Group 1 - Waters Corporation will participate in a fireside chat at the Jefferies Global Healthcare Conference on June 4th, 2025, at 8:45 AM Eastern Time [1] - A live webcast of the event will be available on the Waters Investor Relations website, with a replay accessible for 90 days [1] Group 2 - Waters Corporation is a global leader in analytical instruments, separations technologies, and software, serving various sectors including life sciences, materials, food, and environmental sciences for over 65 years [2] - The company employs over 7,600 individuals across more than 100 countries, collaborating with customers in laboratories, manufacturing sites, and hospitals [2] - Waters Corporation focuses on ensuring the efficacy of medicines, the safety of food, the purity of water, and the quality and sustainability of everyday products [2]

Core Viewpoint - Waters Corporation reported strong first-quarter 2025 results, with non-GAAP earnings and net sales exceeding expectations, driven by robust demand across key sectors and regions [1][2][10]. Financial Performance - Non-GAAP earnings for Q1 2025 were $2.25 per share, surpassing the Zacks Consensus Estimate by 1.35% and increasing 1.8% year over year [1]. - Net sales reached $662 million, exceeding the Zacks Consensus Estimate by 1.08%, with a reported increase of 4% and a 7% increase on a constant currency basis year over year [1][11]. Segment Performance - The Waters segment accounted for 88.8% of net sales, generating $587.3 million, up 4.5% year over year and 8% at constant currency [3]. - The TA segment contributed $74.4 million (11.2% of net sales), reflecting a slight decline of 0.7% year over year but a 1% increase at constant currency [3]. Product and Service Breakdown - Instruments sales (39.7% of net sales) were $262.9 million, increasing 8.7% year over year and 11% at constant currency [4]. - Services sales (39.5% of net sales) totaled $261.2 million, with a modest increase of 0.2% year over year and 3% at constant currency [4]. - Chemistry sales (20.8% of net sales) reached $137.6 million, growing 2.6% year over year and 5% at constant currency [4]. Market Analysis - The Pharmaceutical market (59.1% of net sales) generated $391.1 million, up 4.5% year over year and 8% at constant currency [5]. - The Industrial market (27.5% of net sales) saw sales of $203.4 million, increasing 4.1% year over year and 6% at constant currency [5]. - The Government & Academic market (10.2% of net sales) generated $67.3 million, remaining flat year over year but increasing 3% at constant currency [6]. Geographic Performance - Asia (33.4% of net sales) generated $220.8 million, up 6.4% year over year and 13% at constant currency [6]. - Sales in the Americas (38.6% of net sales) were $255.5 million, increasing 6% year over year and at constant currency [6]. - Europe (28% of net sales) generated $185.4 million, decreasing 1.4% year over year but increasing 1% at constant currency [7]. Operating Details - Non-GAAP selling and administrative expenses were $170.1 million, up 6% year over year, expanding 50 basis points as a percentage of net sales [8]. - Research and development spending was $46 million, increasing 7.7% year over year, with a 20 basis point expansion as a percentage of net sales [8]. - The adjusted operating margin was 25.5%, contracting 150 basis points year over year [8]. Balance Sheet and Cash Flow - As of March 29, 2025, cash and cash equivalents were $382.9 million, up from $325.4 million as of December 31, 2024 [9]. - Cash generated from operations was $259.6 million, down from $262.9 million in the year-ago quarter [9]. - Free cash flow for Q1 2025 was $233.8 million [9]. Guidance - For Q2 2025, Waters expects non-GAAP earnings of $2.88-$2.98 per share, with a Zacks Consensus Estimate of $2.93 per share, indicating 11.4% growth year over year [10]. - Total sales growth is anticipated to be in the range of 4-6% on a reported basis, with constant currency sales growth expected to be between 5% and 7% [11][12].

About a year ago, I published my last article about Waters Corporation (NYSE: WAT ), and in the article I was rather cautious about the company and the stock as an investment and rated the stock as a "Hold." In theMy analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large ...

