Agilent (A) 28 Feb 232023 Q1 Earnings call transcript

Company Profile

Participants

Parmeet Ahuja	Investor Relations
Mike McMullen	President & Chief Executive Officer
Robert McMahon	Senior Vice President & Chief Financial Officer
Padraig McDonnell	President of Agilent CrossLab Group
Sam Raha	President of Agilent Diagnostics & Genomics Group
Jacob Thaysen	President of Agilent Life Science & Applied Markets Group
Matt Sykes	Goldman Sachs
Brandon Couillard	Jefferies
Vijay Kumar	Evercore ISI
Puneet Souda	SVB Securities
Rachel Vatnsdal	JPMorgan
Dan Brennan	Cowen
Patrick Donnelly	Citi
Jack Meehan	Nephron Research
Josh Waldman	Cleveland Research
Lisa Garcia	UBS
Paul Knight	KeyBanc

Call transcript

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Operator

Ladies and gentlemen, welcome to the Agilent Technologies Q1 2023 Earnings Call. My name is Bill and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Parmeet Ahuja, to begin the conference. Parmeet, please go ahead.

Parmeet Ahuja

welcome, of Agilent's fiscal and the call Bill quarter first year you, everyone, conference to for Thank XXXX. Vice With President me and Senior and Agilent's CFO. President CEO; and are Bob McMahon, Mike McMullen, Agilent's

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

on and You GAAP financial will metrics directly comparable find our website. the reconciliations most

are in all noted, basis. references otherwise and metrics impact a growth on growth Core the Unless references of or revenue core any within XX excludes past to decreases to divestitures and acquisitions are the months. revenue financial year-over-year currency increases completed and

on is forecasted rates. guidance exchange based Our currency

at forward-looking During assumes no uncertainties obligation of subject and this to company's of other The our complete risks company we and SEC as the today. picture look statements recent a will more factors. risks are These to statements about make them. call, the performance and company. filings financial also of the are only for Please valid update

the to like I'd turn to Mike. now, over And call

Mike McMullen

both Agent revenues to team joining line for everyone, start were call per billion in up top during portfolio up delivered $X.XX exceeding up Earnings display growth of or core. basis XX $X.XX growth and excellent an regions. QX margin points. all XX% Agilent's bottom and thanks, The today. XX%. expectations. XXXX, Operating And Parmeet. and broad-based quarter full with are a on share Thanks, quarter across the are end resilient markets the of geographic model XX.X%, our

strength closer end market highlights. our Let's us quarter another growth continues core up strength both way growing pharma nicely. across take in materials and and is at our XX% for last of is The performance, a small XX%, large XX% with business first delivering year. now look geographies. outstanding all This Chemicals Advanced with on top with the quarter, growth led and starting with molecule

while grew the Our markets environmental and both academia the XX%, X%. friend business food grew government

a China On basis, geographic led once way. the again

their growth disruption continued and execution delivered associated quarter, we growing delivered any results, also with expectations. exceeding In COVID growth. X% record strong results Our of overcoming Americas shows Europe, China a stronger-than-expected solid The with XX% team during XX%. the our

Group and Markets delivered and at Life business of our LSAG XX% The across billion, unit. by Sciences Applied up Looking revenues end core. markets regions. growth $X.XX delivered performance all

in manufacturing and market LC/MS platforms advanced batteries. growing for be materials performance faster semiconductors continues the during LC and and at to strong. the used Our market Demand materials chemicals strong XX%. than in the end continued particularly their quarter,

Our Spectra our continue quarter in than in business base we the across end grew XX% and more markets. multiple to spectroscopy strengthen

Services the The placements the posted drive QX. safety. Heathrow years million the This revenue This its breadth take security system XX% of driving offerings Airport growth business growth used we record operations our over checkpoints along At is our in support strong at record up rates. customer our of lab Across attach of diversity InsightXXXM. an to accounts. for levels the competitive renewals Asian throughout officially Enterprise team is consistently satisfaction. and X momentum, contracts. the to The In Crosse with team's and passenger ensure advantage is and announced instrument core product and continued $XXX as knowledge at QX, converting appointment of past continued customer enhanced deep of high London driving continues same continues provide to time, group

and $XXX core. X% of million, Genomics up Group delivered Diagnostics The revenues

and double-digit Our growing with pathology-related strong growth business led performed by well posted the NASD Europe. Americas XX%. another quarter,

have Our on double manufacturing NASD groundbreaking additional ceremony And join year. our X of at of us remains capacity. we manufacturing million expansion in oligo the Frederick expansion In $XXX that announced weeks online we come Colorado pleased track ago, Train will January, B are to our mid-calendar an our site. the to Governor facility

and Agilent, to further technologies is partnerships. In NGS addition In using genomics enhancing investments, the we researchers clinical Avida invest we continue in cancer. Biomed company in designed early-stage quarter, approach the sciences capabilities. study to our life externally of the new welcomed assist to organic into team Avida

to new drive marketplace. solutions continue also partner We platform companies with to the technology in our

announced their solution a we IHC for companion development assay multiplex partnership with to expertise workload with quarter, biopharma. drive This to Biosciences combine and diagnostic the tissue Akoya our

