Core Viewpoint - Waters Corporation's stock is trading lower following the release of its fourth-quarter 2025 financial results and fiscal 2026 guidance [1] Fourth Quarter Earnings Snapshot - The company reported quarterly sales of $932.36 million, a 7% increase as reported and 6% in constant currency, surpassing the consensus estimate of $928.09 million [2] - Sales in the academic and government market decreased by 2% as reported and 3% in constant currency [2] - Adjusted earnings were $4.53 per share, exceeding the consensus of $4.51 [2] Sales Performance - Instrument system sales increased by 3% as reported and in constant currency [3] - Recurring revenues, which include service and precision chemistries, rose by 10% as reported and 9% in constant currency [3] - Geographically, sales in Asia increased by 4% as reported and 11% in constant currency, while sales in the Americas rose by 4% as reported and in constant currency, and sales in Europe increased by 13% as reported and 4% in constant currency [3] Fiscal 2026 Guidance - The company anticipates continued momentum into 2026, driven by a multi-year instrument replacement cycle and innovation [4] - Initial guidance for 2026 indicates a combined company sales growth of 5.3% at the midpoint, with potential for outperformance [5] - Expected adjusted earnings for Q1 2026 are projected at $2.25-$2.35 per share, compared to the consensus of $2.52, with sales between $1.198-$1.211 billion [5] - For fiscal 2026, adjusted earnings are expected to be $14.30-$14.50 per share versus the consensus of $14.29, with sales projected at $6.41 billion-$6.46 billion [6] Analyst View - Analysts note that Waters' leadership in the QA/QC market benefits from multiple sector-level and idiosyncratic tailwinds, indicating the company is in the early to middle stages of a long-overdue replacement cycle [7] - The acquisition of BD Bio/Dx is expected to significantly expand the company's total addressable market (TAM) with conservative cost synergies and achievable revenue synergies [7] - Analysts expect "New Waters" to maintain above-group growth, margins, and return on invested capital (ROIC), suggesting the company will sustain a premium multiple [8]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - The company achieved high single-digit reported revenue growth and low double-digit adjusted EPS growth in Q4, with sales growing 7% on a reported basis and 6% in constant currency [6][8] - Adjusted EPS grew low double digits to $4.53, while GAAP EPS was $3.77 [8][31] - For the full year, sales grew 7% on both a reported and constant currency basis, with adjusted EPS growing 11% to $13.13 [9][31] Business Line Data and Key Metrics Changes - Recurring revenue grew 9%, driven by chemistry growth, while instruments grew 3%, led by high single-digit LCMS growth [8][30] - Chemistry revenue grew 12% for the full year, contributing to the overall growth [9][31] - Instrument sales grew 5% for the full year, with high single-digit LCMS growth offset by a low single-digit decline in TA system sales [31][32] Market Data and Key Metrics Changes - Pharma revenue grew 9%, with high single-digit growth across Americas and Europe and low double-digit growth in Asia [13][31] - Industrial grew 6%, while academic and government declined 1% [31] - In China, sales grew 9% for the year, driven by strong performance in biotech and CDMOs [14][32] Company Strategy and Development Direction - The company completed the acquisition of BD's Biosciences and Diagnostic Solutions business, aiming to strengthen its position in high-growth adjacencies and enhance operational execution [6][17] - The strategic roadmap laid out five years ago continues to advance, with a focus on innovation and high-volume testing opportunities [7][9] - The company plans to expand its idiosyncratic growth driver framework from three to five drivers, adding biologics and informatics [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong growth in 2026, with a guidance range of 5.5%-7% for organic constant currency revenue growth [35][36] - The company anticipates approximately $3 billion in revenue contribution from the acquired business in 2026, with a risk-adjusted growth assumption of 2.5% [26][35] - Management highlighted the importance of improving operational execution and pricing discipline to enhance revenue synergies [47][57] Other Important Information - The company expects to realize approximately $55 million of adjusted EBIT from cost synergies in 2026 and $50 million in revenue synergies [23][36] - Free cash flow totaled $677 million for the full year, with a