Agilent (A) Q1 2026 Earnings Call Transcript

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DATE

Wednesday, Feb. 25, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Padraig McDonnell
• Chief Financial Officer — Adam Alanoff
• President, Life Sciences and Diagnostics Markets Group — Simon May
• President, Agilent CrossLab Group — Angelica Riemann
• President, Applied Markets Group — Mike Zhang
• Vice President, Investor Relations — Tejas Savant

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RISKS

• Life Sciences and Diagnostics Group segment revenue growth missed internal expectations, attributed both to weather disruption and to persistent softness in academia and government markets impacting cell analysis and genomics.
• Academia and government end market declined 8% and is expected to face low-single-digit contraction for the full year, with limited visibility on recovery in U.S. budgets.
• Gross margin was 53.7%, down 100 basis points year over year, "primarily due to tariff headwinds" per management commentary.
• Food end market fell 4%, with management noting "the food market was the primary beneficiary of the large China stimulus that boosted growth in 2025," suggesting reduced structural support moving forward.

TAKEAWAYS

• Core revenue growth -- 4.4% for the quarter, equating to $1.8 billion, with reported growth at 7% and currency a 2.6% tailwind.
• Operating margin -- 24.6%, matching internal expectations and down 50 basis points year over year, mainly due to increased tariff expenses and normalized performance-based pay.
• Earnings per share (EPS) -- $1.36 on a non-GAAP basis, a 4% increase year over year; management stated that adjusting for the storm, all metrics would have surpassed the midpoint of guidance.
• Weather impact -- A U.S. winter storm led to a $10 million adverse revenue impact, with the majority recovered early in the following quarter.
• Business segment growth -- Agilent CrossLab Group up 6%; Applied Markets Group up 4%; Life Sciences and Diagnostics Group up 3% with softness in academia and government funding.
• End-market performance -- Pharma up 7%, biotech posted double-digit growth, chemicals and advanced materials up 9% overall and over 20% in materials subsegment, diagnostics and clinical up 7%, environmental and forensics flat, food down 4%, and academia/government down 8%.
• China revenue -- Grew 6%, attributed in part to a minor government stimulus, setting a baseline expectation of $300 million per quarter for the region.
• Backlog and book-to-bill -- Instrument book-to-bill at or above 1 for eight consecutive quarters; high-single-digit local currency growth with notable share gains globally.
• GLP-1 and specialty CDMO growth -- GLP-1 business grew 50%; specialty CDMO increased low double digits with expectations of mid-teens growth for the year.
• Altura and Pro IQ LCMS launches -- 50% of top 20 biopharma companies ordered Altura columns post-October launch, doubling bio column growth to over 30%; single quad family growth exceeded 40% in the quarter, led by Pro IQ LCMS adoption.
• Operating cash flow and capital deployment -- Operating cash flow was $268 million, with $93 million in capital expenditures, $152 million in share repurchases, and $72 million paid in dividends; net leverage ratio finished at 0.8 turns.
• Fiscal year 2026 guidance -- Revenue expected at $7.3 billion to $7.5 billion (core growth 4%-6%); non-GAAP EPS raised to $5.90-$6.04, reflecting a $0.04 increase tied to currency.
• Q2 guidance -- Core revenue growth forecast between 4% and 5.5%; non-GAAP EPS guide at $1.39-$1.42 with 7% growth at range midpoint; operating margin to improve approximately 100 basis points sequentially.
• Ignite operating system impact -- Delivered nearly 200 basis points of pricing benefit in the quarter, with expanding workstreams expected to drive further efficiency, digital order growth, and incremental cost savings.
• Tariffs -- Tariff-related headwinds reduced compared to prior periods; management expects mitigation actions and pricing gains to offset full-year impact, with no guide adjustment for possible changes in tariff rates.
• Enterprise services expansion -- Enterprise services now represent about 10% of total services revenue, growing at a low double-digit CAGR, and providing strategic differentiation through embedded on-site support and digital solutions.
• Innovation pipeline -- Notable new product momentum includes Altura Ultra Inert Columns, S540MD digital slide scanning system, and Raman Insight BRT Series, which secured a $9 million TSA contract.

SUMMARY

Agilent Technologies (NYSE:A) delivered 4.4% core revenue growth and $1.36 non-GAAP EPS in line with internal expectations, despite disruption from a U.S. winter storm that delayed $10 million of revenue. Segment and end-market trends showed marked strength in pharma, chemicals and advanced materials, and specialty CDMO; management confirmed full-year core growth and EPS guidance, raising the EPS midpoint due to favorable currency. The Ignite operating system produced measurable pricing leverage and digital order acceleration, while new product launches and enterprise services wins positioned the company to deepen customer relationships and gain global market share.

• Management signaled a $1 billion addressable opportunity from anticipated pharma reshoring, with first orders expected later in the year and revenue recognition beginning in fiscal 2027 (ending Oct. 31, 2027).
• Strategic M&A activity remains a priority, with management emphasizing that "The bar is very high for a transformative deal," and that capital is being allocated toward opportunities judged by enterprise fit and financial return, not size alone.
• Tariff mitigation actions—including supply chain realignment and pricing adjustments—are expected to fully counterbalance evolving customs landscapes, with no material change to outlook assumed from current global proposals.
• Product cycles in liquid chromatography and LCMS, particularly the Infinity 3 platform and Pro IQ LCMS, are fueling share gains, while backlog and order funnels in key markets support management’s confidence in sequential margin and topline expansion through the year.
• Geographically, China outperformed initial expectations on minor stimulus uptake, while the Americas posted minimal growth largely due to the storm impact and select market softness; management maintains mid- to high-single-digit growth targets for China over the long term.
• The Life Sciences and Diagnostics Group segment lagged corporate growth rates, hindered specifically by sluggish academia and government spending, yet management observed signs of stabilization in European markets and strong share in recurring diagnostics.
• Specialty CDMO utilization is set to increase substantially as new capacity (Trains C/D) ramps, with management confirming the business will achieve "operating margin above the corporate operating margin" once steady-state is reached.

INDUSTRY GLOSSARY

• GLP-1: Glucagon-like peptide-1; an important drug class for diabetes and weight management, referenced as a major revenue driver in pharma end-markets.
• CDMO: Contract Development and Manufacturing Organization; Agilent Technologies’ offering handles outsourced drug development and manufacturing with segment-specific expansion plans.
• CAM: Chemicals and Advanced Materials; a key business segment focused on solutions for semiconductor and materials manufacturing.
• LCMS: Liquid Chromatography-Mass Spectrometry; an analytical instrument category cited for strong product innovation and revenue growth.
• Ignite operating system: Agilent Technologies’ internal enterprise-wide performance and process improvement system, cited as a primary driver for pricing and margin expansion.
• Altura columns: Proprietary biopharma-focused chromatography columns introduced by Agilent Technologies, highlighted as a source of rapid market adoption.
• S540MD: Agilent Technologies’ newly launched digital slide scanning system for cancer diagnostics.
• Book-to-bill: Ratio of orders received to product shipped/billed in a set period; readings at or above 1 indicate order backlog growth.

