A - Earnings call transcript Q4 2024 | Agilent Technologies, Inc.

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Operator

Good afternoon. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agilent Technologies, Inc. Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]

begin may you Ahuja, your conference. Parmeet

Parmeet Ahuja

and the fourth you, welcome, XXXX. everyone, for call conference Agilent's quarter to Thank of year fiscal

I'm historical company's structure, during be our our seen These and changes about sure guidance earlier impact detail. structure. statements. you regarding on shared All no today metrics our in press more will new financial we under this which release organizational call have our will consolidated talk market-focused have financial

segment information our historical reflect these We of recast will to changes ahead upcoming provide Day. Investor

quarterly on to McMahon, With Now and McDonnell, Padraig Agilent's Vice Senior and our CFO. Bob results. and me are CEO; President President Agilent's

Joining Diagnostic the expanded former the newly Angelica President the in formed Applied President of of Binns, and Markets Riemann, Group. Mike will formed president Group. CrossLab the Simon of call Phil President Life Sciences May, is Group; Life Zhang, newly the and and the Applied joining Also Q&A be Agilent Sciences Markets Markets Group; of

This supplement at presentation results, information on webcast website news available and release investor with presentation being quarter to The our are fourth for discussion, recording of financial along our the this webcast www.investor.agilent.com. today's is live.

measures. comments will refer to non-GAAP Today's financial

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

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

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

Padraig McDonnell

Great. Thank you, Parmeet.

thank Hello, today's and for you joining call. everyone,

begin, would new welcome like Mike Zhang. I Before I to AMG President,

Markets former Life manufacturing to Mike broad role, Mike is engineer new Vice as forward GCMS With the Sciences his more is and our most Agilent. a asset within he Manager Mike than new to Agilent and be and General in not and looking Applied and this very in I'm an Group. and China of the both role. Agilent was experience While to incredible recently in this business will business, GC much moving President XX years manufacturing him forward. ago joined AMG in

a I in Binns joined leaving Varian. to also to Agilent Phil told, All just years him Phil and service Phil XX over the is with celebrating want take Agilent XXXX. of moment acquisition wish a advance Varian retirement with in Agilent. wonderful of

graciously retiring Business XXXX. is Phil April Although has he President to from role, serve special agreed as a the through adviser

All wish Phil best us Agilent. the Agilent last during months forward at at to and working of him look with X the very

customer-centric steady ahead become only a share QX transformation strategy our market Agilent's year. solid to led performance. even XXXX structure company call, aggressive point the drivers for quarter especially recovery, first talk accelerate fourth to organizational and of that our market-focused ambition you news results. continued I'm on our also high-level to new that to and customer to results about not to a am read to Now outlook excited nimbler, evolution more the but our happy I our fiscal

XXX $X.XXX QX. delivered a billion, team In reported from basis improvement revenue with flat of quarter, the roughly Agilent a growth sequential X% represents over core growth. fourth the This of points

XXXX. greater was and to market points we expect a we're seeing, improvement our company X. in it to total This book-to-bill addition, continue In than steady

challenging in share trust environment, gained also customers even CapEx evidence that Agilent. our We in all geographies,

FY As confident our outlook on our QX will we Bob QX provide and details accelerate. only deeper for results and evolve, we 'XX. are this will

spend Now to time about I'd we structure today. like talking organizational some earlier announced our new

a and organizational of our transformation result an a is our that more market structure new in Our to accelerate Ignite. we evolution our performance. strategy company a of step first our customer-centric important organizational work, named even our have customer-centric product drives nimbler, enterprise-focused market-focused to strategy is This which become

At The continues of critical changes creating and our customer-first our commercial created infrastructure is years field accelerated seen a The the one ago. we the intensified did capabilities, competitive approach leadership by customer significant Agilent digital organization most ensured experience and on our and in singular were structure. a structure centric. end-to-end commercial our organization a supporting creating an the advantage down then channels customer started foundational sales focus organization new a in is customers. in X has market-focused and and on work commercial that doubled decade we time, market We

of today years part started successful changes the you the are X we So see ago. journey

With to enabling never the first and businesses better priorities. structure, are new aligning units before markets, among on close execution facilitating business the like collaboration we customer our cross-division

around strength X We as offer our customers businesses, the of can well we as end-to-end solutions workflows are that and so that and our our combining portfolios, revolve markets.

revenue Prior to CDMO year, BIOVECTRA. represents as business of diagnostics and biopharma LDG and and discovery, pathology, and scale-up, provides solutions markets. includes serve Bio-Rad our companion clinical Laboratories. Group Life or customers and development chain, and Diagnostics billion LC and NASD comprehensive LDG. at LDG, also therapeutics including technology primarily and diagnostics. The this will genomics. in LCMS, was and Simon May serve as to Science President President capabilities, of cancer President and analysis critical production LDG as Executive pharma, cell leading markets is Agilent earlier Vice Agilent's end of diagnostics and well include focused development which joining includes Simon value platforms on Sciences Life research annual a The of $X.X groups, portfolio of

annual $X.X business. strong preowned and Applied AMG AMG the chemicals of in on The accelerating GC markets food, billion new in is these and will vacuum technology focus growth focused platforms and forensics, spectroscopy, areas AMG environmental, materials growing markets. leadership and on Agilent's GCMS, Markets certified Group, and includes or market. advanced in revenue represents

supporting Mike to Most been represents Agilent President Agilent of Zhang, has Vice the a annual XX-year billion ACG, Mike promoted the and on our in labs. critical and that installed GCMS in productivity applications drive further and AMG. veteran its or positioned and of GC of our end was recently, outcomes lines. our $X.X of Manager enhance base group is capabilities and workflows markets. And leverage President CrossLab all revenue is in to Group, General product focused portfolio targeted instruments and to The uniquely customers comprehensive with

and continue Vice is business role, as see served And Prior the will and one and she we're of automation all becoming how relationships strengthen accelerating of that with of Agilent to current consumables. end Manager ACG President the General Services many as includes nimbler software services, of can across business. This accelerate markets. you ACG. Angelica pace to innovation. demonstrate upgrades President that LC change for are instruments and they series of Agilent Riemann, the lab the ACG seamless serve of customer veteran allows generation, and will LC Green This by also and a Series informatics, her Lab. the and certified solvents advanced solutions space reduce waste. technology optimize III Agilent energy consumption that is and that years compatible has My leadership. simplifies daily our routines QX with previous Infinity refreshes. and The while XX water, LC InfinityLab launch expertise automation And harnesses These III Infinity the customers' which and exciting minimizing of our XX-year

just in has traction While very been early from launched October, customers positive.

