Hello, and welcome to BD's Second Fiscal Quarter 2024 Earnings Call. At the request of BD, today's call is being recorded and will be available for replay on BD's Investor Relations website, investors.bd.com or by phone at +1 (800) 723-5792 for domestic calls and area code +1 (402) 220-2664 for international calls..

[Operator Instructions] I will now turn the call over to Greg Rodetis, Senior Vice President, Treasurer and Head of Investor Relations. .

Good morning, and welcome to BD's earnings call. I'm Greg Rodetis, Senior Vice President, Treasurer and Head of Investor Relations. Thank you for joining us. This call is being made available via audio webcast at bd.com. Earlier this morning, BD released its results for the second quarter of fiscal 2024.

The press release and presentation can be accessed on the IR website at investors.bd.com..

Leading today's call are Tom Polen, BD's Chairman, Chief Executive Officer and President; and Chris DelOrefice, Executive Vice President and Chief Financial Officer.

Following this morning's prepared remarks, Tom and Chris will be joined for Q&A by our segment presidents, Mike Garrison, President of the Medical segment; Dave Hickey, President of the Life Sciences segment; and Rick Byrd, President of the Interventional segment..

Before we get started, I want to remind you that we'll be making forward-looking statements. You can read the disclaimer in our earnings release and the disclosures in our SEC filings available on the Investor Relations website. Unless otherwise specified, all comparisons will be made on a year-over-year basis versus a relevant fiscal period.

Revenue percentage changes are on an FX-neutral basis unless otherwise noted..

Reconciliations between GAAP and non-GAAP measures are included in the appendices of the earnings release and presentation. With that, I am very pleased to turn it over to Tom. .

Thanks, Greg. Good morning, everyone, and thank you for joining us. Second quarter revenue growth accelerated significantly as expected, driven by the strength of our portfolio, increasing volumes across our consumables and Alaris.

Margin performance drove adjusted EPS ahead of our expectations and consistent with our plan, we delivered very strong cash flow and are on track to deliver another year of double-digit free cash flow growth. These results give us the confidence to once again increase our FY '24 adjusted EPS guidance..

Turning to our BD 2025 strategy. We continue to execute well on the actions we outlined at our Investor Day to drive profitable growth and value creation. This includes advancing our innovation pipeline, which supports our durable 5.5% plus targeted growth profile.

One such area is the strong cadence of new innovation across our connected medication management suite, which delivers many unique benefits to our customers..

Q2 was the second full quarter since clearance of our new Alaris system and first half Alaris sales have already eclipsed our total FY '23 performance. Our return to market is ramping faster than initially planned, which wouldn't be possible without our manufacturing team who have executed extremely well in scaling Alaris production.

Q2 set an all-time record in both the number of BD Alaris pumps manufactured and the number of pumps shipped in a quarter to upgrade our customers to the cleared version of the pump.

We have also seen acceleration of committed contracts, inclusive of competitive conversions as health systems value the capability of Alaris and look to standardize their fleet. This offers confidence in the planned second half contribution to growth and will support momentum heading into FY '25..

The Alaris 510(k) clearance is just the beginning.

As we have shared, we are excited about our innovation roadmap, and we are planning upcoming Alaris 510(k) submissions to further strengthen our capabilities, like best-in-class interoperability with over 800 live sites, introduce a steady flow of new customer innovations and ensure continuous compliance.

Examples such as over-the-air technology for efficient software updates and continued advanced cybersecurity are planned in the next submission later this calendar year..

Beyond Alaris, we have a market-leading connected medication management portfolio across inventory management, compounding, pharmacy automation, medication dispensing and infusion and are excited about future innovations and development.

This includes new medication dispensing and informatics innovation, including the next generation of our Pyxis dispensing platform, which innovates on our hardware design and will advance our cloud connectivity..

We continue to scale our BD Health sites informatics platform, now live in over 1,000 sites, and have upcoming launches to integrate hospital medication data from Pyxis with non-acute medication data from our MedBank and MedKeeper platforms, to bring visibility to medication flows across the customers care network..

