WATERS CORP DE
For the period ended Jun 28, 2025. Filed Aug 4, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2025 · Filed Aug 4, 2025
WAT$457.60+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-29; filed 2025-05-06.
0001193125-25-113274
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-28; filed 2025-08-04.
0001193125-25-172087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 22 current paragraphs.
5 unchanged; 4 reworded; 13 added; 57 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 37 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Acquisition of Halo Labs
Current report
On May 20, 2025, the Company completed the acquisition of all of the outstanding equity interests of Optofluidics, Inc., and its wholly owned operating subsidiary, Halo Labs LTD (collectively, “Halo Labs”), for $35 million, net of cash acquired. Halo Labs offers high throughput biopharmaceutical formulation, stability and product quality control tools for aggregate and subvisible particle analysis through the use of custom optics and image processing techniques. As a result of the acquisition, the results of Halo Labs are included in the Company’s consolidated financial statements from the acquisition date.
Current report
Acquisition of BD Biosciences & Diagnostic Solutions Businesses
Current report
On July 13, 2025, the Company entered into definitive agreements with BD, Augusta SpinCo Corporation, a Delaware corporation and wholly owned subsidiary of BD (“SpinCo”), and Beta Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Waters (“Merger Sub”), with respect to a Reverse Morris Trust transaction valued at approximately $17.5 billion as of the date of signing, and pursuant to which, subject to the terms and conditions of such definitive agreements, (i) BD will transfer (or cause to be transferred) and SpinCo will accept and assume (or cause to be accepted and assumed) all of the rights, titles and interests to and under certain assets and liabilities relating to BD’s Biosciences and Diagnostic Solutions business, (ii) BD will distribute to its shareholders all of the issued and outstanding shares of common stock, $0.01 par value per share, of SpinCo (“SpinCo Common Stock”) held by BD by way of a pro rata distribution (the“Spin-Off” and the disposition by BD of 100% of the SpinCo Common Stock by way of the Spin-Off, the “Distribution”) and (iii) following the Distribution, Merger Sub will be merged with and into SpinCo, with SpinCo as the surviving entity (the “Merger”), and all SpinCo Common Stock will be converted into the right to receive shares of common stock, $0.01 par value per share, of the Company (“Company Common Stock”), as calculated and subject to adjustment as set forth in the Merger Agreement (as defined herein). When the Merger is completed, SpinCo will become a wholly owned subsidiary of Waters. Upon completion of the Merger, BD’s shareholders are expected to own approximately 39.2% of the combined company, and existing Waters Corporation shareholders are expected to own approximately 60.8% of the combined company. This strategic combination is expected to create a leading global life sciences and diagnostics company with enhanced scale, complementary capabilities and expandedend-market exposure.
Current report
The definitive agreements entered into in connection with the transaction include (i) an Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 13, 2025, by and among Waters, BD, SpinCo and Merger Sub, and (ii) a Separation Agreement (the “Separation Agreement”), dated as of July 13, 2025, by and among Waters, BD and SpinCo. As set forth in the Merger Agreement, Waters, BD and SpinCo will also enter into several additional agreements in connection with the transaction.
Current report
Prior to, and as a condition of, the Distribution, SpinCo will make a cash payment to BD equal to $4.0 billion (the “SpinCo Cash Distribution”), subject to adjustment for cash, working capital and indebtedness of SpinCo and subject to decrease if additional shares of Company Common Stock will be issued to the Company’s shareholders. The SpinCo Cash Distribution is expected to be paid using proceeds from approximately $4.0 billion of new indebtedness to be incurred by SpinCo prior to the Distribution. The Company is expected to assume all indebtedness incurred by SpinCo in connection with the payment of the SpinCo Cash Distribution upon completion of the Merger. Based on information available through the date of this filing, if the transaction closes, the Company estimates it will incur transaction-related expenses and financing fees of approximately $120 million.
Current report
In order to preserve thetax-free nature of the Spin-Off under the Reverse Morris Trust framework, the exchange ratio for the merger consideration specified in the Merger Agreement (the “Exchange Ratio”) may be adjusted and increased, if necessary, on the terms and subject to the conditions set forth in the Merger Agreement. In the event that the Exchange Ratio is adjusted upwards, the Company may issue apre-closing cash dividend to the shareholders of the Company (the “Waters Special Dividend”) and/or the SpinCo Cash Distribution could be decreased to account for the value of the additional shares issued to the Company’s shareholders.
