A - Earnings call transcript Q2 2021 | Agilent Technologies, Inc.

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Operator

Good afternoon, and welcome to the Agilent Technologies Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] And now I'd like to introduce you to the host for today's conference, Ruben DiRado, Director of Investor Relations. Please go ahead, sir.

Ruben DiRado

welcome, year Agilent's XXXX. and call quarter [Gabriel], fiscal for you, everyone, second to conference Thank and With and McMahon, President CEO; are and me Mike Bob Agilent’s McMullen, Senior Agilent’s President CFO. Vice

information The are CrossLab will Bob is and and in Thaysen, comments today’s of release, our of Padraig Agilent’s news to Sam McDonnell, Life being Agilent’s Diagnostics and recording Q&A Group; Agilent webcast, Joining supplement and and Markets President refer along Mike’s President presentation, President Applied the Group. Science Raha, will this website be live. comments measures. financial made a with Bob webcast non-GAAP and This by Mike Today’s Jacob discussion, presentation investor on to at after of of www.investor.agilent.com. Genomics the Group; available

Core to Guidance are GAAP financial the months. currency, You completed XX on or on past website. April a Unless will core as exchange within the find to are noted, of and revenue directly growth metrics decreases the year-over-year rates growth acquisitions our most increases and XX. the based divestitures on metrics reconciliations references of is references all revenue impact otherwise in excludes and financial comparable basis. and

I’d filings to recent Mike? the of forward-looking other at SEC as update more make over now, today. subject company. These The to company's financial look risks a assumes call to turn statements of like statements them. also will valid performance company We obligation and complete are are and risks Please the for factors. And the Mike. picture our about of to only the and no uncertainties

Mike McMullen

for to call joining thanks today. and our Ruben, everyone Thanks,

team to recognizing time to quarterly what working in team. get need. is we do of extreme details, Agilent India can closely challenging COVID-XX I Before India the situation, our into to with start our by customers want Despite the help our I this

have be could teams has in keep help close and how India I support, team of us true quarter Agilent proud In addition, worked customer out Agilent’ not tirelessly the more finance, together IT ‘One forward. fashion. our and moving worked the second to us

The Our In this Agilent team strong our the sharply quarter a the the to backdrop India up momentum our QX families and time. versus last relatively business are exceeding delivered year, were a difficult out thoughts solid another and recovering team revenues entire Both expectations. market. during QX, continues outstanding when their per earnings in and go against share flat. Agilent of earnings revenue

business is markets, growth broad-based geographies. all groups, and across Our

margins, reported our share billion. the expanded and revenues also expected driving accounted per for XX% faster We earnings growth. basis on up to a about overall contributed and $X.XXX is point of COVID-XX core. a growth. related as revenues XX% for quarter roughly X% up Revenues overall This are

is story, one revenue sustained quarter Our of growth a not above but one or easy growth. compare market

market example It to market in team The outstanding our basis Agilent is Like more ago. and the are of margins cell continuing is action. remains Resolution $X.XX Resolution in Late quarter, XX% up points. example, our years XX% two acquisitions team a recovery. buy the to is This our EPS outpacing markets analysis, from deliver Bioscience also core For build same. high-growth based broad in strong, an one XX.X%. an Agilent. into the environment of are continuing recent revenues a talent operating and than strategy story up Agilent, investments in is our QX of year-over-year. we welcomed growth story growth in of the bringing QX Bioscience XXX up

end-market in markets. highlights, our grew all Moving strongly on to we

in Our growth in XX% and growth XX% pharma is led food. by

market improving with the in growth seeing energy and chemical growth. are We XX%

over academia and diagnostics We and also government. growth in growth posted teens in XX% low

growth. forensics comments. China, his the Bob Geographically, China top with growth environmental the in Americas the growth to mid-teens. Lastly, XX% of Europe more and business led and recover in on from way XX% will provide started later detail in when continues all growing Strength in The last X%. end-market of Asia is rest pandemic. the with X% grew the the year

XX% we XX% Applied during a million is core, at performance generated growth decline on last year. X% our and As and group, LSAG’s and a LSAG is Group of broad-based, the Sciences reported look quarter. geographies. all up $XXX by Life business the basis Markets revenue up across end-markets off

continues strength pay saw in a we business cell growth strength LSAG investments growing and chromatography end biopharma both very along and liquid fast growing to Our pharma and strong, off. product perspective, continued is with in in The in LCMS small From analysis. markets with focus XX% molecule.

During analysis the with our BioTek to quarter, XX%. growing cell grew XX%, business close

quarter, facilities focused LSAG at announced launched is several XX core quarter, team Confocal important in highly non-profit sustainability productivity. earned Green multi-functional Lab labs the This dedicated to that the Awards received contributed products this the My company-wide a a increased on initiatives. announced expands product Consistency, for Cytation Green research. My two Transparency, Reader, also business. with ESG builds Analytical LSAG LSAG and the the respected products strategic new imaging our leadership the also improving scientific ACT During long-term from Choice looking system research of in cell organization automated and reader our Summit. reach analysis advancing Accountability, Virtual focus our Lab. BioTek and to SelectScience cell business Label multi-mode the have Imaging our on In we on Scientists' the sustainability during Cytation

has customer early, While positive. extremely feedback been still

drive overall The continues our of year. customers. the services in and for is revenues analysis growth portfolio see lab and our continue previous for demand up This reported This progress growth ACG’s by versus trajectory of XX% consumables up cell activity to a due basis $XXX leading the seen this a increase X% quarter. parts to last consumption. increase strong is and also our pleased and are contract for on-demand high XX% services very of a contract We the future level business Agilent to a and posted positive Group very with on CrossLab is driven million. as space. renewals more to from business across Revenues the core

in Our with strong digitally instrument off installed ACG will benefit and placements the enabled strong forward. same base business the to service customer investments and offerings. continue our the our At increasing digital pay going uptake consumables continued time,

on we portfolio, and strong come Our continue are service. outstanding above we market service well-positioned LSAG business we driving to growth as our together customer leading in organization, and analytical ACG where is build lab. believe This the market