Core Insights - Waters (WAT) reported revenue of $661.71 million for the quarter ended March 2025, reflecting a year-over-year increase of 3.9% and exceeding the Zacks Consensus Estimate of $654.63 million by 1.08% [1] - The company's EPS for the quarter was $2.25, up from $2.21 in the same quarter last year, also surpassing the consensus estimate of $2.22 by 1.35% [1] Financial Performance Metrics - Net Sales from the Water Division reached $587.30 million, exceeding the average estimate of $578.15 million by analysts, with a year-over-year increase of 4.5% [4] - Net Sales from the TA Division were $74.41 million, slightly below the estimated $77.60 million, representing a year-over-year decrease of 0.7% [4] - Product sales amounted to $400.53 million, surpassing the average estimate of $379.44 million, with a year-over-year increase of 6.5% [4] - Service net sales from TA service were $23.91 million, slightly above the average estimate of $23.34 million, showing a year-over-year decline of 1.4% [4] - Chemistry consumables generated $137.64 million in sales, close to the estimated $138.45 million, reflecting a year-over-year increase of 2.6% [4] - TA instrument systems sales were $50.50 million, below the estimated $52.82 million, with a year-over-year decrease of 0.4% [4] - Waters service net sales were $237.27 million, below the average estimate of $249.33 million, with a year-over-year increase of 0.4% [4] - Waters instrument systems sales reached $212.40 million, exceeding the average estimate of $188.18 million, with a year-over-year increase of 11.1% [4] Stock Performance - Over the past month, Waters' shares have returned +6.9%, compared to the Zacks S&P 500 composite's +11.5% change, indicating a performance that may align with the broader market in the near term [3]

Core Insights - Waters (WAT) reported quarterly earnings of $2.25 per share, exceeding the Zacks Consensus Estimate of $2.22 per share, and showing a slight increase from $2.21 per share a year ago, resulting in an earnings surprise of 1.35% [1] - The company achieved revenues of $661.71 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.08% and reflecting a year-over-year increase from $636.84 million [2] - Waters has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Waters' stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.93, with projected revenues of $737.31 million, and for the current fiscal year, the consensus EPS is $12.84 on revenues of $3.08 billion [7] Industry Context - The Medical - Instruments industry, to which Waters belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - In Q1 2025, sales grew 4% as reported and 7% in constant currency, reaching $662 million, at the high end of guidance [10][25][28] - Earnings per share (EPS) were $2.25 on a non-GAAP basis, reflecting low single-digit growth, and $2.03 on a GAAP basis [11][29] - Gross margin was 58.2%, and adjusted operating margin was 25.5% [29][36] Business Line Data and Key Metrics Changes - Instrument sales grew 11%, driven by mid-teens growth in liquid chromatography and mass spectrometry, particularly in pharma and industrial markets [11][27] - Recurring revenue increased mid-single digits, consistent with expectations for a quarter with two fewer days [11][28] - The chemistry consumables business saw MaxPeak Premier columns grow more than 30% [15] Market Data and Key Metrics Changes - Pharma sales grew 8%, industrial sales grew 6%, and academic and government sales grew 3% [25][26] - In China, sales grew 5%, with double-digit growth in industrial and academic/government applications [11][25] - India delivered revenue growth close to 20% in constant currency, driven by strong demand from generics manufacturers and CDMOs [18][61] Company Strategy and Development Direction - The company is focused on operational excellence, innovation, and maintaining close customer relationships to navigate a dynamic macro environment [8][21] - The strategy includes launching differentiated new products and investing in capabilities to enhance competitive positioning [8][21] - The company raised its full-year constant currency sales growth guidance to 5% to 7% due to better-than-expected Q1 performance [22][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 objectives despite challenges from newly announced tariffs [9][38] - The company expects high single-digit earnings growth for the year, supported by strong sales volume and favorable foreign exchange movements [10][21] - Management noted that the pharma industry remains attractive, with strong innovation and customer spending [52][72] Other Important Information - The company established a cross-functional task force to assess tariff exposure and implement mitigation plans, limiting the net impact of tariffs to $10 million on adjusted operating margin for 2025 [24][36] - The company is actively evaluating M&A opportunities to enhance long-term shareholder value and may resume share repurchase programs in 2025 [31][99] Q&A Session Summary Question: Can you discuss the replacement cycle dynamics in pharma biotech? - Management noted strong double-digit growth in instruments, particularly in large pharma, with the replacement cycle well underway [45][46] Question: Have you seen any change in behavior related to tariffs from pharma customers? - Management indicated no significant change in behavior, with strong momentum continuing through the quarter [49][50] Question: What are your expectations for pricing this year? - Management expects 200 basis points of like-for-like pricing gains, with additional surcharges related to tariffs contributing another 50 basis points [56][57] Question: How do you view the growth in India? - Management expressed confidence in the sustainability of growth in India, driven by strong demand from generics manufacturers [60][61] Question: What is the impact of tariffs on your supply chain? - Management detailed actions taken to mitigate tariff impacts, including inventory adjustments and selective surcharges [64][66] Question: What are your expectations for China for the balance of the year? - Management anticipates low single-digit growth in China for the remainder of the year, despite a strong start [76][77] Question: What is the latest on the academic and government segment? - Management indicated that this segment is small, accounting for about 3% of total revenue, and has seen a significant decline forecasted for the rest of the year [86][89]

