WATERS CORP /DE/

Previous 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):

Current wording

The Company’s operating results are as follows for the three and nine months ended October 3, 2026 and September 27, 2025 (dollars in millions, except per share data):

Previous 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.

Current wording

The Company’s revenue increased 121% in the third quarter of 2026, as compared to the third quarter of 2025 and 110% for the first nine months of 2026 as compared to the first nine months of 2025, primarily driven by $896 million and $2.2 billion of revenue contributed by the BDS Business for the third quarter and since the Closing Date for the first nine months of 2026, respectively. Excluding the BDS Business revenue, legacy revenue increased 9% and 10% in the third quarter and first nine months of 2026, respectively, primarily due to broad-based growth across all product lines and geographical regions. Foreign currency translation decreased total revenue growth by 1% for the third quarter of 2026 and had a minimal impact on total revenue growth for the first nine months of 2026. In addition, the first nine months of 2026 had six more calendar days compared to the first nine months of 2025.

Previous 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.

Current wording

The cost of revenue in the third quarter and first nine months of 2026 increased 168% and 167%, respectively, as compared to 2025. This increase is primarily attributed to the $518 million for the third quarter and $1.4 billion for the first nine months 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 third quarter and first nine months of 2026 included $80 million and $333 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 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.

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.

Previous 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.

Current wording

Selling and administrative expenses increased 86% and 103% in the third quarter and first nine months of 2026, respectively, as compared to 2025. The BDS Business increased selling and administrative expenses by $150 million and $375 million in the third quarter and first nine months 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 $35 million and $155 million of transaction, integration and other internal costs associated with the BDS Business in the third quarter and first nine months of 2026, respectively.

Previous 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.

Current wording

Research and development expenses increased 96% and 117% in the third quarter and first nine months of 2026, respectively, as compared to 2025. The BDS Business increased research and development expenses by $46 million and $154 million in the third quarter and first nine months 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.

Previous 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.

Current wording

Purchased intangibles amortization increased $232 million and $604 million in the third quarter and first nine months of 2026, respectively, as compared to 2025 due to the BDS Business Acquisition.

Previous wording

In the second quarter and first half of 2026, the Company implemented a reduction in workforce that impacted approximately 3% of the Company’s employees. As a result, the Company incurred approximately $49 million and $52 million of severance-related costs for the second quarter and first half of 2026, respectively. During these periods, the Company paid $21 million and $23 million of severance-related costs in connection with the workforce reduction for the second quarter and first half of 2026, respectively. The accrued restructuring expense was approximately $29 million at July 4, 2026. This reduction in workforce will provide the Company with annual salary-related cost savings of approximately $120 million. The salary related cost savings achieved through the end of the second quarter 2026 was $14 million with the cost savings estimated to be approximately $67 million in 2026.

Current wording

In the second quarter of 2026, the Company implemented a reduction in workforce that impacted approximately 3% of the Company’s employees. As a result, the Company incurred approximately $12 million and $64 million of severance-related costs for the third quarter and first nine months of 2026, respectively. During these periods, the Company paid $23 million and $46 million of severance-related costs in connection with the workforce reduction for the third quarter and first nine months of 2026, respectively. The accrued restructuring expense was approximately $18 million at October 3, 2026. This reduction in workforce will provide the Company with annual salary-related cost savings of approximately $120 million. The salary related cost savings achieved through the end of the third quarter of 2026 was $39 million with the cost savings estimated to be approximately $67 million in 2026.

Previous 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.

Current wording

Operating income was $128 million and operating loss was $6 million for the third quarter and first nine months of 2026, respectively, a decrease of $64 million and $538 million as compared to $192 million and $532 million of operating income in the third quarter and first nine months 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 $333 million of acquisition-related inventory and fixed asset fair value step-up expense in the first nine months of 2026 and $232 million and $604 million of purchased intangibles amortization related to the BDS Business in the third quarter and first nine months of 2026, respectively. In addition, operating income for the third quarter and operating loss for the first nine months of 2026 were impacted by $54 million and $176 million, respectively, of transaction, integration and other internal costs associated with the BDS Business Acquisition, $12 million and $64 million, respectively, of severance-related costs associated with a workforce reduction and $7 million and $25 million, respectively, of expenses associated with the Company’s new ERP system implementation.

