01—Abstract
Summary
Summary of the 10-Q filed May 12, 2026. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation's first-quarter 2026 results (quarter ended April 4, 2026) reflect the February 9, 2026 completion of the acquisition of the Biosciences & Diagnostic Solutions (BDS) business of Becton, Dickinson and Company, structured as a Reverse Morris Trust transaction.
The acquisition issued 38,542 thousand shares of Waters common stock, with a total BDS Business Acquisition consideration of $12.96 billiona, and it dramatically changed the comparability of the financials. Total revenues rose to $1.267 billion from $662 million, with the filing attributing $520 million of the increase to BDS Business revenue since the Closing Date. Excluding BDS, legacy revenue increased 13%, led by broad-based growth across product lines and regions.
Profitability weakened sharply. The company reported an operating loss of $47 millionb, compared with operating income of $152 million in the prior-year quarter (the MD&A cites $151 million on a recast basis), and a net loss of $72 million, or $(0.87) per diluted share, versus net income of $121 million, or $2.03 per diluted share. The filing attributes the swing to $99 million of acquisition-related inventory and fixed asset fair value step-up expense, $140 million of incremental purchased intangibles amortization, higher interest expense, and $83 million of transaction, integration and other internal costs.
Net cash used in operating activities was $3 millionc, compared with $260 million provided a year earlier, which management attributes largely to a $140 million net receivable due from BD and $88 million of transaction and integration payments. The balance sheet expanded significantly, with total assets of $24.53 billion (up from $5.08 billion), goodwill of $9.32 billion, intangible assets of $8.78 billion, and total debt of $5.22 billion, including $3.5 billion of Senior Notes issued by a subsidiary, Augusta SpinCo Corporation, in March 2026. The company also disclosed that it may be eligible for a refund of tariffs following a February 20, 2026 U.S. Supreme Court decision, but has not recognized any material amount as of April 4, 2026.
02—Key points
Key Highlights
- Total revenues were $1.267 billion, up from $662 million, with $520 million contributed by the BDS Business since the February 9, 2026 Closing Date; legacy revenue increased 13%.
- Operating loss of $47 million compared with operating income in the prior-year period, driven by $99 million of acquisition-related inventory and fixed asset step-up expense and $140 million of higher purchased intangibles amortization.
- Net loss of $72 million, or $(0.87) per diluted share, versus net income of $121 million, or $2.03 per diluted share, in the first quarter of 2025.
- Net cash used in operating activities was $3 million, compared with $260 million provided in the prior-year period, reflecting a $140 million net receivable due from BD and $88 million of transaction and integration payments.
- The BDS acquisition was valued at $12.96 billion in total consideration, funded in part by issuing 38,542 thousand Waters shares to BD shareholders, with former Waters shareholders owning approximately 60.8% of the outstanding shares on a fully diluted basis.
- Total debt rose to $5.22 billion at April 4, 2026, from $1.41 billion, including $3.5 billion of Senior Notes issued March 23, 2026, and the company was in compliance with all debt covenants.
- Management said the Supreme Court's February 20, 2026 ruling invalidating IEEPA tariffs may make the company eligible for tariff refunds, but no material amount has been recognized.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed May 12, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.27B$771.00M | +64.3% |
| R&D Expenses | $96.00M$49.00M | +95.9% |
| SG&A Expenses | $387.00M$198.00M | +95.5% |
| Operating Expenses | $1.31B$583.00M | +125.4% |
| Operating Income | -$47.00M$188.00M | −125.0% |
| Interest Expense | $48.00M$15.00M | +220.0% |
| Net Income | -$72.00M$147.11M | −148.9% |
| EPS (Basic) | $-0.87$2.47 | −135.2% |
| EPS (Diluted) | $-0.87$2.47 | −135.2% |
| Shares Outstanding (Basic) | 82.14B59.52B | +38.0% |
| Shares Outstanding (Diluted) | 82.14B59.66B | +37.7% |
05—Questions
Frequently Asked Questions
What drove the swing from profit to loss in the first quarter of 2026?
The filing attributes the net loss to BDS Business Acquisition-related items: $99 million of purchase accounting fair value step-up expense, $140 million of increased purchased intangibles amortization, higher interest expense of $32 million, and transaction, integration and other internal costs of $83 million, partly offset by higher sales volume.
How much of the revenue growth came from the BDS acquisition?
The company stated that revenue increased 91%, primarily driven by $520 million of revenue contributed by the BDS Business since the Closing Date. Excluding BDS revenue, legacy revenue increased 13%, with foreign currency translation adding 2% to total revenue growth.
Why was operating cash flow negative in the quarter?
Net cash used in operating activities was $3 million. Management cited a net $140 million receivable due from BD relating to net cash settlement for activity since the Closing Date, $88 million of transaction and integration payments, and lower net income, partly offset by higher customer advances and deferred revenue.
How is the company financing the acquisition and how much debt does it now carry?
SpinCo borrowed $4.0 billion of term loans in February 2026 to fund a cash distribution to BD shareholders. In March 2026, $3.5 billion of Senior Notes were issued to repay the delayed draw term loan. Total outstanding debt was $5.2 billion at April 4, 2026, and the company had $1.6 billion available under its revolving credit facility.
Does the company expect any tariff relief?
Following a February 20, 2026 U.S. Supreme Court decision invalidating tariffs imposed under the International Emergency Economic Powers Act, the company may be eligible for a refund of tariffs previously paid. The recoverability and timing remain uncertain, and no material amount has been recognized as of April 4, 2026.
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