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    Earnings call· Jan 2026(Q1 FY26)

    AGILENT TECHNOLOGIES Q1 FY26 earnings call A

    Feb 25, 2026 Source

    Executive summary

    Agilent Q1 FY26 — Solid Start with Strong Pharma and CAM Growth, Despite Weather Impact

    Agilent delivered a solid start to FY26, with strong core revenue growth driven by robust performance in pharma and chemicals and advanced materials, despite a $10 million weather-related revenue impact. The company maintained its full-year guidance, anticipating continued momentum from key markets, new product innovations, and the Ignite Operating System to drive margin expansion and long-term value. Management expressed confidence in the underlying business trends and strategic initiatives.

    Highlights

    9

    • Q1 revenue of $1.8 billion, growing 4.4% on a core basis, within guidance range.

    • Operating margins of 24.6% were in line with expectations.

    • EPS of $1.36 was within expectations.

    • Pharma growth was 7%, with double-digit growth in biotech and mid-single-digit small molecule growth.

    • GLP-1 growth of 50%, with specialty CDMO growing low double digits.

    • Chemicals and Advanced Materials (CAM) grew 9%, with advanced materials up more than 20%.

    • Diagnostics and Clinical business grew 7%.

    • Instrument book-to-bill at or above 1 for the eighth consecutive quarter.

    • Infinity III HPLC LC growth in high single digits, gaining market share.

    Concerns

    6

    • Q1 revenue impacted by $10 million due to U.S. winter storm.

    • Europe growth was 4%, slower than expected due to tariff discussions.

    • Americas growth of 1% directly impacted by weather and softness in smaller end markets.

    • Environmental forensics was flat due to continued softness in U.S. and China government funding.

    • Food business declined 4% (outperformed expectations ex-China).

    • Academia and government market was down 8%, more than expected.

    Guidance & targets

    20
    CategoryTargetConfidence
    Full-year FY26 Core Revenue Growth
    4% to 6%
    high materiality
    High
    Full-year FY26 Reported Revenue
    $7.3 billion to $7.5 billion
    high materiality
    High
    Full-year FY26 Non-GAAP EPS
    $5.90 to $6.04
    high materiality
    High
    Full-year FY26 Operating Margin Expansion
    75 bps
    medium materiality
    High
    Full-year FY26 Tax Rate
    14.5%
    low materiality
    High
    Full-year FY26 Other Income
    $22 million
    low materiality
    High
    Full-year FY26 Diluted Shares Outstanding
    283 million
    low materiality
    High
    Full-year FY26 Operating Cash Flow
    $1.6 billion to $1.7 billion
    medium materiality
    High
    Full-year FY26 Capital Expenditures
    $500 million
    medium materiality
    High
    Q2 FY26 Core Revenue Growth
    4% to 5.5%
    high materiality
    High
    Q2 FY26 Reported Revenue
    $1.79 billion to $1.82 billion
    high materiality
    High
    Q2 FY26 EPS
    $1.39 to $1.42
    high materiality
    High
    Full-year FY26 Academia and Government Growth
    low single-digit decline
    medium materiality
    Medium
    Full-year FY26 Food Market Growth
    flat
    medium materiality
    Medium
    Full-year FY26 Environmental and Forensics Growth
    low single-digit growth
    medium materiality
    Medium
    Full-year FY26 Pricing Growth
    at least 100 basis points
    medium materiality
    High
    Q2 FY26 Academia and Government Growth
    mid-single digits decline
    low materiality
    Medium
    Specialty CDMO Growth
    mid-teens growth
    medium materiality
    High
    China Revenue Run Rate
    $300 million per quarter
    medium materiality
    Medium
    China Long-term Growth
    mid- to high single digits
    low materiality
    Medium

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Agilent CrossLab Group (ACG)
    Growth driven by strong consumables growth in high single digits, solid performance in services, and balanced growth globally with all regions growing mid-single digits or better.
    		—6%——
    Agilent Applied Markets Group (AMG)
    Growth ahead of expectations, led by double-digit performance in spectroscopy, fueled by strong results in the semiconductor space.
    		—4%——
    Agilent Life Sciences and Diagnostics Markets Group (LDG)
    Growth a bit below expectations, impacted by weather and softness in academia and government, which challenged cell analysis and genomics results. Larger end markets (pharma biotech and diagnostic) grew high single digits.
    		—3%——
    Geographic - Asia
    Strongest growth observed in Asia, with robust performance in both China and other Asian regions.
    China growth: 6%Rest of Asia growth: 13%
    		————
    Geographic - Europe
    Slower than expected growth due to transient discussions around higher tariffs causing some customers to slow purchasing decisions.
    		—4%——
    Geographic - Americas
    Directly impacted by weather and pockets of softness in smaller end markets.
    		—1%——

    Operational metrics

    29
    Revenue
    $1.8 billion4.4% core growth
    Q1 FY26

    Reported revenue for the first quarter, with core growth within guidance range.