Full Conference Call Transcript

Tejas Savant: Thank you, and welcome, everyone, to Agilent Technologies, Inc.'s conference call for 2026. With me on the line are CEO, Padraig McDonnell, and CFO, Adam Alanoff. Joining for the Q&A will be Simon May, President of the Life Sciences and Diagnostics Markets Group, Angelica Riemann, President of the Agilent CrossLab Group, and Mike Zhang, President of the Applied Markets Group. This presentation is being webcast live. The press release for our first quarter financial results, investor presentation, and information to supplement today's discussion along with a recording of this webcast are available on our website at investor.agilent.com. Today's comments will refer to non-GAAP financial measures. Non-GAAP measures are supplemental and should not be considered a substitute for GAAP results.

You will find the most directly comparable GAAP financial metrics and reconciliations in the press release and on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year over year, and references to revenue growth are on a core basis. All references to profitability metrics are on a non-GAAP basis. Core revenue growth is adjusted for the impact of currency exchange rates, and any acquisitions and divestitures completed within the past 12 months. Guidance is based on forecasted exchange rates. During this call, we will make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today.

Agilent Technologies, Inc. assumes no obligation to update them. Please refer to the company's recent SEC filings for a more detailed discussion of the risks and other factors that could cause performance to differ from these forward-looking statements. I will now turn the call over to Padraig.

Padraig McDonnell: Thanks, Tejas, and welcome, everyone. It was a solid start to the year with the Agilent Technologies, Inc. team executing well in a generally improving albeit dynamic market environment. For the first quarter, Agilent Technologies, Inc. reported $1.8 billion in revenue, growing 4.4% on a core basis within our November guidance range. End-market conditions were largely consistent with our expectations. Top-line results were affected by the winter storm in the U.S. during January. The storm drove roughly a $10 million revenue impact with the majority recovered in February. The impact primarily came from our logistics providers not being able to ship products from our main American logistics center in Memphis, Tennessee for three days.

This is typically the busiest shipping week of the quarter. Despite the weather, operating margins of 24.6% were in line with our expectations, setting a solid jumping-off point for the remainder of the fiscal year. Moving forward, we anticipate benefiting from leverage on increasing volumes, and we expect to see tariff headwinds continuing to decrease, as well as incremental benefits from our Ignite operating system that together will drive sequential margin improvements throughout the rest of the year. First quarter EPS of $1.36 also was within expectations. Adjusted for the impact of the storm, our first quarter revenue, operating margin, and EPS all would have been above the midpoint of our November guidance ranges, a healthy underlying outcome.

Throughout the quarter, the Agilent Technologies, Inc. team remained, as always, committed to delivering for our customers.

Before getting into the specifics of our first quarter results, I want to share my thoughts on three key business initiatives that are fueling our growth. These include our highly differentiated service organization that reinforces our customer intimacy, a theme you have heard me talk about frequently, an update on recent innovations, and finally, how the Ignite operating system continues to drive Agilent Technologies, Inc.'s transformation. I want to start by talking about our differentiated customer intimacy. Last quarter, I highlighted our field service engineers' outsized contribution to our deal funnel and conversion rates. This time, I want to focus on our enterprise services business, where we had several marquee customer wins with major pharma accounts.

Our enterprise services offerings allow us to cement our extraordinary customer intimacy and is a key strategic differentiator for Agilent Technologies, Inc. that unlocks significant downstream value. This business represents roughly 10% of our total services revenue today and has grown nicely at a low double-digit CAGR. Beyond the direct revenue contribution, the relationships we build with our customers create tremendous long-term value for Agilent Technologies, Inc., uniquely positioning us to gain wallet share over time. The offering includes embedding our expert on-site support technicians in customer sites and leveraging digital capabilities through CrossLab Connect that provide monitoring, alerting, and performance analytics.

This allows us to gain unique insights and visibility into lab operations, and critically, deliver improved efficiency and economics for our customer labs. Successful outcomes position us as a trusted partner, one customers can count on to provide critical data and insights that inform their future technology needs and instrument purchasing decisions. We have agreements with nearly all of the top 20 biopharma companies. In addition, we have won 18 competitive displacements across our end markets over the past three years. Early customer feedback from a recent marquee win reinforces the value of having our specialists on-site, including faster response times, improved parts availability, and better advice in consumables and system usage.

The insights that we gain from our leading services team are a key success factor in driving customer-focused innovation that underpins durable long-term growth at above-market rates. I want to highlight several recent examples that are resonating particularly well with our customers. Starting with our Altura Ultra Inert Column Portfolio, in October, we launched our first Altura column to support biopharma workflows, including GLP-1s. Already, 50% of the top 20 biopharma companies have ordered these columns since we launched, and Altura has more than doubled our bio column growth to over 30%, a testament to Altura's compelling performance. Just last month, we launched our next column in the Altura family, focused on improving PFAS workflows.

These columns are specifically developed to solve key workflow challenges and address new EU regulations, plus they double throughput for customers by enabling separation of both short- and long-chain PFAS in a single workflow. The launch is off to an excellent start with strong demand out of the gates and extremely positive customer feedback versus competitor offerings. You can expect continued expansion of the Altura family for new use cases later this year and beyond. Next, I want to highlight the Pro IQ LCMS, which continues to build momentum since its mid-summer launch. We are seeing a robust uptake, with growth of our single quad family exceeding 40% in the quarter.

The value proposition of an advanced single-quad LCMS with expanded mass range is resonating and is particularly compelling for pharma customers who are transitioning from small molecule to biologics and monoclonal antibodies. Our cancer diagnostics business also is innovating to meet customer needs. Last quarter, I talked about the expansion of our most advanced automated platform, Omnis, to a broader set of customers. This launch is off to a very strong start, offering medium-throughput labs access to the latest technology with attractive economics. Also, in cancer diagnostics is our new S540MD slide scanner system, which we announced in late January as part of our continued effort to enable the latest digital tools for our cancer diagnostic customers.

Finally, early in the quarter, our market-leading spectroscopy business announced the release of our Raman Insight BRT Series alarm resolution system. The new system offers next-generation throughput and sensitivity to enhance safety and streamline operations at airport security checkpoints. This new instrument helped secure a $9 million TSA contract during the quarter, and we are confident that we are well positioned to win larger aviation security tenders in the coming years.

The last topic I want to focus on is our Ignite operating system. As you know, we launched Ignite in 2025 to drive execution excellence, accelerate decision-making, and unlock the full value of Agilent Technologies, Inc. as an integrated enterprise. Over the past year, Ignite has evolved into our enterprise operating system, a core differentiator that aligns strategy, resources, and accountability to drive sustainable growth, margin expansion, and long-term shareholder value. Ignite has already delivered clear financial results in its first 12 months, including doubling our price realization, generating substantial procurement savings, simplifying our organizational structure, and launching our tariff mitigation program.