In Agilent and Just addition U.S. highlights, was among top Capital recognized in most business the XXX these the companies again to group CNBC. by just

this are in customer industry and equipment focus to our As and services we proud medical announcement, for relations. very part of on treatment the of leader be employees the

enhance start yet work great produced of was another was team It with investments once the Agilent build navigated market a Build the Buy the growth our QX in The to excellent challenging again growth in high-growth company done uncertainties targeted to aim are of drivers. and expand a year. example areas and strategy. we've that Those outstanding growth drivers and QX heart resilient results. our through to business multiple create

to QX, we ahead resilience As and business. we of strength our the in remain confident look

extremely team with One and deal to high level prepared that well Agilent to have unstoppable is execute challenges an face. at continues they We any an

revenue remain on keeping strong start strategic continue I convinced strong our eye while and we overall, are close the results. focus to Given provide core on and we capabilities drive conditions. EPS to detail execution the overall guidance our outlook our will raising but also the full a macroeconomic year will year, unmatched

joining you today. now, for you. to And Bob, over us Thank

Robert McMahon

Thanks, quarter second take In as focus statement the financial provide on I'll other with afternoon, up non-GAAP full as revenue Unless otherwise finish you I'll my everyone. income our initial in and and Mike for guidance through remarks year my and the the will well key updated metrics. some good details today, quarter. on guidance then additional remarks noted, results.

expectations. performance. revenue core We extremely basis. QX up for QX higher year with reported are than we and were of exceeding from was as our the XX% X% Revenues forecast pleased year. a on solid we was start the $X.XX very quarter was to beginning It our was billion, the the expected. contribution expected. the while the a Currency also X-point was full Pricing headwind improvement M&A an quarter, was which as a

large Materials of molecule Small continued molecules. year. growing as like Performance grew growth very XX% also share Pharma to across detail small of to grew Now XX% And our mentioned, XX%, year. quarter following strong, and molecule on large some both end were Results Advanced X%. our growth XX% last be Mike in grew markets. largest market, Chemicals top XX% I'd on last the was additional very strong. again while and during pharma solid

market. doing and the area. quarter, The are in X% continues outsized The the by driven to chemical and environmental as spending are business during market market drives the Semiconductors advanced government driving and food grew deliver PFAS batteries broad in energy this while by XX%, leads helped approved by increased to in and materials recently well growth. this for of The forensics customer subsegments the environmental testing the in demand, China. grew double-digit market chemicals led growth investment legislation area investment Americas U.S.

the industry-wide Asia genomics X% growth Europe services. and And Our up challenges led way in by partially the Regionally, results. and versus market. LCs in the business Pathology market academia by clinical the diagnostics market and grew strong led last offset here, us showed government and for was XX% X%, year.

China delivered geographic both a our in with quarter another in growth at The expectations. exceeding Europe expectations. XX% X%, the coming line had and grew solid XX%, On Americas team basis,

rest turn Now of P&L. let's to the the

had both per year to to points The last Below was And was we outstanding, a quarter basis for expected. margin XX% and up summary, helped $X.XX, tax ago. putting up were the quarter XXX year. gross a the coupled share line operating basis XX good per million earnings from the XX.X%, QX discipline good gross start performance, from rate with top as very a diluted from SG&A ago. XX% In year. our shares XX.XX% drive and earnings up core it our and margin share line, growth, XX% with all margin year together, cost ended XX First points XX.X%, growth

sheet. Now on flow our some metrics balance cash and

CapEx. in In by quarter, returned of cash operating B and to through repurchasing last generated be $XX In in $XX manufacturing versus flow, CapEx to million capacity investing $XX Train the and up QX, in million our year, XX% spending projects. expansion shareholders shares $XXX we while million. by million other driven $XXX dividends our scale-up worth line we continues million

by continuing We successful new $X repurchase with share along increasing dividend our capital our to X%, a we're also approach announced authorization billion balanced deployment.

net as balance of the healthy X.X. leverage Our sheet quarter continues ratio with remain we a to ended

to be interest macroeconomic The move remains the volatile. revised and to environment outlook year our currencies Now and the quarter. continue upcoming for let's dynamic rates and

weaken year, updates our to rebounded X.X%, major year full $X.XX currency the a to currencies guide be it the almost $X.XX billion $XXX are full And to XXX an has still X.X% to the good our And as guide However, This basis increasing of increasing the November. increase headwind midpoint reflects we core point quarter of first seen expect to to since of also reported February. favorable result, of to guidance million dollar our in initial our growth. the X%. for full in We've to somewhat revenue in year movements the a the given although billion. start currency year, a we full year range revenue range against guidance

our raising new also we're of guidance range share. EPS per $X.XX full to addition, In to $X.XX year a

spending our -- recently to up $XXX beginning forecasted $XXX from the announced the guidance manufacturing of to given are million, expansion the oligo our year. at lastly, year NASD we And million our updating the capacity double capital for

Now billion. reported growth of turning to X% core in $X.XXX This billion QX, X.X%. of to revenue X.X% the represents expect X% to $X.XXX range growth of to we and

while points, growth a of Currency M&A X.X QX with QX. of will is headwind be points consistent in to X.X which contribute is expected

be $X.XX, representing Second XX% prior to the share are quarter and per $X.XX XX% of versus year. expected non-GAAP earnings to growth between

I'm the pleased delivered quarter. first team has with how the in

are things on We can we focused control. the

strong market to driving go through we grow year. the marketplace faster services, and as the broad in with to the products execution expect is we and of team our Our portfolio continue coupled than

questions. Parmeet? the things on back being for Parmeet Thanks we I'll your now over turn call. take to as And

Parmeet Ahuja

if Thanks, could Bill, for Q&A provide instructions Bob. now. you please the

Operator

Instructions] Sachs. take first afternoon We Matt this our of Sykes from question [Operator Goldman

Matt Sykes

Mike the and Bob, and maybe facing given it talked year, past last we'll comp the quarter start that of just you've about underpenetration. areas in it ACG, on was the had

was feel see it from of you I a for Could continue throughout region still out. this growth you year think there's sort regional and of lot market China you that called next? give into in and mark-to-market of ACG standpoint, just us maybe end a where room we kind on a an if

Mike McMullen

Thanks, Yes. Matt.

