Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements.
Changes in local currencies exclude the effect of currency exchange rate fluctuations. Local currency amounts are determined by translating current and previous year consolidated financial information at an index utilizing historical currency exchange rates. We believe local currency information provides a helpful assessment of business performance and a useful measure of results between periods. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We present non-GAAP financial measures in reporting our financial results to provide investors with an additional analytical tool to evaluate our operating results.
We also include in the discussion below disclosures of immaterial qualitative factors that are not quantified. Although the impact of such factors is not considered material, we believe these disclosures can be useful in evaluating our operating results.
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Overview
We operate a global business with sales that are diversified by geographic region, product range, and customer. We hold leading positions worldwide in many of our markets and attribute this leadership to several factors, including the strength of our brand name and reputation, our comprehensive offering of innovative instruments and solutions, our Spinnaker sales and marketing program, and the breadth and quality of our global sales and service network.
Net sales in U.S. dollars increased 4% in 2025 and 2% in 2024. Excluding the effect of currency exchange rate fluctuations, or in local currencies, net sales increased 3% in both 2025 and 2024. We estimate local currency net sales increased 4% in 2025 and were flat in 2024 excluding the impact of previously disclosed delayed shipments in 2023 and acquisitions.
We faced a difficult environment in 2025 due to global trade disputes/tariffs, governmental policies and geopolitics that increased uncertainty in our end markets and the global economy, while having a negative impact on customer behavior and our import costs. Our team's resilience and agility, and our pricing, supply chain, productivity and cost savings initiatives, were critical to our ability to mitigate these challenges. We also continue to benefit from our strong global leadership positions, diversified customer base, innovative product offering, investment in emerging markets, significant installed base, and the impact of our sophisticated global sales and marketing programs. Over the past few years, we also accelerated our digital capabilities to identify and pursue growth opportunities, while increasing the effectiveness of our global sales organization. We also have continued to increase engagement with our customers with our Go-to-Market and digital approaches. Our market-leading solutions and ability to leverage our innovative portfolio have also allowed us to quickly capitalize on our customers' demand for automation and digitalization solutions and faster growing segments. We are well positioned and have continued to make investments to further strengthen our portfolio and capture future growth opportunities. Our service business also delivered strong results in 2025 as we have been able to support our customers’ ability to maintain uptime, improve productivity, and comply with regulatory requirements.
As we enter 2026, we expect to continue to benefit from market trends toward automation and digitalization. We also anticipate future opportunities with customer replacement cycles and investments in on/near-shoring activities. However, timing remains unclear and many of our end-markets, including pharma/biopharmaceutical, food, and chemical, remain challenged and continue to face uncertainty.
Our laboratory sales grew modestly in 2025 including improved bioprocessing market conditions, while biotech research and academia market conditions were softer. We believe we will benefit from favorable pharma/biopharma market trends in the future. We also believe we will continue to benefit from increased customer demand for automation, digitalization, and safety; new facility investments; and continued focus on regulatory compliance including data integrity requirements. Overall, we believe we are well positioned to continue to capture growth and gain market share in our laboratory business.
Our industrial sales had good growth in 2025 with increases in both product inspection and core industrial. We continue to benefit from our strong product offering and focus on the more attractive, faster-growing segments of the market and strong execution of our growth initiatives in each region.We also continue to benefit from market trends in automation and digitalization and also expect to benefit from customer on/near-shoring activities in the future. Our core industrial-related products are also especially sensitive to changes in economic growth. China and emerging market economies have historically been an important source of growth based upon the expansion of their domestic economies, and we expect this to also be a source of long-term growth. Product inspection experienced strong growth in 2025, and we expect our product inspection end-market to continue to benefit from our customers’ focus on brand protection, food safety, and productivity.
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Our food retailing sales improved during 2025 primarily due to increased project activity, especially in the Americas. Traditionally, the spending levels in this sector have experienced more volatility than our other end-markets due to the timing of customer project activity and new regulations.
In 2026, we will continue to pursue the overall business growth strategies which we have followed in recent years:
Gaining Market Share. Innovation is essential to gaining market share and is fundamental in all aspects of our business including sales and marketing and technology leadership. Our global sales and marketing initiative, Spinnaker, continues to be an important growth strategy. We aim to gain market share by implementing sophisticated sales and marketing programs, leveraging our extensive customer databases, product offering, and installed base. While this initiative is broad-based, efforts to improve these processes include the use of digitalization and advanced data analytics to identify, prioritize, and pursue growth opportunities; the implementation of effective pricing related to value-based selling strategies and processes; improved sales force guidance, training, and effectiveness; cross-selling; increased segment marketing; and leads generation and nurturing activities. We also have added resources to pursue under-penetrated market opportunities and continue to adapt our Go-to-Market approaches with additional inside and telesales resources, while also increasing digital customer interaction. We continue to benefit from digitalization tools to gain efficiencies and increase the effectiveness of our field sales force.
In addition, our comprehensive service offerings, and our initiatives to globalize and harmonize these offerings, help us further penetrate developed markets. We estimate that we have the largest installed base of weighing instruments in the world, and we continue to leverage advanced data analytics and invest in sales and marketing activities to increase the proportion of our installed base that is under service contract, or sell new products that replace old products in our installed base. In addition to traditional repair and maintenance, our service offerings continue to expand into value-added services for a range of market needs, including regulatory compliance. We have also improved our service model to incorporate remote service, depot drop-off/pickup, and other approaches.
Faster-Growing Markets. Emerging markets, comprising Asia (excluding Japan), Eastern Europe, Latin America, the Middle East, and Africa, account for approximately 33% of our total net sales of which 16% relates to China. We have a two-pronged strategy in emerging markets: first, to capitalize on long-term growth opportunities in these markets, and second, to leverage our low-cost manufacturing operations in China which was recently designated a Lighthouse site by the World Economic Forum's Global Lighthouse Network. We have a nearly 40-year track record in China, and our sales in Asia have grown more than 10% on a compound annual growth basis in local currencies since 2000. Over the years, we also have broadened our product offering to the Asian markets. India has also been a source of emerging market sales growth in past years due to increased life science research activities. Overall, versus the prior year, we experienced a 3% increase in emerging market local currency sales by destination during 2025, which included a local currency sales increase of 1% in China and 5% in other emerging markets, respectively. Going forward, we continue to redeploy resources and sales and marketing efforts to pharma/biopharmaceutical, food manufacturing, chemical, and new energy. We believe the long-term growth of these segments will be favorably impacted by the Chinese government’s emphasis on science, high-value industries, product quality, and food safety. We expect both our laboratory and industrial businesses to benefit from our focus on these segments. We also continue to pursue growth in under-penetrated emerging markets. However, emerging market sales can be volatile as we experienced in China over the past several years. China has historically been volatile, and market conditions may change unfavorably due to various factors. In addition to China and emerging markets, we also pursue other faster-growth vertical markets. While rather small, these markets present outsized growth potential. Segments include semiconductors, advanced materials, and new energy. The
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components of these faster-growing segments will change as various markets develop, and we will continue to leverage the breadth and scope of our product offering as new opportunities emerge.
Extending Our Technology Lead. We continue to focus on product innovation. In the last three years, we spent a total of $574 million on research and development, reflecting approximately 5% of net sales. We seek to improve our product offerings and their capabilities with additional integrated technologies and software, which we believe supports our pricing differentiation and accelerates product replacement cycles. In addition, we aim to create value for our customers by having thorough knowledge of their processes via our significant installed product base.
Expanding Our Margins. We continue to strive to improve our margins by enhancing our value proposition via innovation, more effectively pricing our products and services, optimizing our cost structure, and improving our mix in higher-margin businesses such as service. For example, sophisticated digital tools to provide us new insights to further refine our price strategies and processes. We have also implemented productivity and cost savings initiatives over recent years to mitigate our reduced volume, while also focusing on reallocating resources to better align our cost structure to support our investments in market penetration initiatives, higher-growth/profitable areas, and opportunities for margin improvement.
We also have implemented global procurement and supply chain management programs over the last several years aimed at lowering costs and have increased our focus on these programs with our SternDrive initiative. SternDrive is our global operational excellence program for continuous improvement efforts within our supply chain, manufacturing, and back-office operations. Blue Ocean is also an important enabler of our various margin expansion initiatives. Our move to standardized business processes, systems, and data structures throughout our global organization provides greater data transparency and faster access to real-time data while enabling our various digital strategies. Our cost leadership and productivity initiatives are also focused on continuously improving our invested capital efficiency, such as reducing our working capital levels, improving our order to cash cycle, and ensuring appropriate returns on our expenditures.