Also, Ignite demonstrated its effectiveness in M&A execution through the successful BioVectra integration, establishing a repeatable playbook to accelerate value capture in future transactions. In this first quarter alone, Ignite delivered nearly 200 basis points of pricing, continued tariff expense reductions, and a very successful launch of our new agilent.com website that helped drive growth in digital orders at more than two times our overall order book. Looking ahead to the remainder of FY 2026, we are expanding Ignite into new value creation work streams and leveraging a portion of savings to reinvest in the business.

These workstreams include increasing returns on innovation investments by improving speed to market, advancing digital and e-commerce capability to enhance commercial productivity, and deploying targeted artificial intelligence initiatives with clear ROI to enhance customer insights, automate routine work, and compress manufacturing cycle times. We are also accelerating software development and enhancing our supply chain capabilities by executing no-regret investments that improve efficiency, resilience, and proximity to customers in an evolving geopolitical environment.

Now let me share some additional details about our Q1 results, starting with our end markets. The improvement that we saw in our end markets across last year was generally maintained throughout the first quarter. Overall, we are seeing underlying momentum in our markets. Importantly, secular trends in our largest end markets remain on a strong footing. That includes reshoring of pharma and semiconductor manufacturing, GLP-1 uptake, and LC and GC instrument replacement cycles. Pharma growth was 7%, in line with our expectations, with double-digit growth in the biotech space supported by increased funding and M&A activity late in the calendar year. Mid-single-digit small molecule growth was also solid, showing continued momentum from 2025.

The quarter saw a modest benefit from continued normalization in calendar year-end budget flush, in line with our expectations. We delivered excellent GLP-1 growth of 50%, with healthy contributions coming from our specialty CDMO as well as our analytical lab business. Our specialty CDMO business grew low double digits during the quarter; we continue to expect mid-teens growth for the year. We saw continued strength in chemicals and advanced materials (CAM). The 9% growth in CAM was above our expectations, with exceptional strength on the materials side of the business, which grew more than 20%. This strong result in advanced materials demonstrates our leadership in providing solutions for the top semiconductor manufacturers globally.

The current shortage of memory chips and the global effort to achieve semiconductor supply chain independence has driven investment by these firms in our leading atomic spectroscopy tools. With support from the recent Omnis family launch, diagnostics and clinical business continued to perform well, growing at 7% again this quarter. Environmental and forensics was flat, with continued softness in government funding in the U.S. and China, offset by growth in the rest of Asia and Europe. In Q1, the food business declined 4%, which outperformed our expectations, with strong low double-digit growth ex-China. As a reminder, the food market was the primary beneficiary of the large China stimulus that boosted growth in 2025.

And finally, academia and government, our smallest market, was down 8%, more than expected in the quarter. Academia and government conditions in the U.S. continue to be soft, with customers using available funding to keep their labs running as opposed to investing in new capital equipment. Excluding academia and government, our instruments grew at a healthy mid-single-digit rate. Our instrument book-to-bill has now been at or above 1 for the eighth consecutive quarter. The Infinity 3 HPLC continues to delight our customers. The LC instrument replacement cycle momentum built by our differentiated Infinity 3 system during FY 2025 continued through 2026, and with LC growth in the high single digits, we are gaining share globally versus our competition.

On the GC side of the replacement cycle, we saw low single-digit growth, a strong result considering the tough year-over-year compare from significant volumes associated with last year's Chinese stimulus. Ex-China, GC instrument growth was mid-single digits, in line with our expectations of around 100 basis points of lift during the GC replacement cycle.

And even with the strong results, the upside from pharma reshoring has yet to impact our numbers. We are seeing increased activity in U.S.-based pharmaceutical manufacturing as companies rethink resilience and capacity. Based on announced investments and recent customer activity, we estimate this will represent a $1 billion addressable market opportunity through 2030. We continue to expect the first orders from reshoring to book late this year and the revenue impact from those orders to bolster top-line growth in FY 2027 and beyond. As we look to the rest of the year, our priorities remain unchanged: advance our Ignite operating system, further enhance commercial execution, and capture opportunities from improving end markets, innovative new products, and a multipronged replacement cycle. With a solid start to the year and the outlook for end markets broadly consistent with our original expectations, we are maintaining our expected core growth range of 4% to 6% for the full year. We now expect between $5.90 and $6.04 of earnings per share in FY 2026, with a $0.04 increase due to favorable currency impact. For Q2, early trends are encouraging, and we are expecting core growth of approximately 4% to 5.5%, which includes a majority of the $10 million storm impact from late in the first quarter.

EPS is expected to be between $1.39 and $1.42, representing 7% growth at the midpoint of our range. We remain highly disciplined around capital deployment, investing for organic growth through innovation and capacity expansion. Simultaneously, we are focused on M&A targets that are both a strategic fit and financially attractive. I will now hand it over to Adam who will provide details on the quarter and our financial outlook.

Adam Alanoff: Thanks, Padraig, and good afternoon, everyone. In my comments today, I will provide additional details on revenue in the quarter as well as walk through the income statement and cover other key financial metrics. I will then cover our updated full year and second quarter guidance. Revenue was $1.8 billion. On a core basis, we posted growth of 4.4%, while reported growth was 7%. Currency had a favorable impact of 2.6%, in line with our November guidance. At a business segment level, ACG grew 6%, in line with expectations, driven by strong consumables growth in the high single digits, solid performance in services, and balanced growth globally with all regions growing mid-single digits or better.

AMG grew 4%, ahead of expectations. Growth was led by double-digit performance in spectroscopy, fueled by the excellent results in the semiconductor space that Padraig mentioned earlier. LDG grew 3%, a bit below expectations. In addition to the weather impact, we saw softness in academia and government that challenged our cell analysis and genomics results. On a geographic basis, we saw our strongest growth in Asia, with China growing 6% and the rest of Asia growing a robust 13%. Europe was a bit slower than expected with 4% growth, as transient discussions around higher tariffs caused some customers to slow purchasing decisions late in the quarter.

Americas growth of 1% was directly impacted by the weather, as well as pockets of softness in our smaller end markets. Q1 gross margins were 53.7%. On a year-over-year basis, they were down by 100 basis points, primarily due to tariff headwinds. Operating margin was 24.6%, in line with our expectations and down 50 basis points year over year on increased tariff expenses and normalized performance-based pay in the current year. Now moving below the line, we had $10 million of other income while our tax rate was 14.5% as expected. Finally, we had 284 million diluted shares outstanding in the quarter, slightly better than expected with some incremental share repurchases during the quarter.

Putting it all together, Q1 earnings per share were $1.36 and grew 4%. Adjusted for the weather, we would have been above the midpoint of our first quarter guidance range. We are confident we will see improved earnings growth through the remainder of the year, driven by improving volumes and easier tariff and performance-based pay compares.

