Summary of Waters (NYSE: WAT) FY Conference Call - January 12, 2026 Company Overview - **Company**: Waters Corporation - **Industry**: Life Science Tools and Diagnostics - **Recent Acquisition**: BD's Bioscience and Diagnostics business Key Points Transformation and Growth Strategy - Waters has undergone a transformation over the past five years, enhancing commercial strength and innovation, leading to the acquisition of BD's Bioscience and Diagnostics business [2][19] - The company invests approximately 10% of product sales in R&D to develop complex instrumentation into user-friendly systems for regulated applications [3][4] Market Position and Financial Performance - Waters operates in core markets valued at approximately $11 billion, growing mid-single digits, while the biologics market is growing at double digits [5][6] - The total addressable market (TAM) for Waters is estimated at $19-$20 billion, with growth projected in mid to high single digits [6] - Waters has achieved an adjusted operating margin that is 180 basis points higher than its closest competitor, with an 8% growth rate over the last 12 months, outpacing the industry average [16] Product and Service Innovations - Key product innovations include: - **Alliance iS**: Leading instrument in its category, reducing errors in quality control by 40% and growing 270% year-over-year [10] - **Xevo TQ Absolute**: Most sensitive mass spectrometer for PFAS testing, growing 40% in its third year [10] - **MaxPeak Premier columns**: Bio-inert columns for biologics characterization, growing 35% year-over-year [11] - The service team contributes roughly one-third of total revenue, with a Net Promoter Score (NPS) 20% higher than the industry average [4] Acquisition of BD's Bioscience and Diagnostics Business - The acquisition is valued at $3.3 billion, with a 5% CAGR from 2019 to 2024, and 80% of revenue is recurring [19][20] - The business includes: - **Biosciences**: $1.5 billion revenue, focusing on flow cytometry and antibodies [20] - **Diagnostic Solutions**: $1.8 billion revenue, with a strong presence in microbiology and molecular diagnostics [21] Strategic Synergies and Future Growth - Expected synergies from the acquisition include: - **Cost Synergies**: Estimated at $200 million over three years, with potential to exceed $300 million [29][30] - **Revenue Synergies**: Anticipated revenue growth of $115 million from high-growth adjacencies [32] - Focus on cross-selling opportunities and leveraging BD's commercial infrastructure to enhance Waters' product offerings [33] Financial Outlook - Waters projects a 7% CAGR in revenue over the next five years, with a margin expansion of approximately 500 basis points [39] - Expected mid-teen EPS growth, supported by strong performance in biologics and diagnostics [39] Additional Insights - The company is optimistic about the impact of GLP-1 testing, PFAS testing, and generics testing in India, contributing significantly to revenue growth [14][17] - Waters aims to build a biologics QC environment that simplifies processes similar to small molecules, enhancing market access for biosimilars [25][51] Conclusion - Waters is positioned strongly for future growth, driven by strategic acquisitions, innovative product offerings, and a robust financial outlook, setting the stage for continued success in the life sciences industry [39]