A maker of analytical instruments that help scientists separate, identify, and measure chemicals, Waters Corporation builds liquid chromatography and mass spectrometry systems (like ACQUITY UPLC and Xevo) used by pharmaceutical, industrial, and academic labs, plus thermal analysis tools under its TA Instruments brand. Founded in 1958 by James Waters, the company began as a five-person "research boutique" in the basement of the Framingham, Massachusetts police station, building custom instruments like nerve gas detectors before becoming a leader in chromatography.
Waters posts a $86M operating loss as $399M in acquisition charges from the $16.8B BDS deal overwhelm a doubling of revenue.
The BDS acquisition closed, and the bill came due. more than doubled to $1.65 billion, but $399 million in and step-up charges from the deal pushed the company to an $86 million operating loss. The legacy business grew 7%, but the quarter was defined by the cost of transformation.
Key takeaways
rose 113% to $1.65 billion, driven entirely by $817 million in revenue from the newly acquired BDS business; legacy Waters revenue grew 7% on continued instrument and consumable demand.
The company reported an operating loss of $86 million, compared with $188 million in a year ago, as $399 million in and charges from the BDS acquisition absorbed the gain.
Cost of rose 184%, including $154 million in acquisition-related and fixed asset expenses, while selling and administrative costs included $37 million in BDS transaction and integration costs.
Section summaries
Management's Discussion and Analysis
Total revenue surged 113% to $1.6B in Q2 FY2026, driven by the BDS Business acquisition, while operating loss reached $86M due to acquisition-related amortization and costs.
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Total net revenues increased 113% in Q2 and 103% in H1 2026, primarily from $817M and $1.3B of , respectively; legacy revenue grew 7% and 10%.
A workforce reduction affecting roughly 3% of employees resulted in $49 million in , with expected annual salary savings of approximately $120 million.
was $201 million for the quarter, up from $41 million a year ago, though the first half of the year generated $198 million, down from $301 million, as $105 million in BDS transaction and integration payments weighed on liquidity.
Total outstanding debt stood at $5.1 billion at quarter-end, including $3.5 billion in Senior Notes due February 2027, after the company repaid the SpinCo Delayed Draw Term Loan.
What changed
The BDS acquisition closed on February 9, 2026, making Q2 the first full quarter of results for the new Biosciences and Advanced Diagnostics segments, which contributed $817 million in combined .
The $3.5 billion Senior Notes due February 2027, flagged as a key watch item, remain outstanding and unrefinanced, representing a near-term liquidity event.
The legacy Waters business grew 7% in Q2, decelerating from the 13% growth reported in Q1 2026, though the filing attributes the Q1 figure to broad-based demand and does not cite a specific cause for the moderation.
The 's U.S. industrial demand, a concern flagged in prior quarters, is not broken out separately in this filing, leaving the trajectory of that slowdown unclear.
The company initiated a restructuring program, a new development not flagged in prior filings, taking $49 million in charges to reduce headcount by roughly 3%.
What to watch
Refinancing or repayment of the $3.5 billion Senior Notes due February 2027, and its effect on and ratios.
Q3 2026 and margin as acquisition-related and step-up charges continue to flow through the income statement.
Progress toward the $200 million in cost synergies and $290 million in synergies from the BDS integration, and any additional .
Q3 2026 legacy Waters growth to see if the 7% Q2 rate stabilizes or if the 13% Q1 figure was a one-time rebound.
Operating loss was $86M in Q2 and $134M in H1 2026, compared to of $188M and $340M in the prior year, driven by $399M and $650M in purchased intangibles and .
Cost of rose 184% in Q2, including $154M of acquisition-related and fixed asset expense; selling and administrative expenses included $37M in BDS transaction and integration costs.
The company incurred $49M in Q2 restructuring charges for a workforce reduction affecting ~3% of employees, expected to yield annual salary savings of ~$120M.
Net fell to $198M in H1 2026 from $301M, primarily due to $105M in BDS transaction and integration payments and a $157M net receivable from BD.
Total outstanding debt was $5.1B as of July 4, 2026, including $3.5B in newly issued Senior Notes used to repay the Delayed Draw Term Loan.
Quantitative and Qualitative Disclosures About Market Risk
Foreign exchange risk is the primary market risk, with 68% of cash held in non-U.S. dollar currencies and partially hedged via derivatives.
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As of July 4, 2026, $365 million of the company's $539 million in cash and equivalents was held in currencies other than the U.S. dollar.
A hypothetical 10% adverse strengthening of the U.S. dollar would reduce the fair value of non-U.S. dollar cash holdings by approximately $37 million, mostly recorded in .
The same 10% adverse currency move would increase by approximately $4 million due to outstanding foreign currency exchange contracts.
Outstanding agreements would increase in fair value by approximately $128 million under the 10% adverse scenario, recorded in , with no material impact from related interest income.
The company states there have been no other material changes in market risk during the six months ended July 4, 2026.
There have been no material changes in the Company’s legal proceedings during the six months ended July 4, 2026 as described in Item 3 of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 23, 2026.
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There have been no material changes in the Company’s legal proceedings during the six months ended July 4, 2026 as described in Item 3 of Part I of the Company’s Annual Report on Form
10-K
for the year ended December 31, 2025, as filed with the SEC on February 23, 2026.
Information regarding risk factors of the Company is set forth under the heading “Risk Factors” under Part I, Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 23, 2026. The Company reviewed its risk facto…
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Information regarding risk factors of the Company is set forth under the heading “Risk Factors” under Part I, Item 1A in the Company’s Annual Report on Form
10-K
for the year ended December 31, 2025, as filed with the SEC on February 23, 2026. The Company reviewed its risk factors as of July 4, 2026 and determined that there were no material changes from the ones set forth in the Annual Report on Form
10-K.
Note, however, the discussion of certain factors under the subheading “Special Note Regarding Forward-Looking Statements” in Part I, Item 2 of this Quarterly Report on Form
10-Q.
These risks are not the only ones facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may have a material adverse effect on the Company’s business, financial condition and operating results.
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