Let me turn to cash flow and balance sheet. Operating cash flow was $268 million in the quarter, and we invested $93 million in capital expenditures. We purchased $152 million in shares and paid $72 million in dividends during the quarter, and we ended the quarter with a net leverage ratio of 0.8 turns, maintaining our strong balance sheet. Now let me share some additional details on the updated outlook for the year and the guidance for our second quarter. Because of changes in FX, we now expect fiscal year 2026 revenue to be in the range of $7.3 to $7.5 billion on a reported basis.

This continues to represent growth of 4% to 6% on a core basis, as currency is now expected to be a 1.5% tailwind during the year. This revenue guidance embeds full-year business segment, end market, and geographic growth assumptions that are consistent with what we shared in November. Our largest end markets—pharma, CAM, and diagnostics and clinical—are all off to a strong start. Across our smaller end markets, we saw some pockets of softness relative to our expectations in the first quarter, especially in our cell analysis business where academic customer budgets are most heavily indexed to government funding.

Going forward, we continue to expect low-single-digit full-year decline in academia and government, flat performance in food, and low-single-digit growth in environmental and forensics, partially helped by easier comps for the remainder of the year. Moving down the P&L, we continue to expect to deliver 75 basis points of operating margin expansion at the midpoint. And while we continue to evaluate the evolving tariff situation in light of recent developments, this guide does not incorporate material changes in tariff rates relative to our view at the start of the year. While we still await the details, we do not expect a meaningful change to our outlook based on the high-level proposals that have been discussed.

Our expected tax rate for fiscal year 2026 is unchanged at 14.5%. We also expect $22 million of other income and 283 million diluted shares outstanding for the year. Fiscal year non-GAAP earnings per share are now expected to be between $5.90 and $6.04, representing earnings growth of 5.5% to 8%, with the $0.04 increase due to a favorable currency outlook versus our original guide.

For your modeling, let me share some additional expectations we have incorporated into our guidance for the year. We continue to expect pricing growth of at least 100 basis points supported by Ignite. Although the tariff situation is evolving, we expect to fully offset tariff impact over the course of the year through a combination of cost-saving and pricing actions. The tariff dynamics will drive a modestly more-than-typical sequential improvement in operating margin over the course of the year. As we have said before, this translates into a slight second-half weighting on operating profit and EPS versus what we typically see.

There is no change to our operating cash flow range of $1.6 to $1.7 billion, and we are still expecting to invest approximately $500 million in capital expenditures. Now moving to the second quarter, we expect our reported revenue to be in the range of $1.79 to $1.82 billion. This represents growth of roughly 4% to 5.5% on a core basis, while currency is expected to be approximately a 3% tailwind. This outlook includes weather-delayed revenue from Q1. It also assumes our academia and government end market declines in the mid-single digits. We expect our operating margin to improve by approximately 100 basis points in Q2 relative to the first quarter.

Our guide assumes 283 million diluted shares outstanding in the second quarter. Second quarter EPS guidance is $1.39 to $1.42, representing growth of 6% to 8%.

Tejas Savant: With that, I will turn the call back over to Padraig for closing comments.

Padraig McDonnell: Thanks, Adam. As you have heard, FY 2026 is off to a good start. Our unique growth drivers, including superior customer intimacy developed by our best-in-class services team, a healthy innovation pipeline to deliver products that solve real-world customer problems, and the Ignite operating system that brings together our best attributes for the benefit of all stakeholders, combine to drive growth and operating leverage that fuels our success. As the year unfolds, we are well positioned to benefit from the instrument replacement cycle and continuing recovery across our largest end markets to win share and deliver resilient above-peer growth and margin performance over the long term.

I also wanted to take this opportunity to express my gratitude to the Agilent Technologies, Inc. team for their exceptional efforts throughout the quarter. I especially want to recognize our global operations and logistics colleagues who worked tirelessly to meet the challenges presented by the weather and deliver for our customers. Thank you for your attention. I will turn it back over to Tejas for Q&A. Tejas?

Tejas Savant: Thanks, Padraig. Nicole, can you please share the instructions for the Q&A?

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press 9 to raise your hand and 6 to unmute.

Operator: Your first question comes from the line of Tycho Peterson with Jefferies. Your line is open. Please go ahead. A reminder to please unmute yourself by pressing 6.

Jack Meehan: Hi. This is Jack on for Tycho. Thanks for the question. Just wanted to walk through the impact of the snowstorm and expectations for catch-up there. I appreciate you said $10 million of revenues. Just curious if that is already in hand for Q2 or something that is still being recouped? And then any color on margin impact that would have had in the quarter—gross margins and operating—if it would have been without the snowstorm? Thanks.

Padraig McDonnell: Yes. I will start off and I will hand it over to Adam. First of all, a really solid finish overall with 4.4% growth and high single digits in our three markets. But, Adam, can you give some color around the weather impact?

Adam Alanoff: Yes. Thanks. And I would first like to say, I did not think I would be on this call talking about the weather, so it is always fun to do that. When you think about the impact of the weather, we said it was about $10 million. We have already seen that come back, or the majority of it. There are some pieces of it that will take a little longer, and that is really related to services and things like that do not happen instantly. So we have already recovered the vast majority of it. Then to your second question related to margin, it would have been a very modest impact to margin.

So what we delivered in the quarter was a reasonable proxy for the actual performance.

Jack Meehan: Okay. That is helpful. And then sticking on margin, I appreciate you are still guiding the 75 bps for the year. Just give a little bit more color on the cadence from here and the bridge to that improvement after being down a little bit in Q1. I think you said slight second-half weighting. I guess, what is baked in for Q2 versus the second half? And then what do you see as the biggest swing factors to that step-up? Thanks.

Adam Alanoff: Yes. I will take this one. From a year-over-year basis, we expect the second quarter to be a 50 basis point improvement, and that is really driven by pricing, volume, and then Ignite savings, and then that is offset by performance-based pay and, once again, the tariffs. As you know, as we have talked about, the tariffs are fully mitigated by the second half of the year. When you move through the rest of the year, that is where you start to see the acceleration in our margin, and then that is driven by continued volume leverage, pricing, and Ignite, and then slightly offset by some of the people costs and growth investments that we are making through the year.

Operator: Your next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open. Please go ahead.

Vijay Kumar: Hey, guys. Thank you for taking my question. Maybe, Padraig, my first one, high level. When I look at this cadence for the year, first half versus back half, your guidance for first half implies slightly less than 5% and in the back half, to hit the midpoint, it needs to be above 5%. Can you just talk about what drives the back-half step-up to get there? Is this some new product cycles, or is this something else that is going on in the business that gives us this back-half visibility?

