AGILENT TECHNOLOGIES INC

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding growth opportunities, including for and in our end markets, our strategic direction, new product and service introductions and the position of our current products and services, market demand for and adoption of our products and solutions, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on differentiating our product solutions, improving our customers’ experience and productivity, future financial results, our operating margin, our investments, including in manufacturing infrastructure, research and development and expanding and improving our applications and solutions portfolios, expanding our position in developing countries and emerging markets, our contributions to our defined benefit plans, impairment and adjustments of goodwill and other intangible assets, the impact of foreign currency movements, our hedging programs and other actions to offset the effects of foreign currency and interest rate movements, our future effective tax rate, unrecognized tax benefits, reimbursement incentives, our ability to satisfy our liquidity requirements, including through cash generated from operations, the potential impact of adopting new accounting pronouncements, indemnification, our sales, our purchase commitments, our capital expenditures, the integration, effects and timing of our acquisitions and other transactions, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, our stock repurchase program and dividends, macroeconomic conditions, market conditions, the recovery and health of our end markets, our geographical diversification, interest rate and inflationary pressures, that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding growth opportunities, including for and in our end markets, new product and service introductions, the position and strength of our businesses, products and services, market demand for and adoption of our products and solutions, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on enhancing our customers’ experience, delivering differentiated product solutions and driving productivity improvements, leveraging our product platforms to maximize growth, our investments, including in manufacturing infrastructure, research and development and expanding and improving our applications and solutions portfolios, expanding our position in developing countries and emerging markets, our contributions to our defined benefit plans, our hedging programs and other actions to offset the effects of foreign currency and interest rate movements, our future effective tax rate, unrecognized tax benefits, reimbursement incentives, our ability to satisfy our liquidity requirements, including through cash generated from operations, the potential impact of adopting new accounting pronouncements, indemnification obligations, our sales, our purchase commitments, our capital expenditures, the integration, effects and timing of our acquisitions and other transactions, expense reduction and other results from our restructuring programs and other cost saving initiatives, our stock repurchase program and dividends, macroeconomic and market conditions, the recovery and health of our end markets, seasonality, mix, future financial results, our operating margin, our geographical diversification, interest rates, inflationary pressures and local regulations and restrictions, that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Previous wording

Agilent Technologies, Inc. ("we," "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

Current wording

Agilent Technologies, Inc. ("we," "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

Previous wording

Net revenue of $1,578 million and $4,809 million for the three and nine months ended July 31, 2024 decreased 6 percent and 7 percent, respectively, when compared to the same periods last year. Overall, foreign currency movements for the three and nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point for both periods when compared to the same periods last year. Net revenue for the three and nine months ended July 31, 2024, declined in our life sciences and applied markets and diagnostics and genomics segments partially offset by revenue growth in our Agilent Crosslab segment. Revenue declined in all regions, particularly in China, and in nearly all of our end markets we serve, most significantly in the pharmaceutical market due to our customers' continued capital expenditure pressures. Revenue generated by our life sciences and applied markets business in the three and nine months ended July 31, 2024 decreased 8 percent and 11 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024, had an overall unfavorable impact on revenue growth of 1 percentage point for both periods when compared to the same periods last year. Revenue generated by our diagnostics and genomics business for the three and nine months ended July 31, 2024 decreased 9 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point and no impact, respectively, when compared to the same periods last year. Revenue generated by our Agilent CrossLab business in the three and nine months ended July 31, 2024 increased 4 percent and 5 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point and no impact, respectively, when compared to the same periods last year.

Current wording

Net revenue of $1,681 million for the three months ended January 31, 2025 increased 1 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year. Net revenue for the three months ended January 31, 2025, increased in our Life Sciences and Diagnostics Markets and Agilent CrossLab segments partially offset by decreased revenue in our Applied Markets segment. Revenue from our BIOVECTRA acquisition contributed approximately 2 percentage points in the three months ended January 31, 2025. Revenue generated by our Life Sciences and Diagnostics Markets segment for the three months ended January 31, 2025 increased 4 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 1 percentage point when compared to the same period last year. Revenue generated by our Agilent CrossLab segment for the three months ended January 31, 2025 increased 1 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year. Revenue generated by our Applied Markets segment for the three months ended January 31, 2025 decreased 4 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025, had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year.

Previous wording

Net income for the three and nine months ended July 31, 2024 was $282 million and $938 million, respectively, compared to net income of $111 million and $765 million for the corresponding periods last year. In the nine months ended July 31, 2024, cash provided by operations was $1,270 million compared to cash provided by operations of $1,256 million in the same period last year.