In Q2, we made meaningful progress achieving other key R&D milestones, including several in our peripheral vascular disease platform, which is one of our key growth areas.

Longer term, these technologies are each expected to deliver over $50 million in incremental fifth year revenue and will broaden our leadership in the $5 billion PVD category that is growing high single digits..

In our venous portfolio, we have now enrolled over 60 patients in our ARCH pivotal IDE for our BD Liverty TIPS Stent Graft. This novel self-expanding covered stent improves the standard of care for portal hypertension.

Building on our success in launching venous products that help deliver better clinical outcomes for patients and strengthening our presence in the venous market..

In our arterial portfolio, we enrolled the first patient in our AGILITY pivotal IDE study for our low-profile arterial stent graft, a differentiated technology that minimizes access site complications with precise stent placement that could provide an important new treatment option for over 18 million patients with peripheral arterial disease in the U.S.

alone..

We also filed our SCION SFA pivotal IDE submission with the FDA for our new sirolimus DCB for the treatment of PAD. We see this new alternative drug platform as a key growth catalyst for both SFA and below-the-knee applications..

We are also executing well on our simplification strategy to drive margin expansion. We are seeing growing momentum as we scale our BD Excellence operating system and build world-class lean management systems and culture throughout BD.

This drove strong Q2 performance in areas such as waste reduction and production efficiency, contributing to our margin goals..

Our focus on cash flow also continues to deliver positive results, generating about $1.1 billion in free cash flow in the first half. This strong start to FY '24 positions us to deliver double-digit growth in free cash flow for the full year.

It also enables continued execution of our disciplined capital allocation strategy including accretive M&A opportunities in higher-growth categories and opportunistically returning cash to shareholders..

Lastly, our teams around the world continue to make advancements on our corporate sustainability strategy. We were recently named among Fortune Magazine's Most Innovative Companies list, a testament to our 70,000 associates who work every day to deliver innovation that meaningfully advances the standard of care around the world.

We continue to forge partnerships that expand access to these critical innovations. And most recently, we announced the first-ever option in Singapore for women to self-collect a sample for cervical cancer screening in the privacy of their own home..

In summary, we are delivering accelerated revenue growth, are executing ahead of our plan on Alaris and driving strong margin performance with a growing contribution from BD Excellence. We once again raised our adjusted diluted EPS guidance for fiscal 2024 and believe we are well positioned to achieve our BD 2025 goals.

I'll now turn it over to Chris to review our financials and outlook. .

Thanks, Tom, and good morning, everyone. As Tom noted, we executed well on our performance goals in Q2. As expected, we delivered strong acceleration in our revenue growth, we exceeded both our margin and earnings goals and delivered very strong free cash flow growth..

I'll now provide some insights into our revenue performance in the quarter. Q2 revenue was $5 billion, with organic growth of 5.7%, driven by strong volume. Growth was led by double-digit growth in BD Interventional with low single-digit growth in BD Medical and BD Life Sciences.

Total Q2 revenue growth of 4.7% reflects the divestiture of our surgical instruments platform..

Regionally, organic growth was driven by the U.S., partially offset by expected market dynamics in China. In BD Medical, growth was led by Medication Management with strong performance in infusion systems driven by the BD Alaris return to market and mid-single-digit growth across our Medication Delivery Solutions portfolio in the U.S. and EMEA.

Strong demand in our Pharmaceutical Systems, pre-fill devices for biologic drugs offset transitory market dynamics across the industry, including customer inventory destocking..

BD Life Sciences performance was led by Integrated Diagnostic Solutions with high single-digit growth in our microbiology platforms and mid-single-digit growth in specimen management, which offset a comparison to the prior year and transitory market dynamics in select segments in Biosciences..

BD Interventional Organic growth was led by continued strong growth in UCC with continued momentum in our PureWick franchise, delivering another quarter of double-digit growth, along with related licensing revenue.

