Waters Corporation (WAT): Business Model Canvas [Dec-2025 Updated]

You're digging into the engine room of a market leader, and honestly, the story for Waters Corporation as we head into late 2025 isn't just about selling expensive analytical gear; it's about the sticky, recurring revenue machine they've built. Think about it: over half their sales, 58%, come from the Biopharma giants, and their precision chemistry consumables revenue is humming, growing 13% in Q3 2025 alone, all supporting that massive installed base. They are perfectly positioned to capitalize on hot areas like GLP-1 and PFAS testing, but the real magic is how they lock in customers with service and software, keeping that gross margin near 59%. I've mapped out the entire nine-block structure for you, so you can see exactly where the near-term risks and long-term cash flows are hiding below.

Waters Corporation (WAT) - Canvas Business Model: Key Partnerships

You're looking at the structure of Waters Corporation (WAT) as of late 2025, and the partnerships are clearly central to its aggressive growth strategy, especially following major announcements in 2025. Honestly, the scale of the planned combination with BD's Biosciences & Diagnostic Solutions business is the headline here.

Strategic Combination with BD's Biosciences & Diagnostic Solutions Business is Pending

The definitive agreement announced in July 2025 to merge with Becton, Dickinson and Company's (BD) Biosciences and Diagnostic Solutions business is valued at approximately $17.5 billion. This Reverse Morris Trust transaction is structured so that existing Waters shareholders are expected to own approximately 60.8% of the combined entity, with BD shareholders owning about 39.2%. Waters Corporation is expected to assume approximately $4 billion of incremental debt as part of the deal structure, which also includes a $4 billion cash distribution to BD before closing. The combined company is projected to generate pro forma sales of approximately $6.5 billion and adjusted EBITDA of about $2.0 billion for calendar year 2025. This move is designed to double the total addressable market to roughly $40 billion, with expectations for over 70% of the combined company's revenue to be recurring annually. The transaction is targeted to close near the end of the first quarter of calendar year 2026.

Here are the key financial projections tied to this pending combination:

Technology Collaborations for Instrument and Software Integration (e.g., Wyatt Integration)

Waters Corporation's earlier acquisition of Wyatt Technology, completed in May 2023 for $1.36 billion, is a prime example of technology integration driving future revenue. Wyatt Technology, which had 2022 revenues of approximately $110 million and an adjusted operating margin of approximately 40%, significantly boosts Waters' position in bioanalytical characterization. Waters expects to generate over $70 million in annual revenue synergies by the fifth year following that transaction close, which points toward 2028. This technology is critical for new modalities, such as cell and gene therapies, which represent a significant market opportunity with a total addressable market of $1.8 billion and projected annual growth of 10-12%. The integration is also expected to be accretive to Waters' adjusted earnings per share beginning in the first quarter of 2024.

The strength in recurring revenue, which grew 11% in constant currency in Q3 2025, is partly supported by these integrated software and service offerings, including the Empower™ informatics platform.

Suppliers for Specialized Components and Global Logistics Support

While specific supplier contracts aren't public, the operational scale suggests reliance on a robust network. Waters Corporation's Q3 2025 results showed reported sales of $800 million, up 8% year-over-year, indicating high demand for components and reliable global movement of finished goods. The company is raising its full-year 2025 reported sales growth guidance to the range of +6.5% to +7.1%. This sustained growth requires dependable supply chains for specialized components used in liquid chromatography and mass spectrometry instruments. The company's current ratio stood at 1.75 as of late 2025, suggesting adequate short-term liquidity to manage supplier payments.

Academic and Government Research Institutions for Co-development and Testing Standards

Waters Corporation's role as a partner in advancing science is evident in its focus on regulated and high-volume testing environments, which inherently involves collaboration with standards bodies and academic leaders. The company's instruments are vital for quality control (QC) in small-molecule generics and large-molecule biopharma, including novel drugs like Antibody Drug Conjugates (ADCs). The recurring revenue segment, which saw 9% service growth in Q3 2025, is sustained by ongoing validation and support required by these institutions to maintain regulatory compliance with bodies like the FDA and EMA.