Previous 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.

Current wording

In the third quarter and first nine months of 2026, the Company’s interest expense, net increased $31 million and $108 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 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.

Current wording

The Company’s effective tax rates for the third quarter and first nine months of 2026 were (9.6%) and 18.3%, respectively, compared to 12.5% and 14.9% for the third quarter and first nine months 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 first half of 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 nine months of 2026. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.

Previous wording

Net (Loss) Income per Diluted Common Share

Current wording

Net Income (Loss) per Diluted Common Share

Previous 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.

Current wording

The decline in the net income per diluted common share to $0.82 in the third quarter and to a net loss per diluted common share of $1.37 in the first nine months of 2026, respectively, as compared to the $2.50 and $7.00 of net income per diluted common share in the third quarter and first nine months 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 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.

Current wording

Net cash provided by operating activities was $315 million, compared to net cash provided by operating activities of $488 million in the first nine months of 2026 and 2025, respectively. The decline is primarily attributable to the $142 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition and $46 million of restructuring related payments for the nine months ended October 3, 2026.

Previous 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.

Current wording

Net cash provided by investing activities included capital expenditures related to property, plant, equipment and software capitalization of $150 million in the first nine months of 2026 as compared to the $74 million of capital expenditures in the first nine months of 2025. The 2026 investing activities were impacted by the $85 million of net cash acquired from the BDS Business Acquisition, which was net of the $59 million final closing statement payment in the quarter related to the BDS Acquisition.

Previous wording

On March 23, 2026, SpinCo issued senior notes (the “Senior Notes”) in the aggregate principal amount of $3.5 billion. Net proceeds from the offering of the Senior Notes, together with cash on hand, were used by the Company to repay $3.5 billion of indebtedness outstanding under the SpinCo Delayed Draw Term Loan.

Current wording

On March 23, 2026, SpinCo issued senior notes (the “Senior Notes”) in the aggregate principal amount of $3.5 billion. Net proceeds from the offering of the Senior Notes, together with cash on hand, were used by the Company to repay $3.5 billion of indebtedness outstanding under the SpinCo Delayed Draw Term Loan. As of October 3, 2026 the Company had $650 million of Senior Notes that will mature in September 2027. The Company has sufficient capital to fund this payment through cash on hand and borrowing capacity under its existing credit facility.

Previous wording

As part of the BDS Business Acquisition, a portion of the total consideration paid was reflected as a deposit asset on the opening balance sheet, which is attributable to the Company’s present right to the future economic benefits of the business in those foreign jurisdictions where legal and beneficial title had not transferred to the Company as of February 9, 2026. Changes in the deposit asset are driven by changes in the underlying assets and liabilities in those foreign jurisdictions, and the cash payments (or cash receipts) resulting from the changes in these assets are classified as investing cash flows. The change in the deposit asset of $51 million in the first half of 2026 is primarily related to the collection of third-party customer receivables that existed as of February 9, 2026.

Current wording

As part of the BDS Business Acquisition, a portion of the total consideration paid was reflected as a deposit asset on the opening balance sheet, which is attributable to the Company’s present right to the future economic benefits of the business in those foreign jurisdictions where legal and beneficial title had not transferred to the Company as of February 9, 2026. Changes in the deposit asset are driven by changes in the underlying assets and liabilities in those foreign jurisdictions, and the cash payments (or cash receipts) resulting from the changes in these assets are classified as investing cash flows. The change in the deposit asset of $59 million in the first nine months of 2026 is primarily related to the collection of third-party customer receivables that existed as of February 9, 2026.