Current wording

Net income for the three months ended January 31, 2025 was $318 million compared to net income of $348 million for the corresponding period last year. In the three months ended January 31, 2025, cash provided by operations was $431 million compared to cash provided by operations of $485 million in the same period last year.

Previous wording

Dividends. During the three and nine months ended July 31, 2024, we paid cash dividends of $0.236 per common share or $68 million and $0.708 per common share or $206 million, respectively, on the company's common stock. During the three and nine months ended July 31, 2023, we paid cash dividends of $0.225 per common share or $66 million and $0.675 per common share or $199 million, respectively, on the company's common stock.

Current wording

Dividends. During the three months ended January 31, 2025, we paid cash dividends of $0.248 per common share or $71 million on the company's common stock. During the three months ended January 31, 2024, we paid cash dividends of $0.236 per common share or $69 million on the company's common stock.

Previous wording

2023 Repurchase Program. On January 9, 2023, we announced that our board of directors had approved a share repurchase program (the "2023 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2023 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2023 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2023 repurchase program commenced on March 1, 2023, and also terminated and replaced the 2021 repurchase program. During the three and nine months ended July 31, 2023, we repurchased and retired 2.812 million shares for $335 million, excluding excise taxes of $2.4 million and 3.256 million shares for $396 million, excluding excise taxes of $2.4 million, respectively, under this authorization. During the three and nine months ended July 31, 2024, we repurchased and retired 4.397 million shares for $585 million, excluding excise taxes of $5.4 million and 5.991 million shares for $815 million, excluding excise taxes of $6.4 million, respectively, under this authorization. As of July 31, 2024, we had remaining authorization to repurchase up to approximately $709 million of our common stock under the 2023 repurchase program.

Current wording

2023 Repurchase Program. On January 9, 2023, we announced that our board of directors had approved a share repurchase program (the "2023 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2023 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2023 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2023 repurchase program commenced on March 1, 2023. During the three months ended January 31, 2024, we repurchased and retired no shares under this authorization. During the three months ended January 31, 2025, we repurchased and retired 649,857 shares for $90 million under this authorization. As of January 31, 2025, we had remaining authorization to repurchase up to approximately $284 million of our common stock under the 2023 repurchase program.

Previous wording

Looking forward, we continue to be focused on improving our customers’ experience, differentiating product solutions and productivity. While market conditions remain challenging, particularly in China, and customer capital budgets continue to be constrained, we expect a slow and steady recovery in the short-term and remain optimistic about the long-term health of our key end markets. Though inflationary pressures have moderated, we will continue to mitigate through targeted pricing and various other cost savings strategies.

Current wording

Looking forward, our primary focus remains on enhancing our customers’ experience, delivering differentiated product solutions and driving productivity improvements. While customer capital budgets continue to be constrained, we anticipate a steady recovery in the near-term. We also remain optimistic about the long-term health of our key end markets. Although inflationary pressures are uncertain, we will continue to mitigate their impact through targeted pricing strategies and various other cost-saving initiatives.

Previous wording

Summary of Restructuring Plans. In fiscal year 2024 and 2023, we announced restructuring plans that were both designed to reduce costs and expenses in response to recent macroeconomic conditions. These actions impact all three of our business segments. The costs associated with these restructuring plans were not allocated to our business segments' results; however, each business segment will benefit from the future cost savings from these actions. When completed, the restructuring programs are expected to result in the reduction in annual cost of sales and operating expenses over the three business segments.

Current wording

Summary of Restructuring Plans. In fiscal years 2024 and 2023, we announced restructuring plans that were both designed to reduce costs and expenses in response to macroeconomic conditions. These actions impact all three of our business segments. The costs associated with these restructuring plans were not allocated to our business segments' results; however, each business segment will benefit from the future cost savings from these actions. When completed, the restructuring programs are expected to result in the reduction in annual cost of sales and operating expenses over the three business segments.

Previous wording

The aggregate restructuring liability of $46 million at July 31, 2024, is recorded in other accrued liabilities on the condensed consolidated balance sheet and reflects estimated future cash outlays.

Current wording

The aggregate restructuring liability of $5 million at January 31, 2025, is recorded in other accrued liabilities on the condensed consolidated balance sheet and reflects estimated future cash outlays.

Previous wording

Fiscal Year 2024 Plan ("FY24 Plan"). In the third quarter of fiscal year 2024, we announced a new restructuring plan designed to further reduce costs and expenses in response to current macroeconomic conditions. The plan includes a reduction of our total headcount by approximately 500 regular employees, representing approximately 3 percent of our global workforce. The timing and scope of the workforce reductions will vary based on local legal requirements. The costs associated with this workforce reduction include severance and other personnel-related costs. While the majority of the workforce reduction will be completed by the end of fiscal year 2024, we expect to substantially complete the remaining restructuring activities by the second quarter of fiscal year 2025. When completed, the restructuring program is expected to result in the reduction of approximately $100 million in annual cost of sales and operating expenses over our three business segments.

