WATERS CORP /DE/

Previous wording

The Company has four operating segments: Analytical Sciences, Biosciences, Advanced Diagnostics, and Materials Sciences. Analytical Sciences products and services primarily consist of high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLCTM” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”), light scattering and field-flow fractionation instruments (Wyatt), and precision chemistry consumable products and related services. Materials Sciences products and services primarily consist of thermal analysis, rheometry and calorimetry instrument systems and service revenue. Biosciences products and services primarily consist of instruments, software and informatics, reagents, and single cell multiomics solutions, supporting the advanced analysis of cell populations for use in fields such as immunology, oncology, and infectious disease research. Advanced Diagnostics products and services primarily consist of a broad range of diagnostic instrumentation, assays, consumables, automation, and informatics that support the detection, identification and drug susceptibility testing of infectious disease organisms.

Current wording

The Company has four operating segments: Analytical Sciences, Biosciences, Advanced Diagnostics, and Materials Sciences. Analytical Sciences products and services primarily consist of high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”), light scattering and field-flow fractionation instruments (Wyatt), and precision chemistry consumable products and related services. Materials Sciences products and services primarily consist of thermal analysis, rheometry and calorimetry instrument systems and service revenue. Biosciences products and services primarily consist of instruments, software and informatics, reagents, and single cell multiomics solutions, supporting the advanced analysis of cell populations for use in fields such as immunology, oncology, and infectious disease research. Advanced Diagnostics products and services primarily consist of a broad range of diagnostic instrumentation, assays, consumables, automation, and informatics that support the detection, identification and drug susceptibility testing of infectious disease organisms.

Previous wording

Acquisition of BD Biosciences & Diagnostic Solutions Businesses

Current wording

Acquisition of BD Biosciences and Diagnostic Solutions Businesses

Previous 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, which have also prompted retaliatory tariffs by a number of countries, including tariffs and export restrictions on certain manufacturing components imposed by China and tariffs pursuant to trade agreements the U.S. has entered into with certain countries. In addition, a number of new tariffs have been threatened, and the U.S. and other countries continue to negotiate trade arrangements and tariff levels. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. This decision introduces uncertainty regarding potential refund processes and future trade policy actions and could affect the Company’s cost structure and supply chain planning. As a result of this ruling, the Company may be eligible for a refund of tariffs previously paid on imported goods. As the recoverability and timing of any such refund remains uncertain, the Company has not recognized any material amounts as of April 4, 2026. The Company continues to monitor developments around the Supreme Court’s decision and evaluate its potential impact on the Company’s future financial results and business.

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, which have also prompted retaliatory tariffs by a number of countries, including tariffs and export restrictions on certain manufacturing components imposed by China and tariffs pursuant to trade agreements the U.S. has entered into with certain countries. In addition, a number of new tariffs have been threatened, and the U.S. and other countries continue to negotiate trade arrangements and tariff levels. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). On March 4, 2026, the U.S. Court of International Trade ordered the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, and the CBP has begun accepting and processing applications for refunds on certain IEEPA tariffs. This decision introduces uncertainty regarding potential refund processes and future trade policy actions and could affect the Company’s cost structure and supply chain planning. As a result of this ruling, the Company may be eligible for a refund of tariffs previously paid on imported goods. As the recoverability and timing of any such refund remains uncertain, the Company has not recognized any material amounts as of July 4, 2026. In response to the U.S. Supreme Court ruling mentioned above, the U.S. government implemented new tariffs under alternative statutory authority. The Company continues to monitor developments around the Supreme Court’s decision and evaluate its potential impact on the Company’s future financial results and business.

Previous wording

The Company’s operating results are as follows for the three months ended April 4, 2026 and March 29, 2025 (dollars in millions, except per share data):

Current wording

The Company’s operating results are as follows for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions, except per share data):

Previous wording

Due to the acquisition of the BDS Business on February 9, 2026, period over period comparability of the Company’s financial results has been materially impacted. In addition, the Company’s first quarter 2026 results include the BDS Business’s financial results only from the Closing Date through the end of the period, further affecting comparability with prior periods and in the future.

Current wording

Due to the acquisition of the BDS Business on February 9, 2026, period over period comparability of the Company’s financial results has been materially impacted. In addition, the Company’s 2026 results include the BDS Business’s financial results only from the Closing Date through the end of the period, further affecting comparability with prior periods and in the future.

