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. We have recast our historical segment information to reflect these changes and have provided the financial details on our website. Agilent Technologies delivered outstanding results of $1.74 billion in revenue in the third quarter, exceeding our guidance while continuing to transform our enterprise operating model in a highly dynamic environment.

Just as important, our two-year growth stack also is improving, showing that this is a durable momentum, not just a short-term bounce. The two-year stack is a summation of our growth over two consecutive years, providing a clear view of sustained performance by smoothing out short-term quarterly fluctuations. Given this strength, we are raising our fiscal 2025 full year revenue guidance to the range of $6.91-$6.93 billion, representing a core growth of 4.5% at the midpoint. This is a $150 million increase from our prior range at the midpoint and 1.5 percentage points of additional core growth, a clear step up in our growth outlook heading into Q4.

This upgrade reflects our confidence in delivering another step up of revenue into Q4 even as we absorb the impact of tariffs this year. In Pharma, small molecule grew double digits fueled by demand in downstream QA QC and strong adoption of our InfinityLab LC Series Portfolio. GLP1s also continue to drive demand both for our leading analytical lab solutions and the unique capabilities we bring with Biovectra. We also saw healthy contributions from our food and diagnostics and clinical end markets and the academia and government end market returned to modest growth despite continued funding pressures.

What went well
  • Q3 revenue was $1.74 billion, above the high end of guidance, with core growth of 6.1% and reported growth of 10.1% (currency +2.1%, M&A +1.9%).
  • The quarter marked the fifth consecutive quarter of sequential core revenue acceleration, improving from 1.2% in Q1 to 5.3% in Q2 to 6.1% in Q3.
  • The two largest end markets led the way, with Pharma up 9% (small molecule double digits) and Chemical and advanced materials up 10% with broad-based strength across all major geographies.
  • The NASD CDMO business grew in the high 20s on continued demand for siRNA modalities, and management raised its confidence in a double-digit full-year NASD outlook.
  • InfinityLab LC platform delivered mid-teens growth with early adopters returning for larger follow-on purchases, and the new Pro iQ LCMS system is tracking well ahead of its launch forecast.
  • Agilent raised full-year FY2025 revenue guidance to $6.91-$6.93 billion, a $150 million increase at the midpoint and 1.5 percentage points of additional core growth versus the prior range.
  • Instrument book-to-bill remained above one for the sixth consecutive quarter, and management cited market share gains across all major geographies.
  • Pricing improved to about 100 basis points year on year (double the roughly 50 basis points a year ago), and Ignite drove more than 15% reduction in management layers plus double-digit savings in key cost categories.
What went wrong
  • Operating margin of 25.1% was below management's own expectations for the quarter and declined about 230 basis points year on year.
  • Gross margin came in at 53.1%, down year on year, driven by currency, tariffs, and downtime to expand capacity at Biovectra.
  • Net tariff and related logistics costs were the single biggest margin headwind, contributing about 200 basis points of the year-on-year operating margin decline, with $35 million of tariff cost recognized in Q3 versus about $25 million originally planned.
  • Environmental and Forensics was the only end market to decline in the U.S., with the Americas down about 20% as U.S. EPA changes drove caution on capital spending; PFAS softness in the Americas is expected to weigh on Q4 and Q1.
  • Operating cash flow fell to $362 million, down versus last year, as working capital rose on volume growth and tariff-related inventory build, plus severance costs from organizational efficiency efforts.
  • Biopharma spending remained muted as expected, with biopharma excluding NASD roughly flat and biopharma capital budgets still conservative amid limited venture capital funding.

Guidance Changes

MetricPeriodCurrent guidance
FY2025 revenueFY2025$6.91-$6.93 billion, up 4.3%-4.6% core and 6.2%-6.5% reported (4.5% core at midpoint)
FY2025 non-GAAP EPSFY2025$5.56-$5.59, up 5.1%-5.7% year on year
Q4 revenueQ4 FY2025$1.82-$1.84 billion, up 4.8%-6% core and 7.1%-8.3% reported (currency +0.2%, M&A +2.1%)
Q4 non-GAAP EPSQ4 FY2025$1.57-$1.60, representing leveraged earnings growth of 7.5%-9.6%
Q4 operating margin (sequential)Q4 FY2025targeting approximately 230 basis points of sequential improvement (also cited as ~200bps)
FY2025 net tariff costFY2025~$20 million net cost; ~$70 million gross for the second half ($35M Q3 plus similar Q4)
FY2025 other income / tax rate / diluted sharesFY2025$26 million other income, 12% tax rate, 285 million diluted shares

Performance Breakdown

MetricYoYNote
Total revenue +6.1% core / +10.1% reported Broad-based demand led by Pharma and Chemical and advanced materials, plus a 2.1% currency tailwind and 1.9% M&A contribution
Non-GAAP EPS +4% to $1.37 Strong top line at the high end of expectations, partly offset by lower margins from tariffs, higher variable pay, and commercial investment
Pharma end market +9% Double-digit small molecule growth, InfinityLab LC adoption, GLP-1 demand, and improved funnel conversion as lab managers access capital budgets
Chemical and advanced materials end market +10% Rebounding capital investment from chemical customers, new semiconductor fab investment, and replacement of an underinvested installed base
Life Sciences and Diagnostics Markets Group (LDG) +7% Low double-digit LC and LCMS instrument growth plus strong NASD and Biovectra CDMO performance
Applied Markets Group (AMG) +5% Strong GCMS and spectroscopy growth, supply-chain reshoring, greenfield and capacity expansion, and 8850 GC ramp; led by Asia ex-China and EMEA
Agilent CrossLab Group (ACG) +5% Mid single-digit consumables and services growth despite a $50 million tariff-driven pull forward of consumables sales into Q2
NASD (siRNA CDMO) growth well into the 20s (high 20s) Growing demand for siRNA modalities in clinical and commercial programs, plus recent approvals and label expansions
Gross margin 53.1%, down year on year Currency, tariffs, and Biovectra capacity-expansion downtime
Operating margin 25.1%, down ~230 bps Tariffs and logistics (~200bps), unfavorable currency, and the Biovectra shutdown; also above plan on variable pay and commercial spend
Pricing ~+100 bps Value-driven Ignite pricing actions, roughly double the ~50 bps benefit a year ago

