Agilent (A) 27 Feb 242024 Q1 Earnings call transcript

Company Profile

Participants

Parmeet Ahuja	executive
Michael McMullen	executive
Padraig McDonnell	executive
Robert McMahon	executive
Derik De Bruin	analyst
Matthew Sykes	analyst
Angelica Riemann	executive
S. Brandon Couillard	analyst
Puneet Souda	analyst
Rachel Vatnsdal Olson	analyst
Philip Binns	executive
Patrick Donnelly	analyst
Daniel Brennan	analyst
Catherine Ramsey	analyst
Jack Meehan	analyst
Doug Schenkel	analyst
Joshua Waldman	analyst
Daniel Leonard	analyst
Luke Sergott	analyst
Paul Knight	analyst

Call transcript

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Operator

Ladies and gentlemen, welcome to the Agilent Technologies Q1 2024 Earnings Call. My name is Regina, and I will be coordinating your call today. [Operator Instructions]. I will now hand you over to your host, Parmeet Ahuja, to begin. Please go ahead.

Parmeet Ahuja

welcome, of Agilent's fiscal and the call Regina, quarter first year you, everyone, conference to for Thank XXXX. elect; Operating With President me CFO Genomics and and Chief Diagnostics of President Group. and Agilent's McMahon, CEO Officer and CEO; Padraig acting Senior are McConnell McDonald, and Mike Vice and Bob McMullen, the Agilent's President Agilent

named investor release along Agilent Group; for our Joining financial presentation this Life Science our first and Agilent Group. This recording President of comments the www.investor.agilent.com. to and quarter Riemann, webcast being discussion The non-GAAP financial in Angelica the will webcast the the today's at available Q&A news to will on be President results, our is website presentation measures. supplement newly Applied CrossLab of are information with Binns, Today's Markets of Phil live. and refer

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

announced, certain of in our DGG. analysis fiscal changes As cell structure into of previously to implemented beginning move the the from to we reporting XXXX, quarter first related our segment business LSAG

reflect segment to our have historical these our consolidated impact recast information company's These have statements. changes. on We no financial changes

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

Michael McMullen

for everyone, joining our thanks, call. and Parmeet, Thanks,

of results, I Padraig on our is want that and be quarter last week our will review I fiscal company with was and the I Agile's I news Operating miss end May in acknowledge that almost decision role difficult to first years Officer Before the first special year, the love, One Chief this at XX after X. new working McDonnell CEO become great retiring and I Agilent will that a the to with team. It will retire

you be Agilent's [ in you we to ]. I moving will firsthand Padraig that over seeing Padraig operating words? forward of forward. [ However, a promising leader have to known must result skills key handing compelling in a great has at winning and he his strength to position I I a build every capable developed feeling [ have it's from with the a quite and Padraig leadership a teams reins exceptional Agilent With and say ]. gratifying tremendously track he during and outlook. strategies, successor deliver Agilent. very [ CEO be business XX-year Padraig long-term our at result to customer has a success for that is closely ] look product XX [ to driven ] customers always to the a capable have during all time. worked him has what company, knows those culture, would strong team say and our of position held years. focus our success. few been Padraig markets, and He a career and know with I've record completely Agilent's than I knowledge, has more of He committed results. ] like

Padraig McDonnell

CEO, career and your I'm this Thank as support to you, Mike. you able my for throughout transition. I'm honored follow to during next and be grateful Agilent's

our ahead bring enterprise a call, front can and excited growing I'm our to to Angelica tell, base business continued tell Riemann I all Expect ACG. I've you of with that services to of that on in continue help set meeting I'd forward ACG in division compelling evolving working us I also has our experience After You the pleasure to and look to the future. customers. see with the the the and align as of leading she the X.X great the installed on from you like for the you opportunities things our Angelica and broad life. some and lie this has had Agilent impact this customers our and demonstrated and skill have the in supporting customers possibilities has welcome Agilent, to great last by team. significant signs to made call. years, a we to story meeting

Michael McMullen

]. Thanks, [ Padraig

I of take the results, call, take the lead For ] on [ while as will ] overview quarter, next covering financial duties our new [ Padraig will today's CEO. these

results. the Now QX on to

market pleased environment. of with The start in We execution the strong team are the continues year. Agilent challenging a its

revenue provided team's last X.X% compare XX% and in management cost drove better down expected with year. results quarter This per last in of tough first billion. decline growth evidence of coming QX of The disciplined $X.XX from $X.XX a year. of line our a top represents further X% capabilities higher-than-expected The at QX of earnings share against than better-than-expected

This increase China year. markets growth globally. our drivers falls line From down in experienced which is we our is performance outlook in year, November. Key perspective, applied the stabilization you pharma business end full we an XX% but Given we last our continued in sequential recovery our and in the solid that the was quarter year total slow secular with steady market was shared the XX% ongoing first our are QX in to maintaining and results with throughout expectations. view QX

revenue for and with both the while batteries against expected, including China year, While our Americas bits markets, than line sequential PFAS high quarter. ] declining and us. resilient was Solutions fourth very better applied In QX last Materials, and the a [ and of markets QX in more for finished from growth strong were end overall show were than Advanced expected these Europe semiconductors expectations. Geographically,

difficult XX%. Looking Life at last against and unit, This is Markets by performance down Applied million growth revenues business Sciences a compare year. of delivered of Group XX% and the $XXX

still than early too expected. better market recovery, overall an call results to While were

