10-QPeriod: Q3 FY2023

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q3 Ended Jul 31, 2023

Filed August 31, 2023For Securities:A

Summary

Agilent Technologies, Inc. reported total net revenue of $1,672 million for the third quarter of fiscal year 2023, a 3% decrease compared to the prior year. For the first nine months of fiscal year 2023, revenue increased by 3% to $5,145 million. The company experienced a significant decline in income from operations, which was heavily impacted by a substantial asset impairment charge of $277 million related to the shutdown of its Resolution Bioscience business. Despite the revenue dip in the current quarter, driven by weaker demand in the Life Sciences and Applied Markets segment, particularly in Asia Pacific, the company saw growth in its Agilent CrossLab segment. Looking ahead, Agilent anticipates a challenging macroeconomic environment and customer capital expenditure pressures, especially in China, but remains optimistic about long-term growth opportunities across its key markets.

Financial Highlights

57 data points
Beta

Revenue

$1.67B

39.4% Gross Margin

Net Income

$111.00M

6.6% Net Margin

EPS (Diluted)

$0.38

Total Assets

$10.68B

Cash & Equivalents

$1.33B

Free Cash Flow

$481.00M

Financial Statements
Beta
Revenue$1.67B
Cost of Revenue$1.01B
Gross Profit$658.00M
R&D Expenses$118.00M
SG&A Expenses$407.00M
Operating Expenses$1.54B
Operating Income$133.00M
Interest Expense$24.00M
Net Income$111.00M
EPS (Basic)$0.38
EPS (Diluted)$0.38
Shares Outstanding (Basic)294.00M
Shares Outstanding (Diluted)295.00M

Key Highlights

  • 1Q3 FY2023 Net Revenue: $1,672 million, down 3% year-over-year.
  • 2Nine Months FY2023 Net Revenue: $5,145 million, up 3% year-over-year.
  • 3Significant Asset Impairment: $277 million charge due to the shutdown of the Resolution Bioscience business, impacting profitability.
  • 4Income from Operations Decline: Decreased 68% in Q3 FY2023 due to impairment charges, and 18% year-to-date.
  • 5Segment Performance Mix: Life Sciences and Applied Markets revenue declined 9% in Q3, while Agilent CrossLab revenue grew 10%.
  • 6Strong Cash Flow from Operations: $1,256 million generated in the first nine months of FY2023, up from $864 million in the prior year.
  • 7Active Share Repurchase Program: Approximately $1.604 billion remaining authorization under the 2023 repurchase program.

Frequently Asked Questions

The significant decrease in net income and income from operations was primarily due to a substantial asset impairment charge of $277 million related to the decision to shut down the Resolution Bioscience business. This charge impacted the company's profitability for the quarter and the first nine months of the fiscal year.

Performance varied across segments. The Life Sciences and Applied Markets segment saw a 9% revenue decrease in Q3 FY2023, impacted by weaker demand in certain markets and regions like Asia Pacific. In contrast, the Agilent CrossLab segment showed robust growth, with revenue increasing by 10% in Q3 FY2023, driven by strong demand for its services across all end markets. The Diagnostics and Genomics segment also experienced modest growth.

Agilent anticipates a challenging macroeconomic environment with pressure on customer capital expenditures, particularly in China. However, the company remains optimistic about its long-term growth prospects across all its key end markets, supported by its differentiated product solutions and focus on customer experience and productivity.

Agilent continues to focus on balanced capital allocation. This includes returning capital to shareholders through dividends and significant share repurchases, with approximately $1.604 billion remaining authorization under its 2023 repurchase program. The company also continues to invest in its manufacturing capacity, notably for nucleic acid-based therapeutics.