Executive Summary

Q2 FY25 beat on both revenue and non-GAAP EPS: $1.668B (+6% y/y; +5.3% core) and $1.31 EPS vs S&P Global consensus ~$1.626B and $1.26, aided by broad-based growth, PFAS strength, and Ignite-driven execution; GAAP EPS was $0.75 given restructuring, impairments, and securities losses . Consensus values marked with asterisks are from S&P Global. [Values retrieved from S&P Global]
Operating margin held at 25.1% despite ~55 bps tariff headwind; gross margin 54.1% with tariff, FX, and mix pressure, offset by pricing and Ignite savings .
FY25 outlook raised on reported revenue (+$50M FX tailwind) to $6.73–$6.81B with core growth unchanged at 2.5%–3.5% and EPS maintained at $5.54–$5.61; Q3 guide: $1.645–$1.675B and $1.35–$1.37 EPS .
Catalysts: continued PFAS momentum (70%+ growth; now annualizing >$100M), instrument replacement cycle (Infinity III LC, GC/GCMS), and Ignite transformation (pricing, procurement, org changes) helping fully mitigate tariffs by FY26 and support estimate stability near term .

What Went Well and What Went Wrong

What Went Well
- PFAS workflows surged >70% y/y in Q2, adding ~80 bps to growth and annualizing to well over $100M; Europe and China more than doubled PFAS business. “We are very confident in the continued momentum in this emerging $1 billion addressable market by 2030.”
- CrossLab (ACG) outperformed: $713M revenue (+7% reported, +9% core) with strength in consumables, automation, and services; book-to-bill >1; digital orders +12% to $295M .
- Ignite transformation driving pricing (≥100 bps price in FY25), procurement (>$50M annualized savings exiting FY25), organizational efficiency (~$80M annualized savings 2H), and >$130M profit impact in FY25; “Ignite has become the backbone of our operating system” .
What Went Wrong
- Gross margin declined y/y to 54.1% as tariffs (~55 bps), FX, and mix weighed; management expects full tariff mitigation in FY26, but FY25 margins are closer to flat y/y .
- China logistics/customs delays slowed instrument deliveries in AMG/LDG (offset by ~$15M consumables pull-forward into Q2); normalization expected in May/Q3 .
- Applied Markets Group (AMG) revenue -1% reported (flat core) and operating margin -150 bps y/y to 19.5% given timing-related GC shipments .

Financial Results

Income statement and EPS vs estimates

Metric	Q2 2024	Q1 2025	Q2 2025 Actual	Q2 2025 Consensus*
Revenue ($B)	$1.573	$1.681	$1.668	$1.626*
GAAP EPS ($)	$1.05	$1.11	$0.75	n/a
Non-GAAP EPS ($)	$1.22	$1.31	$1.31	$1.264*

Margins (non-GAAP where stated)

Margin	Q1 2025	Q2 2025
Gross Margin %	n/a	54.1%
Operating Margin %	25.1%	25.1% (flat y/y; ~55 bps tariff headwind in gross margin)

Non-GAAP to GAAP reconciliation drivers (Q2 2025)

Adjustment (Q2)	Per-share impact
Restructuring and other related costs	$0.20
Asset impairments	$0.05
Intangible amortization	$0.10
Transformational initiatives	$0.08
Acquisition and integration costs	$0.01
Net loss on equity securities	$0.10
Other	$0.03
Tax adjustment	$(0.01) (non-GAAP tax rate 11.5%)

Segment performance (Q2 y/y)

Segment	Revenue Q2’24 ($M)	Revenue Q2’25 ($M)	Reported Growth	Core Growth	Op Margin Q2’24	Op Margin Q2’25
Life Sciences & Diagnostics (LDG)	604	654	+8%	+3%	19.0%	19.7%
CrossLab (ACG)	664	713	+7%	+9%	32.5%	32.4%
Applied Markets (AMG)	305	301	-1%	0%	21.0%	19.5%

