How did Agilent's revenue and expenses shift in Q1 2025?

Agilent Technologies (AGIL) experienced a significant increase in revenue and a notable rise in expenses during Q1 2025, driven primarily by the acquisition of Dakota Instruments (DAKI) and the continued growth of its core businesses.

1. Revenue Shift:
   • Agilent's revenue for Q1 2025 was $1.718 billion, reflecting a 79.4% increase compared to the same period in the previous year. This substantial growth is attributed to the contribution from Dako, which generated $126.2 million in revenue during this quarter.
   • The core business of Agilent, excluding Dako, also showed strong growth, with revenue increasing by 17.2% year-over-year. This indicates a robust performance across Agilent's core product lines.

2. Expense Shift:
   • Total expenses for Agilent in Q1 2025 amounted to $1.626 billion, up from $1.134 billion in the corresponding quarter of the previous year. This increase is primarily due to the addition of Dako's expenses, which totaled $126.2 million.
   • The cost of revenue increased by 77.4% year-over-year, driven by the acquisition and the growth in sales. The cost of sales as a percentage of revenue decreased slightly to 94.4% from 95.9% in the prior year, indicating improved gross margin efficiency.
   • Research and development (R&D) expenses rose by 69.1%, reflecting Agilent's continued investment in innovation and product development. Sales and marketing expenses increased by 56.7%, likely due to the expansion of the business and the integration of Dako's sales and marketing efforts.
   • General and administrative (G&A) expenses grew by 39.7%, primarily due to the addition of G&A expenses from Dako, as well as the costs associated with integrating the acquired company into Agilent's operations.
3. Conclusion:
   • Agilent's strategic acquisition of Dako has been a pivotal factor in its revenue and expense shifts. The company has not only seen a significant boost in revenue but has also experienced a corresponding increase in expenses, particularly in R&D, sales, and G&A categories. This indicates Agilent's commitment to expanding its product offerings, enhancing its market presence, and integrating new capabilities into its operations. The successful integration of Dako is expected to further enhance Agilent's financial performance in the coming quarters.