Agilent Technologies(A) - 2025 Q3 - Quarterly Results

Executive Summary & Financial Highlights Third-Quarter Fiscal Year 2025 Performance Agilent achieved strong revenue and net income growth in Q3 FY2025, exceeding revenue guidance and marking its fifth consecutive quarter of accelerating core revenue growth Third-Quarter Fiscal Year 2025 Key Financial Data (Year-over-Year): | Metric | Amount | YoY Growth (Reported) | YoY Growth (Core) | | :--- | :--- | :--- | :--- | | Revenue | $1.74 billion | 10.1% | 6.1% | | GAAP Net Income | $336 million | 19.1% | - | | GAAP EPS | $1.18 | 22% | - | | Non-GAAP Net Income | $390 million | 1.3% | - | | Non-GAAP EPS | $1.37 | 4% | - | Full Year 2025 and Q4 Outlook The company raised its full-year FY2025 revenue outlook and provided Q4 revenue and non-GAAP EPS guidance, anticipating continued growth Full Year 2025 and Q4 Outlook: | Metric | Range | YoY Growth (Reported) | YoY Growth (Core) | | :--- | :--- | :--- | :--- | | Full Year 2025: | | | | | Revenue | $6.91 billion - $6.93 billion | 6.2% - 6.5% | 4.3% - 4.6% | | Non-GAAP EPS | $5.56 - $5.59 | - | - | | Q4 Fiscal Year 2025: | | | | | Revenue | $1.822 billion - $1.842 billion | 7.1% - 8.3% | 4.8% - 6.0% | | Non-GAAP EPS | $1.57 - $1.60 | - | - | CEO Commentary CEO Padraig McDonnell highlighted strong Q3 performance driven by the successful "Ignite Transformation" strategy and focus on profitable growth and operational excellence across all business groups, regions, and key markets - Third-quarter results mark the fifth consecutive quarter of accelerating core revenue growth, demonstrating the success of the Ignite Transformation strategy[3] - The company's focus on profitable growth and operational excellence led to growth across all three business groups, all regions, and its two largest markets[5] - The Ignite enterprise operating model enables agile and rapid response to a highly dynamic macro environment, while maintaining focus on strong execution, innovation pipeline, and deep customer relationships[5] Segment Performance Life Sciences and Diagnostics Markets Group (LDG) The LDG segment achieved significant revenue growth in Q3 FY2025, though its operating margin slightly decreased year-over-year LDG Third-Quarter Fiscal Year 2025 Performance (Year-over-Year): | Metric | 2025 Q3 | 2024 Q3 | YoY Growth (Reported) | YoY Growth (Core) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $670 million | $585 million | 14% | 7% | | Operating Margin | 17.6% | 19.6% | - | - | Agilent CrossLab Group (ACG) The ACG segment achieved robust revenue growth in Q3 FY2025 and maintained a high operating margin, despite a slight year-over-year decrease ACG Third-Quarter Fiscal Year 2025 Performance (Year-over-Year): | Metric | 2025 Q3 | 2024 Q3 | YoY Growth (Reported) | YoY Growth (Core) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $744 million | $691 million | 8% | 5% | | Operating Margin | 33.3% | 35.9% | - | - | Applied Markets Group (AMG) The AMG segment achieved revenue growth in Q3 FY2025, with operating margin remaining stable but slightly decreasing year-over-year AMG Third-Quarter Fiscal Year 2025 Performance (Year-over-Year): | Metric | 2025 Q3 | 2024 Q3 | YoY Growth (Reported) | YoY Growth (Core) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $324 million | $302 million | 7% | 5% | | Operating Margin | 21.8% | 23.2% | - | - | Financial Statements (GAAP) Condensed Consolidated Statement of Operations In Q3 FY2025, the company's net revenue and net income both increased year-over-year; however, for the nine months ended July 31, 2025, net income and diluted EPS decreased year-over-year Condensed Consolidated Statement of Operations (Millions of US Dollars, except per share data): | Metric | 2025 Q3 | 2024 Q3 | 2025 Nine Months | 2024 Nine Months | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $1,738 | $1,578 | $5,087 | $4,809 | | Cost of Sales | $850 | $723 | $2,434 | $2,190 | | R&D Expenses | $111 | $127 | $336 | $368 | | Selling, General and Administrative Expenses | $417 | $395 | $1,281 | $1,171 | | Operating Income | $360 | $333 | $1,036 | $1,080 | | Net Income | $336 | $282 | $869 | $938 | | Diluted EPS | $1.18 | $0.97 | $3.05 | $3.20 | Condensed Consolidated Balance Sheet As of July 31, 2025, the company's total assets and total stockholders' equity increased, primarily due to higher cash and cash equivalents and accounts receivable, while total liabilities slightly decreased Condensed Consolidated Balance Sheet (Millions of US Dollars): | Metric | July 31, 2025 | October 31, 2024 | | :--- | :--- | :--- | | Assets: | | | | Cash and Cash Equivalents | $1,535 | $1,329 | | Accounts Receivable, Net | $1,382 | $1,324 | | Inventories | $1,014 | $972 | | Total Current Assets | $4,253 | $3,959 | | Property, Plant and Equipment, Net | $1,966 | $1,778 | | Goodwill | $4,475 | $4,477 | | Total Assets | $12,226 | $11,846 | | Liabilities and Equity: | | | | Total Current Liabilities | $1,892 | $1,895 | | Long-Term Debt | $3,350 | $3,345 | | Total Liabilities | $5,856 | $5,948 | | Total Stockholders' Equity | $6,370 | $5,898 | | Total Liabilities and Stockholders' Equity | $12,226 | $11,846 | Condensed Consolidated Statement of Cash Flows For the nine months ended July 31, 2025, net cash provided by operating activities decreased year-over-year, net cash used in investing activities remained constant, and net cash used in financing activities significantly decreased due to fewer common stock repurchases Condensed Consolidated Statement of Cash Flows (Millions of US Dollars): | Metric | 2025 Nine Months | 2024 Nine Months | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,014 | $1,270 | | Net Cash Used in Investing Activities | $(304) | $(304) | | Net Cash Used in Financing Activities | $(515) | $(777) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $1,537 | $1,782 | Non-GAAP Reconciliations and Definitions Non-GAAP Net Income and Diluted EPS Reconciliations The company provides non-GAAP net income and diluted EPS, excluding specific items like restructuring, intangible asset amortization, and transformation initiatives, to offer a clearer view of core business operations Non-GAAP Net Income and Diluted EPS Reconciliations (Millions of US Dollars, except per share data): | Metric | 2025 Q3 GAAP | 2025 Q3 Non-GAAP | 2024 Q3 GAAP | 2024 Q3 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Net Income | $336 | $390 | $282 | $385 | | Diluted EPS | $1.18 | $1.37 | $0.97 | $1.32 | | Metric | 2025 Nine Months GAAP | 2025 Nine Months Non-GAAP | 2024 Nine Months GAAP | 2024 Nine Months Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Net Income | $869 | $1,140 | $938 | $1,121 | | Diluted EPS | $3.05 | $4.00 | $3.20 | $3.83 | - Non-GAAP adjustments primarily include restructuring and related costs, asset impairments, intangible asset amortization, transformation initiatives, acquisition and integration costs, net (gain) loss on equity securities, pension settlement losses, and other adjustments[23][24][25][26][27][28][29] Non-GAAP Segment Operating Income Operating income for each reporting segment is presented on a non-GAAP basis, excluding specific expenses such as restructuring, intangible asset amortization, and transformation initiatives, to reflect management's assessment of core business units Third-Quarter Fiscal Year 2025 Segment Operating Income (Millions of US Dollars): | Segment | Operating Income | Operating Margin (%) | | :--- | :--- | :--- | | Life Sciences and Diagnostics Markets Group | $118 | 17.6% | | Agilent CrossLab Group | $248 | 33.3% | | Applied Markets Group | $71 | 21.8% | - Segment operating income excludes expenses such as restructuring and related costs, intangible asset amortization, transformation initiatives, and acquisition and integration costs[37] Core Revenue Reconciliations by Segment The company provides core revenue growth data to exclude the impact