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]

Financial Performance - Sales for Q3 2025 were $800 million, an increase of 8% compared to $740 million in Q3 2024[2] - GAAP diluted EPS for Q3 2025 was $2.50, down from $2.71 in Q3 2024; non-GAAP EPS grew 16% to $3.40 from $2.93[3] - Net income for the three months ended September 27, 2025, was $148,923 thousand, compared to $161,503 thousand for the same period in 2024, reflecting a decline of 8%[21] - For the nine months ended September 27, 2025, total net sales were $2,232,924 thousand, representing a 7% increase from $2,085,673 thousand in the same period of 2024[25] - The company reported a net income per diluted common share of $2.50 for the three months ended September 27, 2025, down from $2.71 in the prior year[21] - The company reported a GAAP net income of $532,072 for the nine months ended September 27, 2025, with a 23.8% net income margin[27] - Adjusted Non-GAAP net income for the nine months ended September 27, 2025, was $635,989, reflecting a 28.5% net income margin[27] Revenue Growth - Pharma segment grew 11% in constant currency, with double-digit growth in the Americas[5] - Recurring revenue increased by 9% in constant currency, driven by strong uptake of new bioseparation products[5] - The pharmaceutical market segment saw a 12% increase in net sales, reaching $479,776 thousand for the three months ended September 27, 2025[23] - The Asia region reported net sales of $269,714 thousand for the three months ended September 27, 2025, a 7% increase from $251,329 thousand in the prior year[23] - The company experienced a constant currency growth rate of 8% for total net sales in the three months ended September 27, 2025, compared to the same period in 2024[23] Guidance and Projections - The company raised its full-year 2025 constant currency sales growth guidance to +6.7% to +7.3%[7] - Full-year 2025 non-GAAP EPS guidance was raised to $13.05 to $13.15, reflecting approximately +10% to +11% year-over-year growth[8] - Q4 2025 constant currency sales growth is expected to be in the range of +5.0% to +7.0%[9] - Q4 2025 non-GAAP EPS is projected to be between $4.45 and $4.55, indicating a year-over-year growth of approximately +9% to +11%[9] - Projected sales growth rate for the twelve months ending December 31, 2025, is expected to be 6.5% as reported, with a constant currency sales growth rate of 6.7%[38] - Projected GAAP earnings per diluted share for the twelve months ending December 31, 2025, is estimated to be between $11.10 and $11.20, with adjusted non-GAAP earnings per diluted share projected between $13.05 and $13.15[38] Expenses and Costs - Operating income for the three months ended September 27, 2025, was $192,114 thousand, a decrease from $211,132 thousand in the prior year[21] - Research and development expenses for the three months ended September 27, 2025, were $53,643 thousand, up from $45,336 thousand in the same period of 2024, indicating an increase of 18%[21] - The company incurred acquisition-related costs of $30,544 for the three months ended September 27, 2025, which accounted for 3.8% of total operating income[27] Cash Flow and Assets - Net cash provided by operating activities for the nine months ended September 27, 2025, was $488.002 million, down from $521.984 million in the prior year, reflecting a decrease of 6.5%[35] - Free cash flow for the nine months ended September 27, 2025, was $552.113 million, slightly down from $556.272 million in the same period of the previous year[35] - Cash and cash equivalents rose to $459,118, compared to $325,355 at the end of 2024[33] - Total assets increased to $4,862,564 as of September 27, 2025, up from $4,553,795 at the end of 2024[33] - Accounts receivable increased to $748,519, up from $733,365 at the end of 2024[33] - Cash and cash equivalents at the end of the period on September 27, 2025, were $459.118 million, an increase from $330.514 million at the end of the same period in 2024[35] Debt and Equity - The company experienced a net change in debt of $(242.986) million for the nine months ended September 27, 2025, compared to $(530.000) million in the previous year[35] - Total stockholders' equity increased to $2,330,693 as of September 27, 2025, compared to $1,828,507 at the end of 2024[33] New Products and Innovations - New product developments include the Xevo™ Charge Detection Mass Spectrometer, which uses up to 100-fold less sample volume than current techniques[5] - The company is confident in achieving significant cost and revenue synergies from the integration with BD's Biosciences & Diagnostic Solutions business[6]