modalities NASD. at customers we to accelerate a We're BIOVECTRA most advanced peptide to CDMO support now their of acquisition QX, Agilent, of therapies. capabilities editing part expand rapidly market-leading synthesis, demonstrating our in our continue our beyond and our to like therapeutic programs. closed capabilities years therapeutic services oligonucleotide commitment to coming being Also more gene world-class growing of BIOVECTRA portfolio we over expand rapidly expected the providing With to the market bringing adding production

focus last capabilities I would able to members to leadership our team and even Plus dozens of to we putting innovation first harness. on team welcome became visited so and we Just customers can accelerating to capitalize Agilent and I pace be employees. to as on of add the Agilent more the spoke and by my clear month, BIOVECTRA we BIOVECTRA BIOVECTRA's opportunities both new was exhilarated abundantly

Separately, during hit the another important quarter, we milestone.

objective new mobilized PFAS The focused to sharply first This is meet the ecosystem key Agilent what why such we and are the digital Materials. exactly drive Ignite we. for through year, organization result Ignite introduced execution And company. Advanced stated program. is investment their our growth of revenue moving the billion our calls, business increasing previous our the ways I've is accelerate digital market-focused with reinforce full our us vectors time That's creation and orders the growth do in For expansion value can in and than by customers The faster to across mark capabilities. $X ensure is we're of so world our to ever, margin in as biopharma, team transformation in that needs. To passed structure. we a on our

adding customers on marketplace We shareholders. are our laser-focused winning to and the in value

December us that transformation deeply that strategy our the these on more into Day Ignite details, York. on including at evolved in XX New dive will our Investor We strategy help and will execute

Bob XXXX to our provide fiscal outlook comments, of for will Bob. first details of will results closing delivers you, remarks. as After back for Over his as and our the the some year be the Bob now well quarter. I

Robert McMahon

Padraig, Thank good you, and afternoon, everyone.

guidance non-GAAP some you other income today, remarks for I'll our I and my of In XXXX. otherwise Unless cover statement revenue results. fourth then take metrics. fiscal the details noted, quarter first financial additional key year the and quarter will on focus will on and remarks my through XXXX provide

EPS XXX up of billion, On with XX decline points. our revenue we Agilent finished as X.X% our a are points with currency fourth we basis revenues while of sequential exceeded basis core with was reported $X.XXX benefited of executed well XX in improvement said, core a points. a QX albeit were Padraig growth we BIOVECTRA As line X.X% the expectations improving basis our expectations, pleased against from market. contributed basis, quarter a QX and as with challenging, our results. over

positive Sciences grew constrained mid-single our digits. was year-on-year, Life million consecutive recovery. our by third We $XXX than spending Having book-to-bill business, quarter, Looking CapEx that, and the by the revenue. X% of see decline our unit, Applied an this at ongoing as said once and instruments continue to business performance one. for for conservative while evidence reported orders greater a consumables instrument instrument volumes in QX Group again That as Markets represents steady customer our be grew

The business quarter in every million for has up in Group. CrossLab X%. The digits every China, and up Agilent market quarter, delivered revenue ACG services grew it every to fast-growing grew business, year-over-year, was but except of where on this it year. Moving QX as again contracts enterprise including $XXX our the in sequentially. double flat business, region

to customers of recently assets, utilization instruments. leverage Our applied OpEx was our maximize the deliver offset their $XXX outcomes. and and expectations. productivity and continue long-standing received customers decline solid as softness years. The markets on the from largest Genomics globally one saw strategic was a to Pathology analysis revenue, that top partnerships X% their NASD above a and operations We our representing by in of throughout in our budgets Group largest in a goals cell rightsize award expected of and million Diagnostics recognition beneficial growth and posted supplier slightly

our at looking end Now geographies. markets and

decline Our single pharma low molecule better declined small largest Within X%, except we the pharma, expected. while for what digits. Americas, market Americas declined slightly NASD. biopharma region the grew pressured digits, expected by Encouragingly, in quarter. regions, The all grew was mid-single than end the of

region Americas in year return and growth to the to XXXX. both NASD expect We fiscal

growing Chemicals Materials with Advanced and mid-single business market. X% in driven Advanced semiconductor In revenue digits, our our Materials, grew the submarket by

diagnostics strongly, growing the and and by in clinical performed driven in pathology market genomics. performance business improved X%, end Our

with although X%, end of timing That to growing All dollars our except to U.S., In than very business roughly related regions flat in growth environmental sequentially. for see strong QX the and markets. more multiple across said, we were XX% declined we solutions forensics, grew, PFAS in continue being orders.

exceeded digits, end markets. down was government our ex X% X%. grew down last low Asia while the as grew while China and academia and only in digits wrapping up China was and our expectations. quarter, Geographically, single market high Europe year, X% expected. versus the our and China Americas down Now was Food declined single

in orders stimulus booked and fiscal first our also We XXXX. in October year anticipate China much more

was XX the to margin by in move points driven let's of quarter, volume lower last Now the mix. the year Gross and versus basis down XX.X% rest P&L.

we operating fully the give annualization in returns Our XXXX. quarter. XX.X% these margin with transformation initiatives took the EPS recognized market in productivity year earlier in Ignite our and the The this initial savings, actions from and as the fiscal cost confidence was of driving us coupled were growth year recovery the

continue to drive EPS growth we ways below line. the addition, In to look for

Our net million in benefited interest was count tax from quarter rate diluted income we in while and was share shares a the line, outstanding. lower XXX our