Surgery delivered another strong quarter with double-digit organic growth, supported by global adoption of our Phasix resorbable scaffold..

Lastly, growth was supported by Peripheral Intervention with double-digit growth in our peripheral vascular disease platform, where we continue to drive market penetration with our Rotarex atherectomy system and our venous portfolio. The quarter's performance reflects the breadth of the BD portfolio that delivers a durable growth profile..

Now moving to our P&L. We realized strong sequential margin improvement with adjusted gross margin of 53% and adjusted operating margin of 24.3%, both above our expectations.

For adjusted gross margin, our simplification and BD Excellence initiatives are continuing to drive net cost improvement and sequentially, as planned, we saw a reduced impact from prior year inventory reductions that increased cash flow, driven by strong SSG&A, expense reductions and leverage, our adjusted operating margin increased sequentially by 410 basis points and year-over-year by 160 basis points with Q2 being above our fiscal year '23 full year margin..

As a result of these items, we exceeded our Q2 operating income and adjusted diluted EPS expectations resulting in adjusted diluted EPS of $3.17, which grew double digits or 10.8% on a reported basis. Regarding our cash and capital allocation. Year-to-date free cash flow increased more than $900 million year-over-year to over $1.1 billion.

This reflects continued improvements around working capital, including our actions to optimize inventory levels, continued discipline around capital investments and leveraging our fixed asset base as a result of the benefits from our BD Excellence operating system..

We remain focused on free cash flow conversion and are on track to deliver another double-digit step improvement in FY '24 and remain well positioned to achieve our long-term cash goals. With our strong cash flow, year-to-date, we returned over $1 billion in capital to shareholders, including dividends and $500 million in share repurchases..

We improved our net debt position ending Q2 with a net leverage ratio of 2.6x. Our cash and short-term investments balance was almost $3.2 billion, inclusive of about $2 billion in proceeds from debt refinancing during the quarter that will be utilized to repay maturing debt over the balance of the calendar year.

Collectively, this positions us well to capitalize on accretive value-creating tuck-in M&A..

Moving to our updated guidance for fiscal year '24. The detailed assumptions underlying our guidance can be found in our presentation. As we look ahead for the balance of the year, we remain focused on driving areas of momentum, including Alaris and continue to monitor transitory market dynamics.

For the full year, we are maintaining our organic revenue growth guidance range of 5.5% to 6.25%..

Based on our Q2 margin performance, we are raising our adjusted diluted EPS guidance range to $12.95 to $13.15 on a reported basis, which is an increase of $0.11 at the midpoint. Strong delivery in Q2 positions us well to achieve our second half earnings growth targets..

Regarding foreign currency, based on current spot rates, the impact of currency has moved modestly since our last update. And for illustrative purposes, we see an additional headwind of approximately 40 basis points to full year revenue from translational currency impacts..

First, regarding revenue, the midpoint of our guidance reflects about 7.5% second half organic sales growth with nearly 250 basis points contribution from Alaris and just over 5% growth in the remainder of the BD portfolio.

We expect Q3 organic growth of at least 6% with Q4 further accelerating, driven in part by Alaris momentum and improving grow-over dynamics in China..

For the full year, our assumptions imply just over 100 basis points revenue contribution from Alaris or at least $300 million in FY '24 revenues. Second, we are well positioned to achieve our updated adjusted operating margin guidance of at least 50 basis points improvement, which implies full year operating margins of at least 24%.

We expect Q3 adjusted operating margin will be modestly higher than Q2, given the strong performance in this quarter..

We continue to expect margin acceleration in Q4, driven by our BD Excellence and continuous improvement efforts and continued expense leverage on expected strong revenue performance, including Alaris. Lastly, we expect our tax rate to be ratable across Q3 and Q4 at about 15% when considering the midpoint of our updated full year guidance range..

In summary, based on the strength of our portfolio and momentum in Alaris, we have clear line of sight to deliver our fiscal year '24 revenue guide and another year of strong growth. Our team's execution supported over-delivering on our margin expectations.

