01—Abstract
Summary
Summary of the 10-Q filed August 4, 2025. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation's second-quarter 2025 Form 10-Q, filed August 4, 2025, reports net sales of $771.3 milliona for the three months ended June 28, 2025, up from $708.5 million a year earlier, and net income of $147.1 million, or $2.47 per diluted share, versus $142.7 million and $2.40 in the prior-year quarter.
For the first half of 2025, total net sales were $1.43 billionb and net income was $268.5 million, or $4.50 per diluted share. Operating income for the quarter was $188.2 million, roughly flat with $189.1 million a year earlier, as higher sales were offset by higher selling and administrative expenses, which included about $14 million of transaction costs tied to the pending merger. Net cash from operating activities was $300.7 million for the first half, compared with $317.4 million in the prior-year period, and cash and cash equivalents rose to $367.2 million at June 28, 2025.
The most significant development is the July 13, 2025 definitive agreement to combine with Becton, Dickinson and Company's Biosciences & Diagnostic Solutions business in a Reverse Morris Trust transaction valued at approximately $17.5 billionc as of signing. BD shareholders are estimated to own about 39.2% of the combined company and Waters shareholders about 60.8%. The company expects to assume approximately $4 billion of incremental debt and must pay BD a $733 million termination fee in certain circumstances.
Closing is expected around the end of the first quarter of 2026, subject to regulatory approvals and Waters shareholder approval. The company has also secured a $1.8 billiond 364-day bridge loan commitment. On the balance sheet, total debt was $1.46 billion at June 28, 2025, down from $1.63 billion at December 31, 2024, and $260 million of notes became current.
Net sales growth was driven by instrument systems and chemistry consumables, with China chemistry sales helped by approximately $8 million of pull-forward ahead of new tariffs. U.S. sales declined 1% in the quarter, and TA instrument sales in the U.S. fell 21% in the first half.
02—Key points
Key Highlights
- Q2 2025 net sales rose to $771.3 million from $708.5 million, and first-half net sales reached $1.43 billion from $1.35 billion.
- Q2 2025 net income was $147.1 million, or $2.47 per diluted share, compared with $142.7 million, or $2.40 per diluted share, a year earlier.
- Operating income was $188.2 million in Q2 2025, essentially flat versus $189.1 million, with about $14 million of merger-related transaction costs included in expenses.
- Agreed on July 13, 2025 to combine with BD's Biosciences & Diagnostic Solutions business in a transaction valued at about $17.5 billion, with BD shareholders owning about 39.2% of the combined company.
- The pending merger would add approximately $4 billion of incremental debt, and a $733 million termination fee is payable in certain circumstances.
- Total debt declined to $1.46 billion at June 28, 2025 from $1.63 billion at December 31, 2024, and the company completed the $35 million Halo Labs acquisition in May 2025.
- Net cash provided by operating activities was $300.7 million for the first half of 2025, versus $317.4 million a year earlier, reflected in a $24 million increase in tax payments tied to the final 2018 Tax Reform Transition payment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Waters kept $0.19.
- Revenue$771.0M100.0%
- Cost of revenue−$321.4M41.7%
- Gross profit$449.6M58.3%
- Operating costs−$261.6M33.9%
- Operating income$188.0M24.4%
- Interest, other & tax−$40.9M5.3%
- Net income$147.1M19.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 4, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $771.00M$708.53M | +8.8% |
| Cost of Revenue | $321.41M$288.24M | +11.5% |
| Gross Profit | $449.59M$420.29M | +7.0% |
| R&D Expenses | $49.00M$46.18M | +6.1% |
| SG&A Expenses | $198.00M$173.25M | +14.3% |
| Operating Expenses | $583.00M$519.42M | +12.2% |
| Operating Income | $188.00M$189.11M | −0.6% |
| Interest Expense | $15.00M$23.73M | −36.8% |
| Net Income | $147.11M$142.74M | +3.1% |
| EPS (Basic) | $2.47$2.41 | +2.5% |
| EPS (Diluted) | $2.47$2.40 | +2.9% |
| Shares Outstanding (Basic) | 59.52B59.34M | +100196.6% |
| Shares Outstanding (Diluted) | 59.66B59.45M | +100244.8% |
05—Questions
Frequently Asked Questions
How did Waters perform in the second quarter of 2025?
Total net sales increased to $771.3 million from $708.5 million, and net income rose to $147.1 million from $142.7 million. Diluted EPS was $2.47 compared with $2.40. Operating income was $188.2 million versus $189.1 million, as higher selling and administrative expenses and merger-related transaction costs offset higher sales.
What is the BD Biosciences & Diagnostic Solutions transaction?
On July 13, 2025, Waters agreed to a Reverse Morris Trust transaction in which BD's Biosciences & Diagnostic Solutions business will be spun off to BD shareholders and merged with a Waters subsidiary. The combined stock and cash purchase price is valued at approximately $17.5 billion. BD shareholders are estimated to own about 39.2% of the combined company, and the closing is expected around the end of the first quarter of 2026, subject to regulatory and Waters shareholder approvals.
How will the transaction affect Waters' debt?
The company expects to assume approximately $4 billion of incremental debt tied to a cash payment to BD. It has also obtained a 364-day bridge loan commitment of $1.8 billion to fund a possible Waters special dividend and related fees and expenses. The filing states the special dividend could range from zero to approximately $1.8 billion.
What risks does the merger pose to shareholders?
The filing notes that completion depends on regulatory approvals, Waters shareholder approval, and an IRS private letter ruling, so there is no assurance the deal closes on the expected terms or timeline. Waters would owe BD a $733 million termination fee in certain circumstances. Shareholders may also face dilution from new shares issued and a stock price that has been volatile since announcement.
Were there any notable regional or tariff-related effects on sales?
U.S. net sales declined 1% in the second quarter, and U.S. TA instrument sales fell 21% in the first half. China sales grew 17% in the quarter, which the company estimates included about $8 million of chemistry consumable sales pulled forward ahead of new tariffs. The company says tariffs could significantly affect its results, though it expects its mitigation actions to offset a substantial portion of the impact.
06—Continue