Padraig McDonnell: Yes. The underlying—you will see really strong underlying momentum in our businesses and our key biggest markets. You can see that in pharma, driven by GLP-1s, but also the replacement cycle going extremely well. You see our Infinity 3 number growing in double digits, and we are seeing from our latest market share report that we are taking oversized share in that area. Then, of course, you can go down through our CAM markets as well where you can see a lot of secular drivers. We grew 20% in advanced materials from the semiconductor onshoring and so on.

So underlying momentum in the markets, we have very good visibility in funnels, we are seeing very strong win-loss rates, and, of course, we are going to watch that as we go forward. But we see that continued momentum to improve.

Adam Alanoff: Then I would just jump in. The step-up between the first half and the second half is not that big. It is really 49% in the first half and then 51% in the second half on revenue.

Vijay Kumar: Understood. And maybe one on tariffs. Just given the Supreme Court ruling, how are you thinking about the tariff assumptions? Are you assuming now the global minimum of 15%? And how does that change versus your prior assumptions?

Padraig McDonnell: Adam, I will give this one to you.

Adam Alanoff: Sure. The first thing is, one, the situation continues to be dynamic, and we do not know that much information about what the 15% would look like and exactly how it is going to play out. But if you assume that the 15% is, on the surface, what it says across all different markets, what I would say is we would not change our guide on it. It really comes down to a couple of things. One, we made a series of no-regret moves, and that was really about leveraging our supply chain, bringing our manufacturing close to the customer, so that would not change.

The second is we have been utilizing pricing and surcharges, really as appropriate, and been very thoughtful about that, so that also helps us. The third piece I would add is, in any dynamic market, as you see and we are living in, what gives me confidence is I look at how the Ignite operating system has been able to allow us to react and be resilient as things change. So right now, we would not change any of our guide based on what we know. That said, we are ready to react, and we are ready to respond as things evolve.

Padraig McDonnell: I would just close it off by saying the actions we have taken to bring manufacturing close to our customers and strengthen supply chains are no-regrets moves. We have had that plan for a long time now, and outside of surcharges, we would not expect to reverse them in any way.

Operator: Your next question comes from the line of Doug Schenkel with Wolfe Research. Your line is open. Please go ahead.

Doug Schenkel: Good afternoon, guys, and thank you for taking my questions. Two topics I wanted to address. One is the capital equipment environment, and then the second is M&A. On the first topic, how would you describe demand month by month going back to, say, November and December and through the beginning of the calendar year?

I ask because some of your peers have suggested that demand may have slowed a bit over the past several weeks, and I am just trying to get at whether or not this is just kind of normal typical seasonality or if there is anything you are seeing from an environmental standpoint, meaning uncertainty related to things from a policy dynamics that are flaring up again and slowing things down, or whether this is just normally what you would see going from calendar Q4 to calendar Q1. The second topic is really on M&A and, simply put, how would you describe the environment, your readiness, and your appetite to do a multibillion-dollar deal? Thank you.

Padraig McDonnell: Thanks, Doug. I will take the first one, and Adam can take the second one. If you look at a proxy of pharma and you look at our replacement cycle, we had a very strong quarter. Biotech led that business, and, of course, we saw a reasonable budget flush. It was not over the top, but a reasonable budget flush in December. In January, you saw—we talked about some of the disruption we saw intra-quarter in Europe, for example, and the weather impact. But I would say it has been very, very steady. We have seen our funnels continue to be steady, in a lot of cases growing. Why is that?

I think CapEx conditions continue to improve with the MFN deals reducing the tariff uncertainty. That has been very big for our pharma customers. You see the strong GLP-1 growth and our CDMO—the base in CDMO—growing extremely well. We are very pleased to see how the trajectory of orders continues to go on the CapEx side. Of course, we are watching our funnels as we go forward on it, so I would not say we see any deterioration in terms of CapEx. On the capital allocation, which is a big question—I am sure we will get it a few times today—I am going to get Adam to answer that one.

Adam Alanoff: Thanks for the question. I think it is important that we always start with our capital allocation priorities, which are not changing. One, we are prioritizing investments in growth, and that is through internal innovation. Second is M&A, and the third is investments in strategic capacity expansion. At the same time, we are going to continue to return excess capital to shareholders, and that is through a growing dividend and share repurchases. The next thing I want to say as context is we like our organic business, and we like our plan. We do not need to do any transformative deals or any transformative transactions to achieve those growth ambitions.

We do not have any arbitrary size filter on our deal funnel, but I want to be very deliberate about this. The bar is very high for a transformative deal, and there are not that many of those out there. We are really focused on making sure that any deal that we do is aligned to our enterprise pillars, that we are focused on opportunities where we have a right to win, we are able to integrate whatever asset we are buying, and that we pay the right price for it so that we are generating cash-on-cash returns above our hurdle rate.

We think the market out there—there are some nice opportunities—and we are continuing to evaluate those, but we are looking at them against the filter that I just said. Once again, we like our organic business, so we do not need to do any kind of transformative transaction to achieve our ambitions.

Doug Schenkel: Thank you again.

Operator: Your next question comes from the line of Patrick Donnelly with Citi. Your line is open. Please go ahead.

Patrick Donnelly: Hey, guys. Thank you for taking the questions. Padraig, I wanted to focus on the LDG segment. I understand the weather impact. It did come in light even backing that out. It sounds like it is around the cell analysis and genomics piece, maybe some softer purchasing in Europe. It does sound like LCMS and the CDMO overall held in well. Can you just expand on what you saw there? And then also, staying in the LDG segment, just the profitability probably for Adam—what drove the softness there? Is that just mix with the cell analysis? I want to get a little more color there.

Padraig McDonnell: Yes. Thanks, Patrick. LDG grew 3% in the quarter. It was a bit below our mid- to high-single-digit expectations. In addition to the weather impact, we saw softness in academia and government that challenged our cell analysis and genomics business. But our larger end markets—pharma, biotech, and diagnostics—grew high single digits. Simon, do you want to give us some more color on LDG, what you saw in the quarter, particularly on those businesses?

Simon May: Yes. Thanks, Padraig. As Padraig already mentioned, we were challenged by the weather situation and also the ongoing softness that we are seeing in academic research markets, most notably in the U.S. In our cell analysis portfolio as well, we have a relatively lower portion of recurring revenue mix than we have elsewhere in our portfolio, and we have a bit more exposure on the smaller capital equipment side there. As we think about the macro situation going forward, the exposure to academia and government is always going to be there, and we still see a lot of cautious spending. But we also think we have reasons to believe we are at or near the bottom.

U.S. academic science budgets appear to be plateauing. Europe is more stable. We are anticipating some modest incremental improvement in academia and government in Europe. Also, the feedback I have been getting from the teams as I have been seeing customers and attending the sales meetings over the past few weeks is that there is a sense of optimism in the field. We have a strong portfolio. We have very strong conviction in the portfolio on a medium- to long-term basis, and I think we will see that improvement begin to unfold as time passes.

