WAT · Q1 2026 Earnings

Bullish

Waters Corporation

Reported May 5, 2026

30-second summary

Waters' first quarter as the combined BD entity printed $1.267B revenue (+91% YoY reported, +11% organic constant-currency) and non-GAAP EPS of $2.70, beating the Q1 guide of $1.198B–$1.211B / $2.25–$2.35 by ~$56M and 35 cents respectively. Organic cc growth of 11% versus the 7–9% guide is the real story — back-loaded EPS conservatism from Q4 was set against a stronger H1 than management let on. FY raised on every line: organic cc growth to 6.5–8.0% (from 5.5–7.0%), adjusted EPS to $14.40–$14.60 (from $14.30–$14.50), and BD acquired revenue to ~$3.035B (from ~$3.000B).

Headline numbers

EPS

Q1 FY2026

$2.70

Revenue

Q1 FY2026

$1.27B

+91.0% YoY

Free cash flow

Q1 FY2026

$-0.04B

Operating margin

Q1 FY2026

-3.7%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.27B	+91.0%	$0.93B	+35.9%
EPS	$2.70	—	$4.53	-40.4%
Operating margin	-3.7%	—	29.0%	-3270bps
Free cash flow	$-0.04B	—	$0.13B	-133.6%

Guidance

Strong Q1 FY2026 beat on both revenue and EPS, with management

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	$1.198 billion to $1.211 billion	$1.267 billion	+$0.056 billion above high end of guide	Beat
Adjusted EPS	Q1 FY2026	$2.25 to $2.35	$2.70	+$0.35 above high end of guide	Beat
Organic constant currency revenue growth	Q1 FY2026	7.0% to 9.0%	11%	+2-4 percentage points above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q2 FY2026	$1.616 billion to $1.631 billion	+109–116% YoY
Adjusted EPS	Q2 FY2026	$2.95 to $3.05	—
Organic constant currency revenue growth	Q2 FY2026	6.0% to 8.0%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Organic constant currency revenue growth	FY 2026	5.5% to 7.0%	6.5% to 8.0%	+1.0pp raised at midpoint (prior 6.25% → current 7.25%)	Raised
Adjusted EPS	FY 2026	$14.30 to $14.50	$14.40 to $14.60	+$0.10 raised at high end; +$0.05–$0.10 overall	Raised
Adjusted EPS growth (year-over-year)	FY 2026	8.9% to 10.4%	10% to 11%	+0.6–1.1pp raised at midpoint	Raised
Organic reported revenue	FY 2026	$3.355 billion to $3.405 billion	$3.370 billion to $3.420 billion	+$0.015–$0.065 billion raised	Raised
Acquired business reported revenue	FY 2026	$3.000 billion	$3.035 billion	+$0.035 billion	Raised

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Analytical Sciences Division	$0.607B	+14.0%
Advanced Diagnostics Division	$0.349B	+560.0%
Materials Sciences Division	$0.079B	+6.0%
Biosciences and Diagnostic Solutions Revenue (Q1 owned period)	$520 million	—
Product Revenue	$919 million	—
Service Revenue	$348 million	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Americas	$0.505B	+98.0%
Europe	$0.412B	+122.0%
Asia	$0.35B	+58.0%
Organic Revenue Growth (constant currency)	11%	—
Adjusted EPS Growth Year-over-Year	20%	—
Adjusted Operating Margin	23.6%	—

Management tone

External uncertainty → AI/cloud informatics pilots → Replacement-cycle mid-innings runway → BD as the operating story with conservative organic baseline → BD execution is delivering ahead of plan and synergies are running cleaner than the deal model

The BD narrative has moved from "structured synergy bridge" (Q2) to "operational countdown" (Q3) to "embedded in guide at conservative levels" (Q4) to "tracking ahead and producing pricing/compliance upside not yet in numbers" (Q1). This quarter management explicitly described the 180-day plan delivering tangible results within weeks — weekly call rates in US Advanced Diagnostics doubled, an initial review of 1,600 US Diagnostic Solutions reagent rental contracts identified ~700 (~44%) currently out of compliance representing a "double-digit million dollar shortfall annually," and deal desks are now operating across biosciences and diagnostics. (In Q&A, Udit referenced the review as "roughly 1,700 or so accounts, close to half" — directionally consistent with the prepared remarks but with slightly looser framing.) Management quoted on the call: "Our Biosciences and Advanced Diagnostics Divisions are off to a strong start with a significant improvement in growth rates." Two quarters ago Tycho Peterson pressed on whether BD's pre-close deterioration was structural; this quarter Q4 weakness was characterized in Q&A as benefitting from "tremendous collaboration" and improved funnel quality post-close, not market deterioration.

