Waters Corporation (NYSE: WAT) swings to Q2 loss after $13B BDS acquisition
Waters Corporation reported sharply higher scale in 2026 following completion of the $12.96 billion acquisition of BD’s Biosciences and Diagnostic Solutions business. For the quarter ended July 4, 2026, total net revenues were $1.65 billion, up from $771 million a year earlier, driven by adding Biosciences and Advanced Diagnostics alongside the legacy analytical instruments business.
Profitability deteriorated as integration-related costs and amortization flowed through. The quarter showed an operating loss of $86 million versus $188 million of operating income a year earlier, with purchased intangibles amortization of $244 million and restructuring charges of $49 million. Net loss was $136 million for the quarter and $208 million for the first half, compared with net income of $147 million and $268 million in the prior-year periods.
The balance sheet expanded significantly: total assets rose to $24.75 billion, including $9.42 billion of goodwill and $8.52 billion of intangible assets. Debt increased to $5.09 billion, mainly from new Senior Notes and a SpinCo term loan used in the transaction, while cash and cash equivalents stood at $539 million. Waters also implemented a workforce reduction affecting about 3% of employees, recording $52 million of severance-related restructuring costs.
Positive
- Revenue roughly doubled, with quarterly net revenues rising to $1.65 billion from $771 million a year earlier, reflecting the scale added by the BDS Business Acquisition.
- The BDS Business contributed substantial identifiable intangible assets of $8.38 billion and preliminary goodwill of $8.09 billion, broadening Waters’ presence in biosciences and diagnostics.
- Operating cash flow remained positive at $198 million for the first half of 2026 despite integration costs, supporting ongoing investment and debt service.
Negative
- Waters swung to a net loss of $136 million in Q2 2026 and $208 million for the first half, from net income of $147 million and $268 million in the prior-year periods.
- Total debt increased to $5.09 billion from $1.41 billion at year-end 2025, materially raising leverage and interest expense (first-half interest expense $108 million vs. $28 million a year earlier).
- Integration-related charges weighed on earnings, including $437 million of intangible amortization and $52 million of restructuring costs in the first half of 2026, plus TSA costs of about $40 million.
- The company implemented a workforce reduction affecting approximately 3% of employees, indicating cost-cutting and restructuring pressures post-acquisition.
Filing Explained
As of July 4, $129 million of acquisition consideration remained a prepaid deposit because certain businesses had not legally transferred.
Form 10-Q is an unaudited quarterly report. Waters records the BDS acquisition as completed on
Issuing those additional shares increased the total share count and reduced the percentage ownership of former Waters holders; the filing reports the resulting fully diluted split as
However, certain Deferred Close Businesses had not legally transferred as of
The purchase-price allocation remains preliminary and may change during the measurement period, which cannot exceed one year from the
Key Figures
Key Terms
Reverse Morris Trust financial
Deferred Close Businesses financial
Term SOFR financial
cash flow hedges financial
Pillar Two system of global minimum tax rules financial
Earnings Snapshot
FAQ
How did Waters (WAT) perform financially in Q2 2026?
What is the size and structure of Waters’ acquisition of BD’s BDS Business?
How much debt does Waters (WAT) have after the BDS acquisition?
What are Waters’ key intangible assets and goodwill from the BDS deal?
How did the BDS acquisition affect Waters’ revenue mix and scale?
What restructuring actions did Waters (WAT) take in 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| ☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
| Emerging growth company | ||||||
Table of Contents
WATERS CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
INDEX
| PART I | FINANCIAL INFORMATION | Page | ||||
| Item 1. |
Financial Statements |
|||||
| Consolidated Balance Sheets (unaudited) as of July 4, 2026 and December 31, 2025 |
3 | |||||
| Consolidated Statements of Operations (unaudited) for the three months ended July 4, 2026 and June 28, 2025 |
4 | |||||
| Consolidated Statements of Operations (unaudited) for the six months ended July 4, 2026 and June 28, 2025 |
5 | |||||
| Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the three and six months ended July 4, 2026 and June 28, 2025 |
6 | |||||
| Consolidated Statements of Cash Flows (unaudited) for the six months ended July 4, 2026 and June 28, 2025 |
7 | |||||
| Consolidated Statements of Stockholders’ Equity (unaudited) for the three months ended July 4, 2026 and June 28, 2025 |
8 | |||||
| Consolidated Statements of Stockholders’ Equity (unaudited) for the six months ended July 4, 2026 and June 28, 2025 |
9 | |||||
| Condensed Notes to Consolidated Financial Statements (unaudited) |
10 | |||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
41 | ||||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
54 | ||||
| Item 4. |
Controls and Procedures |
55 | ||||
| PART II |
OTHER INFORMATION |
|||||
| Item 1. |
Legal Proceedings | 55 | ||||
| Item 1A. |
Risk Factors | 55 | ||||
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 56 | ||||
| Item 5. |
Other Information | 56 | ||||
| Item 6. |
Exhibits | 57 | ||||
| Signature | 58 | |||||
Table of Contents
July 4, 2026 |
December 31, 2025 |
|||||||
(In millions, except share data) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | $ | ||||||
| Accounts receivable, net |
||||||||
| Inventories |
||||||||
| Other current assets |
||||||||
| |
|
|
|
|||||
| Total current assets |
||||||||
| Property, plant and equipment, net |
||||||||
| Intangible assets, net |
||||||||
| Goodwill |
||||||||
| Operating lease assets |
||||||||
| Other assets |
||||||||
| |
|
|
|
|||||
| Total assets |
$ | $ | ||||||
| |
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Notes payable |
$ | $ | ||||||
| Accounts payable |
||||||||
| Accrued employee compensation |
||||||||
| Deferred revenue and customer advances |
||||||||
| Current operating lease liabilities |
||||||||
| Accrued income taxes |
||||||||
| Accrued warranty |
||||||||
| Other current liabilities |
||||||||
| |
|
|
|
|||||
| Total current liabilities |
||||||||
| Long-term liabilities: |
||||||||
| Long-term debt |
||||||||
| Long-term deferred tax liabilities |
||||||||
| Long-term operating lease liabilities |
||||||||
| Long-term portion of retirement benefits |
||||||||
| Long-term income tax liabilities |
||||||||
| Other long-term liabilities |
||||||||
| |
|
|
|
|||||
| Total long-term liabilities |
||||||||
| |
|
|
|
|||||
| Total liabilities |
||||||||
| Commitments and contingencies (Notes 6, 7 and 10) |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, par value $ |
||||||||
| Common stock, par value $ |
||||||||
| Additional paid-in capital |
||||||||
| Retained earnings |
||||||||
| Treasury stock, at cost, |
( |
) | ( |
) | ||||
| Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total stockholders’ equity |
||||||||
| |
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | $ | ||||||
| |
|
|
|
|||||
Three Months Ended |
||||||||
July 4, 2026 |
June 28, 2025 |
|||||||
(In millions , except per share data) |
||||||||
| Revenues: |
||||||||
| Product revenue |
$ | $ | ||||||
| Service revenue |
||||||||
| |
|
|
|
|||||
| Total net revenues |
||||||||
| Costs and operating expenses: |
||||||||
| Cost of product revenue |
||||||||
| Cost of service revenue |
||||||||
| Selling and administrative expenses |
||||||||
| Research and development expenses |
||||||||
| Purchased intangibles amortization |
||||||||
| Restructuring charges |
||||||||
| |
|
|
|
|||||
| Total costs and operating expenses |
||||||||
| |
|
|
|
|||||
| Operating (loss) income |
( |
) | ||||||
| Other expense, net |
( |
) | ||||||
| Interest expense |
( |
) | ( |
) | ||||
| Interest income |
||||||||
| |
|
|
|
|||||
| (Loss) income before income taxes |
( |
) | ||||||
| Benefit (provision) for income taxes |
( |
) | ||||||
| |
|
|
|
|||||
| Net (loss) income |
$ | ( |
) | $ | ||||
| |
|
|
|
|||||
| Net (loss) income per basic common share |
$ | ( |
) | $ | ||||
| Weighted-average number of basic common shares |
||||||||
| Net (loss) income per diluted common share |
$ | ( |
) | $ | ||||
| Weighted-average number of diluted common shares and equivalents |
||||||||
Six Months Ended |
||||||||
July 4, 2026 |
June 28, 2025 |
|||||||
(In millions, except share data) |
||||||||
| Revenues: |
||||||||
| Product revenue |
$ | $ | ||||||
| Service revenue |
||||||||
| |
|
|
|
|||||
| Total revenues |
||||||||
| Costs and operating expenses: |
||||||||
| Cost of product revenue |
||||||||
| Cost of service revenue |
||||||||
| Selling and administrative expenses |
||||||||
| Research and development expenses |
||||||||
| Purchased intangibles amortization |
||||||||
| Restructuring charges |
||||||||
| |
|
|
|
|||||
| Total costs and operating expenses |
||||||||
| |
|
|
|
|||||
| Operating (loss) income |
( |
) | ||||||
| Other income, net |
||||||||
| Interest expense |
( |
) | ( |
) | ||||
| Interest income |
||||||||
| |
|
|
|
|||||
| (Loss) income before income taxes |
( |
) | ||||||
| Benefit (provision) for income taxes |
( |
) | ||||||
| |
|
|
|
|||||
| Net (loss) income |
$ | ( |
) | $ | ||||
| |
|
|
|
|||||
| Net (loss) income per basic common share |
$ | ( |
) | $ | ||||
| Weighted-average number of basic common shares |
||||||||
| Net (loss) income per diluted common share |
$ | ( |
) | $ | ||||
| Weighted-average number of diluted common shares and equivalents |
||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 4, 2026 |
June 28, 2025 |
July 4, 2026 |
June 28, 2025 |
|||||||||||||
(In millions) |
(In millions) |
|||||||||||||||
| Net (loss) income |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Other comprehensive income (loss): |
||||||||||||||||
| Foreign currency translation |
( |
) | ||||||||||||||
| Unrealized gains (losses) on derivative instruments before reclassifications |
( |
) | ( |
) | ( |
) | ||||||||||
| Amounts reclassified to interest income |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Unrealized gains (losses) on derivative instruments before income taxes |
( |
) | ( |
) | ( |
) | ||||||||||
| Income tax benefit |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Unrealized gains (losses) on derivative instruments, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||
| Retirement liability adjustment before reclassifications |
||||||||||||||||
| Amounts reclassified to other income, net |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Retirement liability adjustment before income taxes |
||||||||||||||||
| Income tax benefit |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Retirement liability adjustment, net of tax |
||||||||||||||||
| Other comprehensive income (loss) |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Comprehensive (loss) income |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
Six Months Ended |