Adam Alanoff: The only thing I would add on margin is beyond the weather and the academia and government softness, there is the CDMO batch cadence that also impacts the margin in the first quarter. With CDMO, obviously, a batch is not a batch is not a batch. They are all a little bit different and have different revenue profiles and different timing. Just given the cadence we had in Q1, that also impacted the margin.

Patrick Donnelly: Okay. That is helpful. And then, Adam, I want to pick up right there in terms of CDMO. Can you guys just talk about NASD, BioVectra, what you saw in the quarter? It sounded like overall it was low double-digit growth for specialty CDMO. Can you just give a bit more color? And again, it sounds like the mid-teens still very much on the table. So just the visibility and pacing of those businesses as we work our way forward. Thank you, guys.

Adam Alanoff: Yes. I will start off, and then I will pass it over to Simon if he has anything to add. Absolutely, we saw low double-digit growth in the first quarter as expected. Once again, it really is about the batch cadence, and it is normal quarter-over-quarter revenue variance that you would expect. We continue to expect mid-teens growth for the full year, and that is based on our production schedules and the demand dynamics we are currently seeing in the market. The only other thing I would add that may be helpful for you is our mix of business in NASD continues to skew toward larger commercial batches, with 60% coming from commercial programs.

On the other hand, commercial programs represent about only one third of the BioVectra revenue, so they have a little bit different profile. We expect, based on what we have now, that it will continue to ramp through the year.

Simon May: I think Adam covered most of it there. Just to add a couple of points, we did see strong year-over-year order intake in the first quarter. As Adam said, NASD continues to skew favorably towards commercial programs. As we look to the rest of the year, we have good visibility to the pipeline, and we see revenue ramp in the second half of the year.

Patrick Donnelly: Great. Thank you, guys.

Operator: Your next question comes from the line of Dan Brennan with TD Cowen. Your line is open. Please go ahead.

Dan Brennan: Great. Thank you. Maybe just to start off, I understand if you back out the $10 million, the growth would have been right in line with the 5%. You kind of walked through all the puts and takes. But just stepping back, you guys have been on a pretty consistent pace of coming in ahead of guidance. Five percent growth is still solid in this environment. Just wondering how we might think about the rest of your guidance in terms of what would drive you to the higher end or lower end, given that trend of consistently beating numbers, and now it looks more in line this quarter.

Padraig McDonnell: Yes. I will talk at a high level. We are really set up for success, Dan. You look at the innovative products really going extremely well—Infinity 3 and the replacement cycles, Pro IQ—you know, the strong commercial team, good connection with customers and our enterprise service capabilities that I talked about in my prepared remarks. This was a solid Q1 and excellent growth despite the weather. On the top line, we are confirming it. I think it is prudent, but appropriate given the macro uncertainty that is around as always. The operating profit growth of 10% and 75 bps margin expansion at the midpoint is really solid.

We have had a number of sales kickoffs around the globe in the last months. Funnels are very robust. We have seen almost our best market share report to date. Everything is moving in the right direction, so that gives us positivity as we go through the year.

Dan Brennan: Got it. Thank you. Oh, go ahead. Sorry.

Adam Alanoff: Sure. I can just give you a little bit more detail on what would push us to the upside versus push us to the downside of the guide if that is helpful. It is really around three things. One is a pickup in the small- and mid-cap biotech sector. All of the green shoots are still there, but then there is that time lag between how the incremental investment, IPOs, and M&A convert into actual spending and investment. The second is academia and government—if we start to see more stability there, that can push us to the upside.

The third, while China remains stable, and we believe it will be stable at about that $300 million per quarter run rate, if there was a stimulus, a bigger stimulus toward the end of the year, that would be an upside. What I will say is there was a small stimulus in the first quarter, which we did very well in. That would give us confidence if there was a second SAMR stimulus that happened later in the year, we would perform well on that. That is what would push us to the upside.

The downside is just the opposite—if small and mid-cap remain muted, academia and government continues to get worse, and then China sees a decline in the low-single-digit range versus our flat assumption.

Dan Brennan: Alright. And maybe a second one just on CAM. Obviously, super important business, really strong quarter. You gave some color, but just a little bit more there in terms of why it came in better. I know you addressed it in the prepared remarks. Maybe a little bit more color on how you are thinking about that going forward for the rest of the year. Thank you.

Padraig McDonnell: Yes. It is sometimes an underappreciated part of our business. It is our core business—our heritage is in the applied markets—and in CAM we delivered 9% growth. The advanced materials subsegment grew at 20%. We saw really robust demand because of our leading position around semiconductor. There is a lot of reshoring going on. Our spectroscopy and our GCMS tools are critical in that manufacturing supply chain and for chemical plants that are around supporting that. The ongoing reshoring really helps in that space. Increased clarity on tariff policies, easing U.S.-China tensions, and strong demand for memory chips are supportive. We are number one by a long way in the CAM market.

Our leadership positions and our market shares are unmatched there. Put it all together, it is a very important secular driver for us, and we could see that continuing throughout the year.

Operator: Your next question comes from the line of Dan Leonard with UBS. Your line is open. Please go ahead. Dan, a reminder to kindly unmute yourself.

Dan Leonard: Sorry about that. Thank you for taking the question. I will pick up right where you left off, Padraig. You talked about atomic spectroscopy upside in the quarter due to the memory shortage—this is not something you talk about a lot. How are you framing that opportunity?

Padraig McDonnell: Yes. It is not just the memory shortage; it is the reshoring of fabs that you see globally. You even see it in India where fabs are being set up, also in Asia and the Americas. It has been really a mix of all that together, and a lot of demand on that side. Also, on the chemical side, you have downstream processes that are needed for AI that support that in terms of it, and that really bolsters a lot of demand. Just to give a bit of color, our chemical business is about two thirds, advanced materials is about one third of the CAM business. We expect that to continue to grow.

The energy business where we are working on the battery side is naturally hedged against oil volatility as well. We continue to see good strength in that. So it is a mix of all of the above.

Dan Leonard: Thank you. And just a follow-up on what you are seeing in pharma. You mentioned mid-single-digit growth in small molecule. Is that all GLP-1s? And can you talk about the situation in pharma outside of GLP-1s?

Padraig McDonnell: Yes. Biotech grew low double digit for us. That is really around our specialized CDMO core growth of low double digits. What we see as the U.S. biotech recovery is starting in well-funded large caps. We see that continuing. For small and big caps, the improved funding backdrop is really helping. Breaking it down, if you look at our small molecule business, which is very solid at mid-single-digit growth, Asia is leading the way in small molecules with low double-digit growth. We see that continuing, and we are very well hedged on the GLP-1 side—both from our CDMO side, but also our analytical side. We are testing both on the orals and on the injectable side.

GLP-1 grew at 50% in the quarter; that was 7% for the analytical labs and, on the CDMO side, 120% growth. Underpin all of that with the market conditions, then look at our replacement cycle moving forward—40% growth in our single quad, which is right at the sweet spot of QA/QC. It is really strong momentum in that market and we see that continuing for the rest of the year.

