Agilent Technologies (A) TD Cowen 46th Annual Health Care Conference summary

Business performance and growth outlook

• Achieved high single-digit growth in top three end markets, with Q1 core growth at 4.4%, impacted by winter weather; adjusted results would have exceeded guidance midpoint.

• Pharma, CAM, and clinical/diagnostics segments benefited from secular tailwinds such as MFN clarity, GLP-1 ramp, siRNA growth, and reshoring trends.

• Innovations like Infinity III, Pro iQ LC-MS, and Altus Bio Inert columns are driving share gains and positive customer response.

• Confident in delivering full-year guidance: 4%-6% core revenue growth, 75 bps margin expansion, 10% operating profit growth, and 6%-8% EPS growth (9%-11% ex-tax changes).

• Revenue split between first and second half of the year aligns with historical patterns, with expected growth acceleration in the back half.

Key market drivers and risks

• Upside swing factors include midcap biotech spend, Academia & Government (A&G) customers, and China; biopharma financings and M&A activity are positive indicators.

• NIH budgets and court decisions may boost A&G spend, while China showed 6% YoY growth in Q1, aided by stimulus and favorable timing.

• Risks include conservative lab spending and timing of stimulus in China; upside possible if spending patterns improve.

• GLP-1s contributed $130M in revenue last year, with 50% growth in Q1; company is well-positioned for both injectable and oral modalities.

• Enzymatic ligation seen as an industry positive, with no near-term threat to siRNA leadership; bookings extend into 2027.

Capital allocation and M&A strategy

• Capital allocation priorities remain unchanged: focus on internal innovation, targeted M&A, strategic capacity expansion, and returning excess capital via dividends and buybacks.

• No need for a transformative deal; disciplined approach to M&A, targeting services, recurring revenue, software, automation, and specialty CDMO niches.

• Transformation deals are not a current priority; company maintains a wide aperture but prioritizes value creation and integration capability.

• Ongoing investments in digital, AI, and CDMO capacity, with new trains C and D coming online next year.