WAT Q1 Earnings Call: Instrument Demand and Targeted Pricing Drive Outperformance; Guidance Raised Amid Tariff Mitigation

WAT Cover Image
WAT Q1 Earnings Call: Instrument Demand and Targeted Pricing Drive Outperformance; Guidance Raised Amid Tariff Mitigation

In This Article:

Scientific instruments company Waters Corporation (NYSE:WAT) announced better-than-expected revenue in Q1 CY2025, with sales up 3.9% year on year to $661.7 million. Guidance for next quarter’s revenue was better than expected at $751 million at the midpoint, 0.8% above analysts’ estimates. Its non-GAAP profit of $2.25 per share was 1.2% above analysts’ consensus estimates.

Is now the time to buy WAT? Find out in our full research report (it’s free).

Waters Corporation (WAT) Q1 CY2025 Highlights:

  • Revenue: $661.7 million vs analyst estimates of $654.1 million (3.9% year-on-year growth, 1.2% beat)

  • Adjusted EPS: $2.25 vs analyst estimates of $2.22 (1.2% beat)

  • Adjusted EBITDA: $218.3 million vs analyst estimates of $206.1 million (33% margin, 5.9% beat)

  • Revenue Guidance for Q2 CY2025 is $751 million at the midpoint, roughly in line with what analysts were expecting

  • Management slightly raised its full-year Adjusted EPS guidance to $12.90 at the midpoint

  • Operating Margin: 22.9%, up from 21% in the same quarter last year

  • Free Cash Flow Margin: 35.3%, down from 36.8% in the same quarter last year

  • Organic Revenue rose 6.7% year on year (-9.3% in the same quarter last year)

  • Market Capitalization: $21.39 billion

StockStory’s Take

Waters Corporation’s first quarter results were influenced primarily by robust demand for analytical instruments, particularly in pharmaceutical and industrial applications. CEO Udit Batra attributed the company’s double-digit instrument growth to a combination of strong replacement cycles in late-stage pharma quality control and manufacturing, as well as high adoption rates for new products like the Alliance iS HPLC system and the Xevo TQ Absolute mass spectrometer. Batra emphasized the momentum in high-volume testing for GLP-1 and PFAS, signaling that these specialized applications continue to drive outsized growth in both established and emerging markets.

Looking ahead, management’s updated guidance reflects confidence in both the continued recovery of customer capital spending and the company’s ability to offset newly announced tariffs. CFO Amol Chaubal described Waters’ swift supply chain and pricing actions as key to limiting the net impact of tariffs. As Batra noted, “We are executing from a position of strength, anchored by resilient sources of growth and a revitalized portfolio that continues to command strong pricing.” The company also highlighted idiosyncratic growth drivers and ongoing innovation as foundational to its raised full-year earnings outlook.

Key Insights from Management’s Remarks

Waters’ management highlighted several product and market dynamics that underpinned the quarter’s outperformance and ongoing operational resilience.