Financial Data and Key Metrics Changes - In the first quarter, sales grew 4% as reported and 7% in constant currency, landing at the high end of guidance [11][26] - Earnings per share (EPS) reached $2.25 on a non-GAAP basis, reflecting low single-digit growth and high single-digit growth in constant currency terms [12][29] - GAAP EPS was $2.03, with gross margin at 58.2% and adjusted operating margin at 25.5% [29][37] Business Line Data and Key Metrics Changes - Instrument sales grew 11%, driven by mid-teens growth in both liquid chromatography and mass spectrometry, particularly in pharma and industrial end markets [12][27] - Recurring revenue increased mid-single digits, consistent with expectations for a quarter with two fewer days [12][28] - The chemistry consumables business saw MaxPeak Premier columns grow more than 30% [16] Market Data and Key Metrics Changes - In China, sales grew 5%, led by double-digit growth in industrial and academic/government applications [12][27] - Asia grew 13% overall, with China specifically growing 5%, while the Americas grew 6% and Europe grew low single digits [27] - The pharma segment saw double-digit growth in Asia and the Americas, with 3% growth in Europe [26] Company Strategy and Development Direction - The company is focused on three guiding principles: staying close to customers, enhancing competitive position through innovation, and supporting employees [10] - The company raised its full-year constant currency sales growth guidance to 5% to 7% due to better-than-expected first-quarter performance [22][33] - The company is well-positioned to benefit from US pharma reshoring initiatives and tariff-related capacity shifts [21][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 objectives despite recent tariffs, with no expected impact on original EPS guidance [38][40] - The company anticipates high single-digit earnings growth this year, supported by strong sales volume and favorable foreign exchange movements [11][25] - Management noted that the pharma industry remains attractive, with strong innovation and customer spending [52][72] Other Important Information - The company established a cross-functional task force to assess tariff exposure and implement mitigation plans, limiting the net impact of tariffs to a modest $10 million on adjusted operating margin for 2025 [24][36] - Free cash flow for the first quarter was $234 million, representing 35% of sales, with a net debt position of approximately $1.1 billion [30][31] Q&A Session Summary Question: Can you discuss the replacement cycle dynamics in pharma biotech? - Management noted strong double-digit growth in instruments, particularly in large pharma, with the replacement cycle well underway [46] Question: Have you seen any change in behavior related to tariffs from pharma customers? - Management indicated no significant change in behavior, with strong momentum continuing through the quarter [51] Question: What are your expectations for pricing this year? - Management expects 200 basis points of like-for-like pricing gains, with additional surcharges related to tariffs contributing another 50 basis points [57][59] Question: How do you view the growth in India? - Management reported close to 20% revenue growth in India, driven by strong demand from generics manufacturers [19][62] Question: What is the impact of tariffs on your supply chain? - Management detailed that the gross impact of tariffs is $45 million, with various mitigation strategies already in place [66][70] Question: What is the outlook for the academic and government segment? - Management indicated that this segment is small, accounting for about 3% of total revenue, and has been adjusted for a significant decline for the rest of the year [85][87]