||||||||
July 4, 2026 |
June 28, 2025 |
|||||||
(In millions) |
||||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ | ( |
) | $ | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Stock-based compensation |
||||||||
Deferred income taxes |
||||||||
Depreciation |
||||||||
Amortization of intangibles |
||||||||
Amortization of acquisition-related inventory and fixed assets step-up recognized |
||||||||
Change in operating assets and liabilities: |
||||||||
(Increase) decrease in accounts receivable |
( |
) | ||||||
Increase in inventories |
( |
) | ( |
) | ||||
Increase in other current assets |
( |
) | ( |
) | ||||
Decrease in other assets |
||||||||
Increase (decrease) in accounts payable and other current liabilities |
( |
) | ||||||
Increase in deferred revenue and customer advances |
||||||||
Decrease in other liabilities |
( |
) | ||||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities: |
||||||||
Additions to property, plant, equipment and software capitalization |
( |
) | ( |
) | ||||
Cash acquired in business acquisition |
( |
) | ||||||
Investments in unaffiliated companies, net |
( |
) | ( |
) | ||||
Change in deposit asset, related to deferred close entities |
||||||||
Net cash provided by (used in) investing activities |
( |
) | ||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt issuances |
||||||||
Payments on debt |
( |
) | ( |
) | ||||
Payments of debt issuance costs |
( |
) | ( |
) | ||||
Proceeds from stock plans |
||||||||
Purchases of treasury shares |
( |
) | ( |
) | ||||
(Payments for) proceeds from derivative contracts |
( |
) | ||||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ||||||
(Decrease) increase in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of period |
||||||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
Non-cash investing activities related to the BDS Business Acquisition: |
||||||||
Fair value of Waters common stock issued |
$ | |||||||
Notes payable and debt assumed |
$ | |||||||
Estimated net working capital adjustment |
$ | |||||||
Number of Common Shares |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||
| Balance March 29, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| Other comprehensive income |
— | — | — | — | — | |||||||||||||||||||||||
| Issuance of common stock for employees: |
||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
— | — | — | — | ||||||||||||||||||||||||
| Stock options exercised |
— | — | — | — | ||||||||||||||||||||||||
| Stock-based compensation |
— | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance June 28, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Number of Common Shares |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||
| Balance April 4, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Net loss |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
| Other comprehensive income |
— | — | — | — | — | |||||||||||||||||||||||
| Issuance of common stock for employees: |
||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
— | — | — | — | ||||||||||||||||||||||||
| Stock options exercised |
— | — | — | — | ||||||||||||||||||||||||
| Treasury stock |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
| Stock-based compensation |
— | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance July 4, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Number of Common Shares |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||
| Balance December 31, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| Other comprehensive income |
— | — | — | — | — | |||||||||||||||||||||||
| Issuance of common stock for employees: |
||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
— | — | — | — | ||||||||||||||||||||||||
| Stock options exercised |
— | — | — | — | ||||||||||||||||||||||||
| Treasury stock |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
| Stock-based compensation |
— | — | — | — | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance June 28, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Number of Common Shares |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||||
| Balance December 31, 2025 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Net loss |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
| Share issuance for acquisition (1) |
— | — | — | — | ||||||||||||||||||||||||
| Other comprehensive loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
| Issuance of common stock for employees: |
||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
— | — | — | — | ||||||||||||||||||||||||
| Stock options exercised |
— | — | — | — | ||||||||||||||||||||||||
| Treasury stock |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
| Stock-based compensation |
— | — | — | |||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance July 4, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (1) | Refer to Note 4, “Acquisitions” for further details. |
Balance at Beginning of Period |
Additions |
Deductions and Other |
Balance at End of Period |
|||||||||||||
Allowance for Credit Losses |
||||||||||||||||
July 4, 2026 |
$ | $ | $ | $ | ||||||||||||
June 28, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||
Total at July 4, 2026 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
401(k) Restoration Plan assets |
$ | $ | $ | $ | ||||||||||||
Foreign currency exchange contracts |
||||||||||||||||
Interest rate cross-currency swap agreements |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Liabilities: |
||||||||||||||||
Interest rate cross-currency swap agreements |
||||||||||||||||
Interest rate swap cash flow hedge |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Total at December 31, 2025 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
401(k) Restoration Plan assets |
$ | $ | $ | $ | ||||||||||||
Foreign currency exchange contracts |
||||||||||||||||
Interest rate cross-currency swap agreements |
||||||||||||||||
Interest rate swap cash flow hedge |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Liabilities: |
||||||||||||||||
Foreign currency exchange contracts |
$ | $ | $ | $ | ||||||||||||
Interest rate cross-currency swap agreements |
||||||||||||||||
Interest rate swap cash flow hedge |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
July 4, 2026 |
December 31, 2025 |
|||||||||||||||
Notional Value |
Fair Value |
Notional Value |
Fair Value |
|||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
Other current assets |
$ | $ | $ | $ | ||||||||||||
Other current liabilities |
$ | $ | $ | $ | ||||||||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||
Other assets |
$ | $ | $ | $ | ||||||||||||
Other liabilities (1) |
$ | $ | $ | $ | ||||||||||||
Accumulated other comprehensive loss |
$ | ( |
) | $ | ( |
) | ||||||||||
Interest rate swap cash flow hedges: |
||||||||||||||||
Other assets |
$ | $ | $ | $ | ||||||||||||
Other liabilities |
$ | $ | $ | $ | ||||||||||||
Accumulated other comprehensive loss |
$ | ( |
) | $ | ( |
) | ||||||||||
(1) |
Includes $ |
Financial Statement Classification |
Three Months Ended |
Six Months Ended |
||||||||||||||||
July 4, 2026 |
June 28, 2025 |
July 4, 2026 |
June 28, 2025 |
|||||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||||
Realized losses on closed contracts |
Cost of revenue | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||
Unrealized gains on open contracts |
Cost of revenue | |||||||||||||||||
Cumulative net pre-tax losses |
Cost of revenue | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | |||||||
Interest rate cross-currency swap agreements: |
||||||||||||||||||
Interest earned |
Interest income | $ | $ | $ | $ | |||||||||||||
Unrealized gains (losses) on open contracts |
Other comprehensive income (loss) | $ | $ | ( |
) | $ | $ | ( |
) | |||||||||
Interest rate swap cash flow hedges: |
||||||||||||||||||
Unrealized gains (losses) on open contracts |
Other comprehensive income (loss) | $ | $ | ( |
) | $ | $ | ( |
) | |||||||||
| (1) | Unrealized (losses) gains on open contracts from interest rate cross-currency swap agreements fluctuated year over year primarily due to changes in foreign exchange rates, which resulted in period-to-period |
Balance at Beginning of Period |
Accruals for Warranties |
Settlements Made |
Acquisitions |
Balance at End of Period |
||||||||||||||||
| Accrued warranty liability: |
||||||||||||||||||||
| July 4, 2026 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
| June 28, 2025 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
July 4, 2026 |
June 28, 2025 |
|||||||
| Balance at the beginning of the period |
$ | $ | ||||||
| Deferred revenue acquired |
||||||||
| Recognition of revenue included in balance at beginning of the period |
( |
) | ( |
) | ||||
| Revenue deferred during the period, net of revenue recognized |
||||||||
| |
|
|
|
|||||
| Balance at the end of the period |
$ | $ | ||||||
| |
|
|
|
|||||
July 4, 2026 |
||||
| Unfulfilled performance obligations expected to be recognized in: |
||||
| |
$ | |||
| |
||||
| |
||||
| |
|
|||
| Total |
$ | |||
| |
|
|||
July 4, 2026 |
December 31, 2025 |
|||||||
| Raw materials |
$ | $ | ||||||
| Work in progress |
||||||||
| Finished goods |
||||||||
| |
|
|
|
|||||
| Total inventories |
$ | $ | ||||||
| |
|
|
|
|||||
Amount |
||||
| Number of fully diluted shares of Company common stock immediately prior to the BDS Business Acquisition (a) |
||||
| Share issuance ratio |
||||
| |
|
|||
| Number of shares of Company common stock issued to BD shareholders as a result of the BDS Business Acquisition |
||||
| Less: SpinCo Make Whole Awards (b) |
( |
) | ||
| |
|
|||
| Number of shares of Company common stock issued to BD common stockholders |
||||
| Company common stock price (c) |
||||
| |
|
|||
| Fair value of Company common stock issued |
$ | |||
| |
|
|||
| Fair value of share-based compensation awards issued to SpinCo Business Employees related to pre-combination services (d) |
||||
| Estimated net working capital adjustment |
||||
| Financing fees paid on behalf of SpinCo |
||||
| |
|
|||
| Total BDS Business Acquisition consideration |
$ | |||
| |
|
|||
| (a) | The following table represents the number of fully diluted shares of the Company’s common stock: |
Amount |
||||
| Number of shares of Company common stock issued and outstanding (excluding Company common stock held in treasury) |
||||
| Number of shares of Company common stock issued upon conversion of Company equity awards |
||||
| |
|
|||
| Number of fully diluted shares of Company common stock immediately prior to the BDS Business Acquisition |
||||
| (b) | The number of shares of Company common stock underlying the Company’s restricted stock unit awards (the “Waters RSU Awards”) and the Company’s stock appreciation right awards (the “Waters SAR Awards”) that were awarded in respect of BD awards, pursuant to the Employee Matters Agreement, based on BD awards outstanding. |
| (c) | Represents the opening price per share of the Company’s common stock as reported by the New York Stock Exchange on February 9, 2026. |