QX a per our was year ago. that $X.XX, earnings expectations together, was all X% it from ahead share putting up of Now and

cash me sheet. let Now balance the turn to flow and

million the million a capital balance $XX and and enjoy sheet flows. strong invested expenditures. very in We $XXX cash cash healthy in we continue Operating was flow quarter, to

operating the exceeded expectations, we For our $X.XX cash flow billion. well with cash of operating year, flow

we over million $XX consisting in and During $XXX $XXX to in shareholders, million share returned quarter, dividends. the repurchases million of

For billion to through the over we returned year, shareholders repurchasing and $X.X shares dividends.

of may in forward, BIOVECTRA also with the Looking yield. of advancing in a acquired dividend you our leverage quarter. seen another dividend, very a We year a as increases the number ratio quarter X% net we strong our ended even increase X.X, in announced recently, quarterly we marking industry-leading have

healthy the balance provide business invest plenty and flow of forward. in cash opportunity strong us going Our with sheet to

we In steady in improvement the saw and performed quarter. summary, well market

opportunities. and investing We high-growth executing well, are staying disciplined in

first the quarter. let's to upcoming and year our Now outlook for move fiscal on

recovery have we We past seen expect fiscal the to throughout XXXX. continue quarters few that the

to to the more the full throughout of growth. grow improvement While than levels we we market year, year with traditional year slower rates the second expect historical for expect of the half returning the

expect core of that mirror We basis. a improvement our results on cadence to

with than X earlier, As Padraig greater the a company, X over for instruments. exited for QX we ratio book-to-bill and noted

the In in addition, QX was first XXXX that grew quarter year-on-year. instrument orders

not certainly does quarter a trend is make, it one While encouraging.

in range expect For end. of given at of BIOVECTRA billion the represents contributes is to high U.S. This while year, low growth the points, we growth billion. guide, $X.XX X.X% related X.X%. at near-term and X% end, start to X.X% X.X%. range to think to a the a this of the headwind we full the X.X This $X.XX in plan the revenue translates year X.X% a To way core M&A dynamics the is prudent slight reported to Currency of to a

From Europe. a perspective, geographic modest expect growth the in we Americas and

a associated While activity revenue we approach see funnel increasing of in China, timing on the stimulus. taking conservative with we're the

over see resulting the growth year to expect year. We full course of recovery the for the slightly in positive in China,

X From we a growth business groups return led to perspective, in all ACG. to expect group by

is this true well. under the structure As statement new a as note,

Investor provide to will ahead As information Parmeet historical we segment changes mentioned earlier, our reflect of upcoming recast these Day.

with In more in the terms the year improvement of year. we of throughout normalized half second the expected phasing, expect growth

the $XX points of due XX this interest XX roughly we versus million to line, of operating of year. the basis interest margin expect the BIOVECTRA net net financing income the are year. expense projecting Below We to expansion for

million rate In and addition, XX% of tax we shares outstanding. expect a XXX

year-on-year. dilution, Fiscal in a the a X% EPS XXXX $X.XX and This and incorporates range from X of be growth excluding $X.XX range X% planned expected BIOVECTRA. BIOVECTRA non-GAAP to to represents to if year the is rate to rate of X% the X% dilution $X.XX, growth

flow We to year expect XXXX. cash fiscal in remain strong

and roughly for expansion. spending million in cash year We in is the operating NASD CapEx $X.XX as XXXX the are expecting billion flow $XXX peak

to revenue to billion in billion. range $X.XX of expect QX, the Looking we $X.XX

the X.X% growth budget to basis Currency XX represents X.X X.X%. a a this assumes reported of end year. while flush is to of of calendar forecast of point expected growth. significant decline is This Our M&A headwind, during no points contribute

to We end. flat core growth the between expecting are a X% of decline upper at

Adjusting timing impact, Lunar important New pull the versus in which This $XX for points late additional communicated due note impacted January expecting Lunar our the QX be sequential QX percentage million this It's projected the Year of year-over-year last year. growth New last in estimate continued to X will of occurs roughly forward year. February we to that improvement. in results by includes are year we negatively of Year, we revenue

are due $X.XX First be than share to per rate quarter $X.XX, year to non-GAAP the the between XXXX timing. lower New expected earnings growth Year and full Lunar

Looking into future XXXX and prospects. and the of our beyond, we remain incredibly optimistic our about markets long-term

transformation We will a approach growth, are to accelerated will confident propel we market-focused and and in our the Ignite company. stronger become new us

With that, some Padraig? back comments. I'll turn Padraig over for it closing to

Padraig McDonnell

at I to times these I've exciting said before want say it Agilent. and again, are it

strategy, we've moves processes transformation bold our created have months, focused help people while in create developed the the we've along win several We've last made vectors. Over our momentum. we've strategy. empowering been continuing execute on our our and Already, new growth to our evolving Ignite that to on way, transforming that And future kicked off We've strategy. to moves the made marketplace.

that growth are acquisitions the capability and strengthening acquisitions lay future and We contribute to our we efficiently are making for to M&A. foundation will integrate that will those effectively our

our enable initial the our results among only includes all magazine our actions recognition yet who customers are the what and speed best a another This but change, is we is have, only ambitious, while professionals the Agilent list our our shareholders. our enduring us company we These This sets for ones culture, shareholders. this building that for resilient exactly us and the company creates need already know month Agilent standard value best internally, this the companies. a ahead. performing. for with outstanding And the outstanding of ensure not workplaces and we and capability, amid for XX to Agilent to reinvigorate XXXX, of to This an #XX and Fortune world's culture the team named recognition evolve are for excellence the industry. team delivering customers position of well is high to They journey the we build is thrive strength in that talented

I we we the today's have, be for and opportunities Thank energized momentum you more make. again will couldn't joining history by the will call. we seize the

Now Parmeet? your forward questions. answering I to look

Parmeet Ahuja

now. could instructions provide for Thanks, if you Padraig. Operator, Q&A please

Operator

[Operator Instructions] from comes from today line And Patrick your Citi. of Donnelly first the question