Current report
The transaction is expected to close around the end of the first quarter of calendar year 2026, subject to receipt of required regulatory approvals, shareholder approval from the Company’s shareholders and satisfaction of other customary closing conditions.
Current report
The Company’s net sales increased 9% in the second quarter of 2025, as compared to the second quarter of 2024, with foreign currency translation increasing total sales growth by 1%. For the first half of 2025, the Company’s net sales increased 7%, with the effect of foreign currency translation decreasing sales growth by less than 1% as compared to the first half of 2024. The net sales growth in the second quarter and first half of 2025 was driven by strong customer demand across most major geographies, end markets and products.
Current report
Recurring revenues (combined sales of precision chemistry consumables and services) increased 12% and 6% for the second quarter and first half of 2025, respectively, with foreign currency translation increasing sales growth by 1% for the second quarter of 2025 and decreasing sales growth by approximately 1% for the first half of 2025. Service revenues increased 9% and 5% for the second quarter and first half of 2025, respectively. Chemistry sales growth increased 17% and 10% for the second quarter and first half of 2025, respectively. The double-digit chemistry sales growth can be attributed to approximately $8 million of chemistry consumable sales in China, which the Company believes may reflect sales that were pulled-forward into the second quarter of 2025, prior to the implementation of new tariffs.
Current report
Operating income decreased less than 1% for the second quarter of 2025 primarily due to the impact of the higher sales volume being offset by the change in sales mix, merit increases and approximately $14 million of transaction costs associated with the Merger. In addition, operating income for the second quarter of 2025 included the impact of $5 million of expenses associated with the Company’s new ERP system implementation. The effect of foreign currency translation increased operating income by $2 million.
Current report
Operating income increased 5% for the first half of 2025, due to the impact of the higher sales volume and the absence of severance-related costs associated with a workforce reduction in China and certain litigation settlements incurred in 2024, being partially offset by merit increases and $14 million of transaction costs associated with the Merger. In addition, operating income for the first half of 2025 also includes the impact of $7 million of expenses associated with the Company’s new ERP system implementation. The effect of foreign currency translation decreased operating income by $6 million.
Current report
On May 22, 2025, the Company and certain of its subsidiaries, as guarantors, entered into an Amendment and Restatement Agreement in respect of that certain Amended and Restated Credit Agreement, dated as of September 17, 2021 and amended as of March 3, 2023, with the lenders and issuing banks party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the Company, among other things, reduced the aggregate total borrowing capacity of its existing senior unsecured revolving credit facility (the “Credit Facility”) by up to $200 million for an aggregate principal amount of up to $1.8 billion. The Credit Facility will mature on May 22, 2030 subject to the Company’s ability to request, subject to customary conditions, aone-year extension to which each lender may, in its discretion, agree.
Removed paragraphs (57)
Previous report
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
The Company’s net sales increased 4% in the first quarter of 2025, as compared to the first quarter of 2024, with foreign currency translation decreasing total sales growth by 3%. The first quarter sales growth was broad-based across most major regions, primarily driven by the increase in customer demand for our LC, MS and LC & MS instrument systems.
Previous report
Recurring revenues (combined sales of precision chemistry consumables and services) increased 1% in the first quarter of 2025, with foreign currency translation decreasing sales growth by 3%. In addition to this negative effect of foreign currency translation, recurring revenues were also negatively impacted by two fewer days in the first quarter of 2025 as compared to the first quarter of 2024, resulting in service revenue growth being flat and chemistry sales increasing 3% in the first quarter of 2025.
Previous report
Operating income was $152 million in the first quarter of 2025, an increase of 13% as compared to $134 million in the first quarter of 2024. The increase in operating income was primarily attributed to the higher sales volume in the first quarter of 2025 and the absence of $8 million of restructuring expense and $10 million of patent litigation expense incurred in the first quarter of 2024.
