Financial Data and Key Metrics Changes - Revenue from continuing operations was $11.8 million, an increase of 59% compared to $7.4 million in the prior year period [6][22] - Adjusted EBITDA loss improved nearly 50% year over year, with a loss of $4.6 million compared to a loss of $5.3 million in the prior year [7][27] - Net loss from continuing operations was $9.8 million, up from $5.9 million in the prior year period [27] - Cash and cash equivalents at the end of the quarter were $124.3 million, with no debt outstanding [28] Business Line Data and Key Metrics Changes - Handheld product and service revenue was $11 million, up 86% from $5.9 million in the prior year, driven by $4 million in revenue from recently acquired FTIR products [22] - Program product and service revenue decreased to $100,000, down $1.4 million year over year [22] - OEM and funded partnership revenue was $700,000, with no comparable revenue recorded in the prior year [24] - Recurring revenue represented 37% of total revenues, amounting to $4.4 million, a 54% increase over the prior year [25] Market Data and Key Metrics Changes - The company is seeing strong interest in modern detection equipment across military and security agencies due to heightened geopolitical tensions [9] - The Texas Department of Public Safety placed a $2 million order for MX908 devices, reflecting urgency in modernizing public safety tools [11] - The EU's Rescue U initiative is prompting member states to build strategic stockpiles of response capabilities, with significant orders from countries like Finland and the Czech Republic [13] Company Strategy and Development Direction - The company is focused on three strategic areas for 2025: market expansion, advancing innovation, and reinforcing financial discipline [10][19] - The transformation aims to position the company in higher growth handheld markets aligned with national security funding and public health responses [5] - The company anticipates positive adjusted EBITDA by Q4 2025 and full-year cash flow positivity in 2026 [19][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities arising from increased national security funding and public health initiatives [8] - The company expects total revenue growth to accelerate above 20% in 2026, driven by expanding handheld adoption and launching next-generation products [30] - Management reiterated confidence in achieving cash flow breakeven in 2026, supported by a healthy cash balance and streamlined cost structures [28][30] Other Important Information - The company has transitioned its production from Boston to Danbury, Connecticut, which is expected to lower facility costs and improve margins [20][44] - The strategic divestiture of the biopharma desktop portfolio has fortified the company's cash position and reduced operating costs [5][19] Q&A Session Summary Question: Insights on RedWave integration and cross-selling opportunities - Management highlighted successful integration with RedWave, leading to a diversified product portfolio and increased sales team efficiency [38][39] Question: Update on the transition to Danbury and annual savings targets - The transition is progressing well, with expected annual savings of approximately $2 million from the move [44] Question: Timing for full production mode on the AvCAD program - Management expects a decision on full-rate production by the end of the government fiscal year, with potential revenue ramping gradually [51][52] Question: Visibility on government contracts and installed base expansion - Management noted good pipeline development for federal and international opportunities, with a diversified sales approach [70][72] Question: Pricing strategy and capacity utilization in Danbury - Pricing is expected to remain stable for 2025, with immediate cost benefits anticipated from the Danbury facility [75][76]

Financial Data and Key Metrics Changes - Revenue from continuing operations for Q1 2025 was $11.8 million, a 59% increase from $7.4 million in the prior year period, driven by strong device sales [6][23] - Adjusted EBITDA loss improved nearly 50% year over year in Q1 2025 compared to Q1 2024, reflecting the impact of the strategic transformation [7][28] - Net loss from continuing operations for Q1 2025 was $9.8 million, compared to $5.9 million in the prior year period, largely due to a non-cash charge related to the RedWave acquisition [28] Business Line Data and Key Metrics Changes - Handheld product and service revenue was $11 million for Q1 2025, up 86% from $5.9 million in Q1 2024, primarily driven by $4 million in revenue from recently acquired FTIR products [23] - Recurring revenue, which includes consumables, accessories, and service revenue, represented 37% of total revenues, amounting to $4.4 million, a 54% increase year over year [25] - Program product and service revenue decreased to $100,000 in Q1 2025, down $1.4 million year over year due to the completion of initial low-rate production deliveries [23][24] Market Data and Key Metrics Changes - The company is seeing strong interest in modern detection equipment across military and security agencies, particularly in response to heightened geopolitical tensions in Europe [10][14] - The U.S. government has increased its focus on drug interdiction, which is expected to drive future procurement opportunities for the company's handheld devices [8][9] Company Strategy and Development Direction - The company has established three strategic focus areas for 2025: increasing adoption of devices for public health and safety, advancing innovation in analytical tools, and reinforcing financial discipline [11][20] - The transition of production from Boston to Danbury, Connecticut is expected to significantly lower facility costs and improve margins, supporting the path to profitability [21][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA by Q4 2025 and cash flow positivity in 2026, supported by growth drivers and cost savings from facility consolidation [20][31] - The company anticipates total revenue growth to accelerate above 20% in 2026, driven by expanding handheld adoption and launching next-generation products [31] Other Important Information - The company ended Q1 2025 with $124.3 million in cash and cash equivalents, with no debt outstanding, providing a strong financial position to support future growth [29] - The company is focused on maintaining pricing stability for 2025 while monitoring potential tariff impacts [72] Q&A Session Summary Question: Insights on RedWave integration and demand acceleration - Management highlighted successful integration with RedWave, contributing to a diversified revenue stream and strong sales team performance [39][40] Question: Update on the transition to Danbury and annual savings - The transition is progressing well, with expected annual savings of approximately $2 million, with benefits anticipated in the second half of the year [44] Question: Timing for full production mode on AvCAD - Full rate production decision is expected by the end of the government fiscal year, with potential revenue ramping gradually [51][54] Question: Installed base expansion and gross margin benefits - Over 2,800 MX systems are active, with a significant portion under service contracts, and next-gen systems are expected to provide gross margin benefits [57][58] Question: Visibility on government contracts and pricing strategy - Management noted good pipeline development for federal and international opportunities, with pricing expected to remain stable for 2025 [66][72]

