Agilent Technologies (A) Q2 FY26 earnings call: guidance and Q&A

Inquired about the drivers behind strong CAM growth, particularly semi-related, and the impact of Middle East conflict, while also asking about the continued decline in A&G and instrument segment performance.

Padraig McDonnell highlighted 8% CAM growth driven by semiconductor demand and chemical CapEx, noting low teens growth ex-China. He stated A&G declined 5% as expected, with Americas revenue flat and signs of stability. He emphasized strong instrument momentum, including low double-digit growth in LC/LC-MS and GC, driven by replacement cycles and share gains.

“CAM was 8% growth in Q2. That beat our mid-single-digit guide, plus mid-single-digit guide. We're mid-single digits in chemicals, high middle single digits and low double digits in Advanced Materials.”

asked by Vijay Kumar · answered by Padraig McDonnell

Asked for details on what drove the impressive margin expansion in Q2, including the contribution from pricing, and the visibility into the significant Q4 margin ramp.

Adam Elinoff attributed margin beat to Ignite (including over 200 bps pricing), execution excellence, structural improvements in operations and procurement, volume leverage, and favorable geographic mix (skew towards Americas). He explained the Q3 margin flatness due to inflation and normalized mix, with Q4 ramp being normal and H1 to H2 operating profit split of 47% to 53% being consistent with historical norms.

“Ignite, and I say that in the broadest sense of the word, so that includes the pricing. So you heard over 200 bps of pricing in there as well as execution excellence from the team and structural improvements we're seeing.”

asked by Vijay Kumar · answered by Adam Elinoff

Inquired about the visibility for the projected mid-teens growth in the Advanced Therapeutics division for FY26, especially given the Q2 high single-digit growth and the Train C build-out.

Padraig McDonnell reiterated mid-teens growth for FY26 based on production schedules and demand. Simon May added that there is strong visibility for the second half, with production schedules pointing to very strong year-over-year growth in Q3. He confirmed mechanical completion of Train C and its on-schedule go-live in spring 2027, with strong line of sight to demand for the bulk of FY27.

“The short answer to the question is we've got really strong visibility in the second half of the year. And the phasing of production schedules point towards very strong year-over-year growth in the third quarter.”

asked by Patrick Donnelly · answered by Simon May

Asked to quantify the semiconductor business, its leverage to logic vs. memory, and the sustainability of double-digit growth in spectroscopy, including new fab construction and pricing power.

Padraig McDonnell stated that semiconductor is about 30% of the Chemical and Advanced Materials market. He confirmed strong pricing power and noted that the business is growing due to continued CapEx deployment in fabs and high-purity chemical companies. He expressed optimism for continued growth as the cycle moves forward.

“Our advanced materials market -- if you split it out on the chemical and Advanced Materials, semiconductor is about 30% of that market as we look at it.”

asked by Tycho Peterson · answered by Padraig McDonnell

Questioned the exceptional 11% growth in Diagnostics and Clinical, asking if there were unusual factors not expected to repeat, given the lower full-year guide.

Padraig McDonnell confirmed the 11% growth was exceptional. Simon May explained it was driven by strategic focus and investment, strong ramp of the Omnis family (double-digit growth in both instruments and assays), and demand in companion diagnostics (e.g., antibody drug conjugates). He noted strong execution and durable market dynamics.

“We saw double-digit growth in both instruments and assays. We also continue to do very well in companion diagnostics.”

asked by Dan Brennan · answered by Simon May

Asked for more specifics on the 9% decline in China, particularly regarding funding delays, and a broader overview of the Academia & Government market globally.

Padraig McDonnell attributed China's decline to larger-than-expected softness during Lunar New Year and tightened/delayed government spend, impacting academia stimulus. He noted Agilent is under-indexed to DX and Pharma but over-indexed to Applied in China. For A&G globally, he mentioned Americas was flat, Europe recovering in key markets, and overall muted performance with U.S. being 3-4% of sales and facing multiyear grant uncertainty.

“China A&G is very soft in the quarter on tightened and delayed government spend leading to lower academia stimulus.”

asked by Michael Ryskin · answered by Padraig McDonnell

Inquired about the specific reasons for the Food market's decline, particularly delays in China and India, and the outlook.

Padraig McDonnell stated the Food market declined 3% in Q2, primarily due to delayed government spending in Asia. He noted that the China stimulus from last year created a tough comp for FY26, and slower government funding combined with Middle East conflict pressures on food shipments and testing in Asia are incremental challenges. Despite this, he expressed long-term optimism due to evolving food safety regulations, demand for healthier foods, and PFAS testing.

“The China stimulus from last year really set up a tough comp for us in FY '26 and slower government funding and of course, pressure from the Middle East conflict on food shipments and testing in Asia is an incremental challenge.”

asked by Catherine Schulte · answered by Padraig McDonnell