Our portfolio end broad helped the market coverage drive and performance. diversified

for in spending. grew We conservative experience expected, better China driven But are which and to QX a digits, capital environment performance mid-single consumables, than continue results a were better-than-expected applied markets. by

our manufacturing continue During steps we the as expansion we take also ensure long-term the to leadership completed our in of Shanghai China. quarter, to facility

shipments made also customer for We Agilent's first released offerings. our LC/MS newly

to This, quad, architecture LC/Q-TOF enables new Our ] the [ latest the including in enhanced of and of a Revident, that first XXXXd addition expanded sensitivity systems workflows, generation triple for million. highest productivity. The combine PFAS. a with maximize with is posted new Group of all for $XXX operation enhanced across growth time regions CrossLab X% China. up revenue This except instrument and intelligence Agilent

with by for is delivered down recurring improve. contracts. deliver customer led to strength also service This a in double-digit the business Group performance revenue way building $XXX both X% of consumables a strategy of and our result focused Genomics growth million, enterprise contracts core. continue services resiliency the larger overall, continued highlights Diagnostics Connect of This and business. and revenue to end-to-end rates business. The strength while value led Our our

expected. and and mid-single by of a portfolio double businesses volume last by single NASD. digits which offset declined is growth as NGS compare more very low year This our was NGS grew NASD from program. significant digits tough declines than QC XX% because Our chemistries pathology-related in a driven commercial

marks we We new [ enter analyzing of efficiency indications deliver platform programs new We many the a innovate only process of Agilent for world system. a the the recognition for perspective, with This operations protein site across pharma, academia an Agilent to named our companies. them Singapore mixtures. a recognition our award sectors. From food [ as quarter, and DGG induced Proteo target improves populations. forum innovation to analysis in XXX solutions and The and ] to Germany. quality. The the be top [indiscernible] differentiated us Global was increasing continue second recognized after a to range the productivity, achieved that ranking customers. This across complex of Lighthouse workflows X boost team Global for Agilent recently life ago. encouraged tools implementing our the lighthouse. the long-term analyzer ] for of In patient a list two and due is most sustainable the biotech, achieved science seeing [indiscernible] be facility recently Vauban, large prospects the output of simplifies Lighthouse to global we overall company for years continues economic

are and Index Sustainability Jones ninth America a row. in North In we in addition, for the in Dow the included year globally

half second half, first environment slow Looking in ahead, a to the we improvement the the the persist expect and market current expect year. steady we through of

the make We for will us future. stronger actions and position taking continue us will that well

execution will productivity. driving prioritize our growth investing and to on for maintain We approach a with focus

my better-than-expected for And the team Our for closing now well Tom After QX. Bob's and full details will results QX provide on our I some the year. you. comments, reinforced be our our as view now, results outlook for confidence to Agilent as will joined the Bob, remarks. over

Robert McMahon

on percentage points, revenue today, X.X% Mike, metrics. some core. basis, X.X%. greater while then income Thanks, reported additional up X.X%, overall, as had impact quarter a On statement through take were our as financial In was the I'll orders X.X $X.XX quarter. of my revenue second afternoon, and billion, provide revenue And I'll of M&A reported remarks in you a QX everyone. in expected. added well a resulting currency decline other details as finish key good decline of with and a negative the guidance. QX in than

in end As very year-on-year the Materials globally. The with saw down single in Pharma, We last XX% down grew outside Advanced Within of tough low low softness molecule year. was bolstered was XX%. and but quarter market a off Small low largest consumables. China, broad as strength increase sequentially. teens comparison biopharma digits by pharma, single well single-digit declined resilience a and Mike market high services in Chemical with mentioned, digits Advanced X% declined growth growth as our Materials

XXs impressive year, are these extremely tough compare Given high the results. of last growth

activity. As decline. The Academia in side chemical The market and growth X%. reflects lab the market and was this a Government stability saw academic expected, the funding of up

LC market cell LC/MS. forensics Our environmental the Pathology business headwinds and more and market growing XX% Clinical in The X%, year. mid-single-digit and declined QX and than after genomics, of in declined analysis by in offset continued Diagnostics last was in X% growth

estimate around down up mid-single by but while were ACG some low last and down demand new a compare growing chemicals. XX% $XX low was single digits, see regulations roughly New of softness be the to to China digits. single Lunar and muted year NGS last was mentioned, year. The sequential due Even as X% the testing. revenue XXs and and in growth in as was forward declines the Europe was impact continued Americas, in world quarter. our our a China grew up market bigger-than-expected both sequentially. was basis, million or in Europe benefited which in stabilization for declined better X% PFAS with Mike by Americas Food China's digits offset China. pharma from customers NASD faced chemistries. This continue was outperformed. Europe expectations. geographic were services, incremental was driven and from excluding exceeded down driving while quarter, and China continued Americas In difficult pharma the revenue Americas last the Year X% low a this the much expected and mid-single digits, pull-forward impact We the demand down demand to X% softness adjusting China for a line in over showed of than China strong impact, On after increase QX. pulled our We X% and expectations year-on-year expectations.

the down Moving P&L.

and year productivity margin lower mix. First XX a quarter by offset points XX.X% was gross cost savings from basis demand were and down ago as

year-over-year operating Our XX.X% down margin of expected. as was

cash by flow. interest are treasury in delivering with from cost Our nice coupled we Below the our quarter, planned. ongoing as driven very benefited savings income greater-than-expected team, work initiatives the strong from line,

had Our a per were earnings million expectations. together, outstanding. all XXX year was and XX.X% QX Putting it rate diluted tax we down X% ago shares $X.XX, of ahead and share from our

to as was last million above cash dividends. turn our generation. and cash in we balance through significantly with pleased quarter, I And flow expansion. invested during continue continue the to cash shareholders be QX, we sheet. the returned planned $XX In me flow let our quarter, $XX expenditures Now the million capital $XXX million year. Operating to flow in NASD very we

to the remainder a $XXX Mike we in up catch we repurchased anti-dilutive the minimum mentioned, no million good reinforces repurchasing share year. to in expect to confidence our provided year. as the expect during quarter, start the all, it had full guide in QX, of Although And we shares All November. we on year were a repurchased. the of for our In be

