8-K: Waters Q3 2025 Sales & EPS Beat Guidance, Raises Outlook

Waters Corporation reported strong third-quarter 2025 financial results, exceeding sales and non-GAAP EPS guidance and raising its full-year outlook, driven by robust Pharma segment growth and new product uptake.

Summary

• Third quarter 2025 sales were $800 million, an increase of 8% as reported and 8% in constant currency, compared to $740 million in Q3 2024, exceeding guidance.
• GAAP diluted earnings per share (EPS) for Q3 2025 were $2.50, compared to $2.71 for Q3 2024.
• Non-GAAP EPS for Q3 2025 grew 16% to $3.40, compared to $2.93 for Q3 2024, exceeding guidance.
• Instruments sales grew 6% in constant currency, led by high single-digit LC & MS growth, and the TA Division returned to positive growth.
• Recurring revenue grew 9% in constant currency, with chemistry growing double digits due to strong uptake of new bioseparations products.
• The Pharmaceutical market segment grew 11% in constant currency, driven by broad-based growth across all regions, including double-digit growth in the Americas.
• Full-year 2025 constant currency sales growth guidance was raised to a range of +6.7% to +7.3%.
• Full-year 2025 non-GAAP EPS guidance was raised to a range of $13.05 to $13.15, reflecting year-over-year growth of approximately +10% to +11%.

Sentiment

Score: 9

Explanation: The company reported strong Q3 results, surpassing both sales and non-GAAP EPS guidance. It also raised its full-year sales and non-GAAP EPS outlook, indicating robust underlying business momentum. Key segments like Pharma and recurring revenue showed double-digit growth, and the acquisition integration is on track, all contributing to a highly positive sentiment.

Positives

• Q3 2025 sales of $800 million exceeded guidance.
• Q3 2025 non-GAAP EPS of $3.40 exceeded guidance, reflecting strong 16% growth.
• Instruments sales grew 6% in constant currency, with high single-digit LC & MS growth.
• The TA Division returned to positive growth.
• Recurring revenue grew 9% in constant currency, with chemistry growing double digits.
• Strong uptake of new Affinity bioseparation columns.
• The Pharma segment grew 11% in constant currency, with double-digit growth in the Americas.
• Full-year 2025 constant currency sales growth guidance was raised to +6.7% to +7.3%.
• Full-year 2025 non-GAAP EPS guidance was raised to $13.05 to $13.15, reflecting +10% to +11% year-over-year growth.
• Developed the Xevo Charge Detection Mass Spectrometer, which uses up to 100-fold less sample volume and delivers results in under 10 minutes.
• Integration planning for the acquisition of BD's Biosciences & Diagnostic Solutions business is progressing as expected, with high confidence in achieving significant cost and revenue synergies.

Negatives

• GAAP diluted EPS for Q3 2025 decreased to $2.50 from $2.71 in Q3 2024.

Risks

• One or more closing conditions for the proposed transaction with Augusta SpinCo Corporation (SpinCo) and Becton, Dickinson and Company (BD), including regulatory approvals, may not be satisfied or waived.
• A governmental entity may prohibit, delay, or refuse to grant approval for the proposed transaction, or impose conditions, limitations, or restrictions.
• The required approval by Waters stockholders for the proposed transaction may not be obtained.
• The proposed transaction may not be completed on the terms or in the timeframe expected, or at all.
• Unexpected costs, charges, or expenses may result from the proposed transaction.
• Uncertainty exists regarding the expected financial performance of the combined company following completion of the proposed transaction.
• Failure to realize the anticipated benefits of the proposed transaction, including delays in completion or integration, is possible.
• Difficulties and delays may occur in achieving revenue and cost synergies from the transaction.
• The combined company may be unable to retain and hire key personnel.
• The occurrence of any event could give rise to the termination of the proposed transaction.
• Stockholder litigation or other legal matters related to the proposed transaction may affect its timing or occurrence or result in significant costs.
• Evolving legal, regulatory, and tax regimes could impact the business.
• Changes in general economic and/or industry-specific conditions or volatility from tariffs could affect results.
• Actions by third parties, including government agencies, pose a risk.
• The anticipated tax treatment of the proposed transaction may not be obtained.
• There is a risk of greater than expected difficulty in separating SpinCo's business from BD's.
• Management time may be disrupted from ongoing business operations due to the pendency of the proposed transaction.
• Other effects of the pendency of the proposed transaction on relationships with employees, customers, suppliers, or other counterparties are possible.
• General risks include expectations regarding strategy, future financial and operational performance, economic and market conditions, growth rates, strategic initiatives, adapting to global dynamics (tariffs, supply chain), potential impacts of a U.S. government shutdown, ability to retain and attract customers, market size and growth opportunities, competitive positioning, projected costs, technological capabilities, and objectives of management.