Pursuing Strategic Acquisitions. We seek to pursue "bolt-on" acquisitions that may leverage our global sales and service network, respected brand, extensive distribution channels, and technological leadership. We have identified life sciences and distribution channels as key areas for acquisitions. For example, in 2025, we acquired several North American distributors that increased our direct market access while expanding our service business, as well as an extension of our life science equipment offering and other acquisitions.
Results of Operations — Consolidated
Global trade disputes/tariffs
In 2025, the U.S. government enacted incremental tariff rates on U.S. imports from certain foreign countries. In response to the U.S. tariffs, the Chinese government implemented an additional tariff on imports from the U.S. We estimate that we incurred costs before mitigation actions from the 2025 incremental tariffs of approximately $50 million in 2025, and have implemented various actions to fully offset the effect of the current incremental tariffs in 2026. Incremental tariffs rates are currently 15% on imports from Switzerland, 25% on non-USMCA imports from Mexico, 30% on imports from China, 15% on imports from the European Union and 10% on imports from the United Kingdom. The U.S. government has indicated it may make further changes to tariff rates in the future that may adversely impact our financial results in future periods.
The recent escalation in global trade disputes/tariffs has increased economic uncertainty in our end markets and the global economic environment, including increasing the risk of recession in many
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countries, and market conditions may change quickly. Although we have implemented various actions to mitigate the effect of current tariffs, they could adversely impact our financial results and could have a greater impact on our operating results in future periods.
Net sales
Net sales were $4.0 billion for the year ended December 31, 2025, compared to $3.9 billion in 2024 and $3.8 billion in 2023. This represents increases of 4% in 2025 and 2% in 2024 in U.S. dollars and increases of 3% in both 2025 and 2024 in local currencies. We estimate local currency net sales increased 4% in 2025 and were flat in 2024 excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions. In 2025, we experienced soft market demand in our end markets. We continue to benefit from the execution of our global sales and marketing programs, our innovative product portfolio, and investments in our field organization, particularly surrounding digital tools and techniques. However, there continues to be uncertainty in our end-markets and the economic environment related to global trade/tariffs, governmental policies, the geopolitical environment, the conflict in Ukraine, and continuing instability in the Middle East and market conditions may change quickly.
In 2025, our net sales by geographic destination increased in U.S. dollars compared to 2024 by 5% in the Americas, 6% in Europe, and 2% in Asia/Rest of World. In local currencies, our net sales by geographic destination increased in 2025 by 5% in the Americas, 1% in Europe and 2% in Asia/Rest of World, with 1% in China. Excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions, we estimate local currency net sales in 2025 increased by 4% in the Americas, 3% in Europe and 3% in Asia/Rest of World, with 1% in China. A discussion of sales by operating segment is included below.
As described in Note 3 to our consolidated financial statements, our net sales comprise product sales of precision instruments and related services. Service revenues are primarily derived from repair and other services, including regulatory compliance qualification, calibration, certification, preventative maintenance, and spare parts.
Net sales of products increased 3% in U.S. dollars and 1% in local currencies during 2025 and 1% in both U.S. dollars and local currencies in 2024. Service revenue (including spare parts) increased 8% in U.S. dollars and 7% in local currencies in 2025, and increased 7% in both U.S. dollars and local currencies in 2024. Service revenue benefited approximately 1% from acquisitions in 2025.
Net sales of our laboratory products and services, which represented approximately 56% of our total net sales in 2025, increased 3% in U.S. dollars and 1% in local currencies during 2025.We estimate laboratory local currency net sales increased 3% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023. The local currency increase in net sales of our laboratory-related products during 2025 includes growth in most product categories, especially process analytics.
Net sales of our industrial products and services, which represented approximately 39% of our total net sales in 2025, increased 6% in U.S. dollars and 5% in local currencies during 2025. We estimate industrial local currency net sales increased 5% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023 and acquisitions. The local currency increase in net sales of our industrial-related products during 2025 includes strong growth in product inspection, and modest growth in core-industrial.
Net sales of our food retailing products and services, which represented approximately 5% of our total net sales in 2025, increased 5% in U.S. dollars and 3% in local currencies during 2025.We estimate food retailing local currency net sales increased 5% in 2025 excluding the impact of the previously disclosed delayed shipments in 2023. The local currency increase in net sales of our food retailing products during 2025 includes increased project activity in the Americas.
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Gross profit
Gross profit as a percentage of net sales was 59.4% for 2025, 60.1% for 2024, and 59.2% for 2023.
Gross profit as a percentage of net sales for products was 61.1% for 2025, compared to 62.1% for 2024 and 60.6% for 2023. Gross profit as a percentage of net sales for services (including spare parts) was 54.4% for 2025, compared to 53.7% for 2024 and 54.3% for 2023.
The decrease in gross profit as a percentage of net sales for 2025 primarily reflects increased tariff costs, lower sales volume related to the recovery of shipping delays in the prior year, and unfavorable business mix, partially offset by favorable price realization and benefits from our SternDrive program.
Additional changes in global trade disputes/tariffs may negatively impact our gross margins in future periods. As previously mentioned, we have implemented various actions to mitigate the effect of the current tariffs.
Research and development and selling, general, and administrative expenses
Research and development expenses as a percentage of net sales were 5.0% for 2025, compared to 4.9% for both 2024 and 2023. Research and development expenses in U.S. dollars increased 6% in 2025 and 2% in 2024, and in local currencies increased 2% in both 2025 and 2024.
Selling, general, and administrative expenses as a percentage of net sales were 24.8% for 2025, compared to 24.2% for 2024 and 23.9% for 2023. Selling, general, and administrative expenses increased 7% in U.S. dollars and 5% in local currencies in 2025 and increased 4% in both U.S. dollars and local currencies in 2024. The increase during 2025 primarily includes sales and marketing investments, offset in part by savings from our cost savings initiatives.
Amortization expense
Amortization expense was $74.5 million in 2025, compared to $72.9 million and $72.2 million in 2024 and 2023, respectively.
Restructuring charges
During the past few years, we initiated various cost reduction measures. Restructuring charges were $17.9 million in 2025, compared to $19.8 million and $32.7 million in 2024 and 2023, respectively. Restructuring expenses are primarily comprised of employee-related costs.
Other charges (income), net
Other charges (income), net consisted of net income of $16.8 million, $4.6 million, and $4.1 million in 2025, 2024, and 2023, respectively. Other charges (income), net includes non-service pension costs (benefits), net (gains) losses from foreign currency transactions and hedging activities, interest income, and other items. Non-service pension benefits were $13.6 million, $7.7 million, and $7.6 million in 2025, 2024, and 2023, respectively. Other charges (income), net also includes acquisition transaction costs of $2.2 million in 2025 and $0.3 million in 2024. For the year ended December 31, 2025, it also includes a net benefit of $4.4 million related to contingent consideration associated with previous acquisitions.
Interest expense and taxes
Interest expense was $68.5 million in 2025, compared to $74.6 million in 2024 and $77.4 million in2023. The decrease in interest expense is primarily related to lower interest rates throughout the year.
Our reported tax rate was 17% in 2025, compared to 17% and 19% in 2024 and 2023, respectively. The reported tax rate in 2025 and 2024 includes a non-cash discrete current tax benefit of $13.7 million and $23.0 million, respectively, resulting from the reduction of uncertain tax position liabilities related to
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the settlement of a tax audit. The reported rate in 2025 also includes a non-cash discrete deferred tax benefit of $5.8 million resulting from the reduction of a valuation allowance related to the settlement of a tax audit.
On July 4, 2025, the United States enacted new tax legislation into law. The legislation did not have a material impact on our annual income tax rate or consolidated financial statements.
Results of Operations — by Operating Segment
The following is a discussion of the financial results of our operating segments. We currently have five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other Operations. A more detailed description of these segments is outlined in Note 18 to our consolidated financial statements.
U.S. Operations (amounts in thousands)
Segment net sales increased 4% in 2025 and 3% in 2024 and net sales to external customers increased 5% in 2025 and 2% in 2024. Net sales to external customers and segment net sales benefited 1% from acquisitions in 2025. The growth in net sales to external customers during 2025 was reduced approximately 1% from the previously disclosed shipping delays, which benefited 2024 net sales to external customers by approximately 2%. Net sales to external customers for 2025 includes particularly strong growth in process analytics, food retail and product inspection.
Segment profit decreased $17.7 million in our U.S. Operations segment during 2025, compared to an increase of $28.0 million during 2024. The segment profit decline in 2025 includes higher tariff costs and lower sales volume related to the previously disclosed shipping delay recovery in the prior year, offset in part by pricing.