guidance for our to the Now quarter. second

QX revenue This to decline X.X% X% billion. will on reported and billion points. $X.XX to and be expect of headwind a X.X% decline $X.XX X.X% in are the growth Currency of to basis basis core We basis combined against a M&A of represents range X.X% a on last of year. a XX a

the Our the I QX reflects QX of also pull China forward million mentioned guidance in earlier. $XX impact

and earnings between non-GAAP be share quarter Second $X.XX. $X.XX per expected to

a Mike work to real over to Before thanks turning Padraig want you. Mike, been my to pleasure it ]. to congratulate express and has just [ back with Mike, I to

few many always in leadership downs your forward ups working And looking Mike. again. thing been over years, on and partnership. past congratulations turn back one I'll I is I'm things have there and you. count steady really And [ to the Padraig I Mike? to ], these knew now markets While strong could with

Michael McMullen

does and and over it of my and you. with ambitious XXth to goal had then significantly into One team earnings been Agilent's Agilent in company of you value represent we honor Agilent years. I with of community. couldn't as first transform CEO differentiated to together shareholder and stepped working X thank launched to years. by. and a Time financial new In diagnostics investor Agilent One the the we've the results creation truly achievements XXXX, life I broader accomplished and Thanks, you what company. to goals the science to for team has last leading want of have a say drive Agilent and We long-term delivered compelling a up together serving the tremendous team all call I be the unmatched a fly an final support by the truly culture. Bob. Today your Agilent marks over engagement all proud with

remain with While remains the improve investments condition. long-term promise human conditions end power current market the buying growth to challenging, markets of

pleasure on at been a stronger will the front, industry capitalize differentiated of Padraig you'll [ serve to over to work On we've ] know customers it. in results. you [ a all enjoy Padraig's the you years Agilent ] miss and the never working I position our while been I will market with Like our the with within continue to deliver of opportunities the same I our financial ahead. to It's in time, business. that me, and with know be knowledge impressed years.

speaks his earlier, build it role. exceptional noted journey results. continue deliver new business and in to track how His knows leadership Agilent compelling I his of strategies, and doubt, As teams develop no success during he record for have itself winning will

for Q&A. now Agilent. over to While to come Parmeet best call the the yet is you, I'm this Thank for that last you, my certain with earnings is you, and

Parmeet Ahuja

could Regina, please now. if provide instructions for you Thanks, Q&A Mike.

Operator

Our first Derik the of De comes with Instructions] Bank America. question of line [Operator Bruin from

Derik De Bruin

business. there's from question, readouts ] the been incoming [ there first that some year. It's because can had So year? some some you not the this just the catch what question I market. your like -- it an all been I grow like, been growth any that, the can like on And sort just thought getting ] of there's assume of we've what questions. HELIOS-B going a like is segment things on for year, market are taking overcapacity because it do like, clinical Just I of there's And look, at trajectory still pushouts this as grow was -- situation confident their just lot risk with that, developments longer I to NASD thoughts a in there's is to up? is couple think [ that the in is guess doing this sort NASD of other [indiscernible] trial, please? people

Michael McMullen

Bob I'll on this. team tag with

for So business. of in we programs broadest a our NASD remarks, we've as such. had, the situation where in I clinical are number prepared expected And you as think, came the QX saw in and

less into active this lot the a as well with clinical the programs versus are script is the some very with talking out as been the customers year, particularly our resequencing Bob, commercial And we're in who we the So year we've volume I about pointed 'XX. of the team clinical. for outlook know of some

Robert McMahon

Yes. And the building one as expansion. as we're that forecast in I That's Train [ of intact things, say talking element out remains of mentioned our talking customers. trials. of C very of optimistic Derik. future we you're you terms important would an for about, clinical our D remain and of one the about the ] about

potential some built that's I at looking trial but that we're programs guide lines of clinical And pushouts programs giving we very are it's me, up look 'XX. that, of commercial based into although clinical think the the flat our into seeing number FY the kind is. you are about programs future. to -- not keeping have, and it on this or We excited and But if the way as they we're excuse year hope, closer probably time at revisiting

Michael McMullen

is not reacting some significant how to It's a And also Bob, IRAC. a change overcapacity are in to the industry that fair really I our really think in-sourcing. it's in byproduct say of this the or customers of

Robert McMahon

That's right.

Derik De Bruin

sort things give mean, like of a releases the ready doesn't does in that's an released better. Pharma? question, just or to you're what segue be of like inflection are start developments? Any call great my bit budget timing into next the it the a point, of that around little latest -- you of sort sort do Can -- you on budgets seeing sounded but of when notable It of of sound me on like sort I quarter? you any sort thoughts to -- that? signs like life what's are takes sound that your Well, could signs which is second

Michael McMullen

[ Yes. lot in this question. outlook? Great with question, came would. what's team I your within Agilent, talking know spending Derik. it Obviously, mentioned, of just But ], we thought a QX And time where the we top of about mind you've as customers and exact Padraig

Padraig McDonnell

cautious I be And think globally. continue to Mike. Thanks, Yes. customers

in I think in budget versus what 'XX, half It's see the last in pretty that saw capital and terms no in expecting stability, seeing cycle. ] negative, heard we budgets. [ of as And we're the last this it. stable is of the -- but positive what time improvement both we material we're move year. cycle directions, customers But but fewer early negative we've in

watching seeing we're that how goes. So and

Michael McMullen

Yes.

you year. seeing positive lot caution, of me our more shared what was for tone think outlook negative change still earlier, [ and last at not It's we're a this but anything the to I us still cause with ], to Padraig time was year. the super yet not

you -- Bob think I very much. thank

I one. think, had you Bob,

Robert McMahon

the going speaks of just business that the say performance we was and lab I to actually things in Yes, in very our which one our sector. see activity. consumables is to pharma strong services

turning in and we've the we're seen cycle second a And so while here, the capital year. around about half of optimistic depressed that