net debt position of $820 million at year-end [34][36] Q&A Session All Questions and Answers Question: Concerns about BD results and recovery path - Management acknowledged several issues that emerged in Q4 impacting growth, emphasizing a focus on improving operational execution and leveraging new product launches for recovery [44][46] Question: Full year guidance and deceleration - Management clarified that the guidance reflects a prudent approach, incorporating potential headwinds and assuming mid-single-digit growth in China [54][55] Question: Synergy targets and operational excellence - Management confirmed a focus on achieving synergy targets through operational improvements and disciplined pricing strategies [66][70]

Financial Data and Key Metrics Changes - The company achieved high single-digit reported revenue growth and low double-digit adjusted EPS growth in the fourth quarter, with sales growing 7% on a reported basis and 6% in constant currency [6][9] - Adjusted EPS grew 10% to $4.53, while GAAP EPS was $3.77 [33][34] - For the full year, sales grew 7% on both a reported and constant currency basis, with adjusted EPS growing 11% to $13.13 [10][34] Business Line Data and Key Metrics Changes - Recurring revenue grew 9%, driven by chemistry growth, while instrument revenue grew 5%, led by high single-digit LCMS growth [9][10] - Chemistry revenue grew 12% for the full year, significantly above the historical average growth rate of 7% [12][34] - The transition to a subscription-based model for Empower reduced overall instrument growth by a low single-digit percentage for the quarter, but is expected to provide long-term recurring revenue benefits [9][10] Market Data and Key Metrics Changes - Pharma revenue grew 9%, with high single-digit growth across the Americas and Europe, and low double-digit growth in Asia [15][31] - Industrial revenue grew 6%, while academic and government declined 1% [33] - In China, the company grew 9% for the year, driven by strong performance in biotech and CDMOs [16][34] Company Strategy and Development Direction - The company completed the acquisition of BD's Biosciences and Diagnostic Solutions business, aiming to strengthen its position in high-growth adjacencies and enhance operational execution [6][19] - The strategic roadmap laid out five years ago continues to advance, with a focus on innovation and commercial execution [8][10] - The company plans to expand its idiosyncratic growth driver framework from three to five drivers, adding biologics and informatics to the existing drivers [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong growth in 2026, with a blended year-over-year revenue growth of approximately 5.3% at the midpoint of the combined company [29][38] - The company expects to realize approximately $50 million in revenue synergies in 2026, reflecting initial contributions from commercial excellence initiatives [38][39] - Management highlighted the importance of improving operational execution and pricing discipline to enhance revenue and profitability [48][58] Other Important Information - The company expects to achieve approximately $55 million of adjusted EBIT from cost synergies in 2026 [25][39] - Free cash flow totaled $677 million for the full year, with a net debt position of $820 million at the end of the year [36][39] Q&A Session Summary Question: Insights on BD results and path to recovery - Management acknowledged several issues that emerged in Q4 impacting growth, but emphasized that these will now be present in a lower baseline for 2026, allowing for potential upside [45][47] Question: Impact of Empower transition on instruments - Management noted that the transition to subscription has created a low single-digit headwind to overall instrument numbers, but expressed confidence in the strong performance of LCMS and the overall instrument funnel [46][52] Question: Full year guidance and deceleration - Management explained that the guidance reflects prudence and incorporates assumptions about various market segments, including academic and government, and the impact of the Empower transition [55][56] Question: Update on pro forma leverage and interest expense - Management indicated that net debt is expected to be around 2.4x net debt to EBITDA, with plans to reduce it below 2 times within 18 months [63][64] Question: Synergy targets and operational execution - Management confirmed that they are on track to deliver the commitments made during the deal announcement, with a focus on identifying opportunities for cost synergies [67][70]