Pricing discipline is the new operational lever. Management deployed the Waters pricing team across biosciences and diagnostic solutions, established two new deal desks, and said pricing actions "taken right away in the quarter" are already augmenting revenue. Bringing BD pricing discipline up to Waters levels via deal desks, tariff mitigation on legacy BD business, and reagent contract compliance is upside NOT embedded in guidance. Q4's framing offered unquantified upside buckets; Q1 has now operationalized three of them (pricing, compliance, tariffs) — a meaningful credibility upgrade on the conservatism claim.

Chemistry has shifted from cyclical strength to structural narrative. Q1 prints +13% led by MaxPeak Premier and new products within bioseparations, framed by management as a "vertical success." The cross-divisional revenue synergy is already showing up — approximately one percentage point of analytical sciences growth came from tandem quadrupole mass spec sales through the biosciences channel.

China has evolved from "don't extrapolate" (Q2) to "DRG headwind emerging" (Q4) to "pharma >+50%, localization manufacturing begins Q3" (Q1). The Suzhou-area localization for flow instruments begins manufacturing in Q3, applying the same playbook that drove >50% China pharma growth in legacy analytical sciences. The China story is now a structural BD lever, not a cyclical question.

The FY EPS raise of $0.10 against a $0.35 Q1 beat tells you management is still de-risking. Confidence is on display in the qualitative commentary but not yet flowed through to the print. Back-half organic cc was explicitly de-risked to 6% (vs. Q2 guide midpoint of 7%) on "incremental prudence" and updated FX, despite order strength.

Q&A highlights

Tycho Peterson · Jefferies

Breakdown of the $40M BD revenue beat and $35M revenue synergies embedded in guidance. What specifically is driving revenue synergies and what portion comes from pricing actions versus other levers?

Amol explained the $35M synergies come from instrument replacement, service plan attachment, and e-commerce. Udit added that pricing actions, tariff neutralization on legacy business, and reagent rental contract compliance improvements are NOT embedded in guidance. The 180-day plan focusing on funnel reviews, field activity increases (call rates doubled in US diagnostics), pricing discipline via deal desks, and China localization are driving early outperformance beyond synergies.

$40M beat on BD revenue in owned period$35M revenue synergies embedded in 2026 guidanceWeekly call rates doubled in US advanced diagnostics1,700 reagent rental contracts reviewed; ~50% out of compliance; double-digit million dollar shortfall identified

Patrick Donnelly · Citi

Color on legacy Waters instrumentation, particularly LCMS strength and pharma trends. Also asked about the transition/underperformance in Q4 and whether it was execution vs. market improvement.

Udit detailed LCMS high single-digit growth driven by replacement cycle, new products (Xevo MRT), and idiosyncratic drivers (GLP-1, biologics, India generics). Pharma grew mid-teens overall with high single-digit growth in Americas/Europe (ethical pharma leading) and >50% growth in China (biotech, CDMOs). On BD transition: emphasized diligent integration planning, improved funnel quality, pricing implementations, and reagent contract reviews. Noted the 180-day plan and Waters' playbook of high-volume regulated applications are driving the improvement.

LCMS instruments high single-digit growthPharma overall mid-teens growth; China >50% growthAmericas and Europe pharma high single-digit growthFunnel quality improved post-close

Vijay Kumar · Evercore ISI

Clarification on the delta between BD full-quarter reported growth (flat) vs. period-owned growth (5%). Was there timing/shipment benefits? What about FX/working day impacts on core Waters? Confidence in 6% back-half guidance given strong fundamentals and order trends.

Amol explained the difference is due to extra working days in Q1 and timing of pre-close versus post-close periods. For core Waters, 4 extra working days provided ~2% revenue benefit to legacy business, but chemistry (13%) and service (14%) showed meaningful outperformance even stripping days impact. First-half legacy constant currency growth ~9%; back-half de-risked to 6% due to 4 fewer working days in Q4 and macro caution, but order strength remains robust. Udit reinforced confidence from improving baseline (respiratory headwinds gone in Q2, DRG headwinds gone in H2), new product launches (FXI, A7), and revenue synergies.

4 extra working days in Q1 = ~2% revenue benefit to legacy WatersChemistry 13%, service 14% growth (ex-days impact)H1 legacy constant currency growth ~9%H2 de-risked to 6% constant currency

Evie Kozlowski · Goldman Sachs

Chemistry growing mid-teens (13%) vs. prior full-year guidance of 6-7%. Is this durable? What is updated full-year chemistry guidance? Also, decision rationale on China localization for flow cytometry manufacturing, investment level, and sustainability of growth drivers like MNC pharma funding in China.