Previous wording

The Company’s revenue increased 91% in the first quarter of 2026, as compared to the first quarter of 2025, primarily driven by $520 million of revenue contributed by the BDS Business since the Closing Date. Excluding the BDS Business revenue, legacy revenue increased 13%, primarily due to broad-based growth across all product lines and geographical regions. Foreign currency translation increased total revenue growth by 2%. In addition, the first quarter of 2026 had six more calendar days compared to the first quarter of 2025.

Current wording

The Company’s revenue increased 113% in the second quarter of 2026, as compared to the second quarter of 2025 and 103% for the first half of 2026 as compared to the first half of 2025, primarily driven by $817 million and $1.3 billion of revenue contributed by the BDS Business for the second quarter and since the Closing Date for the first half of 2026, respectively. Excluding the BDS Business revenue, legacy revenue increased 7% and 10% in the second quarter and first half of 2026, respectively, primarily due to broad-based growth across all product lines and geographical regions. Foreign currency translation decreased total revenue growth by 2% for the second quarter of 2026 and had a minimal impact on total revenue growth for the first half of 2026. In addition, the first half of 2026 had six more calendar days compared to the first half of 2025.

Previous wording

The cost of sales in the first quarter of 2026 increased 145% as compared to the first quarter of 2025. This increase is primarily attributed to the $361 million of cost of sales from the BDS Business since the Closing Date as well as the increase in legacy business sales volume. In the first quarter of 2026, cost of sales included $99 million of fair value inventory and fixed asset step-up expense recognized as a result of the BDS Business Acquisition.

Current wording

The cost of revenue in the second quarter and first half of 2026 increased 184% and 166%, respectively, as compared to 2025. This increase is primarily attributed to the $560 million for the second quarter and $921 million for the first half of 2026 of cost of revenue from the BDS Business since the Closing Date as well as the increase in legacy business sales volume. The cost of revenue in the second quarter and first half of 2026 included $154 million and $253 million, respectively, of fair value inventory and fixed asset step-up expense recognized as a result of the BDS Business Acquisition.

Previous wording

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. At current foreign currency exchange rates, the Company expects foreign currency translation to be neutral to gross profit during 2026.

Current wording

Cost of revenue 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. At current foreign currency exchange rates, the Company expects foreign currency translation to be neutral to gross profit during 2026.

Previous wording

Selling and administrative expenses increased 121% in the first quarter of 2026 as compared to the first quarter of 2025. The BDS Business increased selling and administrative expenses by $99 million in the first quarter of 2026 since the Closing Date. The remaining increase in selling and administrative expenses is primarily due to an increase in costs associated with merit compensation for the Company’s employees as well as $82 million of transaction, integration and other internal costs associated with the BDS Business.

Current wording

Selling and administrative expenses increased 105% and 111% in the second quarter and first half of 2026, respectively, as compared to 2025. The BDS Business increased selling and administrative expenses by $125 million and $224 million in the second quarter and first half of 2026, respectively, since the Closing Date. The remaining increase in selling and administrative expenses is primarily due to an increase in costs associated with merit compensation for the Company’s employees as well as $37 million and $119 million of transaction, integration and other internal costs associated with the BDS Business in the second quarter and first half of 2026, respectively.

Previous wording

Research and development expenses increased 104% in the first quarter of 2026 as compared to the first quarter of 2025. The BDS Business increased research and development expenses by $42 million in the first quarter of 2026 since the Closing Date. The remaining increase in research and development expenses can be attributed to increases from costs associated with merit compensation to the Company’s employees and costs associated with new products and the development of new technology initiatives. In the first quarter of 2026, research and development expenses included $1 million of transaction, integration and other internal costs associated with the BDS Business.

Current wording

Research and development expenses increased 149% and 129% in the second quarter and first half of 2026, respectively, as compared to 2025. The BDS Business increased research and development expenses by $66 million and $108 million in the second quarter and first half of 2026, respectively, since the Closing Date. The remaining increase in research and development expenses can be attributed to increases from costs associated with merit compensation to the Company’s employees and costs associated with new products and the development of new technology initiatives. In the second quarter and first half of 2026, research and development expenses included $1 million and $2 million, respectively, of transaction, integration and other internal costs associated with the BDS Business.

Previous wording

Purchased intangibles amortization increased $140 million in the first quarter of 2026 as compared to first quarter of 2025 due to the BDS Business Acquisition.

Current wording

Purchased intangibles amortization increased $232 million and $372 million in the second quarter and first half of 2026, respectively, as compared to 2025 due to the BDS Business Acquisition.