Key areas where these partnerships are essential:

• Co-development for next-generation therapeutic analysis.
• Establishing analytical methods for large molecules and novel modalities.
• Ensuring compliance with global regulatory standards.
• Driving adoption of new bioseparations products, which saw double-digit chemistry growth in Q3 2025.

Contract Research and Manufacturing Organizations (CRO/CDMOs) for Generics Growth in India

Waters Corporation has long served the Indian pharma industry, particularly for small molecule QA/QC. This partnership model is crucial as the biosimilar market in India was estimated to grow at a 22% CAGR to reach $12 billion by 2025. Globally, the CDMO and CRO market is projected to reach $355 billion by 2030. India's Contract Research, Development, and Manufacturing Organization (CRDMO) sector is specifically projected to expand from $3-3.5 billion today to $22-25 billion by 2035. Waters' analytical technologies are deployed in contract manufacturers for the QA/QC of both generic and large-molecule drugs, helping these organizations scale their operations and transition toward value-added, innovative products.

The instrument segment itself showed growth of 6% in constant currency in Q3 2025, led by high single-digit growth in LC & MS, which directly benefits from the capital investment cycles of these expanding CRO/CDMO partners.

Finance: review the pro forma debt-to-EBITDA ratio post-BD close against the current 0.55 debt-to-equity ratio by end of Q4.

Waters Corporation (WAT) - Canvas Business Model: Key Activities

You're looking at the core engine of Waters Corporation's value creation, the activities that translate innovation into revenue and profit as of late 2025. It's all about precision engineering and capturing the recurring spend that follows.

Research and Development (R&D) for pioneering innovation like Xevo CDMS

Waters Corporation continuously invests to maintain its technological lead in analytical instrumentation. R&D spending is a key input here, supporting the development of systems like the Xevo TQ Absolute, which accounted for 50% of tandem quad revenue in the fourth quarter of 2024. For the first quarter of 2025, Research and development expenses were reported as $46,622 thousand. The company tracks R&D spending as a percentage of non-service total company revenue for the year ended December 31, 2024.

Manufacturing of high-precision liquid chromatography (LC) and mass spectrometry (MS) systems

The manufacturing activity centers on producing high-precision LC and MS systems, which are critical for regulated industries. Instrument sales grew 8% in constant currency in the fourth quarter of 2024, with liquid chromatography, mass spectrometry, and TA systems each growing high single digits or better. The company's overall sales for Q4 2024 reached $873 million.

Global sales and service support for a large installed instrument base

Supporting the installed base drives resilient revenue streams. Service plan attachment reached over 50% of the active installed base for the first time in the fourth quarter of 2024. This support structure fuels recurring revenue, which grew 9% in Q4 2024, driven by chemistry and service revenue increases. For the full year 2024, Waters brought in approximately $3.0 billion in revenue.

Operational excellence to maintain a gross margin around 59%

Maintaining high gross margins reflects strong pricing power and cost control in manufacturing and service delivery. Waters Corporation reported a gross margin of 59.4% for December 2024. The rolling three-period average for the gross margin stands at 59%. The company's adjusted operating margin reached 35.5% in Q4 2024, aided by pricing and cost management efforts.

Here's a quick view of key operational metrics:

Strategic focus on high-growth areas like GLP-1 and PFAS testing

Waters Corporation is actively scaling its position in high-growth areas, which management expects to contribute to annual growth. Management anticipates a 30 basis points annual growth contribution from GLP-1 and PFAS testing for 2025. This focus is showing results; Q1 2025 data revealed a 90% quarter-over-quarter surge in PFAS-related sales. The company plans to invest more into India and focus on GLP-1 testing and PFAS testing. The overall 2025 outlook projects constant currency sales growth of 4.5%-7%.