Diagnostics last and and the $XXX led million, and Growth versus up expansion core capacity remains X% NASD high-growth For NASD increase plans XX% business Genomics our by offerings NASD reported remain oligo XX% broad-based, our genomics strong is for a year. our and businesses. our Group, for were revenues Demand up on-track.

Bioscience We’re very pleased our acquisition quarter. during Resolution the with of

With their a key of in exciting Resolution liquid is area very player a cancer technology, Bioscience biopsy diagnostics.

will the The team. is now more business capability in continues. of from them I’m goes the We the business are on, strength a and have you more on like our strong One hearing forward. the as look that Agilent its our second I confident very execution by this glad and to and This would driven quarter Agilent of contributions. team. and the recap time be to being us customer our momentum take portfolio focus, relentless on

buy and delivering, build above-market Our growth. growth strategy intended, as with is

this pandemic is the on stronger even Over that company. said coming in approach a results. out the of you’re impact Agilent current last of year, focused I I our believe have the often as seeing

so As we ahead, of a look and with both we sense confidence. do optimism

and because We of portfolio. optimistic continued the our market are of strength the recovery

right driven we to the We operationally have team, because win. and focused, are customer confident excellent

a we will of full-year growth. again we once As excellent Bob top are continuation line a guidance. details, earnings raising share our and result, expecting but more are revenue our

We also line generation. and convert top this expect to growth excellent cash into earnings strong

creation discussed on XXXX, in months During growth well goals we December, way and and we for expanding increasing fiscal our our into those event our objectives. achieving shareholder Six are value model investor to margins. our long-term

Agilent win. providing strong prowess and build service customer delivering. bar on exceed customer team growth to is its Our services. and to the to industry-leading The and products expectations in One raised execution continue continues buy We’ve drive and strategy demonstrate

we While look now on being we have looking forward from call optimism pandemic, the yet the hand your to I for are I will and future questions. to both with global Bob. Bob? off today the fully and forward to you emerge Thank the confidence. to call

Bob McMahon

third outlook for second my my metrics. some focus finish some revenue I’ll billion, Revenue Thanks today, currency and on other through XX%, then the and details under remarks non-GAAP afternoon the financial you was good our X quarter growth QX everyone. additional the contributed Core with on while will up updated results. Mike XX%. otherwise growth. Unless I’ll and reported revenue just noted, income reflecting quarter. statement and In $X.XXX take key of was XXXX for provide points growth of remarks

strongly. Spec. results led investments year. is we of all saw markets strong, again largest are tools These We market, make is are higher, new XX% was delivering as capabilities posting on From fast on our very as our all off. the based vaccines. our with growing and growth way, Mass and top delivering develop by analysis, our to or growing with led last focus growth. Bio-Pharma to to markets and cell continue groups end-market This three pleased second end growth they growing quarter customers therapies LC, mid-teens Pharma, broad paying an X% critical Growth perspective, business

pharma Our represented our biopharma over quarter. and roughly the grew of in business XX% XX% business

Our are year. the XX% diagnostics XX% market the we posted see the run end-market to has half Overall, of very month diagnostics to across in chemical of exited regions came food anniversary in energy decline quarter enter to visits we the segment as closer of weak end-market And grew pre-pandemic market We a we continues onset were continue food our we market the XX%. the experienced businesses pharma to as supply-chain. see levels. pre-pandemic continue pandemic growing being rate experienced global year. quarter last to volumes at the quarter. non-COVID across as the large as we to improve investments the the doctor pharma and second small the than returned continued We year. markets with clinical a we to routine and very slightly recover a April testing growing the higher off in levels. last and growing strong The performance, the segments its within mid-XXs We continue strongest also strong in entire momentum, well-positioned as pleased growth and expect we The all the throughout strong molecule at XX%

strength will in Our continued were and believe a materials quarter sign, our strong, of ahead positive and the primarily us order results continue. markets. to driven this were by trend And the in leading finished revenues rates chemicals growth

We in strong government also saw a nice the labs market as resume and non-COVID-related funding operations environment. in a recovery academia

of against the the XX% grew in to We activity, and the recover market academia to business rest weakest of expect increase the government With throughout the our comparison year. would continue the year.

and by grew saw regions pharma led government, forensics low and X% all XX%. XX% single-digit the Lastly, geographic range in markets growth and Europe growth grew, grew Americas China consumables, the And This driven XX% least markets Americas, The academia atomic Mike grew food, all noted, a academia, led market than Those basis, as government all was in pharma and last XXs. high and driven XX% at growing XX%. high grew the after the by and XX%. by the year. more C&E. and Americas services by at experienced in spectroscopy. environmental On growth markets three and

orders mid-single growth digits the Our during revenue quarter. growth in outpaced by

gross of flat the quarter margin a was than XX.X%, Now turning year-on-year despite points currency. more the rest from headwind to second of XX basis P&L,

ramped the growth with and Our from we up solid line spending even last coupled second the Driven increased points a came of as our in deliver XX% versus this volume, EPS operating we year. operating year up Strong top as $X.XX, invest margin quarter helped future. basis in by saw is XXX last for leverage activity at XX.X%.

