01—Abstract
Summary
Summary of the 10-Q filed May 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation's Form 10-Q for the first quarter ended March 29, 2025 reports total net sales of $661.7 milliona, up from $636.8 million in the first quarter of 2024, with product sales rising 6% and service sales flat.
Operating income increased 13% to $151.7 millionb, and net income rose 19% to $121.4 million, or $2.03 per diluted share versus $1.72 a year earlier. The filing attributes the operating income increase mainly to higher sales volume and the absence of $8 million of restructuring expense and $10 million of patent litigation expense recorded in the prior-year quarter. Instrument system sales increased 9%, while recurring revenues rose 1%, with foreign currency translation reducing total sales growth by 3%.
Cash generation was steady, with net cash provided by operating activities of $260 millionc versus $263 million a year earlier, and the company reduced net debt borrowings by $170 million. Total debt stood at $1.46 billion at quarter end, including a $100 million note payable classified as current, and cash and cash equivalents rose to $383 million. Stockholders' equity increased to $1.96 billion.
The company made no open market share repurchases in 2025 or 2024, with $1.0 billiond remaining under its authorization. The filing highlights tariffs as a key uncertainty.
The U.S. government has issued tariffs on imported goods, with the effective date delayed until July 2025 for all countries except China, and management states these could have a significant impact on the statement of operations and cash flows, though it expects offsetting actions to mitigate a substantial portion of the impact. The company also notes an ongoing ERP implementation expected to cost approximately $130 million over three years.
02—Key points
Key Highlights
- Total net sales rose 4% to $661.7 million, with instrument system sales up 9% and recurring revenues up 1%.
- Operating income increased 13% to $151.7 million, with operating margin of 22.9% versus 21.0% a year earlier.
- Net income increased 19% to $121.4 million; diluted EPS was $2.03 compared with $1.72.
- Operating cash flow was $259.6 million versus $262.9 million in the prior-year quarter.
- Total debt was $1.46 billion, with net debt borrowings reduced by $170 million during the quarter.
- Tariffs on imported goods could have a significant impact on results; the effective date for most countries is delayed until July 2025.
- The company plans to spend approximately $130 million on a new ERP system over the next three years.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Waters kept $0.18.
- Revenue$662.0M100.0%
- Cost of revenue−$276.7M41.8%
- Gross profit$385.3M58.2%
- Operating costs−$233.3M35.2%
- Operating income$152.0M23.0%
- Interest, other & tax−$30.6M4.6%
- Net income$121.4M18.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 6, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $662.00M$636.84M | +4.0% |
| Cost of Revenue | $276.75M$261.79M | +5.7% |
| Gross Profit | $385.25M$375.05M | +2.7% |
| R&D Expenses | $47.00M$44.59M | +5.4% |
| SG&A Expenses | $174.00M$174.54M | −0.3% |
| Operating Expenses | $510.00M$502.99M | +1.4% |
| Operating Income | $152.00M$133.85M | +13.6% |
| Interest Expense | $14.00M$25.52M | −45.1% |
| Net Income | $121.38M$102.20M | +18.8% |
| EPS (Basic) | $2.04$1.73 | +17.9% |
| EPS (Diluted) | $2.03$1.72 | +18.0% |
| Shares Outstanding (Basic) | 59.44B59.23M | +100249.5% |
| Shares Outstanding (Diluted) | 59.71B59.43M | +100371.1% |
05—Questions
Frequently Asked Questions
How did Waters perform in the first quarter of 2025?
Total net sales increased 4% to $661.7 million, operating income rose 13% to $151.7 million, and net income grew 19% to $121.4 million. Growth was broad-based across most regions, with Europe the exception, declining 1%.
What drove the increase in operating income?
The filing attributes the increase primarily to higher sales volume and the absence of $8 million of restructuring expense and $10 million of patent litigation expense recorded in the first quarter of 2024.
How is the company managing its debt and cash?
Total debt was $1.46 billion at March 29, 2025, down from $1.63 billion at December 31, 2024. Net debt borrowings decreased by $170 million, and cash and cash equivalents increased to $383 million. The company was in compliance with all debt covenants.
What are the main risks flagged in the filing?
Tariffs on imported goods and related retaliatory tariffs or supply-chain disruptions could significantly affect results. Management says offsetting actions are expected to mitigate a substantial portion of the impact but cannot assure that the effects will not be material. Foreign currency translation also reduced sales growth by 3%.
Is the company returning capital to shareholders through buybacks?
No open market share repurchases were made in 2025 or 2024. The company has $1.0 billion remaining under its repurchase authorization, which was extended through January 21, 2028, and has not paid dividends.
06—Continue