And as a result, as we enter the second half, we are on track to achieve our full year margin improvement goals and once again increased our fiscal year '24 earnings outlook.

Additionally, we remain well positioned to deliver another year of double-digit free cash flow growth, which increases our capacity to support additional value-creating opportunities, including M&A..

Our strategy is demonstrating positive momentum, and we remain well positioned to continue to deliver on our BD 2025 growth objectives. With that, let's start the Q&A session.

Operator, can you please assemble our queue?.

[Operator Instructions] Our first question will come from Travis Steed with Bank of America. .

Congrats on a good quarter. I wanted to ask about the second half ramp, both from a revenue and margin perspective.

So on revenue growth, you need to step up closer to kind of above the full year range in the second half, curious what the underlying drivers there are and how much of that is dependent upon the increased demand you're seeing in Alaris?.

And then on the margin side, curious how much of the outperformance in Q2 was onetime versus underlying? And how you're thinking about the second half and how much of that's kind of derisked versus 3 months ago?.

Yes. Thanks for the question, Travis. Yes. So first of all, we were pleased with the quarter. To your point on revenue, one, we did see strong acceleration quarter-over-quarter as expected on revenue. We tried to outline the ramp. Clearly, the back half guidance at our midpoint implies about 7.5% growth.

But when you unpack that with the momentum that we have in Alaris, we now expect nearly 250 basis points contribution to our second half growth. That would put us at least $300 million for the full year. So if you strip that out, the rest of the BD portfolio has to perform at just over 5%. We feel confident in that. We have strong areas of momentum..

I think one thing that you saw in our core performance this quarter was -- our core consumables that are anchored against the core of health care, performing really well as you see strong utilization in the health care system.

We continue to see great momentum in areas like PureWick, driving strong outsized double-digit growth in that platform, momentum in PVD. And so there's a lot of pockets of strength that we'll continue to build on there..

From a margin standpoint, so first, the drivers of the margin that we articulated at the start of the year have played out as expected. To your point, we had really strong execution in the quarter. This is driven by our cost improvement initiatives, the momentum on BD Excellence.

So we over-delivered 2 quarters in a row, and we're well on track to deliver the full year, which is at least 50 basis points increase year-over-year. We're just over 24%..

As you think of the performance in the quarter, it really wasn't one thing. I would just say strong execution throughout and we remain focused on executing in the back half of the year. I think the important thing is in the back half of the year, there were questions about the ramp. Q2 is a strong signal that we're well on track.

As a matter of fact, one simple way to think of this is our first half gross margin was about 52%. And we know we had those kind of transient onetime items, the outsized FX and then the decision we made last year to reduce inventory levels, which improved strong cash flow. Those are worth over 200 basis points.

Those are completely behind us as we move to the second half. You add that to the 52% and you're basically where we need to be in the back half already..

So we just have to continue the strong cost improvement. In addition to that, we lapped the outsized inflation. In the front half of the year, that was almost 150 basis points. We cycled through that and that moderates down very low. So lot of momentum in terms of how we're advancing margin..

And then lastly, what I would point to is, obviously, with that Alaris momentum and ramp through Q3 and Q4, you get a bit of what I would call outsized leverage on the revenue that's also worth about 150 basis points in the back half. As a matter of fact, our OpEx expenditures are not reducing. They're about flat or even up slightly.

So it's not about cost reductions in OpEx. It's all about the top line leverage, which we feel good about. .

We'll go next to Robbie Marcus with JPMorgan. .

Nice quarter. I'll try and ask one that answers a couple of things. As you look at the balance of the year, you said you just need 5% in the base business.

So if we look at second quarter, excluding the Urology payment and Alaris, what did the base business do so we could get that kind of comparison?.

And then maybe while you're at it, speak to some of the underlying trends in Pharm Systems and MMS where results came in a little lower, but it sounds like you're very confident for the rest of the year. .

Thanks, Rob. So I think as we look at the quarter and as we look forward to the year, we feel really good about the momentum and the diversity of BD's portfolio.