The focus areas are driving performance:

• GLP-1 therapeutics testing is a key driver for pharmaceutical innovation alignment.
• PFAS testing sales saw a 90% quarter-over-quarter surge in Q1 2025.
• The company's Q2 2025 total sales reached $771 million, a 9% year-over-year increase.
• The 2025 non-GAAP EPS guidance is projected at $12.70-$13.00.

Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Key Resources

The Key Resources for Waters Corporation are centered on its deep scientific expertise, proprietary platforms, and the scale of its installed customer base, all underpinned by a solid balance sheet as of early 2025.

The foundation rests on differentiated intellectual property (IP) in UPLC and MS technologies. Waters Corporation designs, manufactures, and commercializes technologies including Ultra-Performance Liquid Chromatography (UPLC) and Mass Spectrometry (MS) systems. This commitment to innovation is reflected in the investment allocated to future development, with Research and Development expenses reported at \$46.6 million for the first quarter of 2025. Recent technological advancements include the October 2025 launch of the Waters Xevo Charge Detection Mass Spectrometer and the introduction of the Charged Aerosol Detector for use with its software platform in November 2025. The acquisition of Wyatt Technology in May 2023 for \$1.36 billion in cash further solidified its advanced characterization IP.

The proprietary Empower software platform acts as a critical resource for data integrity and compliance. Empower Software Solutions is the flagship suite of Chromatography Data System (CDS) and Lab Management System (LMS) solutions. This platform supports a wide range of third-party instruments in addition to Waters' own LC and GC systems. To monitor and optimize usage, the Empower Analytics tool provides five pre-built dashboards: System Summary, System Usage, Project Usage, User Analysis, and Methods Analysis.

Waters Corporation maintains a large, active global installed base of analytical instruments, which drives recurring service and consumable revenue. This base is supported by one of the largest direct sales and service organizations focused exclusively on analytical workflows. The strength of this installed base is evidenced by the 11% constant currency growth in instrument sales reported in the first quarter of 2025. Furthermore, specific high-growth applications, such as PFAS testing, saw growth of more than 90% in that same quarter.

The financial strength supporting these operational resources includes significant liquidity:

The human capital is substantial, comprising a highly specialized global staff of approximately 7,600 employees as of late 2024, growing to 7,600+ employees as of November 2025. This workforce is deployed globally to maintain and expand the installed base.

The composition of the global field force, critical for service and installed base expansion, included:

• Field representatives: Approximately 4,200 in 2024.
• Manufacturing facilities: Primary sites in 9 U.S. locations.
• International manufacturing locations: 11 locations including Singapore, Bangalore, and Shanghai.
• Key product brands: ACQUITY UPLC Systems, Xevo mass spectrometry systems, and Alliance HPLC systems.
• End-market focus: Pharmaceutical, life sciences, food, and environmental sectors.

The direct sales and service organization is one of the largest focused exclusively on the analytical workflows offered by Waters Corporation. Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Value Propositions

You're looking at the core reasons why labs stick with Waters Corporation, especially when the regulatory stakes are high. It's all about delivering data you can stake your multi-million dollar drug approval on.

Precise, reliable data for highly regulated industries like Pharma QA/QC

Waters Corporation's value proposition centers on providing the foundational trust required in regulated environments. The company's systems are deeply embedded, with globally, more than 80% of novel drugs having used the Empower Software for submissions to regulatory authorities. This level of adoption creates high switching costs for customers in Quality Assurance/Quality Control (QA/QC) labs. Furthermore, the focus on execution excellence helps maintain high operating margins, with the adjusted operating income margin reaching 31.0% in fiscal year 2024, demonstrating operational efficiency that translates to reliable product support.

• Recurring revenue, which includes service and chemistry consumables, grew by 9% in constant currency in Q3 2025.
• The Pharma segment, the largest market, saw low double-digit growth in Q4 2024, supported by customer CapEx spending recovery.
• The company's full-year reported sales growth guidance for 2025 is projected to be in the range of +2.5% to +5.0%.

