Stock Analysis on Net
Stock Analysis on Net

Thermo Fisher Scientific Inc. (NYSE:TMO)

Common-Size Income Statement 

Thermo Fisher Scientific Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Product revenues 58.27 58.38 58.90 63.56 77.43
Service revenues 41.73 41.62 41.10 36.44 22.57
Revenues 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of product revenues -30.09 -29.21 -30.73 -31.72 -34.67
Cost of service revenues -28.98 -29.51 -29.37 -26.04 -15.25
Cost of revenues -59.07% -58.72% -60.10% -57.76% -49.92%
Gross profit 40.93% 41.28% 39.90% 42.24% 50.08%
Selling, general and administrative expenses -19.60 -20.04 -19.71 -20.02 -20.42
Research and development expenses -3.14 -3.24 -3.12 -3.28 -3.59
Restructuring and other costs -0.81 -0.89 -1.07 -0.25 -0.50
Operating income 17.38% 17.11% 16.00% 18.69% 25.57%
Interest income 2.23 2.51 2.05 0.61 0.11
Interest expense -3.18 -3.24 -3.21 -1.62 -1.37
Other income (expense) -0.03 0.03 -0.15 -0.23 -1.77
Income before income taxes 16.40% 16.41% 14.70% 17.44% 22.55%
Provision for income taxes -1.23 -1.53 -0.66 -1.57 -2.83
Equity in losses of unconsolidated entities -0.09 -0.10 -0.14 -0.38 -0.01
Net income 15.08% 14.78% 13.90% 15.50% 19.71%
Net (income) losses attributable to noncontrolling interests and redeemable noncontrolling interest -0.04 -0.01 0.09 -0.02 -0.01
Net income attributable to Thermo Fisher Scientific Inc. 15.05% 14.77% 13.99% 15.47% 19.70%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The common-size income statement reveals significant shifts in revenue composition and profitability over the five-year period. A notable trend is the decreasing proportion of revenues derived from product sales, coupled with a corresponding increase in service revenues. While total revenues remain consistently at 100%, the balance between these two revenue streams has changed considerably.

Revenue Composition
Product revenues decreased from 77.43% of total revenues in 2021 to 58.27% in 2025, representing a substantial decline. Conversely, service revenues increased from 22.57% in 2021 to 41.73% in 2025. This suggests a strategic shift towards a service-oriented business model.
Cost of Revenues
The cost of revenues, as a percentage of revenues, increased from -49.92% in 2021 to -59.07% in 2025. This increase is more pronounced in the cost of service revenues, which moved from -15.25% to -28.98% over the same period. The increasing cost of service revenues, relative to service revenues, may indicate rising delivery costs or investments in service infrastructure.
Gross Profit
Gross profit margin declined from 50.08% in 2021 to 40.93% in 2025. This decrease aligns with the increasing cost of revenues and the shift in revenue mix towards services, which appear to have lower gross margins than product sales.
Operating Expenses
Selling, general, and administrative expenses remained relatively stable, fluctuating between -20.42% and -19.60% of revenues. Research and development expenses also exhibited a slight downward trend, decreasing from -3.59% to -3.14%. Restructuring and other costs were more volatile, peaking at -1.07% in 2023 before decreasing to -0.81% in 2025.
Operating Income
Operating income decreased from 25.57% of revenues in 2021 to 16.00% in 2023, before partially recovering to 17.38% in 2025. This suggests initial pressure on profitability, followed by some stabilization and improvement in later years. The recovery in operating income is not proportional to the changes in revenue composition, indicating other factors are at play.
Non-Operating Items
Interest income increased significantly from 0.11% to 2.23%, likely due to higher interest rates or increased cash balances. Interest expense also increased, but at a slower rate, from -1.37% to -3.18%. Other income (expense) fluctuated, with a slight negative impact in 2025. These non-operating items had a moderate impact on overall profitability.
Net Income
Net income attributable to Thermo Fisher Scientific Inc. decreased from 19.70% of revenues in 2021 to 13.99% in 2023, then increased to 15.05% in 2025. This trend mirrors the operating income trend, suggesting a strong correlation between operational performance and net profitability. The provision for income taxes decreased as a percentage of revenue, partially offsetting the decline in operating income in earlier years.

In summary, the company experienced a significant shift in its revenue mix, with a growing emphasis on service revenues. This shift was accompanied by increasing costs of revenues and a corresponding decline in gross profit margin. While operating income and net income experienced a dip in 2023, they showed signs of recovery in the subsequent years, though not fully restoring the levels seen in 2021.

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