Patrick Donnelly

of now, you for X side one just I over the maybe instrument order little talk just you side. -- a know bit Can on in are our what Padraig, there's about the a guys quarters where we next are? year on your looks X growth touched you, the book-to-bill what about year-over-year. the on like? for guys in what As the the know, work cycle way the through market so. cycle, upside we as expectations or the you overcorrect Does to it instrument debate

guys go are the this to size think replacement the that you right and up? we How forward it framing What's we where of way as here? are about cycle,

Padraig McDonnell

S. O see. Patrick. X, Thanks, our Yes. seeing Great and clearly, in to recovery book-to-bill question. a which was really instruments steady is great we're than greater

replacement seen it's Infinity see that to different what vendors. competitors expect across would terms that orders III and installed from new announced we some It's benefiting And of start we've probably for customer median you the tens probably would uniform, side a is -- base an with different we see our not of is excitement own solutions, it's we're where at speeds. of month, cycle, have you seeing seeing with are we last -- across where at expect their of cycle be. industry We of from But see increased what we refresh lot our the do different systems. But times. in on through In expected that millions timing see already we there. our is to a that replacement we of dollars what base, our course, and demand way we're

but So what that is in cycle slow replacement in we expect off and steady, kicking to be QX. really

Patrick Donnelly

million sounds think to seeing you to we sounds guys hovering focus got you in like just China, there. know kind hear then -- talk growth slight forward there orders that helpful. Can guys guys. still is It hearing October. around with your a of maybe stimulus as seeing like there guys you the first That's I you way Okay. that you and the Are right about are And about on expectation stability. here? you It a for what revenue recovery. $XXX move a helpful always What's quarter steady Bob, 'XX it. were

year? that that. like our through segments there maybe Different sounds it continued maybe improvement helpful we would way work as picking So a and are the to of be up bit bit little little talk a are -- through different

Padraig McDonnell

Patrick. Thanks, Yes.

So it continue a to and bit than our consumables. performance to activity was across also see was encouraging and services expected, to better really improve lab

point. seen also So quite we China, within have gains really is actually dramatic share which a good

already would it's say say steadily stimulus would what side, stimulus teams. And the talked about orders the I some to on in we call improving, the had So is I we've talking in.

expect revenue. QX. direct We And in of the dollars market getting translate we really, course, in the and, of both getting as see really the That momentum -- from a dollars the confidence is input course, this to more good in. more much of sign will,

that steadily And we year, Patrick. improving. through So the expect

we Emerging to durable expertise, moving. the Act happening in for improve. The the China. for with us up It our that solutions the of of Pollutants across across just or business. go we a standout through And globe us that the real expect fastest-growing was region, as the forward, pick show we've coupled that business you expect what to to was that globe. great goes where PFAS was one already seen stimulus there some our orders go area the is in are have and the that technical factors We nature And China great these growth

So standout. clear real one that was

Robert McMahon

to on is to want what just saying. Padraig add Patrick,

I $XXX in to QX, right. $XXX sequential was from increase roughly China, precise We a million be X%, nice with as absolutely mentioned. down which You're quarter and it ended million, the was

grew chemical to in In both the quarter. addition advanced and the materials actually PFAS,

the quite flat, we're activity bidding first was terms we thing. half this and active the was a in kind as that -- from as conservative course as a I continue pharma nice mentioned, standpoint of position a orders, in very 'XX. of leadership of which stimulus taking well And approach, quarter are but to of the and the throughout seeing a expect of have funnel We there here actually

Operator

from Matt comes Sykes line question Goldman the of next from Sachs. Your

Matthew Sykes

Maybe one DGG, the of been growth of first just quarter. on sort has course year, the the noticeably over which on but strong weighing

had You And that do a Dx as genomics. as growth Could cancer 'XX? is, on called more sustainable just through color we out bit particularly provide little you genomics think well growth? as what's driving how move in that you

Padraig McDonnell

just off, I'll it start Yes. kick to and I'll over Simon.

and We still if we're market. which slightly to really high challenging What we add which growth know Simon, posted in you while want nice expectations, our durable a a was color? single-digit pathology in seeing seeing don't some digits of QX business, low ahead any grew highly market, of are also in genomics, I expectations. But single business ahead in it's is growth,

Simon May

to quick of a quick couple Just a -- points add.

And mentioned, we the growth pretty particular, and quarter. were and Padraig As in consumables the instruments the single-digit we there. saw that pathology mix blend between the high pleased in in with

that to continue healthy us XXXX. tees and placements, instrument really our we going nicely quite up We with be into think

seeing genomics we've time growth that our library had drivers about it this us going we've seen And in FY see the we growth fantastic position because also was NGS both Avida as we side, propositions. conditions hope these the a do it's in think And by genomics, And I they're we the really genomics say 'XX. enjoy. value and macro particular, the believe growth see the our chemistry. on clearly Magnis first quite durable that lot automated pivot I'd while in in that that now. again, vectors a down On a continues the bit competitive of where double of really NGS prep to for We're traction. got a to encouraged given we've differentiated we that gives very there strategy into our and notable pathology and that genomics for we're see here, pipeline

Matthew Sykes

strategy for -- segments should a just from this resegmentation. question we of due competitors to wondering these R&D them be in necessarily as might to go-to-market Padraig, referenced put their LC Or direction? I development from high-level you, a I'm base. accelerating how of innovation, on new the It maybe that new Great. And be the we for faster help. follow-up, pace my and makes R&D resegmentation replacement past some doesn't sense we've to for an a installed mean the see product really you cycle for to similar cycle product the inform it they refresh start faster to seen Should and the introductions is going resegmentation? together.