Operator

Goldman the Sachs. Sykes next of come Matt Our with question line will from

Matthew Sykes

know like of informing just you doesn't the it's picture baked to sounded of make guide, the that It out, there What for some improvement. catalysts China It kind half improvement? but for are in and some worse are sounds bounce not bigger confidence it's looking necessarily in made of for potentially? some your you China. some risks level China for in back simply And kind of your back optimism some along of maybe about get just I about comments just Maybe like sequential half. did comments nascent sort you the bottom. start what

Michael McMullen

overall bit big think, we a print was question, we A answer to now to part your a Yes, nice in had Matt. of better revenue that have pull-in than for numbers a Year, real Yes, real. the of New several really, I had as are And QX the from real the start the growth, from orders, expected. the a sequential the sure. Thanks Lunar performance was but quarters off business we question, year. China. And and

change challenging So the would -- on to market world a seeing anything has in very what we're macro China. continued not dramatically be economic that also

business. just better So is slightly fact coming now on [ the jump the a we The of rate there's business run oh think know this you the gives what confidence -- fact And us had that number of are that gives had anticipated. it's quarters we've that ]? the to outlook. I predictability on one more want us again, But than Bob, numbers in ongoing in I confidence that in Padraig

Padraig McDonnell

look are Mike as quarters have is stable, well. also if consistent. Matt, numbers as that sign. in Yes. And ended I we our forecast better And at well up positive any just aren't order kind of now anticipated. so guide. it's think it, talked speak. bank, a is funnel, And just that of you when if, as at we than you I which QX putting about assuming We our we stable mentioned, think inflection we'll look Actually, the what little very relatively to been money four as in That's a the being

Matthew Sykes

ACG, maybe then And good quarter. a which on had just

business You ACG? kind growth? the contract that is And what maybe With and segment to Services. just size specifically driving can growth, talked the over Enterprise within of about contribution that of that ACG of contract kind talk then that year? make about this the revenue course help could maybe you And what

Michael McMullen

I want President. response And Group new opportunity use like of to it's just introduce about Matt, I the business thanks to and for sure. have ACG a probably your first, Bob, But XX% to ACG make over maybe X-part I'd think support our the this years. roughly to

what's on is business. total growth seeing been that we're share Angelica, in So in the roughly about contracts thoughts of could really contract business driving And XX% your maybe services you our the arena.

Angelica Riemann

Thanks, Yes. Mike.

part situation that lab-wide to helping mentioned, it's enterprise where us navigating of offerings, a business. that's XX% and of they're economic that And page improvement the about total lab as have services really been driven customers the you allowed own offerings has really enterprise help demand entire operation. by in their As we're portfolio important their particularly optimize lab to operations, those customers. really efficiency, to them our in And this facilitate lab able

Michael McMullen

times offering and of the labs times, productivity economic in we in well-received help as And tough times, have. a market productivity the the driving

Robert McMahon

one quick thing Matt, just other on that.

resiliency One of And the great continues talk things again this nice helped that stability year. as the of one that if Angelica a power and and digits, team a the that that /X that heard be the instrument we double And business. rate ] is of that growing roughly locks a well. in and about you lot business and think kind have of this of at business attach to about tailwind business, you been [ increasing the X when really will us the inevitable it point doing, of year-on-year that turnaround see that in about grow

Operator

Couillard Your comes line next with Jefferies. Brandon from question of the

S. Brandon Couillard

we So Advanced headwinds chemical Materials expecting. Obviously, side. actually and still better little the we some than business, in performed the seeing were you're chemical a

moving give what half for union look of seeing Just kind your of the you're macro business that state from perspective us second outlook the and there, like? into a

Michael McMullen

Yes.

do on I'll team a ]. this [ tag So Padraig with

year across investment to continue again real made I battery that nice our we QA/QC. this And drivers semiconductor chain in some productivity. supply driving being investments also the much markets. We're I [ earlier in So U.S. continued the battery, think the in Advanced relative see secular the And is these the we globe. the of in growth what pretty as saw side growth PFAS we've think started to ] and development, about business we're seeing fab talked relative may the to Materials applied is seeing recall, And you environmental

remains our I think delivered all source secular I QX. time, the outlook the market overall is that market we're be a pointing for to us And market there'll been in positivity that drivers subdued. of space, think we've the expected to expecting same those remain chemical for some albeit can applied in

Padraig McDonnell

right, Mike. Yes. That's

-- tough a really two the the very sequential side broad and very Advanced with it's I we of on saw think our it see given result extremely is a versus of And tough XX% this I compare in compare a growth. think from last we decline, a sequential resilience but teams. The strong year, portfolio was a We area. we Materials had high tale submarkets. did QX improvement chemical but was impressive the saw extremely energy Overall, 'XX. XXs in truly

We have ability have to upsell proposition. cross And value offerings and our strong that across services that. of course,

S. Brandon Couillard

then, first explain what of midpoint? moving gets market end by what the guide the or outlook beat sticking And the I upside [indiscernible] quarter Bob, in in you're with the all kind other the the NASD the is of parts of year, range organic terms for This the lower, growth same to for mean, quarter. year, geography you you the first

Robert McMahon

the a we're What that. where still of question, the at I year. great of Brandon. about year, good beginning really the lower, a feel is say the the That's the what Advanced overall, if looking maintaining started It's are that of slightly you NASD though, the kind probably and year. results at start better the than really, by would two in be are chemical forecasted. about here to guide we're really Academia and had business. as But of areas some so them. about Yes. couple talked being a with And slightly pieces, We better we looked the you we that the would banking we side Materials moving across are and little LSAG of that good And offset felt