I posted on First more actually there's all, us. a opportunities of recognition provide bit have color the opportunity And of appreciate lie. to still in where the may more a front those and of lot we we numbers little think I want

Padraig McDonnell

Yes.

the outside think to hardware lot and had so industries in add I being lot across and been utilization offerings, where the certainly a an customer offering broad-based. pharma see to around value value opportunity look, particularly we has a of grow. of where We used able be operations broad So on, see as that we different platforms -- product to asset we've a our to

our given in our also to and and to attach through think base the year. markets going different I sectors ability we big is go continue as installed

Mike McMullen

I we we see Yes, in in a think flagged when the obviously, past. China. That's lot opportunity, of

interest well. space. pharma that been as is a lot pointing seeing historically we're growing the the one has CAM space in centered other in The of We're the to growth

hasn't an about think an taking made renewals we out call, that's still enterprise from would the again, story are level. market end played of just I And also we then to fully the for talking see some I So Those some the well. remind more Matt, And area we would perspective, clearly support yet. the growth. expect geographically, attach up in as and you, record contracts share on rates going keep points China

So here. lot a like to

Matt Sykes

guided to for outlook kind mean on kind you've your Great. growth mid-single-digit year. And of the a then refresh maybe full instruments. us just of I for

a backlog. little a we're of more that you are sort Given year, overall? back on instruments the thinking have for visibility about this How half you ways that little probably into

Mike McMullen

Yes.

bit -- all, So of -- first to all, this remind let backlog, on of I'll I high. audience remains just Bob first of the quality very taking about talk it's a think with me I'm the backlog but extremely our important let's that the to

So our anything at but see team the -- to down great cancellations pulling and seeing can not backlog work out or backlog. we're you of of the any work

So us around forecast. that level can of confidence gives revenues we the

relative I half new -- to new anything acknowledge to of the the we news we think second still talk there relative want half, isn't about still year. the to back the really about today to remain uncertainty

we in talked So new here. really It's no what consistent to November. about news very

of rates normalization us normalization about deal of think lot you're talking -- cycle hear going times. a growth I of to

deal think I add we've remain more historical I Bob, funnels don't the you'd are towards So times that? healthy. And know anything if to cycle already levels. The

Robert McMahon

go not you're the year against very No, the in back we double-digit we anything from year the think the I recovery but with start of will But very business. LSAG up growth pleased Mike start material mean, of I comps with strong I as tough a said, with right. half good to very change. the the think, had obviously,

Operator

Brandon of to next The Couillard Jefferies.

Brandon Couillard

for counterparts. in Mike, up was a think the than that you quarter. better China Could we've I from little you bit lot a some That's of unpack said other heard XX% the been in us? have linearity the for Could if due and the year. perhaps maybe fact your X later talk China month through to that the about quarter you're full it outlook

changed digits I all. So think has high single was it at

Mike McMullen

team room you if a and of glad there's you the lot done the really proud noticed, what here smiling I'm Well, here. in of you because conference has the were in see here, Brandon room

to think teams execute. ability interact to waves of our its So the know how it's -- this with enabled we timing execute It's issue. to I don't quarter. with the were hit ability customers during a our also COVID team all and execution about because of digitally. But We've

people customer support couldn't sites, the to office to while were go to couldn't or customers. go they maybe the So able

were it China in pharma, We we we I double-digit So was a -- of delighted broad-based story. QX. just with the growth performance Bob, had just food. think in were growth and out And chem,

is is was team it results. different others with I know So the I saying pleased than different. but our think are narrative really also also my in China capability

Brandon Couillard

guess, around talk earmarked that Got it. case I that time And for current expansion. then as line In time Train think Train on Can kind And demand. a to you of amount remember same was I back just B, expansion. this about the good of I NASD with the for the C, customer build-out. already

Mike McMullen

and team and Yes. I myself a Bob. Sam this want tag to with with bit

evenly online B. coming year. we latest So that's to refer expansion That's Train this the

that expansion, remind, plans that that you're see the to ramp. and ceremony the when new mid-calendar you for And project we call of groundbreaking we We're referring to a into Sam when our Project a as for really what to full And book it chance are pass over just endeavor of business and a what expect we had want good. going we for track first looks that go to of some on to coming year or to maybe up. live fact, firsthand have then with Agilent. matter to [indiscernible]; see Brandon, In went again, it I'm we revenue

Sam Raha

really, tracking coming all, And right, really we're on. steel other for A midpoint you right Yes. facility to first me great it progress as stainless Bob in the miles on work Train that put joined is validation and happening plan of making, the see first-hand, looking really piping of that's been nice. infrastructure midyear do Mike, mentioned, to Yes, -- happy was we're B, lot so. place. and of miles And

time online from and also and C or single projects of expanding that the groundbreaking started noted, these we've to the me, February, for with but the we be middle siRNA, there's D. C of take the February, pardon the CRISPR. first some process XXXX. As antisense at as remember, And to revenue will end you trains, trains, and both serve our ability guide X dedicated would And coming in D, capabilities as Train Train customers RNA well did

all So excited under firing is the in team Crude's cylinders. leadership progress about in the NASD Brian

Mike McMullen

go me earlier Sam, unless to you're to commit for going to live.

you right? think to meant say I 'XX,

Sam Raha

Did I way. that. of you're Thanks instead catching 'XX. it's that me you, one other say 'XX? catching. Mike, for Usually, the accelerates Thank Indeed, the for

Robert McMahon

the And so around forth. Brandon, orders question point Yes. and to of purchase your

