Waters (WAT) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $1.645 billion, more than doubling year-over-year due to the Biosciences and Diagnostic Solutions (BDS) acquisition and strong organic growth, with all divisions outperforming and exceeding guidance.

• Adjusted EPS was $3.05, up 3% year-over-year, while GAAP EPS was a loss of $1.39 due to acquisition-related charges and restructuring costs.

• Integration of acquired BDS businesses is progressing, with revenue synergies, operational improvements, and a 180-day growth plan accelerating performance.

• Decisive cost actions and restructuring, including a 3% workforce reduction, are supporting margin expansion and long-term growth.

• Operating losses were reported due to acquisition-related costs, increased amortization, and restructuring charges.

Financial highlights

• Q2 2026 as-reported revenue: $1.645 billion; organic revenue: $828 million, up 7% as reported and 9% in constant currency.

• Biosciences and Diagnostic Solutions revenue: $817 million, up 4% year-over-year.

• Adjusted EPS: $3.05, up 3% year-over-year; GAAP net loss: $136 million for Q2 2026.

• Adjusted gross margin: 54%; adjusted operating margin: 25%.

• Free cash flow: $200 million after severance and integration costs; cash and cash equivalents at quarter-end: $539 million.

Outlook and guidance

• Full-year 2026 organic constant currency revenue growth guidance raised to 7%-9%; total reported revenue expected between $6.415 billion and $6.476 billion.

• Full-year adjusted EPS expected: $14.45-$14.65 (10%-12% growth year-over-year); Q3 2026 adjusted EPS: $3.95-$4.05.

• Adjusted EBIT margin expected at 28.2% for 2026; net interest expense of $190 million and tax rate of 15.5%.

• Annual salary-related cost savings from workforce reduction estimated at $120 million, with $67 million expected in 2026.

• Ongoing monitoring of tariff and trade policy changes, with potential impacts on cost structure and supply chain.