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Introduction & Market Context
Waters Corporation (NYSE:WAT) presented its second-quarter 2025 earnings results on August 4, 2025, revealing strong financial performance and announcing a transformational acquisition. The company’s stock responded positively to the news, rising 2.99% in premarket trading to $299, following a previous close of $290.31.
The presentation highlighted Waters’ continued momentum across most geographic regions and emphasized the company’s execution of its innovation and growth strategy. Most significantly, Waters unveiled plans to acquire BD Biosciences & Diagnostic Solutions, positioning the company for what it describes as "transformational value creation."
Quarterly Performance Highlights
Waters reported Q2 2025 revenue of $771 million, representing 9% growth as reported and 8% growth in constant currency. Non-GAAP earnings per share reached $2.95, increasing 12% (11% in constant currency) compared to the same period last year.
The company’s performance was driven by 4% constant currency instrument growth, with high single-digit growth in liquid chromatography (LC) and mass spectrometry (MS). Recurring revenue, a key focus area for Waters, grew 11% in constant currency.
As shown in the following financial results summary:
Waters’ Q2 results build upon the momentum seen in Q1 2025, when the company reported revenue of $662 million and EPS of $2.25. The sequential improvement demonstrates the company’s ability to execute its growth strategy effectively.
Geographic and Segment Analysis
Waters’ performance varied significantly across geographic regions and business segments. The Waters Division led growth with a 10% increase in constant currency, while the TA Division declined by 6%.
From a geographic perspective, China and Asia ex-China regions both delivered impressive 14% growth in constant currency. Europe showed solid performance with 8% growth, while Americas lagged with just 2% growth, primarily due to a 20% decline in the TA Division in that region.
The following breakdown illustrates the geographic performance by division:
In terms of end markets, the pharmaceutical sector remained Waters’ largest revenue contributor, followed by industrial and academic & government segments. The academic & government segment showed notable strength with 9% growth in constant currency.
The revenue stratification across these segments is visualized in the following chart:
Strategic Initiatives Driving Growth
Waters attributed its strong performance to successful execution of its commercial strategy, innovation launches, and targeted growth initiatives. The company reported that its commercial execution key performance indicators are running ahead of targets in areas such as instrument replacement, service plan attachment, and eCommerce adoption.
Innovation launches have been particularly successful, with the Alliance iS system achieving three times the sales growth year-over-year in Q2 2025. Other product innovations, including the Xevo TQ Absolute+XR and MaxPeak Premier, saw sales growth of 40% and 32% respectively.
The company’s strategic focus on high-growth areas is also paying dividends, with GLP-1 therapeutics, PFAS testing, and generics all contributing to growth acceleration:
Transformational Acquisition of BD Biosciences
The most significant announcement in Waters’ presentation was the proposed acquisition of BD Biosciences & Diagnostic Solutions. The company positioned this as a transformational move that will create substantial value through both cost and revenue synergies.
Waters projects cost synergies of $200 million by year three post-acquisition, representing approximately 5% of the combined cost base. These savings will come from manufacturing and supply chain optimization ($80M), commercial and service efficiencies ($75M), and R&D and G&A consolidation ($45M).
On the revenue side, Waters expects to generate $290 million in additional sales by year five, translating to $145 million in adjusted EBITDA impact. The company anticipates the transaction will be EPS accretive in the first year.
The following chart details the expected synergies:
Waters highlighted that BD Biosciences & Diagnostic Solutions is expected to return to normalized growth, with a standalone CAGR of 5.5% from 2025-2030. With revenue synergies, the combined growth rate is projected to reach 7% CAGR over the same period:
The company specifically identified microbiology as a clear opportunity for value creation upside. Microbiology represents approximately two-thirds of the $1.8 billion BD Diagnostics Solutions business, with significant growth potential in mass spectrometry applications ($500 million market growing at high single digits) and sterility testing in pharmaceutical QA/QC ($300 million addressable market).
Forward-Looking Statements & Guidance
Waters provided updated guidance for both the full year and third quarter of 2025. For FY 2025, the company expects constant currency revenue growth of 5.5% to 7.5% compared to FY 2024, with a 0.5% negative impact from foreign exchange. This translates to reported growth of 5.0% to 7.0%.
Non-GAAP EPS for the full year is projected to be between $12.95 and $13.05, representing 11% growth in constant currency. For Q3 2025, Waters forecasts constant currency revenue growth of 5.0% to 7.0% and non-GAAP EPS of $3.15 to $3.25.
The detailed guidance is presented in the following slide:
This guidance reflects continued confidence in Waters’ growth trajectory, building on the company’s Q1 performance when it raised its full-year EPS guidance to expect 8-10% growth.
Conclusion
Waters’ Q2 2025 presentation paints a picture of a company executing well on its core business while simultaneously pursuing transformational growth through acquisition. The strong financial results across most regions and segments, coupled with the strategic acquisition of BD Biosciences & Diagnostic Solutions, position Waters for continued growth in the coming years.
Investors appear to be responding positively to both the quarterly performance and the acquisition announcement, as evidenced by the premarket stock movement. As Waters moves forward with the integration of BD Biosciences & Diagnostic Solutions, the market will be watching closely to see if the company can deliver on its projected synergies and growth targets.
Full presentation:
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