We taking the orders visibility into good we in frame given funnel time there. the the but have pipeline haven't started

into So we expansion. that be have wouldn't $XXX high million we putting in confidence the

Operator

to going Kumar Evercore Vijay ISI. We're next now of

Vijay Kumar

easier. second Was Congrats the QX? on second question guidance, there that anything points quarter any China a impact, good of revenues to organic. there X% got for get That's anything comps XQ? to high XXX Is here guess I basis here print the sequential the any at guide step fall end. at Or to down first X.X% here, in of quarter? the sequential Mike. can that timing a My on explain the

Mike McMullen

up full going to I think for unusual Yes. think detail answer over about QX I was additional our above but the I'll is year this And in that the the what another quarters. set want Bob we movements do is guide no, pass between to not guide. we're Bob, to

the was that there. So process

Robert McMahon

we're think have where it's good forecasting look I mean, right. in feel the and we exactly just XX%, significantly how with is think I we guided off to and X% past. consistent a I at year the as this, still think we above we came I still That's X.X% full

Mike McMullen

Bob? prudent today, missed we're I yet very have

Vijay Kumar

I was that, for Mike. waiting

So quarter prudent the have a to guide. a Is comment? say is that second fair

Mike McMullen

That is correct.

Vijay Kumar

did at then on have And Fantastic. one I NASD, -- Mike this Novartis.

API pipeline uses I What's in-house. customer? Novartis to maybe a provide and know at you're And starting pulling as they're think some the big their I to is see ASD manufacturing in context and looking train risk? how

Mike McMullen

Yes. I'll to the some have agreements from all, -- tag of part get. relative add new that of this. much market the we We no has news. announcement on of additional on Sam, team color. is want demand you first actually and we if been But and I'll how Novartis always plan lead contractual to the

much well one of customer. the in So But lot number we I the have business. going there is to we everyone those and about us diversified Novartis a known. customers think have forward that but lot about that of talk a move great base lot a be a talk business. And we we book Novartis a we about of really we broader as of many hit not confidence to to know success of going supporting. to know business there's build We relative we're of allowed hard is that that's talk a because I have book programs have rates because as a And we well. this programs all gives Anylam to lot worked we're but

Bob? And

Robert McMahon

mean to say case -- we me satisfy. good position and had about to we or just extremely the than capacity and mean I something. I to be I marketplace. feel be more feel our our very the add about We've about And orders in the good mean very overall constrained. this want continued that. I clear that think I we've means let can continues technology I be Yes, to expansion. think we nothing I would

Mike McMullen

appreciate that Thanks, Bob. I build.

Sam Raha

about encouraging today that just right? with billion programs for we're right? of growing the a the $X.X $X the more partners can things, think are on to really molecules what's suppliers a XXXX. work before. quick pharma over therapeutic today, at to and market that are bit is little doing this market just give dozens Just of We've we I number stated And the by billion oligo of if stages. Mike, add couple various advancing, XX you We color,

molecules working there something are the and about. programs of of some on, pipeline have also absolutely excited which broad of is being the populations we're that So potential

Operator

next We SVB. of Puneet go now to Souda

Puneet Souda

and correct, historical one, sort would X% it the first on it pricing contribution I don't call, So If appears you X% quarter full Agilent has from contribution Bob, volume in grown. of I that which the heard imply I'm year. the and for for this are levels a below what expecting pricing contribution know still if year

the So China, tailwinds obviously, in just growth maybe in just NASD you're strong and the congrats the and -- we're quarter. trying on to given seeing the areas other understand,

sort the in seeing there tougher of half? that of is beyond you're are sort compares So the anything second emerging

Robert McMahon

No, it's a great question.

remarks. overall quick make reference prepared than higher the I a So Actually, QX in as did was expected. the X%

the we're speak it that I FY full are time. We forecasting volume. contribution roughly X-point X would would of year that you're still and taking planning a say price X% 'XX. to right, for is What a And at quarter

the is around we've As our think anything that we're I But uncertainties wouldn't again. there's some changed say And word with said, forward, still -- guidance use our that's to and forecast looking materially has dealing macro. I prudent would continue of where the going expect to the beginning ability that I've quarters been throughout continue forward. that several since very year last that with and I to the standpoint. our pricing maintain pleased course And to from of

Puneet Souda

and of on helpful. of for the you positions And one -- China. in have -- then most for part as one was And This on document legacy China. heard obviously, your is that the the you sizable. China. You within the obviously is are it? How the Agilent -- stimulus is have thinking listed that Lunar is that the about loan clarify listed well? just actually the Year, longest That's put out companies I I mean the of baked into guide stimulus, Okay. about New to wanted

just and that in China for to trying XXXX what does growth understand So 'XX. mean

Mike McMullen

You question. want to take the the of first part

Robert McMahon

and our in reflected point but come QX. roughly it's QX. X.X back of Year impact not only the been New Sure. that's in us It QX in in headwind Yes. also QX Lunar to But was was

of was calendar perspective, and it is at So kind the this off the from equipment that's And hospitals. Sims section for in There looking we're is kicked the still way there in early. focused planned. regards QX. on as But in to it's universities stimulus, a our got

see I And So this it out. think China point, our but plays to assumed we're kind the at we of haven't how waiting stimulus. or right put really relative anything guide growth to now in

it So our then and deployed an if does to forecast. our be current get that upside will to way, comes

Mike McMullen

And I think Puneet, continuing strong of of the you QX prouder as said last it well. to I how here QX second mean, delivered half our to well. couldn't expect very, be that's and we be momentum team, continue would business in and I year they in China very continues throughout in strong that and the