Financial Data and Key Metrics Changes - The company achieved high single-digit reported revenue growth and low double-digit adjusted EPS growth in Q4 2025, with sales growing 7% on a reported basis and 6% in constant currency [5][7] - Adjusted EPS grew 11% to $13.13 for the full year, while GAAP EPS was $10.76 [9][33] - Recurring revenue grew 9%, driven by a 12% increase in chemistry [7][32] Business Line Data and Key Metrics Changes - Instrument revenue grew 5%, led by high single-digit growth in LCMS, while TA instruments declined due to cautious spending in the U.S. and Europe [9][30] - Chemistry revenue grew 12% for the full year, significantly above the historical average growth rate of 7% [12][33] - The transition to a subscription-based model for Empower reduced overall instrument growth by a low single-digit percentage for the quarter, but is expected to provide long-term recurring revenue benefits [8][48] Market Data and Key Metrics Changes - Pharma revenue grew 9%, with high single-digit growth across the Americas and Europe, and low double-digit growth in Asia [13][30] - In China, sales grew 9% for the year, driven by strong performance in biotech and CDMOs [14][33] - Non-pharma end markets saw industrial growth of 6%, while academic and government declined by 1% [13][32] Company Strategy and Development Direction - The company completed the acquisition of BD's Biosciences and Diagnostic Solutions business, aiming to strengthen its position in high-growth adjacencies and enhance operational execution [5][18] - The strategic roadmap laid out five years ago continues to advance, with a focus on innovation and commercial execution [6][9] - The company plans to expand its idiosyncratic growth driver framework from three to five drivers, adding biologics and informatics to its growth strategy [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic revenue growth of 5.5%-7% for 2026, with the acquired business expected to contribute $3 billion in revenue [26][35] - The company anticipates a blended year-over-year revenue growth of approximately 5.3% for the combined entity in 2026, with an adjusted operating margin percentage of approximately 28.1% [27][36] - Management highlighted the importance of improving operational execution and pricing discipline to enhance revenue synergies [44][52] Other Important Information - Free cash flow totaled $677 million for the full year, with a net debt position of $820 million at year-end [34][36] - The company expects to realize approximately $55 million of adjusted EBIT from cost synergies in 2026, alongside $50 million in revenue synergies [24][36] Q&A Session Questions and Answers Question: Insights on BD results and path to recovery - Management acknowledged several issues that impacted growth in the BD business, including a weaker flu season and challenges in export approvals, but expressed confidence in a lower baseline for 2026 to support recovery [42][46] Question: Impact of Empower transition on instruments - Management noted that the transition to subscription for Empower had a low single-digit headwind on overall instrument growth but is expected to provide long-term recurring revenue benefits [43][48] Question: Full year guidance and deceleration dynamics - Management clarified that the guidance reflects a prudent approach, incorporating assumptions of mid-single-digit growth in China and the impact of the Empower transition [49][50]

分组1 - Waters reported quarterly earnings of $4.53 per share, exceeding the Zacks Consensus Estimate of $4.5 per share, and up from $4.1 per share a year ago, representing an earnings surprise of +0.74% [1] - The company achieved revenues of $932.36 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.55%, and an increase from $872.71 million year-over-year [2] - Over the last four quarters, Waters has consistently surpassed consensus EPS and revenue estimates [2] 分组2 - The stock's immediate price movement will depend on management's commentary during the earnings call, with Waters shares up about 0.4% year-to-date compared to the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $2.54 on revenues of $713.34 million, and for the current fiscal year, it is $14.25 on revenues of $3.36 billion [7] - The Medical - Instruments industry, to which Waters belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Core Viewpoint - Waters Corporation has successfully completed the combination with Becton, Dickinson and Company's Biosciences & Diagnostic Solutions businesses, creating a global leader in life sciences and diagnostics with a strong financial outlook [1][3] Company Developments - The transaction has resulted