Operator: Your next question comes from the line of Jack Meehan with Nephron Research. Your line is open. Please go ahead.

Jack Meehan: Thank you. Good afternoon.

Padraig McDonnell: Sorry, Jack. I think we dropped off there. On mute.

Tejas Savant: Operator, can we go to the next question? We will circle back to Jack once he is back on.

Operator: Absolutely. Your next question comes from the line of Michael Ryskin with Bank of America. Your line is open.

Michael Ryskin: Hey, guys. Thanks for the question. Hope you can hear me. I want to follow up on what I think Patrick was asking about earlier about some of the moving pieces in the quarter, especially with the $10 million weather shift. I want to make sure I am understanding the dynamics correctly. My read of it is it sounds like you have had a slightly slower start to the year than you anticipated in select markets like cell analysis, like A&G specifically, maybe a little bit on food. I just want to make sure I am understanding that correctly. Again, I do not want to blow it out of proportion, especially with $10 million shipped.

I just want to make sure we got that. And then a follow-up to that is, obviously, you are maintaining your full-year core guide. Is there something that is offsetting that where you talked about GLP-1s, you talked about CAM. Is the strength there offsetting it? Is this just sort of like you had buffer in the model built in and you are absorbing some of these hits, you expect to recoup it later in the year?

Maybe an easier way to ask all of this is, you are going to give us an end-market breakout for the year in terms of core growth—if you could run through that compared to where you were a quarter ago, that might be helpful. Thanks.

Padraig McDonnell: Adam, do you want to take this one, and I will take the second part of that question?

Adam Alanoff: Yes. In the dynamics of the quarter, there were minor differences in our smaller markets, but our key markets actually performed quite well. If you think about pharma, CAM, and then our diagnostics business, they all performed very well. Then we had small pockets of slight differences from where we guided. Overall, we are actually doing quite well. Then, unfortunately, the storm hit in the last three days of the quarter, which are our biggest days of the quarter. We were not able to recognize the revenue, which we have since recognized the following Monday. I will pass it over to Padraig.

Padraig McDonnell: If you are looking at the academia and government side, it is the smallest part of our business. NIH is 1% of our funding, so it is slightly less than what we expected, but it is really the smallest part of our business. I described the real momentum we have in the key markets—continued improvement in pharma, we are seeing spend in biotechs, GLP-1 business continues to be extremely strong, CDMO continues to move forward, and CAM strength. Put that all together with the funnels that we are seeing and our growth on our Infinity 3—if you look at that compared to our peers, we are almost 2x in terms of the quarter—and that is driving the replacement cycle.

All of those things moving together, we are very positive about the rest of the year.

Adam Alanoff: I would just remind you that for the full year, we are maintaining our end-market guides. We expect them to land in roughly the same place.

Michael Ryskin: Okay. Alright. Appreciate it. I will leave it there. Thanks.

Operator: Your next question comes from the line of Jack Meehan with Nephron Research. Your line is open. Please go ahead.

Jack Meehan: Thank you. Hopefully, you can hear me now. Yes. I want to follow up on the M&A question because this is the number one debate we have been fielding. You talked a lot about how Ignite has improved your capabilities around M&A execution. Just wondering if you could elaborate on that, as number one. And then number two is, just from a product area, I was curious your take on diagnostic assets. You have a unique position with Dako that seems to be doing pretty well. Where does the IVD market stack up on your pecking order as an industry of interest?

Padraig McDonnell: Yes. Adam, maybe you can talk about Ignite and what we are seeing on the integration capability side, and I will take the second one.

Adam Alanoff: Sure. There are a couple pieces to why Ignite gives us the confidence that we would be able to integrate an asset effectively. If you look at what the Ignite program is, it is really about a management system and how you bring a bunch of different functions together to execute on a project in an efficient way. That is exactly what an integration is. Managing tariffs is a cross-functional activity where you need people moving in coordination to achieve an outcome. That is what an integration is. The first point I would make is, just running through the Ignite program and using the Ignite system that we have now implemented gives us confidence we can execute an integration.

The other piece I would point out is BioVectra—we have leveraged that capability to integrate BioVectra into our network, and that is another proof point to our readiness to integrate the right asset.

Padraig McDonnell: I think Adam talked about our capital allocation philosophy, so I will not go back over that one. We are focused on increasing our service and recurring revenue. I think we have been very clear on that—you will see software and automation, also content on systems, etc. We have many high-growth adjacent markets where we would have examples in all of that. Specifically about diagnostics, it is one of our businesses. That is not excluded, of course, but it is a very durable market. We had 7% growth in Q1, and pathology is a mid-single-digit grower as we have seen over time with a lot of long-term growth drivers.

It is an area where we will continue to look in all those spaces, but again—where do we have a right to win, does it link with the strategy within that segment, does it increase our recurring revenue—that is very important to us as we go forward. And, of course, we have the Ignite operating system to allow us to integrate it very, very quickly as well.

Adam Alanoff: Thank you, guys.

Operator: Your next question comes from the line of Puneet Souda with Leerink Partners. Your line is open. Please go ahead.

Puneet Souda: Yes. Hi, Padraig and Adam and team. Thanks for taking my question. First one, again, GLP-1 growth there is strong, but my question is more on the utilization on the oligo side on the NASD side. Any update on the full utilization of Train C, which I think is anticipated in 2027? The question is really around the margin impact in light of this utilization, where it stands today, how it ramps up, and how should we think about the commercial batches versus the early-stage pipeline work that you are seeing?

Padraig McDonnell: Yes. I would start off and I will hand it over to Adam for some more color. We have a very strong order backlog, and we are confident in the FY 2026 outlook continuing to ramp. Of course, you have month-to-month variances, but we have Train C and D coming online. I have to say we are delighted to have that capacity coming online where it is because we are booked out for 2026, and now we are booking into 2027 with larger commercial batches. So it is at the right time. Adam, do you want to give more color on the cadence?

Adam Alanoff: Yes. Thanks for the question. At steady state, the specialty CDMO business will return an operating margin above the corporate operating margin, so it is a good business to be in. Specific to 2027, Train C and Train D will be ramping through the year, and so there will be a negative margin impact; however, we will offset that with other activities within the business.

Puneet Souda: Got it. Okay. Namely through Ignite. I see. Okay. That is helpful. And then just to follow up on the—you made a comment about the small biotech capital raises and capitalization driving growth. As you see that across the business, just wondering if you can double-click on where you are seeing that. Is that more on the LC instrumentation side, cell analysis, or is it more on the CDMO side of the business where you are seeing the uptick from the emerging and small biotechs?

Adam Alanoff: So let me—I think I just need to clarify because the comment was made in the context of what would be the upsides to the forecast. It was really set around, if we see a meaningful uptick in the small- and mid-cap biotech, then we would start to see upside to our forecast. While we have seen the capital market profile change improving, we have yet to see a meaningful uptick in the small- and mid-cap investments.