High-sensitivity instruments (e.g., Xevo TQ Absolute) for complex bioanalysis

The introduction of the Xevo TQ Absolute XR mass spectrometer, building on the Xevo TQ Absolute platform, directly addresses the need for high sensitivity in complex bioanalysis. This new system is designed to deliver exceptional performance for the most sensitive, trace-level analyses. The platform's robustness is a key differentiator, minimizing unplanned downtime which is critical for large batch analysis in drug development. For instance, long-term reliability was demonstrated across more than 20,000 LC-MS/MS injections of protein precipitated plasma with no loss in signal response.

Here's a quick comparison of the operational efficiencies offered by the latest platform over its predecessor and the competition:

Solutions for emerging, high-growth testing: GLP-1 and PFAS detection

Waters Corporation is strategically positioned to capitalize on regulatory-driven testing growth. The demand for GLP-1 therapeutics testing and the tightening regulations around PFAS contamination are providing significant tailwinds. Management anticipates that both GLP-1 and PFAS testing applications will contribute an average of 30 basis points in annual growth to Waters from 2024 through 2030. The momentum is clear; Q1 2025 data revealed a 90% quarter-over-quarter surge in PFAS-related sales, showing rapid market adoption of their solutions for these emerging contaminants.

Enhanced laboratory productivity through simplified, integrated systems (Alliance iS)

Productivity gains are delivered through intelligent, integrated systems like the Alliance iS HPLC System, which is designed to reduce the frequency of human errors that cause costly investigations and delays. The system's enhanced integration, particularly with Empower Software user access control, ensures end-to-end traceability. This focus on simplicity and compliance directly impacts lab efficiency. The Alliance iS platform is claimed to reduce common user errors by up to 40%. In specific performance tests, the system delivered chlorhexidine carryover of 0.00055%, significantly better than up to 0.05% seen on other HPLC systems on the market.

The Alliance iS platform is a key revenue driver, accounting for 20% of HPLC revenues as of Q4 2024, indicating strong customer commitment to this simplified architecture.

Comprehensive service plans covering over 50% of the active installed base

The recurring revenue stream, stabilized by service contracts, is a core element of the business model's resilience. Waters has successfully driven attachment rates for these plans. Service plan attachment reached over 50% of the active installed base for the first time, as reported in late 2024/early 2025 context. This high coverage ensures predictable revenue streams, which grew by 9% in constant currency in Q3 2025. This service commitment, backed by engineers achieving the highest service satisfaction scores among all instrument vendors in the life science tools industry according to SDi, reinforces the overall value proposition by maximizing asset uptime.

• The high service attachment rate means more predictable revenue, stabilizing cash flow.
• The company's FlexCHOICE: mySystem Coverage offers options for 2-5 years of coverage when purchased with an instrument.
• Unplanned outages for critical assets can cost an average of $260,000 an hour, which these comprehensive plans help safeguard against.

Waters Corporation (WAT) - Canvas Business Model: Customer Relationships

You're looking at how Waters Corporation keeps its high-value analytical instrument customers locked in for the long haul; it's not just about the initial sale, it's about the decades of support that follow. This deep engagement is critical, especially since service offerings represented over 35% of sales for Waters in 2024.

Dedicated field service engineers for high-touch, long-term support

Waters Corporation maintains a significant global support footprint, with approximately 2000 dedicated staff members across the world contributing to its growth plan, which certainly includes service and support functions. This high-touch model is designed to maximize instrument uptime, which is non-negotiable for regulated labs. The success of this strategy is visible in the attachment rate for service plans, which reached over 50% of the active installed base for the first time in the context of Q4 2024 results. This focus on service stability is a key part of the recurring revenue story.

Consultative sales model for complex, high-value capital equipment

Selling complex liquid chromatography (LC) and mass spectrometry (MS) systems requires a consultative approach, moving beyond simple transactions. This is evident in the strong performance of the core instrument business, which saw an 8% increase in sales in Q4 2024. The pharmaceutical segment, a major customer base for these high-value systems, showed robust demand, posting sales of $479.8 million in the third quarter of 2025, marking a +12% growth. This growth is directly supported by a recovery in customer capital expenditure spending and ongoing instrument replacement cycles.

