Waters Corporation
WAT · NYSE
Next quarter
Reports Nov 3, 2026.
Consensus is $4.01 EPS for Sep 2026 across 8 estimates, ranging $3.95 to $4.16.
WAT Jun 2026
- 1.33%
- +0.99%
- $3.01
- $3.05
- —
- $1.65B
Reported results
- $1.65B
- -$86.00M
- -5.23%
- -$136.00M
- -$1.39
Highlights
- Revenue: Reported revenue was $1.645 billion, up 113% year over year and above the high end of guidance, including $828 million of organic revenue and $817 million from the acquired Biosciences and Diagnostic Solutions businesses.
- Organic growth: Organic revenue increased 7% as reported and 9% in constant currency, with ASD instrument revenue up 8% in constant currency and chemistry consumables growing double digits.
- Acquired businesses: Biosciences and Diagnostic Solutions revenue was $817 million, $15 million above guidance and up 4% versus the prior-year comparable period, accelerating to mid-single-digit growth under Waters ownership.
- Adjusted earnings: Adjusted EPS was $3.05, up 3% from $2.95 a year ago, $0.04 above the $3.01 consensus estimate and at the high end of company guidance.
- GAAP results: GAAP diluted EPS was a loss of $1.39 versus earnings of $2.47 a year ago, reflecting $399 million of acquisition-related amortization and fair-value step-up charges, plus $51 million of restructuring and other costs.
- End-market recovery: Pharma and A&G delivered low-double-digit organic constant-currency growth, while management said recovery broadened into previously lagging customer segments.
- Full-year outlook: Waters raised organic constant-currency growth guidance to 7%–9%, acquired-business revenue to approximately $3.045 billion, reported revenue to $6.415–$6.476 billion and adjusted EPS to $14.45–$14.65, or 10%–12% growth.
- Next quarter: Third-quarter guidance calls for organic constant-currency growth of 8%–10%, acquired-business revenue of approximately $895 million, total revenue of $1.745–$1.762 billion and adjusted EPS of $3.95–$4.05.
- Cash flow and leverage: Adjusted free cash flow was $202 million versus $159 million a year ago, while cash was $539 million and debt was $5.086 billion at July 4 following the acquisition.
Analysis
Waters delivered a stronger-than-expected second quarter as the end-market recovery broadened and the newly acquired Biosciences and Diagnostic Solutions businesses performed ahead of plan. Reported revenue of $1.645 billion was more than double the $771 million generated a year ago, although the comparison is heavily shaped by the acquisition. On an underlying basis, organic revenue rose 7% reported and 9% in constant currency to $828 million. Adjusted EPS of $3.05 exceeded the $3.01 consensus estimate and rose 3% from $2.95 a year ago. Reported revenue also increased from $1.27 billion in the prior quarter, while GAAP EPS declined from a prior-quarter loss of $0.87 to a loss of $1.39 as acquisition accounting continued to weigh on earnings.
The print was defined by broad-based organic momentum, faster-than-expected improvement in the acquired portfolio and a substantial increase in full-year guidance. ASD instrument growth reached 8% in constant currency, chemistry consumables grew double digits, and Pharma and A&G each delivered low-double-digit growth. The acquired businesses generated $817 million of revenue, 4% above the comparable prior-year period and $15 million above guidance, with management citing commercial execution and operational improvements. Waters raised every major full-year guidance component, including adjusted EPS to $14.45–$14.65, while adjusted free cash flow rose to $202 million from $159 million a year ago.
Underlying growth recovery
The legacy Waters business produced $828 million of organic revenue, up 7% on a reported basis and 9% in constant currency from $771 million a year ago. Management characterized the recovery as broadening beyond the customer segments that had led the initial rebound. Pharma and A&G each delivered low-double-digit growth in constant currency, supporting stronger demand across the portfolio.
- ASD instruments: Revenue was $240 million, up 5% reported and 8% in constant currency.
- Chemistry consumables: Growth was in the double digits, helping ASD reported revenue reach $669 million versus $627 million a year ago.
- Materials Sciences: Revenue increased 6% to $87 million from $82 million.
Acquired portfolio execution
The acquired Biosciences and Diagnostic Solutions businesses contributed $817 million of revenue in their first full quarter under Waters ownership, versus $783 million on a prior-year comparable basis. The $34 million increase represents 4% growth and was $15 million above company guidance. Waters attributed the acceleration to commercial execution, operational improvements and its 180-day growth revitalization plan.
- Biosciences: Revenue was $368 million.
- Diagnostic Solutions: Revenue was $449 million versus $425 million in the comparable prior-year period.
- Clinical business: Revenue was $72 million versus $62 million a year ago.
- Integration: Management said integration momentum and synergies are building, but the acquisition also materially increased reported costs, debt and amortization.
Earnings and acquisition accounting
Adjusted operating income was $411 million, or a 25.0% margin, compared with $225 million and a 29.1% margin a year ago. The lower adjusted margin reflects the changed portfolio mix and acquisition-related cost structure, while early cost actions helped offset unfavorable foreign exchange translation. Adjusted EPS still rose to $3.05 from $2.95 and exceeded the $3.01 consensus estimate.
- GAAP impact: Waters reported an operating loss of $86 million and a net loss of $136 million, versus operating income of $188 million and net income of $147 million a year ago.
- Purchase accounting: Cost of revenue included $155 million of inventory and fixed-asset step-up charges, while purchased-intangible amortization was $244 million; $399 million of these items was excluded from adjusted results.
- Other adjustments: Restructuring and other costs were $51 million, ERP and transformation costs were $9 million, and acquisition-related costs were $37 million.
Raised 2026 outlook
Waters raised all components of its full-year outlook after the second-quarter outperformance and stronger end-market conditions. The new forecast assumes organic constant-currency revenue growth of 7%–9%, compared with 10% growth in the first half, and incorporates approximately $3.045 billion of acquired-business revenue on an owned-period basis.
- Full-year revenue: Reported revenue is expected at $6.415–$6.476 billion, including organic reported revenue of $3.370–$3.431 billion.
- Full-year earnings: Adjusted EPS is expected at $14.45–$14.65, representing 10%–12% year-over-year growth, or 12%–14% in constant currency.
- Third quarter: Guidance calls for total revenue of $1.745–$1.762 billion, acquired-business revenue of approximately $895 million and adjusted EPS of $3.95–$4.05.
Cash flow and balance sheet
Adjusted free cash flow improved to $202 million from $159 million a year ago, despite a $144 million working-capital and other cash use. Operating cash flow was $200 million versus $41 million a year ago, helped by non-cash acquisition charges. The balance sheet now reflects the scale and financing of the BDS transaction.
- Liquidity: Cash and equivalents were $539 million at July 4, down from $588 million at December 31, 2025.
- Debt: Notes payable and debt stood at $5.086 billion, up from $1.407 billion at year-end.
- Acquisition footprint: Total assets increased to $24.751 billion from $5.077 billion, including $8.521 billion of intangible assets and $9.421 billion of goodwill.