Swiss Operations (amounts in thousands)
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 3% in 2025 and 7% in 2024, and in local currencies decreased 3% in 2025 and increased 5% in 2024. Net sales to external customers in U.S. dollars decreased 4% in 2025 and increased 16% in 2024, and in local currencies decreased 7% in 2025 and increased 14%
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in 2024. The decrease in net sales to external customers includes a decline of approximately 3% during 2025 from the previously disclosed shipping delays, which benefited net sales to external customers by approximately 7% in 2024. Local currency net sales to external customers during 2025 includes declines in most product categories.
Segment profit increased $3.1 million in our Swiss Operations segment during 2025, compared to a decrease of $0.8 million during 2024. Segment profit increased in 2025 primarily due to higher net sales to other segments, offset in part by unfavorable foreign currency translation.
Western European Operations (amounts in thousands)
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 5% in 2025 and 6% in 2024, and in local currencies increased 1% in 2025 and 6% in 2024. Net sales to external customers in U.S. dollars increased 4% in 2025 and 8% in 2024, and in local currencies were flat in 2025 and increased 8% in 2024. The growth in net sales to external customers during 2025 was reduced approximately 2% from the previously disclosed shipping delays, which benefited 2024 net sales to external customers by approximately 5%. Local currency net sales to external customers during 2025 includes strong growth in core industrial and retail products.
Segment profit increased $20.4 million in our Western European Operations segment during 2025, compared to an increase of $27.6 million in 2024. The segment profit increase reflects increased net sales and benefits from our margin expansion initiatives, as well as favorable foreign currency translation.
Chinese Operations (amounts in thousands)
(1)Represents U.S. dollar growth (decline).
Segment net sales in U.S. dollars increased 2% in 2025 and decreased 5% in 2024, and in local currencies increased 2% in 2025 and decreased 3% in 2024. Net sales to external customers in U.S. dollars increased 1% in 2025 and decreased 13% in 2024, and in local currencies increased 1% in 2025 and decreased 11% in 2024. The growth in net sales to external customers during 2025 was reduced approximately 1% from the previously disclosed shipping delays, which benefited 2024 net sales to
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external customers by approximately 1%. The increase in local currency net sales to external customers during 2025 reflects modest growth in both laboratory and industrial products.
Segment profit decreased $0.9 million in our Chinese Operations segment during 2025, compared to a decrease of $21.3 million in 2024. The decrease in segment profit during 2025 primarily reflects increased tariff costs, offset in part by benefits from increased sales and our margin expansion initiatives.
Other Operations (amounts in thousands)
(1)Represents U.S. dollar growth (decline).
Other Operations includes reporting units in Southeast Asia, Latin America, Eastern Europe, and other countries. Segment net sales in U.S. dollars increased 9% in 2025 and 8% in 2024, and in local currencies increased 9% in 2025 and 10% in 2024. Net sales to external customers in U.S. dollars increased 7% in 2025 and 8% in 2024, and in local currencies increased 7% in 2025 and 10% in 2024. Other Operations net sales to external customers and segment net sales in 2025 benefited approximately 2% from acquisitions. The growth in net sales to external customers during 2025 was reduced approximately 2% from the previously disclosed shipping delays, which benefited 2024 net sales by approximately 4%. The increase in local currency growth in net sales to external customers during 2025 includes strong growth in most product categories, particularly process analytics.
Segment profit increased $17.5 million in our Other Operations segment during 2025, compared to an increase of $17.9 million during 2024. The increase in segment profit during 2025 primarily related to increased segment net sales and benefits from our margin expansion initiatives.
Liquidity, Capital Resources, and Future Cash Requirements
Liquidity is our ability to generate sufficient cash to meet our obligations and commitments. Sources of liquidity include cash flows from operating activities, available borrowings under our Credit Agreement, the ability to obtain appropriate financing, and our cash and cash equivalent balances. Currently, our financing requirements are primarily driven by working capital requirements, capital expenditures, share repurchases, and acquisitions. Global market conditions can be uncertain, and our ability to generate cash flows could be reduced by a deterioration in global markets.
We currently believe that cash flows from operating activities, together with liquidity available under our Credit Agreement, local working capital facilities, and cash balances, will be sufficient to fund currently anticipated working capital needs and spending requirements for at least the foreseeable future.
Cash provided by operating activities totaled $955.8 million in 2025, compared to $968.3 million in 2024 and $965.9 million in 2023. The decrease in 2025 includes higher cash incentive payments of approximately $36 million related to prior year performance, offset in part by lower tax payments.
Capital expenditures are made primarily for investments in information systems and technology, machinery, equipment, and the purchase and expansion of facilities. Our capital expenditures totaled $107.1 million in 2025, $103.9 million in 2024, and $105.3 million in 2023. Capital expenditures in 2026
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are expected to approximate $130 million subject to business and economic conditions and foreign currency fluctuations.
We continue to explore potential acquisitions. In connection with any acquisition, we may incur additional indebtedness. During 2025, we made several acquisitions related to our North America distribution, an extension of our life science equipment offering, and other acquisitions. The cumulative initial cash payments were $93.8 million and we may be required to pay additional consideration of up to $35.5 million. Goodwill recorded in connection with the acquisitions totaled $56.0 million. We also recorded $38.9 million of identified intangibles primarily pertaining to customer relationships in connection with the acquisitions, which will be amortized on a straight-line basis over 5 to 10 years. For additional information related to these acquisitions, refer to Note 4 to the consolidated financial statements. In 2024 and 2023, we incurred acquisition payments of $10.1 million and $5.8 million, respectively. In addition, we made the final contingent consideration payment of $10.0 million relating to the PendoTECH acquisition in 2023, of which $5.6 million is included in financing activities for the amount accrued at the acquisition date and $4.4 million is included in operating activities for the amount not accrued at the acquisition date on the Consolidated Statement of Cash Flows in accordance with U.S. GAAP.
Cash flows used in financing activities during 2025 primarily comprised share repurchases. In accordance with our share repurchase program, we spent $800 million in 2025 and $850 million and $900 million in 2024 and 2023, respectively, on the repurchase of 646,608 shares, 645,139 shares, and 691,913 shares, respectively. Our share repurchase program does not obligate us to acquire any specific number of shares; however, in 2026, we intend to spend in the range of $825 million to $875 million on the repurchase of shares, subject to business and economic conditions.
On July 4, 2025, the United States enacted new tax legislation into law. We reflected the impact of the legislation, which was not material, in 2025. We do not expect the legislation to have a material impact on our projected annual income tax rate or consolidated financial statements.
We plan to continue to repatriate earnings from China, Switzerland, Germany, the United Kingdom, and certain other countries in future years and expect the only additional cost associated with the repatriation of such foreign earnings will be withholding taxes. All other undistributed earnings are considered to be permanently reinvested. We believe the ongoing tax impact associated with repatriating our undistributed foreign earnings will not have a material effect on our liquidity.
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Senior Notes and Credit Facility Agreement
Our short-term borrowings and long-term debt consisted of the following at December 31, 2025:
U.S. Dollar Other PrincipalTrading Currencies Total
Senior Notes debt issuance costs, net (2,076) (1,757) (3,833)
(1) See Note 6 and Note 7 for additional disclosures on the financial instruments associated with the Credit Agreement.
(2) The benchmark interest rate is determined by the borrowing currency. The benchmark rates by borrowing currency are as follows: SOFR for U.S. dollars (plus a 10 basis points spread adjustment), SARON for Swiss franc, EURIBOR for euro and SONIA for Great British pounds.
As of December 31, 2025, approximately $536.3 million of additional borrowings were available under our Credit Agreement and we maintained $66.9 million of cash and cash equivalents. At December 31, 2025, the interest payments associated with 71% of our debt are fixed obligations. We expect to make interest payments of approximately $71.0 million during 2026 associated with our debt outstanding as of December 31, 2025.
Changes in exchange rates between the currencies in which we generate cash flow and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates. Further, we do not have any downgrade triggers from rating agencies that would accelerate the maturity dates of our debt. We were in compliance with our debt covenants as of December 31, 2025.
Senior Notes
The Senior Notes listed above are senior unsecured obligations and interest is payable semi-annually. The Senior Notes each contain customary affirmative and negative covenants as further described in Note 10 to our consolidated financial statements.
In January 2025, we entered into an agreement to issue and sell EUR 100 million 10 1/2-year Senior Notes with a fixed interest rate of 3.80% (3.8% Euro Senior Notes) in a private placement, which will
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mature in July 2035. We used the proceeds from the sale of the notes to refinance existing indebtedness and for other general corporate purposes.