share and million XX.XX% was rate tax XXX shares. was count Our

the on cash flow to sheet. Now, and balance

drive from Our cash our XX% This during delivered strategy. has continued into strong We deployment help quarter, in more flow the performance operating than million strong cash flows. translated flow up year. cash capital $XXX last very balanced to

capital the also During million business. invest Bioscience and We paying million in retuned shareholders continue to as balance $XX and shareholders, million of our $XXX M&A a the ended in enjoy million spending for and quarter strategically in to $XXX the in Year million mentioned, million net sheet, share while $XXX flexibility which to quarter, business capital in invested we $XX financial repurchasing form on to to-date, we’ve of the out We we returned Mike us expenditures. by dividends, purchase with $XXX million. re-investing spent X.XX dividends the expenditures. repurchases, $XXX and forward. strong And going shares million Resolution enables to a

ended we debt raised ongoing leverage at very in quarter, and and reduced redeemed million long billion was with $XXX quarter $X.X interest $XXX a the in the cash, $X.X million maturing term debt of expense. year favorable that outstanding During We terms, our XX. in ratio next billion net

build the on and outlook strong the quarter, for opportunity half to full-year first see the third results. turning our to we Now, great

still our is continue solid our in businesses. have with we and momentum pandemic the recovery while forward, end-markets see us, in to all Looking

again share. and As second revenue we’re the expectations for per strong year. both our This the earnings projections for increasing a increasing full-year QX reflects our half and result, results of

We are guidance. new Bioscience the also incorporating into our Resolution

For markets billion, midpoint $X.XX currency X growth attributable at representing and nearly to of increasing roughly up million in to of our government, and expect forensic reflects include of food, growth our that and $X.XX C&E. the diagnostics full-year to XX% growth to about reported XX% This XX% momentum pharma, second are revenue, core half-point End and Included a a of billion points will we XX%. continued to recover increased half environmental the M&A. of half we We and outlook is range the $XXX see continue in and the sustained in also clinical, markets. and to academic in end-markets. second year the and

As points. in plan we in event basis expansion Mike basis mentioned of annual points long-range XXX provided margin range during a of XX our December, to the investor

exceeds for updated the guidance Our the end that of top year range.

fiscal of per In addition, EPS to of $X.XX XX% non-GAAP growth is to we the range for XXXX a share. our are increasing This to $X.XX XX% year.

are to XX% of quarter, XX% expect growth of to we growth XX.X%. we to Now range fiscal $X.XX representing XX% third to to expecting for per share EPS XX% million to growth in of billion, to $X.XX quarter the and XX%. $X.XX of revenue $X.XX the be And core reported third range non-GAAP with from

position and results the back pleased With the of say, our the how the half continue for believe strong call the strong and the with we’ve year. Ruben execution I year. of achieved opening you put Now, want questions, Q&A. before us in to that, are remainder for our great for strategies We to to we’re a extremely started results we’ve drive first driving to

Ruben DiRado

for Gabriel, Bob. instruction provide could Thanks the Q&A. if you please

Operator

go Absolutely. of [Operator will come Our Instructions] Kumar from first Please Vijay ISI. Evercore ahead. question

Vijay Kumar

large if impressive is in on small what XX your maybe talk molecule, Hey and at acceleration? I contribution in you fiscal assumption is in end-market can $XXX much this Is this about? think of million was prior the level, guys, talk driving on question and start thanks so impressive, the plus [half molecule gaining for number, Are market taking congrats pretty it's a maybe you for this to the a on incremental want about I my what pharma It how a is about share accelerated growing? NASD? sequentially coming guys did BioTek. really year]. XX high

Mike McMullen

pharma our I'll I'll was in take [indiscernible] pass the business Yes, groups. seen the unpack all Bob. No. congratulations Yes, that lot there across we've extremely three to there the results end with a pleased and business to we're really of Vijay. the Vijay

markets. that for across we sure, but the to the three not relevance investments all recovery off the new and portfolio across execution from that team in think I of has investments think I and the expand we to the in our our I of groups and I the paying NASD seeing market on this by seeing the for several are that that certainly growth forward. therapeutics I think XXs about. years a over nice business really we NASD and that also point, the a you're And been number about And in what your talked on space only new think shows various benefiting is But that business was business, going still you we have are nice in last great saw it capacity launched mean, of high million are uptake. end feel very track $XXX good in products

Bob McMahon

a faster market. we're And capturing think in share my I growing perspective,

I a there growth, of So, think market. that getting is also than more we're share both above but fair market on of our combination expectations

Vijay Kumar

on comments COVID perhaps stories here like guys but the strokes been the about these teens, you asking there if question the looks of I the think sustainable, Difficulty] the again, and Group going are what plus high think question should perhaps diagnostics of on for Maybe share this more some some line are in I'm group. guide and etcetera Certainly been, broad helpful about Mike. on to how be of guidance, minuses? Biopharma companies. not has some gains that, sustainable? the trends, pretty I looking a question to hard for is One That's comps be medium-term the at I'm maybe talk these But one cleanest has of [Technical product it think

Mike McMullen

to Hey end in if a if think it's stimulating some some comments? been levels investments start increased markets. think Bob, has maybe can with I there these of on I COVID, positive of I some So, actually

and business core story. very So, growth from And markets of is we've our all play mentioned we a that while. really our think about of the business. the core the against perspective in We've doing rates in to for sustainable we are has terms to a pleased here seen participate some what that story been role have is these story team we're that fight able COVID-XX, earlier, our but been driving a

Vijay Kumar

Understood. Thanks guys.