| (d) | Consideration for replacement of outstanding equity awards of BD held by employees of Conveying Businesses. All outstanding BD stock appreciation right awards (whether vested or unvested) held by an employee of SpinCo of a Conveying Business as of immediately prior to the Distribution Time was converted, as of the Effective Time, into Waters SAR Awards and all BD time-based restricted stock unit awards and BD performance-based restricted stock unit awards held by an employee of SpinCo of a Conveying Business as of immediately prior to the Distribution Time were converted, as of the Effective Time, into Waters RSU Awards as set forth in the Employee Matters Agreement. A portion of the fair value of equity awards held by employees of SpinCo associated with Conveying Businesses and replaced as a result of the BDS Business Acquisition represents consideration transferred because it relates to services rendered by such BDS Business employees to BD prior to the BDS Business Acquisition. This amount is calculated based on the ratio of the pre-combination service period (from the grant date until the Closing Date) to the longer of the original total service period or the modified service period, if any, multiplied by the fair value of the BD awards (the number of BD awards multiplied by the BD share price on the Closing Date). The Company has incurred compensation expense of $ million related to services from the Closing Date through July 4, 2026. |
| Purchase Price |
||||
| BDS Business Acquisition Consideration |
$ | |||
| Less: Prepaid deposit asset for Deferred Close Businesses |
( |
) | ||
| |
|
|||
| Net consideration |
||||
| |
|
|||
| Identifiable Net Assets Acquired |
||||
| Assets |
||||
| Cash and cash equivalents |
||||
| Accounts receivable |
||||
| Inventories |
||||
| Other current and non-current assets |
||||
| Property, plant and equipment |
||||
| Intangible assets |
||||
| Operating lease assets |
||||
| Liabilities |
||||
| Accounts payable and accrued expenses |
( |
) | ||
| Notes payable and debt |
( |
) | ||
| Deferred revenue and customer advances |
( |
) | ||
| Operating lease liabilities |
( |
) | ||
| Other current and non-current liabilities |
( |
) | ||
| Deferred tax liabilities |
( |
) | ||
| |
|
|||
| Net Assets Acquired |
||||
| |
|
|||
| Goodwill |
$ | |||
| |
|
|||
| Net consideration |
$ | |||
| |
|
Amount |
Weighted-Average Life |
|||||||
| Developed technology – Biosciences |
$ | |||||||
| Developed technology – Diagnostics |
||||||||
| Customer relationships – Biosciences |
||||||||
| Customer relationships – Diagnostics |
||||||||
| Trade name – Biosciences |
||||||||
| Trade name – Diagnostics |
||||||||
| |
|
|
|
|||||
| Total |
$ | |||||||
| |
|
|||||||
Amount |
||||
| Land and land improvements |
$ | |||
| Buildings and leasehold improvements |
||||
| Production and other equipment |
||||
| Construction in progress |
||||
| Placed instruments at customers |
||||
| |
|
|||
| Total |
$ | |||
| |
|
|||
July 4, 2026 |
June 28, 2025 |
|||||||
| Revenue |
$ | $ | ||||||
| Net loss |
( |
) |
( |
) | ||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total |
|||||||||||||
| Goodwill as of December 31, 2025 |
$ | $ | $ | $ | ||||||||||||
| Goodwill reclassification |
( |
) | ||||||||||||||
| BDS Business Acquisition |
||||||||||||||||
| Currency translation |
( |
) | ( |
) |
( |
) |
( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Goodwill as of July 4, 2026 |
$ | |||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
July 4, 2026 |
December 31, 2025 |
|||||||||||||||||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Weighted- Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Weighted- Average Amortization Period |
|||||||||||||||||||||||||||
| Capitalized software |
$ | $ | years | $ | $ | years | ||||||||||||||||||||||||||
| Purchased intangibles |
years | years | ||||||||||||||||||||||||||||||
| Trademarks |
||||||||||||||||||||||||||||||||
| Licenses |
years | years | ||||||||||||||||||||||||||||||
| Patents and other intangibles |
years | years | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
$ | $ | years | $ | $ | years | ||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Annual Expense |
||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
Senior Notes |
Term |
Interest Rate |
Maturity Date |
Aggregate Principal |
||||||
2027 Notes |
$ | |||||||||
2029 Notes |
||||||||||
2031 Notes |
||||||||||
2033 Notes |
||||||||||
2036 Notes |
||||||||||
July 4, 2026 |
December 31, 2025 |
|||||||
| Senior unsecured notes - Series K - |
$ | $ | ||||||
| Senior unsecured notes - Series L - |
||||||||
| Senior unsecured notes - Series N - |
||||||||
| |
|
|
|
|||||
| Total notes payable and debt, current |
||||||||
| Senior unsecured notes - Series M - |
||||||||
| Senior unsecured notes - Series O - |
||||||||
| Senior unsecured notes - Series P - |
— | |||||||
| Senior unsecured notes - Series Q - |
— | |||||||
| SpinCo Term Loan - due February 2028 |
— | |||||||
| Senior Notes - |
— | |||||||
| Senior Notes - |
— | |||||||
| Senior Notes - |
— | |||||||
| Senior Notes - |
— | |||||||
| Senior Notes - |
— | |||||||
| Credit agreement |
||||||||
| Unamortized debt issuance costs |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total long-term debt |
||||||||
| |
|
|
|
|||||
| Total debt |
$ | $ | ||||||
| |
|
|
|
|||||
| Financial Statement Classification |
July 4, |
December 31, |
||||||||
2026 |
2025 |
|||||||||
| Assets: |
||||||||||
| Property operating lease assets |
Operating lease assets | $ | $ | |||||||
| Automobile operating lease assets |
Operating lease assets | |||||||||
| |
|
|
|
|||||||
| Total lease assets |
Operating lease assets | $ | $ | |||||||
| |
|
|
|
|||||||
| Liabilities: |
||||||||||
| Current operating lease liabilities |
Current operating lease liabilities | $ | $ | |||||||
| Long-term operating lease liabilities |
Long-term operating lease liabilities |
|||||||||
| |
|
|
|
|||||||
| Total lease liabilities |
Long-term operating lease liabilities |
$ | $ | |||||||
| |
|
|
|
|||||||
2026 |
$ | |||
2027 |
||||
2028 |
||||
2029 |
||||
2030 |
||||
2031 and thereafter |
||||
Total future minimum lease payments |
||||
Less: amount of lease payments representing interest |
( |
) | ||
Present value of future minimum lease payments |
||||
Less: current operating lease liabilities |
( |
) | ||
Long-term operating lease liabilities |
$ | |||
Three Months Ended July 4, 2026 |
||||||||||||
Net loss |
Weighted-Average Shares (1) |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net loss per basic common share |
$ | ( |
) | $ | ( |
) | ||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
||||||||||||
Net loss per diluted common share |
$ | ( |
) | $ | ( |
) | ||||||
| (1) | Includes issuance of |
Three Months Ended June 28, 2025 |
||||||||||||
Net income |
Weighted- Average Shares |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net income per basic common share |
$ | $ | ||||||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
||||||||||||
Net income per diluted common share |
$ | $ | ||||||||||
Six Months Ended July 4, 2026 |
||||||||||||
Net loss |
Weighted-Average Shares (1) |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net loss per basic common share |
$ | ( |
) | $ | ( |
) | ||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
||||||||||||
Net loss per diluted common share |
$ | ( |
) | $ | ( |
) | ||||||
| (1) | Includes issuance of |
Six Months Ended June 28, 2025 |
||||||||||||
Net income |
Weighted- Average Shares |
Per Share |
||||||||||
(Numerator) |
(Denominator) |
Amount |
||||||||||
Net income per basic common share |
$ | $ | ||||||||||
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities |
( |
) | ||||||||||
Net income per diluted common share |
$ | $ | ||||||||||
Currency Translation |
Unrealized Income on Retirement Plans |
Unrealized Loss on Derivative Instruments |
Accumulated Other Comprehensive Loss |
|||||||||||||
| Balance at December 31, 2025 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
| Other comprehensive loss, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Balance at July 4, 2026 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 4, 2026 |
June 28, 2025 |
July 4, 2026 |
June 28, 2025 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Instrument systems |
$ | $ | $ | $ | ||||||||||||
| Consumables |
||||||||||||||||
| Service |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended |
||||||||||||||||
July 4, 2026 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total Revenues |
|||||||||||||
| Revenues: |
||||||||||||||||
| Asia: |
||||||||||||||||
| China |
$ | $ | $ | $ | ||||||||||||
| Asia Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Asia |
||||||||||||||||
| Americas: |
||||||||||||||||
| United States |
||||||||||||||||
| Americas Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Americas |
||||||||||||||||
| Europe |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended |
||||||||||||||||
June 28, 2025 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total Revenues |
|||||||||||||
| Revenues: |
||||||||||||||||
| Asia: |
||||||||||||||||
| China |
$ | $ | $ | $ | ||||||||||||
| Asia Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Asia |
||||||||||||||||
| Americas: |
||||||||||||||||
| United States |
||||||||||||||||
| Americas Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Americas |
||||||||||||||||
| Europe |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Six Months Ended |
||||||||||||||||
July 4, 2026 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total Revenues |
|||||||||||||
| Revenues: |
||||||||||||||||
| Asia: |
||||||||||||||||
| China |
$ | $ | $ | $ | ||||||||||||
| Asia Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Asia |
||||||||||||||||
| Americas: |
||||||||||||||||
| United States |
||||||||||||||||
| Americas Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Americas |
||||||||||||||||
| Europe |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Six Months Ended |
||||||||||||||||
June 28, 2025 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total Revenues |
|||||||||||||
| Revenues: |
||||||||||||||||
| Asia: |
||||||||||||||||
| China |
$ | $ | $ | $ | ||||||||||||
| Asia Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Asia |
||||||||||||||||
| Americas: |
||||||||||||||||
| United States |
||||||||||||||||
| Americas Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total Americas |
||||||||||||||||
| Europe |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
July 4, 2026 |
June 28, 2025 |
July 4, 2026 |
June 28, 2025 |
|||||||||||||
| Net revenues recognized at a point in time: |
||||||||||||||||
| Instrument systems |
$ | $ | $ | $ | ||||||||||||
| Consumables |
||||||||||||||||
| Service revenues recognized at a point in time (time & materials) |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues recognized at a point in time |
||||||||||||||||
| Net revenues recognized over time: |
||||||||||||||||
| Service and software maintenance revenues recognized over time (contracts) |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total net revenues |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended |
||||||||||||||||
July 4, 2026 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total |
|||||||||||||
| Total revenues, net |
$ | $ | $ | $ | ||||||||||||
| Less: |
||||||||||||||||
