01—Abstract
Summary
Summary of the 10-Q filed August 11, 2026. Cited figures are marked; the original filing is the authoritative source.
Waters Corporation reported a second quarter 2026 net loss of $136 milliona, or $1.39 per diluted share, compared with net income of $147 million, or $2.47 per diluted share, in the second quarter of 2025.
Total net revenues were $1.645 billionb, up from $771 million, driven primarily by the acquisition of the Biosciences and Diagnostic Solutions (BDS) business of Becton, Dickinson and Company, which closed on February 9, 2026 and contributed $817 million of revenue in the quarter. The filing states that legacy revenue, excluding the BDS business, increased 7% in the quarter and 10% for the first half of 2026. For the first half, the company reported a net loss of $208 million and an operating loss of $134 million, compared with operating income of $340 million a year earlier.
The acquisition was structured as a Reverse Morris Trust transaction, with Waters issuing 38,542 thousand shares to BD shareholders, valued at $12.8 billionc, and assuming $4.0 billion of debt. Total debt rose to $5.086 billion at July 4, 2026, from $1.407 billion at December 31, 2025, and goodwill increased to $9.421 billion from $1.340 billion. Operating cash flow for the first half fell to $198 million from $301 million, which the company attributes mainly to a $673 million receivable due from BD, transaction and integration payments, and the timing of settlements.
Acquisition-related inventory step-up expense of $253 milliond, purchased intangibles amortization, interest expense, and integration costs weighed on results. The company also recorded $52 million of severance costs from a workforce reduction affecting about 3% of employees, and it states that the IEEPA tariff refund amount is uncertain, so no material refund has been recognized. Management notes that the company may be eligible for tariff refunds following a February 2026 U.S. Supreme Court ruling, but recoverability and timing remain uncertain.
02—Key points
Key Highlights
- Second-quarter 2026 total net revenues were $1.645 billion, up from $771 million a year earlier, with BDS Business contributing $817 million.
- Net loss for the quarter was $136 million, or $1.39 per diluted share, versus net income of $147 million, or $2.47 per diluted share, in the prior-year quarter.
- Operating loss was $86 million in the second quarter and $134 million for the first half of 2026, compared with operating income of $188 million and $340 million in the same periods of 2025.
- Total debt increased to $5.086 billion at July 4, 2026, from $1.407 billion at December 31, 2025, after $3.5 billion of Senior Notes issued in March 2026 and the $4.0 billion of debt assumed in the acquisition.
- Goodwill rose to $9.421 billion from $1.340 billion, and intangible assets, net, rose to $8.521 billion from $558 million, reflecting the BDS Business Acquisition.
- First-half operating cash flow was $198 million, down from $301 million, primarily due to a $673 million receivable from BD and $105 million of transaction and integration payments.
- Legacy revenue, excluding the BDS business, grew 7% in the second quarter and 10% for the first half of 2026, with growth described as broad-based across product lines and regions.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed August 11, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.65B$799.89M | +105.7% |
| R&D Expenses | $122.00M$53.64M | +127.4% |
| SG&A Expenses | $405.00M$214.23M | +89.1% |
| Operating Expenses | $1.73B$607.77M | +184.8% |
| Operating Income | -$86.00M$192.11M | −144.8% |
| Interest Expense | $60.00M$26.64M | +125.3% |
| Net Income | -$136.00M$148.92M | −191.3% |
| EPS (Basic) | $-1.39$2.50 | −155.6% |
| EPS (Diluted) | $-1.39$2.50 | −155.6% |
| Shares Outstanding (Basic) | 98.20B59.53M | +164871.1% |
| Shares Outstanding (Diluted) | 98.20B59.62M | +164611.0% |
05—Questions
Frequently Asked Questions
Why did Waters report a net loss this quarter after a profit a year ago?
The filing attributes the swing mainly to BDS Business Acquisition-related items: purchase accounting fair value step-up expense, higher purchased intangibles amortization ($244 million in the quarter versus $12 million a year earlier), restructuring charges of $49 million, higher interest expense of $60 million, and transaction and integration costs. The company also cites a low effective tax rate of 3.5% for the quarter.
How is the BDS acquisition affecting the balance sheet?
The acquisition added $8.4 billion of identifiable intangible assets and $8.1 billion of goodwill, and increased total assets to $24.751 billion from $5.077 billion at December 31, 2025. Stockholders' equity rose to $15.195 billion from $2.562 billion, reflecting the share issuance, and long-term debt increased to $4.886 billion from $947 million.
Is there a risk tied to the receivable from Becton, Dickinson?
Yes. The company reports a $673 million receivable from BD, which it describes as a significant concentration of accounts receivable. Days sales outstanding were 110 days at July 4, 2026, compared with 86 days a year earlier, and the company states that excluding the BD receivable, DSO was 73 days. BD is described as an investment-grade company, and the company says it has not experienced collection issues to date.
What is the status of the tariff refund opportunity?
Following a February 20, 2026 U.S. Supreme Court decision invalidating IEEPA tariffs, the company may be eligible for refunds of tariffs previously paid. Because the recoverability and timing remain uncertain, the company has not recognized any material amounts as of July 4, 2026. The filing also notes that new tariffs were implemented under alternative authority.
What are the company's main debt obligations and maturities?
Waters had $3.5 billion of Senior Notes issued in March 2026 with maturities from 2027 to 2036 and a weighted-average interest rate of 4.44% across its senior notes and credit borrowings. Other obligations include a $450 million SpinCo Term Loan due February 2028, $200 million of current senior unsecured notes, and a $1.8 billion revolving credit facility with $0.3 billion drawn. The company states it was in compliance with all debt covenants as of July 4, 2026.
06—Continue