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    Earnings call· Apr 2026(Q2 FY26)

    AGILENT TECHNOLOGIES Q2 FY26 earnings call A

    May 27, 2026 Source

    Executive summary

    Agilent Technologies Q2 FY26 — Strong Revenue Growth and Margin Expansion Driven by Ignite System

    Agilent delivered a strong second quarter, outperforming revenue and EPS guidance, largely driven by the compounding benefits of its Ignite operating system. The company saw broad-based strength across key end markets and instrument replacement cycles, with notable performance in Advanced Materials and Diagnostics. While facing headwinds in China and the Food segment, Agilent raised its full-year outlook, confident in its operational efficiencies and innovation pipeline.

    Highlights

    5

    • Revenue of $1.83 billion, growing 6.3% on a core basis, exceeding guidance by 80 basis points.

    • Operating margin of 26.4%, a year-over-year improvement of 130 basis points.

    • EPS of $1.49, representing 14% year-over-year growth and exceeding guidance by $0.07.

    • AMG revenue grew 11% on a core basis, well ahead of expectations, led by spectroscopy.

    • LDG revenue grew 9% on a core basis, driven by low double-digit growth in LC/LC-MS and cancer diagnostics.

    Concerns

    4

    • China revenue declined 9% in the quarter, more than expected, due to Lunar New Year timing and prior-year stocking.

    • Food end market declined 3% due to softer-than-expected results in Asia from funding delays in China and India.

    • Academia and government end market declined 5% in line with expectations.

    • Inflationary cost pressures, including Middle East conflict logistics and chip costs, are expected in H2.

    Guidance & targets

    19
    CategoryTargetConfidence
    Full-year FY26 Core Revenue Growth
    4.5% to 6%
    high materiality
    High
    Full-year FY26 Adjusted EPS
    $6.00 to $6.10
    high materiality
    High
    Full-year FY26 Operating Margin Expansion
    85 basis points
    medium materiality
    High
    Full-year FY26 Operating Cash Flow
    $1.6 billion to $1.7 billion
    medium materiality
    High
    Full-year FY26 Capital Expenditures
    approximately $450 million
    medium materiality
    High
    Q3 FY26 Reported Revenue
    $1.83 billion to $1.85 billion
    high materiality
    High
    Q3 FY26 Core Revenue Growth
    4.4% to 5.9%
    high materiality
    High
    Q3 FY26 EPS
    $1.48 to $1.50
    high materiality
    High
    Full-year FY26 Pharma End Market Growth
    high single-digit growth
    medium materiality
    High
    Full-year FY26 Academic and Government End Market Growth
    low single-digit decline
    medium materiality
    High
    Full-year FY26 Chemicals and Advanced Materials End Market Growth
    mid- to high single-digit growth
    medium materiality
    High
    Full-year FY26 Diagnostics and Clinical End Market Growth
    mid- to high single-digit growth
    medium materiality
    High
    Full-year FY26 Environmental and Forensics End Market Growth
    low to mid-single-digit growth
    medium materiality
    High
    Full-year FY26 Food End Market Growth
    low single-digit decline
    medium materiality
    Medium
    Full-year FY26 AMG Business Segment Growth
    mid-single-digit growth
    medium materiality
    High
    Full-year FY26 LDG Business Segment Growth
    mid-single-digit growth
    medium materiality
    High
    Full-year FY26 ACG Business Segment Growth
    mid-single-digit growth
    medium materiality
    High
    Full-year FY26 Asia ex-China Revenue Growth
    mid- to high single-digit growth
    medium materiality
    High
    Full-year FY26 Advanced Therapeutics Division Growth
    mid-teens growth
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Applied Markets Group (AMG)
    Well ahead of expectations, driven by strong demand for market-leading tools to support semiconductor production and downstream supply chain.
    Double-digit performance in spectroscopyBenefited from TSA airport security contract
    		—11%——
    Life Sciences and Diagnostics Markets Group (LDG)
    Nicely ahead of expectations, with upside driven by LC/LC-MS and cancer diagnostics. Cancer diagnostics business includes clinical pathology products and companion diagnostic services, performing well with Omnis family traction and strong growth in pathology reagents.
    Low double-digit growth in LC and LC/MSLow double-digit growth in cancer diagnostics businessHigh single-digit growth from specialty CDMO (Advanced Therapeutics division)
    		—9%——
    Agilent CrossLab Group (ACG)
    In line with guidance, impacted by Lunar New Year timing and challenging consumables compare due to pre-tariff stocking in China last year.
    Consumables grew high single digits (ex-China)Ex-China ACG grew at high end of mid-single digits
    		—2%——