Operator

from JPMorgan. Peterson Please go of ahead. will question next come Your Tycho

Tycho Peterson

leveraging afternoon. Can M&A overall a distributed you your million, CLIA this just good with question lab, a Hey, actually think well. and you I talk start as forward? million, across do I distributed know Their have two going but is the $XX year like the wanted how obviously about CLIA lab portfolio the about $XX model revenue but just on to resolution. the those contribution businesses? model both

Mike McMullen

the thanks few question Yes. for Sam. pass make Tycho good I'll over to it here a and I'll comments and afternoon.

are about So, be, the Bioscience look of comments think we're on becoming from were visit had and my Agilent. to about excited that as going we a with we've part I Resolution going very even I just the now think from back excited having even you've what's with been And deeper team even team. Sam, a come more company

in So – first you've year, a because face with over well had over chance and Tycho's of answer perhaps maybe face in, a to trip why don't I your you but business that pass lead question. our to

Sam Raha

today is for CDx Thanks develop to to exciting again that the now Agilent, question, human is, specific LabCorp even business pharma and expect related our And to a biomarkers in are it of approved coming substantial the and lab continue the Tycho. traditional actual the Bio in to both company. primary year, There very done as the to revenue. and will our which are pharma parts companion and the very get are ramp, and this was that block] in beings important. work that to something both to also Thanks see to that our business former testing Yes, of the companion part it's Yes. will diagnostics, revenue services, we there here team better what is first-hand [ultimately from months working you much the is with at time we there. services finally diagnostics in Tycho do the that some months, market. XX then be for is XX with And exciting part akin what Resolution over in because doing, testing we testing part some that's is out real and but but today very see answer will pharma The of we're have important, result understand of both LabCorp, relationship that as of Mike. the CLIA mentioned, enthusiasm

Mike McMullen

Yeah. the That's focus.

Tycho Peterson

two Mike, talked that all Okay. and plus you and on sustained segments sustainably. don't up think I regions know XX% quick food momentum. follow-ups, And But about then – the quarter about strong we being growth XX%. market

there question that just is they of about on you then unrelated can XX is ACG much were curious reinvestment And there? out overhaul margins, this So, just totally the operating of China stockpiling? I'm How is there? coming talk down about bps. whether

Mike McMullen

sure. Yes,

I two You're on questions. the numbers, it close study for so can Tycho, see thanks good

overall pleased China at level. – rate it across exact... with the growth a it's in not I don't of don't we as XX% been clinically in a we So, have – strength really throughout globe, look strength I And that Bob, rate fact, think in quarters. but but been saw to We it's expecting geographies for well. also of that while story, other food, when And part a continued XXXX is beyond, the here number story be we're super this growth expect are of years a it's we year, a probably and same

Bob McMahon

Yes, that's right.

Mike McMullen

Geographic with part the but not the way, of leading the story, of split, China story. but broad-based it kind part being the was key only a

Bob McMahon

but testing. some seeing of a really to certainly of globe. or And testing surveillance strong testing Tycho you testing food and is effect what both Asia. absolutely, of a business, core Mike's China this I of kind investment I in here think Rest around the of the think point in various recovery And and COVID we're was Yes, slightly halo than time, overall aspects back increased we reverting over kind actually of seeing Europe lower see Americas saw we're increased and the China

question... I think feel about we business there. think your good And And so, on then very I the

Mike McMullen

to one thing. add want Bob just I

that's in testing rate But food. a cannabis thought of us the lower a bit there Additional of been historically inclusion well. with the market getting bump as the for a Americas, growth we're in

Bob McMahon

business Mike. then in Yes, in you're capabilities areas and like to to continue a Tycho, did see there Thanks activity, see two some reinvestment, is seeing digital so thing. good increase a you investments of ACG as some the is combination we thanks. And double the things. down this I One increased our continue what and is to think we actually

sales Our and traveling service customers. are engineers more to field

activity, on comes associated And very ability so, increases good business we're some some on-demand that saw ACG about with seeing the with and to which we just feel there incremental increased long-term, side, also we but forward. it But continued business our cost. going scale

Mike McMullen

Absolutely.

Tycho Peterson

thank Okay, you.

Mike McMullen

You're welcome.

Operator

question And Please Schenkel next with Cowen. come ahead. Doug will your go from

Doug Schenkel

taking for one Thanks well guys. some and sense Bob I'm more QX math I'm hand, you guided revenue above questions. a afternoon, us just fiscal your of little trying here, make consensus. to On doing guidance. Good my expectations

rest a kind sequential like accounting know year of even I in Year growth moderation And down reason there period. to one normally the maybe you that sideways, hand then X% the assumes in guidance move is going little I big into think and which QX, of growth Lunar QX markets, that implied back implied the relative something On comps. for fiscal is the think year-over-year bigger think to a in in fourth to other move revenue quarter for you don't no have in the a China, essentially we're even than a number, pretty other sequentially better I relative your your New is of if quarter, bit

it I seems remarks, slowdown. got So, at what the you've there’s listened seeing all M&A crushing that, in it and like look there. numbers to your and And you're more no prepared sure then, you're with in

here? anything missing I am So,

Bob McMahon

No, we you most I world our recovery would us term very that's still think And our stop feel what think see and pandemic, the forward. our QX continued in to about the prudent see visibility. of good are and around the we forecast that isn't we reading from I – in is, going the going good of in We anything vaccines rollout there numbers a a have about of but We our certainly, very are we think Doug. where well, I feel little I to near that the still the want terms are momentum. is how say and