Operator

at Rachel next JPM. to go now We Vatnsdal

Rachel Vatnsdal

the Congrats quarter. on

So environment. of just a one that a or semiconductor were throughout semiconductors market up semiconductors, were peers XXXX, flagged reset expecting first facing on to given customers have the macro they your semi as just soft be

So you in semi-dry strength mentioned prepared.

seeing off of that So which first can flagged? play you semis? in then of really walk your just market the us you do peers are in, guys the of part softness one And any have through, you

Mike McMullen

demand. I answer it additional business color want some Yes, seeing grew little the and we're Jacob provide start the Jacob, XX% in and you we play no. is mean, more strong color? And short to But so turn and forth. over still to to our where would I then give spectroscopy a say over I'll about we'll quarter

Jacob Thaysen

absolutely. Yes,

require to that market in have into the portfolio instruments. recopy fine for generally QC I in in hence, level strongest also labs they the we would using same We the the are same continue material speaking, like goes say but fabs, both and have in testing the for all semi see they fabs in we in upstream -- demand science. And but of chemicals the from atomic the the do they the semicon industry, this

a So labs. new we Those the but of the in lot were built continuous see also for operation the fabs benefits.

also course, upside -- before the We, expect some continue a are take we market news into to we in for mentioned lot also our a to the across us. of the our broad CMS. into it rest expect only lithium where the But for Obviously, we comes other demand, as in really But of that this see also, the a see spectroscopy particularly U.S. not we while. be both semicon a investments lot the in the continue parts and needs of batteries, time business of to of will world, I where this So materials of see GC, the an lithium around LCs, in whole lot the play. but interest portfolio for market, particularly we spectroscopies battery

So are of a very and excited about lot that see there. space we continued growth

Mike McMullen

which world funding made government the the think too, the seeing I us. of has about we're industry Jack, And in part of of some earlier, the point semiconductor environment, as benefited you some funding coming from parts different

Rachel Vatnsdal

The just then And this molecule grew maybe over large pharma faster small towards shifting Great. than more biotech. molecule quarter.

us that terms from the small how in related molecule talked spend? molecule that as that an it in in, are before can resets on And being really well. were long through we in what of outpaced catch-up walk large some XXXX, about purchases to time update normalized you Can back past You've growth outpaced then of inning kind sustain level? just spending to And of small strength molecule driven XXXX that in you in back delayed frame. instrument

Mike McMullen

think, got baseball really saw Sure, quarter. that member I LC LC/MS great analogy in the think Rachel, on Danish some I and question do the clearly this good but this Jacob, particular over pass strength a outpacing XX% And we of in growth, print I to molecule staff dare small market. the

Jacob Thaysen

Yes, don't game. absolutely. I baseball will I a think start this by saying, is

there space. think opportunity a is on I continuous indicate

and molecules. -- both continue the small believe and over years and the performance is we the done we that is of And reflection for see current portfolio the in both a we a our So made I we investments CMS. big to the past LC market into think -- opportunities have there into

where solutions. on we have So it's instrument lot into instruments on investment making very focused of gone routine reliable and and a much really, really robust strategically

service significant you uptime instruments We continues continue ease but our instruments. about to pain truly focus out how customers' our course, our organization on spend can not also and about into going is contracts time to is only of we of consumables to and also the both put commercial understand lot brilliantly overall that smarts and of And a the connect it. performance point the on use, of also

a great this continues business Agilent. So be to just for

Robert McMahon

add we the Yes, beginning Rachel, year. maybe can strong normalizing year, talked kind -- about because I points few maybe at this of a of this this is the performance Bob,

continues, We we're do also that it. well very And to is over -- But market. team nice it up I you of about we've time. the this said and the to take that what biopharma, business small starting nicely. talked small faster our and I the year across certainly very going think well. that and and the than the both us molecule think that of beauty large growing seeing And still I portfolio we got you're is diversification will think normalize Jacob some think as And have if speaks

Operator

Derik DeBruin to We'll [ph] of America. next now of go Bank

Unidentified Analyst

expressed more Could bit in call. You've a Chem into Derik. last on some [ph] Europe? the is just you latest This you're Peter for particularly bending in what seeing the on on dive in caution,

be well, So that if would great. can touch on that you as

Mike McMullen

Yes.

few a quarter Europe as print remarks we in through invite I'll I it but the with pretty the across the comments make came was strength were delighted in exceeded here, in then the here first organ So well call Actually, our expectations. the good. and marketplace hope

of digits or high end our X think X better. markets were growing I single

as chem But a don't were us pharma space. I a standouts investment the continue think watch with had. broad-based to But along closely for really in space the for plans our remains you... as But particularly that's off we're the that I good accounts with area watch to start have markets again, I we delighted actually growth know -- we're say diagnostics. we And to the the well but us. if for chemical large

Padraig McDonnell

high areas share growing broad-based of focus, course, take attach and said lot services rates to I to the well. you both together markets I the out in digits. been on been work on consumables as in all, really in Mike, do our think and a single able has And X all really has to of able it's benefited what of think I markets, team it has X think

Mike McMullen

I customers the think relative in but about environment weather put cost talk don't weather I to think on we pressure less more Europe actually energy favorable demand. and has energy

net but an still been that's eye on So keeping positive things. we're

Unidentified Analyst

further ahead, much of just of then what's you the the of years? your could forward? looking pacing gas going and there, then across kind outlook in 'XX? is And Okay. potential kind then in discuss margin How the out expansion level out What's -- and left tank

Mike McMullen

that, to Bob? want take You

Robert McMahon

that the still have obviously, I tank, Yes. gas margins. environment I able the despite still I think, manage inflationary we're in in, yes. growing our we're mean to

OpEx. half You it gross saw both through a about coming nice quarter balance of with as as this half here through coming it of margin well

forward, I about XXX how thinking as think points That's going year as a it. to we're we about the over this next about way think reasonable is years basis of it course think XX I that several rest think still the of the to well.