Current wording

Fiscal Year 2024 Plan ("FY24 Plan"). In the third quarter of fiscal year 2024, we announced a restructuring plan designed to reduce costs and expenses in response to macroeconomic conditions. The costs associated with this workforce reduction include severance and other personnel-related costs. While the majority of the workforce reduction was completed by the end of fiscal year 2024, we expect to substantially complete the remaining restructuring activities by the second quarter of fiscal year 2025. When completed, the restructuring program is expected to result in the reduction of approximately $100 million in annual cost of sales and operating expenses over our three business segments.

Previous wording

In connection with the FY24 Plan, we have recorded approximately $67 million in restructuring and other related costs in both the three and nine months ended July 31, 2024.

Current wording

In connection with the FY24 Plan, we have recorded approximately $1 million in restructuring and other related costs due to changes in estimate in the three months ended January 31, 2025.

Previous wording

Our revenues, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. Overall, foreign currency movements for the nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point when compared to the same period last year. Typically, when movements in foreign currency exchange rates have a negative impact on revenue, they will also have a positive impact by reducing our costs and expenses. We calculate the impact of movements in foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods. We hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short term and anticipated basis. We do experience some fluctuations within individual lines of the condensed consolidated statement of operations and balance sheet because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (up to a rolling twelve-month period). We may also hedge equity balances denominated in foreign currency on a long-term basis. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Current wording

Our revenues, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year. Typically, when movements in foreign currency exchange rates have a negative impact on revenue, they will also have a positive impact by reducing our costs and expenses. We calculate the impact of movements in foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods. We hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short term and anticipated basis. We do experience some fluctuations within individual lines of the condensed consolidated statement of operations and balance sheet because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (up to a rolling twelve-month period). We may also hedge equity balances denominated in foreign currency on a long-term basis. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Previous wording

Revenue from products for the three and nine months ended July 31, 2024 decreased 8 percent and 10 percent, respectively, when compared to the same periods last year. The product revenue decline in the three and nine months ended July 31, 2024 was primarily driven by decreases in our liquid chromatography, mass spectrometry and cell analysis businesses partially offset by increases in our consumables and pathology businesses when compared to the same periods last year. Overall, product revenue declined due to our customers' continued capital expenditure pressures and mostly impacted the pharmaceutical market within our life sciences and applied markets and diagnostics and genomics segments.

Current wording

Revenue from products for the three months ended January 31, 2025 decreased 1 percent when compared to the same period last year. The product revenue decline in the three months ended January 31, 2025 was primarily driven by decreases in our gas chromatography, cell analysis and spectroscopy businesses partially offset by increases in our liquid chromatography and liquid chromatography mass spectrometry businesses when compared to the same period last year.

Previous wording

Services and other revenue for the three and nine months ended July 31, 2024 increased 1 percent and 2 percent, respectively, when compared to the same periods last year. Services and other revenue consist of contract repair, preventative maintenance, compliance services, relocation services, installation services and consulting services related to the companion diagnostics and nucleic acid solutions businesses. For the three and nine months ended July 31, 2024, service revenue increases reflected strong growth from contract repair and preventative maintenance services partly offset by declines in installation services related to the decline of the product revenues.

Current wording

Services and other revenue for the three months ended January 31, 2025 increased 7 percent when compared to the same period last year. Services and other revenue consist of contract repair, preventative maintenance, compliance services, relocation services, installation services and consulting services related to the companion diagnostics and nucleic acid solutions businesses. For the three months ended January 31, 2025, service revenue increases reflected strong growth from contract repair and preventative maintenance services partially offset by declines in per incident services including consulting services, compliance and relocations.

Previous wording

Revenue generated by Agilent CrossLab in the three and nine months ended July 31, 2024, increased 4 percent and 5 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point and no impact, respectively, when compared to the same periods last year. For the three months ended July 31, 2024, we saw revenue growth across most of our end markets led by strong revenue growth in the pharmaceutical, environmental and forensics and diagnostics and clinical markets and moderate revenue growth in the chemical and applied materials and food markets when compared to the same period last year. For the nine months ended July 31, 2024, we saw revenue growth across all of our end markets led by strong revenue growth in the pharmaceutical, diagnostics and clinical and environmental and forensics markets when compared to the same period last year.

