Core Insights - Waters Corporation has launched the Charged Aerosol Detector (CAD) designed for seamless integration with Waters Empower Software, which is widely used for regulatory submissions in the pharmaceutical industry [1][5][10] - The CAD enables near-universal detection of a wide range of analytes, including those difficult to measure with traditional methods, enhancing the capabilities of laboratories in various sectors [2][3][7] Product Features - The CAD provides sensitive and reproducible measurements of analytes with little or no UV absorption, making it suitable for characterizing small molecules, biopharmaceuticals, food additives, and environmental pollutants [3][4] - It addresses common issues faced by users of multi-vendor LC-CAD configurations, such as dropped communications, with 70% of users reporting these problems [4][7][10] - The detector is compatible with various Waters liquid chromatography systems, including the Alliance iS HPLC System and ACQUITY UPLC Systems, ensuring broad applicability [4][5] Market Position - Waters Empower Software is utilized for approximately 80% of novel drug submissions to regulatory authorities, highlighting its critical role in the pharmaceutical industry [1][10] - The introduction of the CAD reinforces Waters' commitment to providing a comprehensive range of liquid chromatography detectors that are compatible with Empower Software, enhancing the user experience and operational efficiency [5][9] Availability - The Waters Charged Aerosol Detector is currently available for pre-order, with shipments expected to begin in April 2026 [5]

Core Viewpoint - Waters Corporation reported a strong Q3 performance with sales of $800 million, an 8% year-over-year increase, exceeding market expectations for both revenue and profit [3][10]. Group 1: Pharmaceutical Market Performance - The pharmaceutical segment experienced a robust demand, achieving an 11% year-over-year growth, with double-digit increases in both the Americas and Asia, while Europe maintained a solid single-digit growth [3][10]. - The Chinese market was a key highlight, with pharmaceutical sales growing over 20% year-over-year, reflecting increased R&D investments from local CDMO and biotech companies [3][10]. - Revenue related to GLP-1 testing doubled globally, driven by the expansion of drug development and production in the Americas and Europe [3][10]. Group 2: Instrument Sales and Innovations - Instrument sales grew by 11% quarter-over-quarter, marking the best performance outside of the pandemic year of 2020, supported by a comprehensive product matrix [7][8]. - The Alliance series HPLC products saw over 300% year-over-year growth, indicating strong user recognition of the platform [8]. - The Xevo™ TQ Absolute series platform grew by 30% year-over-year, bolstered by the market introduction of the new Xevo™ TQ Absolute XR model [8][10]. Group 3: Technological Advancements - Waters is enhancing its core technological advantages in large molecule drug analysis, launching the Xevo™ charge detection mass spectrometer, which offers ten times faster analysis speed and requires only 1% of the sample volume compared to traditional methods [12][18]. - The Empower platform is being upgraded to integrate various technologies, including flow cytometry, to create a unified, compliant data environment, with cloud and AI/ML functionalities expected by 2026 [14][18]. Group 4: Strategic Integration and Long-term Growth - Waters is actively pursuing a merger with BD Biosciences and Diagnostic Solutions, expected to complete in Q1 2026, which will enhance its product portfolio and market access, particularly in high-growth areas like cancer immunotherapy and personalized medicine [17][18]. - The company aims to leverage the merger to accelerate its long-term growth strategy while maintaining high standards of innovation and operational execution [17][18].