in the formation of four divisions: Waters Analytical Sciences, Waters Biosciences, Waters Advanced Diagnostics, and Waters Materials Sciences, focusing on high-volume testing in regulated applications and expansion into high-growth markets [5][6] - Claire M. Fraser, Ph.D., has been appointed to the Waters Board of Directors, bringing extensive experience in genomics and molecular diagnostics [2][3] Transaction Details - The combination was executed through a Reverse Morris Trust transaction, with Waters shareholders owning 60.8% and BD shareholders owning 39.2% of the combined company on a fully diluted basis [7] - BD shareholders will receive approximately 0.135 shares of Waters common stock for each share of BD common stock held as of February 5, 2026 [7] Strategic Focus - The company aims to address unmet customer needs, deliver long-term shareholder value, and provide solutions that advance global health through innovative products and a culture of innovation [3][9]

Core Viewpoint - BD has successfully completed the spin-off of its Biosciences & Diagnostic Solutions business, combining it with Waters Corporation, marking a significant milestone in its BD 2025 strategy and positioning the company for future growth in the MedTech sector [1][3]. Transaction Details - BD shareholders will receive approximately 0.135 shares of Waters common stock for each share of BD common stock held as of February 5, 2026, along with cash for any fractional shares [2]. - BD received $4 billion in cash from the transaction, valuing the spun-off business at $18.8 billion based on Waters' stock price on February 6, 2026 [2]. - BD plans to utilize $2 billion of the proceeds for share repurchases and the remaining $2 billion for debt repayment, with both initiatives expected to occur in the near term [2]. Strategic Positioning - The combination with Waters is seen as a pivotal step in BD's transformation into a focused, pure-play MedTech company, enhancing its ability to capitalize on emerging healthcare trends such as connected devices and AI [3]. - BD has strategically shaped its portfolio by divesting non-core assets and making over 20 tuck-in acquisitions to strengthen its market presence [3]. Future Outlook - BD is implementing its Excellence Unleashed strategy to enhance its commercial capabilities, drive innovation, and ensure high-quality operations, which is expected to lead to sustainable revenue and cash flow growth [4]. - The company believes it is well-positioned to generate long-term shareholder value due to its global scale and recurring consumables model [4]. Leadership Changes - Claire M. Fraser, Ph.D., has been appointed to the Waters Corporation Board of Directors following the transaction, stepping down from BD's Board after nearly two decades [5]. - Her expertise in genomics and molecular diagnostics is expected to benefit Waters significantly [6].

Q4 2025 Earnings Call Presentation February 9, 2026 Disclaimer Forward-Looking Statements & Non-GAAP Financial Measures: This presentation contains forward-looking statements regarding future results and events, including financial and operational guidance and projected estimates. For this purpose, any statements that are not statements of historical fact may be deemed forward-looking statements. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend," "outlook," and similar expres ...

Financial Performance - Fourth quarter 2025 sales reached $932 million, a 7% increase from $873 million in Q4 2024[3] - Non-GAAP EPS for Q4 2025 grew 10% to $4.53, compared to $4.10 in Q4 2024[4] - Full-year 2025 sales totaled $3,165 million, reflecting a 7% increase from $2,958 million in 2024[10] - Recurring revenue increased 10% in Q4 2025, driven by strong demand in precision chemistries[9] - The pharmaceutical market saw an 8% sales increase in Q4 2025, while the industrial market also grew by 8%[8] - For the three months ended December 31, 2025, total net sales increased by 7% to $932,362 thousand compared to $872,714 thousand in the same period of 2024, with a constant currency growth rate of 6%[27] - For the twelve months ended December 31, 2025, total net sales reached $3,165,286 thousand, marking a 7% increase from $2,958,387 thousand in 2024, with a constant currency growth rate also at 7%[29] - Pharmaceutical market sales increased by 9% to $1,873,362 thousand, while the Industrial market grew by 6% to $961,154 thousand[29] - The total recurring revenue for the twelve months was $1,819,644 thousand, reflecting an 8% increase compared to the previous year[29] Future Projections - The company expects full-year 