Operator

comes of line the from Partners. with Your next Souda Leerink Puneet question

Puneet Souda

maybe, growing slight my think orders to a you else on And question seeing with down the could you Lunar really on instrumentation I And in you talked a I little in bit baking faster China? want a is step maybe clarifying you're guide. just quick XQ book-to-bill Year? So elaborate you're question, the bit a question what book-to-bill first seeing than on more about Bob, But sure the and revenue. what beyond look around the a are respect does New make What the QX. to versus side, there? It

Robert McMahon

we New have number. I'll $XX one a a One seasonality. in do true to so gets Year. question. is the lower Yes. I pushed because That's one. of are million But Lunar the There of last QX things with typically questions timing revenue of lot take that. to [indiscernible], from -- mean, another. There I'll form, one strictly start the that China in that that quarter But is typically

building normal that we're So seasonality. in

in In book-to-bill China, actually than book-to-bill terms one greater in China. was of

So book-to-bill in our instruments, terms of expected. of below stabilization. one, for was continued kind And it

was be of of we in, some a Now China the result orders the came expecting forward where revenue and QX. shipped to that were pull that in

So in there's all But positive to the year. start there. all, some element of a timing

Michael McMullen

Bob, our I'd is cover QX and on that if results as just too, are book-to-bill I say as that, the pattern. headline QX normal seasonality normal

book-to-revenue been it normalization lot I flow. think patterns of terms in the a [indiscernible] seeing of And business again, situations. about talking we've and So we're seasonal

Puneet Souda

more pharma a biotechs, question. seeing simple that. it growth? And small on bit talk about pharma, Maybe question, just the side, maybe Is you high-level traction, you're a CDMOs. the more elaborate then a large Could bit a just CROs, little where

Robert McMahon

across our was actually the take I'll business, strength that, our biopharma. look we Puneet. relative If at in Yes,

our our The large been standout business and midsize consumables And the has is that. molecule. and to a business skewed companies. the ACG cap So large larger on

the in activity to speaks actually labs. it So

emerging the a pharma starting kind I see expect I stronger of where side would that in relative to and markets starting The are it to speaks to We it. stronger but call drivers, gets a in certainly our market. course is the but have were still the year the that don't the comps. the that more business. as [indiscernible] we stabilization of we're long-term the trend, down And And growth favorable see instruments want to biotech on business and strength of throughout to think, get I -- continue that

Michael McMullen

biopharma in I Bob, of grew I business outside actually our think correctly, quarter. recall the China,

Robert McMahon

right. That's

Operator

Vatnsdal with Rachel of JPMorgan. line the from comes question next Your

Rachel Vatnsdal Olson

I So up up, follow comment on to book-to-bill. want first a around just there

for book-to-bill the So that instrumentation you the timing really some of was for related. and was quarter, one below mentioned

can is for [indiscernible] for trends little seeing you us ] instrumentation And [ trends out the call from What dynamics in geography there that further. down So you or any guess, example? curmatography well? a as I just to are then business break versus bit on liquid

Michael McMullen

here. don't trends I there's any think new

on without don't the side. from if challenges think area has LC really details side product about an into in talked want Materials, the want jump real applied but to year-on-year add? you particularly you with molecule we've markets, small any think going we maybe Advanced been else thoughts in Phil, trends know any here, new don't I perhaps there's saw there in I line, the you but better-than-expected outstanding with to have here trends of our the something But the where I

Philip Binns

sure, Mike. Yes,

secular the spots pretty that's around some think there. to comments in instrumentation, the the of business the just around seeing forward, your the driving I markets which QX but tired We're similar are support some the performing. case is much areas in how bright markets

Robert McMahon

Phil at pharma diagnostics were the the better is than we markets, to which our of the the clinical, it piece is rest on exception and looked with what they we which and than thing Mike build which expected. that's we've The is down we down been that much XX% about. talking down what business, number. a other driving one look If what just the better of been market was really the small were expecting. at XX%, was When just Rachel, LSAG

Michael McMullen

question, on really speaks the your LC to to the that pharma pressure business. dynamic And Rachel, in Right.

Rachel Vatnsdal Olson

And just wanted trends. monthly to then about I ask

into little the talked a and in January peers slow out gate February. bit, spending how your of bit of a have then about early Some

we So a similar start I Any enter through slower guess, has on seeing the XQ would where back? spending just have since here. started us of fiscal you walk guys weeks color of trends you Can year? more come few be there as that any to And helpful. to visibility you

Michael McMullen

Well, that's for we have always relative seasonality January. while, why this talked the a about I've And in and in been to slow business we it's QX.

think [indiscernible]. am, historically. but than ], significantly closer know don't that I seen we're that I seeing [ trends I any you're different we've Padraig So

Padraig McDonnell

Mike. think that's right, Yes. No, I

but our contract not I side, think service side, in the a on seeing the ACG side, capital much. service strong business we're -- we number on of ACG see comes the under

Robert McMahon

final January Yes. that, expected. on we And -- point put Bill as just a finer in a came

Operator

the question will line from ISI. come Evercore next Our of Kumar Vijay with

Unknown Analyst

do is And see will on do foresight a hints China have Jordan of any Have stimulus, you implications side. This you follow-up Agilent? have to if stimulus to for we any year? seen Vijay. that the what Maybe the one start on on

Michael McMullen

we're head, outlook. Both upside our does conference it's not And happen, in anything [ potential I shaking and are any and heard Padraig stimulus. if I can our We've to no. it tell is about you what ] the

Unknown Analyst

more for to how the of remainder Can year? Understood. you about me. And the And talk one your quarter? for any pricing trended maybe in has updates the then expectations

Michael McMullen

Bob, do you take to want one? that

Robert McMahon

the results. with between X%. pleased were was We It X% and Yes.

seasonality that expect So in we mix and see but with line in the kind to would of the saw, QX. we

it's now, right on track. So

of consumables about, the business anything side. good followed mix, diagnostics As out we and realization we very the actually, in and not some price business by ordinary we've our did ACG then speaking, And quarter. but result generally talked have the instrumentation in a had see genomics greatest

expected all the we're track full for So in, what we on for year.

