Waters Corporation's Q4 2024: Contradictions in Pharma Growth, China Market, and Fiscal Outlook

These are the key contradictions discussed in Waters Corporation's latest 2024 Q4 earnings call, specifically including: Pharma growth expectations and replacement cycle dynamics, China market performance, and fiscal guidance considerations:



Revenue and Earnings Growth:
- Waters Corporation reported sales of $873 million for Q4 2024, growing 6% as reported and 8% in constant currency.
- The growth was driven by strong performance across all three reported regions and strong growth in instruments, particularly in liquid chromatography, mass spectrometry, and light scattering.

Pharma Segment Performance:
- The Pharma segment saw sales growth of 10%, with significant contributions from large pharma, contract manufacturing organizations, and generics customers.
- This growth was due to the recovery of spending tied to high-volume regulated QA/QC applications and the strong performance of new product launches like Alliance iS and Xevo TQ Absolute.

Operational and Margin Expansion:
- Waters achieved a 60 basis point increase in adjusted operating margin to 35.5%, absorbing significant FX headwinds.
- This was due to operational excellence and a focus on pricing, productivity, and cost management, which counteracted macroeconomic challenges.

PFAS Testing and Industry Growth:
- PFAS-related applications grew over 40% in the quarter, contributing significantly to the company's growth.
- The growth in this segment was driven by the success of the Xevo TQ Absolute instrument and the increasing demand for PFAS testing due to regulatory requirements and market expansion.