Waters (NYSE:WAT) reported second-quarter 2026 revenue of $1.645 billion, driven by 9% organic constant-currency growth and a 4% increase in revenue from its acquired Biosciences and Diagnostic Solutions businesses. The company raised its full-year outlook for organic revenue, acquired-business revenue and adjusted earnings per share after results exceeded its prior guidance.
Adjusted earnings per share rose 3% to $3.05, at the high end of Waters’ guidance range. On a GAAP basis, the company recorded a diluted loss per share of $1.39, reflecting acquisition-related purchase accounting charges, including acquired-intangible amortization and inventory step-up expenses. Free cash flow was $202 million during the quarter, after severance and integration-cost payments.
Organic Business Growth Exceeds Guidance
The Analytical Sciences Division generated $669 million in revenue, up 7% as reported and 9% in constant currency. Instruments grew 8%, chemistry increased 10%, and service rose 9% on a constant-currency basis. Pharma revenue increased 11%, while non-pharma revenue rose 4%, including 11% growth in academic and government customers.
Batra said pharma demand was supported by capital spending from large pharmaceutical companies, contract organizations and generics customers, alongside demand tied to GLP-1 testing, India and biologics. During the question-and-answer session, he said GLP-1 testing-related revenue grew more than 40% in the quarter, with growth above 30% in the Americas, above 36% in Europe and nearly doubled revenue in India.
The Materials Science Division returned to growth, posting revenue of $87 million, up 6% as reported and 8% in constant currency. The company cited electronics testing for semiconductor and data-center applications as well as aerospace and defense testing demand.
Acquired Businesses Accelerate
The Biosciences and Diagnostic Solutions businesses acquired from Becton, Dickinson and Company generated $817 million in second-quarter revenue, up 4% from the comparable prior-year period and ahead of Waters’ guidance. Batra said the growth rate improved 400 basis points from flat growth in the prior quarter’s full-quarter comparison.
The Biosciences Division recorded $368 million in revenue, up 3%. Flow clinical revenue rose 8%, helped by commercial execution, pricing measures and improved market conditions. Flow research revenue declined 2%, although research-use-only reagents returned to growth during the quarter.
China remained a headwind for Biosciences, particularly in flow clinical, where China revenue declined 20% amid diagnostic-related group constraints and the lack of a localized product portfolio. Waters said it expects localized flow products to be available in China during the fourth quarter and plans to launch its FACSDiscover A7 cell analyzer on Sept. 15.
The Advanced Diagnostics Division produced $521 million in revenue, up 7%. Its Diagnostic Solutions business generated $449 million, rising 5%, while the company’s Clinical Business Unit generated $72 million, up 15% as reported and 14% in constant currency.
Within Diagnostic Solutions, microbiology revenue rose 4% to $319 million, supported by commercial execution and pricing actions. Molecular diagnostics and point-of-care revenue increased 9% to $129 million, driven by placements for HPV testing on the BD COR system. China microbiology revenue declined 13%, though management said the result was better than expected.
Waters said its BACTEC FXI blood culture system received FDA 510(k) clearance and is now available commercially in the United States, following initial placements in Japan and Europe. Batra said more than 12,000 older BACTEC systems are past due for replacement, including roughly 4,500 in the U.S.
Pricing, Cost Actions and Synergies
Management said its 180-day revitalization plan for the acquired businesses is focused on commercial accountability, pricing and contract compliance, and share recovery in flow research. The company achieved 90 basis points of net price realization in the acquired businesses during the second quarter, up from a historical 50 basis points, and is targeting 150 basis points of price contribution.
Waters also said it identified approximately 700 U.S. Diagnostic Solutions reagent-rental contracts that were out of compliance and has begun remediation efforts. Batra said the company has implemented regional “deal desks” designed to manage discounting and speed approvals.
The company completed its planned 2026 cost actions and now expects $75 million in cumulative savings this year. Management said the actions represent approximately $200 million of run-rate savings, ahead of its previous schedule. Chief Financial Officer Amol Chaubal said the company expects the cost actions to provide a $25 million adjusted operating-income benefit in the third quarter and a $50 million benefit in the fourth quarter.
Outlook Raised
Waters raised its full-year organic constant-currency revenue growth outlook to 7% to 9%. Foreign exchange is expected to be a roughly 60-basis-point headwind, resulting in projected organic reported revenue of $3.370 billion to $3.431 billion.
The company now expects the acquired businesses to produce approximately $3.045 billion of 2026 revenue, a $10 million increase from previous guidance. Total reported revenue is projected to be $6.415 billion to $6.476 billion, while adjusted EBIT margin is expected to remain 28.2%.
Full-year adjusted EPS is forecast at $14.45 to $14.65, representing 10% to 12% growth as reported and 12% to 14% growth in constant currency. For the third quarter, Waters expects total reported revenue of $1.745 billion to $1.762 billion and adjusted EPS of $3.95 to $4.05.
About Waters (NYSE:WAT)
Waters Corporation is a global provider of analytical instruments, software and services for laboratory and research applications. The company designs, manufactures and sells technologies centered on liquid chromatography, mass spectrometry, separation science, and related sample preparation and detection systems. Its product portfolio includes chromatographs, mass spectrometers, columns and consumables, laboratory informatics and workflow software, as well as technical support and training services that help customers run and interpret complex analyses.
Waters serves a wide range of end markets that include pharmaceutical and biotechnology companies, contract research and testing laboratories, academic and government research institutions, clinical diagnostics, food and environmental testing, and industrial and chemical manufacturers.
