Key financial results
- Total revenue: Total company as reported revenue was $1.767 billion, comprising $871 million of organic revenue and $896 million of Waters Bioscience and Waters Diagnostic Solutions.
total company as reported revenue was $1.767 billion, comprising of $871 million of organic revenue and $896 million of Waters Bioscience and Waters Diagnostic Solutions.
- Organic and EPS: Organic revenue grew 9% as reported and 10% in constant currency, while adjusted EPS grew 21% to $4.10, driven by top line momentum, operational excellence, and cost actions.
- Margins: Adjusted gross margin was 55.8% and adjusted operating margin was 30.1%.
Adjusted gross margin was 55.8% and adjusted operating margin was 30.1%
- Cash flow: Free cash flow was $68 million after $81 million of integration, restructuring, and SAP-related costs and $240 million of timing items primarily related to higher receivables.
Free cash flow was $68 million after approximately $81 million of BD integration, restructuring and SAP-related costs
Business segment results
- Analytical Sciences: The Analytical Sciences division delivered revenue of $703 million, up 8% as reported and 9% in constant currency.
The Analytical Sciences division delivered as reported revenue of $703 million, up 8% as reported and 9% in constant currency.
- Analytical Subsegments: Within Analytical Sciences, instruments grew 10%, chemistry grew 12%, and service grew 8% in constant currency.
In constant currency, instruments grew 10% and chemistry grew 12% and service grew 8%.
- Biosciences: The Biosciences division delivered revenue of $396 million, representing 2% reported growth.
The Biosciences division delivered as reported revenue of $396 million, representing 2% reported growth
- Biosciences Flow: In Biosciences, Flow Clinical grew 4% and Flow Research grew 1%.
- Advanced Diagnostics: The Advanced Diagnostics division delivered revenue of $575 million, representing 2% reported growth.
The Advanced Diagnostics division delivered as reported revenue of $575 million, representing 2% reported growth
- Diagnostic Solutions: Diagnostic Solutions delivered $500 million of reported revenue, flat year-over-year, with microbiology up 4% and Molecular Diagnostics and Point of Care down 6%.
Diagnostic Solutions delivered $500 million of reported revenue, flat year-over-year.
- Clinical Business Unit: The clinical business unit delivered $75 million of revenue, up 17% as reported and 18% in constant currency.
The clinical business unit, which reflects our mass spec diagnostic portfolio, delivered $75 million of revenue, up 17% as reported and 18% in constant currency
- Material Sciences: The Material Sciences division delivered revenue of $93 million, up 7% as reported and 9% in constant currency.
The Material Sciences division delivered as reported revenue of $93 million, up 7% as reported and 9% in constant currency
Capital allocation
- Capital return: Management did not discuss share repurchases, dividends, or debt paydown on the call.
Industry trends and dynamics
- Pricing: Net price realization scaled to 120 basis points, up from 90 basis points last quarter.
net price realization scaled to 120 basis points, up from 90 basis points last quarter
- China: China returned to growth for Biosciences after 10 quarters of decline, driven by localization coming online ahead of schedule.
- Semiconductors and Data: In semiconductor and data testing, growth is accelerating in the Material Sciences division as chip production output and data center build out scale further.
Competitive landscape
- Market Position: Legacy Waters has averaged approximately 8% organic constant currency growth over past quarters, outpacing the life science tools market at 2% and the closest peer at 5%.
We have averaged approximately 8% organic constant currency growth, well ahead of 2% for the life science tools market and 5% for our closest peer.
Macroeconomic environment
- Demand Environment: Management noted that improving end markets and rising customer lab activity are lifting demand for products in preclinical and downstream settings.
Growth opportunities and strategies
- Synergies: Management remains firmly on track to deliver $50 million of revenue synergies in 2026.
We firmly remain on track to deliver $50 million of revenue synergies in 2026.
- Acquisitions: Waters announced the acquisition of MobileIron Systems, a pioneer of slim high-resolution ion mobility separation technology, to expand in Discovery Proteomics.
this morning, we announced the acquisition of [ MobileIron ] Systems, the pioneer of slim high-resolution ion mobility separation technology.
- HPV Partnerships: Commercial partnerships for the Onclarity HPV self-collection kit were announced with Quest Diagnostics and LabCorp, with revenue expected to begin next year.
We recently announced commercial partnerships for this breakthrough innovation with Quest Diagnostics and LabCorp
Financial guidance and outlook
- Full Year Revenue: Management raised full year 2026 revenue guidance by $43 million at the midpoint, with total reported revenue expected to be $6.479 billion to $6.497 billion.
- Full Year EPS: Full year 2026 adjusted EPS guidance was raised to a range of $14.60 to $14.70.
we are also raising our full year 2026 adjusted earnings per fully diluted share guide to the range of $14.60 to $14.70.
- Q4 Revenue: For the fourth quarter of 2026, total reported revenue is expected to be $1.801 billion to $1.819 billion, with organic constant currency revenue growth of 7% to 9%.
total reported fourth quarter 2026 revenue of $1.801 billion to $1.819 billion.
- Q4 EPS: Fourth quarter adjusted EPS is expected to be in the range of $4.58 to $4.68.
Fourth quarter adjusted earnings per fully diluted share is expected to be in the range of $4.58 to $4.68.
- 2027 Framework: For 2027, management provided a starting framework of mid-single-digit plus organic growth and 100 basis points of operating margin expansion to 29.2%.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total As-Reported Revenue | $1.767 billion | Not stated |
| Organic Revenue | $871 million | 9% as reported, 10% constant currency |
| Biosciences and Diagnostic Solutions Revenue | $896 million | 1% reported growth |
| Adjusted EPS | $4.10 | 21% growth |
| Analytical Sciences Division Revenue | $703 million | 8% as reported, 9% constant currency |
| Material Sciences Division Revenue | $93 million | 7% as reported, 9% constant currency |
How management sounded
Positive (+45 on our -100 to +100 scale). Management highlighted double-digit organic growth, rapid BD integration, raised full-year guidance, and strong new product momentum. 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
- Progression of BD integration and the realization of $50 million in revenue synergies for 2026 and additional synergies for 2027.
- Adoption and scaling of new product launches including the FACSDiscover A7 Flow Cytometer and Xevo MRT instruments.
- Impact of localization initiatives in China and the normalization of channel inventory.
Earlier calls
- Q2 2026 (Aug 4, 2026), tone Positive: Waters delivered strong second-quarter results with 7% reported and 9% constant currency organic revenue growth, exceeding guidance across all four divisions.