And I'd say, as you look at the areas across the company, we see particular strengths in Medical, in Intervention, in the Life Science businesses that are focused in the health care provider space, right, that are benefiting from strong utilization across the board..

You can see our volumes, if you compare volumes this year versus last year, you're seeing strong growth from a volume perspective. And that's, of course, being supplemented by our very strong innovation pipeline as well.

That's allowing us -- that strength of our diverse portfolio is allowing us to overcome what we see as transitory market dynamics that you're seeing across companies in the life science research area as well as in the B2B pharm systems marketplace where you're seeing destocking in certain areas..

With that said, we're seeing really strong growth continue, right, around double-digit growth in biologics. The biologics are now over 40% of our Pharm Systems business. So we feel really good about that. And that percentage in weighting is only increasing, right, towards $1 billion of biologic sales in that area.

And so as we think about -- that's one of the strengths of BD's portfolio is those puts and takes across and being able to deliver in multiple different environments, really strong revenue performance.

So Chris, anything to add?.

I would just add, I think Q2 is certainly representative of the growth rate that we need. We feel good about that. There's all kinds of puts and takes in the P&L. I mean just -- Alaris was a modest contribution. It wasn't significant. It's really most predominant in the second half, and that will be a strong driver for us.

I articulated the second half drivers.

Keep in mind, in Q2, you had some of these other negative comps, right?.

You mentioned licensing. There was also a licensing headwind that was in our Life Sciences business, and we were cycling through some very large capital installs.

That's a space that -- we still feel good about customer interest, have strong momentum, and there were some timing dynamics there with the launch of our technology in BDB and a really strong install result in the quarter. So net-net, there's always lots of puts and takes. The 5% is something that we're confident in as we think of the second half. .

We'll go next to Vijay Kumar with Evercore. .

I guess my one question here is on Alaris, the $300 million, Tom, can you give us a sense on what the implied exit rate number is in Q4 for Alaris? Because I understand from a growth perspective, it might be a little tricky. I know you have some upgrades going on.

What is the dollar revenue number implied for Q4? And I know Alaris was raised from $200 million to $300 million, but the organic for fiscal was maintained.

Is that just conservatism?.

Yes. Thanks for the question. So first off, we are really happy that we delivered on our #1 priority last year, which is the clearance of the BD Alaris system. And we said our #1 priority for this year became the relaunch of Alaris and remediation and return to it being a contributing growth driver.

And we're certainly delivering exactly on that goal like we did last year. Really proud of our manufacturing team. Hopefully, you heard it in our prepared remarks, right? We went from clearance at the end of Q4 to this past quarter, Q2, setting an all-time record in both the production and shipment numbers of Alaris.

That's a combination for sale and remediation, but it really reflects that core manufacturing excellence capability that BD has, which we think is best-in-class in the industry, and this is a great example of it..

We continue to get really positive customer feedback. We've got positive contract momentum. And as you heard, we've got plans progressing for our next 510(k) submission later this calendar year, which will begin to continue to build new innovations on the back of the 510(k) that we got cleared in Q4..

So as we think about next year, to your question, we don't put out quarterly guidance by product line by any means. But what I would say is, as Chris said, our current guide implies, as you said, over $300 million, actually closer to $350 million for the year.

And we've said before that we expect certainly FY '25 to be at least at our historical run rate, right, which you kind of think of as $400 million. Anything beyond that, we'll get into as we get into FY '25 guidance. But clearly, our performance this year is positioning us really well towards that previously stated goal. .

The only thing -- just small thing I would add, we did say that for Q3, you should expect total growth inclusive of Alaris of at least 6%. And then you would expect a sequential step up in Q4. So you think of that step up, a portion of that is going to be Alaris.

There's also the China grow-over favorable comp that we'll have, but Alaris is a portion of that. .

We'll go now to Larry Biegelsen with Wells Fargo. .

Congrats on a nice quarter here. Chris, I know it's really early, but love to hear your confidence in the 25% operating margin goal in fiscal 2025.

