AGILENT TECHNOLOGIES, INC. Q2 FY2025 earnings call

• Agilent delivered strong second quarter results with revenue of $1.67 billion, 6% reported growth, 5.3% core growth, and operating margin of 25.1%. EPS was $1.31, growing 7%. • Growth across markets and regions, with China leading at 10% growth, India at high teens growth. • Performance in segments: ACG grew 9% driven by automation, services, and consumables; LDG grew 3% with pathology and NASD driving growth; AMG was flat on core basis. • Ignite transformation yielding results like tariff mitigation, pricing capabilities, and organizational efficiency improvements. • New products launched, including Seahorse XF Flex analyzer, InfinityLab Pro iQ series, and enhanced 8850-GC. • Digital orders grew 12% to $295 million. • BIOVECTRA business performed well, exceeding guidance.

Agilent CrossLab Group (ACG) reported revenue of $713 million, growing 9%. Life Sciences and Diagnostics Markets Group (LDG) reported $654 million in the quarter, growing 3%. Applied Markets Group (AMG) reported $301 million in the quarter, flat versus last year on a core growth basis. Q2 revenue was $1.67 billion, with core growth of 5.3% and reported growth of 6%.

• Maintained core growth rate of 2.5% to 3.5%. • Adjusted full year reported revenue guidance to $6.73 billion to $6.81 billion, with reported growth of 3.4% to 4.6%. • Maintained full year EPS guidance of $5.54 to $5.61. • Incorporated tariff costs into guidance, expecting to fully mitigate costs in fiscal 2026. • Third quarter guidance: revenue of $1.645 billion to $1.675 billion, non-GAAP EPS between $1.35 and $1.37.

• Tariff uncertainties and geopolitical developments impacting costs and competitiveness. • Macro environment uncertainties affecting customer spending and market conditions. • Dynamic nature of tariff landscape and difficulty in predicting future tariff rates.

Q: Patrick Donnelly asked about order trends, pull forward around pharma tariffs, and order vs revenue.

A: Padraig McDonnell said book to bill was greater than 1, orders grew low single digits in Q2, with no significant pull forward from pharma tariffs, and consumables pull forward was offset by instrument delays.

Q: Patrick Donnelly followed up on NASD and BIOVECTRA.

A: Padraig McDonnell and Simon May mentioned strong performance in CDMO businesses, NASD with high single digit growth, BIOVECTRA in high teens, and clear line of sight to growth.

Q: Jack Meehan asked about China growth, margin impact.

A: Bob McMahon explained China growth was stable, margin impact from tariffs was covered by mitigation activities, with margin expected to be flat year-on-year but on track for expansion in 2026.

Q: Rachel Vatnsdal asked about reshoring, pricing.

A: Padraig McDonnell and Robert W. McMahon discussed early stages of reshoring discussions, enterprise pricing capabilities, and progress in pricing mitigation to cover tariff impacts.

Q: Vijay Kumar asked about ACG guidance, P&L margins.

A: Angelica Riemann explained ACG guidance adjusted for tariff-related consumables pull forward but fundamentals remain strong, and Robert W. McMahon discussed gross margin impact from tariffs and organizational health activities.