Waters Corporation WAT reported first-quarter 2025 non-GAAP earnings of $2.25 per share, beating the Zacks Consensus Estimate by 1.35% and increasing 1.8% year over year. 

Net sales of $662 million topped the Zacks Consensus Estimate by 1.08%. The figure increased by 4% on a reported basis and 7% on a constant currency (cc) basis year over year.

Waters saw a strong first quarter, with sales exceeding the high end of its guidance range. Growth momentum continued across all three major regions-Asia, Americas and Europe- driven by robust demand in the Pharma and Industrial sectors.

Liquid chromatography and mass spec sales grew in double digits, marking positive growth in these key end markets.

Waters Corporation Price, Consensus and EPS Surprise

Waters Corporation price-consensus-eps-surprise-chart | Waters Corporation Quote

Waters’ Q1 Top Line in Detail

WAT operates under two organized segments: Waters and TA.

The Waters segment (88.8% of net sales) generated sales worth $587.3 million, up 4.5% and 8% on a year-over-year and CC basis, respectively. Sales in the TA segment were $74.4 million (11.2%), reflecting a year-over-year decline of 0.7%, but increasing 1% at cc.

Products & Services: The division comprises three segments: Instruments, Services, and Chemistry.

Instruments sales (39.7% of net sales) were $262.9 million, increased 8.7% on a year-over-year basis and 11% at cc.

Services registered sales (39.5% of net sales) worth $261.2 million, climbing a mere 0.2% year over year and 3% at cc.

Chemistry sales (20.8% of net sales) were $137.6 million, growing 2.6% year over year and 5% at cc.

The Services and Chemistry segments jointly generated recurring revenues of $398.8 million, up 1% year over year and 4% at cc.

Markets: Waters serves three end markets: Pharmaceutical, Industrial, and Governmental & Academic.

The Pharmaceutical market (59.1% of net sales) generated sales of $391.1 million, which increased 4.5% on a year-over-year and 8% at cc.

The Industrial market’s (27.5% of net sales) sales were $203.4 million, up 4.1% year over year and 6% at cc.

The Government & Academic market (10.2% of net sales) generated $67.3 million in sales, which remained flat year over year and increased 3% at cc.

Geography: Waters’ operating regions include Asia, the Americas and Europe.

Asia (33.4% of net sales) generated $220.8 million in sales, up 6.4% and 13% on a year-over-year and cc basis, respectively.

Sales in the Americas (38.6% of net sales) generated $255.5 million, which increased 6% in both year-over-year and cc terms.

Europe (28% of net sales) generated $185.4 million in sales, which decreased 1.4% year over year but increased 1% at cc.

Story Continues

WAT’s Q1 Operating Details

In the first quarter of 2025, non-GAAP selling and administrative expenses were $170.1 million, up 6% year over year. As a percentage of net sales, the figure expanded 50 basis points (bps) on a year-over-year basis.

Research and development spending of $46 million increased 7.7% year over year. As a percentage of net sales, the figure expanded 20 bps year over year.

The adjusted operating margin was 25.5%, which contracted 150 bps year over year.

Waters Balance Sheet & Cash Flow

As of March 29, 2025, cash, cash equivalents were $382.9 million, up from $325.4 million as of Dec. 31, 2024.

Waters generated cash from operations of $259.6 million in the reported quarter, down from $262.9 million in the year-ago quarter.

WAT recorded a free cash flow of $233.8 million in the first quarter of 2025.

WAT Raised Guidance

For the second quarter of 2025, Waters expects non-GAAP earnings of $2.88-$2.98 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Zacks Consensus Estimate for earnings is pegged at $2.93 per share, down by a penny over the past 30 days but indicates 11.4% growth from the figure reported in the year-ago quarter.

Waters anticipates sales to grow 5-7% on a cc basis after adequately discounting recent policy developments in the United States. 

On a reported basis, total sales growth is predicted to be in the range of 4-6% backed by the strong first quarter and tailwinds from favorable forex. 

The Zacks Consensus Estimate for revenues is pegged at $746.9 million, suggesting 5.42% year-over-year growth.

For 2025, Waters anticipates non-GAAP earnings between $12.75 per share and $13.05 per share. 

The Zacks Consensus Estimate for earnings is pegged at $12.85 per share, up by a penny over the past 30 days, indicating an 8.4% increase from the figure reported in 2024.

On a reported basis, total sales are suggested to improve by 4.0 – 6.0% while at cc sales is expected to increase between 5% and 7%.

Waters Zacks Rank & Stocks to Consider

Currently, Waters carries a Zacks Rank #3 (Hold).

ANI Pharmaceuticals ANIP, Acurx Pharmaceuticals ACXP, and Agenus AGEN are some better-ranked stocks in the broader Zacks Medical sector. Each of the three stocks carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ANI Pharmaceuticals is set to report its first-quarter 2025 results on May 9. Acurx Pharmaceuticals is set to report first-quarter 2025 results on May 13. Agenus is set to report its first-quarter 2025 results on May 12.

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