Current wording

Revenue in the Agilent CrossLab segment for the three months ended January 31, 2025, increased 1 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year. For the three months ended January 31, 2025, we saw revenue growth across most of our end markets led by strong growth in the environmental and forensics, diagnostics and clinical, and food markets partially offset by a decline in the academia and government market when compared to the same period last year.

Previous wording

Revenue in the diagnostics and genomics business for the three and nine months ended July 31, 2024, decreased 9 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024 had an overall unfavorable impact on revenue growth of 1 percentage point and no impact, respectively, when compared to the same periods last year. For the three and nine months ended July 31, 2024, we saw a significant decline in revenue in the pharmaceutical market due to lower sales in our cell analysis, nucleic acid solutions and genomics businesses when compared to the same periods last year.

Current wording

Revenue in the Applied Markets segment for the three months ended January 31, 2025 decreased 4 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year. For the three months ended January 31, 2025, we saw a significant decline in revenue in the chemical and advanced materials and academia and government markets partially offset by significant revenue growth in the food market when compared to the same period last year.

Previous wording

Research and development expenses for the three and nine months ended July 31, 2024 increased 8 percent and were flat, respectively, when compared to the same periods last year. Research and development expenses for the three months ended July 31, 2024 increased due to restructuring charges primarily related to recent actions and higher variable pay partially offset by lower salary expense related to workforce reduction activities and transformational initiatives when compared to the same period last year. Research and development expenses for the nine months ended July 31, 2024 slightly increased due to restructuring charges primarily related to recent actions and an impairment of in-process research and development mostly offset by lower salary expense related to workforce reduction activities and lower transformational initiatives and variable pay when compared to the same period last year.

Current wording

Research and development expenses for the three months ended January 31, 2025 decreased 12 percent when compared to the same period last year. Research and development expenses in the three months ended January 31, 2024 included an impairment of in-process research and development of $6 million. Research and development expenses for the three months ended January 31, 2025 also decreased due to lower salary expense related to prior year workforce reduction activities, lower variable pay and stock-based compensation expense when compared to the same period last year.

Previous wording

Interest income for the three months ended July 31, 2024 and 2023 was $19 million and $13 million, respectively. Interest income for the nine months ended July 31, 2024 and 2023 was $56 million and $34 million, respectively. The increase in interest income in 2024 was primarily due to higher cash balances and increases in interest rates related to our cash and cash equivalents.

Current wording

Interest income for the three months ended January 31, 2025 and 2024 was $15 million and $18 million, respectively. The decrease in interest income in 2025 was primarily due to lower cash balances.

Previous wording

At July 31, 2024, our headcount was approximately 17,400 as compared to approximately 18,300 at July 31, 2023.

Current wording

At January 31, 2025, our headcount was approximately 17,900 as compared to approximately 17,700 at January 31, 2024.

Previous wording

In the three and nine months ended July 31, 2023, other income and expense, net includes a net gain of $1 million and a net loss of $13 million, respectively, on equity securities. In the three and nine months ended July 31, 2023, other income and expense, net includes income of $3 million and $10 million, respectively, related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). In the three and nine months ended July 31, 2023 other income and expense, net also includes income of $3 million and $8 million, respectively, related to the provision of site service costs to, and lease income from Keysight Technologies, Inc. The costs associated with these services are reported within income from operations.

Current wording

For the three months ended January 31, 2025, other income (expense), net of $4 million income includes a net gain of $1 million on equity securities and income of $13 million related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $3 million. The costs associated with these services are reported within income from operations. For the three months ended January 31, 2025, other income (expense), net also includes expense of $14 million related to the settlement loss of our Netherlands defined benefit pension plan.

Previous wording

In the three and nine months ended July 31, 2024, other income and expense, net includes a net gain of $2 million and a net gain of $6 million, respectively, on equity securities. In the three and nine months ended July 31, 2024, other income and expense, net includes income of $5 million and $19 million, respectively, related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). In the three and nine months ended July 31, 2024, other income and expense, net also includes income of $3 million and $9 million, respectively, related to the provision of site service costs to, and lease income from Keysight Technologies, Inc. The costs associated with these services are reported within income from operations. In the nine months ended July 31, 2024, other income and expense, net also includes $8 million of income related to foreign currency translation reclassified out of accumulated comprehensive income (loss).

Current wording

For the three months ended January 31, 2024, other income (expense), net of $23 million income includes a net gain of $3 million on equity securities and income of $7 million related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $3 million. The costs associated with these services are reported within income from operations. For the three months ended January 31, 2024, other income (expense), net also includes $8 million of income related to foreign currency translation reclassified out of accumulated comprehensive income (loss).

