Waters Corporation Q4 FY2025 earnings call

• Delivered strong Q4 finish with high single-digit reported revenue growth and low double-digit adjusted EPS growth. - Completed acquisition of BD's Biosciences and Diagnostic Solutions business, uniting world-class expertise. - Commercial execution KPIs running ahead of commitments, instrument replacement momentum building, service plan attachment increased, e-commerce penetration reached ~45% of consumables revenue. - Innovation driving growth with new products like Alliance iS HPLC, Xevo TQ Absolute mass spec platforms, MaxPeak Premier chemistry. - Idiosyncratic growth drivers in 2025 contributed over 300 basis points of growth, including GLP-1 testing-related revenue doubling, PFAS testing growth robust, India ex GLP-1 revenue growing low teens. - Expanding idiosyncratic growth driver framework to 5 drivers: GLP-1s, PFAS, India generics, biologics, informatics. - Integration of BD business has clear execution priorities, cost and revenue synergies on track.

Fourth quarter reported sales grew 7% and adjusted EPS grew low double digits. Full year sales grew 7% on reported and constant currency basis. Recurring revenue grew 9% in Q4 and 8% for full year. Instrument sales grew 3% in Q4, led by high single-digit LC-MS growth, and 5% for full year, led by LC-MS. TA Instruments declined in Q4 due to cautious spending. BD Biosciences and Diagnostic Solutions business contributed $3B revenue in 2026 with ~2.5% underlying growth before execution and pricing improvements. Waters has 4 divisions: Analytical Sciences, Biosciences, Advanced Diagnostics, Material Sciences.

• Stand-alone full year 2026 organic constant currency revenue growth expected 5.5% - 7%. - Acquired business expected to contribute $3B revenue in 2026 with ~2.5% underlying growth. - Total 2026 reported revenue ~$6.405B - $6.455B, blended year-over-year growth ~5.3% at midpoint. - Adjusted operating margin 28.1% in 2026. - Full year 2026 adjusted EPS $14.30 - $14.50. - First quarter 2026 stand-alone organic constant currency revenue growth expected 7% - 9%, reported stand-alone revenue ~$718M - $731M. - Acquired business expected to contribute $480M revenue in partial first quarter with low single-digit decline. - Total first quarter 2026 reported revenue ~$1.198B - $1.211B. - First quarter adjusted earnings per fully diluted share expected $2.25 - $2.35.

• BD business in 2025 faced issues like weakened demand in China due to diagnostics testing consumption reduction, U.S. government shutdown affecting Biosciences business, milder flu season impacting point-of-care business. - Transition to subscription-based model for Empower may have short-term impact on instrument growth rate. - Foreign exchange and other market conditions could impact financial performance.

Q: Tycho Peterson asked about BD results and instrument impact from Empower transition.

A: Udit Batra and Amol Chaubal discussed BD business issues in 2025, focus on operational execution, pricing discipline, and instrument performance with Empower transition.

Q: Catherine Schulte asked about full year guide deceleration.

A: Udit Batra and Amol Chaubal explained guidance philosophy, assumptions, and focus on operational execution.

Q: Jack Meehan asked about pricing in BD.

A: Udit Batra discussed centralized pricing discipline for instruments and recurring revenue.

Q: Douglas Schenkel asked about synergy targets.

A: Amol Chaubal discussed underwriting model and progress on synergy targets.

Q: Matthew Larew asked about BD commercial investment.

A: Udit Batra discussed commercial investment for operational excellence.

Q: Casey Woodring asked about chemistry performance and pricing.

A: Udit Batra and Amol Chaubal discussed chemistry growth, new products, and pricing.

Q: Puneet Souda asked about conservatism in acquired assets growth.

A: Udit Batra and Amol Chaubal discussed prudence in baking in headwinds.

Q: Subbu Nambi asked about operating margin progression.

A: Amol Chaubal discussed operating margin and alignment with deal model.