End-market KPIs (Q2 core growth; revenue mix)

End Market	Q2 Core Growth	Share of Revenue
Pharma	+6%	36%
Academic & Government	-2%	8%
Diagnostics & Clinical	+8%	15%
Chemicals & Advanced Materials	+4%	22%
Food	+8%	9%
Environmental & Forensics	+6%	10%

Notes: Company cited book-to-bill >1 and orders up low-single digits in Q2; 12% growth in digital orders to $295M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	FY25	$6.68–$6.76	$6.73–$6.81	Raised (FX)
Core Revenue Growth (%)	FY25	+2.5% to +3.5%	+2.5% to +3.5%	Maintained
Non-GAAP EPS ($)	FY25	$5.54–$5.61	$5.54–$5.61	Maintained (absorbing tariffs)
OI&E ($)	FY25	~$0M (FY guide)	+$15M income	Raised
Tax rate (non-GAAP)	FY25	n/a	~12%	New detail
Diluted share count	FY25	286M (assumption)	285M (Q2 actual; FY guide 285M)	Slightly lower
Revenue ($B)	Q3 FY25	n/a	$1.645–$1.675	New
Non-GAAP EPS ($)	Q3 FY25	n/a	$1.35–$1.37	New
Dividend	Q3 FY25	n/a	$0.248/share payable 7/23/25	Announced

Additional color: Group-level Q3 core growth assumptions: LDG mid-single digits; ACG and AMG low single digits .

Earnings Call Themes & Trends

Topic	Q4 FY24 (Q-2)	Q1 FY25 (Q-1)	Q2 FY25 (Current)	Trend
Tariffs/macro	Transformation initiatives; steady market improvement	Solid start; guide maintained; Lunar New Year impacts	~55 bps gross margin hit; $50M 2H tariff exposure (base case) plus potential $40M EU-to-US; largely mitigated via pricing, supply chain moves, inventory; fully mitigated in FY26	Rising risk, mitigation scaling
PFAS	High-40s global growth in Q4	70%+ growth	>70% growth; >$100M annualizing; adj. market ~$1B by 2030; expansion into air/volatile PFAS (2–3% → 8–12% of market in 12–18 months)	Strengthening, broadening
Product cycle (Infinity III LC)	New org; product momentum	Strong reception; drives funnel	Strong adoption; higher attach rates of services/consumables; LC replacement cycle building; 6–9 month funnels	Ramping
CDMO (NASD, BioVectra)	NASD softer in FY24	n/a in slides	NASD high single digits Q2; aiming double-digit 2H; BioVectra high-teens; GLP-1 scale-up; some Q3 planned downtime	Improving mix/visibility
China	Challenging FY24	Better-than-expected stimulus win rate	+10% growth; consumables pull-forward ~$15M; customs slowed some instruments; stable sequentially; Phase 2 stimulus funnel strong	Stabilizing
Pricing/Ignite	Cost actions, transformation	Early Ignite benefits	≥100 bps price in FY25; $80M annualized OpEx savings 2H; >$50M procurement annualized by YE25; >$130M profit in FY25	Scaling execution
Digital/Automation	n/a	n/a	Digital orders +12% to $295M; automation growth in ACG	Positive

Management Commentary

“Ignite has become the backbone of our operating system… enabling faster decision-making, more scalable growth, and over $130 million of profit for fiscal year 2025.”
On PFAS: “In Q2, PFAS grew more than 70% year-over-year… provided an incremental 80 basis points to our growth… annualizing to well over $100 million.”
Margin context: “Gross margin was 54.1%… ~55 bps of incremental tariff costs… Operating margins of 25.1%; excluding tariffs, it would have been an increase year on year.”
Tariff playbook: “We estimate gross incremental tariff exposure in 2H is $50M… possible additional $40M if EU tariffs rise to 50%… we anticipate the net impact would be minimal for the year… expect actions to fully mitigate in fiscal 2026.”
China dynamics: “Pull-forward of ~$15M ACG consumables into Q2… longer customs processing on some instruments; we expect reversal in Q3… return to normal customs in May.”