| Labor costs within selling and administrative and research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Material purchases |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Labor costs within product and service cost of revenues |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other segment expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Corporate and other expenses: |
||||||||||||||||
| Corporate expenses |
( |
) | ||||||||||||||
| Purchased intangibles amortization and purchase accounting fair value step-up expenses |
( |
) | ||||||||||||||
| Stock-based compensation |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
$ | $ | $ | $ | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income % |
% | % | % | ( |
%) | |||||||||||
Three Months Ended June 28, 2025 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total |
|||||||||||||
| Total revenues, net |
$ | $ | $ | $ | ||||||||||||
| Less: |
||||||||||||||||
| Labor costs within selling and administrative and research and development expenses |
( |
) | ( |
) | ( |
) | ||||||||||
| Material purchases |
( |
) | ( |
) | ( |
) | ||||||||||
| Labor costs within product and service cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
| Other segment expenses |
( |
) | ( |
) | ( |
) | ||||||||||
| Corporate and other expenses: |
||||||||||||||||
| Corporate expenses |
( |
) | ||||||||||||||
| Purchased intangibles amortization and purchase accounting fair value step-up expenses |
( |
) | ||||||||||||||
| Stock-based compensation |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating Income % |
% | % | % | |||||||||||||
Six Months Ended July 4, 2026 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total |
|||||||||||||
| Total revenues, net |
$ | $ | $ | $ | ||||||||||||
| Less: |
||||||||||||||||
| Labor costs within selling and administrative and research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Material purchases |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Labor costs within product and service cost of revenues |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other segment expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Corporate and other expenses: |
||||||||||||||||
| Corporate expenses |
( |
) | ||||||||||||||
| Purchased intangibles amortization and purchase accounting fair value step-up expenses |
( |
) | ||||||||||||||
| Stock-based compensation |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
$ | $ | $ | $ | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income % |
% | % | % | ( |
%) | |||||||||||
Six Months Ended June 28, 2025 |
||||||||||||||||
Analytical & Materials Sciences |
Biosciences |
Advanced Diagnostics |
Total |
|||||||||||||
| Total revenues, net |
$ | $ | $ | $ | ||||||||||||
| Less: |
||||||||||||||||
| Labor costs within selling and administrative and research and development expenses |
( |
) | ( |
) | ( |
) | ||||||||||
| Material purchases |
( |
) | ( |
) | ( |
) | ||||||||||
| Labor costs within product and service cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
| Other segment expenses |
( |
) | ( |
) | ( |
) | ||||||||||
| Corporate and other expenses: |
||||||||||||||||
| Corporate expenses |
( |
) | ||||||||||||||
| Purchased intangibles amortization and purchase accounting fair value step-up expenses |
( |
) | ||||||||||||||
| Stock-based compensation |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating income |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating Income % |
% |
% |
% | |||||||||||||
Table of Contents
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
The Company has four operating segments: Analytical Sciences, Biosciences, Advanced Diagnostics, and Materials Sciences. Analytical Sciences products and services primarily consist of high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and, together with HPLC, referred to as “LC”), mass spectrometry (“MS”), light scattering and field-flow fractionation instruments (Wyatt), and precision chemistry consumable products and related services. Materials Sciences products and services primarily consist of thermal analysis, rheometry and calorimetry instrument systems and service revenue. Biosciences products and services primarily consist of instruments, software and informatics, reagents, and single cell multiomics solutions, supporting the advanced analysis of cell populations for use in fields such as immunology, oncology, and infectious disease research. Advanced Diagnostics products and services primarily consist of a broad range of diagnostic instrumentation, assays, consumables, automation, and informatics that support the detection, identification and drug susceptibility testing of infectious disease organisms.
The Company’s products are used by pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic and government customers. These customers use the Company’s products to detect, identify, monitor and measure the chemical, physical and biological composition of materials and to predict the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids in various industrial, consumer goods and healthcare products.
Acquisition of BD Biosciences and Diagnostic Solutions Businesses
On February 9, 2026 (the “Closing Date”), the Company completed the acquisition (the “BDS Business Acquisition”) of the Biosciences and Diagnostic Solutions business (the “BDS Business”) of Becton, Dickinson and Company (“BD”). The transaction was structured as a Reverse Morris Trust transaction, where the BDS Business was spun off to BD shareholders and simultaneously merged with a wholly-owned subsidiary of the Company. The 2026 financial results of the BDS Business from the Closing Date are included in the Company’s 2026 consolidated financial results presented herein.
Tariffs
The Company sells and services its customers in over 35 countries outside of the U.S. and we have major manufacturing operations in the U.S., Ireland, U.K., Switzerland, Puerto Rico and in Singapore where we utilize subcontractors with worldwide capabilities.
In 2025, the U.S. government issued varying levels of tariffs on all imported goods into the U.S., including a baseline 10% tariff, subject to certain exceptions, which have also prompted retaliatory tariffs by a number of countries, including tariffs and export restrictions on certain manufacturing components imposed by China and tariffs pursuant to trade agreements the U.S. has entered into with certain countries. In addition, a number of new tariffs have been threatened, and the U.S. and other countries continue to negotiate trade arrangements and tariff levels. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). On March 4, 2026, the U.S. Court of International Trade ordered the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, and the CBP has begun accepting and processing applications for refunds on certain IEEPA tariffs. This decision introduces uncertainty regarding potential refund processes and future trade policy actions and could affect the Company’s cost structure and supply chain planning. As a result of this ruling, the Company may be eligible for a refund of tariffs previously paid on imported goods. As the recoverability and timing of any such refund remains uncertain, the Company has not recognized any material amounts as of July 4, 2026. In response to the U.S. Supreme Court ruling mentioned above, the U.S. government implemented new tariffs under alternative statutory authority. The Company continues to monitor developments around the Supreme Court’s decision and evaluate its potential impact on the Company’s future financial results and business.
These tariffs, any resulting retaliatory tariffs and any related supply-chain disruptions could have a significant impact on the Company’s consolidated statement of operations and statement of cash flows. In response to currently applicable and potential future tariffs, the Company is continuing to evaluate and implement a series of actions and policies that are intended to offset a portion of the impact of the tariffs on the Company’s financial position and results of operations. While the Company believes that these actions and policies will mitigate a substantial portion of the impact of the tariffs, the Company cannot provide any assurances that the tariffs or any resulting impediments to trade will not have a material effect on the Company’s consolidated statement of operations and statement of cash flows.
41
Table of Contents
In addition to changes in trade policy, the U.S. administration has implemented a number of other regulatory, policy and personnel changes, including the elimination, downsizing and reduced funding of certain government agencies and programs and the cancellation or delay of government contracts and research grants. In addition, the administration has changed the composition of and guidance from advisory panels on healthcare practices.
Financial Overview
The Company’s operating results are as follows for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions, except per share data):
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| July 4, 2026 | June 28, 2025 |
% change | July 4, 2026 | June 28, 2025 |
% change | |||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Product revenue |
$ | 1,220 | $ | 473 | 158 | % | $ | 2,139 | $ | 874 | 145 | % | ||||||||||||
| Service revenue |
425 | 298 | 43 | % | 773 | 559 | 38 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total net revenues |
1,645 | 771 | 113 | % | 2,912 | 1,433 | 103 | % | ||||||||||||||||
| Costs and operating expenses: |
||||||||||||||||||||||||
| Cost of revenue |
911 | 321 | 184 | % | 1,590 | 598 | 166 | % | ||||||||||||||||
| Selling and administrative expenses |
405 | 198 | 105 | % | 788 | 373 | 111 | % | ||||||||||||||||
| Research and development expenses |
122 | 49 | 149 | % | 218 | 95 | 129 | % | ||||||||||||||||
| Purchased intangibles amortization |
244 | 12 | 1,933 | % | 396 | 24 | 1,550 | % | ||||||||||||||||
| Restructuring charges |
49 | 3 | * | * | 52 | 4 | * | * | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating (loss) income |
(86 | ) | 188 | (146 | %) | (134 | ) | 340 | (139 | %) | ||||||||||||||
| Operating (loss) income as a % of revenue |
(5.2 | %) | 24.4 | % | (4.6 | %) | 23.7 | % | ||||||||||||||||
| Other (expense) income, net |
— | (1 | ) | (100 | %) | 1 | 1 | — | ||||||||||||||||
| Interest expense, net |
(55 | ) | (10 | ) | 450 | % | (96 | ) | (20 | ) | 380 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (Loss) income before income taxes |
(141 | ) | 178 | (179 | %) | (229 | ) | 321 | (171 | %) | ||||||||||||||
| Benefit (Provision) for income taxes |
5 | (31 | ) | (116 | %) | 21 | (52 | ) | (140 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net (loss) income |
$ | (136 | ) | $ | 147 | (193 | %) | $ | (208 | ) | $ | 268 | (178 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net (loss) income per diluted common share |
$ | (1.39 | ) | $ | 2.47 | (156 | %) | $ | (2.31 | ) | $ | 4.50 | (151 | %) | ||||||||||
| ** | Percentage not meaningful |
Due to the acquisition of the BDS Business on February 9, 2026, period over period comparability of the Company’s financial results has been materially impacted. In addition, the Company’s 2026 results include the BDS Business’s financial results only from the Closing Date through the end of the period, further affecting comparability with prior periods and in the future.