Software subscription model transition for Empower, ensuring recurring engagement

Waters Corporation is actively pushing the transition of its informatics platform, Empower, to a subscription model. Management has called this a 'very significant opportunity,' noting early adoption by customers as of Q3 2025. This shift is part of a broader strategy to bolster recurring revenue streams. For the third quarter of 2025, total recurring revenue grew 9% year-over-year, specifically driven by a 13% increase in chemistry sales and a 7% increase in service revenue. This recurring segment provides essential stability to the overall financial picture.

Here's a quick look at how the recurring and instrument businesses are performing, based on the latest available figures:

Customer-centric focus to drive instrument replacement cycles

The company's mission explicitly centers on 'Driving Customer Success,' which is a lens for evaluating its financial trajectory. A key goal for 2025 is to fortify its number one position in customer satisfaction. This focus directly feeds the instrument replacement cycle, which is a major driver of current financial momentum. The full-year 2025 constant currency sales growth guidance was raised to a range of +5.0% to +7.0%, reflecting confidence in these ongoing replacement dynamics.

Technical support and training for specialized applications

Waters Corporation supports its specialized application base through ongoing technical assistance. The company is actively testing Artificial Intelligence (AI) tools to assist with troubleshooting guidance and providing customer support to help users select the correct columns and chemistry for their needs. This digital layer enhances the value derived from the installed base. The overall 2025 non-GAAP EPS guidance was raised to a range of $12.75 to $13.05, reflecting the success of these integrated product and service offerings.

• Service plan attachment rate: Over 50% of the active installed base.
• Q3 2025 Pharma segment growth: +12%.
• Full-Year 2025 constant currency sales growth guidance midpoint: 7%.
• AI deployment: Assisting with quality control screening and troubleshooting.
• Full-Year 2025 non-GAAP EPS growth projection: Approximately +8% to +10%.

Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Channels

You're looking at how Waters Corporation gets its analytical instruments, software, and consumables into the hands of scientists across the globe. The channel strategy is a blend of direct, high-touch engagement for complex systems and scalable digital/partner routes for recurring needs.

The backbone of the high-value channel is the dedicated staff. Waters Corporation has over 7,600+ passionate employees globally as of early 2025. These employees are key to the direct sales force for high-value instrument systems, such as the LC-MS portfolio, which saw 6% growth in constant currency during Q3 2025. This direct engagement is crucial for the approximately 5,700 customers Waters serves, primarily in specialty clinical laboratories.

The global network of direct service and support organizations is heavily implied by the recurring revenue performance. Service sales, a core part of the direct support channel, increased 8% year-over-year on a reported basis in Q3 2025, growing 7% in constant currency. This service revenue, combined with chemistry sales, forms the recurring revenue stream, which grew 9% in constant currency in Q3 2025, reaching $458.4 million jointly.

For chemistry consumables and parts, the channel leans toward direct sales, supported by digital enablement. Chemistry sales, which include consumables, showed double-digit growth, increasing 14% reported and 13% at constant currency in Q3 2025. Waters Corporation has a stated goal to grow its large molecule chemistry portfolio from 40% to 50% by 2030, which relies on effective distribution channels for these consumables.

The company's reach extends across more than 100 countries, utilizing a mix of direct presence and regional distribution partners in select international markets where a direct footprint might be less efficient or established.

Digital platforms are increasingly important for both software delivery and customer support. The company is focusing on scaling its position in areas like e-commerce adoption. Furthermore, Artificial Intelligence is being tested to provide customer support, offering guidance to customers on the specific columns and chemistry they need, which is a digital layer over the direct consumable channel.