    Operating Margin
    24.6%down 50 bps YoY
    Q1 FY26

    Operating margins were in line with expectations, impacted by increased tariff expenses and normalized performance-based pay.

    EPS
    $1.364% growth
    Q1 FY26

    EPS was within expectations. Adjusted for weather impact, it would have been above the midpoint of guidance.

    Gross Margins
    53.7%down 100 bps YoY
    Q1 FY26

    Primarily due to tariff headwinds.

    Other Income
    $10 million
    Q1 FY26

    Reported other income for the quarter.

    Tax Rate
    14.5%
    Q1 FY26

    Tax rate for the quarter, as expected.

    Diluted Shares Outstanding
    284 million
    Q1 FY26

    Slightly better than expected, with incremental share repurchases.

    Capital Expenditures
    $93 million
    Q1 FY26

    Invested in capital expenditures during the quarter.

    Share Repurchases
    $152 million
    Q1 FY26

    Amount of shares purchased during the quarter.

    Dividends Paid
    $72 million
    Q1 FY26

    Dividends paid to shareholders during the quarter.

    Net Leverage Ratio
    0.8 turns
    Q1 FY26

    Maintained strong balance sheet.

    Pharma Growth
    7%
    Q1 FY26

    In line with expectations, supported by increased funding and M&A in biotech.

    GLP-1 Growth
    50%
    Q1 FY26

    Strong growth from both specialty CDMO and analytical lab business.

    Specialty CDMO Growth
    low double digits
    Q1 FY26

    Growth during the quarter, with mid-teens growth expected for the full year.

    Chemicals and Advanced Materials (CAM) Growth
    9%
    Q1 FY26

    Above expectations, with exceptional strength in advanced materials driven by semiconductor manufacturing.

    Diagnostics and Clinical Business Growth
    7%
    Q1 FY26

    Continued strong performance, supported by the Omnis family launch.

    Environmental Forensics Growth
    flat
    Q1 FY26

    Softness due to government funding in the U.S. and China, offset by growth in rest of Asia and Europe.

    Food Business Growth
    -4%
    Q1 FY26

    Outperformed expectations, with strong growth outside China. Q1 FY25 benefited from large China stimulus.

    Academia and Government Growth
    -8%
    Q1 FY26

    More than expected decline, with soft conditions in the U.S. where customers prioritize keeping labs running over new capital equipment.

    Instruments Growth (excluding academia and government)
    mid-single-digit
    Q1 FY26

    Healthy growth rate for instruments when excluding the academia and government market.

    LC Instrument Growth
    high single digits
    Q1 FY26

    Gaining share globally, driven by Infinity III HPLC replacement cycle momentum.

    GC Instrument Growth
    low single-digit
    Q1 FY26

    Strong result considering tough year-over-year compare from last year's Chinese stimulus.

    Single-Quad LC/MS Family Growth
    exceeding 40%
    Q1 FY26

    Robust uptake of Pro iQ LC/MS, particularly compelling for pharma customers transitioning to biologics.

    Biocolumn Growth (Altura)
    over 30%more than doubled
    Q1 FY26

    Driven by the launch of Altura ultra-inert column portfolio, with strong adoption by biopharma companies.

    Instrument Book-to-Bill
    at or above 1eighth consecutive quarter
    Q1 FY26

    Indicates continued strong demand for instruments.

    Enterprise Services Business Growth
    low double-digit
    CAGR

    Represents roughly 10% of total services revenue, growing nicely.

    Digital Orders Growth
    more than 2 timesoverall order book
    Q1 FY26

    Driven by the successful launch of the new agilent.com website.

    Specialty CDMO Commercial Batches Mix
    60%
    Q1 FY26

    Mix of business in NASD continues to skew towards larger commercial batches.

    BIOVECTRA Commercial Programs Mix
    1/3
    Q1 FY26

    Commercial programs represent about one-third of BIOVECTRA revenue.

    Industry KPIs

    6
    MetricValueDetails
    Revenue EPS guidance4% to 6%%
    China revenue exposure6%%
    Pricing price realization200 basis pointsbps
    End market demand funnel commentary—
    Reshoring US manufacturing tailwind$1 billionUSD
    Instruments vs consumables services mix10%%

    Product announcements

    6
    ProductTypeDetails
    Altura ultra-inert column portfoliolaunch
    Altura column for PFAS workflowslaunch
    Pro iQ LC/MSmilestone
    Omnis automated platformexpansion
    S-540-MD Slide Scanner Systemlaunch
    Raman Insight BRT series alarm-resolution systemlaunch

    Risks & headwinds

    7
    U.S. Winter Storm ImpactQ1 FY26

    $10 million revenue impact

    Mitigation: Majority of revenue recovered at beginning of February; included in Q2 guidance.