Revenue
The Company’s revenue increased 113% in the second quarter of 2026, as compared to the second quarter of 2025 and 103% for the first half of 2026 as compared to the first half of 2025, primarily driven by $817 million and $1.3 billion of revenue contributed by the BDS Business for the second quarter and since the Closing Date for the first half of 2026, respectively. Excluding the BDS Business revenue, legacy revenue increased 7% and 10% in the second quarter and first half of 2026, respectively, primarily due to broad-based growth across all product lines and geographical regions. Foreign currency translation decreased total revenue growth by 2% for the second quarter of 2026 and had a minimal impact on total revenue growth for the first half of 2026. In addition, the first half of 2026 had six more calendar days compared to the first half of 2025.
42
Table of Contents
Cost of Revenue
The cost of revenue in the second quarter and first half of 2026 increased 184% and 166%, respectively, as compared to 2025. This increase is primarily attributed to the $560 million for the second quarter and $921 million for the first half of 2026 of cost of revenue from the BDS Business since the Closing Date as well as the increase in legacy business sales volume. The cost of revenue in the second quarter and first half of 2026 included $154 million and $253 million, respectively, of fair value inventory and fixed asset step-up expense recognized as a result of the BDS Business Acquisition.
Cost of revenue is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms. At current foreign currency exchange rates, the Company expects foreign currency translation to be neutral to gross profit during 2026.
Selling and Administrative Expenses
Selling and administrative expenses increased 105% and 111% in the second quarter and first half of 2026, respectively, as compared to 2025. The BDS Business increased selling and administrative expenses by $125 million and $224 million in the second quarter and first half of 2026, respectively, since the Closing Date. The remaining increase in selling and administrative expenses is primarily due to an increase in costs associated with merit compensation for the Company’s employees as well as $37 million and $119 million of transaction, integration and other internal costs associated with the BDS Business in the second quarter and first half of 2026, respectively.
Research and Development Expenses
Research and development expenses increased 149% and 129% in the second quarter and first half of 2026, respectively, as compared to 2025. The BDS Business increased research and development expenses by $66 million and $108 million in the second quarter and first half of 2026, respectively, since the Closing Date. The remaining increase in research and development expenses can be attributed to increases from costs associated with merit compensation to the Company’s employees and costs associated with new products and the development of new technology initiatives. In the second quarter and first half of 2026, research and development expenses included $1 million and $2 million, respectively, of transaction, integration and other internal costs associated with the BDS Business.
Purchased Intangibles Amortization
Purchased intangibles amortization increased $232 million and $372 million in the second quarter and first half of 2026, respectively, as compared to 2025 due to the BDS Business Acquisition.
Restructuring Charges
In the second quarter and first half of 2026, the Company implemented a reduction in workforce that impacted approximately 3% of the Company’s employees. As a result, the Company incurred approximately $49 million and $52 million of severance-related costs for the second quarter and first half of 2026, respectively. During these periods, the Company paid $21 million and $23 million of severance-related costs in connection with the workforce reduction for the second quarter and first half of 2026, respectively. The accrued restructuring expense was approximately $29 million at July 4, 2026. This reduction in workforce will provide the Company with annual salary-related cost savings of approximately $120 million. The salary related cost savings achieved through the end of the second quarter 2026 was $14 million with the cost savings estimated to be approximately $67 million in 2026.
43
Table of Contents
Operating (Loss) Income
Operating loss was $86 million and $134 million for the second quarter and first half of 2026, respectively, a decrease of $274 million and $474 million as compared to $188 million and $340 million of operating income in the second quarter and first half of 2025, respectively. These decreases were primarily due to the impact of the higher sales volume from the legacy business and the BDS Business revenue since the Closing Date, being offset by $253 million of acquisition-related inventory and fixed asset fair value step-up expense in the first half of 2026 and $232 million and $372 million of purchased intangibles amortization related to the BDS Business in the second quarter and first half of 2026, respectively. In addition, the second quarter and first half of 2026 operating losses were impacted by $39 million and $121 million, respectively, of transaction, integration and other internal costs associated with the BDS Business Acquisition, $49 million and $52 million, respectively, of severance-related costs associated with a workforce reduction and $9 million and $18 million, respectively, of expenses associated with the Company’s new ERP system implementation.
Interest Expense, net
In the second quarter and first half of 2026, the Company’s interest expense increased $45 million and $80 million, respectively, which can be primarily attributed to the financing costs incurred by the Company related to the funding of the BDS Business Acquisition.
Benefit (Provision) for Income Taxes
The Company’s effective tax rates for the second quarter and first half of 2026 were 3.5% and 9.2%, respectively, compared to 17.2% and 16.2% for the second quarter and first half of 2025, respectively. The change between the effective tax rates can primarily be attributed to the impact of discrete tax benefits, primarily transaction and restructuring costs, in the current period and differences in the proportionate amounts of pre-tax income, due to the BDS Business Acquisition, recognized in jurisdictions with different effective tax rates.
Effective in 2024, various foreign jurisdictions began implementing aspects of the guidance issued by the Organization for Economic Co-operation and Development related to the new Pillar Two system of global minimum tax rules. These changes in tax law did not have a material impact on the Company’s financial position, results of operations and cash flows for the first half of 2026. The Company continues to monitor the adoption of the Pillar Two rules in additional jurisdictions.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, (“OBBBA”), enacting changes to the United States federal tax code, including adjustments to effective tax rates on certain types of income and certain deduction limitations. The OBBBA did not have a material impact on the Company’s financial position, results of operations and cash flows for the period ended July 4, 2026.
Net (Loss) Income per Diluted Common Share
The decline in the net loss per diluted common share to $1.39 and $2.31 in the second quarter and first half of 2026, respectively, as compared to the $2.47 and $4.50 of net income per diluted common share in the second quarter and first half of 2025, respectively, is attributed to the following BDS Business Acquisition-related items: purchase accounting fair value step-up expense, increases in purchased intangibles amortization expense, restructuring charges, increase in interest expense, and various transaction, integration and other internal costs.
Liquidity and Capital Resources
Net cash provided by operating activities was $198 million, compared to net cash provided by operating activities of $301 million in the first half of 2026 and 2025, respectively. The decline is primarily attributable to the net $157 million receivable due from BD, relating to net cash settlement for activity since the Closing Date, and $105 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition.
44
Table of Contents
Net cash provided by (used in) investing activities included capital expenditures related to property, plant, equipment and software capitalization of $87 million in the first half of 2026 as compared to the $48 million of net cash used in investing activities in the first half of 2025. The 2026 investing activities were impacted by the $144 million of cash acquired from the BDS Business Acquisition.
On March 23, 2026, SpinCo issued senior notes (the “Senior Notes”) in the aggregate principal amount of $3.5 billion. Net proceeds from the offering of the Senior Notes, together with cash on hand, were used by the Company to repay $3.5 billion of indebtedness outstanding under the SpinCo Delayed Draw Term Loan.
On January 8, 2026, Augusta SpinCo Corporation, a subsidiary of the Company (“SpinCo”) entered into a Term Loan Credit Agreement with the lenders named therein, Barclays Bank PLC, as administrative agent, and the other parties party thereto (the “SpinCo Credit Agreement”). On February 6, 2026 (the “Funding Date”), SpinCo borrowed $4.0 billion of unsecured term loans under the SpinCo Credit Agreement, consisting of a $3.5 billion tranche which will mature and be payable in full 364 days after the Funding Date (“SpinCo Delayed Draw Term Loan”) and a $500 million tranche which will mature and be payable in full on the second anniversary of the Funding Date (“SpinCo Term Loan”), and such funds were used by SpinCo on the Funding Date to finance the cash distribution to be paid to BD’s shareholders in connection with the BDS Business Acquisition (the “SpinCo Cash Distribution”). Upon consummation of the BDS Business Acquisition, all of this indebtedness was assumed by the Company. The SpinCo Term Loan has a maturity date of February 4, 2028.
As part of the BDS Business Acquisition, a portion of the total consideration paid was reflected as a deposit asset on the opening balance sheet, which is attributable to the Company’s present right to the future economic benefits of the business in those foreign jurisdictions where legal and beneficial title had not transferred to the Company as of February 9, 2026. Changes in the deposit asset are driven by changes in the underlying assets and liabilities in those foreign jurisdictions, and the cash payments (or cash receipts) resulting from the changes in these assets are classified as investing cash flows. The change in the deposit asset of $51 million in the first half of 2026 is primarily related to the collection of third-party customer receivables that existed as of February 9, 2026.
