Q3 2025 Waters Corp Earnings Call Transcript
Key Points
- Waters Corp (WAT) reported strong third-quarter results with sales growing 8% as reported and in constant currency.
- The company achieved a 16% increase in non-GAAP earnings per share, reaching $3.40, which exceeded the midpoint of their guidance by $0.20.
- Instrument sales grew 11% quarter-over-quarter, marking the largest third-quarter ramp in the company's history outside of the 2020 COVID year.
- The company's innovative products, such as the Xevo CDMS and new chemistry products, are gaining adoption and solving unmet needs in bioanalytical characterization.
- Waters Corp (WAT) raised its full-year 2025 guidance, expecting constant currency sales growth in the range of 6.7% to 7.3% and adjusted earnings per share between $13.05 and $13.15, representing double-digit growth.
- Despite strong quarterly performance, the increase in full-year guidance was less than the magnitude of the quarterly beat, indicating cautious outlook.
- Margins were lighter than expected, with a significant jump in operating margin anticipated in Q4, raising concerns about sustainability.
- The tax rate was low in Q3, contributing to EPS upside, but a significant increase is expected in Q4, which could impact net earnings.
- There are still pockets of low growth, particularly in China generics pharma discovery and CROs, which remain slower than expected.
- The company faces potential challenges in maintaining momentum in China, as academic and government stimulus-related revenue could lead to an air pocket once the stimulus is exhausted.
Welcome to the Waters Corporation third quarter 2025 financial results conference call. (Operator Instructions). This call is being recorded. If anyone has any objections, please disconnect at this time. It is now my pleasure to turn the call over to Mr. Caspar Tudor, Head of Investor Relations. Please go ahead, sir.
Thank you, Leila, and good morning, everyone. Welcome to Waters Corporation's third quarter earnings call. Joining me today are Dr. Udit Batra, our President and Chief Executive Officer; and Amol Chaubal, our Senior Vice President and Chief Financial Officer. Before we begin, I will cover the cautionary language.
In this conference call, we will make forward-looking statements regarding future events or future financial performance of the company. Additionally, we will comment on the expected timing for completion of Water's pending combination with the Biosciences and Diagnostic Solutions business, of Becton Dickenson & Company as well as the expected financial and operational
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