2026 organic constant currency revenue growth of 5.5% to 7.0%, translating to reported revenue of $3.355 billion to $3.405 billion[14] - Total company revenue for full-year 2026, including expected revenue synergies, is projected to be between $6.405 billion and $6.455 billion[15] - First quarter 2026 organic constant currency revenue growth is anticipated to be in the range of 7.0% to 9.0%[17] - The acquisition of BD Biosciences and Diagnostic Solutions is expected to contribute approximately $3.000 billion to reported revenue in 2026[14] - Non-GAAP EPS for full-year 2026 is projected to be between $14.30 and $14.50, representing year-over-year growth of approximately 8.9% to 10.4%[16] - Projected revenue for the twelve months ending December 31, 2026, is estimated to be between $6.405 billion and $6.455 billion, with organic reported revenue growth expected to be between 6.0% and 7.5%[41] - The company anticipates an impact of $3.0 billion from acquired business contributions to projected revenue for the twelve months ending December 31, 2026[41] - GAAP earnings per diluted share for the twelve months ending December 31, 2026, is projected to be between $6.63 and $6.83, while adjusted non-GAAP earnings per diluted share is expected to be between $14.30 and $14.50[41] Operational Highlights - Waters segment net sales rose by 8% to $823,937 thousand, while TA segment sales remained flat at $108,425 thousand[27] - Service revenue grew by 9% to $329,156 thousand, and Chemistry sales increased by 13% to $170,356 thousand, reflecting strong demand in these areas[27] - In terms of geography, Europe saw a significant increase of 13% in net sales, reaching $315,971 thousand, while Asia's sales grew by 4% to $283,967 thousand[27] - Asia's total net sales for the twelve months were $1,040,397 thousand, a 7% increase, with a constant currency growth rate of 13%[29] - The company emphasizes the importance of constant currency growth rates as a measure of underlying performance, excluding foreign currency impacts[27] - The overall performance indicates a solid growth trajectory across various segments and geographies, positioning the company favorably for future expansion[29] Financial Position - Total assets increased to $5,083,977 thousand as of December 31, 2025, up from $4,553,795 thousand in 2024[36] - Cash and cash equivalents rose to $587,831 thousand, compared to $325,355 thousand in the previous year[36] - Accounts receivable increased to $828,844 thousand, up from $733,365 thousand year-over-year[36] - Total liabilities decreased to $2,522,735 thousand from $2,725,288 thousand in 2024[36] - The company’s total stockholders' equity increased to $2,561,242 thousand as of December 31, 2025, compared to $1,828,507 thousand in 2024[36] Income and Cash Flow - The company reported a net income of $225,214 thousand for the three months ended December 31, 2025, with diluted earnings per share of $3.77[31] - Net income for the three months ended December 31, 2025, was $225.2 million, a decrease of 2.5% compared to $231.4 million for the same period in 2024[38] - Net cash provided by operating activities for the twelve months ended December 31, 2025, was $652.6 million, down 14.3% from $762.1 million in 2024[38] - Free Cash Flow - Adjusted Non-GAAP for the twelve months ended December 31, 2025, was $677.3 million, compared to $744.3 million in 2024, reflecting a decrease of 9%[38] - The company reported a net cash used in investing activities of $152.3 million for the twelve months ended December 31, 2025, compared to $144.0 million in 2024[38] - Stock-based compensation increased to $54.1 million for the twelve months ended December 31, 2025, from $44.7 million in 2024, representing a growth of 21.5%[38] - The company made business acquisitions totaling $35.1 million net of cash acquired during the twelve months ended December 31, 2025[38] - The effect of exchange rate changes on cash and cash equivalents resulted in an increase of $2.96 million for the three months ended December 31, 2025[38] Operating Income - For the three months ended December 31, 2025, GAAP operating income was $270,516 thousand, representing a 29.0% operating margin[31] - Adjusted non-GAAP operating income for the same period was $328,431 thousand, with a 35.2% operating margin[31] - The company incurred acquisition-related costs of $36,771 thousand, which accounted for 3.9% of total expenses in the three months ended December 31, 2025[31] - The adjusted non-GAAP net income for the twelve months ended December 31, 2025, was $929,890 thousand, with diluted earnings per share of $13.13[31]