Previous report
Results of Operations
Previous report
Sales by Geography
Previous report
Geographic sales information is presented below for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
Previous report
Geographically, the Company’s sales increase in the first quarter of 2025 was broad-based across most major regions except for Europe, which decreased 1%. Foreign currency translation decreased Europe’s sales by 2%. Asia’s sales increased 6% in the quarter, led by India where sales grew 9%. Foreign currency translation decreased Asia’s sales growth by 6%, primarily driven by the Japanese yen.
Previous report
Sales by Trade Class
Previous report
Net sales by customer class are presented below for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
Previous report
During the first quarter of 2025, sales to pharmaceutical customers increased 5%, with all regions growing except for China, where sales to pharmaceutical customers declined 9%. Foreign currency translation decreased pharmaceutical sales growth by 3%. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, increased 4% in the first quarter of 2025, with foreign currency translation decreasing sales growth by 2%.
Previous report
Our combined sales to academic and government customers were flat in the first quarter of 2025, with foreign currency translation decreasing sales growth by 3%. Sales to our academic and government customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.
Previous report
Waters Products and Services Net Sales
Previous report
Net sales for Waters products and services were as follows for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
Previous report
Waters products and service sales increased 5% in the first quarter of 2025, with the effect of foreign currency translation decreasing sales growth by 3%. Waters instrument system sales increased 11% in the first quarter of 2025 due to stronger customer demand for our Acquity and Xevo TQ-S instrument systems. Waters service sales growth was flat in the first quarter of 2025 due to the negative impact from foreign currency translation which decreased service sales growth by 3% and the two fewer days in the first quarter of 2025 as compared to the first quarter of 2024.
Previous report
TA Product and Services Net Sales
Previous report
Net sales for TA products and services were as follows for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
Previous report
TA sales declined 1% in the first quarter of 2025 due to lower customer demand for TA products in most major regions except for Asia, where sales increased 15%. Foreign currency translation decreased TA sales growth by 1% in the quarter.
Previous report
Cost of Sales
Previous report
Cost of sales increased by 6% in the first quarter 2025, primarily due to higher sales volume and changes in the sales mix. Cost of sales is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms.
Previous report
Selling and Administrative Expenses
Previous report
Selling and administrative expenses were flat in the first quarter of 2025 compared to the first quarter of 2024. The effect of foreign currency translation decreased selling and administrative expenses by 2% in the first quarter of 2025.
Previous report
As a percentage of net sales, selling and administrative expenses were 26.4% and 27.4% for the first quarter of 2025 and 2024, respectively.
Previous report
Research and Development Expenses
Previous report
Research and development expenses increased 5% in the first quarter of 2025, primarily driven by merit compensation and costs associated with the development of new product and technology initiatives. The impact of foreign currency exchange did not have a significant impact in the first quarter of 2025.
Previous report
Litigation Provisions
Previous report
The Company recorded $10 million of patent litigation settlement provisions and related costs in the first quarter of 2024. No litigation provisions were recorded by the Company in the first quarter of 2025.
Previous report
Interest Expense, net
Previous report
Interest expense, net, decreased $11 million in the first quarter of 2025, which can be primarily attributed to the repayment of outstanding debt.
Previous report
Provision for Income Taxes
Previous report
The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17%, respectively, as of March 29, 2025. The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. The effect of applying the concessionary income tax rate rather than the statutory tax rate to income from qualifying activities in Singapore increased the Company’s net income by $0.5 million and $2 million and increased the Company’s net income per diluted share by $0.01 and $0.03 for the first quarter of 2025 and 2024, respectively.
Previous report
The Company’s effective tax rate for the first quarter of 2025 and 2024 was 15.1% and 11.0%, respectively. The income tax provision includes a $2 million and a $1 million income tax benefit related to stock-based compensation for the first quarter of 2025 and 2024, respectively. The remaining differences between the effective tax rates can primarily be attributed the impact of discrete tax benefits in the prior year and to differences in the proportionate amounts ofpre-tax income recognized in jurisdictions with different effective tax rates.
Previous report
Effective in 2024, various foreign jurisdictions began implementing aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. These changes in tax law did not have a material impact on the Company’s financial position, results of operations and cash flows for the first quarter of 2025. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.