Padraig McDonnell

when asymmetric from do X our focus, innovation what to going to see about to in want refocusing our will really the investment but a also Yes. be And We energy, this Well, closer things. able of are the talk going we really key investments for accelerate you that. be most areas. allocation. capital It's time the look, And it's also our to refocusing the reasons. biggest I think we're want segments, few we're I or to make that groups to customers, but understanding do where

deep also accelerate. You're growth But to key see X we focused company, on going to don't programs we accelerate. making across want to factors want and be our sure inches we be the

an product lines. it. no see But of we amount of structure, of you're to can have product about acceleration going doubt board. the incremental to lines R&D, new this a from And across additions huge course, We have

Operator

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

Rachel Vatnsdal Olson

to on but this on you guys tariff potential Agilent's wanted I the up how early follow thinking about World? impact from appreciate China remind Is anything a there guidance from So embedded impact Patrick's point in tariff us was Trump then administration? it's what to question on Rest the are tariff China. in that standpoint? And risk Agilent and of First can you business the of days, at in currently I

Robert McMahon

this I'll that Bob. question. is Rachel, take

if been on I within been chunks, first took on I is we've obviously question. the doubled As exact imagine, X What then supply been work China back you that 'XX, -- this chain, and fair a amount when in our diversifying working on would down came that can we've doing particularly actually, into of COVID. tariffs with 'XX there's it resiliency take

something in be U.S. that it is that's And we more of would $XX future certainly more in the additional than is sourced magnitude Obviously, material. X/X a activities. of so would $XX business million today, to mitigation comes and with product million of the this potential manageable with give it But with us you broad-based the think to frame existing our roughly reference, that, be just U.S. from that

Rachel Vatnsdal Olson

helpful. on That's just Great. my then follow-up. And

Chemical that Materials mentioned this trends the drove and down Materials You some X% performance some the wondering, that mentioned quarter. Advanced the on saw you that? you saw semiconductors I that you You of was just within can side. break of grew that Advanced

You some actually out call semis quarter. this peers weakness had one of in your

an perspective just as And just the So what on well. to business then that underlying Industrial from seeing talk on us about you're side? again,

Padraig McDonnell

Yes.

the by semiconductor. in the in we X% we driven that's very and China, of we're and that was overall, digits we've business battery a We saw that we X%, single and, by But in energy. a also Asia and grew driven chemical saw happy the Advanced and ex So with Materials, seen & way, course, materials, in Chemical lot decline growth low the slight China. have --

and got note CAM year-on-year that time positive 'XX. the broadest And solutions is to since that first thing the would in industry this about is around So it. -- growth for returning it's the QX platform I one we've

So the well really that future. bodes for

Robert McMahon

rest the for of Yes. the on maybe you talked I guidance. and of Rachel, and call, benefit about the folks just the

give to everyone look kind a just end If market, by of frame. it at you

For growth. the full FY we're pharma to 'XX, return expecting year to

and 'XX administration could accelerate Actually mid-single-digit Academia just just least throughout growth flat. some the start be a low that So and also and of mid-single strong potential that government to expect continue off discussion up. highest course where year in pockets with at low the there. here food, to digits given roughly year that the talked there at is and food growth very and both work the to Simon mid, changes the the the FY CAM actually environmental, low to And in of digit. market, the diagnostics the of about potential coming clinical end gave and growth. single Padraig really then given

Operator

Vijay line of from Evercore comes ISI. next from question Your the Kumar

Vijay Kumar

half of off driven in step through of drivers versus I'm here versus you Maybe second if up. 'XX. markets last a us back that fiscal the being you 'XX? on does half it the just When normalizing? half by look is curious, end the could fiscal walk back Bob, assume at Maybe dynamics question first first just from half half,

Robert McMahon

exactly Yes, Vijay, that's right.

Lunar the So year But if depressed first to of continued I timing artificially relative is, Year. the because this you look fiscal we're our expecting of half of of of just what recovery and versus quarter half, would at New the first a course growth our throughout obviously, half the of more normalized way second year our the call, year. the nature with in back

up? days talked on Padraig we're see III, see that and But show to particularly pharma expecting about. areas, that very also that stimulus with the we that recovery Padraig activity just help early as from fully couple that. certainly that then It mentioned, the approach how out. course We've replacement conservative perspective, of can year, are also obviously, mentioned, as taken shows China the that does of cycle certainly, plays throughout standpoint. And better of positive back potential that Infinity a from accelerating. all so We'll baked the up in And on in not where getting the with for and a a

So those biotech of next well continued and biggest the recovery as biotech side the year. throughout X then you're course small would on be actually the seeing

Vijay Kumar

free margins? fiscal on cash a that the margins, down guide margin step-up one sort impressive element Pretty above, similar maybe then a What the I side. cash on Is flow want free right. QX in the to in execution of question. sure timing free cash drives and 'XX. numbers step I assuming And had what back the Understood. just is and is cadence half assuming make

Robert McMahon

Yes.

into and Train your for in the let really finish a question of D. expansion a of slight around this continue step-up levels -- to so cash spending NASD as I as Yes, are last we versus XXXX QX CapEx year year the flow. a 'XX. for answer heavy that C So we spending expect step me free expecting result don't and down

is would back free So issue. cash then so you flow step timing see down that a that really

typically and lower also at of profitability a -- sales terms our light the and that generate you'll the of that there. And Ignite kickoff full QX, come you've the both the and in In half resets. year, Padraig with in of then is have of expenses many expenses in -- details into meetings then incremental month, Day transformation a some which got in off about We've QX meetings merit we've those very play some been on January that revenue, mid-December. look you the we bottom will then second hear activities -- of we have savings but higher typically there, topline at And as the got amount those of Investor the about, kicking talked are the some line. more will

Operator

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

Jack Meehan

method wondering I through just sure under the new XXXX Not guide? us the this just be you for old provide if color could was can it walk segments. but the each or for assumes Bob, the method, great. if of would any you What

Robert McMahon

that. do could I Yes,

So if I'll this call legacy it, you think about at, numbers.