Doug Schenkel

that's And on then doing hopefully, not right, helpful. up so again all I'm Okay, anything. messing fly, math the

Bob McMahon

the on pretty But fly your is good Doug. math

Doug Schenkel

am you. far. okay so Thank I doing

like guiding the growth it rate year-over-year to second bottom growth revenue higher line. in backing So, top than the of you're that, for seems assuming and or into from couple that operating something be the investment seems like XX% the half. a half that to points And just you're second

the planning position relative So, line we of you think possible lines if year? half could guidance, assuming drive I'm key just the you're the off what And second maybe upside we seems to flow still you through to of building the see opportunistically doing it's revenue you the this first and of about bottom the line operating a forward on to in focus that, along in – the M&A? investment of some talk in what are do It from the saw like investment are? right, could pulling of then areas some even separate

Bob McMahon

behind biggest on me an development let channel. the Yes, both the of that, investment. we really invest the take short perspective, question the the continuing and well to business investment the going forward as Resolution R&D there answer Bioscience around addition capabilities The as and have is that from

half the driving didn't we to that the activities. And are so half have but relative have does outsized really investment here, first in in versus that second an continuing where demand we that to invest

talked momentum incrementals? drive to it'd capabilities continue be the ACG but kind activities around about is And just have we we marketing would you the and building same other R&D like the last an answer digital I things programs forward, of think And our upside, question those had I of of within Some also the will whether if pipeline. aspects, it level is, that the say do going yes.

Doug Schenkel

guys. helpful. Thanks super Okay,

Bob McMahon

the Yes, comments. thanks Doug. Appreciate

Operator

of from go next Your Leonard will come question Wells Dan ahead. Fargo. Please

Dan Leonard

you. Thank

do business, revenue analytical you think line core through benefits as seen on-shoring yet? the the the from on book any off, of first So or order you've

Mike McMullen

kind and reinvestment is prepared about interest for and our of it's material was yet. as chemical area This materials prior the in thanks of Hey, yet. the nothing of question. revenue than Dan. quarters side in actually our of talked We've you C&E the customers order the but the a we you Not of still remarks, stronger heard happening it investment, in core book. future terms book think with in and

passive to in know it, a pointing and the trends terms but this about So, cautious fairly recovery positive of of in which, segment calling are you now.

Dan Leonard

kind business? to And a invest Mike, is, on in Can of positive assume reason want about the of to Bio, Resolution ask talk to you this in the I to come updates And future there. a I a like driver space time. does build [indiscernible] periods seem a of success your for ask absorb follow-up Okay. willingness is that it that losses long you

So, can Thank overall you plan you. fits you how your model? in talk about business that the how and invest operating to

Mike McMullen

a services brand position new of there some business, lot make the guys, we're model of here honest and accept losses well, have maybe around the entering leverage in can you CDx sure perhaps do business the the to have our space. here. premise we investments business operating but on have start that that you're need we've made Sam trying increment you Yeah, we to base play keep where Bob me it to not I'm as same pharma And not type I the up IHC huge depend already of

we from. So, to something have build

plan this So, been look commercial overall look the out But invest absorb operating I in we our on perhaps expense may than has additional building side as plan space. our do different relationships. aggressively well, to think within R&D think structure the to We others model.

from asterisk put think any I and we wasn't manage model Res from, there where out So, we well I so long-term not is our when and given overall said our can within business. we're starting which goals in Bio, we're we starting without zero believe this operating think that

years to have of acquisition, number ago from We Darko. build from something a our

to else Anything a I think perhaps us that that... puts in different a different place. add

Dan Leonard

the appreciate I color.

Okay, thank you.

Mike McMullen

You're welcome.

Operator

go ahead. Please America. of Bank of Bruin de Derik from comes question Next

Derik de Bruin

about sorry, on, had mute the Hi, that. sorry

And the So, growth talk LCMS can about you more of that on little questions going one. service there. couple and a bit a on the

this seeing good about market replacement any of an people Basically, of your that in you are asked I've budgets. all, are accelerated First question or about feeling cycle markets.

one than spending sort area. competitors follow-up. little will question. just a guess about product offerings And I'm that? response talking one what targeting your your got are that LC platforms, then going I more and they biologics of of wondering against so competitive general the of And particularly bit that had You're I've been sort has new

Mike McMullen

the are to loved I'm response. It's maybe he your Jacob, to the Derik. room competitive is able here But at pass to I'm because we're going finally conference be on and screen to in looking question. him over there and answer

you, over pass going Jacob. to I'm So, to it

Jacob Thaysen

Mike. great Thanks Derik question. Yes. is And, this

So thanks for that.

quite First some years. invested of and certainly coincidence, what all – is we the a seeing for have is growth space in LC/MS in you're the both not LC our it something

mass our quads innovated spec around the on of robust our single lines the about and If on especially our the you in portfolio, triple have see reliable team we think and taken time. invested we of and off here really really have customers period really last really

see space, space, clearly see in have lot where upgrades triple quads, can on in we I before opportunities and down the think that tripled into the we pharma and of great there's that, really, food even there. we but a biopharma doubled

the looking software of we platforms. they small customers and our customer or invested when So, from have the move changing experience a lot things, quite you the changing that the base and and different spec are molecule for we seeing also users is a into are the hence, molecule, last mass is

also the all, from a to to regulatory up expectation a usability. from perspective, but of live First

our success So that big is of a in that's what come there to I and in part lot more a area. we believe see truly

look If into the the game. a LC, bio of you is at investing part

come compete LC space. about have out in new everyone us is continuously doing this a out high – high see it against out that will for products in at LC We space very you We can quite now had and and bio end well. come with while

So, tech very we and market to to where important to we'll for continue feel very market keep continue us. good are, we standards invest

Mike McMullen

but on could market some fair pharma that, replacement acceleration if also to think both I expansion to it's I add Derik, particularly molecule. market we're And in Jacob, well, seeing say of just as

Jacob Thaysen

Absolutely.

