Waters Corp ((WAT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Waters Corp painted a picture of robust financial health and strategic optimism. The company showcased strong financial performance, buoyed by product innovation and significant regional growth, particularly in the pharmaceutical sector and the Chinese market. Despite facing some challenges in specific segments and external factors such as tariffs, Waters Corp’s raised guidance and strategic initiatives, including a pending combination with BD, indicate a positive outlook for the future.
Strong Revenue and Earnings Growth
Waters Corp reported an impressive 8% growth in sales, both as reported and in constant currency. Instrument sales increased by 6%, while recurring revenue saw a 9% rise. The company’s non-GAAP earnings per share surged by 16% to $3.40, demonstrating its ability to exceed financial expectations.
Pharma and Regional Performance
The pharmaceutical segment was a standout performer, growing by 11%, with notable contributions from the Americas and Asia. China, in particular, exhibited remarkable strength, with pharma sales increasing by more than 20%, underscoring the region’s critical role in Waters Corp’s growth strategy.
Product Innovation and Adoption
Waters Corp continues to lead in product innovation, highlighted by the launch of the Xevo CDMS and the strong growth of the Xevo TQ Absolute platforms. Products launched in the past five years have grown approximately 50% this quarter, reflecting the company’s commitment to advancing technological solutions.
Guidance Increase
Looking ahead, Waters Corp has raised its full-year 2025 guidance, projecting constant currency sales growth of 6.7% to 7.3% and adjusted earnings per share between $13.05 and $13.15. This increase signals confidence in sustained double-digit growth and the company’s strategic direction.
Combination with BD’s Bioscience & Diagnostic Solutions
The anticipated combination with BD’s Bioscience & Diagnostic Solutions is expected to complete by the end of Q1 2026. This strategic move aims to realize synergies and create additional value, further strengthening Waters Corp’s market position.
Challenges in Specific Segments
Despite overall strong performance, Waters Corp faced lower growth in China generics, pharma discovery, and CROs. The Academic and Government segment also saw minimal growth, increasing by only 1%.
Currency and Tariff Impacts
The company’s guidance takes into account the impacts of recent tariff rate increases and currency translation effects, ensuring a comprehensive outlook that factors in external economic challenges.
In conclusion, Waters Corp’s earnings call reflects a company on a strong growth trajectory, driven by innovation and strategic regional expansion. While challenges remain in certain segments, the overall sentiment is positive, with raised guidance and strategic initiatives paving the way for continued success.