Operator

we'll to of And Brennan Dan Cowen. now next go

Dan Brennan

the But the the questions great one, first -- maybe Chemical quarter on maybe the in quarter. and the a just Advanced asked Materials On another obviously, few first segment. growth

wondering, advanced any of color you higher love and previously us are year? for if the how year, something your give between energy. guided for would to you above out with the then guide growth broke material outlook the on you that chemical quarter and kind And assuming mid-single-digit new the Just this can

Robert McMahon

it's a Dan. take -- question, That's great I'll that. Yes.

of we've all were we think that what seeing outsized digits single that it growth and so we given performance the This advanced And of surprised strong be And the materials chem the QX. we're source our is talked up would markets of submarkets about. market. about had actually markets, a energy the to growth been and ticked at of in a would our we continue bit, what about. that have to about that guide, chemical in have have it talking was beginning been in those high When And was we year, up the revised across the upside. with upside. the the I we one talked If really good

in that So semiconductor area XXs. high batteries in grew excess the in

not and investment is portfolio really to supply really critical the a are our able but continued strength power to And given only tools to there that so the of strength and this expand. be markets into instrumentation really continuing

book a so we the uptick But take the in that high we'll quarter, given we're there, XXs we're don't expecting and expecting strong it. QX. had the digits slight rest performance that So for single high of the

Dan Brennan

it's shape, And great just the low. very the on in -- sheet. Great. maybe balance is leverage Obviously, one

wondering you're any wondering Obviously, since while of M&A from like Just Just to like forward? terms wondering just have at the in your have potential a interesting it's what you I'm quarter. you environment. what had been something I'm guys move time. expect what's for of about right the sellers identified you're we appetite always kind wondering for for of opportunities appetite kind the bigger what the hard seeing management could in looking deal fit. seeing -- to Waters do

Mike McMullen

No, happy -- head the day think to is our closing fit. closing you're at on the right exactly Yes. is where comment your comments which I

favorable ago. some environment than much more still So are last market, dialogue it's of a it year there. off think was so around the view of we There's We Most is at a speak. round. much more think come to to now people willing buyer's a

opportunities remain build strategy. augment So heart for buy growth and we're nothing we the can is of that our have and at to -- core announce this interested organic our obviously in but very looking business we

with will we just the want and don't fine for number have we we the move also all all see wanted As now. thing, of do right bets we a But We'll to remorse. just to buyers times, make I've with side it. stuck buy sure said the right have we we if framework our us. just optionality And ever is on have

to the with that done been framework all very deals happy we've we've So forward. date and use we'll moving to continue

I for you is described a fit criteria really that think that us. piece key

Operator

comes Donnelly question next Citi. from of Our Patrick

Patrick Donnelly

be about quarter, I healthy. the bit last growth color a the the pretty guys Maybe about, And bit. you the started you little any you backlog just which guys natural, eating what talk in a is bit order is the of in bit order revenue guess, little Can a backlog growth color little give you little remaining of saw I there you just growth, into one on versus in order Can a what given the terms know chain the quarter? quarter? looked normalizing I helpful. would side. supply talked like just know just

Mike McMullen

Yes.

Let as some make you in to here. that ratios. me But greater were for don't you book-to-bill what tell provide can specifically summary Bob, jump But mentioned, is free then than orders the quarter I comments we and revenue. feel

grow So in our strength -- and so we with orders services and ASD particular business. continue the to

instrument get team, the commitments. to really backlog record flow On fulfillment meeting of we we on focused to back a to of really customer really side, and been and bring work we've we the this thanks shipment are able delivery continue normal shipment as great had order down those times to the requirements

backlog healthy, Again, would still say just funnels very quality. the that a I remain high is the

cancellations. we think to much have next I pretty no

level revenue So predictability Bob the of It is gives quality that and around that I backlog. good. from

Robert McMahon

say, Mike would be Yes. like and of out or that anything as the haven't of I seen any mean, the be cancellations continues activity. normal said, backlog to would kind back healthy beyond we I anyone that,

Mike McMullen

the But emphasize space. instrumentation earlier, I one towards whole in Again, this point reverting are construct of this a the evolving. that marketplace made norms normalization historic we cycles analytical see deal of would the particularly I

Patrick Donnelly

that. helpful. And on just maybe the PFAS that's spend, appreciate of Yes, testing. kind I environmental

it see actual in where to you're just tracking, talk really of your early Mike, you as the Can here. infrastructure seeing we I just guys about through the and obviously, how that's called kind mean, perspective what of are couple dollars quarters, of last U.S. you there, You've out seems know from on impact durability well. are? the kind coming some seeing but I you're what that excited

Mike McMullen

recently Sure. about and of Jacob the educate the the what Board we're but about I happen think you've talk talking see spent seeing, opportunity. of durability here. want because it some about to have about front Board talk Happy growth time the in it's all that. to And I actually we on to PFAS just don't I

Jacob Thaysen

now of see really and PFAS beginning And the the into continue absolutely. moving looking the in food Yes, was areas. and a opportunities of all PFAS about to supply it's other lot we at in for where types water

we think the are right, you growth So in are early of I the phases opportunity. still

to U.S. $X aside PFAS the there was set know, you As infrastructure a build, billion testing.

of to leading difficult have mean PFAS so measure. is And I very we the one solutions here.

you So sample and but instrumentation you make sure to you also really high-end contaminate very need prep specified consumables don't why that measure.

solutions have and see a of PFAS. in will a invest high-quality energy opportunities spent we to this lot continue there of So we continue to putting beyond space and a of out lot we

is environmental really next decade. a the over be think in that going there place investment a lot I will of

that also about area the excited So really besides Advanced Materials.