Core Insights - Waters Corporation (WAT) reported third-quarter 2025 non-GAAP earnings of $3.40 per share, exceeding the Zacks Consensus Estimate by 5.92% and reflecting a 16% year-over-year increase [1][8] - Net sales reached $800 million, surpassing the Zacks Consensus Estimate by 2.59%, with an 8% increase year-over-year on both reported and constant currency (cc) bases [1][8] Segment Performance - The Waters segment generated sales of $713.4 million, up 9% year-over-year on both reported and cc bases, while the TA segment reported sales of $86.5 million, reflecting a 2% increase [2] - In terms of product categories, Instruments sales were $341.5 million (up 6%), Services sales were $299.9 million (up 8% reported, 7% cc), and Chemistry sales were $158.5 million (up 14% reported, 13% cc) [3] - The Pharmaceutical market generated sales of $479.8 million, increasing 12% year-over-year, while Industrial sales were $235.7 million (up 3%) and Government & Academic sales were $84.4 million (up 2%) [4] Geographic Performance - Asia generated sales of $269.7 million, up 7% reported and 13% cc, while the Americas reported sales of $292.8 million (up 5%) and Europe generated $237.4 million (up 13% reported, 5% cc) [5] Operating Details - Non-GAAP selling and administrative expenses were $179.7 million, an 8.3% increase year-over-year, while research and development expenses rose to $49.9 million (up 11.7%) [6] - The adjusted operating margin was 30.3%, contracting by 50 basis points year-over-year [6] Financial Position - As of September 27, 2025, cash and cash equivalents were $459.1 million, up from $367.2 million as of June 28, with cash from operations reported at $187.3 million and free cash flow at $159.6 million [7] Future Guidance - Waters raised its 2025 guidance for cc sales growth to between 6.7% and 7.3%, with reported sales growth expected in the 6.5%-7.1% range [9] - Non-GAAP earnings guidance for 2025 is now projected to be in the range of $13.05 to $13.15 per share, indicating year-over-year growth of over 10% to 12% on a cc basis [9] - For Q4 2025, Waters expects cc sales growth between 5% and 7%, with non-GAAP earnings projected at $4.45 to $4.55 per share, reflecting year-over-year growth of over 9% to 11% [10]

Financial Data and Key Metrics Changes - The company reported sales of $800 million for the third quarter, reflecting an 8% increase both as reported and in constant currency [23][26] - Non-GAAP earnings per share increased by 16% to $3.40, exceeding the midpoint of guidance by $0.20 [8][25] - Gross margin for the quarter was 59%, a 70 basis point sequential increase from the previous quarter [26] Business Line Data and Key Metrics Changes - Instrument sales grew by 6%, driven by high single-digit growth in the LCMS portfolio [23][25] - Recurring revenue increased by 9%, with service revenue up 7% and chemistry revenue up 13% [25][26] - Alliance iS sales grew over 300%, indicating strong customer adoption of the flagship HPLC product [9] Market Data and Key Metrics Changes - By end market, pharma sales grew by 11%, industrial sales grew by 4%, and academic and government sales grew by 1% [23][25] - Asia saw a 13% growth, while Europe and the Americas each grew by 5% [25] - In China, sales grew by 12%, driven by double-digit growth in pharma and academic sectors [25] Company Strategy and Development Direction - The company is focused on innovation and strategic expansion into high-growth areas, including bioanalytical characterization and bioseparations [7][11] - The pending combination with BD's Biosciences and Diagnostic Solutions business is expected to create significant value and synergies [21][22] - The company plans to launch a series of new products in 2026, enhancing its offerings in large molecule applications and informatics [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing instrument replacement cycle and the positive impact of innovation on growth [30][79] - The external environment is improving, supported by stable global trade conditions and a clearer policy backdrop for pharma customers [27][28] - The company raised its full-year 2025 guidance, expecting constant currency sales growth in the range of 6.7%-7.3% [15][28] Other Important Information - The company achieved a significant milestone with the launch of the Xevo Charge Detection Mass Spectrometer, marking a new era in mass spectrometry [17] - The FDA's new draft guidance on biosimilars is expected to increase demand for analytical instruments, aligning with the company's strategic focus [20][50] Q&A Session Summary Question: Insights on pharma strength in the Americas and China - Management noted double-digit growth in pharma across all regions, driven by the instrument replacement cycle and new product traction [35][36] Question: Thoughts on the BD transaction and revenue synergies - Management expressed confidence in achieving revenue synergies and highlighted ongoing integration planning efforts [44][49] Question: Expectations for fourth quarter guidance and pull-forwards - Management indicated no pull-forwards were observed, with orders growing more than sales, leading to a healthy backlog [57] Question: Clarification on the Empower subscription model - Management discussed the incremental upside of the Empower model, emphasizing its transition to a subscription-based service [62] Question: Update on the TA business and order funnel - Management highlighted a recovery in the TA business due to stabilizing tariffs and improving customer spending [66][68]