Previous wording

For the three and nine months ended July 31, 2024, our income tax expense was $61 million with an effective tax rate of 17.8 percent and $182 million with an effective tax rate of 16.3 percent, respectively. For the three months ended July 31, 2024, there were no significant discrete items. For the nine months ended July 31, 2024, our effective tax rate and the resulting provision for income taxes were impacted by the tax expense of $12 million related to the settlement of an audit in Singapore.

Current wording

For the three months ended January 31, 2025, our income tax expense was $49 million with an effective tax rate of 13.4 percent. For the three months ended January 31, 2025, there were no significant discrete items.

Previous wording

In the U.S., tax years remain open back to the year 2020 for federal income tax purposes and 2019 for significant states. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2014.

Current wording

In the U.S., tax years remain open back to the year 2021 for federal income tax purposes and 2020 for significant states. In other major jurisdictions where we conduct business, the tax years generally remain open back to the year 2014.

Previous wording

New Segment Structure. In the first quarter of fiscal year 2024, we announced a change in our operating segments to move our cell analysis business from our life sciences and applied markets segment to our diagnostics and genomics operating segment in order to further strengthen growth opportunities for both organizations. Following this reorganization, we continue to have three business segments comprised of life sciences and applied markets, diagnostics and genomics and Agilent CrossLab, each of which continues to comprise a reportable segment. We began reporting under this new structure beginning with the Quarterly Report on Form 10-Q for the period ended January 31, 2024. All historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes. There was no change to our Agilent CrossLab business segment.

Current wording

In November 2024, we announced a change in our organizational structure to support our market-focused, customer-centric strategy. Our former Diagnostics and Genomics segment combined with our liquid chromatography and liquid chromatography mass spectrometry instrument platforms to form our new Life Sciences and Diagnostics Markets segment. Our chemistries and supplies, laboratory automation, and software and informatics divisions moved from our former Life Sciences and Applied Markets segment to our Agilent CrossLab segment. The remaining divisions in our former Life Sciences and Applied Markets segment which includes our gas chromatography, gas chromatography mass spectrometry, remarketed instruments, spectroscopy and vacuum divisions form our new Applied Markets segment. We are reporting under this new structure beginning with this Quarterly Report on Form 10-Q for the period ended January 31, 2025. All historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes.

Previous wording

Our diagnostics and genomics business is comprised of seven areas of activity providing active pharmaceutical ingredients ("APIs") for oligo-based therapeutics as well as solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our cell analysis business includes instruments, reagents, software, and labware associated with unique live-cell analysis platforms in addition to mainstream flow cytometers, plate-readers, and plate washers/dispensers which are used across a broad range of applications. Second, our nucleic acid solutions business is a contract and development manufacturing organization that provides services related to and the production of synthesized oligonucleotides under pharmaceutical good manufacturing practices ("GMP") conditions for use as API in a class of drugs that utilize nucleic acid molecules for disease therapy. Third, our pathology solutions business is focused on product offerings for cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry ("IHC"), in situ hybridization ("ISH"), hematoxylin and eosin ("H&E") staining and special staining. Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Fifth, the reagent partnership business provides clinical flow cytometry reagents for routine cancer diagnostics. This business also provides bulk antibodies as raw materials and associated assay development services to IVD manufacturers, biotechnology and pharmaceutical companies. Sixth, our genomics business includes arrays and next generation sequencing ("NGS"). This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy. Finally, our biomolecular analysis business provides complete workflow solutions, including instruments, consumables and software, for quality control analysis of nucleic acid samples. Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques including NGS, utilized in clinical and life science research applications.

Current wording

Our Life Sciences and Diagnostics Markets segment is comprised of seven areas of activity. We provide active pharmaceutical ingredients ("APIs") for oligo-based therapeutics as well as solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our liquid chromatography ("LC") and liquid chromatography mass spectrometry ("LCMS") businesses enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level. Second, our cell analysis business includes instruments, reagents, software, and labware associated with unique live-cell analysis platforms in addition to mainstream flow cytometers, plate-readers, and plate washers/dispensers which are used across a broad range of applications. Third, our contract development and manufacturing organization ("CDMO") business provides services related to and the production of synthesized oligonucleotides under pharmaceutical good manufacturing practices conditions for use as API in a class of drugs that utilize nucleic acid molecules for disease therapy. BIOVECTRA capabilities include microbial fermentation, bioreagents, highly potent active pharmaceutical ingredients, peptide purification and biomanufacturing capabilities in several nucleic acid modalities. Together, our BIOVECTRA and nucleic acid solutions businesses comprise our CDMO offerings to our customers providing clinical-to-commercial scale production capabilities. Fourth, our pathology solutions business is focused on product offerings for cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry, in situ hybridization, hematoxylin and eosin staining and special staining. This business further provides clinical flow cytometry reagents for routine cancer diagnostics. This business also provides bulk antibodies as raw materials and associated assay development services to in vitro diagnostics manufacturers, biotechnology and pharmaceutical companies. Fifth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Sixth, our genomics business includes reagents to support next-generation sequencing ("NGS") workflows and arrays. This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy. Finally, our biomolecular analysis business provides complete workflow solutions, including instruments, consumables and software, for quality control analysis of nucleic acid samples. Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques including NGS, …

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Previous wording

Diagnostics and genomics business revenue for the three and nine months ended July 31, 2024 decreased 9 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2024 had an unfavorable impact on revenue growth of 1 percentage point and no impact, respectively, when compared to the same periods last year.