Previous report
Liquidity and Capital Resources
Previous report
Condensed Consolidated Statements of Cash Flows (in thousands):
Previous report
Cash Flow from Operating Activities
Previous report
Net cash provided by operating activities was $260 million and $263 million during the first quarter of 2025 and 2024, respectively. The decrease in 2025 operating cash flow was primarily the result of higher net income being offset by higher accounts receivable due to an increase in sales volume and the higher annual incentive bonus payments in 2025 compared to 2024. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, aside from the changes in net income:
Previous report
Cash Flow from Investing Activities
Previous report
Net cash used in investing activities totaled $26 million and $30 million in the first quarter of 2025 and 2024, respectively. Additions to fixed assets and capitalized software were $26 million and $29 million in the first three months of 2025 and 2024, respectively.
Previous report
Cash Flow from Financing Activities
Showing the first 40 of 57 passages. Open the source sections for the rest.
Reworded paragraphs (4)
Previous wording
In 2025, the U.S. government issued varying levels of tariffs on all imported goods into the U.S. The effective date of these tariffs has been delayed until July 2025 for all countries except China, as the U.S. seeks to negotiate these tariffs with each of the respective countries. These tariffs, any resulting retaliatory tariffs and any related supply-chain disruptions could have a significant impact on the Company’s consolidated statement of operations and statement of cash flows. In response to the proposed tariffs (or, in the case of China, the tariffs as currently in effect), the Company is continuing to evaluate and implement a series of actions and policies that are intended to offset a portion of the impact of the tariffs on the Company’s financial position and results of operations. While the Company believes that these actions and policies will mitigate a substantial portion of the impact of the tariffs, the Company cannot provide any assurances that the tariffs or any resulting impediments to trade will not have a material effect on the Company’s consolidated statement of operations and statement of cash flows.
Current wording
In 2025, the U.S. government issued varying levels of tariffs on all imported goods into the U.S., including a baseline 10% tariff, subject to certain exceptions. The effective date of these tariffs has been delayed in certain cases, as the U.S. seeks to negotiate these tariffs with each of the respective countries. These tariffs, any resulting retaliatory tariffs and any related supply-chain disruptions could have a significant impact on the Company’s consolidated statement of operations and statement of cash flows. In response to currently applicable and potential future tariffs, the Company is continuing to evaluate and implement a series of actions and policies that are intended to offset a portion of the impact of the tariffs on the Company’s financial position and results of operations. While the Company believes that these actions and policies will mitigate a substantial portion of the impact of the tariffs, the Company cannot provide any assurances that the tariffs or any resulting impediments to trade will not have a material effect on the Company’s consolidated statement of operations and statement of cash flows.
Previous wording
The Company’s operating results are as follows for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands, except per share data):
Current wording
The Company’s operating results are as follows for the three and six months ended June 28, 2025 and June 29, 2024 (dollars in thousands, except per share data):
Previous wording
Instrument system sales increased 9% in the first quarter of 2025 primarily driven by broad-based higher customer demand in all regions of the world, except for Europe, where instrument sales declined 3%. Foreign currency translation decreased instrument system sales growth by 3% in the first quarter of 2025.
Current wording
Instrument system sales increased 5% and 7% for the second quarter and first half of 2025, respectively, primarily driven by broad-based higher customer demand for our instrument systems in most regions of the world. Foreign currency translation increased instrument system sales growth by 1% for the second quarter of 2025 and decreased instrument system sales growth by less than 1% for the first half of 2025.
Previous wording
The Company generated $260 million and $263 million of net cash from operating activities in the first three months of 2025 and 2024, respectively, with the slight decrease being attributable to the changes in the working capital balances. Net cash used in investing activities included capital expenditures related to property, plant, equipment and software capitalization of $26 million and $29 million in the first quarter of 2025 and 2024, respectively.
Current wording
The Company generated $301 million and $317 million of net cash from operating activities in the first half of 2025 and 2024, respectively. The first half of 2025 included an increase of $24 million more in tax payments associated with the final 2018 Tax Reform Transition payment as compared to the prior year. Net cash used in investing activities included capital expenditures related to property, plant, equipment and software capitalization of $48 million and $65 million in the first half of 2025 and 2024, respectively, as well as $35 million used for the Halo Labs acquisition in the second quarter of 2025.