    Operational metrics

    38
    Strategic pricing capability
    200 bps
    Q2

    Delivered approximately 200 basis points of pricing in Q2, putting the company on a path to exceed its initial full year goal of 100 basis points.

    Incremental tariffs operating profit impact
    fully offset
    Q2

    The tariff task force achieved full mitigation of the incremental tariffs that began in late spring, offsetting the operating profit impact through strategic manufacturing moves and targeted price adjustments.

    New digital orders growth
    9%
    Q2

    Digital initiative driving accelerated growth of the e-commerce platform, with new digital orders growing 9% globally and more than 20% ex China.

    Manufacturing overhead reduction
    more than 50 basis points
    vs last year

    Reconfigured operations organization contributed to improved delivery, greater agility, and optimized cost structure, reducing manufacturing overhead by more than 50 basis points versus last year.

    GLP-1 momentum
    about 20%
    year-to-date

    GLP-1 momentum continues, delivering about 20% growth year-to-date with a robust contribution from the analytical lab business in the second quarter.

    Net leverage ratio
    0.7 turns
    Q2

    Ended the quarter with a net leverage ratio of 0.7 turns, maintaining a strong balance sheet.

    Capital expenditures
    $76 million
    Q2

    Invested $76 million in capital expenditures during Q2.

    Share repurchases
    $65 million
    Q2

    Purchased $65 million in shares in Q2.

    Dividends paid
    $72 million
    Q2

    Paid $72 million in dividends in Q2.

    Currency impact on reported growth
    3.7%
    Q2

    Currency had a favorable impact of 3.7% on reported growth in Q2, a slightly larger tailwind than February guidance.

    Tax rate
    14.5%
    Q2

    Tax rate of 14.5% was as expected in Q2.

    Other income
    $11 million
    Q2

    Had $11 million of other income in Q2.

    Diluted shares outstanding
    283 million
    Q2

    Had 283 million diluted shares outstanding in Q2, in line with expectations.

    Biotech growth
    low double digitsthird consecutive quarter
    Q2

    Within pharma, biotech grew low double digits for the third consecutive quarter, led by large caps.

    Small molecule growth
    low single digits
    Q2

    Within pharma, small molecule grew low single digits.

    Forensics growth
    greater than 50%
    Q2

    Delivered greater than 50% growth in forensics in Q2, including the TSA security contract and multiple competitive large tender wins.

    Environmental growth
    low single-digit growthagainst a challenging double-digit year-over-year compare
    Q2

    Environmental delivered low single-digit growth against a challenging double-digit year-over-year compare.

    Food decline
    3%
    Q2

    Food, the second smallest end market, declined 3% with softer-than-expected results in Asia due to funding delays in China and India.

    Academia and Government decline
    5%
    Q2

    Academia and government, the smallest end market, declined 5% in line with expectations.

    Americas revenue growth
    11%
    Q2

    Saw strongest results in the Americas with 11% revenue growth.

    Europe and Asia ex-China revenue growth
    high single digits
    Q2

    Europe and Asia ex-China revenue grew high single digits with excellent diagnostics momentum in Europe, while pharma and semiconductor investments were strong in Asia, ex-China.

    China revenue decline
    9%a bit more than we had expected
    Q2

    China declined 9%, a bit more than expected, though on a first half basis, China was roughly flat.

    China revenue
    roughly flat
    H1

    On a first half basis, China revenue was roughly flat, very much in line with the full year guide.

    LC and LC/MS growth
    low double-digit growth
    Q2

    Included market-leading low double-digit growth in LC and LC/MS.

    GC growth
    low double-digit growth
    Q2

    Included market-leading low double-digit growth in GC.

