What Management Said
Read the full Q4 2025 transcript ↗Unless otherwise noted, all references to increases or decreases in financial metrics are year-over-year, and references to revenue growth are on a core basis. Core revenue growth is adjusted for the impact of currency exchange rates and any acquisitions and divestitures completed within the past 12 months. I'm looking forward to working with the team to drive growth and innovation, advance operational excellence, and preserve Agilent's history of financial discipline. In the fourth quarter, Agilent reported $1.86 billion in revenue, growing 7.2% on a core basis, our sixth consecutive quarter of core growth acceleration.
Momentum remains broad-based across the portfolio, supported by strong LC and LCMS demand and share gains, CDMO upside, solid double-digit contributions in key regions, and a replacement cycle that continues to accelerate. Ignite helped deliver more than 200 basis points of sequential margin improvement compared with last quarter, while funding incremental performance-driven variable pay. The bottom-line result was four-quarter earnings per share of $1.59, above the midpoint of our guidance. As we close the 2025 fiscal year, I want to highlight four key dimensions where we made exciting progress this year and that will drive our growth for the future.
Fourth, the Ignite Operating System that enables us to effectively combine these elements to drive long-term growth and maximize value for customers, shareholders, and employees. The success of our customer-focused innovation was on display throughout the year with products and services that differentiate us from the competition and drive our growth by solving real customer problems. Infinity III drove double-digit LC growth in the second half of the year. The summer launch of our Pro iQ drove overall single-quarter LCMS growth of more than 50% in the first full quarter.
What went well
- Q4 revenue was $1.86 billion, up 7.2% on a core basis (9.4% reported), above the high end of guidance and marking the sixth consecutive quarter of core growth acceleration.
- Q4 non-GAAP EPS was $1.59, above the midpoint of guidance and up 9% year over year.
- Pharma, the largest end market, grew 12% in the quarter, with LC up low double digits and LCMS up mid-teens, supported by Infinity III and the Pro iQ LCMS ramp (single-quad LCMS growth exceeded 50% in its first full quarter).
- The specialty CDMO/NASD business grew more than 40% on a core basis, now represents nearly 20% of LDG revenue, and saw commercial programs drive 60% of NASD revenue, with BIOVECTRA delivering a record Q4.
- The Ignite Operating System delivered more than 200 basis points of sequential margin improvement and has already generated well over $150 million in annualized savings; operating margin reached 27.2%, up more than 200 basis points sequentially.
- Growth was broad-based geographically, with the Americas and Europe both up 11% and India up high teens, delivering double-digit growth ex-China.
- The balance sheet remained strong with a net leverage ratio of 0.8 and $545 million of operating cash flow in the quarter; the company raised its dividend by 3%.
- Full-year GLP-1 revenue reached about $130 million (roughly $40 million in Q4), with the analytical-lab portion growing about 40% in 2025.
What went wrong
- China revenue declined 4% in Q4, below the company's prior low-single-digit growth expectation, with most end markets down low to mid single digits.
- Academia and government declined about 10% in constant currency, a larger drop than guided, driven by U.S. federal spending reductions with Americas instruments down mid-20s.
- Gross margin of 54.1% was down 100 basis points year over year due to tariff headwinds, and operating margin was down slightly year over year for the same reason.
- Performance-driven variable pay created an incremental 60 basis point sequential headwind to operating margin; absent it, margins would have expanded 270 basis points sequentially versus the 230 basis point guide.
- BIOVECTRA's Q4 contribution came in around $22 million versus roughly $35 million previously guided, reflecting an intra-quarter cadence shift.