Financial Data and Key Metrics Changes - The company reported sales of $800 million for the third quarter, reflecting an 8% increase both as reported and in constant currency [23][26] - Non-GAAP earnings per share increased by 16% to $3.40, exceeding the midpoint of guidance by $0.20 [8][25] - Gross margin for the quarter was 59%, a 70 basis point increase from the previous quarter [26] Business Line Data and Key Metrics Changes - Instrument sales grew by 6%, driven by high single-digit growth in the LC-MS portfolio [25] - Recurring revenue increased by 9%, with service revenue up 7% and Chemistry revenue up 13% [25][26] - Chemistry products saw a significant boost, with new product launches contributing to a 13% growth in the segment [12][25] Market Data and Key Metrics Changes - By end market, Pharma grew 11%, Industrial grew 4%, and Academic and Government grew 1% [23][25] - Asia experienced a 13% growth, while Europe and the Americas each grew by 5% [25] - In China, sales grew by 12%, driven by double-digit growth in Pharma and Academic & Government sectors [25] Company Strategy and Development Direction - The company is focused on innovation and expansion into high-growth areas, including bioanalytical characterization and bioseparations [7][11] - The pending combination with BD's Bioscience & Diagnostic Solutions business is expected to create significant value and synergies [21][22] - The company plans to launch a series of new products in 2026, enhancing its competitive position in the market [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing instrument replacement cycle and the potential for sustained growth driven by innovation [30][77] - The external environment is improving, with more stable global trade conditions and a clearer policy backdrop for Pharma customers [27][30] - The company raised its full-year 2025 guidance, expecting constant currency sales growth in the range of 6.7%-7.3% [15][28] Other Important Information - The company is seeing strong demand for GLP-1 testing and PFAS testing, which are key growth drivers [9][10] - The integration planning for the BD transaction is progressing rapidly, with a focus on achieving synergies [21][22] Q&A Session Summary Question: Can you provide more color on Pharma strength in the Americas and China? - Management noted double-digit growth in Pharma across all regions, driven by the success of the replacement cycle and new product traction [35][36] Question: What are your thoughts on the BD transaction and revenue synergies? - Management expressed confidence in achieving revenue synergies and highlighted the integration planning efforts underway [44][49] Question: Can you clarify on the fourth quarter guidance and any pull-forwards? - Management indicated no pull-forwards were observed, with orders growing more than sales, leading to a healthy backlog [56][57] Question: How do you see the biosimilar opportunity evolving? - Management is optimistic about the shift towards analytical testing for biosimilars, which aligns with the company's strategy [50][51]

Financial Data and Key Metrics Changes - The company reported sales of $800 million, reflecting an 8% increase both as reported and in constant currency compared to the third quarter of fiscal year 2024 [21][24] - Non-GAAP earnings per share increased by 16% to $3.40, exceeding the midpoint of guidance by $0.20 [6][23] - Gross margin for the quarter was 59%, a 70 basis point sequential increase from the prior quarter [24] Business Line Data and Key Metrics Changes - Instrument sales grew by 6%, driven by high single-digit growth in the LCMS portfolio [21][23] - Recurring revenue increased by 9%, with service revenue up 7% and chemistry revenue up 13% [23] - Alliance iS sales grew over 300%, indicating strong customer adoption of the flagship HPLC product [7] Market Data and Key Metrics Changes - By end market, pharma sales grew by 11%, industrial sales grew by 4%, and academic and government sales grew by 1% [21][23] - Asia saw a growth of 13%, while Europe and the Americas each grew by 5% [23] - In China, sales grew by 12%, driven by double-digit growth in pharma and academic sectors [23] Company Strategy and Development Direction - The company is focused on innovation and strategic expansion into high-growth areas, including bioanalytical characterization and bioseparations [5][14] - The pending combination with BD's Biosciences and Diagnostic Solutions business is expected to create significant value and synergies [19][20] - The company plans to launch a series of new products in 2026, enhancing its competitive position in the market [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing instrument replacement cycle and the potential for sustained growth driven by new product launches and market demand [6][14] - The external environment is improving, supported by stable global trade conditions and a clearer policy backdrop for pharma customers [12][25] - The company raised its full-year 2025 guidance, expecting constant currency sales growth in the range of 6.7%-7.3% [12][25] Other Important Information - The company achieved a free cash flow of $160 million after capital expenditures and transaction-related expenses [24] - The integration planning for the BD combination is progressing rapidly, with a focus on operational readiness [20] Q&A Session Summary Question: Can you provide more color on the pharma strength in the Americas and China? - Management noted that double-digit growth in the U.S. was driven by the success of the replacement cycle and new product traction, while in China, growth was supported by CDMOs aiding local biotech [29][30] Question: What are the latest thoughts on revenue synergies from the BD transaction? - Management expressed confidence in achieving revenue synergies, highlighting the potential for increased uptake of BD's products and improved service plans [35][39] Question: How does the recent FDA update on biosimilars impact Waters? - Management indicated that the shift towards analytical testing for biosimilars could significantly increase demand for their analytical instruments, aligning with the company's strategy [41] Question: What are the expectations for the fourth quarter regarding budget flush and pull forwards? - Management confirmed no pull forwards were observed and maintained a prudent outlook for Q4, expecting a 5-7% growth [42][44] Question: How should we think about the incremental upside from the Empower model? - Management highlighted the transition to a subscription-based model as a significant opportunity, with several customers already moving in that direction [46][48]