    LC replacement cycle tailwind
    200, 300 bps
    ongoing

    Expected to be a 200-300 bps tailwind to LC growth, driven by underinvestment, aging fleets, favorable CapEx conditions, and customer-focused innovations.

    GC replacement cycle tailwind
    100 bps
    ongoing

    Expected to be a 100 bps tailwind, with a typical lifespan of 10 years for GCs, driving moderate annual uplift over a longer period.

    Altura, Ultra and Elite columns growth
    more than 50%sequentially
    Q2

    Altura, Ultra and Elite columns continue to see strong traction, growing more than 50% sequentially.

    Altura, Ultra and Elite columns penetration
    75%
    Q2

    Altura, Ultra and Elite columns reached 75% of the top 20 biopharma accounts, reinforcing innovation engine and unified commercial organization.

    China Innovation Center focus areas
    —
    ongoing

    The China Innovation Center will strengthen R&D capabilities across multiple emerging areas, including digital, AI and automation.

    9500 ICPMS launch acceleration
    full quarter
    Q2

    The 9500 ICPMS launch was expedited by a full quarter due to the Ignite operating system's optimized approach to innovation, faster decisions, and focused capital allocation.

    AI as enterprise focus area
    —
    FY26

    AI is a key FY '26 enterprise focus area, with potential to be a tremendous growth driver for the life sciences industry, particularly in accelerating drug development.

    Advanced Therapeutics Train C build-out
    mechanical completion
    Q2 FY26

    Achieved mechanical completion of our Train C build-out, positioning us well to begin revenue generation at the new facility next spring.

    Full-year FY26 currency tailwind
    1.8%
    FY26

    Currency is now expected to be a 1.8% tailwind during the full year.

    Q3 FY26 currency tailwind
    0.6%
    Q3 FY26

    Currency is expected to be approximately a 0.6% tailwind in Q3 FY26.

    Full-year FY26 diluted shares outstanding
    283 million
    FY26

    Expected to have 283 million diluted shares outstanding for the full year.

    Q3 FY26 diluted shares outstanding
    283 million
    Q3 FY26

    Assumes 283 million diluted shares outstanding in the third quarter.

    Instrument book-to-bill
    above 1ninth consecutive quarter
    Q2

    Commercial excellence delivered a book-to-bill above 1 again this quarter for instruments, marking the ninth consecutive quarter where instrument orders met or exceeded revenue.

    Industry KPIs

    9
    MetricValueDetails
    Revenue EPS guidance4.5% to 6% core growth, $6.00 to $6.10 EPS%
    China revenue exposuredeclined 9%%
    Pricing price realizationapproximately 200 basis pointsbps
    Diagnostics testing demand11% growth%
    M a contribution synergiesrobust long-term growth, strong strategic fit and opportunities for synergy realization
    Segment organic revenue growthAMG 11%, LDG 9%, ACG 2%%
    Reshoring US manufacturing tailwindinitial orders at the end of our fiscal year with revenue starting in FY '27
    Instruments vs consumables services mixhigh single-digit growth%
    Organic core revenue growth by end marketPharma 6%, Chemical and Advanced Materials 8%, Diagnostics and Clinical 11%, Environmental and Forensics 13%, Environmental low single-digit growth, Food declined 3%, Academia and Government declined 5%%

    Product announcements

    4
    ProductTypeDetails
    9500 triple quad ICPMSlaunch
    Upgraded flagship GCslaunch
    New Altura columnslaunch
    OpenLab CDS Version 3.0expansion

    Deals & partnerships

    1
    Biocare MedicalAcquisition of a company specializing in cancer diagnostics solutions.

    Agilent announced the acquisition of Biocare Medical in March. Pre-close preparations for integration are being driven by the Ignite system to ensure readiness upon closing.

    Risks & headwinds

    5
    Middle East conflict logistics and material shortagesH2 FY26

    upward pressure on our costs

    Mitigation: Ignite operating system will deliver meaningful efficiencies and help absorb those inflationary impacts; built a playbook for addressing trade and geopolitical challenges.