Future Outlook

Waters Corporation is raising its full-year 2025 constant currency sales growth guidance to a range of +6.7% to +7.3% and its full-year 2025 non-GAAP EPS guidance to $13.05 to $13.15, reflecting approximately +10% to +11% year-over-year growth. For the fourth quarter of 2025, the company expects constant currency sales growth between +5.0% and +7.0% and non-GAAP EPS in the range of $4.45 to $4.55. Integration planning for the acquisition of BD's Biosciences & Diagnostic Solutions business is progressing as expected, with high confidence in achieving significant cost and revenue synergies.

Management Comments

• "Our team yet again delivered outstanding results, driven by strong execution and our differentiated product portfolio." Dr. Udit Batra, President & CEO.
• "Pharma grew double digits as the instrument replacement cycle entered its second year, and new LC-MS and chemistry products captured opportunities from the growing share of biologics and novel modalities in the pharma pipeline." Dr. Udit Batra.
• "Our chemistry portfolio continues to set the standard in the industry, with excellent customer reception of our new Affinity bioseparation columns." Dr. Udit Batra.
• "In bioanalytical characterization, we have worked closely with customers to develop the Xevo Charge Detection Mass Spectrometer, which uses up to 100-fold less sample volume than current techniques and delivers results in under 10 minutes." Dr. Udit Batra.
• "We will uphold the same high standards of innovation, operational excellence, and execution in BDs Biosciences & Diagnostic Solutions business as we accelerate our long-term growth strategy." Dr. Udit Batra.
• "Integration planning is progressing as expected, and we remain highly confident in the achievability of the significant cost and revenue synergies we have identified." Dr. Udit Batra.

Industry Context

The strong performance in the Pharma segment, driven by an instrument replacement cycle and new products for biologics and novel modalities, indicates a healthy demand within the pharmaceutical and biotechnology sectors for advanced analytical instrumentation. Innovation in bioanalytical characterization, such as the Xevo Charge Detection Mass Spectrometer, suggests a competitive landscape where companies are striving for higher sensitivity, lower sample volume, and faster analysis times, which are critical for drug discovery and development. The ongoing integration planning for the acquisition of BD's Biosciences & Diagnostic Solutions business positions Waters to expand its footprint and capabilities in related life science tools, potentially creating a more diversified and robust offering in the analytical and diagnostic markets.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to global benchmarks for direct assessment against industry standards.

Corporate Governance

Legal Proceedings

• No new or ongoing legal proceedings were detailed in this filing. However, the company noted the risk of potential stockholder litigation or other legal matters related to the proposed transaction with SpinCo and BD.

Stakeholder Impact

• Shareholders: Positive impact from strong financial performance, raised guidance, and potential synergies from the BD acquisition. They are urged to read proxy/information statements for the proposed transaction.
• Employees: Potential impact from the integration of BD's Biosciences & Diagnostic Solutions business, with a noted risk of inability to retain and hire key personnel.
• Customers: Benefits from new product innovations such as the Xevo Charge Detection Mass Spectrometer and Affinity bioseparation columns. Potential impact from the BD acquisition on customer relationships.
• Suppliers: Potential impact from the BD acquisition on supplier relationships.
• Creditors: Debt levels and financing costs are relevant, though the current period shows a net reduction in debt.

Next Steps

• Waters Corporation will webcast its Q3 2025 financial results conference call on November 4, 2025, at 8:00 a.m. Eastern Time.
• Filing of a registration statement on Form S-4 by Waters, including a preliminary and definitive proxy statement/prospectus, for the proposed transaction with SpinCo and BD.
• Mailing of the definitive proxy statement/prospectus to Waters stockholders.
• Filing of a registration statement on Form 10 by SpinCo, serving as an information statement/prospectus for the spin-off from BD.
• Completion of the proposed transaction between Waters, SpinCo, and BD, subject to closing conditions and regulatory approvals.

Key Dates

Recommendation

Waters Corporation delivered exceptional Q3 2025 results, significantly surpassing both sales and non-GAAP EPS guidance. The company's decision to raise its full-year 2025 sales and non-GAAP EPS outlook signals strong underlying business momentum and management confidence. Key growth drivers include double-digit expansion in the Pharma segment and recurring revenue, coupled with successful new product introductions. The ongoing integration of the BD Biosciences & Diagnostic Solutions business is progressing as expected, with management confident in achieving substantial synergies. These factors collectively point to robust operational health and a positive trajectory for future earnings, making the stock an attractive investment.

Keywords

Waters Corporation, WAT, financial results, Q3 2025, earnings, sales, EPS, analytical instruments, separations technologies, software, life sciences, materials sciences, food sciences, environmental sciences, pharmaceutical, industrial, academic, government, LC-MS, bioseparations, Xevo Charge Detection Mass Spectrometer, Becton Dickinson, BD, SpinCo, acquisition, spin-off, corporate governance, investor relations