Previous wording

Operating loss was $47 million in the first quarter of 2026, a decrease of $198 million as compared to $151 million of operating income in the first quarter of 2025. The decrease was primarily due to the impact of the higher sales volume from the legacy business and the BDS Business revenue since the Closing Date, being offset by $99 million of acquisition-related inventory and fixed asset fair value step-up expense and $140 million of purchased intangibles amortization related to the BDS Business. In addition, the first quarter of 2026 operating loss was impacted by $83 million of transaction, integration and other internal costs associated with the BDS Business Acquisition and the $9 million of expenses associated with the Company’s new ERP system implementation.

Current wording

Operating loss was $86 million and $134 million for the second quarter and first half of 2026, respectively, a decrease of $274 million and $474 million as compared to $188 million and $340 million of operating income in the second quarter and first half of 2025, respectively. These decreases were primarily due to the impact of the higher sales volume from the legacy business and the BDS Business revenue since the Closing Date, being offset by $253 million of acquisition-related inventory and fixed asset fair value step-up expense in the first half of 2026 and $232 million and $372 million of purchased intangibles amortization related to the BDS Business in the second quarter and first half of 2026, respectively. In addition, the second quarter and first half of 2026 operating losses were impacted by $39 million and $121 million, respectively, of transaction, integration and other internal costs associated with the BDS Business Acquisition, $49 million and $52 million, respectively, of severance-related costs associated with a workforce reduction and $9 million and $18 million, respectively, of expenses associated with the Company’s new ERP system implementation.

Previous wording

Interest expense, net, increased $32 million in the first quarter of 2026, which can be primarily attributed to the financing costs incurred by the Company related to the funding of the BDS Business Acquisition.

Current wording

In the second quarter and first half of 2026, the Company’s interest expense increased $45 million and $80 million, respectively, which can be primarily attributed to the financing costs incurred by the Company related to the funding of the BDS Business Acquisition.

Previous wording

The Company’s effective tax rate for the three months ended April 4, 2026 and March 29, 2025 was 18.4% and 15.1%, respectively. The change between the effective tax rates can primarily be attributed to the impact of discrete tax benefits, primarily transaction costs, in the current period and differences in the proportionate amounts ofpre-tax income, due to the BDS Business Acquisition, recognized in jurisdictions with different effective tax rates.

Current wording

The Company’s effective tax rates for the second quarter and first half of 2026 were 3.5% and 9.2%, respectively, compared to 17.2% and 16.2% for the second quarter and first half of 2025, respectively. The change between the effective tax rates can primarily be attributed to the impact of discrete tax benefits, primarily transaction and restructuring costs, in the current period and differences in the proportionate amounts ofpre-tax income, due to the BDS Business Acquisition, recognized in jurisdictions with different effective tax rates.

Previous wording

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 three months ended April 4, 2026. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.

Current wording

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 half of 2026. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.

Previous wording

The decline in the net loss per diluted common share to $0.87 in the first quarter of 2026 as compared to the $2.03 of net income per diluted common share in the first quarter of 2025 is attributed to the following BDS Business Acquisition-related items: purchase accounting fair value step-up expense, increases in purchased intangibles amortization expense, increase in interest expense, and various transaction, integration, and other internal costs.

Current wording

The decline in the net loss per diluted common share to $1.39 and $2.31 in the second quarter and first half of 2026, respectively, as compared to the $2.47 and $4.50 of net income per diluted common share in the second quarter and first half of 2025, respectively, is attributed to the following BDS Business Acquisition-related items: purchase accounting fair value step-up expense, increases in purchased intangibles amortization expense, restructuring charges, increase in interest expense, and various transaction, integration and other internal costs.

Previous wording

Net cash used in operating activities was $3 million as compared to net cash provided by operating activities of $260 million in the first three months of 2026 and 2025, respectively. The decline is primarily attributable to the net $140 million receivable due from BD, relating to net cash settlement for activity since the Closing Date, and $88 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition.

Current wording

Net cash provided by operating activities was $198 million, compared to net cash provided by operating activities of $301 million in the first half of 2026 and 2025, respectively. The decline is primarily attributable to the net $157 million receivable due from BD, relating to net cash settlement for activity since the Closing Date, and $105 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition.

Previous wording

Net cash provided by investing activities included capital expenditures related to property, plant, equipment and software capitalization of $39 million in the first quarter of 2026 as compared to the $26 net cash used in investing activities in the first quarter of 2025. The 2026 investing activities were impacted by the $144 million of cash acquired from the BDS Business Acquisition.

Current wording

Net cash provided by (used in) investing activities included capital expenditures related to property, plant, equipment and software capitalization of $87 million in the first half of 2026 as compared to the $48 million of net cash used in investing activities in the first half of 2025. The 2026 investing activities were impacted by the $144 million of cash acquired from the BDS Business Acquisition.