Aug 4, 2026 earnings call — BD acquisition integration and growth momentum
Waters raised full year 2026 organic constant currency revenue growth guidance to 7% to 9%.
Revenue $1.6B (est $1.6B) · EPS $3.05 (est $3.01) · Next-quarter revenue outlook $1.7B–$1.8B
Key quotes
"We built outstanding momentum in our newly acquired businesses in their first full quarter under Waters' leadership, driving an acceleration to mid-single-digit growth as the controlled actions from a 180-day plan have quickly taken hold and are already reshaping their trajectory."
"It detects bloodstream infections up to 3 hours faster than competing systems, offers 2x to 3x the input capacity and provides customers with meaningful productivity advantages and labor cost savings."
"Together, these actions reflect $75 million in cumulative cost savings expected in 2026 supporting solid margin progression in the second half of the year."
Analyst Q&A 7
BD Life Sciences outlook and EPS details
Q (Vijay Kumar · Evercore): How should we think about BD Life Sciences medium-term growth after five months of ownership? Also, the EPS guide rose only $0.05—does that just carry the Q2 beat forward and did you assume any tariff refunds?
A: Management said execution in the acquired BD businesses is very strong with new products and pricing actions driving momentum. They expect to exit the year with 6% or better growth for the two businesses and noted launches like FACSDiscover A7 on September 15 and FXI with 510(k) approval and about 4,500 U.S. instruments waiting replacement. On EPS, they said the $0.05 full-year raise reflects about $0.30 of EPS from organic sales and cost actions offset by about $0.25 from a stronger U.S. dollar, and any tariff refunds would be net neutral after adjusting customer surcharges.
"So you put it all together, we expect to exit the year with 6% or better growth rate for the 2 businesses." — Udit Batra (CEO)
Pricing impact and reshoring plans
Q (Elizabeth Koslosky · Goldman Sachs): How much of the acquired-business guidance raise is from pricing and how fast can pricing reach 150 basis points? Also, is reshoring incremental growth or just geography shifts and when will it flow through?
A: They said pricing in Q2 was 0.9% versus the traditional 0.5% and they are increasing pricing to 0.9% for the remainder of the year, with the goal to get to 150 basis points as quickly as possible. On reshoring, management called it incremental in the short-to-medium term (2027 to 2030), said they have visibility on around 37 customers that have broken ground and that roughly 70% of those are Waters accounts, but they would not quantify the benefit yet.
"So Q2, Evie, we did 0.9% versus the traditional 0.5%." — Amol Chaubal (CFO)
Flow cytometry recovery and margin mix
Q (Tycho Peterson · Jefferies): For flow cytometry research, how much pressure is from U.S. academic/biotech weakness versus other factors and what initiatives will turn research around? Also, how much of the BD raise is bioscience versus micro/molecular, and how should we think about margins going into '27?
A: They said flow reagent sales grew low single digits but the headwinds are largely on the instrument side, with most of that coming from China; the U.S. saw instrument growth and they will localize the flow portfolio starting Q4 with leadership changes in China. The BD revenue raise is about $25 million offset by a $15 million strong-dollar drag for a net $10 million, spread relatively evenly between Flow and Diagnostic Solutions and within Diagnostic Solutions between molecular and micro, and the $20 million of additional cost actions improved margin by 30 basis points but currency removed that benefit leaving margin at 28.2% with a 100 basis point per year outlook.
"The headwinds are largely based on the instrument side." — Udit Batra (CEO)
Discount controls and China microbiology
Q (Subhalaxmi Nambi · Guggenheim): Where are you in changing how BD manages discounting and could tighter approval slow responsiveness versus competitors? Also, latest view on China microbiology growth and how you will hold your outlook amid reform?
A: They implemented a deal desk playbook (now across divisions) that reduces bureaucracy, clarifies escalation, and they said approvals are faster not slower; the deal desk helped lift pricing from historical 50 basis points to 90 basis points in Q2 and they are on the path to 150 basis points. On China microbiology, performance was better than their prior models (declined low teens versus the 30% modeled), they have localized the FX portfolio for China available in Q4 and made leadership and execution changes, and they feel good about the China outlook.
"We've implemented this playbook on the legacy Waters side, where we set up a deal desk." — Udit Batra (CEO)
GLP-1 testing and BD initiative durability
Q (Puneet Souda · Leerink): How much did GLP-1 testing contribute this quarter and how should we expect its trajectory? Also, which BD initiatives are permanent versus one-time and how should we think about the 2027 run rate?
A: GLP-1 testing grew over 40% this quarter with broad-based strength across Americas (over 30%), Europe (over 36%), and India (almost doubling); the pipeline and instrument and chemistry funnels look healthy. They said GLP-1s contributed about 30 basis points of the idiosyncratic drivers, and the BD initiatives are systemic—commercial execution, pricing and reagent compliance (already 90 basis points and targeting 150), and China portfolio localization—which should be durable; they also noted $50 million of cross-selling revenue synergies for this year as part of broader revenue synergy opportunities.
"GLP-1 testing part of the business grew over 40% this quarter." — Udit Batra (CEO)
Cost synergy phasing and seasonality
Q (Jack Meehan · Operon): Is the $50 million in Q4 a good starting point for 2027 cost synergies and how should we think about next steps? Also, will the acquired businesses keep their historical seasonality under Waters?
A: They said the $50 million in Q4 is largely in hand because those cost actions have already been taken and that brings them to a $200 million run rate, while additional opportunities like network consolidation and inventory management remain under review. They also noted $200 million equals about 4% of the cost base versus a 7.5% benchmark so more actions exist but it's too early to add them into 2027, and seasonality should be generally consistent with how the businesses performed the last 2 or 3 years though transformation could normalize some patterns.
"So the $50 million in Q4 is largely in hand because we've already taken these cost actions." — Amol Chaubal (CFO)
BD growth math and FXI replacement opportunity
Q (Dan Leonard · RBC): Can you reconcile the exit >6% growth message with a negative 10% comp in Q4 and the Q3/Q4 guide math? And what early insights do you have on the diagnostics FXI replacement opportunity versus Alliance iS?
A: They said part of the math is fiscal-year timing: there was about $20 million of trade inventory build in Q3 that unwound in Q4, creating roughly a 3% headwind in Q3 and a 3% tailwind in Q4, and they don't plan to repeat that. They also said the business is accelerating in the second half, quarterization in newly acquired businesses is hard to predict, and on FXI the replacement market is 12,000 instruments ripe for replacement (4,500 in the U.S.), FXI uptake has been excellent, and the reagent rental model gives advantages for addressing delinquent accounts and creating recurring revenue over a multiyear replacement cycle.
"there was about $20 million of trade inventory build in Q3 that unwound in Q4." — Amol Chaubal (CFO)