Here's a look at the Q3 2025 sales breakdown, which reflects the output of these channels:

The recurring revenue streams, which are heavily influenced by the service and chemistry channels, are showing strong momentum:

• Recurring revenue (Service and Chemistry combined) was $458.4 million in Q3 2025.
• Service sales growth was 7% in constant currency for the quarter.
• Chemistry sales growth was 13% in constant currency for the quarter.
• The company is actively working to grow its large molecule chemistry share from 40% to 50% by 2030.

The direct sales force is clearly driving the high-value instrument business, evidenced by the 6% constant currency growth in Instruments sales in Q3 2025. The company's strategy involves converting complex instruments into simpler, more accessible ones, which helps scale the direct sales channel's effectiveness.

You should track the full-year 2025 reported sales growth guidance, which Waters Corporation raised to a range of +6.5% to +7.1%. Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Customer Segments

You're looking at the core of Waters Corporation's revenue engine, and honestly, it's heavily concentrated in a few key areas. This concentration means that the health of those specific sectors directly impacts the top line, so we watch their CapEx spending like a hawk.

The largest portion of Waters Corporation's business comes from the Biopharmaceutical companies segment. As of the latest data structuring, this group accounts for a commanding 58% of total sales. This segment is clearly the priority, driving demand for advanced analytical tools, especially as the pipeline for novel modalities and large molecules expands. For instance, in the third quarter of 2025, the Pharma segment saw growth of 11% in constant currency, showing strong momentum from the instrument replacement cycle.

Next up, we have the Industrial clients, which includes chemical, plastics, and materials testing. This segment represents a solid 31% of the company's revenue base. It's a steady contributor, though it can be more sensitive to broader economic cycles than the pharma sector. In the second quarter of 2025, Industrial segment growth was reported at 6% in constant currency.

Rounding out the top three is the Academic and government research institutions segment, which contributes 11% of sales. This segment is vital for long-term pipeline development but can be more subject to government budget cycles. To be fair, this group sometimes lags in adoption speed compared to commercial labs. In Q2 2025, this segment actually declined by 3% in constant currency, though it performed better than management had initially expected.

Here's a quick summary of how those primary segments stack up based on the structure you provided:

Beyond these main pillars, Waters Corporation serves several other important, specialized customer groups that drive recurring revenue and strategic positioning. These smaller segments are where you see the impact of specific regulatory trends and geographic focus areas.

You should also track these niche but growing areas:

• Specialty clinical laboratories, focusing on areas like toxicology, newborn screening, and therapeutic drug monitoring.
• Generics manufacturers and Contract Development and Manufacturing Organizations (CDMOs).
• Specific focus on the growing generics market in India, which management projected to add 70-100 basis points annually to growth.
• Customers driving demand for GLP-1 and PFAS testing, expected to contribute 30 basis points annually to growth.

The strength in CDMOs is definitely showing up in instrument replacement trends, which is a good sign for the high-value instrument business. Service plan attachment reached over 50% of the active installed base for the first time recently, which speaks to the stickiness of the customer relationship across all these segments.

Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Cost Structure

The Cost Structure for Waters Corporation is heavily weighted toward the creation and support of its complex analytical instrumentation and ongoing innovation. You see this reflected in the high fixed and variable costs associated with manufacturing, R&D, and maintaining a global service footprint.

High cost of goods sold (COGS) due to complex instrument manufacturing

Manufacturing sophisticated liquid chromatography (LC) and mass spectrometry (MS) systems drives a substantial portion of the cost base. For the first quarter of 2025, the Cost of Sales was reported at $276.745 million on total net sales of $661.705 million. This reflects the material and labor intensity of producing high-precision scientific equipment. Also, the recurring revenue from chemistry consumables, while high-margin, still contributes to the overall cost of sales structure.

Significant Research and Development (R&D) investment

Waters Corporation maintains a rigorous investment schedule to ensure its product portfolio remains competitive, especially in areas like GLP-1 and PFAS testing. Research and Development expenses were $46.6 million in Q1 2025, representing a 5% increase year-over-year. Looking across a longer period, the Research and Development expenses for the twelve months ending September 30, 2025, totaled $0.196B (or $196 million). This consistent spending is key to future product cycles, like the adoption seen with the Alliance iS, which accounted for 20% of HPLC revenue in Q4 2024.

