Waters Corporation (WAT) Presents at Cowen 43rd Annual Health Care Conference (Transcript)

Summary of Waters Corporation Conference Call Company Overview - Company: Waters Corporation (NYSE: WAT) - Event: Cowen 43rd Annual Health Care Conference - Date: March 6, 2023 - Participants: Udit Batra (President, CEO and Director), Daniel Brennan (Cowen and Company) Key Points Company Performance - Waters Corporation reported a 12% growth in revenue, with a 3-year stack growth of approximately 8.5% to 9% on a constant currency basis [3][6] - The company maintained flat margins despite facing strong foreign exchange headwinds and ongoing investments in new technologies [3][6] Innovation and Product Development - The company emphasized its commitment to innovation, highlighting new products across various segments including liquid chromatography (LC), mass spectrometry (MS), and software [4][5] - The introduction of new technologies, such as MaxPeak Premier technology and the BioAccord, is expected to significantly contribute to future revenue growth [8][4] Market Segments and Growth Drivers - The company serves resilient end markets, particularly in pharmaceuticals and industrial segments. The pharmaceutical segment is seeing growth in biologics, which now represent about 40% of the pipeline [6][7] - The PFAS testing market is valued between $200 million to $250 million and is growing at 20% [7] - The TA business is also shifting towards more resilient segments like battery testing and electronics testing [7] Financial Guidance - For 2023, Waters Corporation is guiding for 5% to 6.5% growth, which is considered a reasonable starting point given the high base from previous years [13][14] - The company expects to maintain a steady demand profile and does not anticipate a significant decline in instrument growth [18][19] Backlog and Order Outlook - The backlog was slightly down in Q4 but remains at an all-time high, indicating strong demand [20] - The company does not foresee a dramatic change in demand or execution, particularly in the instrument segment [19][20] Strategic Acquisitions - Waters Corporation announced the acquisition of Wyatt Technology, which is expected to enhance its capabilities in biologics testing [5][42] - The acquisition is seen as a strategic move to accelerate growth in adjacent markets, particularly in biologics and viral vector testing [42] Regional Insights - India is showing strong growth, particularly in small molecules and biologics, with expectations for continued expansion [43][44] - China presents uncertainties for 2023, but the company remains optimistic about recovery in the second half of the year, driven by demand in pharmaceuticals and testing [45][46] Software as a Value Proposition - The company views its software, particularly Empower, as a critical asset, with 80% of drugs filed with the FDA utilizing this platform [39][40] - Waters Corporation is focused on monetizing its software position and enhancing its features to create a comprehensive bioanalytical ecosystem [41][40] Conclusion - Waters Corporation is positioned for continued growth through strong commercial execution, innovation, and strategic acquisitions. The company remains optimistic about its market outlook despite potential uncertainties in specific regions and segments.