Q1 2025 Financial Performance - Q1 2025 revenue reached $662 million, reflecting a 7% growth in constant currency[6] - Recurring revenue experienced an 11% growth in constant currency[6] - Instrument sales increased by 4% as reported and 11% in constant currency[6] - Non-GAAP EPS for Q1 2025 was $2.25, a 2% increase, with a 7% growth in constant currency[6] Growth Drivers and Market Segmentation - Instrument sales showed strong growth, with Pharma up 14%, Industrial up 10%, and Academic & Government up 7% in constant currency[9] - Asia showed the strongest geographic growth at 13%, followed by the Americas at 6%, and Europe at 1% in constant currency[19] - Waters segment grew 8% while TA segment grew 1%[19] Innovation and Idiosyncratic Growth - Next-Gen Flagship HPLC sales grew over 3 times year-over-year, representing approximately 20% of HPLC sales[14] - Waters Xevo TQ Absolute sales grew 56% year-over-year[14] - QA/QC testing of GLP-1 drugs is expected to contribute an average 30bps growth annually from 2024 to 2030[15] - PFAS testing is a $400 million global market, estimated to grow approximately 20%[15] FY & Q2 2025 Guidance - The company projects constant currency revenue growth of +5% to +7% for FY 2025 and Q2 2025[21] - The company projects Non-GAAP EPS of $12.75 to $13.05 for FY 2025 and $2.88 to $2.98 for Q2 2025[21]

News Summary Empower Software is the industry's most established and compliant-ready chromatography data system (CDS), widely adopted globally and used to submit data for more than 80% of novel drugs to regulatory authorities.4 The new integration unlocks the ability to use MALS techniques in quality control for biotherapeutics, improving efficiency and Good Manufacturing Practices (GMP) readiness, while reducing end-user training in compliant settings. "Today's launch of Empower for Multi-Angle Light Scatt ...

Financial Performance - First quarter 2025 sales were $662 million, a 4% increase from $637 million in Q1 2024, and a 7% increase in constant currency[3] - GAAP diluted EPS for Q1 2025 was $2.03, up from $1.72 in Q1 2024; non-GAAP EPS was $2.25, reflecting a 2% growth[4] - Instrument sales grew by 11% in constant currency, driven by strong performance in the pharmaceutical and industrial markets[6] - Sales in the pharmaceutical market reached $391 million, a 5% increase from $374 million in Q1 2024[18] - For the three months ended March 29, 2025, GAAP net income was $121,381,000, an increase from $102,196,000 for the same period in 2024, representing a growth of 18.8%[28] - Adjusted Non-GAAP earnings per diluted share for the three months ended March 29, 2025, was $2.25, compared to $2.21 for the same period in 2024, reflecting a 1.8% increase[28] Guidance and Projections - The company raised its full-year 2025 constant currency sales growth guidance to +5.0% to +7.0%[7] - Full-year 2025 non-GAAP EPS guidance was increased to a range of $12.75 to $13.05, indicating a year-over-year growth of approximately +8% to +10%[8] - Second quarter 2025 constant currency sales growth is expected to be in the range of +5.0% to +7.0%[9] - Second quarter 2025 non-GAAP EPS is projected to be between $2.88 and $2.98, reflecting a year-over-year growth of approximately +10% to +13%[9] - Projected sales growth rate for the twelve months ending December 31, 2025, is expected to be between 4.0% and 6.0%[32] - Projected GAAP earnings per diluted share for the twelve months ending December 31, 2025, is estimated to be between $11.88 and $12.18[32] Cash and Assets - Cash and cash equivalents increased to $382,872,000 as of March 29, 2025, up from $325,355,000 at the end of 2024, marking a growth of 17.7%[26] - Total assets rose to $4,591,576,000 as of March 29, 2025, compared to $4,553,795,000 at the end of 2024, indicating a 0.8% increase[26] - Free cash flow for the three months ended March 29, 2025, was $233,811,000, slightly down from $233,840,000 for the same period in 2024[30] - The company reported a net cash provided by operating activities of $259,553,000 for the three months ended March 29, 2025, compared to $262,870,000 for the same period in 2024[28] Liabilities and Obligations - Total liabilities decreased to $2,629,179,000 as of March 29, 2025, from $2,725,288,000 at the end of 2024, a reduction of 3.5%[26] - The company recognized a retention bonus obligation of $2,545,000 related to the Wyatt acquisition, which is not considered a normal ongoing business expense[23] Market Performance - Asia reported sales of $220 million, a 6% increase from $207 million in Q1 2024, with a constant currency growth rate of 13%[18] - The company emphasized its commitment to operational excellence and mitigating impacts from tariffs and policy changes[5]