    China and India government funding delaysQ2 FY26, ongoing

    Food market declined 3% in Q2

    Mitigation: Expect China stimulus to come in at the start of next year (FY27); long-term optimism for food market due to evolving regulations and demand.

    Inflationary cost pressuresH2 FY26

    absorb inflationary cost pressures during the remainder of the year

    Mitigation: Ignite operating system will deliver meaningful efficiencies and help absorb those inflationary impacts, including those from memory chips demand.

    Tough year-over-year comparablesH2 FY26

    increasingly tougher comps

    Mitigation: Execution excellence, market momentum, structural improvements from Ignite, and innovation are expected to drive performance through the second half.

    Memory chips demand impacting costsH2 FY26

    puts upward pressure on our costs

    Mitigation: Ignite operating system will deliver meaningful efficiencies and help absorb those inflationary impacts.

    What to watch in Q3 FY26

    5

    Small to mid-cap biotech demand signals

    next quarter
    Currentpositive demand signals from small to mid caps begin to emerge
    Targetconvert into revenue

    Why it matters

    Indicates broader recovery in biotech funding and spending beyond large caps, which could provide upside to current market trends.

    This includes another quarter of low double-digit growth in biotech led by large caps, while positive demand signals from small to mid caps begin to emerge.

    Q&A highlights

    7

    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

    2 min read6 chapters

    Detailed Narrative

    01

    Ignite Operating System Driving Performance

    The Ignite operating system is increasingly embedding structural benefits, leading to stronger-than-expected revenue growth, significant margin expansion, and double-digit EPS growth. Key impacts include strategic pricing delivering approximately 200 basis points in Q2, full mitigation of incremental tariffs, 9% growth in new digital orders (over 20% ex-China), and supply chain resilience. These efficiencies reduced manufacturing overhead by over 50 basis points versus last year, demonstrating compounding benefits across the business.

    02

    Strong End Market and Instrument Momentum

    Agilent observed continued health in key end markets, aligned with initial expectations. Pharma grew 6%, with biotech showing low double-digit growth. Chemical and Advanced Materials were robust at 8%, fueled by strong semiconductor demand and CapEx. Diagnostics and Clinical grew 11%, driven by expanding cancer and diagnostics offerings. Instrument revenue saw high single-digit growth, including market-leading low double-digit growth in LC/LC-MS and GC, propelled by replacement cycles and innovation.

    03

    Innovation Pipeline and ASMS Launches

    The company is preparing for a significant wave of innovations to be showcased at the 74th American Society for Mass Spectrometry (ASMS) Annual Conference. These include a revolutionary 9500 triple quad ICPMS, designed to address throughput, workflow complexity, and operating costs, and upgraded flagship GCs focusing on efficiency and automation. New Altura columns targeting protein/peptide therapeutics and OpenLab CDS Version 3.0 for unified platform analysis will further strengthen the installed base and recurring revenue.

    04

    Strategic China Focus and AI Integration

    Agilent is reinforcing its commitment to China by launching a China Innovation Center. This center will leverage local technical talent and the innovation ecosystem to strengthen R&D capabilities in digital, AI, and automation, better supporting customers. AI is also a key FY26 enterprise focus, with potential to accelerate drug development for pharma customers and being deployed internally to enhance supply chain prediction and operational efficiency, leading to faster issue response times.

    05

    Biocare Acquisition and Advanced Therapeutics Expansion

    The acquisition of Biocare, announced in March, is progressing, with management confident in its robust long-term growth, strategic fit, and synergy realization opportunities. In the Advanced Therapeutics division (formerly specialty CDMO), mechanical completion of the Train C build-out was achieved in Q2. This milestone positions the company to begin revenue generation from the new facility by spring 2027, supporting the division's mid-teens growth expectations for fiscal year 2026.

    06

    Geographic Performance and Headwinds

    The Americas led with 11% revenue growth, showing broad high single-digit plus results across all end markets except academia and government. Europe and Asia ex-China revenue grew high single digits, with strong diagnostics momentum in Europe and robust pharma/semiconductor investments in Asia ex-China. China declined 9% in Q2, attributed to Lunar New Year timing and prior-year stocking. The Food end market declined 3% due to funding delays in China and India, and Academia and Government declined 5%.

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