The financial performance, as represented by common-size income statements, reveals several notable trends over the observed period. Product revenues consistently represent the majority of total revenues, though their relative contribution has decreased over time, while service revenues have increased. Cost of revenues has generally increased as a percentage of revenues, impacting overall profitability. Operating income and net income attributable to Thermo Fisher Scientific Inc. demonstrate fluctuations, with a general trend towards lower percentages of revenue in recent periods.
Revenue Composition
Product revenues began at 79.31% of total revenues in April 2021, declining to 59.31% by December 2025. Conversely, service revenues increased from 20.69% to 40.69% over the same period. This indicates a strategic shift or changing market dynamics favoring service offerings.
Cost of Revenues
The cost of revenues, as a percentage of total revenues, has generally increased. Starting at -47.42% in April 2021, it rose to -58.98% by December 2025. This increase is observed for both product and service revenues, suggesting potential inflationary pressures or changes in production/service delivery costs. The cost of service revenues experienced a more substantial increase than the cost of product revenues.
Profitability
Gross profit as a percentage of revenues decreased from 52.58% in April 2021 to 41.02% in December 2025. Operating income followed a similar pattern, declining from 30.78% to 18.46% over the same timeframe. Net income attributable to Thermo Fisher Scientific Inc. also decreased, moving from 23.59% to 16.08%. These declines are likely attributable to the increasing cost of revenues and potentially increased operating expenses.
Operating Expenses
Selling, general and administrative expenses remained relatively stable, fluctuating between approximately 18% and 21% of revenues. Research and development expenses also remained consistent, generally between 3% and 4% of revenues. Restructuring and other costs were generally low, but experienced a significant increase in December 2022 and December 2024.
Financial Income & Expense
Interest income increased significantly over the period, from 0.12% to 2.12%. Interest expense also increased, from -1.26% to -2.99%. The net effect of these changes, along with fluctuations in other income/expense, impacted income from continuing operations before income taxes. Provision for income taxes as a percentage of revenues fluctuated, but generally remained between 1% and 5%.
Net Income Adjustments
Equity in earnings (losses) of unconsolidated entities and net (income) losses attributable to noncontrolling interests and redeemable noncontrolling interest had minimal impact on overall net income, with values generally close to zero. These items experienced some fluctuation, but did not significantly alter the overall trend in net income.
In summary, the company experienced a shift in revenue composition, increasing reliance on service revenues, alongside rising costs and a corresponding decline in profitability margins. While revenue remained consistent, the increasing cost structure warrants further investigation.
