Key financial results
- Agilent reported third quarter revenue of $1.88 billion, growing 7.3% on a core basis and exceeding the high end of guidance by 140 basis points.
For the third quarter, Agilent reported $1.88 billion in revenue, growing 7.3% on a core basis and exceeding the high end of our guidance by 140 basis points.
- Operating margin excluding the net benefit from tariff refunds was 27.2%, which was 80 basis points ahead of implied guidance.
Our operating margin of 27.2%, excluding the net benefit from tariff refunds, was 80 basis points ahead of our implied guidance of 26.4%
- Including a net benefit of $20 million from tariff refunds, the operating margin was 28.3%.
Including the net benefit from tariff refunds of $20 million, our operating margin was 28.3%.
- Earnings per share excluding tariff refunds were $1.56, which was $0.06 above the high end of guidance and represented 14% year-over-year growth.
- Including the net benefit from tariff refunds, earnings per share were $1.62.
Including the net benefit from tariff refunds, our earnings per share were $1.62.
- Gross margins were 56.4%, or 54.9% excluding tariff refunds, representing an 180 basis point year-over-year improvement.
Q3 gross margins were 56.4%. Excluding an approximately 160 basis point net benefit from tariff refunds, gross margins were 54.9%.
- Operating cash flow was $519 million, and free cash flow was $439 million with a non-GAAP net income conversion ratio of 96%.
Business segment results
- LDG: Life Sciences and Diagnostics Markets Group revenue grew 10% on a core basis.
LDG revenue grew 10% on a core basis, nicely ahead of expectations.
- LC: Liquid chromatography revenue grew low double digits despite a mid-teens comparison.
- ATD: Advanced therapeutics division revenue grew nearly 30% on strong demand and disciplined execution.
Our advanced therapeutics division, which includes NASD and BIOVECTRA specialty CDMO operations grew nearly 30%.
- AMG: Applied Markets Group revenue grew 7% on a core basis, led by high single-digit growth in spectroscopy and double-digit growth in vacuum.
AMG grew 7% in the quarter on a core basis, well ahead of our low single-digit expectations.
- ACG: Agilent CrossLab Group revenue grew north of 5% on a core basis, driven by strong performance in consumables.
ACG grew north of 5% in the quarter on a core basis, modestly ahead of our forecast, driven by strong performance in consumables.
- Pharma: Pharma end market revenue grew 12%, driven by double-digit biotech growth and mid-single-digit small molecule growth.
Within pharma, biotech grew double digits and small molecule grew mid-single digits.
- CAM: Chemicals and advanced materials grew 7%, led by outstanding performance in advanced materials.
- Diagnostics: Diagnostics and clinical grew 6%, slightly below expectations, though underlying pathology orders grew at a robust double-digit rate.
Diagnostics and clinical grew at the high end of the mid-single-digit range, slightly below our high single-digit guide.
- Food and Academic: Food end market revenue was roughly flat, while academic and government declined 3%.
Capital allocation
- Capital expenditures were $80 million in the quarter.
and we invested $80 million in capital expenditures.
- The company repurchased $78 million in shares during the quarter.
We purchased $78 million in shares and paid $72 million in dividends in Q3.
- Dividends paid during the quarter totaled $72 million.
and paid $72 million in dividends in Q3.
- The $600 million senior notes offering was successfully completed in late June in conjunction with the Biocare acquisition, leaving net leverage at 1 turn.
we successfully completed our $600 million senior notes offering in late June. We ended the quarter with a net leverage ratio of 1 turn
Industry trends and dynamics
- End markets broadly continued to improve, supported by stronger funding translating into spending from small and mid-cap biotech customers.
our largest end markets continue to improve, and our teams are converting that improvement into results
- China revenue grew 9% due to localized manufacturing, go-to-market capabilities, and commercial execution in pharma and food.
- GLP-1 related revenue delivered more than 70% year-over-year growth with contributions from both CDMO and analytical lab businesses.
Our GLP-1 momentum continues, delivering more than 70% year-over-year growth in the quarter
- PFAS testing solutions grew 20% despite a low double-digit comparison.