digits the go a the the instrument for lot single mid-single digits really to digits be being to the opportunity the then And approach real genomics replacement we there low as where year. uptake to So recovery, and high prudent be business with mid- for still the is single of a That's we as rate. instrumentation of of and through cycle more throughout consumables of the mid-single-digit on continues on recovery which to connect going strong the NASD. a and that area and growth the probably to in return III. growth, the business low low slower stalwart services of and then Infinity forward, growth as the double have course then LSAG of of kind taken for of a continued But could with just single we've than there. ACG kind it DGG digits around the our kind a year, very continued course be digit Simon depending performance mentioned, of business, continues pathology

Jack Meehan

Great.

cycle. And sounds was LC, of peers I year Okay. to as what it little just is expectations your benchmark around bit I a I and great. And if for results? you you contribution? think color is of your expectations more Any off would wondering just know as one don't can more bullish be next LCMS? and then try compare be that if a would bit I have comments we you share factor, that, great. talk to could a might be any -- just of trying but some GLP-X thoughts these for and any contrast everybody think any maybe the pertains are color little

Padraig McDonnell

Yes.

but across industries is cycle. in board onetime, I the there So any as at happen a different It terms dynamism lot of of in any times. in time, different it's doesn't before, replacement said

our excitement doubt LCMS improving. our have Infinity we of perspective, and about a are amount that. huge around And LC From our III. no There's orders

around lot a of our We with focus that. programs have customers

is in over in cycle. a we we're a next So that that quarters then It's and number slowdown what one really on think, call. forward. steady to quarter. increase watching year be or next But Will go a of little again a of too will replacement a is, as I early bolus the you bit that maybe see quarter cadence gradual

of customer improving. And market, the would I I conservative sentiment on as last seeing few has in that being years what think say turbulence, we're seen everybody because lot of steadily very around in we're a really the in but of new in QA/QC side, production involved to and this We're year. a with year. in GLP-X We a we grew closer actually getting fantastic lot build-outs had systems. on the well as GLP-X site XX% departments is

both side. course very can of analytical healthy very, pipeline help we strong from CDMO seeing the interesting acquisition year. And customers their of of thing the synthetic actually, a how on CDMO peptides about through of So requests business both a within is capability. of the We're really we BIOVECTRA, the one GLP-X on a lot side and and that's sides have

a of seeing huge there. we're amount So synergies

is we're business. this that's there market to to really very a to take strongly and be going So continue the going

Robert McMahon

just the cycle. build saying Padraig LC is replacement what Jack, on to on

we rest more think taking that And -- get throughout the installed business It and beyond think we're one the at approach, it's next as to is of now our will year. would of conservative is the get I base, the age also look of say, Padraig probably course things a we mentioned. happens, the is it if -- that assured. I well continuing old. I median if

and activity we So continue at we because would to to to expect continues be our to the the through instrumentation services that able business, when replaced be there. business our look consumables be

are be replacement. do time So used that only of being so these able instruments to matter to a and it's

Operator

Our line UBS. the Leonard next from from Dan comes of question

Daniel Leonard

flat is Just instrument to in that time. one in all growth instruments expectation Is clarify on platforms? your last XXXX, across aggregate

Robert McMahon

will expectation digits, it single is Dan. -- it that grow low our Not

Daniel Leonard

in administration? you mentioned, any forecast. I food administration the about other Okay. think, U.S. you something other Any were 'XX? follow-up, sensitive the your think your that forecast there Are change areas you my in And together where putting then when changes for and to areas

Padraig McDonnell

a changes this see be. there's Look, There's Yes. to changes have of lot time. people what a a that lot lot those of we at expecting change can happen of will yet

Of some expect it will percentage as funding, actually increase spending the low the course, is on NIH PFAS see maybe changes forward actually as business. you can a goes which for the of it. in very us We

pricing talked for to also happens continues move be about, to the tariffs, is, say, really index on But what that course, seeing going to The international of would is Bob which important. that, also scenario we -- area on ready IRA watch, biopharma The think is any on ready for biopharma, are I forward. I is side.

of So kind why prudent conservative we're taking that's approach. a

strategy So going say is would all on. the But for Agilent, lots within work outcomes. I what we're from ready

Operator

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

Puneet Souda

you for can made assembly tariffs, was from Asian made we so in China, wanted how sort the in product much of tariff elaborate coming China is versus manufacturing other I there and there retaliatory First globally not understand to of clarify U.S.? China final on could positions on -- countries were any the sort of your and just mean one, I if side. just

Padraig McDonnell

Yes. U.S. supply Bob About in our rest United States, talking world. the of the in XX%, is said, off Maybe there. chain I the can is about by produced XX% start as about

course, But of a it's So produced China. step we in and that's actually have there. small mitigations percentage

can around, we supply before We areas have we've since that the and many globe that move across XXXX. chain done

probably impact quarter to a months. $X few in can probably we a million within of We that $X the mitigate million, expect

would even we're see that, waiting everybody say is But tariffs. The big that but how I we're that out, China? in case, think to across is question I beyond already we're with taking waiting steps ready potential see mitigations. it everybody plays what to is. all So will that for be

Robert McMahon

us into the of Yes, goes for spent We've our now U.S. produced Puneet, in be portfolio is of retaliatory and a of really revenue which capabilities for particularly important China saying, take today. China, there, advantage to to the build on Padraig stimulus full is to full what products able in little actually a effort China, in for very tariffs and time China. that of have is we lot building

standpoint So of that number China impact from will I retaliatory small the exports U.S. the from think relatively that from be

Puneet Souda

a on question Infinity That's have helpful. then And series. I III

major the order was quarter given is being that what's driving is out? it October? And orders this the you you of as side the you telling the positive, the driver and on ordering instrumentation Do launch there saw in any to wondering, book is pause a you? think pointed -- Just timing, prior instrumentation what

Padraig McDonnell

be to really we them customers around planned We our through the And effect, with bring sure replacement. we are very to of course, minimal a make careful of that. had We cycle Yes. honest.

expect more not what their that best-in-class with forward. order that performance of terms voting book about And going in and extremely clear system will we that ramp. will lends seen to from we've extremely productivity It's very that. customers it impact. We're terms only the It's really minimal and far, orders be about productive hearing productivity, customers. be also pleased of on their how in So that that's are excited labs We're we're so but and with continue to and our it. loud a

