Waters Corporation

Welcome to the Waters Corporation second quarter 2025 financial results conference call. All participants will be in listen-only mode until the question and answer session begins. This call is being recorded. If anyone has objections, please disconnect at this time. It is now my pleasure to turn the call over to Mr. Caspar Tudor, head of investor relations. Please go ahead, sir.

Thank you, Leila, and good morning, everyone. Welcome to Waters Corporation's second quarter earnings call. Joining me today are Dr. Udit Batra, our President and Chief Executive Officer, and Amol Charbul, our Senior Vice President and Chief Financial Officer. Before we begin, I will cover the cautionary language. In this conference call, we will make forward-looking statements regarding future events or future financial performance of the company. We will provide guidance regarding possible future results as well as commentary on potential market and business conditions that may impact Waters Corporation during 2025 and beyond. Additionally, we'll comment on the expected timing for completion of Waters' pending combination with the Biosciences and Diagnostic Solutions business of Becton Dickinson and Company, as well as the expected financial and operational impact of this combination on Waters. These statements are only our present expectations, are based on information available to us as of today, as well as forecasts and assumptions of waters management, and are subject to risks and uncertainties, many of which are outside waters control. Actual events or results may differ materially from the statements made on today's call. Please see the risk factors included within our Form 10-K, our Form 10-Qs, our other SEC filings, and the cautionary language included in this morning's earnings release. During today's call, we'll refer to certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are attached to our earnings release and in the appendix of the slide presentation accompanying today's call. Both are available on the investor relations section of our website. Unless stated otherwise, references to quarterly results increasing or decreasing are in comparison to the second quarter of fiscal year 2024. In addition, unless stated otherwise, all year-over-year revenue growth rates and ranges given on today's call are on a comparable constant currency basis. Finally, we do not intend to update our guidance, predictions, or projections, except as part of a regularly scheduled earnings release or as otherwise required by law. On today's call, Udit will begin by covering our key messages for the quarter. Amal will then take you through our results and updated guidance in more detail. After that, Udit will then share facts on key topics related to our pending combination with the BD Biosciences and Diagnostic Solutions business. Then, we'll open the phone line up for questions. With that, I would now like to turn the call over to Udit.

Thank you, Kasper, and good morning, everyone. We're pleased to report another strong quarter with sales again above the high end of our guidance. This performance reflects strong execution, revitalized innovation, and our successful expansion into higher growth areas. Three strategic pillars we set in motion five years ago and continue to deliver with strength and resilience. Sales grew 9% as reported and 8% in constant currency. Instruments grew mid-single digits, led by high single-digit growth in our LC and mass spec portfolio. Recurring revenue grew 11%, driven by 9% service growth and double-digit chemistry growth. Non-GAAP earnings per share were $2.95, up 12% year-on-year and above the midpoint of our guidance. GAAP EPS was $2.47. Sales growth was led by Waters Division, which grew in the high single digits or better across Americas, Europe, and Asia. In the Americas, this growth was partially offset by weakness in the TA division in macro-sensitive polymer and materials testing applications. By end market, pharma grew low double digits, led by strong instrument replacement activity and new product adoption, particularly among large pharma and CDMO customers. In our non-pharma segments, industrial grew 6%, and academic and government performed better than expected, declining low single digits. Within recurring revenue, chemistry benefited from approximately 8 million of sales pulled forward in the second quarter related to tariff dynamics. Excluding this, our overall constant currency growth rate was 7%, with chemistry up 10%. These results reflect solid progress against our strategy, which has remained anchored in three core principles. First, commercial execution. We have driven consistently strong commercial execution across our organization in a highly systematized KPI-oriented approach. So far in 2025, each of our key initiatives is ahead of expectations towards our 2030 targets. In the first half of 2025, service plan attachment has risen 200 basis points to 52%, which already more than doubles our 100 basis point expansion objective for the year. E-commerce adoption continues to advance and is now comfortably above 40% of our chemistry revenue. We have also increased our CDMO penetration with contract organizations now at 27% of our pharma revenue. Second, revitalizing our innovation. Our recent product launches continue to gain strong traction. Alliance IS sales grew 300% year over year in the quarter, while Zivo TQ Absolute platforms grew 40% and continue to lead the market with exceptional robustness and sensitivity. Customer response to the Zivo TQ Absolute XR has been outstanding with Q2 orders more than double our expectations. Its robustness was recently demonstrated by one of our leading customers who was able to complete over 30,000 uninterrupted plasma injections. Maxpeak premier columns, which represent high performance chemistry for complex separations, again grew north of 30% in Q2. We recently launched our BioResolve Protein A affinity columns, marking the first set of affinity columns we have brought to market in bioseparations. Additionally, we've put light scattering on Empower ahead of Target and customer sales are already coming in. Third, capturing long-term growth accretion vectors in our core business and moving into high growth adjacencies. Our idiosyncratic growth drivers have meaningfully outpaced our targets. In the first half of 2025, GLP testing revenue grew 70% year over year. PFAS testing revenue grew over 50% year-over-year, and India revenues grew in the high teens. We also delivered 200 basis points of price contribution both in the quarter and for the first half of the year. We're proud of Water's progress and are continuing to see robust momentum in our business. With that in mind, we're raising our full-year 2025 constant currency sales growth guidance to 5.5% to 7.5%, and raising our full year 2025 non-GAAP EPS guidance to $12.95 to $13.05. I will now turn the call over to Amol to cover our financial results in more detail and provide further details on our guidance.