Current wording

Life Sciences and Diagnostics Markets segment revenue for the three months ended January 31, 2025 increased 4 percent when compared to the same period last year. Foreign currency movements for the three months ended January 31, 2025 had an unfavorable impact on revenue growth of 1 percentage point when compared to the same period last year.

Previous wording

Geographically, revenue for the three months ended July 31, 2024 decreased 14 percent in the Americas with no currency impact, increased 4 percent in Europe with a 1 percentage point unfavorable currency impact and decreased 16 percent in Asia Pacific with a 3 percentage point unfavorable currency impact compared to the same period last year. For the three months ended July 31, 2024, the revenue decline in the Americas was primarily driven by our cell analysis, genomics and nucleic acid solutions businesses. Revenue increased in Europe due to strong performance in our pathology, reagent partnership and biomolecular analysis businesses. The revenue decline in Asia Pacific was driven by our cell analysis and biomolecular analysis businesses partially offset by increased revenue in our reagent partnership business.

Current wording

Geographically, revenue for the three months ended January 31, 2025 increased 10 percent in the Americas with a 1 percentage point unfavorable currency impact, increased 3 percent in Europe with a 1 percentage point unfavorable currency impact and decreased 5 percent in Asia Pacific with a 1 percentage point unfavorable currency impact compared to the same period last year. For the three months ended January 31, 2025, the revenue increase in the Americas was primarily driven by revenue from the BIOVECTRA acquisition as well as strong growth from our liquid chromatography, liquid chromatography mass spectrometry and companion diagnostics businesses. Revenue increased in Europe due to strong growth from our liquid chromatography, liquid chromatography mass spectrometry, genomics and companion diagnostics businesses. The revenue decline in Asia Pacific was driven by our liquid chromatography, cell analysis and pathology businesses partially offset by increased revenue in our liquid chromatography mass spectrometry and genomics businesses.

Previous wording

Looking forward, despite the challenging market conditions, we are optimistic about our long-term growth opportunities in our end markets and continue to invest in expanding and improving our applications and solutions portfolio. We remain positive about our growth in our end markets as our product portfolio around OMNIS and PD-L1 assays continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing related solutions continue to be adopted. Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, and with the ongoing expansion of our nucleic acid solutions production facility in Frederick, Colorado, we are well positioned to serve more of the market demand. We will also continue to invest in research and development and seek to expand our position in developing countries and emerging markets.

Current wording

Looking forward, we are optimistic about our long-term growth opportunities in our end markets and continue to invest in expanding and improving our applications and solutions portfolio. We continue to leverage our liquid chromatography and liquid chromatography mass spectrometry platforms to maximize our growth via key vectors across our markets, making us optimistic about our long-term growth opportunities in the life sciences markets. We remain positive about the growth in our diagnostic and clinical markets around our OMNIS platforms. Market demand for therapeutic oligo continues to grow, and our CDMO business is well positioned to serve expanding customer requirements. We will also continue to invest in research and development, invest in expanding and improving our applications and solutions portfolio and seek to expand our position in developing countries and emerging markets.

Previous wording

The Agilent CrossLab business spans the entire lab with its extensive services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. The services portfolio includes repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements.

Current wording

Our Agilent CrossLab segment provides an extensive services and consumables portfolio that spans the entire lab, in addition to software and laboratory automation solutions, which are designed to improve customer outcomes and represents a broad range of offerings designed to serve customer needs across end-markets and applications. Our services portfolio includes repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirem ents. Our consumables portfolio is designed to improve customer outcomes. Most of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries to supplies. Key product categories in consumables include gas chromatography ("GC") and liquid chromatography ("LC") columns, sample preparation products, custom chemistries, and a large selection of laboratory supplies. Software and informatics solutions include software for instrument control, data acquisition, data analysis, secure storage of results, and laboratory information and workflow management. This software facilitates the compliant use of instruments in pharmaceutical quality assurance and quality control environments. The OpenLab laboratory software suite is a scalable, open software platform that enables customers to capture, analyze, and share scientific data throughout the lab and across the enterprise. Laboratory automation offers automated sample preparation solutions, including liquid handling, plate management, consumables and scheduling software. These solutions range from standalone automation platforms to integrated workflow solutions with seamless integration to our instrumentation.

