Agilent Raises Outlook on Q3 Growth

Agilent Technologies(NYSE:A) reported Q3 FY2025 revenue of $1.74 billion, up 6.1% year-over-year on a core basis, with non-GAAP EPS of $1.37, both exceeding guidance. The company raised its full-year revenue outlook to $6.91 billion-$6.93 billion (core growth 4.5% at midpoint), despite higher tariff expenses, driven by robust demand in both Pharma and Chemicals & Advanced Materials. Key insights from the earnings call highlight multi-segment growth, margin pressures from tariffs and investment, and a strong innovation pipeline supporting future demand.

Agilent delivers multi-segment growth and raises outlook

Agilent achieved five consecutive quarters of accelerating core revenue growth through Q3 FY2025, with broad-based performance led by double-digit expansion in pharmaceutical and chemicals end markets. The Life Sciences and Diagnostics segment grew 7% core year-over-year, highlighted by mid-teens growth in the Infinity Tree LC platform and over 20% core revenue growth in the NASD contract development and manufacturing organization (CDMO) business.

"Our fiscal 2025 third quarter marks our fifth consecutive quarter of sequential core revenue acceleration, a testament to how we've evolved our enterprise strategy to be market-first and then realigned our businesses to our markets. For this fiscal year, we've gone from 1.2% in Q1 to 5.3% in Q2 and now 6.1% in Q3. Just as important, our two-year growth stack also is improving, showing that this is a durable momentum, not just a short-term bounce. The two-year stack sums our growth over two consecutive years, providing a clear view of sustained performance by smoothing out short-term quarterly fluctuations. This metric refers to core (non-GAAP) revenue growth as discussed for Agilent's fiscal periods. Given this strength, we are raising our fiscal 2025 full-year revenue guidance to the range of $6.91 to $6.93 billion, representing a core growth of 4.5% at the midpoint. This is a $150 million increase from our prior range at the midpoint and one and a half percentage points of additional core growth. A clear step up in our growth outlook heading into Q4. This upgrade reflects our confidence in delivering another step up of revenue into Q4 even as we absorb the impact of tariffs this year. Momentum is broad-based and led by our two largest end markets, pharma and chemicals, and advanced materials. In Q3, both grew 9-10%, respectively."
-- Padraig McDonnell, President and CEO

The company’s ability to accelerate growth across multiple segments and raise guidance, even amid external headwinds, demonstrates strong execution and positions Agilent to capitalize on secular demand trends in its core markets.

Tariffs and investment weigh on Agilent margins

Operating margin for Q3 FY2025 was 25.1%, declining approximately 230 basis points year-over-year, primarily due to $70 million in tariff and logistics costs for the second half, higher variable compensation, and incremental commercial investment. Gross margin was 53.1%, and the Ignite program remains on track to fully mitigate tariff impacts by FY2026 through pricing actions and supply chain adjustments.

"When we look at it from a year-on-year basis, we were down about 230 basis points. Again, the big thing was tariffs and logistics related costs associated with those tariffs. And that total would be about 200 basis points on a year-on-year basis. It was pretty significant. On top of that, we saw unfavorable currency effects. And also the effects of the, bio vector shutdown. So when you look at all those piece together, that's why we saw our operating margins decline about 230 basis points year-on-year."
-- Rodney Gonzalez, Interim CFO

Despite near-term margin pressure, management’s transparent mitigation strategy and continued investment in commercial capabilities support the company’s ability to restore profitability and drive future earnings leverage.

Innovation pipeline supports sustained Agilent demand

Recent product launches, including the Infinity Tree LC, Pro IQ LCMS, and DACO OMDAS platforms, contributed to growth in key segments and drove instrument book-to-bill above one for six consecutive quarters. The company’s strong funnel conversion and increasing market share in all major geographies indicate continued momentum into FY2026, especially in replacement cycles and advanced markets such as semiconductors, biopharma, and environmental testing.

"Innovation also continues to be a major driver. Our Infinity Tree LC platform delivered mid-teens growth with early adopters coming back for larger follow-on purchases based on superior performance and productivity gains. And the Pro IQ LCMS system is tracking well ahead of our launch forecast, winning key accounts at major pharma customers. The new system performance benchmarks open new app possibilities across pharma and biopharma, and are resonating strongly with customers, as evidenced by strong funnel growth during the quarter. Also, the newly launched DACO OMDAS family brings our gold standard fully automated pathology class platform to a broader range of lab sizes. Capturing a new market segment and strengthening our diagnostics portfolio. Together, these platforms are not just driving near-term revenue, they're continuing to build a foundation for systems sustained growth into FY '26 and beyond."
-- Padraig McDonnell, President and CEO

Agilent’s innovation-led expansion of its installed base and entry into adjacent segments create persistent secular tailwinds, enhance customer lifetime value, and diversify the business for long-term growth.

Looking Ahead

Management guided Q4 FY2025 revenue to $1.82 billion-$1.84 billion (core growth 4.8%-6.0%) and non-GAAP EPS of $1.57-$1.60, targeting a 230 basis point sequential operating margin improvement. Full-year revenue guidance was raised to $6.91 billion-$6.93 billion (core growth 4.3%-4.6%) and non-GAAP EPS to $5.56-$5.59, with a $20 million tariff headwind now fully incorporated. Agilent confirmed full mitigation of tariff impacts and ongoing cost savings via Ignite for FY2026, but did not provide detailed forward year guidance for FY2026 pending further macroeconomic visibility.

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