WAT · Q2 2026 Earnings

Bullish

Waters Corporation

Reported August 4, 2026

30-second summary

Waters printed $1.645B revenue (+9% organic cc, well above the +6–8% guide) and non-GAAP EPS of $3.05 at the high end of the $2.95–$3.05 range, prompting a raise across every FY2026 line: organic cc to +7.0–9.0% (from +6.5–8.0%), non-GAAP EPS to $14.45–$14.65 (from $14.40–$14.60), and acquired revenue to ~$3.045B. Adjusted operating margin of 25.0% and the Q3 guide implying +16–19% YoY EPS growth signal management sees H2 acceleration, not fade — the back-loaded framework built in Q4 is now printing.

Headline numbers

EPS

Q2 FY2026

$3.05

+1.3% vs est.

Revenue

Q2 FY2026

$1.65B

+113.0% YoY

+1.5% vs est.

Free cash flow

Q2 FY2026

$0.20B

Operating margin

Q2 FY2026

-5.2%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$1.65B	$0.77B	+113.4%	$1.27B	+29.8%
EPS	$3.05	$2.95	+3.4%	$2.70	+13.0%
Operating margin	-5.2%	24.4%	-2960bps	-3.7%	-150bps
Free cash flow	$0.20B	$0.02B	+963.2%	$-0.04B	+581.0%

Guidance

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	Q2 FY2026	$1.616 billion to $1.631 billion	$1.645 billion	+$0.014 billion above guide (0.9% above high end)	Beat
Adjusted EPS	Q2 FY2026	$2.95 to $3.05	$3.05	+$0.00 above guide (at high end)	Beat
Organic constant currency revenue growth	Q2 FY2026	6.0% to 8.0%	9.0%	+1.0 percentage point above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$1.745 billion to $1.762 billion	+118% to +120%
Adjusted EPS	Q3 FY2026	$3.95 to $4.05	+16% to +19%
Organic constant currency revenue growth	Q3 FY2026	—	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$6.405 billion to $6.455 billion	$6.415 billion to $6.476 billion	+$0.010 billion to +$0.021 billion (midpoint raised $0.0155 billion)	Raised
Adjusted EPS	FY 2026	$14.40 to $14.60	$14.45 to $14.65	+$0.05 at both low and high ends (midpoint raised $0.05)	Raised
Organic constant currency revenue growth	FY 2026	6.5% to 8.0%	7.0% to 9.0%	+0.5 to +1.0 percentage point (midpoint raised to 8.0% from 7.25%)	Raised
Adjusted EPS growth (YoY)	FY 2026	10% to 11%	10% to 12%	+1 percentage point at high end (range widened upward)	Raised
Acquired business reported revenue	FY 2026	approximately $3.035 billion	approximately $3.045 billion	+$0.010 billion	Raised

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Analytical Sciences Division (ASD)	$0.669B	—	+7.0%
Biosciences Division (WBD)	$0.368B	—	+2.8%
Advanced Diagnostics Division (ADx)	$0.521B	—	+733.0%
Materials Sciences Division (MSD)	$0.087B	—	+6.0%
ASD Instrument Revenue Growth (Constant Currency)	8.0%	—	—
Biosciences & Diagnostic Solutions Growth	4.0%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Americas	$0.69B	$0.281B	+145.6%
Europe	$0.505B	$0.225B	+124.4%
Asia	$0.45B	$0.266B	+69.2%
Organic Revenue Growth (Constant Currency)	9.0%	—	—
Product Revenue	$1,220M	—	—
Service Revenue	$425M	—	—
Adjusted Operating Margin	25.0%	—	—

Management tone

Customer optimization hangover → BD synergy bridge → Replacement cycle mid-innings + BD conservative baseline → BD tracking ahead + pricing discipline operationalized → End-market recovery has broadened

Prior-quarter framing described BD as "off to a strong start" with three qualitative upside buckets (pricing, compliance, tariffs) beginning to operationalize. This quarter management steps beyond BD-specific execution to a market-wide recovery claim: "the recovery across our end markets has broadened with previously lagging customer segments now returning to growth" and "the market recovery has entered a broader phase, expanding across additional customer segments." That's a different frame from Q1's "BD is delivering ahead of plan" — it moves the confidence beyond synergies to underlying demand across the base business.