So ramp for about year. that next we're excited

Operator

Your Jefferies. of Peterson the next from question Tycho comes from line

Tycho Peterson

you're all here, to any the the a for are pharma able Are from pause little in in what kind and then probe LC to new spec the you little mass did of not bit guiding customers risk did just know I pharma? about you bit. given want at administration. this a any of quarter? And in hearing point? budget pieces a flush spending what delineate I is but there moving What around thinking

Padraig McDonnell

pull Maybe can part, Tycho. We're the seeing activity. from a Yes. I start with bit second pause pharma. a little not from more anything, seeing If actually we're

watch transpires And across not to want that's globally. that's U.S. something weeks. in over the what we're the and new and next of really that few administration the we board. So course, And about coming with the seeing

of terms LC I that? any have and know Bob, the if LCMS, on don't in you color But

Robert McMahon

digits. pharma, of small of just digits. at biotech overall to overall, up pharma was give single Tycho, data. LCMS I pieces If it or was X% up look Pharma biopharma different within If business it of LC, low was down you actually specifically single with our kind at molecule look couple down. we a low being

Tycho Peterson

your maybe you're clinical talking a back how bit I NASD, you thinking know customers? little are And with just helpful. growth 'XX. about to about BIOVECTRA? follow-up commercial to That's on Okay. ability then cross-sell about the versus I talk Can And in you then think

Padraig McDonnell

and off, start to over Tycho, I'll it Simon. hand I'll Yes,

on are broader this a we from source the extremely ability two First were we've cross-selling and of about capability, businesses. why sides. between the range all, accelerate a that key both for of It asking value one that the acquisition we did seen BIOVECTRA of us customers pleased of actually was capability,

color you But know don't Simon, more want add on to if NASD? I

Simon May

Yes.

really and on between the engagement with said, BIOVECTRA the strong teams. Just what been there's to cross-pollination, build NASD Padraig

businesses as earlier, maybe FY think really it's 'XX, The order week, order we're is little expected, that about think important book strong that got I'd Bob of more business. in right to I now. days In qualifications we number exactly away going understand mentioned in the portfolio really on looks mix in the into going Boulder NASD single-digit and between in fact, of bit fit book. a but nuances as commercialization for last NASD, together several the high projecting the growth energized facility they our We've came a fact, the as complementarity spent we say so. Then they

But to with the hit revenue, a 'XX relatively So FY lot overall once a that is we energy about is single-digit XX into going very again, of FY book upside in And lot that NASD in months' there's in view, XX, nudge think about we'll towards double-digit high bullish growth, revenue really XX, as of what of maybe limited FY and going 'XX. But healthy. we're actually 'XX. order terms seeing. again, we're

Operator

next Your question of Brandon Wells comes from from the line Couillard Fargo.

Brandon Couillard

versus premium Infinity you II time the the it us what's Just an out? the an this kicker launch, III system? III -- on the system the replacement XXXX rolled Infinity and well there And legacy -- as can ASP there to II is when this cycle terms ASP the I in of think was remind is

Padraig McDonnell

will builds broader had we've very II, this of Yes, years, talk II. and number than very, on the we course, Agilent I Infinity I successful base the for But with the that don't the years think pricing a Infinity difference in is about of it. say way installed success. a on

have very there. prominent that very, We XXXX out are

of XXXX the extra that them interest in replacement. But We help think lab. and I lot from customers the be we they with are to to Infinity first, talking about labs productivity significant because those see are also going really the have a labs going is seen have capability II

the not broad It's cycle it's say installed to replenishment one a to just see. going would next. base I series So we're

Robert McMahon

is held days. early very up is I would All Yes. -- say has nicely, pricing

Brandon Couillard

And do much maintenance looks what Bob, build-out come like Okay. online? Mike does CapEx for Mike is And next Train how expect year -- you of and then those to me, fiscal to -- or in C the excuse CapEx When 'XX? in NASD? the tied B

Robert McMahon

Yes, question. that's great a

go-forward continued That's validation half build-out and NASD $XXX between of it If kind think I the kind the in look is that Xx like a X.X sales roughly activities on million. company. So total about basis. of to CapEx, maintenance at range of

Operator

comes the question line Your from from Wolfe of Research. Schenkel next Doug

Douglas Schenkel

with I just question on to want first philosophy. a start guidance

error to conservatism sounds it around replacement and there. heading as make degree the on you're bars the those clear, it the new normal on your your new on fiscal board assumptions are lower not base, to factor to to relates But LC I'm trying in China stimulus, fair China Just that administration. be that of a uncertainty of error year across missing to intent a anything the impact it is cycle. of potential like Conservatism a into consistently bars? were was wider than say assumptions end Hopefully,

Padraig McDonnell

faster? recovery? cycle LC in to early very that. in stimulus, which it well, bit we course, reasons. not think replacement because than conservative you we that terms of expected Is it whether is the want to or I a those that is sure said it What days, we're that? on were The Is U.S. less monitor see China we the think of I very make conditions continuing sentiment of improved And little

these factoring into So all things this. are of

bars say in So normal. it are than wider guiding. is we're the what I'd But here, conservative also,

Douglas Schenkel

more seeing are a believe recovery heard just be a large up applications? Or finally, in down demand was low as what was to seems molecule molecule right, biopharma to that I'm indicated others. if That I why? you some I your have effect? wrong, comp prepared from always, If digits, that correct in single And small small but And you versus little that of Okay. remarks, me we've so, while mid-singles. contradictory I if guess, amongst is

little you if curious just a could So us give there. more

Robert McMahon

right. it heard you No, Doug. Yes,

molecule biotech, low digits across instruments was was combination was down large singles. and instruments. the It in our small our business molecule services. both mid single of Our And up

the in shows molecule, single low it Now took large down digits. NASD, was if you which up out

mid-single to, in I of And better it So digits. than think, that the speaks volume actually recovery small molecule. continuation

look replacement pill well-capitalized of go have count, it these continues versus companies. world. the biotechs are when And the just the you If older about you think of to kind up. the probably of They at kind fleet

to was we're come continue it the so of down. kind that first expecting And to -- and

first expecting And moving in cycle, the it be to we're think so we're I positive. the and