Previous wording

Geographically, revenue for the three months ended July 31, 2024 increased 7 percent in the Americas with no currency impact, increased 5 percent in Europe with no currency impact and was flat in Asia Pacific with a 3 percentage point unfavorable currency impact compared to the same period last year. For the three months ended July 31, 2024, revenue in all three regions reflected consistent high demand for repair and maintenance services across the entire portfolio. In Americas and Europe, revenue growth was partially offset by weakness in installation revenue. In the Asia Pacific region the weakness in installation revenue offset the revenue growth seen from repair and maintenance services.

Current wording

Geographically, revenue for the three months ended January 31, 2025 increased 3 percent in the Americas with a 2 percentage point unfavorable currency impact, increased 2 percent in Europe with a 1 percentage point unfavorable currency impact and decreased 1 percent in Asia Pacific with a 2 percentage point unfavorable currency impact compared to the same period last year. For the three months ended January 31, 2025, revenue growth in the Americas was primarily driven by repair, compliance and maintenance services and the lab automation business partially offset by weakness in installation service and the consumables and software and informatics businesses. In Europe, revenue growth was primarily driven by repair and maintenance services and the consumables business partially offset by weakness in installation service, the software and informatics and lab automation businesses. In the Asia Pacific region, weakness in the lab automation and software and informatics businesses was partially offset by the revenue growth from repair and maintenance services and consumables.

Previous wording

Looking forward, Agilent CrossLab services are well positioned to continue their success in our key end markets by supporting a growing installed base of instruments. Digital and remote capabilities will continue to be a key factor in improving the service quality and the customers' experience. Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

Current wording

Looking forward, Agilent CrossLab is well positioned to continue its success in our key end markets by supporting a growing installed base of instruments. Digital and remote capabilities will continue to be a key factor in improving the service quality and the customers' experience. Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

Previous wording

Research and development expenses for the three and nine months ended July 31, 2024, decreased 2 percent and 7 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and nine months ended July 31, 2024 decreased primarily due to lower expenses attributed to business exit activities and salary expense related to workforce reduction activities.

Current wording

Research and development expenses for the three months ended January 31, 2025 decreased 7 percent when compared to the same period last year. Research and development expenses for the three months ended January 31, 2025 decreased primarily due to lower salary expenses related to prior year workforce reduction activities.

Previous wording

Selling, general and administrative expenses for the three and nine months ended July 31, 2024 increased 3 percent and 1 percent, respectively, when compared to the same periods last year. For the three months ended July 31, 2024, selling, general and administrative expenses increased due to higher commissions, variable pay and travel costs partially offset by lower other discretionary spending and salary expense related to workforce reduction activities. For the nine months ended July 31, 2024, selling, general and administrative expenses increased due to higher commissions partially offset by lower travel expenses, variable pay and other discretionary spending and salary expense related to workforce reduction activities.

Current wording

Selling, general and administrative expenses for the three months ended January 31, 2025 increased 3 percent when compared to the same period last year. For the three months ended January 31, 2025, selling, general and administrative expenses increased due to higher allocation of corporate infrastructure expenses partially offset by lower salary expenses related to prior year workforce reduction activities, variable pay and the favorable impact of currency movements.

Previous wording

Geographically, revenue for the three months ended July 31, 2024 decreased 7 percent in the Americas with no currency impact, decreased 5 percent in Europe with no currency impact and decreased 11 percent in Asia Pacific with a 2 percentage point unfavorable currency impact when compared to the same period last year. The revenue decline in the Americas was driven by weakness in our liquid chromatography, gas chromatography mass spectrometry and gas chromatography businesses partially offset by strength in the consumables business when compared to the same period last year. The revenue decline in Europe was driven by weakness in our liquid chromatography and liquid chromatography mass spectrometry businesses partially offset by strength in the consumables business when compared to the same period last year. The revenue decline in Asia Pacific was driven by lower demand in China within our liquid chromatography, spectroscopy and liquid chromatography mass spectrometry businesses when compared to the same period last year.