分组1 - Waters reported quarterly earnings of $3.4 per share, exceeding the Zacks Consensus Estimate of $3.21 per share, and up from $2.93 per share a year ago, representing an earnings surprise of +5.92% [1] - The company achieved revenues of $799.89 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.59% and increasing from $740.3 million year-over-year [2] - Waters has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] 分组2 - The current consensus EPS estimate for the upcoming quarter is $4.57 on revenues of $927.36 million, and for the current fiscal year, it is $12.99 on revenues of $3.14 billion [7] - The Medical - Instruments industry, to which Waters belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Q3 2025 Performance Highlights - Waters Corporation reported Q3 2025 revenue of $800 million, with constant currency (CC) revenue growth of 8%[10] - CC recurring revenue growth was 9%[10] - CC instrument growth was 6%[10] - Q3 2025 Non-GAAP EPS grew by 16% to $3.40[10] - High single-digit (HSD) LC-MS growth and 17% CC growth were achieved[10] Growth Drivers and Innovation - BioAnalytical Characterization new products saw an 11% sequential growth in instrument sales from Q2 2025 to Q3 2025[13, 14] - Chemistry growth was 11% year-to-date in constant currency, driven by new BioSeparations products[16, 17] - Waters Alliance iS sales grew +300% in constant currency in 3Q25 compared to 3Q24[14] - Waters Xevo TQ Absolute sales grew +30% in constant currency in 3Q25 compared to 3Q24[14] Geographic and Market Performance - Pharma sales growth in Q3 2025 in constant currency was 11% overall, with strong performance across Americas, Europe, and Asia ex-China[19, 20] - Asia experienced 13% growth, Americas and Europe both saw 5% growth[34, 35] Guidance - The company projects FY 2025 constant currency revenue growth between 6.5% and 7.1%[37] - The company projects Q4 2025 constant currency revenue growth between 5.2% and 7.2%[37] - Non-GAAP EPS for FY 2025 is projected to be between $13.05 and $13.15[37] - Non-GAAP EPS for Q4 2025 is projected to be between $4.45 and $4.55[37]

Core Insights - Baron Health Care Fund reported a 5.39% gain in Q3 2025, slightly outperforming the Russell 3000 Health Care Index which gained 5.05% [1] - The fund's performance was impacted by poor stock selection in life sciences tools & services and pharmaceuticals, particularly due to Waters Corporation's underperformance [3] Fund Performance - The Baron Health Care Fund's Institutional Shares rose 5.39% in Q3 2025, compared to an 8.18% gain for the Russell 3000 Index [1] - Solid stock selection was offset by negative impacts from active sub-industry allocations and cash holdings during a rising market [1] Waters Corporation Analysis - Waters Corporation (NYSE:WAT) had a one-month return of 8.56% but saw a 10.74% decline over the past 52 weeks, closing at $345.59 with a market cap of $20.571 billion [2] - The fund exited its position in Waters Corporation due to concerns that its acquisition of Becton, Dickinson's biosciences and diagnostics assets would dilute growth and margins, fundamentally changing the investment thesis [3] Hedge Fund Interest - Waters Corporation was held by 37 hedge fund portfolios at the end of Q2 2025, an increase from 33 in the previous quarter [4] - Despite its potential, the company is not considered among the top investment choices compared to certain AI stocks that are perceived to offer greater upside potential [4]

Core Insights - Waters Corp raised its annual profit forecast after exceeding third-quarter profit estimates, driven by increased demand from biotech clients for its drug development tools [1] Group 1: Financial Performance - The company reported better-than-expected third-quarter profits, indicating strong performance in the current market [1] - The raised profit forecast suggests confidence in continued growth and demand for its products [1] Group 2: Market Demand - Improved demand from biotech clients has been a significant factor in the company's performance, highlighting a positive trend in the biotech sector [1] - The tools provided by Waters Corp are essential for drug development, indicating a strong market position within the industry [1]