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Ignite enterprise operating modelValue-driven pricing and structural efficiency programDelivered pricing impact twice last year's, cut management layers more than 15%, and drove double-digit savings in key cost categories, positioning for accelerated Q4 leverage
Tariff mitigationMinimal FY2025 impact guided in MayNow ~$20M net cost for the year; mitigation via footprint shifts, supplier relocation, and targeted pricing, with full mitigation expected in 2026 as European tariffs rose 50%
Pharma replacement cycle and budget normalizationSpending gated by executive-level approvals; gradual recoveryLab managers increasingly accessing capital budgets, larger year-end quotes, and early signs of a standard (not elevated) year-end budget environment
Innovation and new product rampsInfinityLab LC and new platforms launchingInfinityLab mid-teens growth, Pro iQ LCMS ahead of forecast, 8850 GC ramping ahead of plan, and Dako Omnis expanding the diagnostics addressable market
China recovery and stimulusStable, low diagnostics exposureCAM in China up low teens on petrochemicals and domestic semiconductor buildout; a large stimulus order expected late in the year plus the new 'quality productive forces' innovation policy
Capital deployment and M&A readinessDilution-mitigation buybacks; net leverage 0.9xManagement expects M&A to become a more meaningful, disciplined part of capital deployment aligned to strategy, citing high organizational readiness from Ignite

Q&A Summary

Can you unpack the three drivers of the light margins (tariffs/inventory, variable pay, incremental spend) and whether those investments benefit 2026?
The three factors hit in roughly equal measure; tariffs and related logistics were the biggest single impact and will peak in Q4 before trending down and being fully mitigated in 2026. Commercial investment is deliberate to capture rising replacement demand and gain share heading into 2026.
What is the outlook for NASD and the broader pharma picture given biologics headwinds?
NASD grew well into the 20s with strong orders and recent approvals/label expansions, and the full-year outlook is now increasingly confident of double digits. Small molecule grew double digits on InfinityLab adoption; biopharma ex-NASD was roughly flat as spending stays muted but conditions are normalizing.
How widespread is the reduced dependence on spending sign-offs, and how much pent-up demand could it release?
It is seen across all geographies, particularly in small molecule and large pharma, reflecting the gradual replacement cycle. Approvals moving from executives to lab and site managers is improving velocity, with larger quotes going out for year-end.
Was PFAS soft in the U.S. given the ~10% overall growth?
PFAS grew low double digits globally (about 50% year-to-date) but the Americas were down about 20% due to U.S. EPA changes creating CapEx caution, leaving some question over Q4 and Q1; global PFAS remains very strong.
Why weren't the commercial investments baked into the original guide?
The momentum in orders and multiple product launches (InfinityLab, Pro iQ LCMS) running ahead of ramp created a dynamic opportunity; management chose to invest early to gain share in a competitive market rather than wait.
Is taking the ~5.5% Q4 growth midpoint and rolling it into 2026 a reasonable starting point?
It is too early to guide 2026, but the meaningfully stronger second half is a positive momentum indicator; tariffs (the largest 2025 headwind) should be fully mitigated and become a tailwind, and Ignite savings continue, though supplier cost increases remain a watch item.
Can you quantify the full-year tariff hit and confirm that amount comes back on gross margin next year?
Q3 tariff cost was about $35 million (vs. ~$25 million planned, up ~$10 million) with a similar Q4, or ~$70 million for the second half; most mitigation actions are implemented by end of this quarter and benefits start flowing through gross margin in Q1 and across 2026.
What did you see on pricing versus volume in the quarter?
Pricing improved about 100 basis points in the quarter, up from roughly 50 basis points year on year the prior year; tariff surcharges have largely not yet been realized and will flow through in Q4 and 2026.
Did the prior-quarter consumable pull-forward and instrument push-out play out as expected, and any stocking/destocking?
The Q2 consumables pull-forward worked itself out quickly; Q3 saw mid single-digit consumables growth with no further pull-forward and no stocking or destocking, supported by strong lab activity.
How are you thinking about capital deployment and M&A readiness given the 0.9x leverage and leadership changes?
Net leverage is 0.9x and organizational readiness is high thanks to Ignite; M&A is expected to become a more meaningful, disciplined part of capital deployment aligned to strategy pillars, alongside continued internal investment in digital, CRM, and commercial.
What drove the strong Chemical and advanced materials quarter and gives confidence it is sustainable, not a pull-forward?
Growth of 10% was broad-based and driven by supply-chain regionalization capacity, greenfield investments, and an emerging replacement cycle, led by the chemical sector feeding semiconductor and energy demand; management sees it continuing.
What are you seeing in China and the expected stimulus?
China CAM grew low teens on petrochemicals and domestic semiconductor buildout, with a large stimulus order expected late in the year and the new 'quality productive forces' innovation policy as tailwinds; funnels are building and win rates are high, with China improving into 2026.

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Reported 2025-08-27 · figures from the Agilent Technologies, Inc. Q3 2025 earnings call.

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