Operator

the comes next from question of Patrick with Your Citi. Donnelly line

Patrick Donnelly

one maybe Bob, for first. you

an the through, of kind rolling EPS Just kind earnings on net additional of did plan. would the margin you as the how you cost then savings a piece, little on guide. $XX secondarily, like core just looks other you that pieces of you about have in any if guys million just talk flag Can terms got that just there? income. the goes, interest that move helpful. It that's year guys be paces Is number Can And moving lower?

Robert McMahon

Thanks, Yes. of question. And things. say what a is Great couple Patrick. would I

beginning we're as quarter track interest and actually some well, that's income great first in we better-than-expected We in of quarter the at have and first anticipated of the year what million work cash that to flow are year, than of the more it's and targets year. very I that confidence the in for this say full still about savings guide. year, as more treasury savings in would what that I And is think by the on would the say provides early for the $XX the us having and the the team. the on track result really a I --

Patrick Donnelly

you as our side, on quarter. the be of order about just thinking the on for the you're side the instrument the the above And said through book-to-bill. are given kind what year seeing are out book-to-bill -- way you'd and which quarters obviously the you you this have trends maybe seeing on one, I would we're year instrument but kind then quarter, guys the about How in book-to-bill think last we work How and thinking just [indiscernible]. of trends

Robert McMahon

for to in back said. said proof no is we we Yes, change November. what QX a point what

Operator

next with line the TD Your from of question Dan comes Brennan Cowen.

Daniel Brennan

out the just for to number dead put horse, instrument you the the beat know the queue, was. Maybe going say -- in I usually actually just what did but guys you instruments,

of given of actually of on did at instruments much us do year, can a the kind instruments and what how kind like of we we And can what half should then just as the year? comps back you in So give QX expect through quarter? have the get sense pacing then go the easier in we

Michael McMullen

up. but was on consumables the that know I team down our that business, did XX%, LSAG because a includes which calculation was

Robert McMahon

Yes, down look don't teens. low If down was it's down but down at business. all the consumables X% were offset XX%. by that in It give thinking -- we but I the that say information, LSAG we typically was for quarter our was better it than expected, in we growth would QX,

some timing from of million So shift. into almost associated back -- all QX. and QX $XX that a That's equipment lot with of that the capital has to do with

So if line it expect with it, in we to it look be. where at you is

Michael McMullen

then QX, in more right? And into favorable we compares go QX and

Daniel Brennan

it. Got

can would Okay. color spending a there's just China us can expectation maybe And pharma still questions the the But can full see what a number. bit for on in year? different know China? there I upside then kind in applied? of kind is you give you is kind of of running what chance by China. mid-single -- some segment, within to of that you're you the been down seeing more for businesses mind Any color Or handful And a you

Michael McMullen

have we've a it [indiscernible]. up I raised bit. think down It's still

Robert McMahon

yes. Yes,

XX-ish I we markets we at the don't optimistic roughly there. say inflection. in down a cautiously pharma. think range I want percent call I'd still to it's you looked we're X% within But that that before, an so had down were was if

of China performed the is of thing really around is but much that other area globe, So the be continues to the many markets better. great different. The no

when forensics digits. government, about So Advanced grew even think Environmental business did in single academia Chemin ] that grew, [ now single you low and Material our very like so digits. down And our then low was

XX% and was had into then we much half QX, that So down the pretty strong actually because then the year-on-year. China easier stabilization down in you're another started compares very the starting We continued last declines seeing compare back to and compared in year you'll year. in up of significant actually the see XX% get to

about, we're And that that stabilization so But yet about there's not when ready inflection. an reasons call continued Mike to happens, be take it. but we'll it optimistic to talked

Michael McMullen

know jump Padraig, this And as in you I want well. to

Padraig McDonnell

services also that Yes. And I as to and outperform [indiscernible] kind what think we continue see so consumables that continue. expectations expect to of is

Michael McMullen

I a Yes, there. pleased things. pharma, think great I the was story instrument , really is side we're and start But the QX story of the the [indiscernible] the think in with CapEx

Operator

Baird. the with of Your comes Schulte from Catherine next question line

Catherine Ramsey

was first, XX% when quarter. down pharma in Maybe the

molecule maybe performance What X% up a for small China. you I ex was small was the the versus ex think rest and said year? biopharma outlook for of China biopharma the molecule

Robert McMahon

down was for roughly and a it So XX% and basis down small was XX% ex molecule down was roughly it global XX% on China. China,

start area consistent impacted across been the would side, The see small China. pretty that after going QX. better comps So in the in forward big is where has to say, globe, molecule on we'll China I

Catherine Ramsey

consumables on side? growth saw And outside you to the great Can then there of see return what quarter. you it's China talk consumables, maybe through on this a to

Robert McMahon

Our of was in consistent pretty across globe growth. consumables business terms the

Michael McMullen

speaks [ know I being have I pleased lab think robust. seen see you the ], want to the we've consumables really that that to we're you So on if or activity to add it don't anything the to because -- really

So anything else to you on jump want with? in

Philip Binns

Mike. Yes. there, just one item Probably

traction seeing I we are good really development. around our think workflow

solutions drives that's focused connected some workflows easier in heavily end-to-end attach as services our end that's our and our showing obviously the labs, consumables, good So reflected of integrated and really consumable rates business developing solid in on more been most and pretty making is our space. the and in in customers' also lives the we've around which markets, -- well. But traction,