of currency fluctuations and recent acquisitions and divestitures, thereby assessing the true performance of the underlying business Third-Quarter Fiscal Year 2025 Core Revenue Growth by Segment (Year-over-Year): | Segment | GAAP Revenue (Q3'25) | GAAP YoY Growth (%) | Core YoY Growth (%) | Currency Impact (Percentage Points) | | :--- | :--- | :--- | :--- | :--- | | Life Sciences and Diagnostics Markets Group | $670 million | 14% | 7% | 2 | | Agilent CrossLab Group | $744 million | 8% | 5% | 3 | | Applied Markets Group | $324 million | 7% | 5% | 2 | | Agilent (Total) | $1,738 million | 10% | 6% | 2 | - Core revenue growth excludes the impact of currency and acquisitions and divestitures over the past 12 months[12][40] Non-GAAP Measures Explanation Agilent uses non-GAAP measures to evaluate core business performance, forecast future results, and incentivize employees, believing these metrics provide useful supplemental information for investors, but emphasizes a comprehensive understanding in conjunction with GAAP financial data - Non-GAAP net income and EPS primarily exclude the impact of restructuring and related costs, intangible asset amortization, transformation initiatives, acquisition and integration costs, and net (gain) loss on equity securities[13][14][23] - Core revenue growth excludes the impact of currency, acquisitions, and divestitures to assess underlying business performance[12][40] - Management uses non-GAAP metrics to evaluate core business performance, forecast future results, and incentivize employees, believing these metrics aid internal comparisons with historical performance and competitors[30] - The company advises investors that non-GAAP data supplements, rather than replaces, GAAP financial measures and should be understood in conjunction with GAAP financial statements for a comprehensive view of the company's profit and loss[31][32] Company Information & Disclosures About Agilent Technologies Agilent Technologies is a global leader in analytical and clinical laboratory technologies, providing instruments, software, services, and expertise to help customers achieve scientific breakthroughs - Agilent Technologies Inc. is a global leader in analytical and clinical laboratory technologies[9] - The company offers comprehensive solutions including instruments, software, services, and expertise[9] Company Overview: | Metric | Data | | :--- | :--- | | FY2024 Revenue | $6.51 billion | | Global Employees | Approximately 18,000 | Forward-Looking Statements This press release contains forward-looking statements regarding Agilent's growth prospects, business, financial performance, and strategy, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements concern Agilent's growth prospects, business, financial performance, revenue, non-GAAP earnings guidance for Q4 and full-year FY2025, and the impact of its new organizational structure, operational transformation, and market-focused strategy[10] - Risks and uncertainties include unforeseen changes in customer business strength, product demand, currency markets, customer purchasing decisions, and the ability to realize integration and restructuring benefits[10] - Additional risks encompass geopolitical uncertainties, global economic conditions, supply chain adaptability, new product introductions, acquisition integration, and the ability to comply with complex regulations[10] Conference Call & Investor Relations Agilent will host a conference call to discuss its Q3 FY2025 financial results and has provided investor and media contact information - Agilent management will host a conference call on August 27, 2025, at 1:30 p.m. PT to discuss Q3 FY2025 financial results[8] - The conference call will be webcast live, with a replay available on the company's website for 90 days[8] - Investor contact: Parmeet Ahuja, +1 408-345-8948, parmeet_ahuja@agilent.com[15] - Media contact: Andréa Topper, +1 408-709-0060, andrea.topper@agilent.com[15]