Agilent Technologies, Inc.

Ladies and gentlemen, welcome to the Agilent Technologies Q4 2022 earnings conference call. My name is Beau, and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypad. I will now hand you over to your host, Parmeet Ahuja, Vice President of Investor Relations. Mr. Ahuja, please go ahead.

Thank you, Beau, and welcome everyone to Agilent's conference call for the fourth quarter of fiscal year 2022. With me are Mike McMullen, Agilent President and CEO, and Bob McMahon, Agilent Senior Vice President and CFO. Joining in the Q&A after Mike and Bob's comments will be Jacob Tyson, President of the Agilent Life Science and Applied Markets Group, Sam Raha, President of the Agilent Diagnostics and Genomics Group, and Poring McDonald, President of the Agilent Cross Lab Group. This presentation is being webcast live. The news release for our fourth quarter financial results, investor presentation, and information to supplement today's discussion, along with the recording of this webcast, are available on our website at www.investor.agilent.com. Today's comments by Mike and Bob will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year-over-year, and references to revenue growth are on a core basis. Core revenue growth excludes the impact of currency and any acquisitions and divestitures completed within the past 12 months. Guidance is based on exchange rates as of October 31st. As previously announced, beginning in the first quarter of fiscal 2022, we implemented certain changes to our segment reporting structure. We have recast our historical segment information to reflect these changes. These changes have no impact on our company's consolidated financial statements. Please note that we have changed the name of the chemical and energy end market to the chemicals and advanced materials end market. This change better reflects the mix of business in this market. It does not affect financial reporting in this quarter or prior quarters. We will also make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risks and other factors. And now, I'd like to turn the call over to Mike.

Thanks Parmeet, and thanks everyone for joining our call today. In the fourth quarter, the Agile team continued a strong performance. We delivered an excellent quarter, significantly exceeding our revenue and earnings expectations. Revenue of $1.85 billion is up more than 17% core. Our strong top line performance helped deliver fourth quarter operating margins of 29.1%. Operating margins continue to expand despite the inflationary environment and the strengthening dollar, and are up 260 basis points from last year. Earnings per share of $1.53 are up 26%. These Q4 results mark an outstanding finish to another strong year for Agile in fiscal 2022. With full-year revenue of $6.85 billion, we delivered core revenue growth of 12%. This is on top of core revenue growth of 15% in 2021. Our operating margins continue to increase and are 27.1% for the year, up 160 basis points. Earnings per share of $5.22 per share are up 20% for the year. Our exit results this year highlight the ongoing strength of our diversified business and shine a light on the multiple growth drivers we've put in place over the years. They also continue to demonstrate the outstanding execution capabilities of the Agilent team. Throughout the year, we navigated market uncertainties, inflation, COVID-related shutdowns, and supply chain and logistics constraints. Our strength is broad-based, with all three business groups growing double digits for the year. All major geographies and regions grew double digits in FY22 after adjusting from our exit from Russia. This was highlighted by China leading the way, growing 18%. From an end market perspective, all markets expanded, led by excellent growth in our two largest markets, pharma and chemical and advanced materials. All in all, it was an extremely good year for Agilent. Let's now take a closer look at our fourth quarter performance, starting with end market highlights. During Q4, our performance led by 20% plus growth in three of our six end markets. Pharma, our largest market, posted 20% growth on top of 21% in Q4 last year. The chemical and advanced materials business grew 27%. We saw robust demand in chemicals along with secular growth in semiconductors, batteries, and other advanced materials. The food market also grew 20% on strong end-of-year demand in China that had been previously delayed by COVID-related shutdowns. On a regional basis, China led the way for us with stellar 44% growth as demand remained strong. Business activity continued to recover, and the Agile team worked quickly and effectively to start working down the backlog, including delivering main shipments deferred due to the Shanghai COVID-related shutdown in Q2. Europe also exceeded expectations by delivering double-digit growth in the quarter, coming in 14% higher than a year ago with broad strength across our markets, highlighted by low 20s growth in pharma. Looking at our performance by business unit, the Life Science and Applied Markets Group continued its outstanding performance and posted revenue of $1.12 billion. This represents growth of 22%, with the instrument business growing 24%, and our consumers and suppliers business growing 15%. We also saw excellent low 30s growth in our LCMS instruments business, as our solutions continue to resonate with customers. LSEG was able to build our leadership-implied markets with spectroscopy growing in the low 20s and the GC and GC-MS business growing in the low 30s. In addition, Agilent is doing its part to help customers monitor and manage microplastics in the environment as we release the latest version of the 8700 LDIR chemical imaging system. This unique system has been optimized specifically for the analysis of microplastics and environmental samples. The Ashland Cross-Site Group posted revenue of $381 million in Q4. This is a 14% core with broad-based strength across our entire portfolio of offerings. Pharma and chemicals and advanced materials both grew mid-teens for ACG. On a regional basis, China led the way with high 20s growth as business continued to recover. ACG also delivered double-digit growth in Americas. ACG has delivered double-digit growth for us every quarter of this year, and our engagement with large enterprise customers continues to accelerate. Through its deep understanding and insights into lab operations, the ACG team continues to build strategic partnerships and long-term relationships that maximize customer value and provide ongoing demand for services and support. The Diagnostic and Genomics Group delivered revenue of $352 million, up 8% core. TGG's results were led by strong growth in the low 20s for NASD. As expected, our NASD business delivered high quarterly revenue on a sequential basis given the planned shutdown last quarter. Our genomics portfolio also posted solid results, growing low teens, and pathology grew mid-single digits. On a regional basis, DGJ also delivered mid-20s growth in China. In addition to these business group highlights, during Q4, Agile was recognized by the World Economic Forum Global Lighthouse Network as a world leader in advanced manufacturing. Agile's manufacturing facility in Singapore received its recognition for deploying innovative technologies at scale in the manufacture of scientific instruments driving productivity while advancing sustainability. Also, we are extremely pleased to announce a new multi-million dollar partnership with Delaware State University, a leading historically black university. The work we will do together at DSU is geared towards increasing the number of underrepresented students entering STEM fields. In addition, ASL is certified as a Great Place to Work by the Great Place to Work Institute in more than 20 countries and regions around the world during the quarter. This recognition distinguishes Agilent as a top employer based on an independent survey of its global workforce. Recap in 2022, we had another very successful year, not only on delivering excellent financial results, but building for the future. We continue to drive innovation, focus on supporting our customers and executing our build and buy strategy to outgrow the market. The Agilent team continues to deliver. We have built a resilient company with multiple drivers for growth and targeted investments focused on high growth areas. We have an unstoppable One Agilent team that can take on any challenge and execute at an extremely high level. As we look ahead to 2023, we believe these qualities are a winning formula for continuing to deliver in an increasingly uncertain economic environment. Bob will now share more detail on the quarter and the year, along with our initial view and expectations for fiscal year 2023. After his remarks, I will rejoin to add some final comments and perspective. Thank you for joining us today. And now, Bob, over to you.