In December 2022, we entered into an agreement to issue and sell $150 million 10-year Senior Notes in a private placement. We issued $150 million with a fixed interest rate of 5.45% (5.45% Senior Notes) in March 2023, which will mature in March 2033. We used the proceeds from the sale of the notes to refinance existing indebtedness and for other general corporate purposes.
Credit Agreement
On May 30, 2024, we entered into a $1.35 billion Credit Agreement (the Credit Agreement), which amended our $1.25 billion Amended and Restated Credit Agreement (the Prior Credit Agreement), which is further described in Note 10 to our consolidated financial statements.
Other Local Arrangements
In April 2018, two of our non-U.S. pension plans issued loans totaling $48 million (Swiss franc 38 million) to a wholly-owned subsidiary of the Company. The loans have the same terms and conditions, which include an interest rate of SARON plus 87.5 basis points. The loans were renewed for one year in April 2025.
Share Repurchase Program
In November 2025, the Company’s Board of Directors authorized an additional $2.75 billion to the share repurchase program, which had $3.7 billion of remaining availability as of December 31, 2025. The share repurchases are expected to be funded from cash generated from operating activities, borrowings, and cash balances. Repurchases will be made through open market transactions, and the amount and timing of purchases will depend on business and market conditions, the stock price, trading restrictions, the level of acquisition activity, and other factors.
We have purchased 33.0 million common shares since the inception of the program in 2004 through December 31, 2025, at a total cost of $10.6 billion and average price per share of $320.91. During the years ended December 31, 2025 and 2024, we spent $800 million and $850 million on the repurchase of 646,608 shares and 645,139 shares at an average price per share of $1,237.18 and $1,317.52, respectively. We reissued 56,500 shares and 68,428 shares held in treasury for the exercise of stock options and restricted stock units during 2025 and 2024, respectively. In addition, we incurred $7.4 million and $7.8 million of excise tax during the years ended December 31, 2025 and 2024, respectively, related to the Inflation Reduction Act which is reflected as a reduction in shareholders' equity in our consolidated financial statements.
Effect of Currency on Results of Operations
Our earnings are affected by changing exchange rates. We are particularly sensitive to changes in the exchange rates between the Swiss franc, euro, Chinese renminbi, and U.S. dollar. We have more Swiss franc expenses than we do Swiss franc sales because we develop and manufacture products in Switzerland that we sell globally and have a number of corporate functions located in Switzerland. When the Swiss franc strengthens against our other trading currencies, particularly the U.S. dollar and euro, our earnings go down. We also have significantly more sales in the euro than we do expenses. When the euro weakens against the U.S. dollar and Swiss franc, our earnings also go down. We estimate a 1% strengthening of the Swiss franc against the euro would reduce our earnings before tax by approximately $2.8 million to $3.1 million annually.
We also conduct business throughout the world, including Asia Pacific, the United Kingdom, Eastern Europe, Latin America, and Canada. Fluctuations in these currency exchange rates against the U.S. dollar
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can also affect our operating results. The most significant of these currency exposures is the Chinese renminbi. The impact on our earnings before tax of the Chinese renminbi weakening 1% against the U.S. dollar is a reduction of approximately $2.2 million to $2.6 million annually.
In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar, the Swiss franc, and euro. Based on our outstanding debt at December 31, 2025, we estimate that a 5% weakening of the U.S. dollar against the currencies in which our debt is denominated would result in an increase of $53.7 million in the reported U.S. dollar value of our debt.
Taxes
We are subject to taxation in many jurisdictions throughout the world. Our effective tax rate and tax liability will be affected by a number of factors, such as changes in law, the amount of taxable income in particular jurisdictions, the tax rates in such jurisdictions, tax treaties between jurisdictions, the extent to which we transfer funds between jurisdictions, and earnings repatriations between jurisdictions. Generally, the tax liability for each taxpayer within the Mettler-Toledo International Inc. group of companies is determined either (i) on a non-consolidated/non-combined basis or (ii) on a consolidated/combined basis only with other eligible entities subject to tax in the same jurisdiction, in either case without regard to the taxable losses of non-consolidated/non-combined affiliated legal entities.
Environmental Matters
We are subject to environmental laws and regulations in the jurisdictions in which we operate. We own or lease a number of properties and manufacturing facilities around the world. Like many of our competitors, we have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations.
In addition, certain of our present and former facilities have or had been in operation for many decades and, over such time, some of these facilities may have used substances or generated and disposed of wastes which are or may be considered hazardous. It is possible that these sites, as well as disposal sites owned by third parties to which we have sent wastes, may in the future be identified and become the subject of remediation. Although we believe that we are in substantial compliance with applicable environmental requirements and, to date, we have not incurred material expenditures in connection with environmental matters, it is possible that we could become subject to additional environmental liabilities in the future that could have a material adverse effect on our financial condition, results of operations, or cash flows.
Inflation
Global inflation has recently moderated after rising sharply in 2022 and 2021 related to the COVID-19 economic recovery and associated disruptions in global demand, supply chains/logistics, and labor markets, the war in Ukraine and related significant increase in energy costs and the conflict in the Middle East. Inflation can affect the costs of goods and services that we use, including raw materials to manufacture our products, as well as transportation and logistical costs and other external costs and services. Inflation can also affect labor costs which are a significant element of our overall cost structure. Inflation can also lead to increased interest rates as country monetary policies combat inflation. This can result in reduced economic growth and recessionary conditions, as well as higher borrowing costs. Inflation presents several risks to our business as further described on page 21 in the Risk Factors section of this Form 10-K, and these inflationary conditions could have a greater impact on our operating results in future years.
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Quantitative and Qualitative Disclosures about Market Risk
We have only limited involvement with derivative financial instruments and do not use them for trading purposes.
We have entered into certain cross currency swap agreements. The fair value of these contracts was a net liability of $32.2 million at December 31, 2025. Based on our agreements outstanding at December 31, 2025, a 100-basis-point change in interest rates and foreign currency exchange rates would result in a change in the net aggregate market value of these instruments by approximately $6.4 million. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue, income taxes, inventories, goodwill and intangibles, leases, and pensions and other post-retirement benefits. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting estimates affect our more significant judgments used in the preparation of our consolidated financial statements. For a detailed discussion on the application of these and other accounting policies, see Note 2 to our consolidated financial statements.
Income taxes
Income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s assessment of estimated future taxes to be paid on items in the consolidated financial statements. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. The valuation allowance of $68.1 million as of December 31, 2025 is based on management’s estimates of future taxable income and application of relevant income tax law. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to the valuation allowance would increase income or equity in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of the deferred tax asset in the future, an adjustment to the valuation allowance would be charged to income in the period such determination was made.
We plan to repatriate earnings from China, Switzerland, Germany, the United Kingdom, and certain other countries in future years and expect the additional tax costs associated with the repatriation of such earnings will be non-U.S. withholding taxes, certain state taxes, and U.S. taxes on currency gains, if any. All other undistributed earnings are considered permanently reinvested.
The significant assumptions and estimates described in the preceding paragraphs are important contributors to our ultimate effective tax rate for each year in addition to our income mix from geographical regions. If any of our assumptions or estimates were to change, or should our income mix from our geographical regions change, our effective tax rate could be materially affected. Based on earnings before taxes of $1.0 billion for the year ended December 31, 2025, each increase of $10.5 million in tax expense would increase our effective tax rate by 1%.
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Employee benefit plans
The net periodic pension cost for 2025 and projected benefit obligation as of December 31, 2025 were $1.6 million and $99.1 million, respectively, for our U.S. pension plan. The net periodic cost for 2025 and projected benefit obligation as of December 31, 2025 were $5.2 million and $1.0 billion, respectively, for our international pension plans. The expected post-retirement benefit obligation as of December 31, 2025 for our U.S. post-retirement medical benefit plan was $0.1 million.
Pension and post-retirement benefit plan expense and obligations are developed from assumptions utilized in actuarial valuations. The most significant of these assumptions include the discount rate and expected return on plan assets. In accordance with U.S. GAAP, actual results that differ from the assumptions are accumulated and deferred over future periods. While management believes the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our plan obligations and future expense.
The expected rates of return on the various defined benefit pension plans’ assets are based on the asset allocation of each plan and the long-term projected return of those assets, which represent a diversified mix of U.S. and international corporate equities and government and corporate debt securities. In 2002, we froze our U.S. defined benefit pension plan and discontinued our retiree medical program for certain current and all future employees. Consequently, no significant future service costs will be incurred on these plans. For 2025, the weighted average return on assets assumption was 6.75% for the U.S. plan and 4.07% for the international plans. A change in the rate of return of 1% would impact annual benefit plan expense by approximately $10.4 million after tax.