- The FY2026 tax rate is expected to rise 250 basis points to 14.5% due to Pillar Two, OB3 and other jurisdictional changes.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | FY2026 | $7.3B-$7.4B reported, +4%-6% core (1% currency tailwind) |
| Non-GAAP EPS | FY2026 | $5.86-$6.00, +5%-7% growth |
| Operating margin | FY2026 | +75 basis points expansion at the midpoint |
| Tax rate | FY2026 | 14.5% (+2.5 points) |
| Pricing | FY2026 | well above 100 basis points |
| Operating cash flow | FY2026 | $1.6B-$1.7B |
| Capital expenditures | FY2026 | $500 million |
| Other income | FY2026 | $30 million |
| Diluted shares | FY2026 | 284 million |
| Revenue | Q1 FY2026 | $1.79B-$1.82B reported, +4%-6% core (2.5% currency tailwind) |
| Non-GAAP EPS | Q1 FY2026 | $1.35-$1.38 (285M diluted shares) |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +7.2% core (+9.4% reported) | Broad-based strength led by LC/LCMS demand, share gains, CDMO upside and an accelerating replacement cycle; currency added 0.9% and M&A 1.3%. |
| Non-GAAP EPS | +9% ($1.59) | Volume leverage, strong pricing and Ignite-driven margin improvement, above the guidance midpoint. |
| LDG segment | +11% | Strong LC and LCMS instrument performance plus robust CDMO results, well ahead of guidance. |
| AMG segment | +3% | High single-digit growth in GC and GCMS as the instrument replacement cycle builds. |
| ACG segment | +6% | High single-digit growth in the rest of the world offset by mid-single-digit declines in China; 8% ex-China. |
| Pharma end market | +12% | Improving pharma conditions, reduced MFN/tariff uncertainty, and strength in oligos, GLP-1s and Infinity III. |
| Chemical & advanced materials | +7% | Strong demand in the Americas and Europe from semiconductor reshoring and regional supply-chain security investment. |
| Diagnostics & clinical | +7% | Durable mid-to-high single-digit performance with upside from the new Dako Omnis family. |
| Environmental & forensics | +9% | Investment ahead of a revised EU drinking water directive and Americas customers spending capital budgets before year-end. |
| China | -4% | Below the low-single-digit guide; declines in food and environmental offset biopharma and CAM growth; revenue stable around $300M/quarter. |
| Academia & government | -10% (constant currency) | U.S. federal spending reductions, with Americas instruments down mid-20s. |
| Gross margin | -100 bps to 54.1% | Tariff headwinds; improved 100 bps sequentially. |
| Operating margin | down slightly to 27.2% | Tariffs weighed year over year; up more than 200 bps sequentially on volume leverage, pricing and tariff mitigation. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Ignite Operating System | Launched at the start of FY2025 to improve pace and quality of execution | Delivered >$150M annualized savings, doubled price growth vs FY24, and drove tariff mitigation; central to the FY2026 margin plan | — |
| Tariffs | Created gross-margin headwinds through FY2025 | Company is highly confident it will fully mitigate current tariffs over FY2026 via pricing and cost savings, mostly by the second half | — |
| Pharma / biotech recovery | Early signs of normalization | Pharma +12% and biotech up low 20s in Q4; recovery starting in well-funded large caps, small/mid biotech funding improving but not yet an inflection | — |
| CDMO / NASD capacity | Capacity increases implemented at BIOVECTRA in Q3 | Record Q4; robust FY2026 order book, with train C expansion targeted to go live in early-to-mid 2027 | — |
| China stimulus | Stimulus (SAMR tender) expected to contribute | Excluded from the FY2026 guide out of caution after the SAMR tender shifted later into 2026; any benefit would be upside | — |
| Replacement cycle | Early innings for LC; GC cycle just starting | LC replacement cycle accelerating with Infinity III adoption; GC/GCMS cycle normalizing with an aging install base as a multi-year tailwind | — |
| Pharma reshoring | Emerging conversations | Estimated ~$1B addressable opportunity for Agilent by 2030 (expecting about one-third), with first orders possible by end of 2026 - upside to the guide | — |
| M&A / capital allocation | BIOVECTRA acquired and integrated | Priorities unchanged; disciplined, short high-quality target list; successful BIOVECTRA integration builds confidence for future deals | — |
| CFO transition | Rodney Gonsalves served as interim CFO for four months | Adam Elinoff joined as permanent CFO from Amgen, bringing IR, strategy and M&A experience | — |
Q&A Summary
On BIOVECTRA coming in around $22M versus the ~$35M guide, and whether the $100M CapEx increase is all CDMO?
Management was pleased with BIOVECTRA, which came in strong for the year driven by the GLP business against an easy Q4 comp, with key molecules planned for 2026. The incremental $100M CapEx is for additional NASD capacity plus consumables expansion.
On the drivers of the FY2026 75 bps operating margin guide, and whether upside is possible if the top line hits the high end?
The 75 bps midpoint improvement is driven by Ignite pricing optimization, operational efficiencies, tariff mitigation and volume growth, and more than offsets inflation while funding incremental investments in digital, AI and core R&D.
On the tone from biopharma customers and the outlook for the year-end budget flush?
Pharma grew 12% as MFN tariff deals reduced customer uncertainty; biotech grew low 20s (low double digits ex-CDMO) led by well-funded large caps, with Infinity III, Pro iQ and Altura driving momentum; the budget flush is expected to be typical and normalized.
On NASD visibility, capacity trains C and D timing, and any margin impact as they ramp?
FY2025 CDMO results were strong with a robust FY2026 order book covering roughly the full year; FY2026 is mainly execution on existing capacity, with train C going live in early-to-mid 2027 and the associated amortization dynamics already contemplated.
On the downside variance in China in the quarter and performance by end market?
China was down 4%, below the low-single-digit guide, with most markets down low-to-mid singles except A&G (up 5% on academic stimulus); biopharma and CAM grew while food and environmental declined, and revenue remains stable around $300M/quarter with FY2026 assumed flat.