    Tariff HeadwindsQ1 FY26

    100 bps impact on gross margins YoY

    Mitigation: Expected to decrease throughout the year; fully offset over the course of the year through cost savings and pricing actions; Ignite Operating System provides resilience.

    Softness in Academia and Government MarketQ1 FY26, expected low single-digit decline for FY26

    down 8% in Q1 FY26

    Mitigation: Customers using available funding to keep labs running, not investing in new capital equipment. Modest incremental improvement anticipated in Europe. Smallest market for Agilent.

    Softness in Environmental Forensics MarketQ1 FY26, expected low single-digit growth for FY26

    flat in Q1 FY26

    Mitigation: Continued softness in government funding in the U.S. and China, partially helped by easier comps for the remainder of the year.

    Food Business DeclineQ1 FY26, expected flat for FY26

    declined 4% in Q1 FY26

    Mitigation: Outperformed expectations with strong low double-digit growth ex-China. Q1 FY25 was primary beneficiary of large China stimulus.

    Europe Purchasing Decisions SlowdownQ1 FY26

    4% growth in Europe, slower than expected

    Mitigation: Transient discussions around higher tariffs caused some customers to slow purchasing decisions.

    Small and Mid-Cap Biotech PressureOngoing

    remains pressured

    Mitigation: Agilent has relatively small exposure; encouraged by improving funding environment and increased M&A, but lag between funding and spending. Potential upside if meaningful uptick occurs.

    Q&A highlights

    9

    What was the exact revenue impact of the snowstorm, how much has been recouped, and what was the margin impact?

    The revenue impact was about $10 million, with the vast majority already recouped. The margin impact was very modest, so the reported Q1 margin is a reasonable proxy for actual performance.

    “So when you think about the impact of the weather, we said it was about $10 million. We've already seen that come back with the majority of it.”

    asked by Jack Melick · answered by Adam Elinoff

    2 min read6 chapters

    Detailed Narrative

    01

    Impact of U.S. Winter Storm

    A winter storm in the U.S. during the last week of January impacted Q1 revenue by approximately $10 million, primarily due to logistics providers being unable to ship products from the main Americas Logistics Center in Memphis, Tennessee for three days. The majority of this revenue was recovered at the beginning of February, and the margin impact was modest. The company's Q2 guidance includes the recovery of this weather-delayed revenue.

    02

    Ignite Operating System Progress

    The Ignite Operating System, launched at the beginning of 2025, has evolved into an enterprise operating system driving execution excellence and margin expansion. In its first 12 months, Ignite doubled pricing realization, generated substantial procurement savings, simplified organizational structure, and launched a tariff mitigation program. Q1 FY26 saw Ignite deliver nearly 200 basis points of pricing, continued tariff expense reductions, and a successful new website launch driving digital orders at more than 2x the overall order book. The system is expanding into new value creation workstreams, including innovation, digital capabilities, and targeted AI initiatives.

    03

    Customer Intimacy and Enterprise Services

    Agilent's differentiated enterprise services business, representing roughly 10% of total services revenue, grew at a low double-digit CAGR. These services, which include embedding expert on-site support and leveraging digital capabilities through CrossLab Connect, foster strong customer relationships and position Agilent to gain wallet share. The company has agreements with nearly all top 20 biopharma companies and has achieved 18 competitive displacements over the past three years, reinforcing its role as a trusted partner.

    04

    Innovation Highlights

    Recent innovations include the Altura ultra-inert column portfolio, which has more than doubled biocolumn growth to over 30% since its October launch, with 50% of top 20 biopharma companies ordering. A new Altura column for PFAS workflows was launched in January. The Pro iQ LC/MS continues to gain momentum with single-quad family growth exceeding 40%. In cancer diagnostics, the Omnis automated platform and S-540-MD Slide Scanner System are performing well. The Raman Insight BRT series alarm-resolution system secured a $9 million TSA contract.

    05

    Pharma Reshoring Opportunity

    Increased activity in U.S.-based pharmaceutical manufacturing, driven by companies rethinking resilience and capacity, represents an estimated $1 billion addressable market opportunity through 2030. Agilent expects the first orders from reshoring to book late in FY26, with revenue impact bolstering top-line growth in FY27 and beyond. This trend is a significant secular driver for future growth.

    06

    Capital Allocation Priorities

    Agilent's capital allocation priorities remain consistent: prioritizing investments in internal innovation and strategic capacity expansion, followed by M&A. The company emphasizes that it does not need transformative deals to achieve its growth ambitions, and the bar for such transactions is very high. Any M&A activity must align with enterprise pillars, offer a right to win, allow for effective integration, and generate cash-on-cash returns above the hurdle rate. Excess capital will continue to be returned to shareholders through dividends and share repurchases.

    AI-generated summary of the company’s earnings call. Not investment advice.