The discount rates for defined benefit and post-retirement plans are set by benchmarking against high-quality corporate bonds. For 2025, the weighted average discount rate assumption was 5.0% for the U.S. plan and 1.8% for the international plans, representing a weighted average of local rates in countries where such plans exist. A change in the discount rate of 1% would impact annual benefit plan expense by approximately $8.9 million after tax.
Goodwill and other intangible assets
As of December 31, 2025, our consolidated balance sheet included goodwill of $739.2 million and other intangible assets of $278.9 million.
Our business acquisitions typically result in goodwill and other intangible assets, which affect the amount of future period amortization expense and possible impairment expense. The determination of the value of such intangible assets requires management to make estimates and assumptions that affect our consolidated financial statements.
In accordance with U.S. GAAP, our goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluations of goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.
If we are unable to conclude whether the goodwill or indefinite-lived intangible asset is not impaired after considering the totality of events and circumstances during our qualitative assessment, we perform a quantitative impairment test by estimating the fair value of the respective reporting unit or indefinite-lived intangible asset and comparing the fair value to the carrying amount of the goodwill asset. If the carrying amount of the reporting unit or indefinite-lived intangible asset exceeds its fair value, an impairment charge equal to the difference is recognized.
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Both the qualitative and quantitative evaluations consider operating results, business plans, economic conditions, and market data, among other factors. There are inherent uncertainties related to these factors and our judgment in applying them to the impairment analyses. Our assessments to date have indicated that there has been no impairment of these assets.
Should any of these estimates or assumptions change, or should we incur lower than expected operating performance or cash flows, including from a prolonged economic slowdown, we may experience a triggering event that requires a new fair value assessment for our reporting units, possibly prior to the required annual assessment. These types of events and resulting analysis could result in impairment charges for goodwill and other indefinite-lived intangible assets if the fair value estimate declines below the carrying value.
Our amortization expense related to intangible assets with finite lives may materially change should our estimates of their useful lives change.
New Accounting Pronouncements
See Note 2 to the consolidated financial statements.
Item 7A.Quantitative and Qualitative Disclosures about Market Risk
Discussion of this item is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 8.Financial Statements and Supplementary Data
The financial statements required by this item are set forth starting on page F-1 and the related financial schedule is set forth on page S-1.
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.Controls and Procedures
Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that these disclosure controls and procedures are effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
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Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on our assessment, we concluded that, as of December 31, 2025, the Company’s internal control over financial reporting is effective.
PricewaterhouseCoopers LLP, an independent registered public accounting firm that audited the financial statements included in this Report on Form 10-K, has issued their integrated audit report, which covers our internal control over financial reporting, which appears on page F-2.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.Other Information
None.
Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III
Item 10.Directors, Executive Officers, and Corporate Governance
The executive officers of the Company are set forth below. Officers are appointed by the Board of Directors and serve at the discretion of the Board.
Name Age Position
Patrick Kaltenbach 62 President and Chief Executive Officer
Susan Graham-Bryce 50 Chief Human Resources Officer
Gerhard Keller 58 Head of Process Analytics
Shawn P. Vadala 57 Chief Financial Officer
Oliver Wittorf 50 Head of Product Inspection, Retail, and Global Supply Chain
Richard Wong 61 Head of Asia/Pacific
Patrick Kaltenbach joined the Company in January 2021 and assumed the role of Chief Executive Officer beginning April 1, 2021. Prior to joining the Company, he served as the President of the Life Sciences Segment at Becton Dickinson since 2018. Mr. Kaltenbach was President of Life Sciences and Applied Markets Group at Agilent from 2014 to 2018. He held wide-ranging and increasing leadership roles at Agilent and its predecessor company, Hewlett Packard, since joining in 1991.
Susan Graham-Bryce joined the company in 2025 as Chief Human Resources Officer. Prior to joining the company, she served as Chief Talent Officer at GE HealthCare. Ms. Graham-Bryce has held a variety of global HR leadership roles at GE across multiple industries and geographies, including assignments in Germany, France, the United Kingdom, Kenya, and the United States.
Gerhard Keller joined the Company in 1991 and has been Head of Process Analytics since July 2018 and Head of Pipettes since July 2013. He previously was Head of Region East Asia/Pacific and also served in various Sales and Marketing leadership functions in Europe and Asia Pacific. Prior to joining the Company, he worked in Quality Control at Sandoz, now Novartis, in Switzerland.
Shawn P. Vadala joined the Company in 1997 and has been Chief Financial Officer since January 2014 and also responsible for the Company’s Pricing program since 2008. Mr. Vadala previously held various senior financial positions at the Company’s Columbus, Ohio and Greifensee, Switzerland offices and was also responsible for Business Intelligence from 2010 to 2018. Prior to joining the Company, he worked in the Boston and Zurich, Switzerland offices of PricewaterhouseCoopers.
Oliver Wittorf joined the Company in 2004 and held various leadership positions in Operations, Supply Chain Management and IT in Switzerland, the US, and China. He assumed the role of Head of Global Supply Chain Management in 2010 with additional responsibility for the Retail Division in 2020 and the Product Inspection Division in 2026, and was also responsible for Information Technology from 2017 to 2025. Prior to joining the Company, Mr. Wittorf worked for a corporate finance advisory firm in Switzerland.
Richard Wong has been Head of Asia/Pacific since 2009. Prior to joining the Company in 2008, he held various regional management positions with Agilent Technologies from 1998 to 2008 including Life Sciences Field Operations for North Asia based in Beijing and later in Tokyo. He started his career with Hewlett Packard in 1991 and held positions of increasing responsibilities in Sales and Marketing and Finance.
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Certifications
Our Chief Executive Officer and Chief Financial Officer provide certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 in connection with our quarterly and annual financial statement filings with the Securities and Exchange Commission. The certifications relating to this annual report are attached as Exhibits 31.1 and 31.2.
The remaining information called for by this item is incorporated by reference from the discussion in the sections “Proposal One: Election of Directors,” “Board of Directors — General Information,” “Board of Directors — Operation,” “Insider Trading Policy and Procedures,” and “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance” in the 2026 Proxy Statement.
Item 11.Executive Compensation
The information appearing in the sections captioned “Board of Directors — General Information —Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” and “Additional Information — Compensation Committee Interlocks and Insider Participation” in the 2026 Proxy Statement is incorporated by reference herein.
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information appearing in the section “Share Ownership” in the 2026 Proxy Statement is incorporated by reference herein. Information appearing in “Securities Authorized for Issuance under Equity Compensation Plans as of December 31, 2025” is included within Note 12 to the financial statements.
Item 13.Certain Relationships and Related Transactions and Director Independence
Certain Relationships and Related Transactions — None.
Director Independence — The information in the section “Board of Directors — General Information — Independence of the Board” in the 2026 Proxy Statement is incorporated by reference herein.
Item 14.Principal Accounting Fees and Services
Information appearing in the section “Audit Committee Report” in the 2026 Proxy Statement is hereby incorporated by reference.
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PART IV
Item 15.Exhibits and Financial Statement Schedules
(a) Exhibits, Financial Statements, and Schedules:
1. Financial Statements. See Index to consolidated financial statements included on page F-1.
2. Report of Independent Registered Public Accounting Firm (PCAOB ID 238). See page F-2.
3. Financial Statement Schedule. See Schedule II, which is included on page S-1.
4. List of Exhibits. See Exhibit Index included on page E-1.
Item 16.Form 10-K Summary
None.