Derik de Bruin

can But in the start now – of goes everyone next comps sort on double-digit focuses grow comps. any ask that coming be I'm to is just year you easier then of of I Just going right your Great, then will is it they're earnings. sort and COVID ability on about going results, and put question, generally And other like are sort great. people as of thanks. an fiscal Not unfair what this of and the to core next thought, comps the year the think that companies comps. it worrying it tough you thoughts part growth And sort tough hell. I but and tools off the like earnings all really to thoughts tough the that's range? up general share of the strong

Mike McMullen

a in and seeing actually line. with And end this. side, able to Bob I'll said, be I'm U.S. has the think growth reformer deviate I in notes on potential double-digit and to start to EPS been probably our deliver haven't been model That we'll So XXXX. tax not from a then few need that comments. compared I

Bob McMahon

Agreed.

Derik de Bruin

great Okay. I appreciate day. Have a it.

Operator

next Your Sykes from of Sachs. Goldman will question go come ahead. Matt Please

Matt Sykes

my Hey, thanks for questions. taking

wondering just relationships you an give have too look I'm seeing customers. clip. And deepening largely also, what Just of at guys rate analysis. growth if you're of from maybe can then that, cell good of a that terms integrated the category the us is sort it's you at just showing of customer new kind but pretty just and existing of in been in just with customers idea – contribution early, in growing been given

Just Thanks. color put more cell on analysis?

Mike McMullen

think some on view a on size business of customer Sure, Jacob maybe I side. overall pass you Matt, the it the of insight more the Bob for and kind to give

Bob McMahon

are extremely those strong in Agilent profile Matt, to driving margin areas. major drive on of really business we really with is way performance say growth business to above was I pleased average. growth. that going would And we're the say, within Yeah, And across our the continue I cell all well the accelerated analysis to groups of the three

of I'll invest areas and products CXX, the so, And new areas Cytation we such the what continue marketplace. in Jacob customer in but acquisition the we're to as let about where also actually doing some talk some of around the

Jacob Thaysen

Yes, recently question. focus analysis I'll the about with have And as Bob a we cell business, thanks. that where particularly can we It's live space, have CXX. immuno-oncology super by great as Cytation whole. has immunology also some the the good are particularly on also and excited cell And some as mentioned, hear quite space you we analysis another made come out in investments into imaging

configurations Bob really microscope it the think that, BioTek. have out that you it new a way also does the relatively compete is that allows have we it and in microscope talked good can will is a that platform that entry we level upgrade I get use which and what about can build confocal and already and all other it it you market build based on established and then this automation

to base our very we Seahorse]. also our of stat of now really that well. to which about. So, leveraging it And been we see we much clear academia enjoy had very has space [our are course, from that mixed very very BioTek also are move customers is focus delighted But the there stronger in we the biopharma our works for a businesses and a installed have that some where base, unmatched push government strong a customer exposed really a acquisition, and into the

clearly government but are growth. that where of back space, also are course the excited the main that biopharma from comes academia but now I coming we say So, the would we across growth with the

Bob McMahon

And just add saying, an organically that those the you inorganically. if to both is our and in would Matt, to look look this invest I are other of we and strength continue last portfolio, thing we success to to invest one that several in mean what strength further. the at years, over is Jacob I say, the to areas Yes, area marketplace where our given continue

Matt Sykes

Diagnostics. just Thanks then And Great. that. very helpful. on for That's

stronger exit demand catch-up you that I'm comment about the your from the rest sustainability is run and just that year? the quarter but you on talk of some views sort throughout Your diagnostics can of period, sure the rate. the COVID of

Sam Raha

throughout year. very, of very of we course the are if we're where kind opportunities, the – one that's the pleased we with Yes, the think recovery of business about progression that

we're of and If is if testing. just right – really fast is recovery, not a in is recovery growth fall on expecting this overall only when But the year, going. positive we're sustained but sustained business non-COVID positive how area all the saw the now but an grew off going that be in continues say, there in are you signs and very at that recall from to last to our standpoint to very environment you hit the where then look business, testing be we accelerated actually strong pandemic QX, watching

back very benefit compelling then seeing provide to forward. business of and the into Res and and think diagnostics that tests cancer to the getting are doctors' so people think forward. think I a And we're our addition of So, forth, customers got with opportunities the couple we've that I of tests, diagnostic going like for wellness certainly portfolio going I Bio the

Matt Sykes

Great, thank you very much.