Udit attributed chemistry outperformance to multi-year R&D shift (70-80% to bioseparations), steady new product launches, and adoption by biologics developers. Expects chemistry to be a 9-10% grower going forward vs. 7% historically. Amol noted Q2 last year had pull-forward benefit and cautiously guided full-year chemistry at 6.5% due to strong prior baseline, but expects 13% Q1 momentum to continue. On China: Udit explained localization is using same playbook as analytical sciences (50%+ pharma growth in China). Manufacturing localization begins Q3 via Suzhou facility. Also streamlined export control process post-close; seeing highest order volumes post-ban implementation.

Chemistry 13% Q1 growth vs. 6-7% prior FY guidanceFull-year chemistry guidance revised to 6.5% (pruned for conservatism)Chemistry expected to grow 9-10% medium-term vs. 7% historical70-80% of R&D focused on bioseparations over past years

Puneet Souda · Lyric

Pricing vs. volume breakdown in Q1 growth. How much price realization in BD business and is it sustainable given competition in microbiology? Also, where does LCMS replacement cycle stand—could peak move forward to 2026 from 2027?

Amol quantified legacy Waters ~200 bps of pricing (consistent with prior years), BD ~50 bps pricing (historical BD level). Both are embedded in guidance. Management sees meaningful opportunity to bring BD pricing discipline up to legacy Waters level via deal desks, tariff mitigation, and contract compliance, but these upside items are NOT in guidance. Udit noted pockets of Waters-level pricing already appearing in bioscience/diagnostics, not yet pervasive across geographies. On replacement cycle: still good runway into 2027; not yet seeing pull-forward to 2026. 2021-2022 large placement years drive replacement cycle in 2029-2030. Reshoring expected H2 2027-2028 provides bridge between cycles.

Legacy Waters pricing ~200 bps in Q1BD pricing ~50 bps in Q1 (historical level)Opportunity to elevate BD pricing discipline to legacy Waters levelsDeal desks instituted; tariff mitigation and contract compliance identified as upside not in guidance

Answers to last quarter's watch list

Q1 instruments orders/sales conversion sustaining the "extremely strong" funnel — Organic cc growth printed +11% versus the +7–9% guide, with instruments +8%, chemistry +13%, service +14%, LCMS high single digits. Orders again outpaced sales. Validates the back-loaded framework.

Resolved positively

BD revenue synergy realization pace ($50M in FY guide) — $35M of synergies embedded in current guide attributed to instrument replacement, service-plan attachment, and e-commerce, plus $15M from cross-selling mass spec through the biosciences channel. Deal desks operational; 180-day plan producing tangible results within weeks; weekly call rates doubled in US Advanced Diagnostics. Pricing, tariff, and reagent compliance upside is NOT yet in guidance.

Resolved positively

Chemistry growth trajectory — Chemistry printed +13% in Q1, led by MaxPeak Premier and bioseparations new products. Management framed bioseparations as a "vertical success.".

Resolved positively

China growth versus the mid-single-digit assumption — China pharma >+50%; Asia +58% reported. Suzhou manufacturing localization for flow instruments begins Q3.

Resolved positively

Quantification of BD margin progression — Combined-entity adjusted operating margin printed 23.6% in Q1, ~200bps better than expected. Cost synergy actions and business-level cost realignment begin flowing through the P&L starting Q3; management reaffirmed at least 100bps of adjusted operating margin expansion every year through the end of the decade. Standalone BD margin not separately disclosed.

Continue monitoring

Empower transition: quantified upside path — Not addressed in the press release or in Q&A this quarter. Last quarter's "low double-digit millions per fleet" framing was not refreshed.

Not resolved

What to watch into next quarter

Whether Q2 organic cc lands above the +6.0–8.0% guide given Q1's +11% print and reaffirmed order strength — a sub-7% print would call the conservatism claim into question

Pricing-upside conversion: any quantification of the double-digit-million-dollar annual shortfall from the 1,600-contract reagent rental review flowing into guidance, and timing of BD pricing discipline reaching legacy Waters' standards

Suzhou manufacturing localization starting Q3 — whether localized BD flow instruments expand the China TAM via tenders that require local manufacturing

H2 organic cc trajectory against the implied 6% — watch whether order strength translates to H2 prints above the de-risked range

BD margin bridge: first explicit disclosure of segment-level margin progression as Q3 cost synergy actions flow through would frame multi-year synergy credibility against the "100bps per year through end-of-decade" framework

Empower subscription transition — silent this quarter; absence of disclosure for two consecutive quarters now starts to matter

Sources

Waters Corporation Q1 2026 press release (Form 8-K Exhibit 99.1), filed via SEC EDGAR: https://www.sec.gov/Archives/edgar/data/1000697/000119312526204955/d131836dex991.htm
Waters Corporation Q1 2026 earnings call Q&A (analyst attribution and quoted exchanges)

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