Q&A Highlights

Tariffs and order timing: ~$15M consumables pulled into Q2 in China; instrument customs delays offset; no total revenue impact; reversal expected in Q3 .
Margins: FY25 operating margins closer to flat y/y due to tariffs; excluding tariffs, expansion would continue; FY26 gross margins should improve as supply chain moves eliminate gross tariff impact and pricing realization increases .
NASD/BioVectra outlook: NASD set up for double-digit 2H; BioVectra GLP-1 programs scaling (planned Q3 downtime); capacity utilization improving at “Trains” C/D .
Replacement cycles: Infinity III LC adoption strong with higher service/consumables attach; GC/GCMS momentum building with new 8850 GC-MS capability .
China/stimulus: Stable sequential revenue (> $300M), strong Q4 potential from next stimulus phase (not in guidance) .

Estimates Context

Q2 FY25 beats: Revenue $1.668B vs $1.626B consensus*; Non-GAAP EPS $1.31 vs $1.264*; GAAP EPS $0.75 (no consensus provided) . [Values retrieved from S&P Global]
Q3 FY25 guide vs consensus*: Revenue guide $1.645–$1.675B vs ~$1.667B*; EPS guide $1.35–$1.37 vs ~$1.368* — essentially in line at midpoints . [Values retrieved from S&P Global]
FY25 guide vs consensus*: Revenue $6.73–$6.81B vs ~$6.920B* (below consensus on revenue); EPS $5.54–$5.61 vs ~$5.57* (bracketing consensus) . [Values retrieved from S&P Global]

Period	Metric	Company Actual/Guide	S&P Global Street*
Q2 FY25	Revenue	$1.668B	$1.626B*
Q2 FY25	Non-GAAP EPS	$1.31	$1.264*
Q3 FY25	Revenue (guide)	$1.645–$1.675B	$1.666B*
Q3 FY25	Non-GAAP EPS (guide)	$1.35–$1.37	$1.368*
FY25	Revenue (guide)	$6.73–$6.81B	$6.920B*
FY25	Non-GAAP EPS (guide)	$5.54–$5.61	$5.573*

Note: Asterisks denote S&P Global consensus. [Values retrieved from S&P Global]

Key Takeaways for Investors

Quality beat with disciplined guide: Q2 upside on revenue/EPS with FY25 EPS maintained despite tariff headwinds signals confidence in Ignite-driven offsets and price realization .
Mix tailwinds: CrossLab/services/consumables growth and PFAS workflow strength provide resilience while instrument replacement cycles (Infinity III, 8850 GC-MS) add cyclical torque .
Tariff overhang manageable: ~55 bps gross margin impact in Q2; $50M base 2H exposure plus potential EU action largely mitigated; full elimination targeted in FY26—supporting margin re-acceleration next year .
China stabilizing: +10% growth in Q2 with normalization of customs; stimulus phase 2 offers potential Q4 upside not in numbers; reduces downside risk to H2 .
Estimates: FY25 revenue guidance sits below Street while EPS brackets consensus—expect modest top-line estimate trimming but EPS largely intact near term; Q3 guide broadly in line . [Values retrieved from S&P Global]
Capital returns ongoing: Dividend declared ($0.248/share) with anti-dilutive buybacks continuing; balance sheet strong (net leverage ~1x) .
Watch items: Segment mix (AMG timing), tariff developments (EU), margin cadence (Ignite OpEx savings ramp in 2H), and PFAS regulatory adoption across regions .

Additional Q2 Materials and Events

8-K and press release provide detailed segment and non-GAAP reconciliations .
Product launches support replacement and PFAS narratives: enhanced 8850 GC now MS-connected; InfinityLab Pro iQ LC-mass detection series .
New CTO appointment (August Specht) underscores R&D execution focus amid Ignite .

AGILENT TECHNOLOGIES, INC. (A)·Q2 2025 Earnings Summary