And are there items right now we should be aware of, such as TSAs rolling off or an increase in the tax rate that would make double-digit EPS growth challenging next year?.

Yes. Thanks, Larry. Good question. Yes, first of all, to your point, it's a little early to get into 2025. TSA is not material. That's a normal dynamic that happens. As a matter of fact, year-over-year, we're down. So we're actually absorbing that already. And by the time you get through this year, it's not substantive..

The tax dynamics and things like that are evolving. We'll share more at a future date. I think the key thing is we remain committed to our BD 2025 goals. That remains unchanged. Specifically operating margin, I'm glad you mentioned that.

I just think what we've delivered through the first half of this year, the momentum we have with BD Excellence through the back half of this year sets us up nicely with the strong exit rate that gives us confidence in delivering 25% by 2025.

I think the big thing that you'll see is the progression from that improvement coming from largely gross margin. So we have really great momentum inside on our improving waste, improving yield in our manufacturing lines that will drive continued momentum there.

And that will be a catalyst beyond 2025 as we get to the point that we talk about that, too, that will be very positive, help facilitate reinvestment and continue to drive the top line growth as well. Thanks for the question. .

We'll go now to Matthew Taylor with Jefferies. .

So just because there's a lot of focus on the phasing and the ramp through the second half of the year. I guess, you gave us some math and some confidence in that.

I was wondering if you could take the other side of the coin and maybe talk about any risks that you see to that ramp? I mean what would have to go wrong for you not to hit this express progression in revenue acceleration and margin expansion?.

Yes. Thanks for the question. I guess -- so 2 things. One on margin. If you think of margin, a lot of the momentum comes from 2 things like I shared, right? One, we just exit those one-timers in the first half. So high confidence that's done. It's behind us.

The second thing is, our cost improvement initiatives with -- when you think of a cap and roll period and inventory, we have a strong line of sight to that, and we already know the embedded inflation dynamics that are all locked up. So we have a high degree of confidence in what's flowing through gross margin..

And then that operating margin, again, is you get natural leverage on top of that from the growth expansion in Q2, which we also feel good about. The momentum of Alaris is part of that kind of outsized back half growth. And we have a strong line of sight to that progression. So really with where we sit in the year, we're feeling good about that.

Obviously, we continue to monitor the market dynamics that we touched on within the quarter. That's something that's -- we always have -- look for other levers and opportunities to deliver the full year, but that's probably the thing that we'll continue to watch. .

Can I just ask... .

Sure, go ahead. .

I just want to ask a follow-up. You mentioned in the presentation some enhancements to Alaris and Pyxis. So I was hoping you could just talk about the importance of those submissions. .

Yes, sure. Happy to, Matt. So on Alaris, and we'll only share a certain level of information on those at this time. We want to keep some of that surprise for customers in the market as we actually launch them. But on Alaris, we're really happy to be back at the innovation cadence.

I think when we got the clearance, not only are we happy to be back servicing our customers and driving growth and getting after remediation, but we're happy to immediately jump back into innovation cadence. And you can see our team didn't hesitate in doing that..

So the next 510(k) submission on Alaris later this calendar year will include customer benefits, such as over-the-air is planned for that, for software upgrades; advanced cybersecurity features; as well as a number of other components as well as making sure we continue to keep that file updated as part of our compliance strategy.

So that's -- really excited about those..

And on Pyxis, there hasn't been a new Pyxis instrument. There's been software upgrades, but hasn't been a new Pyxis instrument, certainly since we've owned CareFusion, and I think it's been more than 15 years. And so the new Pyxis looks different. It's got -- so it's a new hardware platform that we'll be building off of.

It significantly advances our cloud strategy and connectivity as well as continuing with advanced analytics as well as hardware features built into that. So it's a significant new platform that we'll be launching and investing in to continue to serially innovate upon over the next many, many years.

But we're excited about the first launches of that plan for next year..