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EXHIBIT INDEX
Exhibit
No. Description
3.1 Amended and Restated Certificate of Incorporation of the Company(1)
4.4* Description of Capital Stock
E-1
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Exhibit
No. Description
10.23† Form of Restricted Stock Unit Agreement(23)
10.24† Form of Performance Share Unit Agreement(19)
10.26† Form of Stock Option Agreement Directors(23)
10.27† Form of Stock Option Agreement(23)
10.29† Employee Director Share Award Agreement(23)
10.58† Form of Nonqualified Performance Stock Option Agreement(4)
19.1 Insider Trading Policy(23)
21* Subsidiaries of the Company
23.1* Consent of PricewaterhouseCoopers LLP
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Exhibit
No. Description
32* Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL Document)
_____________________________________
(1)Incorporated by reference to the Company’s Report on Form 10-K dated March 13, 1998
(2)Incorporated by reference to the Company’s Report on Form 8-K dated June 4, 2024
(3)Incorporated by reference to the Company’s Report on Form 10-K dated February 2, 2017
(4)Incorporated by reference to the Company’s Report on Form 10-K date February 9, 2024
(5)Incorporated by reference to the Company’s Report on Form 8-K dated July 2, 2014
(6)Incorporated by reference to the Company’s Report on Form 8-K dated March 31, 2015
(7)Incorporated by reference to the Company’s Report on Form 8-K dated April 18, 2019
(8)Incorporated by reference to the Company’s Report on Form 8-K dated November 6, 2019
(9)Incorporated by reference to the Company’s Report on Form 8-K dated December 16, 2020
(10)Incorporated by reference to the Company’s Report on Form 8-K dated May 20, 2021
(11)Incorporated by reference to the Company’s Report on Form 8-K dated December 29, 2021
(12)Incorporated by reference to the Company’s Report on Form 10-K dated February 15, 2008
(13)Incorporated by reference to the Company’s Registration Statement on Form S-8 dated July 30, 2021 (Reg. No. 333-258294)
(14)Incorporated by reference to the Company’s Report on Form 10-K dated February 16, 2011
(15)Incorporated by reference to the Company’s Report on Form 10-Q dated July 27, 2018
(16)Incorporated by reference to the Company’s Report on Form 8-K dated April 24, 2015
(17)Incorporated by reference to the Company's Report on Form 8-K dated November 8, 2022
(18)Incorporated by reference to the Company's Report on Form 8-K dated December 23, 2022
(19)Incorporated by reference to the Company’s Report on Form 10-K dated February 11, 2022
(20)Incorporated by reference to the Company’s Report on Form 10-K dated February 10, 2023
(21)Incorporated by reference to the Company's Report on Form 8-K dated January 9, 2025
(22)Incorporated by reference to the Company's Report on Form 8-K dated October 21, 2025
(23)Incorporated by reference to the Company’s Report on Form 10-K dated February 7, 2025
* Filed herewith
† Management contract or compensatory arrangement
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SIGNATURES
Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Mettler-Toledo International Inc.
(Registrant)
Date: February 6, 2026
By: /s/Patrick Kaltenbach
Patrick Kaltenbach
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant as of the date set out above and in the capacities indicated.
Signature Title
/s/Patrick Kaltenbach President and Chief Executive Officer
Patrick Kaltenbach
/s/Shawn P. Vadala Chief Financial Officer
Shawn P. Vadala
/s/Roland Diggelmann Director
Roland Diggelmann
/s/Domitille Doat-Le Bigot Director
Domitille Doat-Le Bigot
/s/Elisha Finney Director
Elisha Finney
/s/Pablo Perversi Director
Pablo Perversi
/s/Michael A. Kelly Director
Michael A. Kelly
/s/Thomas P. Salice Director
Thomas P. Salice
/s/Brian Shepherd Director
Brian Shepherd
/s/Michael J. Tokich Director
Michael J. Tokich
/s/Wolfgang Wienand Director
Wolfgang Wienand
/s/Ingrid Zhang Director
Ingrid Zhang
E-4
METTLER-TOLEDO INTERNATIONAL INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-6
Notes to the Consolidated Financial Statements F-9
F-1
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Mettler-Toledo International Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Mettler-Toledo International Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2025 appearing on page S-1 (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
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with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Product Revenue Recognition
As described in Note 2 to the consolidated financial statements, product revenue is recognized from contracts with customers when a customer has obtained control of a product. The Company considers control to have transferred based upon shipping terms. As described in Note 3, for the year ended December 31, 2025, the Company’s net sales were $4.0 billion, of which $3.0 billion relate to product revenue.
The principal consideration for our determination that performing procedures relating to product revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to product revenue recognition.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the product revenue recognition process. These procedures also included, among others, testing the appropriateness of product revenue recognized for a sample of product revenue transactions by obtaining and inspecting evidence of arrangement, evidence of products delivered, and, where applicable, consideration received in exchange for those products.
/s/PricewaterhouseCoopers LLP
Columbus, Ohio
February 6, 2026
We have served as the Company’s auditor since 2005.
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METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31
(In thousands, except share data)
Net sales
Cost of sales
Basic earnings per common share:
Diluted earnings per common share:
The accompanying notes are an integral part of these consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31
(In thousands, except share data)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on cash flow hedging arrangements:
Defined benefit pension and post-retirement plans:
Plan amendments and prior service cost 663 (70) (64)
Total other comprehensive income (loss), net of tax (13,299) (26,043) (92,582)
The accompanying notes are an integral part of these consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
As of December 31
(In thousands, except share data)
ASSETS
Current assets:
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debt 63,931 182,623
Commitments and contingencies (Note 17)
Shareholders’ equity:
Preferred stock, $0.01 par value per share; authorized 10,000,000 shares — —
Accumulated other comprehensive income (loss) (359,157) (345,858)
The accompanying notes are an integral part of these consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the years ended December 31
(In thousands, except share data)
Shares Amount
Excise tax on net repurchases of common stock — — — (8,089) — — (8,089)
Other comprehensive income (loss), net of tax — — — — — (92,582) (92,582)
Excise tax on net repurchases of common stock — — — (7,750) — — (7,750)
Other comprehensive income (loss), net of tax — — — — — (26,043) (26,043)
Excise tax on net repurchases of common stock — — — (7,430) — — (7,430)
Other comprehensive income (loss), net of tax — — — — — (13,299) (13,299)
The accompanying notes are an integral part of these consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31
(In thousands)
Cash flows from operating activities:
Non-cash discrete current tax benefit (13,685) (22,982) —
Increase (decrease) in cash resulting from changes in:
Cash flows from investing activities:
Proceeds from sale of property, plant, and equipment — 1,631 835
Proceeds from government grant 6,170 — 6,094
Cash flows from financing activities:
Payments of excise tax on repurchases of common stock (7,750) (8,089) —
Acquisition contingent consideration paid — — (7,767)
Effect of exchange rate changes on cash and cash equivalents 801 (3,352) (754)
Net increase (decrease) in cash and cash equivalents 7,526 (10,445) (26,159)
Cash and cash equivalents:
Supplemental disclosures of cash flow information:
Cash paid during the year for:
The accompanying notes are an integral part of these consolidated financial statements.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data, unless otherwise stated)
1.BUSINESS DESCRIPTION AND BASIS OF PRESENTATION
Mettler-Toledo International Inc. (Mettler-Toledo or the Company) is a leading global supplier of precision instruments and services. The Company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics, and food retailing applications. The Company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the Company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The Company’s primary manufacturing facilities are located in China, Switzerland, the United States, Germany, the United Kingdom, and Mexico. The Company’s principal executive offices are located in Columbus, Ohio and Greifensee, Switzerland.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include all entities in which the Company has control, which are its wholly owned subsidiaries.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates due to uncertainty around the ongoing developments related to global trade disputes/tariffs, governmental policies, the geopolitical environment, the conflict in Ukraine and continuing instability in the Middle East, as well as other factors. A discussion of the Company's significant accounting policies is included in the Notes to the Consolidated Financial Statements included within this filing.
All intercompany transactions and balances have been eliminated.
Certain prior year items have been updated to conform with current year presentation.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with original maturity dates of three months or less. The carrying value of these cash equivalents approximates fair value.
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for expected credit losses represents the Company’s best estimate based on current and historical information and reasonable and supportable forecasts of future events and circumstances.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor, and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, expected future orders, and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
Long-Lived Assets
a)Property, Plant, and Equipment
Property, plant, and equipment are stated at cost less accumulated depreciation. Repair and maintenance costs are charged to expense as incurred. The Company capitalizes certain direct costs related to the acquisition and development of internal-use computer software. Externally purchased software is capitalized when the Company obtains legal ownership and is amortized over its useful life ranging from three to five years. Internally developed software costs for internal use are capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs associated with internal-use software are amortized on a straight-line basis over 10 years. Fully depreciated assets other than capitalized internally developed software are retained in property, plant, and equipment and accumulated depreciation accounts until disposal.
Depreciation and amortization are charged on a straight-line basis over the estimated useful lives of the assets as follows:
Buildings and improvements 15 to 50 years
Machinery and equipment 3 to 12 years
Computer software 3 to 10 years
Leasehold improvements Shorter of useful life or lease term
b)Goodwill and Other Intangible Assets
Goodwill, representing the excess of purchase price over the fair value of the net assets of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluations of goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.
