Waters 2025 Q1 Earnings Strong Performance as Net Income Rises 18.8%

Waters Corporation (NYSE: WAT) showcased robust first-quarter results for fiscal 2025, with sales reaching $661.71 million, surpassing expectations. The company raised its full-year 2025 guidance, projecting constant currency sales growth of 5-7% and non-GAAP EPS between $12.75 and $13.05, reflecting a positive outlook. Despite facing forex headwinds, Waters delivered impressive growth, marking continued earnings resilience. The adjusted guidance signifies confidence in the company's strategic direction and ability to navigate external challenges effectively.

Revenue

Waters Corporation reported a notable 3.9% increase in total revenue, amounting to $661.71 million in the first quarter of 2025, up from $636.84 million in the same period of 2024.

Earnings/Net Income

Waters's EPS surged by 17.9% to $2.04 in Q1 2025, compared to $1.73 in Q1 2024. This growth reflects the company's sustained profitability, with net income rising by 18.8% to $121.38 million. The EPS demonstrates strong earnings performance.

Price Action

The stock price of Waters declined by 0.86% during the latest trading day, has decreased by 0.53% over the most recent full trading week, and has fallen 1.77% month-to-date.

Post-Earnings Price Action Review

Over the past five years, the strategy of buying Waters (WAT) shares after a quarter-over-quarter revenue drop and holding for 30 days yielded a modest return of 7.12%, underperforming the benchmark by 76.00%. This strategy's compound annual growth rate (CAGR) stood at 1.40%, with a maximum drawdown of -12.66% and a Sharpe ratio of 0.22, indicating limited risk-adjusted returns. Despite this underperformance relative to broader market benchmarks, investors following this strategy have experienced consistent, albeit modest, gains over the specified period. The strategy's risk metrics highlight its conservative nature, providing a stable but less dynamic investment approach for those prioritizing lower volatility over higher returns.

CEO Commentary

Dr. Udit Batra, President & CEO, Waters Corporation, expressed satisfaction with the company's performance, citing the focus and dedication of their teams as key to maintaining momentum amidst a dynamic external environment. He highlighted double-digit instrument growth, particularly in pharma and industrial markets, as a driver of first-quarter results that exceeded expectations. Dr. Batra reaffirmed Waters's commitment to operational excellence and resilience, noting improvements in foreign exchange and operational actions as strategic positioning to navigate recent tariffs and policy changes. He reiterated expectations for high single-digit adjusted EPS growth for the year.

Guidance

The company is raising its full-year 2025 constant currency sales growth guidance to the range of 5.0% to 7.0%. Reported sales growth is also increased to 4.0% to 6.0%. Non-GAAP EPS guidance for the full-year 2025 is now set at $12.75 to $13.05, reflecting approximately 8% to 10% growth year-over-year. For the second quarter of 2025, constant currency sales growth is expected to be between 5.0% and 7.0%, with reported sales growth anticipated in the range of 4.0% to 6.0%. Non-GAAP EPS is projected to be between $2.88 and $2.98, indicating year-over-year growth of 10% to 13%.

Additional News

Waters Corporation has made strategic advancements with the integration of Multi-Angle Light Scattering (MALS) and differential Refractive Index (RI) instruments from its Wyatt Technology portfolio into Empower Software. This integration enhances biologics quality control by reducing software validation time by up to six months and cutting analysis time for biotherapeutic peptides and proteins by 20%. Additionally, Waters expanded its Alliance iS Bio HPLC product line with photodiode array detection, significantly boosting sensitivity for biopharmaceutical development and quality control. These innovations reflect Waters's commitment to improving efficiency and compliance in laboratory settings while supporting sustainable manufacturing practices.