Importantly, PFAS grew 20% despite a low double-digit compare.
Competitive landscape
- Pharma grew 12% in the quarter, outpacing expectations and growth rates reported by peers.
Pharma grew 12% in the quarter, well ahead of our high single-digit expectations and growth rates reported by our peers.
- Agilent secured reshoring orders from 5 of the top 10 pharma companies in the world in the third quarter alone.
In fact, we have secured reshoring orders from 5 of the top 10 pharma companies in the world in the third quarter alone.
- Customer experience surveys indicated over 85% of customers rated their experience as highly favorable, with onboarding and support at or above 95%.
Macroeconomic environment
- Currency exchange rates had a favorable impact of 0.2% on revenue during the quarter.
Currency had a favorable impact of 0.2%, a lower tailwind than our May guidance.
- Middle East conflict and demand for memory chips continued to pressure costs through inflation.
While the Middle East conflict and demand for memory chips continue to pressure our costs
- Strategic pricing initiatives delivered approximately 200 basis points in the quarter, offsetting inflationary pressures.
Our strategic pricing initiatives delivered approximately 200 basis points in Q3.
Growth opportunities and strategies
- The Ignite Operating System drove operational efficiencies, strategic pricing of 200 basis points, and manufacturing excellence.
Our strategic pricing initiatives delivered approximately 200 basis points in Q3. We have now surpassed our initial full year target
- New product launches including the 9500 ICP-MS, 8890B and 8860B GCs, and Altura columns experienced strong customer adoption ahead of plan.
Our recent product launches at the ASMS conference in June are all off to a strong start.
- Initial pharma reshoring orders booked in Q3 exceeded expectations, with revenue contributions expected in fiscal 2027 and beyond.
In pharma, we booked our initial reshoring orders in Q3 ahead of our expectations, and the funnel continues to build.
- The Biocare acquisition closed in late June and contributed $10 million in revenue during the third quarter.
Biocare delivered $10 million in Q3 following close of the transaction.
Financial guidance and outlook
- Full-year core revenue growth is expected to be 5.8% to 6%, an increase of 65 basis points at the midpoint.
we now expect core growth of 5.8% to 6% for the full year. At the midpoint, this represents an increase of 65 basis points versus our prior guide.
- Full-year reported revenue is expected to be in the range of $7.49 billion to $7.51 billion.
we now expect fiscal year '26 revenue to be in the range of $7.49 billion to $7.51 billion on a reported basis.
- Full-year earnings per share excluding tariff refunds are expected to be between $6.12 and $6.15.
fiscal year '26 earnings per share are now expected to be between $6.12 and $6.15
- Full-year earnings per share including tariff refunds are expected to be between $6.18 and $6.21.
- Fourth-quarter reported revenue is expected to be between $1.98 billion and $2 billion, representing core growth of 5.2% to 6.2%.
implies that reported revenue in the fourth quarter will be in the range of $1.98 billion to $2 billion. This represents growth of roughly 5.2% to 6.2% on a core
- Fourth-quarter earnings per share are expected to range from $1.71 to $1.74.
Together, EPS is expected to be in the range of $1.71 to $1.74
Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $1.88 billion | 7.3% core growth |
| Operating Margin | 28.3% | 27.2% ex-refund |
| Earnings Per Share | $1.62 | 14% year-over-year ex-refund |
| Pharma Revenue Growth | 12% | Year-over-year |
| Advanced Therapeutics Division Growth | Nearly 30% | Year-over-year |
| China Revenue Growth | 9% | Year-over-year |
How management sounded
Positive (+45 on our -100 to +100 scale). Management highlighted robust top and bottom-line beats, strong execution, and raised full-year guidance. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The timeline and revenue ramp of Train C in the specialty CDMO business starting next spring.
- The realization of pharma reshoring orders and their revenue contributions in fiscal 2027.
- Continued demand trends and stimulus effects in the China market.
Earlier calls
- Q2 2026 (May 27, 2026), tone Balanced: Agilent reported $1.83 billion in revenue, growing 6.3% on a core basis and beating the high end of guidance by 80 basis points, driven by strong operational execution and replacement cycle momentum.