On how important the pharma reshoring assumption is to the FY2026 guidance?
Reshoring is a modest guide contributor with first orders possible only at the end of 2026; Agilent sees an ~$1B addressable opportunity by 2030 and expects about one-third, representing upside to the forecast.
On how big the GLP-1 business is, its LC/services split, and positioning against generics?
Q4 GLP-1 revenue was about $40M (60% BIOVECTRA, 40% analytical lab), and full-year 2025 was about $130M split evenly; the analytical lab grew about 40%, with India a particularly attractive share-gain opportunity as patents lift into 2026.
On why academic and government was down about 10% constant currency despite better funding certainty?
The decline was driven mainly by U.S. federal spending reductions with Americas instruments down mid-20s; ex-U.S. was stable, the government shutdown had no material impact, and continued softness is expected in FY2026 (A&G is about 1% of the business).
On whether ACG could see a halo benefit from the instrument cycle versus the conservative mid-single-digit 2026 guide?
ACG grew 6% (8% ex-China) driven by the install base and rising attachment rates, with adoption of the Altura column, a new remote-plus services offering and OpenLab; the growing install base and tech refresh set up durable long-term recurring revenue.
What was net pricing in Q4 and what is penciled in for FY2026?
Net pricing was closer to 150 basis points in Q4, and FY2026 pricing is expected to be north of 100 basis points, with potential upside from AI tools and Ignite.
On how orders and backlog grew and whether China stimulus or pharmacopeia updates are showing up?
Book-to-bill was greater than one with stable, positive orders; the SAMR tender shifted from Q1 into later 2026, so an expected ~$10M of Q1 orders is excluded from the guide as upside, and Agilent has a strong ~50% win rate on first-round China stimulus tenders.
On the light Q4 gross margin and the FY2026 gross-margin outlook including tariff versus FX?
Agilent is not guiding gross margin but expects expansion, with tariffs fully mitigated in the second half via pricing and cost reductions, and BIOVECTRA no longer a drag now that it is annualized.
On competitive dynamics and the Q4 LC/LCMS growth numbers across end markets?
Q4 LC grew low double digits and LCMS grew mid-teens with share gains per independent data, driven by Infinity III and Pro iQ; environmental/forensics grew in the 20s, food grew mid-single digits, and the replacement cycle is early-to-mid innings.
On whether the 4-6% FY2026 guide fairly balances the puts and takes or bakes in conservatism?
The 4-6% top line is prudent but appropriate given macro uncertainty and tougher comps; upside levers include broadening pharma recovery, excluded China stimulus, small/mid biotech improvement and A&G stabilization.
On the GC upgrade cycle and how it is progressing versus expectations for 2026?
GC grew high single digits in Q4; the replacement cycle has normalized after years of pressure, Agilent is the market leader with a large aging install base creating a sustainable tailwind, and new products under Ignite should further sustain it.
On why the FY2026 tax rate is jumping and whether it can be offset?
The 250 bps increase to 14.5% reflects Pillar Two, OB3 and jurisdictional changes now solidified, with no expected meaningful change going forward; the impact is more than offset through operating performance above the line and Ignite/global network strategy.
On the M&A deal funnel, appetite for deploying cash, and target size/areas?
Capital allocation priorities are unchanged with capacity for disciplined, strategy-linked M&A focused on fit and shareholder return rather than size; the target list is short and high quality, and the successful BIOVECTRA integration builds confidence, alongside continued shareholder returns.
On whether the Omnis upside is a placement or pull-through comment and where the opportunity is strongest?
It is both - the newly launched Omnis family has seen double-digit growth in instrument placements year over year, with menu expansion a key 12-24 month initiative supporting durable mid-to-high single-digit growth backed by aging populations and cancer incidence.
On the large-molecule versus small-molecule growth split in pharma ex-CDMO for the quarter and 2026?
Both grew about 10% and are roughly a 50/50 split for Agilent, and that balance is expected to continue into 2026.
On the Lunar New Year timing impact on the Q1 FY2026 guide?
Q1 assumes low-single-digit China growth on reduced stimulus (about a negative 700 bps year-over-year impact) offset by favorable Lunar New Year timing (about 800 bps); Q2 will be meaningfully impacted by timing and a tougher comp, balancing out across the quarters.
On where R&D will be deployed and the new high-growth areas of focus?
Agilent simplified from about 20 product lines to nine to direct innovation dollars faster; under new CTO August Specht it will accelerate in oligos, GLP-1s and workflows and invest asymmetrically in software, described as an agile refocusing of R&D.
More on Agilent Technologies, Inc.
Reported 2025-11-24 · figures from the Agilent Technologies, Inc. Q4 2025 earnings call.
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