Operator

Research. And next Nephron we'll go Jack at Meehan to now

Jack Meehan

business. DGG. spend pathology the a on little Maybe Wanted with time to start

stronger in guess, of in there in the few than, Was last quarter? the quarters. seen So what terms noticed was anything double-digit I the growth uptick we've you

Mike McMullen

Sam to Denmark. because going over team Sam I'm in Jack, pathology with He's to actually the that Yes. from now. calling actually right pass is actually

greatest So on ahead, you from can get ground the Go Sam. Glostrup. it and latest

Sam Raha

Mike. the observed Thanks, Jack, you promising things thanks we've a offer I'd I forward. Yes. for couple of question. going also the that think and are quarter in

diagnostics. we trend start through First work health to of and all, COVID care systems cancer reprioritize to hospitals to continue of able see the and being

strength we it IHC in traction market. ready-to-use to the as system, see that's solutions Dakotas. more So be speaking, something including have, that staining antibodies overall, We're for solutions, We've been continuing diagnostic the we sell continued our good broadly think that's that are our in see our But for also I that companion positive. to the advanced reagents.

we've of as So success, geographically, Europe but particularly look well. the Americas that all you at good had in that, some

Jack Meehan

sticking And then Sam, either Mike. for or Great. with for DGG, you,

out called market. companies Just have sounds the curious, end high-teens different issues in on backing into was if that right. I'm genomics just decline different the I in side, of quarter, this a sort like

If what maybe talk you're that seeing, just could be about would you exactly great.

Mike McMullen

it don't extent. was to the that but remember down I but Bob, exact number not

Robert McMahon

down was not to digits high close double it teens. Yes, but

Mike McMullen

going we're we that some a there's a to seeing where I'm this think diagnostic lot what going diagnostics with talk transitory firms And the about the of solutions Okay. in assays. our into their of have a side but on genomics is lot Sam provide we disruption

really good. So your Sam, would be think on perspective the

Sam Raha

that a information that. on restructuring it right, at research now you're And provide companies from genomics to diagnostic on companies other that stock into through. a customers technology-driven definitely challenges they've on of public sure, aware operational And lot They're said, happy purchase customers of of they from there's we've just going have safety Based that purchasing that, you are little sort perhaps seen number seen conservatism Yes, hesitation or that a I'm what back in of, building Mike, down we've and built bit of testing patterns. excess pulled Jack, levels. working up.

definitely had we our is attend doing just recently, SureSelect our comprehensive which been science said, And that cancer which early good access panel being one the to important interest we've I for chance most conferences. CGP cancer Now XXX a genes. AGBT February, for and there, that saw in earlier technology of the is

away genomics and walk continue and the is really our remains market Magnus We leadership SureSelect to which for and platform see broad-based NGS our QC good in interest intact. our automation system

I think we're market headwinds Mike just, but as seeing thing, a I some is this that it's think, So transitory mentioned.

Operator

next Josh our of now question from take Cleveland Waldman We Research.

Josh Waldman

two you, you -- for For I may. if

starts maybe to color we on abate growth surprised, the the more some, second maybe get in as on growth First, to year. guess, end a the bit into didn't we top flow went considerations benefit reiterating guide, of through wondered more I backlog QX provide if wondering a for down the that this the core else? core bit upside full you outlook guess, half the is I'm the if year. of something the the I into I see here that quarter for work could

Mike McMullen

back of half I'll think headline the more about the the is recognition Bob, the but... uncertainty I Yes. let just -- continued

Robert McMahon

to We're that Obviously, of of we prudent think I the I is a characterize the And to what say of Josh, midpoint XX% it take this the Yes, year. of guidance given the the that, raised was QX higher talk I into some that a is quarter time, did we mean, uncertainty time. in kind about visibility guide way we're seeing it activities that. some QX. and so we're X be I going saying backlog full QX at a the as than just to think seeing. what would about with going great But quarter wouldn't having at it and forth. think given I taking we're delivered X

Josh Waldman

it. Got

accounts Okay. think pharma if here I start And key what pharma, from year. respect us update this and then, could hearing in purchasing with time Mike, full following these 'XX? year up instrument you're on on plans accounts to Wondered of on their get typically budgets budgets you clarity to better

Mike McMullen

Sure, Yes. Josh.

done Padraig, just and... fact, around the of some you've I recently accounts with large think pharma In

Padraig McDonnell

Yes.

year. it. I I of So you're but set the budgets our we're moves the how what is seeing closely stable we're funnels no And on are that watching think around And of course, now, time this pharma correct, very think the half for very, on change. are to second

Mike McMullen

on any yet probably we haven't seen themselves but surprises either. think releasing like those aggressively I So they're not

call few a made I comments normalization think times that's -- that's cycle I around times. deal this of why on

Operator

question UBS. next take we'll of Garcia And Lisa now from our

Lisa Garcia

for wanted then to quarter. that like it's that's pharma about if a research. you love business presentation, a recent in $XXX largest performance. maybe think customer over the on talk sell I'd to followed about kind this at analysis like point. And I could. I hear Obviously, by we Congrats set million of indicated it's the

of kind to a would you're groups the and there? great it get what So be sense of different seeing customer

Mike McMullen

recall? news in It's the as a good we start at I had Jacob, hard think to the I to year good analysis, get cell but all

Jacob Thaysen

past what the in right done. main and the within the really analysis. up Actually, business academia cell biopharma absolutely And good biopharma Yes. analysis penetrate We where quarter had we're over in proud another and able have M&A some had opportunities the very in build of the we've been acquired to really the the sale diversifying business we we years. to that job acquisitions you're good of in the years the we've actually of are we we over and a academia past done into really was here exposed

business is immune still opportunities and see end that of lot CAR-T the we investments in there's in the of immuno-oncology, continue we high areas especially into off. we of space have opportunities and system, a in a put see that the others understanding to especially that So and pays and biopharma actually lot the

biopharma the is there lot where I correlation So us of academia space. strong believe a CAR-T here. collaborations There you hospitals of of There's a this. if of in especially big the where there look front a the investing lot into university you opportunities lot in still into see is a is that

of between a crossover right the biopharma So it's now. and kind academia

in see right opportunities we So those areas both now.