Core Insights - Analysts expect Waters (WAT) to report quarterly earnings of $2.22 per share, reflecting a year-over-year increase of 0.5% [1] - Projected revenues for the quarter are $654.63 million, which is a 2.8% increase from the previous year [1] - The consensus EPS estimate has been revised 0.2% higher in the last 30 days, indicating a collective reevaluation by analysts [1][2] Revenue Estimates - 'Net Sales- Water Division' is expected to reach $578.15 million, indicating a year-over-year change of +2.9% [4] - 'Net Sales- TA Division' is projected at $77.60 million, reflecting a year-over-year increase of +3.5% [4] - 'Net Sales- Product sales' is forecasted to be $379.44 million, suggesting a change of +0.9% year over year [4] Service and Product Sales Estimates - 'Net Sales- Service net sales- TA service' is estimated at $23.34 million, indicating a year-over-year decline of -3.8% [5] - 'Net Sales- Product Net Sales- Chemistry consumables' is expected to reach $138.45 million, reflecting a year-over-year increase of +3.2% [5] - 'Net Sales- Product Net Sales- TA instrument systems' is projected at $52.82 million, indicating a year-over-year change of +4.2% [6] - 'Net Sales- Service net sales- Waters service' is expected to be $249.33 million, reflecting a year-over-year increase of +5.5% [6] - 'Net Sales- Product Net Sales- Waters instrument systems' is forecasted at $188.18 million, indicating a year-over-year decline of -1.6% [7] Stock Performance - Waters shares have decreased by -4.1% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [8] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [8]

Financial Data and Key Metrics Changes - The company reported better than expected results in Q1 2025, with revenue and profitability slightly above plan across all business segments [6][15] - Organic sales declined by 1% year-over-year, primarily due to difficult comparisons in semiconductor, agriculture, chemical, and energy businesses [15] - Adjusted EBITDA margin decreased by 50 basis points to 25.5% due to volume deleverage and margin dilution from the acquisition of Mak, partially offset by positive price cost and productivity [15][16] - Adjusted EPS for Q1 2025 was $1.75, exceeding the high end of the guidance by $0.10 [15] Business Line Data and Key Metrics Changes - In Health and Science Technology (HST), organic sales declined by 1%, while organic orders increased by 3% [18] - In Flow Measurement Technology (FMT), organic sales declined by 4% and organic orders declined by 3% [19] - Fire and Safety Division (FSD) saw organic sales increase by 5% and organic orders up by 2% [20] Market Data and Key Metrics Changes - The company experienced resilient demand overall, with organic orders up by 1% and backlog increasing by approximately $60 million [15] - The semiconductor business faced headwinds, particularly in wafer fabrication, while the MRO facing businesses provided a slight tailwind [9][18] Company Strategy and Development Direction - The company is focusing on five strong growth platforms and has identified integrative threats to support higher growth and expanded margins [25][26] - The strategy includes flat organizational structures with autonomous decision rights and a focus on quick iterative innovation [25][26] - The company is committed to returning capital to shareholders while exploring multiple avenues for capital deployment [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the fluid trade and geopolitical situation but noted that they have not observed any immediate signs of demand softening [21][22] - The company has proactively identified an additional $20 million in savings targets for 2025 to mitigate potential volume pressures [22] - Management expressed confidence in their ability to absorb the impact of tariffs through pricing actions and operational efficiencies [21][23] Other Important Information - The company reported a $40 million multiyear agreement for a custom wastewater filtration solution, with 25% of the order booked in Q1 [13] - The company has $490 million remaining under its current share repurchase authorization [16] Q&A Session Summary Question: Clarification on guidance and inputs - Management confirmed comfort with guidance and flexibility to manage inputs, including FX and cost savings [30][32] Question: Resilience of the portfolio amid macro pressures - Management highlighted strong growth platforms and productivity optimization as key to resilience [38][39] Question: Tariff impacts and pricing - Management indicated that the majority of tariff impacts will be seen in Q3 and Q4, with proactive pricing actions in place [45][46] Question: Strategic growth platforms and branding - Management explained the rationale behind combining businesses into strategic growth platforms while maintaining individual brand equity [77][78] Question: Update on semiconductor recovery - Management acknowledged industry challenges but noted some growth tailwinds in MRO facing businesses [70][72]