Michael McMullen

talked Phil. the I'm that positive close future about connect relative services bodes also business on well to really as strong with trend business, comments glad in consumables our rates. We recurring our revenue a about to well, terms of Thanks, growth. very to we're seeing which

Operator

Your Nephron next with Research. Meehan question comes from of the Jack line

Jack Meehan

Just had a couple of follow-ups.

within about DGG. talk seeing still know genomics you're first drag. one in been was, The what of just business a it's you bit could the I a

Just when going do turn? to that's think to you start

Michael McMullen

a yet, of CapEx, but When I'll that shape. of on tale current think of The about in business, as this a and to reasonably we're to there's been pieces workflows, it's consumables it. in not on on one, we there starting see I talk things seeing NGS call the it's life side cities. [ two two in cause really invite sort think ] churn well genomics the really half Bob you're of activities solid signs QA/QC as in but of good growth the our I for that's

challenges I market can really really maybe you seen And business, been think elaborate that? have genomics in U.S.-based Bob, on our some this. we've in

Robert McMahon

the expect that side NGS QX. consumable remarks Mike. referenced was QC we in from the some the I prepared to chemistry the that a our end exited you companies actually portfolio very side half Thanks, of said, some of of year. right. faced starting nice. that The buys and mid-single and quarter, instrument And which in We that had as in They very grew an digits difficult the of comps. had would at businesses. was down. performance That's improve couple the We second reorganized lifetime some genomics

Jack Meehan

wanted with just about resolution market. the ask the been also I forward. continuing NIH that's what in the just moving I very you end But you're here U.S. thoughts for the And seeing guys. for stable Great. know on academic the to durability

Michael McMullen

build I Yes, X% That for numbers. that. I academia quarter. thing think really time real out up this position some Jack, And this research, for noticing our in to was been is actually bright our in thanks We change spot in the a think, grew, for on portfolio the we've and us. working it's and show starting market -- really to

is a been have seeing private relatively what there. sector. really But seeing, the which we're stabilization think funded universities I immaterial. is is part NIH really funding through we're is really is Agile's increasingly And so small of business,

well. China is So And there. so, even as money in saw we money the

that So nice for for it we're kind of of for there a rest and was us can global fairly be really that, stabilization the optimistic the story year. us,

Operator

question come the Doug will of line Research. next Your Schenkel from Wolfe with

Doug Schenkel

guidance a question surely on and [indiscernible]. I deployment. And want on to a capital then ask question

Michael McMullen

Doug. Absolutely. Go ahead,

Doug Schenkel

is for I of norm XX% how Yes, So several first at guided, around half, but the the you've last it's for year, last outside hand, sales than on in the least the year, one that's believe. lower not that's years.

assumption actually categories? you in math certain a improvement Or like end a half the in first declines that could X% X% the math, half. given then organic the just for your improves second function kind question. billion? of exiting QX And On just hand, or other positive some around as you or markets see guidance and certain embeds the geographies revenue to revenue do just that assume $X.X again, organically then X% around the guidance really And to need comps? of do Does

Robert McMahon

spot and your in this is we'll is usual. tell but your I that you is Doug, on get seriousness, all Bob. QX when last we say, math -- math to one. as would I'll what take

look we a that -- is things the ways. different at of look it couple one think of I at we

look In instructive it And growth changes is first kind given you as half right, the you of And at actually to would and -- a look relative we is, second second our I in much half we at at looked with look first way seasonality, is the at in in the when the mentioned, well. the also the a number when at half. rates. implied see And more you're take kind growth also you probably would to noticed at expecting the it, I to the seasonality. historical as we and think a year. you smooth as QX what A looking it compares. line stack you lot look X-year of what easier that that there is back when of rates, that's -- fact, half, is in are at you of more growth basis half look that ask

usual, on there. you're as spot So

Michael McMullen

And because we're comps by Bob, that's word to the the rate the go. as I in in they kind think script, growth of the we as going why really stabilization a emphasized get a lift just you stabilization, have of

Doug Schenkel

know necessary Yes, to much I a on there's is lot get how there. improvement of focus

now? just time air I just So right if math already. lot capital looks right clean. thinking taken about of more the like deployment, what balance of on lot Real super is a now makes think deployment the robust. is I quick. up stability people talk that and cash Capital you comfortable. flow remains The sheet environment know obviously Can I've this your is a

Michael McMullen

Yes.

robust of years nothing to growth deploying way, business. I buy we that a just much capital very more build who and are in strategy. and speaks inclusive number our interested pipeline in funnel for to very It's in have is I a I've seen announce, directly we're obviously in the balanced investing which think And engaged. say to in the but remain is of that interested than M&A.

Operator

Your next Cleveland question Josh comes Research. from the with Waldman line of

Joshua Waldman

Yes.

you guide. pieces and maybe my a the first, guide versus initial couple a starting the with outlook? Bob, Just assume a follow-up you end QX Can comment how on on and bit on the moved to or more I core just the it there. And framework really came guide QX? Or a update the wanted QX outlook then reflect does just changes on moving reflecting bit, is any an but HX? core in confirm down

Robert McMahon

that's both, little a a question. of It's good Josh. Yes,

small is China So what some what QX relatively growth beat roughly it that out of thought exception with had would business, had QX that's switching. and of the and core QX intact is the originally of a QX is into movement also of for point What I year. we say taking that half a the we're of second from the of

that And of the kind so helps the it be, shifting the from and is beat QX takeaway second the expected we or half shift then of rest in spot of of QX us kind to QX timing really year. is the China on the of where the absent

Joshua Waldman

Curious of the all as talk then, you've And to flipping in company sales ] in can been and covered the seeing you orders. [ [ you're still of to elongation Has ] or visibility Mike, quoting, funnel near-term total business of predict opportunity months? improvement how there seeing then about three last what in the specifically. an any kind pharma in also the ability

