01—Abstract
Summary
Summary of the 10-K filed February 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation's 2024 annual report shows net sales were flat at $2.96 billion, with product sales down to $1.84 billiona and service sales up to $1.11 billion.
Net income declined 1% to $637.8 millionb, and diluted EPS was $10.71 versus $10.84 in 2023. Operating income rose slightly to $826.4 million, though foreign currency translation reduced operating income by $43 million. China was a major drag: sales there fell to $397 million from $565 million in 2022, and the company cut about 2% of its workforce in March 2024, primarily in China.
The company's two segments, Waters (LC, MS and chemistry consumables) and TA (thermal analysis, rheometry and calorimetry), were aggregated into one reporting segment. Waters instrument system sales fell 7%c in 2024, while chemistry consumables rose 4% and Waters service sales rose 6%. Services remain a key earnings support, representing over 35% of Waters sales in 2024.
The Wyatt Technology acquisition, completed in May 2023 for $1.3 billiond in cash, contributed $111 million of net sales in 2024. Balance sheet and capital allocation: total debt was $1.6 billion at year-end 2024, down from $2.36 billion, and cash and investments were $325 million. Operating cash flow was $762 million, up from $603 million.
The company made no open-market share repurchases in 2024 and has $1.0 billion remaining under its repurchase authorization, which was extended through January 2028. The company approved a new ERP system in December 2024, expected to cost about $130 million over three years, and management believes existing resources are sufficient for at least the next twelve months.
02—Key points
Key Highlights
- Net sales were flat at $2,958.4 million in 2024 versus $2,956.4 million in 2023, after a 1% decline in 2023.
- Net income fell 1% to $637.8 million and diluted EPS was $10.71, compared with $10.84 in 2023.
- China sales declined to $396.6 million in 2024 from $440.7 million in 2023 and $565.1 million in 2022, driven by lower customer demand and government procurement restrictions.
- Waters instrument system sales fell 7% in 2024, while chemistry consumables rose 4% and Waters service sales rose 6%.
- Operating cash flow rose to $762.1 million from $602.8 million, helped by lower incentive bonus payments and working capital improvements.
- Total debt decreased to $1.63 billion at year-end 2024 from $2.36 billion, with no open-market share repurchases in 2024 and $1.0 billion remaining under the repurchase authorization.
- A new worldwide ERP system, approved in December 2024, is expected to cost about $130 million over three years and to be a multi-year transition with operational risk.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Waters kept $0.22.
- Revenue$2.96B100.0%
- Cost of revenue−$1.20B40.6%
- Gross profit$1.76B59.4%
- Operating costs−$931.8M31.5%
- Operating income$826.4M27.9%
- Interest, other & tax−$188.5M6.4%
- Net income$637.8M21.6%
Where FY2024 revenue went
$2.96B- Cost of revenue: $1.20B, 41% of revenue
- SG&A: $690.1M, 23% of revenue
- Net income: $637.8M, 22% of revenue
- R&D: $183.0M, 6.2% of revenue
- Other operating costs: $58.7M, 2.0% of revenue
- Interest, other & tax: $188.5M, 6.4% of revenue
Kept 22% as net incomeOther operating costs $58.7M · 2.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 25, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $2.96B$2.96B | +0.1% |
| Cost of Revenue | $1.20B$1.20B | +0.4% |
| Gross Profit | $1.76B$1.76B | −0.2% |
| R&D Expenses | $183.03M$174.94M | +4.6% |
| SG&A Expenses | $690.15M$736.01M | −6.2% |
| Operating Expenses | $2.13B$2.14B | −0.3% |
| Operating Income | $826.35M$817.68M | +1.1% |
| Interest Expense | $89.68M$98.86M | −9.3% |
| Net Income | $637.83M$642.23M | −0.7% |
| EPS (Basic) | $10.75$10.87 | −1.1% |
| EPS (Diluted) | $10.71$10.84 | −1.2% |
| Shares Outstanding (Basic) | 59.33M59.08M | +0.4% |
| Shares Outstanding (Diluted) | 59.55M59.27M | +0.5% |
05—Questions
Frequently Asked Questions
How did Waters perform financially in 2024?
Total net sales were $2,958.4 million, essentially flat versus 2023. Operating income rose 1% to $826.4 million, while net income declined 1% to $637.8 million and diluted EPS was $10.71.
What is driving the weakness in Waters' business?
The filing attributes weakness mainly to lower customer demand in China, which fell to $396.6 million of sales, along with trade tensions, tariffs, increased local competition and government procurement restrictions. Waters instrument system sales declined 7% in 2024, with Waters instrument sales in China down 12%.
How strong is the company's balance sheet and cash generation?
Total debt was $1.63 billion at December 31, 2024, down from $2.36 billion a year earlier, and cash, cash equivalents and investments were $325 million. Operating cash flow was $762.1 million, and management believes resources are sufficient for at least the next twelve months.
Is the company returning capital to shareholders?
Waters has not paid dividends in its past three fiscal years and does not intend to pay cash dividends in the foreseeable future. It made no open-market share repurchases in 2024, but its repurchase program, extended through January 21, 2028, has $1.0 billion remaining.
What are the key risks and strategic investments investors should watch?
Key risks include China exposure, foreign currency fluctuations (68% of 2024 net sales were outside the United States), tariffs, goodwill and intangible impairment risk tied to Wyatt, and execution risk on the multi-year ERP implementation. Management is also investing in new products and AI integration.
06—Continue