Two quarters ago management explicitly listed six unquantified upside buckets against a Q1 EPS growth floor of 0.0%. This quarter's Q3 EPS growth guide of +16–19% and a raised FY organic cc range says several of those buckets are now converting. Management framing: "Waters is better positioned today than at any point in our recent history" — the strongest positioning language in four quarters of prior briefs.

The organic cc guide's pattern is worth naming. Q1 printed +11% against a +7–9% guide (240bps beat at midpoint). Q2 printed +9% against +6–8% (200bps beat at midpoint). FY midpoint moved from +7.25% to +8.0% — up 75bps. Management is banking beats rather than flowing them through; the H2 implied organic cc at the FY midpoint remains ~6% despite two quarters of ~10% actual. Either H2 comparisons are genuinely tougher and 6% is the honest number, or the conservatism claim is compounding into a larger upside setup for Q3.

Q3 EPS growth guided at +16–19% versus FY at +10–12% is the loudest signal in the print. That gap requires either Q3 to print materially ahead of trend or Q4 to embed a step-down. Given management's "better positioned than at any point in recent history" language and the Q3 organic cc guide of +8–10% (only 100bps below FY high end), the setup implies Q4 conservatism is where the cushion sits.

Q&A section omitted: no transcript available for this quarter.

Answers to last quarter's watch list

Q2 organic cc above the +6–8% guide — Printed +9.0%, exceeding the guide high end by 100bps. Validates the conservatism thesis; the "sub-7% print" tail risk did not materialize.

Resolved positively

Pricing-upside conversion from the 1,600-contract reagent rental review — Not quantified in the press release, and the guidance narrative attributes the FY raise broadly to "better-than-expected results and broad strengthening in end-market conditions" rather than pricing-specific line items. The double-digit-million annual shortfall from the reagent review does not yet appear as a called-out contributor.

Continue monitoring

Suzhou manufacturing localization starting Q3 — Not addressed in the press release. Q3 is the quarter the manufacturing was slated to begin, so silence at Q2 is expected; watch the Q3 print.

Continue monitoring

H2 organic cc trajectory against the implied 6% — Q3 is guided at +8–10% organic cc, versus the ~6% implied H2 average built into the FY. That's a material beat-versus-implied on the first H2 quarter, and it validates Q1's read that H2 was de-risked, not softened.

Resolved positively

BD margin bridge / segment-level margin progression — Adjusted operating margin of 25.0% (+140bps QoQ) came in ahead of the "100bps per year" commitment on a run-rate basis, but the press release does not disclose BD segment-level margin separately. Cost synergy actions were flagged for Q3 onset; the first explicit segment margin disclosure remains pending.

Continue monitoring

Empower subscription transition — Silent for a third consecutive quarter. This is now a real disclosure gap.

Not resolved

What to watch into next quarter

Whether Q3 organic cc lands at or above the +8–10% guide, and whether Q3 EPS growth actually delivers the +16–19% implied — this is the largest one-quarter growth acceleration guided across the past year and is the credibility test on the "market recovery has broadened" claim

Suzhou-area BD flow instrument manufacturing localization ramp — this quarter was slated to be the operational start; watch for tender wins or China ADx/WBD growth commentary tied to local manufacturing

First disclosure of BD segment-level margin progression as Q3 cost synergy actions flow through — the 100bps/year commitment through end-of-decade needs a concrete Q3 datapoint against the 22.4% standalone BD adjusted operating margin in the deal model

Whether the Q4 implied EPS growth step-down (FY high end +12% vs. Q3 midpoint +17.5%) reflects conservatism or actual back-half fade; a Q4 guide at initial issue that maintains high-teens growth would signal the former

Reagent rental compliance and BD pricing-desk contribution appearing as an explicit called-out driver in the Q3 raise — Q1 framed this as double-digit-million annual upside, and it has not yet surfaced in guidance narrative

Empower subscription transition disclosure — three straight quarters of silence on a mechanism management previously framed as "low double-digit millions per fleet" upside is now a material information gap

Sources

Waters Corporation Q2 2026 press release (Form 8-K Exhibit 99.1), filed via SEC EDGAR: https://www.sec.gov/Archives/edgar/data/1000697/000119312526331413/d163377dex991.htm

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