Michael McMullen

have ] in as jump well. No, Padraig Yes. I'll [

any think I I think it's worse. any the remains don't better the same. business or

again of Bob cadence is to to kind of of the And it's the second the half the half, of year. talking half And just yet we bank about order think why, put book, this the so second because business. typical which second we've in I some the at normal of beat when see mentioned, terms the that's materialize as time we're

Padraig McDonnell

in China times the that's We've that backlog, been fund ] far think have of as has will as that's to win the aftermarket our deal say remain I continuing right, definitely and Mike. the as and orders a And stable led continues nothing business. seen consistent. by at increase it's any level. think theme, deal ex but closure changed. grow, I not remain [ I in elevated cancellations the quality rates an and

Michael McMullen

Yes.

been I elevated, a seeing made but important not an we're elongation. here, think point there's

they than longer in stable, been but past. the they're they're have So

Operator

line question with next from comes Leonard UBS. of Your Dan the

Daniel Leonard

first in question, sequential on Are more to just bit China. China you similar a growth My QX? QX in expecting

Robert McMahon

it's roughly QX. you sequential going No, as same in number, to if the what at looked we be had the

Daniel Leonard

times, mike, thoughts. just And and could would others I retirement. if love elaborate on gotten of on wondering you I number your I've surprised, was were your to I timing. hear congrats the surprised. a was question

Michael McMullen

Yes. Thanks that. for

it love did. but to And company this the the Board So then Agilent selecting call, try many when which knows while enough my choice it's I working a enough company and were for contemplating surprise across out really this just maybe the thoughtful on make and with to and about them. thorough is And we in a really not my me, the that make But how came they in team surprise yes, much this work while. the with contemplating the sure do. selection what a the while then that's they want right for pick run something time hard-wall, was able had I timing really best engage communicating And sort a I into shared process because they to it successor, to and been difficult and news Padraig. really that to they mind, they was with really a a because I've for in for the wanted pulled them decision possible I the time been to to Board in had but really of sure discussion and

Daniel Leonard

seem always of lot a to having fun. You be

it's good. again congrats So been

Michael McMullen

to It's step just be have [indiscernible] But I hard the going strong. family to was Thank you. to too away. say,

so grand a X-month the only XX-month there's brother And son old on, time. sister he could soon and more and a family side. have way will a there's old We going I make lot on -- one have

with of work real the call. it's you again, been So all to a on pleasure

Operator

Your next Barclays. question the of Luke comes Sergott from line with

Luke Sergott

guys and your quarter want margins driven about I and there year obviously, guide? you between do and side. declines kind down volume DGG by and view margins probably how just step the of instrument LSAG the the to the hit assume, LSAG in to the on the talk But on the I DGG the throughout in it's recovery

Robert McMahon

Bob. is this Luke,

Just quick. real

I at it was would If right. there was it we it took margin actually also cost would element actualized that weren't mix volume. LSAG, the and was year-over-year, to a and DGG, and actions in to I QX. result You're improvement in expect of continue fully was down The really all improve. I that an as that of look expected but or say

of as well impact have those the throughout. full we'll in So QX

improvement expect the in both would of I DGG. course and an volumes year So the over LSAG as up grow

Luke Sergott

And the then just a just are guide. frame you here help follow-up the embedded you different Can by guys XQ what from segments? there

Robert McMahon

of into Advanced as decline. if shift Materials, and end of double-digits mid-singles still some forensics timing single and and at of mid-single-digit result the in back looked those and about digits Both high shift, expecting, chemical if Yes, down QX same. the QX also we're look market down QX as Academian and the business digits, down a the of pharma food I kind single of the guide, that are from environmental really of a government diagnostics low China I down and at result some clinical

Operator

will with Our line of from final the KeyBanc. come Paul Knight question

Paul Knight

really love I to you're know, knew I you, don't you CEO. doing super see XX what Mike, and you before became doing, years

geographically, Will on those in-sourcing. the in? more participates things. your the to reinvigorate Like years? Europe Agilent see over So rate you of is would in do market where its the I least you X then two see markets growth why guess, surprise you have question at Japan I terms have, perspective I what the see that will do And one, concluding love kind would Number do think next professionally, for be would of things. growth?

Michael McMullen

years, been X% Paul. way back Thanks, do with a it's we go and Yes, to the ] of my growth you prior market, great work to those days this kind over is think we don't think [ role, we back CAG to mid-singles. way going I in to X%

back number. growing now macro growth challenge rate. kind of pick so that that be sure experienced the will and So big not to right Obviously, that this is X% industry in be and kind growth to long-term we think X% will the anomaly, the that we're you of a market segments can overall certain actually to faster that TAM within always than number, segments that you beat that, that's make those that

been have our be I in for been moves chain I mix. Europe, because think some there's been you'll on going But us do. to long-term actually growth of into evolved of things we've expect see that well China some geographic view geographically. we that a more supply how growth going mean, the and continue we've surprised to be which grower slower we more of has -- other

team Europe. does in Our

I you case rejuvenate particularly, to strength Japan it, of is industry, return going this [ in end and I to the nature can But you're the some see just to the semi to think is to diversified markets that's beauty the expect business geographies. ] of make going think both Japan. which the

long-term role. So that the I in staying be and the would touch. Paul. this to appreciate my last of comments, forward market in But my for guess, looking thanks, projection growth final -- I

Operator

will closing now back call for over Parmeet to the remarks. I turn Ahuja

Parmeet Ahuja

being for to today. With everyone, thanks, call. the day, that, like and Regina, you, good call the close on we'd Have everyone. a Thank

Operator

you Thank call. today's for joining. all concludes this gentlemen, and Ladies

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