Now in cycle. there's certainly is around leading molecule, we the idea nice upside there replacement around think small in indicator but is more biotech this it than a

Operator

line Your of Ryskin next America. question comes from of the Bank from Michael

Michael Ryskin

I know kind But on did First, you to orders ask China I a the make on initial of you prepared remarks, of a follow-up stimulus. of in touched some just questions. stimulus seeing it want come quick some early in. different China couple in comments

for I'm I China expectations. year? embedded ramp think you gradual a And just could sort just perspective of through through go stimulus think loaded? your and directly be of back-end this Is these trickle? there I to the China clear? from in once initial the you're could It how guide, us the but it quarter very what know looking could various play orders through it into you lot not sort be going out there's the of asking -- exceeded walk scenarios next a as to just year? it trying -- Is a

Padraig McDonnell

what commercial before. range. about it that both spoke it's of government is stimulus seen in I We that Yes. Look, much on and the think We see broader we've accounts. terms

come is in our teams to low first of visibility Past capabilities yet, playing running. technical We're the a our terms orders orders don't our into single-digit range quarter, really that's much But this really tenders, in that but quarter looking We've very very, quarter. And in. you capabilities, to course, position have of first lot expecting including highly last interesting close overall the great accounts. successful year, first with been it be couple but is it capitalize. those And in the that's from and we're thing in that in -- strong platform low the launched. it favor the activity, China how orders. government of strong have actually are a we millions puts millions is invested and that of in we deal of initiatives more see our will very broad Our made us range, over to one up

Robert McMahon

get by growth. single-digit frame Mike, divide that kind it X, by China, how would just thinking or of in it of low multiply we to about your we're and that kind you point. -- to QX took just If

get the timing throughout Now occur we're But recovery dates initial awarded kind we'll of guide, put expecting year, lot of the the gives and sense throughout about of we the once revenues forward that then a those course delivery we a forth. the course a the those that and in so know we of you stimulus that for more but actually do going year. and think the will what

Michael Ryskin

Bob, That's Okay. helpful. you. And for maybe then,

of the year? for maybe topline next starting and much how next underlying of Just How still onetime on attribute a honestly, given think, environment. was or of bit year? or impressive can a what's expected, XX for the tied Just point, business, some better little much year, of price guide cost could especially to lot shift than, some a margin going to into next part subdued bit It's it to XX you I little bps. you that the mix savings, the strength really maybe margin Ignite is a transformation expansion just a that of

Robert McMahon

little I it's is say, those Mike, Yes. of things. all What would a

feather will cost Ignite as we maybe associated we'll tuned, the transformation. things a stay mid-December. this And have in little and of mentioned and But certainly some year, those efficiencies the bones come with price on start to both I meat the more So incremental opportunities, you half give before. second into here,

this first has also and recall, June, half the frame of we actions annualization the you well. year the as had the the savings If July time that in to of take

reset. So from so have that that half. we're anniversaried forth merit gets increases benefiting also somewhat and in That first and gets then you the the

actually of series been you'll have kicked so that of year the through a the off. see already course this And throughout initiatives

So...

Padraig McDonnell

help following in ultimately going board, very say to meet about December key we're it's And It's just talk on everybody thought to up York as excited program. as areas an margin in across well in that, and well to it. I growth expansion. Bob, us extremely New would to the It's for out invest

tuned. stay So

Operator

the question your And Dan from final TD Cowen. of comes Brennan line from

Daniel Brennan

Maybe the Americas. first one just on pharma the in

U.S. you assumed I maybe think Pharma unpack happening a what's say called that in in world? of you into And Europe, bit little was kind NASD remarks, in a Can Americas the ex of what's weaker of kind just spot. 'XX? happened of what rest from XQ kind prepared versus

Padraig McDonnell

Europe terms wouldn't of in strength America lot mean, much look, read of saw I into a I Yes. we pharma. the in numbers. too

different there but the budgets, and pharma is, wondering our think continue out terms year in of rates growth comes laid CapEx expect about of their in guide. at to that phases companies next that we Bob I course,

Daniel Brennan

is Okay. you sounds I That's Bob, least, market, prepared helpful. came know a And then below-trend like a half it that into you're on the growth that's just color it first remarks, other trend? are I the can there of of for kind maybe your go you the algorithm times and year. just And maybe up typically would of just kind are that of growth at based of expecting assumptions to talked broader just over few it are you below what terms like helpful. like for weaker one or market remind what assuming? in that you're upon pharma specifically, the market. be kind pointing Can on your if is us spots -- Any

Robert McMahon

obviously if in looked full you for digits, Dan, to we expecting look here. of year mid-single rates X% that the Yes, markets, We're growth long-term across. when aggregate X% believe the at not our we those at are the

We expecting we're that are better doing market. than the

that a and adjust expect cadence. Year, we here, how roughly New that exited basis, Lunar performance timing at look the you If core on of for at flat to continue if X% you the midpoint,

kind normalized have half the would the a you so And more of year growth second rates. of

certainly, like has well. And industrial clinical be of It rate, so been it's the very markets, curve. some year, or of And of ones pharma at throughout things big a continues across then course exiting to the and and the ahead the would strong. diagnostics this are seeing to markets other We're I really being our coming in CAM applied as little the expect business a and board. continue. The of healthy that applied some

So...

Operator

And you. session. Ahuja. this turn the the I back concludes question-and-answer over call to Mr.

Parmeet Ahuja

today. the Thanks, Rob, for everyone, thanks, and joining call

a we the sign off, rest I'd day wish Thanksgiving. week, Have Before like a to everyone. of happy everyone good and

Operator

conference concludes This call. today's

now disconnect. You may

Agilent (A) 25 Nov 242024 Q4 Earnings call transcript