If the Company is unable to conclude whether the goodwill or indefinite-lived intangible asset is not impaired after considering the totality of events and circumstances during its qualitative assessment, the Company performs a quantitative assessment by estimating the fair value of the respective reporting unit or indefinite-lived intangible asset and comparing the fair value to the carrying amount. If the carrying amount of the reporting unit or indefinite-lived intangible asset exceeds its fair value, an impairment charge equal to the difference is recognized.
Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period to be benefited. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 - Business Combinations and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 - Intangible - Goodwill and Other and ASC 360 - Property, Plant, and Equipment.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
Accounting for Impairment of Long-Lived Assets
The Company assesses the need to record impairment losses on long-lived assets (asset group) with finite lives when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. An impairment loss would be recognized when future estimated undiscounted cash flows expected to result from use and eventually disposition of that asset (asset group) are less than the asset’s carrying value, with the loss measured as the difference between carrying value and estimated fair value.
Taxation
The Company files tax returns in each jurisdiction in which it operates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in the respective jurisdictions in which the Company operates. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowance is based on management’s estimates of future taxable income and application of relevant income tax law.
Deferred taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends. Deferred taxes are provided when the Company no longer considers subsidiary earnings to be permanently invested, such as in situations where the Company’s subsidiaries plan to make future dividend distributions.
In accordance with the Tax Cuts and Jobs Act, the Company treats taxes due on future Global Intangible Low-Taxed Income (GILTI) inclusions in U.S. taxable income as a current period expense when incurred.
The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of income tax expense within its consolidated statement of operations.
Currency Translation and Transactions
The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The functional currency for the Company’s operations is generally the applicable local currency. Accordingly, the assets and liabilities of companies whose functional currency is other than the U.S. dollar are included in the consolidated financial statements by translating the assets and liabilities into the reporting currency at the exchange rates applicable at the end of the reporting period. The statements of operations and cash flows of such non-U.S. dollar functional currency operations are translated at the monthly weighted average exchange rates during the year. Translation gains or losses are accumulated in other comprehensive income (loss) in the consolidated statements of shareholders’ equity. Transaction gains and losses are included as a component of net earnings or in certain circumstances as a component of other comprehensive income (loss) where the underlying item is considered a hedge of a net investment or relates to intercompany notes that are long term in nature.
Revenue Recognition
Product revenue is recognized from contracts with customers when a customer has obtained control of a product. The Company considers control to have transferred based upon shipping terms. To the extent the Company’s contracts have a separate performance obligation, revenue related to any post-shipment performance obligation is deferred until completed. Shipping and handling costs charged to customers are
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
included in total net sales and the associated expense is a component of cost of sales. Certain products are also sold through indirect distribution channels whereby the distributor assumes any further obligations to the end-customer. Revenue is recognized on these distributor arrangements upon transfer of control to the distributor. Contracts do not contain variable pricing arrangements that are retrospective, except for rebate programs. Rebates are estimated based on expected sales volumes and offset against revenue at the time such revenue is recognized. The Company generally maintains the right to accept or reject a product return in its terms and conditions and also maintains appropriate accruals for outstanding credits. The related provisions for estimated returns and rebates are immaterial to the consolidated financial statements.
Certain of the Company’s product arrangements include separate performance obligations, primarily related to installation. Such performance obligations are accounted for separately when the deliverables have stand-alone value and the satisfaction of the undelivered performance obligations is probable and within the Company’s control. The allocation of revenue between the performance obligations is based on the observable stand-alone selling prices at the time of the sale in accordance with a number of factors including service technician billing rates, time to install, and geographic location.
Software is generally not considered a distinct performance obligation with the exception of a limited number of small software applications. The Company primarily sells software products with the related hardware instrument as the software is embedded in the product. The Company’s products typically require no significant production, modification, or customization of the hardware or software that is essential to the functionality of the products.
Service revenue not under contract is recognized upon the completion of the service performed. Revenue from spare parts sold on a stand-alone basis is recognized when control is transferred to the customer, which is generally at the time of shipment or delivery. Revenue from service contracts is recognized ratably over the contract period using a time-based method. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification, and preventative maintenance on a customer’s pre-defined equipment over the contract period.
Leases
The Company considers an arrangement a lease if the arrangement transfers the right to control the use of an identified asset in exchange for consideration.
Lease right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make payments arising from the lease agreement. These assets and liabilities are recognized at the commencement of the lease based upon the present value of the lease payments over the lease term. Lease payments include both lease and non-lease components for items or activities that transfer a good or service. Vehicle lease and non-lease components are separately accounted for based on stand-alone value. Real estate lease and non-lease components are accounted for as a single component. Operating lease right-of-use assets include initial direct costs, advanced lease payments, and lease incentives.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
The lease term reflects the noncancellable period of the lease together with periods covered by an option to extend or terminate the lease when management is reasonably certain that it will exercise such option. The Company applies its incremental borrowing rate at the lease commencement date in determining the present value of lease payments as the information necessary to determine the rate implicit in the lease is not readily available. The incremental borrowing rate reflects similar terms by geographic location to the underlying leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease expense includes amortization of the right-of-use asset and interest on the lease liability, both recognized over the lease term. Variable lease payments consist of non-lease services related to the lease. Variable lease payments are excluded from the right-of-use asset and lease liabilities and are expensed as incurred. Short-term leases are less than one year without purchase or renewal options that are reasonably certain to be exercised and are recognized on a straight-line basis over the lease term. The right-of-use asset is tested for impairment in accordance with ASC 360.
Research and Development
Research and development costs primarily consist of salaries, consulting, and other costs. The Company expenses these costs as incurred.
Restructuring Charges
Restructuring charges include costs associated with exit and disposal activities including employee termination benefits, contract termination, and other costs associated with various cost saving initiatives undertaken by the Company.
In situations where contractual termination benefits exist, the Company records accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. All other employee termination arrangements are recognized and measured at their fair value at the communication date unless the employee is required to render additional service beyond the legal notification period, in which case the liability is recognized ratably over the future service period.
Earnings per Common Share
In accordance with the treasury stock method, the Company has included 61,519, 98,803, and 123,406 common equivalent shares in the calculation of diluted weighted average number of common shares for the years ended December 31, 2025, 2024, and 2023, respectively, relating to outstanding stock options and restricted stock units.
Outstanding options and restricted stock units to purchase or receive 72,637, 61,040, and 54,840 shares of common stock for the years ended December 31, 2025, 2024, and 2023, respectively, have been excluded from the calculation of diluted weighted average number of common and common equivalent shares as such options and restricted stock units would be anti-dilutive.
Equity-Based Compensation
All share-based compensation arrangements granted to employees, including stock option grants, are recognized in the consolidated statement of operations based on the grant-date fair value of the award over the period during which an employee is required to provide service in exchange for the award.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
Derivative Financial Instruments
The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. As described more fully in Note 6, the Company enters into certain interest rate and cross currency swap agreements in order to manage its exposure to changes in interest rates. These agreements limit the Company's exposure on interest rate fluctuations on the underlying debt. The Company also enters into foreign currency forward exchange contracts to economically hedge certain short-term intercompany balances involving its international businesses. Such contracts limit the Company’s exposure to currency fluctuations on the underlying hedged item. These contracts are adjusted to fair market value as of each balance sheet date, with the resulting changes in fair value being recognized in other charges (income), consistent with the underlying hedged item.
Fair Value Measurements
The Company measures or monitors certain assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities in which fair value is the primary basis of accounting, mainly derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the fair value hierarchy established under U.S. GAAP and when possible looks to active and observable markets to price identical assets and liabilities. If identical assets and liabilities are not traded in active markets, the Company looks to observable market data for similar assets and liabilities.
Business Combinations and Asset Acquisitions
The Company accounts for business acquisitions under the accounting standards for business combinations. The results of each acquisition are included in the Company’s consolidated results as of the acquisition date. The purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values and any consideration in excess of the net assets acquired is recognized as goodwill. Acquisition transaction costs are expensed when incurred.
In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the expected contingent payments as of the acquisition date. Subsequent changes in the fair value of the contingent consideration are recorded to other charges (income), net.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07: Improvements to Reportable Segment Disclosures, which requires incremental disclosures about a public entity's reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The Company adopted these annual disclosure requirements on a retrospective basis in 2024. See Note 18 for the required reportable segments disclosures.
In December 2023, the FASB issued ASU 2023-09: Improvements to Income Tax Disclosures, which enhances income tax disclosures, especially related to the rate reconciliation and income taxes paid
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
information. The Company adopted these annual disclosure requirements on a prospective basis in 2025. See Note 14 for the required income tax disclosures.