Operator

comes Puneet of [Operator go Instructions] ahead. Please SVBL. from Souda Your question next

Puneet Souda

Yes, And the a hi. expectations Jacob is rise and have and Bob I question in take Mike for What market Bob. baking in for raw I is, you Thanks, pricing material you first. your the question then there follow-up a here bigger prices and for in-line are pricing think ability And the expectations? in Sam. with the case year? to in for

Bob McMahon

organization, of fragile job our supply logistics, chain able I is, say. increasingly first question, and of Puneet, to or our OFS I being team, done just great who've a a what chain on manage all, shout demands say the That's supply fantastic to a out a would would increased just

built significant price our teams controls That's you we're supporting term. our have seen the long-term in half more in so the half with what It And starting would good are through these and in as into that fantastic felt in And of We decreases customers. continued what able to what first drive expectation our increase just a plan. that's and but pricing had job year there the depends volume, been And discussions, but nature say, price the done our built modest year. hadn't the overall, we inflationary well of hasn't see on assuming pricing, into changed. second our group, they've business. I we any the near say, are cost pressures we've or least know to contracts as of you at we this as of areas, on

Puneet Souda

characterize management with for Are And helpful. path? they the one first also a and one talk going position on with Sam, Jacob. you much other the in quick now Lab and again therapy assays that's on think pipeline terms Sam X,XXX – briefly if could sense a what core Resolution and update any regulatory pharma a wondering much again and of for the a PDLX your the the followed you're quarter. could then about then your competitor are X,XXX well, on Biosciences, In LC you Open for the FDA obviously very MRD, has there, congrats product position. on very Thank beyond the efforts I to into similar of for your in Open Okay, you changes then appreciate could us focused if to in your we I'm but bit about briefly, pharmDx seeing just want Jacob totally little Lab. get should market I and framework? past approvals. you being if launches? the done LCs you and new How And follow expectations

Bob McMahon

Bio, you thank for I Resolution question think the the on Yeah, …

Mike McMullen

many in there. How questions

Sam Raha

you. for response Quick

from remains are therapy side, as existing on have as pharma our the partners focus interest that primary we where selection Agilent programs both that's the Resolution into well. as and continued the significant we're and that coming the seeing pipeline clientele Our well our contracted

residual more Now therapy our believe the focus and but minimal remains again selection. is, once minimum do disease applications technology the to we primary fundamental including monitoring,

capability and that. specifically register market we you we Now, before, work, asked companion indication as model, to then I of is approved, think set, the to Agilent, pharma for a about which PDLX to do in used can we've It as where diagnostics believe specific terms and come partners we got tied which commercialize they we've those a is are work to diagnostics develop specific with meaning drugs. on what companion

and you ultimately and testing you. over the long-term heard and but that's model bit we but testing, nature our way, CLIA there's because vision patients the are today, IVD Jacob, test. even that's NGS diagnostic focus diagnostic is kitted diagnostic our have than of a to along course happen lab that little of that that different is based have as model the distributable, that remains IVD our that interest PDLX and an kitted will to got So NGS to near solutions earlier a are we've

Jacob Thaysen

let our start Informatics by me Lab strategy. and to Open you Thank key saying is Yeah. just that and

we can talk in very connected where to instruments in portfolio So, always quickly, up cloud broad and ecosystem our also all a invest an in also where is position – very to the is be end your of do instrument, that track you future, though well an Agilent's going into fact, the can a can we setup connect samples connect Informatics, Lab, into e-commerce continue with to in the believe we this. set connected the very it's time we like our Open we within and we in strong most lab, about and

in very areas I'm months further accelerate last presence the to our further we over excited about these invest, into few to we have to fact here. decided continue invest that So, and

Puneet Souda

That's great. guys. Thanks extra that I appreciate questions. you guys taking

Mike McMullen

a not problem. Sure

Operator

come Your next Couillard Please question Brandon will of Jefferies. go from ahead.

Brandon Couillard

out quarter growth. instruments a Bob or seen terms while Mike I afternoon. of in instrument the good versus you could first quarter? business, chemical that Thanks, energy solid probably the in in you've it's suspect the break aftermarket

full-year in for wanted case. end guide Just what's then specifically? updated the of that confirm embedded the markets to And that's terms

Mike McMullen

here going for compare in right the your on of We're in is but was that answer I up now actual still We're relative question. the our looking stack C&E. for Bob, business though QX our of to C&E. I ratios notes bit instrument strong us the into Bob? And [indiscernible]. move looking to know kind that easiest growth can't probably us, remember

Bob McMahon

we assumption started Brandon was was we and kind third terms then going in business where XX% quarter our than and of your double-digit think the to somewhat but of as recovery. [XX%] is instrument the a And higher LSAG again lower was or both for that I Yes, continued recovery QX forward, last of QX weak base. LSAG guide is going in growth. for it about similar of that to are down slightly terms QX slightly going seeing forward we say, to It the point and than that, of

And – so thinking we're kind it about I of it the terms QX. same QX in think in in that about saw roughly we

Mike McMullen

now more quarter-by-quarter, think it I upside right we overall trending this Bob. than we're taking But I think being downside. see

Bob McMahon

That's right.

