Waters Corporation delivered a solid first quarter in 2025, with management pointing to strong double-digit growth in analytical instrument sales—particularly in liquid chromatography and mass spectrometry—as a primary driver. CEO Udit Batra credited robust demand from pharmaceutical and industrial customers, as well as momentum in emerging high-volume testing areas like PFAS and GLP-1, for the company's performance. Management also highlighted the effectiveness of commercial execution and ongoing innovation in supporting broad-based growth across regions and end markets.
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Waters Corporation (WAT) Q1 CY2025 Highlights:
- Revenue: $661.7 million vs analyst estimates of $654.1 million (3.9% year-on-year growth, 1.2% beat)
- Adjusted EPS: $2.25 vs analyst estimates of $2.22 (1.3% beat)
- Adjusted EBITDA: $218.3 million vs analyst estimates of $205.8 million (33% margin, 6.1% beat)
- Revenue Guidance for Q2 CY2025 is $751 million at the midpoint, above analyst estimates of $737.2 million
- Management slightly raised its full-year Adjusted EPS guidance to $12.90 at the midpoint
- Operating Margin: 22.9%, up from 21% in the same quarter last year
- Organic Revenue rose 6.7% year on year (-9.3% in the same quarter last year)
- Market Capitalization: $20.83 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Waters Corporation’s Q1 Earnings Call
- Jack Meehan (Nephron): Asked about the dynamics of the instrument replacement cycle within pharma and whether tariffs have influenced customer purchasing behavior. CEO Udit Batra replied there was no evidence of order pull-forward related to tariffs, and large pharma, generics, and CDMOs all showed double-digit growth.
- Tycho Peterson (Jefferies): Probed Waters’ ability to sustain price increases and whether pharma customers are pushing back. CFO Amol Chaubal said the company achieved 200 basis points of like-for-like pricing gains and noted high customer acceptance of selective tariff surcharges.
- Catherine Schulte (Baird): Inquired about expectations for China and the impact of stimulus. Batra responded that while Q1 growth was strong, guidance assumes stable, low single-digit growth in China going forward, with any further stimulus considered upside.
- Brandon Couillard (Wells Fargo): Sought clarification on the sustainability of PFAS testing growth and whether recent acceleration was due to timing. Batra emphasized robust, multi-year growth trends and continued regulatory momentum driving demand.
- Daniel Brennan (TD Cowen): Asked whether pharma customers are accelerating orders due to tariff concerns and about demand trends outside QA/QC. Batra reiterated there is no evidence of pull-forward, with replacement cycles and downstream applications remaining the primary growth drivers.
Catalysts in Upcoming Quarters
As we look to future quarters, the StockStory team will monitor (1) ongoing momentum in instrument replacement and new product adoption, (2) the effectiveness of pricing strategies and supply chain adjustments in offsetting tariff-related cost pressures, and (3) the pace of regulatory-driven testing expansion in areas like PFAS and GLP-1. We will also watch for any material changes in academic and government funding that could impact demand.
Waters Corporation currently trades at $354.91, up from $348.70 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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