DHR · 10-Q · 2026Q2 · Full report

Operating Margin Drivers

DANAHER CORP /DE/ · 2026-07-21 · Importance 66 · Surprise 74

Consolidated operating margin increased 520 basis points year over year to 18.0% in the second quarter of 2026 and increased 280 basis points to 20.2% for the first six months. The improvement was primarily driven by the $432 million second-quarter 2025 Life Sciences trade-name impairment and the $447 million first-half 2025 impairment charges, partly offset by Masimo-related costs and dilution. Diagnostics operating margin declined 710 basis points to 16.9% in the second quarter and 440 basis points to 22.3% for the six-month period, due to Masimo inventory fair-value adjustments, transaction costs, pre-acquisition payments, product mix and acquired-business dilution. Life Sciences margin increased 2,640 basis points in the second quarter and 1,410 basis points year to date, while Biotechnology margin increased 30 basis points and 120 basis points, respectively.

Key facts

• Second quarter 2025 impairment charge related to a trade name in the Life Sciences segment favorably impacted operating profit margin comparisons by 730 basis points. source
• Second quarter 2026 fair value adjustments to inventory, transaction costs deemed significant and pre-acquisition share-based and change-in-control payments related to the Masimo Acquisition in the Diagnostics segment unfavorably impacted operating profit margin comparisons by 175 basis points. source
• First half of 2025 impairment charges related to a trade name in the Life Sciences segment and a facility in the Biotechnology segment favorably impacted year-to-date 2026 vs 2025 operating profit margin comparisons by 385 basis points. source
• Life Sciences operating profit (loss) as a percentage of sales was 13.0% for the six-month period ended June 26, 2026 compared to (1.1)% for the comparable 2025 period. source
• First half of 2026 fair value adjustments to inventory, transaction costs deemed significant and pre-acquisition share-based and change-in-control payments related to the Masimo Acquisition in the Diagnostics segment unfavorably impacted year-to-date operating profit margins by 100 basis points. source
• Operating profit margins increased 520 basis points from 12.8% in the three-month period ended June 27, 2025 to 18.0% in the three-month period ended June 26, 2026. source
• Second quarter 2026 fair value adjustments to inventory, transaction costs deemed significant and pre-acquisition share-based and change-in-control payments related to the Masimo Acquisition unfavorably impacted Diagnostics segment operating profit margin by 440 basis points. source
• Incremental dilutive effect in 2026 of acquired businesses unfavorably impacted Diagnostics operating profit margin by 105 basis points for the three-month period. source