Lisa Garcia

Awesome. guess... And I then

Robert McMahon

comment. other one Just

the asked kind of rates. LSAG. faster overall growth Just say than I What about than you had would grew company it faster is

Lisa Garcia

in could on rate. one attachment I Super Awesome. guess just I if one squeeze the helpful. last

just You're line. the over crossed XX%

that's pretty do ACG well the The base revenue think of put I as incremental, progression think of -- about the kind at we this how looking past couple thinking thinking installed over I'm kind we're did years? more larger been particularly out services, I'm quarter. about of a about

Mike McMullen

But I expecting the attach have continued Yes. think rate. or we're make cost you some And I'll in that step-up part.

Padraig McDonnell

Yes.

to organization there's low on we the of with what attach have and for has XXs the annually. course, our of represents commercial point I X value opportunity adopted about X that overall solution And and said growth if to tight that PFAS and of rates. in consumers and about expect that is the think a to are the course, workflow at about million selling think and $XX and customers really instruments. a consumables. services grow think business integration I attach allows us, in increase we you it's we I paid significant drive rate that demonstrate services our biopharma, know more now And as rate attach our Jacob say and driven on really X% forward. attach off. move And will about focus our both solutions That's

Mike McMullen

focused remiss on be services. talked attach that in on of services rate consumers question did to strategy we connect what's make some workflow ties not But changes this ACG about your driving solutions attach in Jacob the rates because to as consumables I'd the have going on And remains but organizationally rate and intact. and

Jacob Thaysen

investment the exactly. Yes, a And also seen there's a the market. the PFAS, selling our of and high-end We in -- parts have of And Padraig now. connect would And I both say with we're instrument way team informatics an I've consumables, beyond uptake with as are think rate a and consumables. about opportunities hence, we we've but not consumables present going mentioning, XXs lot of from that our to will we out from starting and take workflows up go in is other in percent, in it more really the the addressing attach to I only but significant the see the businesses -- solution still and to biopharmas really been growth. addressing along lot impressed a long XXs commercial -- continue driving what Padraig been it's is about the the full was and to instrument after the mentioned rates --

Operator

Knight go We'll of Paul now KeyBanc. to next

Paul Knight

like and guess, or count to last in beyond years here and talk customer. I'm well production X the that that the customer RNA so Novartis. of looks I is the that had, project expanding On or oligo we've group you Alnylam this count by business, it X dominated or assuming X

you're the So does what's my Novartis position partners dominant you market? of way your beyond is going and Do in Alnylam? And two, the this vendor? question really think number suggest you're

Mike McMullen

Paul, question. I'm that on enthusiastic question got hung to glad really you very and answer because your

much, much much We X the but go business much, very base customers broader that. than broader good programs beyond have of a

Robert McMahon

the leader. are And we market

Mike McMullen

piece. over Yes. We on crossed siRNA the

clearly are leader. market the We

going with capacity are leadership. to can't aggressively be overall, CRISPR the great team. after we more expansion, really the But where space the yet we've claim work -- We going of our continued

over doing, to the And the gain share. now we've we're math from continue We in market leader the space. crossed in

Paul Knight

fair the of fact, guess, out kind what market technological I threshold really or we've Is now in that you're say? So building to is the achieved.

Mike McMullen

leader about got what I a understand more their of is now. is, completely those base Project I expanding of think a part I'm We've number which question. hear do capacity to doing, the but really We business and set just business the the need call the broad of small we when we're what area. Over broad-based don't But portfolio Endeavor. think which customers. time, not you market. we're We've I is therapeutics our right in have actually come we got the we're also CRISPR it into all expanding that's there sure We storyboard what I we're got doing we're well. pharma of siRNA.

Robert McMahon

as expanding is just was to Mike I on only Yes. market expanding. build are what not is And we think saying importantly, Paul, but the

if this But you or clinic customers X that beyond that the the the about. are at of you look goes in that the clinic, And products the were pioneers of Alnylams the of world so number talked of pioneers. in the or technology just well the compounds it one are

Sam Raha

to number today even years. us already pharma, pharma of partners. are a publicly. XX of that a actual molecules we're for have And more that anything think I terms I share in various and the last than And companies twitch the Rob, is in at maybe stages. pharma working The said various X literally just that. advancing color caliber the just not add encouraging entered programs within with over we're in stages then has now to doubled But what's partners, of to position

that number So is market happened. FDA happened, of this have approvals have European that maturing that a is approvals the

ride us And momentum leaders but the as hard well. momentum to there the siRNA we've to market. worked there's there's -- So are be for in we that's in

Operator

And you. Thank for gentlemen, further you today. comments. hand have questions I'll it Parmeet, things to no we appears any back closing

Parmeet Ahuja

joining. for of the everyone, would day, we thanks, everyone. a end rest and great to today. that, Bill the call With like Have for Thanks,

Operator

for joining Thank concludes and today's you, and this Parmeet. you ladies your now disconnect may Thank lines. gentlemen, again you And call.

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