Core Insights - Waters Corporation reported third quarter 2025 sales of $800 million, reflecting an 8% increase both as reported and in constant currency compared to $740 million in the same quarter of 2024 [1][14] - The company achieved diluted earnings per share (EPS) of $2.50 on a GAAP basis, down from $2.71 in the previous year, while non-GAAP EPS grew 16% to $3.40 from $2.93 [2][14] - The pharmaceutical segment experienced double-digit growth, driven by an ongoing instrument replacement cycle and new product offerings [3][14] Financial Performance - Sales for Q3 2025 were $800 million, an 8% increase from Q3 2024's $740 million [1][14] - Non-GAAP EPS for Q3 2025 was $3.40, a 16% increase from $2.93 in Q3 2024 [2][14] - Recurring revenue grew by 9% in constant currency, with the chemistry segment showing double-digit growth [14] Growth Drivers - The pharmaceutical segment grew by 11% in constant currency, with strong performance across all regions, particularly in the Americas [14] - The introduction of new products, such as the Affinity bioseparation columns and the Xevo™ Charge Detection Mass Spectrometer, contributed to growth in the chemistry portfolio [4][14] - The company is confident in achieving significant cost and revenue synergies from its integration with Becton, Dickinson and Company [4][14] Guidance - Waters Corporation raised its full-year 2025 constant currency sales growth guidance to a range of +6.7% to +7.3% [5][6] - The full-year 2025 non-GAAP EPS guidance was also raised to a range of $13.05 to $13.15, indicating a year-over-year growth of approximately +10% to +11% [6][7] - For Q4 2025, the company expects constant currency sales growth in the range of +5.0% to +7.0% and non-GAAP EPS between $4.45 and $4.55, reflecting a year-over-year growth of approximately +9% to +11% [7][14]

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Core Insights - Waters Corporation (WAT) is a global leader in analytical instruments and laboratory technologies, with a market cap of $21.4 billion, serving industries such as pharmaceuticals, life sciences, food and beverage, environmental testing, and materials analysis [1] - The company is expected to announce its fiscal Q3 earnings for 2025 on November 4, with analysts predicting a profit of $3.21 per share, a 9.6% increase from $2.93 per share in the same quarter last year [2] - For fiscal 2025, WAT is projected to report a profit of $12.99 per share, reflecting a 9.5% increase from $11.86 per share in fiscal 2024, with further growth expected to $14.18 per share in fiscal 2026 [3] Stock Performance - Over the past 52 weeks, WAT shares have increased by 9.8%, underperforming the S&P 500 Index's 16.9% return but outperforming the Health Care Select Sector SPDR Fund's 2.3% decline [4] - Despite reporting better-than-expected Q2 adjusted EPS of $2.95 and revenue of $771.3 million, WAT shares fell by 1.6% due to investor concerns regarding the planned acquisition of Becton, Dickinson and Company's biosciences and diagnostics unit [5] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for WAT, with five out of 15 analysts recommending "Strong Buy" and 10 suggesting "Hold," while the mean price target is set at $362.36, indicating a marginal potential upside [6]

Core Insights - Waters Corporation has launched the Waters Xevo Charge Detection Mass Spectrometer (CDMS), which offers advanced measurement capabilities for large biomolecules essential for next-generation therapeutics and structural biology [2][4] - The Xevo CDMS addresses limitations in existing analytical tools, providing direct mass measurement for molecules exceeding 150 MDa, thus enabling analysis of complex drug modalities [2][4] Product Features - The Xevo CDMS allows for the analysis of viral vector capsids using up to 100-fold less sample volume compared to current methods, delivering results in under ten minutes [3][4] - It enables real-time characterization of gene therapies during development, enhancing the safety and efficacy of advanced therapies [4][6] - The system utilizes the Electrostatic Linear Ion Trap (ELIT) technology for direct measurement of individual ions, developed in collaboration with Indiana University [5][10] Strategic Importance - The introduction of the Xevo CDMS is part of Waters Corporation's strategic investment in large molecules, which is crucial for advancing therapeutic breakthroughs [4][5] - The technology is expected to accelerate the development of genetic medicines and improve accessibility to life-changing therapies for patients [4][5] Market Position - Waters Corporation is recognized as a global leader in analytical instruments and technologies, serving various sectors including life sciences, materials, food, and environmental sciences for over 65 years [7][8]