Global sales, service, and administrative (SG&A) expenses for field support

Supporting a global installed base requires significant spending on field personnel, logistics, and general overhead. Selling and administrative expenses for the first quarter of 2025 were $174.881 million. This figure covers the necessary infrastructure to support product sales across Asia, the Americas, and Europe, and to service the installed base where service plan attachment reached over 50% in late 2024.

Amortization of purchased intangibles from acquisitions

Costs related to past acquisitions are recognized as non-cash amortization expenses, which impact GAAP earnings. For instance, in Q2 2025, the purchased intangibles amortization charge was $23.619 million. This is a direct result of integrating new capabilities, such as the May 2025 acquisition of Halo Labs for $35 million. For the full year 2024, this expense totaled $47.090 million.

Interest expense on net debt

Financing costs are a component of the overall structure, though they have benefited from debt management. While the specific Q3 2025 net debt figure you mentioned isn't confirmed in the latest reports, the Total debt on the balance sheet as of September 2025 stood at $1.48 Billion USD. For the full year 2025, the projected net interest expense is expected to be $36 million. This is an improvement from the Q1 2025 interest expense, which was $14.3 million, down from $25.5 million the prior year.

Here's a look at some of the key operating expenses for Waters Corporation based on the first half of 2025 data:

You should also note the following cost-related drivers:

• Instrument sales growth in Q3 2025 was 6% in constant currency.
• Chemistry recurring revenue grew by double digits in Q3 2025.
• The company raised its full-year 2025 non-GAAP EPS guidance to a range of $13.05 to $13.15.
• The full-year 2025 reported sales growth guidance was raised to the range of +6.5% to +7.1%.

Finance: draft 13-week cash view by Friday.

Waters Corporation (WAT) - Canvas Business Model: Revenue Streams

You're looking at how Waters Corporation actually brings in the money, which is a mix of big upfront purchases and steady, predictable income streams. This mix is key to their valuation, especially as they navigate the late 2025 environment.

The company raised its full-year 2025 constant currency sales growth guidance to a range of 6.7% to 7.3%. This reflects confidence built on strong execution through the first three quarters of the year.

Instrument sales, covering Liquid Chromatography (LC), Mass Spectrometry (MS), and Thermal Analysis (TA) systems, are still a major part of the top line. In the third quarter of 2025, instrument sales grew 6% in constant currency, showing the replacement cycle is definitely active, especially with high single-digit growth in the LC-MS portfolio. For context, in the first quarter of 2025, instrument growth was even stronger at 11% in constant currency.

The recurring revenue side is where the stability comes from, and it's growing faster than instruments recently. Overall recurring revenue grew 9% in constant currency in the third quarter of 2025. This is built on two main pillars:

• Recurring revenue from service contracts grew 7% in Q3 2025.
• Recurring revenue from precision chemistry consumables grew 13% in Q3 2025, showing strong uptake of new products like those for bioseparations.

Software licensing and subscription fees, which includes the critical Empower platform, fall under this recurring bucket, contributing to the double-digit growth seen in the chemistry segment. The focus on consumables and service helps smooth out the lumpiness of large instrument sales.

Here's a look at how the revenue components stacked up based on trailing twelve-month data ending September 28, 2024, to give you a sense of the historical weighting, alongside the recent Q3 2025 growth rates:

The third quarter of 2025 saw total sales hit $800 million, an 8% increase as reported and in constant currency compared to the prior year period. The company generated $160 million in free cash flow during that quarter, while net debt stood at $948 million at the end of the period.

For a quick reference on the 2024 baseline, full-year 2024 sales were $2,958 million, which was flat as reported year-over-year. Finance: draft the Q4 2025 revenue forecast based on the raised full-year guidance by next Tuesday.