Results of Operations
Revenues by Geography
Geographic revenue information is presented below for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions):
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| July 4, 2026 | June 28, 2025 |
% change | July 4, 2026 | June 28, 2025 |
% change | |||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Asia: |
||||||||||||||||||||||||
| China |
$ | 206 | $ | 117 | 76 | % | $ | 359 | $ | 208 | 73 | % | ||||||||||||
| Asia Other |
244 | 149 | 64 | % | 441 | 279 | 58 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Asia |
450 | 266 | 69 | % | 800 | 487 | 64 | % | ||||||||||||||||
| Americas: |
||||||||||||||||||||||||
| United States |
570 | 229 | 149 | % | 985 | 445 | 121 | % | ||||||||||||||||
| Americas Other |
120 | 51 | 135 | % | 210 | 91 | 131 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Americas |
690 | 280 | 146 | % | 1,195 | 536 | 123 | % | ||||||||||||||||
| Europe |
505 | 225 | 124 | % | 917 | 410 | 124 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total revenues |
$ | 1,645 | $ | 771 | 113 | % | $ | 2,912 | $ | 1,433 | 103 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Geographically, BDS Business revenue for the second quarter and first half of 2026 was $161 million and $266 million in Asia, $387 million and $623 million in the Americas and $269 million and $448 million in Europe, respectively. Foreign currency translation had minimal impact on the BDS Business since the Closing Date. Excluding the BDS Business revenue, legacy Waters revenue increased 9% and 10% in Asia, 8% and 7% in the Americas and 5% and 14% in Europe for the second quarter and first half of 2026, respectively, as compared to the second quarter and first half of 2025. This revenue growth was broad-based across all major regions, led by China and the Americas. Foreign currency translation decreased Waters legacy revenue growth by 2% and had minimal impact in the second quarter and first half of 2026, respectively.
45
Table of Contents
Revenues by Product
Product revenue information is presented below for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions):
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| July 4, 2026 | June 28, 2025 |
% change | July 4, 2026 | June 28, 2025 |
% change | |||||||||||||||||||
| Revenues |
||||||||||||||||||||||||
| Instrument systems |
$ | 455 | $ | 308 | 47 | % | $ | 831 | $ | 571 | 46 | % | ||||||||||||
| Consumables |
765 | 165 | 364 | % | 1,308 | 303 | 332 | % | ||||||||||||||||
| Service |
425 | 298 | 43 | % | 773 | 559 | 38 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total revenues |
$ | 1,645 | $ | 771 | 113 | % | $ | 2,912 | $ | 1,433 | 103 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Instrument system revenue increased 47% and 46% in the second quarter and first half of 2026, respectively, primarily driven by the $131 million and $227 million, respectively, in instrument revenue contributed by the BDS Business. Excluding the impact of the BDS Business instrument revenue, legacy instrument revenue increased 5% in both the second quarter and first half of 2026. This revenue growth was primarily driven by higher customer demand for our LC & MS instrument systems across most major regions. Foreign currency translation decreased legacy instrument system revenue growth by 3% in the second quarter of 2026 and 1% for the first half of 2026.
Recurring revenues (combined sales of precision chemistry consumables and services) increased 157% and 141% for the second quarter and first half of 2026, respectively, primarily driven by $686 million and $1.1 billion, respectively, of revenue contributed by the BDS Business since the Closing Date. Excluding the BDS Business revenue, legacy recurring revenues increased 9% and 13%, in the second quarter and first half of 2026, respectively, primarily due to broad-based growth across all geographical regions. Foreign currency translation decreased recurring revenues growth by 1% and increased by 1% for the second quarter and first half of 2026, respectively. Excluding the BDS Business revenue, chemistry consumable revenue increased 10% and 13% for the second quarter and first half of 2026, respectively. The double-digit chemistry growth can be attributed to the uptake in columns and application-specific testing kits to pharmaceutical customers. Foreign currency translation decreased 2% and had minimal impact on chemistry consumable revenue growth in the second quarter and first half of 2026, respectively. In addition, the recurring revenues growth was positively impacted by the six additional calendar days in the first half of 2026.
Operating Segments
As a result of the BDS Business Acquisition, the Company has reorganized itself into the following operating segments: Analytical Sciences; Materials Sciences; Biosciences and Advanced Diagnostics. For purposes of financial reporting, the Analytical Sciences (formerly Waters Division, excluding Waters Clinical business) and the Materials Sciences (formerly TA Division) operating segments have been combined into one reportable segment. Biosciences and Advanced Diagnostics each represent a reportable segment, resulting in three total reportable segments, as presented below. To conform to the current post-acquisition reporting structure, the Company has reclassified the Waters Clinical business into the Advanced Diagnostics segment for all periods presented.
Revenues by segment were as follows for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions):
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| July 4, 2026 | June 28, 2025 |
% change | July 4, 2026 | June 28, 2025 |
% change | |||||||||||||||||||
| Analytical & Materials Sciences |
$ | 756 | $ | 709 | 7 | % | $ | 1,442 | $ | 1,318 | 10 | % | ||||||||||||
| Biosciences |
368 | — | ** | 600 | — | * | * | |||||||||||||||||
| Advanced Diagnostics |
521 | 62 | ** | 870 | 115 | * | * | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total revenues |
$ | 1,645 | $ | 771 | 113 | % | $ | 2,912 | $ | 1,433 | 103 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
46
Table of Contents
Segment operating (loss) income were as follows for the three and six months ended July 4, 2026 and June 28, 2025 (dollars in millions):
| Three Months Ended | ||||||||||||||||
| July 4, 2026 | % of Revenues |
June 28, 2025 |
% of Revenues |
|||||||||||||
| Analytical & Materials Sciences |
$ | 266 | 35.2 | % | $ | 279 | 39.4 | % | ||||||||
| Biosciences |
126 | 34.2 | % | — | ** | |||||||||||
| Advanced Diagnostics |
119 | 22.8 | % | 22 | 35.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total segment operating income |
511 | 31.1 | % | 301 | 39.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less corporate and non-segment expenses: |
||||||||||||||||
| Corporate and other expenses |
(173 | ) | (88 | ) | ||||||||||||
| Purchased intangibles and acquisition-related fair value step-up amortization |
(399 | ) | (12 | ) | ||||||||||||
| Stock compensation expense |
(25 | ) | (13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating (loss) income |
$ | (86 | ) | (5.2 | %) | $ | 188 | 24.4 | % | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| ** | Percentage not meaningful |
| Six Months Ended | ||||||||||||||||
| July 4, 2026 | % of Revenues |
June 28, 2025 |
% of Revenues |
|||||||||||||
| Analytical & Materials Sciences |
$ | 502 | 34.8 | % | $ | 496 | 37.6 | % | ||||||||
| Biosciences |
209 | 34.8 | % | — | ** | |||||||||||
| Advanced Diagnostics |
189 | 21.7 | % | 40 | 34.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total segment operating income |
900 | 30.9 | % | 536 | 37.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less corporate and non-segment expenses: |
||||||||||||||||
| Corporate and other expenses |
(339 | ) | (146 | ) | ||||||||||||
| Purchased intangibles and acquisition-related fair value step-up amortization |
(650 | ) | (24 | ) | ||||||||||||
| Stock compensation expense |
(45 | ) | (26 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating (loss) income |
$ | (134 | ) | (4.6 | %) | $ | 340 | 23.7 | % | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| ** | Percentage not meaningful |
Corporate and other expenses consist of information technology, financing and accounting, human resources, communication and legal function costs; ERP implementation and transformation costs; restructuring costs; and BDS Business Acquisition-related costs including all incremental costs incurred to effect the BDS Business Acquisition, such as advisory, legal, accounting, tax, valuation, other professional fees, integration costs and other expenses.
Analytical & Materials Sciences
Analytical Sciences products and service revenue increased 7% and 10% in the second quarter and first half of 2026, with the effect of foreign currency translation decreasing sales growth by 2% and having a minimal impact, respectively. Instrument system revenue (primarily LC and MS technology-based) increased 5% and 6% in the second quarter and first half of 2026, respectively, primarily driven by higher customer demand for our Acquity and Xevo TQ-S instrument systems.
Analytical Sciences consumables’ revenue grew double-digits due to the continued demand across all major geographies driven by the uptake in columns and application-specific testing kits to pharmaceutical customers. Foreign currency decreased chemistry revenue growth by 2% and had a minimal impact in the second quarter and first half of 2026, respectively. Service revenue growth increased 8% and 12% in the second quarter and first half of 2026, respectively, due to higher service demand billing in most major regions. Foreign currency translation decreased sales growth by 1% and increased service sales growth by 1% in the second quarter and first half of 2026, respectively.
47
Table of Contents
Materials Sciences revenue increased 6% in both the second quarter and first half of 2026, which was primarily driven by customer demand for our thermal analysis and rheology instrument systems and services. Foreign currency translation decreased revenue growth by 2% and increased by 1% in the second quarter and first half of 2026, respectively.
The Analytical & Materials Sciences segment operating income as a percentage of revenues decreased in the second quarter and first half of 2026 as compared to the second quarter and first half of 2025 as a result of the higher sales volumes being offset by the impact of foreign currency translation, sales mix, merit compensation costs and additional new product development costs.
Biosciences
The Biosciences revenues of $368 million and $600 million in the second quarter and first half of 2026, respectively, includes only revenue from the Closing Date through the end of the reporting period. The Biosciences cost of revenue was $147 million and $244 million and operating costs were $96 million and $148 million, for the second quarter and first half of 2026, respectively.
Advanced Diagnostics
The Advanced Diagnostic Solutions revenues of $521 million and $870 million in the second quarter and first half of 2026, respectively, includes $72 million and $133 million of total revenue attributed to the Waters Clinical Business in the second quarter and first half of 2026, respectively, which was recast into the Advanced Diagnostics segment. The remaining revenue for 2026 is attributed to BDS Business revenue from the Closing Date through the end of the reporting period.
The Advanced Diagnostics segment operating income as a percentage of revenue in the second quarter and first half of 2026 was 22.8% and 21.7%, respectively. Advanced Diagnostics cost of revenue was $279 million and $482 million and operating costs were $122 million and $198 million for the second quarter and first half of 2026, respectively.
