Waters (WAT) U.S. All Stars Conference summary

Business performance and growth

• Achieved 9% organic growth in Q2, with instruments and service growing high single digits and chemistry double digits; China and India delivered double-digit growth, with India exceeding 20%.

• Pharma end market saw double-digit growth, especially in China (over 24%), while industrial and academic/government segments also performed well.

• Integration with acquired businesses is progressing, with both legacy and acquired segments growing and contributing to overall momentum.

• Cost synergy run rate of $200 million achieved within nine months, ahead of the original three-year target.

• Base business is now a sustainably high single-digit grower, setting up for further acceleration into 2027.

AI, innovation, and market trends

• AI adoption is driving incremental demand for consumables, especially in quality control (QC) and late-stage development, with robust signals in QC and early signals in discovery.

• Software of record in pharma QC is widely adopted, with increased seat purchases to train AI agents.

• AI-driven reagent and column consumption is higher in QC than in discovery, with BD Biosciences seeing more discovery-side demand.

• Reshoring and AI are both seen as long-term growth drivers, with reshoring expected to contribute incrementally from 2027 to 2030.

Guidance, replacement cycles, and product launches

• Raised organic growth guidance for the year, with prudent assumptions for Q3 and Q4; Q4 guidance contemplates 4% growth, with potential upside from China stimulus and product launches.

• Instrument replacement cycle is elongated, with strong replacement funnels extending visibility through 2027; biotech, CROs, and drug discovery segments are now starting to replace.

• New product launches, such as Alliance iS and TQ Absolute XR, are driving growth and competitive share gains in LC and LC-MS.

• Chemistry business benefits from e-commerce, innovation, and AI-driven demand, with high single to double-digit growth expected.