I'd say -- just say the other thing is that we do continue to invest across our connected medication management portfolio, which is obviously highly unique in the industry. And it's one of those -- we get asked the question about connected care and how we think about it because it can often be used as a buzzword.

Our approach to connected care has been we look at major health care processes, and we look at how we use data and connected solutions to then transform them and what we've done in Med Management, right, from software in the pharmacy for compounding and inventory management to Pyxis on the floor to Alaris and our health site platform, which brings that site line or visibility to all the data coming from all of our systems to improve processes.

It's a great example of how we're doing that..

Obviously, we talked about continuing to innovate Alaris, continuing to innovate on Pyxis, but we're also continuing to innovate on other elements of that. And we shared another good example of that earlier today.

One of the upcoming launches, how we're taking now not only our Pyxis platform, but 2 of the acquisitions we made over the last couple of years, our MedBank platform, which is basically Pyxis for the non-acute, a benchtop unit and GSL.

And we're putting that data now in through health sites so that people will be able to see end-to-end visibility of medications from Pyxis to MedBank to GSL, all integrated.

So if you're an IDN, you're trying to manage across the care continuum as you've been acquiring assets there, right? BD is going to be a company that enables you to do that very uniquely as part of our strategy. So yes, thanks for the question, Matt. .

We'll go next to Matt Miksic with Barclays. .

Yes, I was on mute. Sorry for that. So just one question, and it's kind of a high-level question, Chris and Tom. You talked about the sequential acceleration in growth, which is evident and the improvement in margins, which you had kind of laid out early in the year.

I think when folks look at the results, we're seeing really strong margin growth and strength in the quarter. And what I just mentioned and what you described, sequential acceleration but sort of in an environment where volumes have been stronger across a bunch of med tech businesses. Maybe a touch closer to in line even after adjusting for FX..

And so I guess the good news and encouraging news around Alaris is great, some of the other business lines that you've talked about is great.

Was there anything that's had a surprise on the downside, something that was -- remained challenging longer or anything you'd call out? And maybe how you see that playing out the rest of the year?.

Yes, I'll take that, Matt. So no, we feel good. It fits right in line with what we -- what I described before, which was you're seeing the diversity of our portfolio, which is a real strength for the company.

Where again, those -- the Medical products, Intervention, Life Science businesses that are exposed to health care utilization, health care provider space, right, the vacutainers, the diagnostic systems products, et cetera, along with Intervention and all the Medical products used in that.

They're benefiting from that strong utilization and our innovation pipeline that are enabling us to offset what our transitory broad dynamics in the -- that people are seeing in the life science research space and the B2B pharma systems with some destocking, particularly in vaccines and anti-coag..

So we feel really good about those businesses as well. As I said, we're seeing strong double-digit growth right around double-digit growth in biologics and Pharm Systems. We've got a great pipeline there with key launches later this year, turning over to customers, Libertas and Evolve, for them to start doing trials on.

We see in our B2B space, we're still in a market that's going through a cycle that we certainly see some positive signs on with NIH funding, having higher visibility. Overall, we're seeing the FACSDiscover now -- platform. We just launched the 3 and 4 lasers..

So that's adding access to a more cost-effective option for customers to get into that transformational technology. So we're excited by that. And we're still over delivering, I think, versus what you're seeing comps from others in some of those spaces. And so as those markets end up rebounding, again, which we see that forthcoming over time.

We think we're really well positioned there as well, which is just going to help our overall growth. And again, in the meanwhile, that diversified portfolio strength is allowing us to do very well, both on revenue and clearly on a margin perspective. .

And that will conclude today's question-and-answer session. At this time, I'd like to turn the floor back over to Tom Polen for any additional or closing comments. .

Okay. Thank you, operator, and thank you, everyone, and thank you for your questions and interest in BD. We look forward to sharing our progress towards delivering our BD 2025 goals and increased outlook for FY '24 on our next call. Have a great rest of the day. .

Thank you. This does conclude this audio webcast. On behalf of BD, thank you for joining today. Please disconnect your lines at this time and have a wonderful day..