48
Table of Contents
Liquidity and Capital Resources
Condensed Consolidated Statements of Cash Flows (in millions):
| Six Months Ended | ||||||||
| July 4, 2026 | June 28, 2025 | |||||||
| Net (loss) income |
$ | (208 | ) | $ | 268 | |||
| Depreciation and amortization |
508 | 101 | ||||||
| Acquisition-related inventory fair value step-up |
253 | — | ||||||
| Stock-based compensation |
45 | 26 | ||||||
| Deferred income taxes |
114 | 2 | ||||||
| Change in accounts receivable |
(782 | ) | 43 | |||||
| Change in inventories |
(68 | ) | (36 | ) | ||||
| Change in accounts payable and other current liabilities |
557 | (164 | ) | |||||
| Change in deferred revenue and customer advances |
116 | 64 | ||||||
| Other changes |
(337 | ) | (3 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
198 | 301 | ||||||
| Net cash provided by (used in) investing activities |
97 | (85 | ) | |||||
| Net cash used in financing activities |
(337 | ) | (174 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
(7 | ) | — | |||||
|
|
|
|
|
|||||
| (Decrease) increase in cash and cash equivalents |
$ | (49 | ) | $ | 42 | |||
|
|
|
|
|
|||||
Cash Flow from Operating Activities
Net cash provided by operating activities was $198 million and $301 million during the first half of 2026 and 2025, respectively. The decrease in 2026 operating cash flow was primarily caused by the BDS Business Acquisition. This decrease in operating cash flow can be attributed to the $105 million of payments made in connection with BDS Business acquisition transaction closing; integration and transformation cost as well as the lower net income, higher accounts receivables balances due to an increase in sales volume and the timing of the BDS Business initial net cash settlement for activity since the Closing Date. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, aside from the changes in net income:
| • | The change in accounts receivable, an increase of $782 million for the six months ended July 4, 2026, was primarily attributable to an increase in receivables due from BD of $673 million since the acquisition date. Days sales outstanding was 110 days at July 4, 2026 and 86 days at June 28, 2025. Excluding the $673 million of customer receivables due from BD, days sales outstanding was 73 days. |
| • | The increase in inventory can primarily be attributed to higher tariffs on material costs as well as an increase in safety stock levels to help navigate tariffs and mitigate any future supply chain issues and the effect of foreign currency translation. |
| • | The changes in accounts payable and other current liabilities were a result of the timing of payments to vendors, as well as the annual payment of management incentive compensation. Included in trade accounts payable are $516 million of payments due to BD for activities performed on our behalf under the TSA. |
| • | Net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts earlier in the year. |
| • | Other changes were attributable to variation in the timing of various provisions, expenditures, prepaid income taxes and accruals in other current assets, other assets and other liabilities. |
49
Table of Contents
Cash Flow from Investing Activities
Net cash provided by investing activities totaled $97 million in the first half of 2026 as compared to net cash used in investing activities of $85 million in the first half of 2025. The 2026 investing activities were impacted by the $144 million of cash acquired from the BDS Business Acquisition and the 2025 investing activities were impacted by the $35 million of cash used to complete the acquisition of Halo Labs. Additions to fixed assets and capitalized software were $87 million and $48 million in the first half of 2026 and 2025, respectively.
As part of the BDS Business Acquisition, a portion of the total consideration paid was reflected as a deposit asset on the opening balance sheet. Changes in the deposit asset are driven by changes in the underlying assets and liabilities in those foreign jurisdictions. The change in the deposit asset of $51 million in the first half of 2026 is primarily related to the collection of third-party customer receivables that existed as of February 9, 2026.
Cash Flow from Financing Activities
As of July 4, 2026, the Company had a total of $5.1 billion in outstanding debt, which consisted of $0.9 billion in outstanding senior unsecured notes, $3.5 billion in outstanding Senior Notes, $0.5 billion borrowed under the SpinCo Credit Agreement and $0.3 billion borrowed under the credit agreement governing its $1.8 billion revolving credit facility. The Company’s net debt borrowings during the three months ended July 4, 2026 were $298 million higher than as of June 28, 2025, which reflects the proceeds from debt issuances of $3.7 billion and payments on debt of $4.0 billion, respectively, primarily related to the funding of the BDS Business Acquisition.
On March 23, 2026, SpinCo issued Senior Notes in the aggregate principal amount of $3.5 billion. The obligations of SpinCo under the Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and certain subsidiaries of the Company, which also guarantee the Company’s existing credit facilities. Net proceeds from the offering of the Senior Notes, together with cash on hand, were used by the Company to repay $3.5 billion of indebtedness outstanding under the SpinCo Delayed Draw Term Loan. The Senior Notes require payment of principal at maturity and interest semi-annually in cash and in arrears on March 23 and September 23 of each year, commencing on September 23, 2026.
On January 8, 2026, SpinCo entered into the SpinCo Credit Agreement. On February 6, 2026, SpinCo borrowed $4.0 billion of unsecured term loans under the SpinCo Credit Agreement, consisting of a $3.5 billion tranche which will mature and be payable in full 364 days after the Funding Date and a $500 million tranche which will mature and be payable in full on the second anniversary of the Funding Date, and such funds were used by SpinCo on the Funding Date to finance the SpinCo Cash Distribution. Upon consummation of the BDS Business Acquisition, all of this indebtedness was assumed by the Company. The $3.5 billion of proceeds from the Senior Notes were used by the Company to repay the $3.5 billion principal balance on the SpinCo Delayed Draw Term Loan in March 2026. The SpinCo Term Loan has a maturity date of February 4, 2028.
As of July 4, 2026, the Company had entered into interest rate cross-currency swap derivative agreements with durations up to three years with an aggregate notional value of $1.3 billion to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and yen-denominated net asset investments. As a result of entering into these agreements, the Company lowered net interest expense by approximately $8 million and $5 million in first half of 2026 and 2025, respectively. The Company anticipates that these swap agreements will lower net interest expense by approximately $15 million in 2026.
In December 2024, the Company’s Board of Directors authorized the extension of its existing share repurchase program through January 21, 2028. The Company’s remaining authorization is $1.0 billion. The Company did not make any open market share repurchases in 2026 or 2025. The Company repurchased $14 million and $14 million of common stock related to the vesting of restricted stock units during the first half of 2026 and 2025, respectively.
Additionally, the Company received $15 million and $13 million of proceeds from the exercise of stock options and the purchase of shares pursuant to the Company’s employee stock purchase plan during the first half of 2026 and 2025, respectively.
The Company had cash, cash equivalents and investments of $539 million as of July 4, 2026. The majority of the Company’s cash and cash equivalents are generated from foreign operations, with $488 million held by foreign subsidiaries as of July 4, 2026, of which $365 million was held in currencies other than U.S. dollars.
In connection with the BDS Business Acquisition, the Company issued 38,542 thousand shares of the Company’s common stock to BD shareholders with an approximate fair value of $12.8 billion, which is presented as an adjustment to reconcile net income in the consolidated statement of cash flows for the first half of 2026.
Guarantor Financial Information
The Senior Notes are senior unsecured obligations of SpinCo and are fully and unconditionally guaranteed on a senior unsecured basis by the Company, and certain of Company’s subsidiaries: Waters Technologies Corporation, TA Instruments – Waters L.L.C., Waters Asia Limited, Wyatt Technology, LLC, Accuri Cytometers, Inc., Augusta Life Sciences US OpCo I LLC, Augusta Life Sciences US OpCo II LLC, Augusta Life Sciences US SpinCo LLC, Cellular Research, Inc., HandyLab, Inc., PharMingen, NAT Diagnostics, Inc. and Omega Biosystems Incorporated (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”). The Company owns substantially all of the assets of each of the Subsidiary Guarantors and conducts substantially all of its operations through the Subsidiary Guarantors and its other subsidiaries. Each of the Subsidiary Guarantors is consolidated into the Company’s financial statements.
50
Table of Contents
The following tables include summarized financial information on a combined basis for SpinCo and the Subsidiary Guarantors and is presented after the elimination of: (i) intercompany transactions and balances among the Company, SpinCo and the Subsidiary Guarantors, and (ii) equity in earnings from and investments in in any subsidiaries of the Company that do not guarantee the Senior Notes (the “Non-Guarantor Subsidiaries”) (in millions).
| As of | ||||
| July 4, 2026 | ||||
| Current assets |
$ | 1,468 | ||
| Intercompany receivables from the Non-Guarantor Subsidiaries |
273 | |||
|
|
|
|||
| Total current assets |
1,741 | |||
| Noncurrent assets |
10,732 | |||
|
|
|
|||
| Total assets |
12,473 | |||
|
|
|
|||
| Current liabilities |
1,181 | |||
| Intercompany payables to the Non-Guarantor Subsidiaries |
312 | |||
|
|
|
|||
| Total current liabilities |
1,493 | |||
| Noncurrent liabilities |
6,068 | |||
|
|
|
|||
| Total liabilities |
$ | 7,561 | ||
|
|
|
|||
| Three months ended |
||||
| July 4, 2026 | ||||
| Revenues, excluding intercompany |
$ | 574 | ||
| Revenues from Non-Guarantor Subsidiaries |
361 | |||
|
|
|
|||
| Total revenue |
935 | |||
| Operating loss, excluding intercompany |
(257 | ) | ||
| Operating income from Non-Guarantor Subsidiaries |
79 | |||
|
|
|
|||
| Total operating loss |
(178 | ) | ||
| Net loss, excluding intercompany |
(289 | ) | ||
| Net income from Non-Guarantor Subsidiaries (1) |
745 | |||
|
|
|
|||
| Total net income |
$ | 456 | ||
|
|
|
|||
| (1) | Includes $669 million of dividend income from Non-Guarantor Subsidiaries for the three months ended July 4, 2026. |
| Six months ended | ||||
| July 4, 2026 | ||||
| Revenues, excluding intercompany |
$ | 1,011 | ||
| Revenues from Non-Guarantor Subsidiaries |
597 | |||
|
|
|
|||
| Total revenue |
1,608 | |||
| Operating loss, excluding intercompany |
(566 | ) | ||
| Operating income from Non-Guarantor Subsidiaries |
104 | |||
|
|
|
|||
| Total operating loss |
(462 | ) | ||
| Net loss, excluding intercompany |
(662 | ) | ||
| Net income from Non-Guarantor Subsidiaries (1) |
1,031 | |||
|
|
|
|||
| Total net income |
$ | 369 | ||
|
|
|
|||
| (1) | Includes $927 million of dividend income from Non-Guarantor Subsidiaries for the six months ended July 4, 2026. |
51
Table of Contents
Contractual Obligations, Commercial Commitments, Contingent Liabilities and Dividends
In connection with the BDS Business Acquisition, the Company entered into a Transition Services Agreement (“TSA”) with BD, under which the Company receives certain back-office and fulfillment support services, including finance, accounting, information technology, human resources and other administrative functions. The TSA is intended to provide continuity of operations during the post-transaction integration for a period of up to three years at an annual cost of approximately $90 million. The Company has incurred $40 million of TSA costs for the six months ended July 4, 2026. The majority of the TSA costs are included in selling and administrative expenses in the accompanying consolidated statement of operations.