Brandon Couillard

you. remarks materials? prepared based constraints, more, at but doesn't it what if then just or today, Got supply one extent all other seeing to you marked sound your And like, boards any circuit on printed are

Mike McMullen

constraints. remarks echo in chain heard at and that you our just order tied team higher earlier, was what about any office in our I to orders, China is C&E, Bob spectacular some not would that on so job, Brandon, talked supply strong a but all we growth mentioned

way to able make it listen, the ship we've get So, to happen. to easy, been and not been able product teams but find We've product. a it's

think well. I and we at manageable it's forward all think is as So, the relatively to moving Bob material quarter

Bob McMahon

right. That's

Brandon Couillard

thanks. Great,

Operator

next of ahead. Please will your question Citi. come go Donnelly And from Patrick

Patrick Donnelly

there, you're in seeing there for question is thanks the book guys. order encouraging in C&E higher questions coming Brandon's what taking Great, talk through you just more? the on revenue. bit growth following-up a Obviously, than on Maybe can

that historically in growth bit is of over years. past heard You it's you've much this you? guys know the a to this know, quickly there. you positive you noted won't give enough on hesitant the turn been confidence too I’ve that from [indiscernible] couple mean was most kind I bake of to I among

I guess then and [recovering guidance raise the piece a comfortable bit the back biggest sustainability segment about more that there? that doing the through talk just you was can half] So,

Mike McMullen

early my more Yes. positive things you're Thanks, initial here see side where materials and the that's and phases say of We to glad in are why remember the earlier chemical we're start little starting because Materials I orders the good we're getting light would I'm feel I'll quoting C&E. still it on in Patrick. about transition. Chemicals And side to the my about to some differently you compared said on still once would segments. of I a and talk order really the say comments, relatively book activity always tone. that refining I bit the

the As much but positive. more yes you are larger business us, we that am – of for part know, I

see the in the had I quarters kind to a in book this long yes, think I in seamless prior the and seeing probably this we've quarter. order space. had we it's that in it view but see of first we're And wanted time trends C&E time PMIs, I started on the to

Bob McMahon

built And I as is I build kind QX in that there to have one QX. of, Patrick to still taking We've we saying, would a is – would it quarter on in still said, what Mike upside bias of and a the into time. some say, we're at say he

Patrick Donnelly

balance larger? Okay, nature? talk deals sheet of more leverage be pipeline on where expect about and the that will bit still focused if segments bit on a on the we then the the certainly maybe if we helped, maybe you obviously times. you you something you Bob, the the And on a could landscape. Mike, mentioned appreciated. Resolution deal that's that saw that you just for helpful. guys hunt Are and talk Bob, activity few Should touched to about the then a could little want go, you're M&A

Mike McMullen

Yes.

that BioTek, of a We analysis, same. an gone focus would largest space, great like growth kind And is our bringing that's new we've think to we're look think date that We're accretive strategy. our buy that as multiples on to teams on areas our terming build do We in after. genomics growth – we We the us. going, growth we've of like of you're Informatics our the I key the ACEA, which area to, cell BioTek, the biopsy a team, So we of willing we signaled our deals view for been like so I interest remains at deal. M&A still like in be the and are see part Bio segments. deals maintaining We like Res been seeing. higher like others. We've

growth a number and have quite we that bring don't of areas deals do for opportunities. find we we willing to to work. teams continuing make were the great company look But Again, businesses our new have We to to we're to that. model great do can into if

to we're private founders we home growing space, remain and a of like you my how disciplined the of culture, in great We run stay business lot for your terms You for to frothiness say successful for like but this in segments guys company looked company, the in where team. the where be will my we like certain of the to we've just of There's a listen, valuation your long-term. at company have just terms in often been going expectations. market,

working to Bob we're adjust model. for to stick can So, It’s question... been the think going we our and I us

Bob McMahon

our grade of times Mike give other we're to intent to gives net investment plenty to that going flexibility deals is growth that maintain an and we that a around invest accretive at, say Just as leverage the quickly, talked deals us continue than to X specific in and just kind ended to not of target about. quarter

Patrick Donnelly

it. Bob, appreciate really Okay. and Mike Thanks,

Mike McMullen

welcome. very You're

Operator

UBS. today go question Brennan And your last come ahead. Please Dan from will of

Unidentified Analyst

[Nathan] for is this Dan. Hi on

instruments we're a of quick extent impacted traction, are end the of that coming in seeing your pandemic, cycle upgrade any now your cycle the or acceleration any has you in kind upgrade of what been the Just and any out question. market? by pandemic, To

Mike McMullen

say seeing I think think And that kind our pandemic now in really of I is to we cycle. just any we're positive I business. turning would Yes, hit, to when different C&E direction. the that it down as question, the your Particularly actually slowed of replacement answer side indications commented,

So, I'd space spectroscopy say in platforms. been to C&E are the tied that even chromatography it's

Bob McMahon

but say, all the early I as still days, looking positive. are Nathan would Mike trends said,

Unidentified Analyst

just, [pharma], grow. market share just on Can Great. I And switch what you? seeing share mention you that if end you elaborate gains gains you're can did is top driving for

Mike McMullen

lab, come working – Jacob I and very haven't and If where know jump the been we competition. combination chance as the multiple build seeing service the they’ve it have out reach value our to about differentiated ACG you're we businesses as of a analytical to well solutions experience together from you superior innovative that our call And have years. continue in market but A think had a think well. LSAG for earlier [indiscernible] bringing you it's into mentioned to our yet, commercial the proposition the – I and by

portfolio, So, capability I reach. then think further it's the within been the combination commercial out that of building portfolio and building the and workflow focus service

LSAG earlier really obviously then the NASD helping a business. company addition a well been us analysis, in in factors biopharma, it's cell and those Sam's we and the in play in new and all combination then our groups, to think I do talked to which of about is play our ACG

think I combination those of it's been a all factors.

So, all the of in that's growth parts why keep broad-based using the word it we you because see businesses.

feel while. we we results on for were the working So, really the a from good about size

Unidentified Analyst

thanks. Great,

Operator

Thank everyone you us. concludes this conference call. joining today’s And for

disconnect. may You now

Agilent (A) 26 May 212021 Q2 Earnings call transcript