Agilent’s third quarter was shaped by robust demand in its pharmaceutical and chemicals and advanced materials end markets, which management cited as primary drivers behind the company’s double-digit revenue growth. CEO Padraig McDonnell highlighted that investments in semiconductor and chemical sectors, as well as strong adoption of the Infinity Tree LC platform and Pro IQ LCMS system, contributed to this momentum. Management also pointed to improved capital spending by customers and a gradual replacement cycle for aging lab instruments as factors supporting the quarter’s performance.
Is now the time to buy A? Find out in our full research report (it’s free).
Agilent (A) Q2 CY2025 Highlights:
- Revenue: $1.74 billion vs analyst estimates of $1.67 billion (10.1% year-on-year growth, 4.3% beat)
- Adjusted EPS: $1.37 vs analyst estimates of $1.37 (in line)
- Adjusted EBITDA: $509 million vs analyst estimates of $488.2 million (29.3% margin, 4.3% beat)
- Revenue Guidance for Q3 CY2025 is $1.83 billion at the midpoint, above analyst estimates of $1.77 billion
- Management reiterated its full-year Adjusted EPS guidance of $5.57 at the midpoint
- Operating Margin: 20.7%, in line with the same quarter last year
- Organic Revenue rose 6.1% year on year vs analyst estimates of 3.3% growth (281.9 basis point beat)
- Market Capitalization: $35.5 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Agilent’s Q2 Earnings Call
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Dan Brennan (TD Cowen) pressed CEO Padraig McDonnell for details on margin pressures and whether recent commercial investments would yield returns in the coming year. McDonnell clarified that tariff costs, increased commercial spending, and higher variable pay contributed equally, with investments intended to support future demand.
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Tycho Peterson (Jefferies) asked about the reduction in executive approval requirements for pharma capital spending and whether pent-up demand would boost orders. McDonnell noted broader approval authority for lab managers, leading to improved replacement cycles and larger year-end quotes.
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Rachel Vatnsdal (JPMorgan) inquired whether the robust fourth-quarter revenue guidance implied similar growth for next year. McDonnell and Gonzalez stated it was too early to provide guidance for the full year but emphasized that current momentum gives a solid foundation for future growth.
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Michael Ryskin (Bank of America) sought clarification on the magnitude and timeline of tariff mitigation for margins. CFO Rodney Gonzalez specified that tariff impacts would peak in the current year, with mitigation efforts expected to benefit margins starting next year.
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Patrick Donnelly (Citi) queried whether margin expansion was achievable next year given this year’s headwinds. McDonnell pointed to Ignite-driven efficiencies, expected tariff relief, and revenue leverage as key contributors to potential margin improvement.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory analyst team will monitor (1) the pace of margin recovery as tariff mitigation and operational efficiencies scale, (2) sustained demand and replacement cycles in pharma and chemicals, and (3) the adoption and revenue contribution of new products like Infinity Tree LC and Pro IQ LCMS. Updates on government stimulus in China and trends in customer capital spending will also be important indicators of Agilent’s ability to maintain its current growth trajectory.
Agilent currently trades at $124, up from $118.71 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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