01—Abstract
Summary
Summary of the 10-K filed February 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation reported 2025 total net sales of $3.17 billiona, up from $2.96 billion in 2024, with product sales of $1.98 billion and service sales of $1.19 billion.
Operating income was $802.6 millionb, down from $826.4 million, and net income was $642.6 million, or $10.76 per diluted share, compared with $10.71 in 2024. Management attributed the operating income decline to approximately $82 million of transaction, integration and other internal costs tied to the BDS Business Acquisition, plus $20 million of ERP implementation expenses. Operating cash flow was $653 million, down from $762 million, reflecting tax payments, ERP costs and acquisition-related payments.
The most consequential event is the February 9, 2026 completion of the acquisition of the Biosciences and Diagnostic Solutions businesses of Becton, Dickinson and Company, structured as a Reverse Morris Trust, at a total purchase price including assumed debt of $16.8 billionc. BD shareholders own approximately 39.2% of the combined company and existing shareholders own approximately 60.8%. To fund a $4.0 billion cash distribution to BD, the company assumed $4.0 billion of term loans: a $3.5 billion tranche maturing in February 2027, which management plans to refinance in the first quarter of 2026 with long-term bonds, and a $500 million tranche maturing in February 2028.
The 2025 results do not include the BDS Business, so the filing's 2025 figures reflect the standalone Waters and TA business only. Management expects cost synergies of approximately $200 milliond within three years and revenue synergies of approximately $290 million within five years.
Key risks highlighted include integration execution, the substantial increase in indebtedness, goodwill and intangible impairment exposure, tariff and trade policy uncertainty (including a February 20, 2026 Supreme Court decision invalidating certain IEEPA tariffs), and China demand. The company has not paid dividends in the past three fiscal years.
02—Key points
Key Highlights
- Total net sales rose to $3.17 billion in 2025 from $2.96 billion in 2024, with product sales up to $1.98 billion and service sales up to $1.19 billion.
- Operating income declined to $802.6 million from $826.4 million, mainly due to about $82 million of BDS transaction and integration costs and $20 million of ERP implementation expenses.
- Net income was $642.6 million, or $10.76 per diluted share, versus $10.71 in 2024.
- Waters completed the $16.8 billion BDS Business Acquisition on February 9, 2026 via a Reverse Morris Trust; BD shareholders hold about 39.2% of the combined company.
- The company assumed $4.0 billion of SpinCo term loans, with a $3.5 billion tranche due February 2027 that management plans to refinance with long-term bonds in Q1 2026.
- Expected synergies are approximately $200 million of cost savings within three years and $290 million of revenue synergies within five years.
- Operating cash flow was $653 million in 2025, down from $762 million, and year-end cash was $588 million against $1.4 billion of debt before the BDS financing.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Waters kept $0.20.
- Revenue$3.17B100.0%
- Cost of revenue−$1.29B40.7%
- Gross profit$1.88B59.3%
- Operating costs−$1.07B33.9%
- Operating income$802.6M25.4%
- Interest, other & tax−$160.0M5.1%
- Net income$642.6M20.3%
Where FY2025 revenue went
$3.17B- Cost of revenue: $1.29B, 41% of revenue
- SG&A: $830.4M, 26% of revenue
- Net income: $642.6M, 20% of revenue
- R&D: $195.7M, 6.2% of revenue
- Other operating costs: $47.8M, 1.5% of revenue
- Interest, other & tax: $160.0M, 5.1% of revenue
Kept 20% as net incomeOther operating costs $47.8M · 1.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 23, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $3.17B$2.96B | +7.0% |
| Cost of Revenue | $1.29B$1.20B | +7.4% |
| Gross Profit | $1.88B$1.76B | +6.7% |
| R&D Expenses | $195.71M$183.03M | +6.9% |
| SG&A Expenses | $830.37M$690.15M | +20.3% |
| Operating Expenses | $2.36B$2.13B | +10.8% |
| Operating Income | $802.59M$826.35M | −2.9% |
| Interest Expense | $69.55M$89.68M | −22.4% |
| Net Income | $642.63M$637.83M | +0.8% |
| EPS (Basic) | $10.80$10.75 | +0.5% |
| EPS (Diluted) | $10.76$10.71 | +0.5% |
| Shares Outstanding (Basic) | 59.51M59.33M | +0.3% |
| Shares Outstanding (Diluted) | 59.71M59.55M | +0.3% |
05—Questions
Frequently Asked Questions
How did Waters perform in 2025 before the BDS acquisition closed?
Net sales grew 7% to $3.17 billion. Growth was led by Waters instrument systems (up 7%), chemistry consumables (up 12%) and services (up 7%), with China sales up 10% after a 10% decline in 2024. Net income was $642.6 million, or $10.76 per diluted share.
What is the financial structure of the BDS Business Acquisition?
BD spun off its Biosciences and Diagnostic Solutions business into SpinCo, which paid BD a cash distribution of about $4.0 billion funded by $4.0 billion of new term loans. SpinCo then merged into a Waters subsidiary, with SpinCo shares converted into 38,541,852 Waters common shares. Waters assumed the $4.0 billion of debt at closing.
What debt maturities does Waters face after the acquisition?
The $3.5 billion tranche matures 364 days after the February 6, 2026 funding date, and the company plans to refinance it in the first quarter of 2026 with long-term bond financing. The $500 million tranche matures on the second anniversary of the funding date and is expected to be repaid before maturity. Waters also had $460 million of existing debt due in 2026.
What are the main risks investors should monitor?
The filing highlights integration and synergy execution risk, the substantial new indebtedness that could limit flexibility and raise borrowing costs, possible goodwill and intangible impairments, tariff and trade uncertainty, and reduced demand from China and from academic and government funding. It also notes restrictions under the Tax Matters Agreement for two years after the SpinCo Cash Distribution.
Does Waters pay dividends or repurchase shares?
Waters has not declared or paid cash dividends in the past three fiscal years and does not intend to pay them in the foreseeable future. It made no open-market share repurchases in 2024 or 2025, and $1.0 billion remains authorized under the repurchase program extended through January 21, 2028.
06—Continue