In November 2024, the FASB issued ASU 2024-03: Disaggregation of Income Statement Expenses, which requires disclosures about the nature of expenses presented on the face of the income statement. The Company will adopt the annual disclosure requirements in 2027 and is currently evaluating the impact of this guidance on the consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06: Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs. The guidance is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company has not determined when and how it will adopt this guidance and is currently evaluating the impact on the consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12: Codification Improvements, which updates U.S. GAAP for a broad range of topics arising from technical corrections, unintended application of the codification, clarifications, and other minor improvements. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the potential impact, if any, on the consolidated financial statements.
3.REVENUE
The Company disaggregates revenue from contracts with customers by product, service, timing of revenue recognition, and geography. A summary by the Company’s reportable segments follows for the years ended December 31:
Service Revenue:
Service Revenue:
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
Service Revenue:
The Company's global revenue mix by product category for the year ended December 31, 2025 is laboratory (56% of sales), industrial (39% of sales), and retail (5% of sales). The Company’s product revenue by reportable segment is proportionately similar to the Company’s global mix with the exception of the Company’s Swiss Operations, which is largely comprised of laboratory products, and the Company’s Chinese Operations, which has a slightly higher percentage of industrial products. A breakdown of the Company’s sales by product category for the year ended December 31 follows:
A breakdown of net sales to external customers by geographic customer destination, net for the year ended December 31 follows:
The payment terms in the Company’s contracts with customers do not exceed one year and therefore contracts do not contain a significant financing component. In most cases, after appropriate credit evaluations, payments are due in arrears and are recognized as receivables. Unbilled revenue is recorded when performance obligations have been satisfied, but not yet billed to the customer. Unbilled revenue as of December 31, 2025 and 2024 was $32.3 million and $32.6 million, respectively, and is included within accounts receivable. Deferred revenue and customer prepayments are recorded when cash payments are received or due in advance of the performance obligation being satisfied. Deferred revenue primarily includes prepaid service contracts, as well as deferred installation.
Changes in the components of deferred revenue and customer prepayments during the period are as follows:
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
The Company generally expenses sales commissions when incurred because the contract period is one year or less. These costs are recorded within selling, general, and administrative expenses. The value of unsatisfied performance obligations other than customer prepayments and deferred revenue associated with contracts greater than one year is immaterial.
4.ACQUISITIONS
In 2025, the Company acquired several companies related to its North American distribution, an extension of its life science equipment portfolio and other acquisitions. The cumulative initial cash payments were $93.8 million and the Company may be required to pay additional consideration of up to $35.5 million. The additional consideration is based upon various financial thresholds measured over a period of one to three years after the closing of the respective transaction. The estimated fair value of the aggregate contingent consideration obligation at the time of acquisition of $21.2 million was initially determined using a Monte Carlo simulation based on the Company's forecast of future financial results. The initial estimated fair value of contingent consideration was increased by $1.8 million during the fourth quarter of 2025, based upon actual results and future financial projections. The fair value measurements are based on significant inputs not observable in the market and thus represent a Level 3 measurement. In 2025, the Company realized a net benefit of $4.4 million, including the above amount, in Other Charges (Income), net related to contingent consideration associated with previous acquisitions.
Goodwill recorded in connection with the acquisitions totaled $56.0 million, which is deductible for tax purposes. Goodwill of $36.2 million and $19.8 million are included in the Company’s U.S. Operations segment and Other Operations segment, respectively. Identified intangible finite-life assets acquired include customer relationships of $35.0 million. The Company used variations of the income approach in determining the fair value of the intangible assets acquired. Specifically, the multi-period excess earnings method was used to determine the fair value of the customer relationships acquired. The Company's determination of the fair value of the acquired intangible assets involved the use of estimates and assumptions principally related to revenue growth and customer attrition rates.
The identifiable finite-life intangible assets will be amortized on a straight-line basis over a period of 5 to 10 years and the annual aggregate amortization expense is estimated at $4.0 million. Net tangible assets acquired were $17.1 million and were recorded at fair value in the consolidated financial statements. Acquired assets of $6.6 million and $10.5 million are included in the Company's U.S. Operations segment and Other Operations segment, respectively.
In 2024 and 2023, the Company also incurred additional acquisition payments totaling $10.1 million and $5.8 million, respectively, associated with other immaterial acquisitions.
In 2023, the final contingent consideration payment of $10.0 million was made relating to the PendoTECH acquisition of which $5.6 million is included in financing activities for the amount accrued at the acquisition date and $4.4 million is included in operating activities for the amount not accrued at the acquisition date on the Consolidated Statement of Cash Flows in accordance with U.S. GAAP.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
5. INVENTORIES
Inventories consisted of the following at December 31:
6. FINANCIAL INSTRUMENTS
The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company enters into certain interest rate and cross currency swap agreements in order to manage its exposure to changes in interest rates. The amount of the Company’s fixed obligation interest payments may change based upon the expiration dates of its interest rate and cross currency swap agreement and the level and composition of its debt. The Company also enters into certain foreign currency forward contracts to limit the Company’s exposure to currency fluctuations on the respective hedged items. For additional disclosures on derivative instruments regarding balance sheet location, fair value, and the amounts reclassified into other comprehensive income and the effective portion of the cash flow hedges, also see Note 7 and Note 11 to the consolidated financial statements. As also mentioned in Note 10, the Company has designated its euro-denominated debt as a hedge of a portion of its net investment in a euro-denominated foreign subsidiary.
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
Cash Flow Hedges
The Company has entered into a number of cross currency swaps designated as cash flow hedges. The agreements convert borrowings under the Company’s credit facility into synthetic Swiss franc debt, which allows the Company to effectively change the floating rate SOFR-based interest payments, excluding the credit spread, to a fixed Swiss franc income or expense as follows:
Agreement Date AmountConverted Effective Swiss FrancInterest Rate Maturity Date
In June 2025, the Company entered into a cross currency swap arrangement, as summarized above, to replace the cross currency swap that matured in June 2025. The new swap was designated as an effective cash flow hedge.
The Company amended all active cross currency swap agreements in 2023 to replace all references of LIBOR to SOFR as the interest rate benchmark to align with the amendment to the Company's Credit Facility Agreement, as discussed in Note 10 to the consolidated financial statements. As part of these amendments, the corresponding fixed Swiss franc interest rates were amended as well to reflect the change in the benchmark.
The Company’s cash flow hedges are recorded gross at fair value in the consolidated balance sheet at December 31, 2025 and 2024 and are disclosed in Note 7 to the consolidated financial statements. A derivative gain of $4.5 million based upon interest rates at December 31, 2025 is expected to be reclassified from other comprehensive income (loss) to earnings in the next 12 months. Through December 31, 2025, no hedge ineffectiveness has occurred in relation to these cash flow hedges.
Other Derivatives
The Company primarily enters into foreign currency forward contracts in order to economically hedge short-term intercompany balances largely denominated in Swiss franc, other major European currencies, and the Chinese renminbi with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. The foreign currency forward contracts are recorded at fair value in the consolidated balance sheet at December 31, 2025 and 2024, as disclosed in Note 7 to the consolidated financial statements. The Company recognized in other charges (income), net a net loss of $2.1 million and net gain of $2.0 million and a net loss of $19.7 million during the years ended December 31, 2025, 2024, and 2023, respectively, which offset the related net transaction gains (losses) associated with these contracts. At December 31, 2025 and 2024, these contracts had a notional value of $1.2 billion and $788.6 million, respectively.
The Company may be exposed to credit losses in the event of nonperformance by the counterparties to its derivative financial instrument contracts. Counterparties are established banks and financial
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METTLER-TOLEDO INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share data, unless otherwise stated)
institutions with high credit ratings. The Company believes that such counterparties will be able to fully satisfy their obligations under these contracts.
7. FAIR VALUE MEASUREMENTS
At December 31, 2025 and 2024, the Company had derivative assets totaling $3.2 million and $9.2 million, respectively, and derivative liabilities totaling $37.4 million and $8.5 million, respectively. The Company has limited involvement with derivative financial instruments and therefore does not present all the required disclosures in tabular format. The fair values of the cross currency swap agreements, and the foreign currency forward contracts that economically hedge short-term intercompany balances are estimated based upon inputs from current valuation information obtained from dealer quotes and priced with observable market assumptions and appropriate valuation adjustments for credit risk. The Company has evaluated the valuation methodologies used to develop the fair values by dealers in order to determine whether such valuations are representative of an exit price in the Company’s principal market. In addition, the Company uses an internally developed model to perform testing on the valuations received from brokers. The Company has also considered both its own credit risk and counterparty credit risk in determining fair value and determined these adjustments were insignificant for the years ended December 31, 2025 and 2024.