Current wording

Geographically, revenue for the three months ended January 31, 2025 increased 2 percent in the Americas with a 1 percentage point unfavorable currency impact, decreased 4 percent in Europe with a 1 percentage point unfavorable currency impact and decreased 7 percent in Asia Pacific with a 2 percentage point unfavorable currency impact when compared to the same period last year. The revenue growth in the Americas was driven by strength in our gas chromatography and remarketed instruments businesses partially offset by weakness in the vacuum business when compared to the same period last year. The revenue decline in Europe was driven by weakness in our gas chromatography mass spectrometry and gas chromatography businesses partially offset by strength in the spectroscopy and vacuum businesses when compared to the same period last year. The revenue decline in Asia Pacific was driven by weakness in our gas chromatography, spectroscopy and vacuum businesses partially offset by strength in the gas chromatography mass spectrometry business when compared to the same period last year.

Previous wording

For the nine months ended July 31, 2024, revenue declined across all end markets. Revenue in the pharmaceutical market declined significantly due to weakness in our liquid chromatography, liquid chromatography mass spectrometry and gas chromatography businesses when compared to the same period last year. Revenue in the chemicals and advanced materials market declined significantly due to weakness in our liquid chromatography, spectroscopy and gas chromatography businesses partially offset by strength in our consumables business when compared to the same period last year. Revenue in the food market declined significantly due to weakness in our liquid chromatography, gas chromatography mass spectrometry and spectroscopy businesses partially offset by strength in our consumables business when compared to the same period last year. Revenue in the academia and government market declined significantly due to weakness in our liquid chromatography and liquid chromatography mass spectrometry businesses when compared to the same period last year.

Current wording

For the three months ended January 31, 2025, revenue declined significantly in the chemicals and advanced materials and academia and government markets partially offset by strong revenue growth in the food and diagnostics and clinical markets and modest revenue growth in the pharmaceutical and environmental and forensics markets. Revenue in the chemicals and advanced materials market declined significantly due to weakness in our spectroscopy and gas chromatography businesses partially offset by strength in the remarketed instruments business when compared to the same period last year. Revenue in the academia and government market declined significantly due to weakness in our gas chromatography, gas chromatography mass spectrometry and spectroscopy businesses when compared to the same period last year. Strong revenue growth in the food market was driven by strength in our gas chromatography mass spectrometry, spectroscopy and gas chromatography businesses when compared to the same period last year. Strong revenue growth in the diagnostics and clinical market was driven by strength in our remarketed instruments and gas chromatography mass spectrometry businesses when compared to the same period last year.

Previous wording

Looking forward, despite the challenging market conditions and customer capital budget constraints, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs. We will continue to invest in expanding and improving our applications and solutions portfolio.

Current wording

Looking forward, we anticipate continued steady market recovery and are optimistic about our long-term growth opportunities in the applied markets as our broad portfolio of products and solutions are well suited to address customer needs. We will continue to invest in expanding and improving our application-focused solutions that include instruments and software.

Previous wording

Research and development expenses for the three and nine months ended July 31, 2024, were flat and decreased 3 percent, respectively, when compared to the same periods last year. Research and development expenses for the three months ended July 31, 2024, were flat due to lower salary expense related to workforce reduction activities and the favorable impact of currency movements offset by higher program investments when compared to the same period last year. Research and development expenses for the nine months ended July 31, 2024 decreased due to lower salary expense related to workforce reduction activities, variable pay and lower consumables costs when compared to the same period last year.

Current wording

Selling, general and administrative expenses for the three months ended January 31, 2025, were flat when compared to the same period last year. Selling, general and administrative expenses for the three months ended January 31, 2025, were impacted by lower salary expense, marketing expense, variable pay and the favorable impact of currency movements offset by a higher allocation of corporate infrastructure expenses when compared to the same period last year.

Previous wording

Operating margin for products and services for the three and nine months ended July 31, 2024 decreased 3 percentage points in both periods when compared to the same periods last year. Operating margin was impacted by lower sales volume and the unfavorable impact of currency movements partially offset by lower salary expense related to workforce reduction activities, and shipping costs when compared to the same period last year.

Current wording

Operating margin for the three months ended January 31, 2025 decreased 1 percentage point when compared to the same period last year. Operating margin was impacted by lower sales volume and the unfavorable impact of currency movements partially offset by lower salary expense and warranty costs when compared to the same period last year.

Previous wording

Income from operations for the three and nine months ended July 31, 2024 increased $11 million or 8 percent and $50 million or 15 percent, respectively, on a corresponding revenue increase of $15 million and $54 million, respectively.

Current wording

Income from operations for the three months ended January 31, 2025, decreased $8 million or 8 percent on a corresponding revenue decrease of $14 million.

Previous wording

Our financial position as of July 31, 2024 consisted of cash and cash equivalents of $1,779 million as compared to $1,590 million as of October 31, 2023.

Current wording

Our financial position as of January 31, 2025 consisted of cash and cash equivalents of $1,467 million as compared to $1,329 million as of October 31, 2024.