Senior Notes: As of July 4, 2026, the Company had $3.5 billion of cash requirements for the outstanding Senior Notes that will mature as follows: $650 million in 2027; $600 million in 2029; $750 million in 2031; $750 million in 2033; and $750 million in 2036. The Senior Notes require payment of principal at maturity and interest semi-annually in cash and in arrears on March 23 and September 23 of each year, commencing on September 23, 2026. See also Note 6 in the Condensed Notes to the Consolidated Financial Statements for further information.
SpinCo Term Loan: As of July 4, 2026, the SpinCo Term Loan had $450 million outstanding and a maturity date of February 4, 2028.
A summary of the Company’s remaining contractual obligations and commercial commitments is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 23, 2026. The Company reviewed its contractual obligations and commercial commitments as of July 4, 2026 and determined that there were no material changes outside the ordinary course of business from the information set forth in the Annual Report on Form 10-K.
From time to time, the Company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business. The Company believes that it has meritorious arguments in its current litigation matters and that any outcome, either individually or in the aggregate, will not be material to the Company’s financial position or results of operations.
During fiscal year 2026, the Company expects to contribute a total of approximately $3 million to $6 million to its defined benefit plans.
The Company has not paid any dividends and has no plans, at this time, to pay any dividends in the future.
Critical Accounting Policies and Estimates
In the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 23, 2026, the Company’s most critical accounting policies and estimates upon which its financial status depends were identified as those relating to revenue recognition, valuation of long-lived assets, intangible assets and goodwill, income taxes, uncertain tax positions and business combinations and asset acquisitions. The Company reviewed its policies and determined that those policies remain the Company’s most critical accounting policies for the six months ended July 4, 2026. Refer to Note 1 Basis of Presentation and Summary of Significant Accounting Policies, in the Condensed Notes to Consolidated Financial Statements for any changes in those policies during the six months ended July 4, 2026.
New Accounting Pronouncements
Please refer to Note 1 Basis of Presentation and Summary of Significant Accounting Policies, in the Condensed Notes to Consolidated Financial Statements.
52
Table of Contents
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the information incorporated by reference herein, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not statements of historical fact may be deemed forward-looking statements. You can identify these forward-looking statements by the use of the words “feels”, “believes”, “anticipates”, “plans”, “expects”, “may”, “will”, “would”, “intends”, “suggests”, “appears”, “estimates”, “projects”, “should” and similar expressions, whether in the negative or affirmative. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the control of the Company, including, and without limitation:
| • | certain risks related to the BDS Business Acquisition, including, without limitation: |
| • | failure to realize the anticipated benefits of the BDS Business Acquisition, including as a result of delay in integrating the businesses of the Company and SpinCo, on the expected timeframe or at all; |
| • | the ability of the combined company to implement its business strategy and achieve revenue and cost synergies; |
| • | foreign currency exchange rate fluctuations potentially affecting translation of the Company’s future non-U.S. operating results, particularly when a foreign currency weakens against the U.S. dollar; |
| • | current global economic, sovereign and political conditions and uncertainties, the effect of new or proposed tariff or trade regulations, as well as other new or changed domestic and foreign laws, regulations and policies (or new interpretations thereof); inflation and interest rates; the impacts and costs of war, in particular as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East; and the possibility of further escalation resulting in new geopolitical and regulatory instability; |
| • | economic conditions in China, trade tensions and tariffs between the U.S. and China and their impact on our business, increased competition from local and international competitors in China, the Chinese government’s ongoing tightening of restrictions on procurement by government-funded customers and other regulatory and other challenges and uncertainties in the Chinese market; |
| • | the Company’s ability to access capital, maintain liquidity and service the Company’s debt in volatile market conditions; |
| • | changes in timing and demand for the Company’s products among the Company’s customers and various market sectors, particularly as a result of fluctuations in their expenditures or ability to obtain funding; |
| • | the ability to realize the expected benefits related to the Company’s various cost-saving initiatives, including workforce reductions and organizational restructurings; |
| • | the introduction of competing products by other companies and loss of market share, as well as pressures on prices from competitors and/or customers; |
| • | changes in the competitive landscape as a result of changes in ownership, mergers and continued consolidation among the Company’s competitors; |
| • | regulatory, economic and competitive obstacles to new product introductions, lack of acceptance of new products and inability to grow organically through innovation; |
| • | rapidly changing technology and product obsolescence; |
| • | the risks related to the development, deployment and use of artificial intelligence (“AI”); |
| • | a failure to timely and effectively use AI and embed it into new product offerings and services that negatively impacts our competitiveness; |
| • | risks associated with previous or future acquisitions, strategic investments, joint ventures and divestitures, including risks associated with achieving the anticipated financial results and operational synergies, contingent purchase price payments and expansion of our business into new or developing markets; |
53
Table of Contents
| • | risks associated with unexpected disruptions in operations, including risks associated with our transition to a new ERP system; |
| • | risks related to any public health crisis or pandemic, climate change, severe weather and geological conditions or events or other events beyond our control; |
| • | failure to adequately protect the Company’s intellectual property, infringement of intellectual property rights of third parties and inability to obtain licenses on commercially reasonable terms; |
| • | the Company’s ability to acquire adequate sources of supply and its reliance on outside contractors for certain components and modules, as well as disruptions to its supply chain; |
| • | risks associated with third-party sales intermediaries and resellers; |
| • | the impact and costs of changes in statutory or contractual tax rates in jurisdictions in which the Company operates as well as shifts in taxable income among jurisdictions with different effective tax rates, the outcome of ongoing and future tax examinations and changes in legislation affecting the Company’s effective tax rate; |
| • | the Company’s ability to attract and retain qualified employees and management personnel; |
| • | risks associated with cybersecurity and our information technology infrastructure, including attempts by third parties, both private and state-sponsored, to defeat the information security measures of the Company or its third-party partners and gain unauthorized access to sensitive and proprietary Company products, services, systems, or data; |
| • | risks associated with compliance with data privacy and information security laws and regulations regarding the collection, transmission, storage and use of personally identifying information; |
| • | increased regulatory burdens as the Company’s business evolves, especially with respect to the U.S. Food and Drug Administration and U.S. Environmental Protection Agency, among others, and in connection with government contracts; |
| • | regulatory, environmental and logistical obstacles affecting the distribution of the Company’s products, completion of purchase order documentation and the ability of customers to obtain letters of credit or other financing alternatives; |
| • | risks associated with litigation and other legal and regulatory proceedings; and |
| • | the impact and costs incurred from changes in accounting principles and practices. |
Certain of these and other factors are discussed under the heading “Risk Factors” under Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 23, 2026. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements, whether because of these factors or for other reasons. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included in this report. Except as required by law, the Company does not assume any obligation to update any forward-looking statements.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
The Company is also exposed to the risk of exchange rate fluctuations. The Company maintains cash balances in various operating accounts in excess of federally insured limits, and in foreign subsidiary accounts in currencies other than the U.S. dollar. As of July 4, 2026 and December 31, 2025, $488 million out of $539 million and $372 million out of $588 million, respectively, of the Company’s total cash and cash equivalents were held by foreign subsidiaries. In addition, $365 million out of $539 million and $306 million out of $588 million of cash and cash equivalents were held in currencies other than the U.S. dollar at July 4, 2026 and December 31, 2025, respectively. As of July 4, 2026, the Company had no holdings in auction rate securities or commercial paper issued by structured investment vehicles.
54
Table of Contents
Period |
Total Number of Shares Purchased (in thousands) (1) |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Programs |
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs ( in thousands) |
||||||||||||
April 5, 2026 to May 2, 2026 |
3 | $ | 330.73 | — | $ | 961,207 | ||||||||||
May 3, 2026 to May 30, 2026 |
1 | $ | 337.08 | — | $ | 961,207 | ||||||||||
May 31, 2026 to July 4, 2026 |
1 | $ | 363.04 | — | $ | 961,207 | ||||||||||
Total |
5 | $ | 338.46 | — | $ | 961,207 | ||||||||||
| (1) | All shares repurchased as referenced in the table above related to the vesting of restricted stock during the three months ended July 4, 2026. |
Table of Contents
Item 6: Exhibits
| Exhibit Number |
Description of Document | |
| 31.1 | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | |
| 32.2 | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | |
| 101 | The following materials from Waters Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Operations (unaudited), (iii) the Consolidated Statements of Comprehensive Income (unaudited), (iv) the Consolidated Statements of Cash Flows (unaudited), (v) the Consolidated Statements of Stockholders’ Equity (unaudited) and (vi) Condensed Notes to Consolidated Financial Statements (unaudited). | |
| 104 | Cover Page Interactive Date File (formatted in iXBRL and contained in Exhibit 101). | |
| ** | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference. |
57
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| WATERS CORPORATION |
| /s/Amol Chaubal |
| Amol Chaubal |
| Senior Vice President and Chief Financial Officer |
| (Principal Financial Officer) |
| (Principal Accounting Officer) |
Date: August 11, 2026
58