Padraig McDonnell: Yes. If you look at small and medium-sized biotech, we have a relatively small exposure, but we are actually encouraged by the improving biotech funding and increased M&A. You see that a lot. If you look at the macros, in January total biopharma financing rose about $11 billion. That is a two-year high. We watch that. You have the patent cliff that is looming, of course, with heightened biopharma focus and M&A. I think 2025 was one of the strongest years in M&A for pharma, which, of course, was about $240 billion. But I think it is too early to call an inflection for us, and there is a lag between improving funding environment and customer spending.

We are extremely well placed with our tools—Pro IQ LCMS, Infinity 3—and, of course, we will see a recovery in our cell analysis business for those tools as we go forward. That is the way I would say it. It is a relatively smaller exposure for us, but we are really encouraged by the improvement in the funding environment.

Operator: Your next question comes from the line of Brandon Couillard with Wells Fargo. Your line is open. Please go ahead.

Brandon Couillard: Hey. Thanks, guys. Good afternoon. The 6% growth in China—was that all stimulus-related? And it would be helpful if you just touch on a couple of the end markets there. Curious if you are seeing any of them turn more positively or if it is really just still status quo.

Padraig McDonnell: Yes. We were very pleased with our 6% growth—better than expected and, compared to peers, also better than expected. There was a slight bit of more spending before Lunar New Year, but not too much. Last year, we saw a very strong GACC stimulus business. We saw a small one this year. We won about 30% of that. As we go through the year, we expect it to be a $300 million-per-quarter business. Overall, we are under-indexed to DX and pharma and over-indexed to the applied markets. We see continued strength on that side. We expect China to grow mid- to high-single digits over the long term—not the double-digit rates we saw ten years ago—mid- to high-single digits.

Our track record—how we are able to do manufacturing in China and our commercial teams being very, very close to the customers—is really important. Adam talked about the larger stimulus that is looming towards the end of the year. We are not counting that in our guide, but if that comes in, it is going to be significantly more than the GACC stimulus, and we expect an outsized win in it. We are optimistic about China. We have the largest installed base. Look at the pace of innovation in life science and the applied markets—it supports strong demand for instruments and our solutions.

If you look at the China five-year plan, whether it is rapid application of AI, healthcare, green sustainable developments, and new regulations for pollutants like PFAS, we are right in the sweet spot in terms of those priorities, so we feel very good about China.

Brandon Couillard: That is helpful. And then, Adam, it would be great to get some color on the AMG markets by region. I think Simon said Europe was pretty solid. Just curious where you are seeing the weakness—is it all in the Americas? Any color would be helpful by region. Thanks.

Adam Alanoff: Yes. The softness we have been seeing is really primarily in the Americas. There is reason to be optimistic—the NIH budget came in line, flat to slightly up. The 15% cap on overhead research costs was blocked. That said, it goes back to what Simon talked about, which is we are still seeing a little bit of hesitancy in our customers to make bigger investments as they are really focused on operating their labs.

Simon May: And just to clarify the Europe comment, that was a forward-looking comment that we envision more stability in Europe than in the Americas with academic and government, and cautious optimism around incremental improvement. That was a forward-looking statement.

Operator: Your next question comes from the line of Casey Woodring with JPMorgan. Your line is open. Please go ahead.

Casey Woodring: Great. Thanks for fitting me in. I will ask my two upfront. The first is just on LC and LCMS pacing over the course of the year. LC grew high singles in Q1. Can you just talk about what LCMS grew in the quarter and walk through the growth phasing for LC and LCMS over the course of the year? And then secondly, Padraig, you called out the three enterprise service wins in ACG, and you talked a little bit about it in your script. Can you maybe just elaborate on what the financial impact could look like from those contracts and how we should think about the impact to the model and how those ramp over time? Thank you.

Padraig McDonnell: Yes. Let me talk about the enterprise services, and I will comment then on the LCMS. On the enterprise services side, it is a really important flywheel for the future because we are fully working with customers on their lab management and productivity. You can imagine the insights we get on replacement cycle through that and how we move forward on it. It is not just about the services; it is about the consumables and it is about the instrument replacements that we can drive going forward. We have had significant replacements in competitive accounts.

We are kind of unique in how we are doing that in the market, and we are seeing that as a flywheel to continue going forward. In accounts where we do have enterprise service agreements, we have a higher consumables attach rate, we have a higher services attach rate, and we have an early warning system around replacement cycles that we have early conversations about. On the LC side of things, it has been a steady pace and a really good quarter. On the LCMS side, Simon, do you want to add any color?

Simon May: Yes. To reiterate on LC, we saw high single-digit growth in the quarter, with particular strength in China and APAC. As we have mentioned already, very strong performance in Infinity 3—customers continue to love it—and I still think we are relatively early to mid in the replacement cycle there. Win-loss rates continue to be positive, with notable share gains based on the industry data. We are now seeing additional tailwind there with the Altura columns. On the LCMS side, we were in line with our expectations in the first quarter, coming off a tough sequential and year-over-year compare, it has to be said. We were very pleased with Pro IQ, with 40% growth—really exceptional adoption there.

In LCMS, similar story with respect to win-loss rates and the industry data, which signifies some notable share gains. Beyond the Pro IQ, which is off to a very strong start, we are also very encouraged by our broader LCMS innovation pipeline.

Padraig McDonnell: Just going back to the enterprise services, I want to bring in Angelica because she has been very close to some of these marquee wins and the growth trajectory of what we are seeing with the customer.

Angelica Riemann: Thanks, Padraig, and thanks for the question, Casey. We are very excited about the enterprise business and the opportunity that it unlocks. When you think about it, it allows us to really embed our service into the accounts, and they are looking at managing assets across the laboratory. Not only does it give us the opportunity to help customers with their lab operations and keep their labs up and running and producing those scientific results, it gives us visibility and access more broadly in these laboratory environments so that we are not only looking at our own replacement cycle but we are also looking at competitive displacement opportunities and incremental wallet share opportunities.

Over the course of time, the relationships that we are building compound. They compound from a growth perspective, but they also compound from the insights that we get from customers and how we bring that back into the innovation muscle that we have here at Agilent Technologies, Inc., and how we can continually grow, evolve, and continue to serve our customers on all different levels, whether it is lab operations, scientific outcomes, or ongoing value over time. In closing—

Operator: Your final question comes from the line of Evie Kozlowski with Goldman Sachs. Evie, please limit yourself to one question. Your line is open. Please go ahead. A reminder to please unmute yourself by pressing star 6.

Tejas Savant: Operator, Evie is not there. I think we can leave it there. That is all the time we have for this afternoon, and thank you to everyone for joining us. We look forward to speaking with you soon. This concludes today's call.

Operator: Thank you for attending. You may now disconnect.

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