0001090872-26-000055
SEC filingRevenue grew 8% YoY to $3.63B, driven by double-digit segment growth, with operating margin expanding 50bps to 20.7%.
In the six months ended April 30, 2026, Agilent reported net revenue of $3,633 million, an 8% increase over the prior-year period, with foreign currency providing a 3-point tailwind. Gross margin improved to 53.3% from 52.7%, supported by higher sales volume, targeted price increases, lower restructuring expense, and lower intangible amortization, partially offset by higher tariffs and unfavorable business mix. Operating income rose 11% to $752 million, driving operating margin expansion to 20.7% (from 20.2%). Net income increased 21% to $644 million.
All three segments contributed to growth. Life Sciences and Diagnostics Markets revenue grew 8% to $1,411 million, with strong performance in pharmaceutical and diagnostics/clinical markets partially offset by weakness in academia/government. Agilent CrossLab revenue increased 8% to $1,517 million, driven by broad strength in repair, maintenance, and compliance services as well as consumables. Applied Markets revenue grew 10% to $705 million, led by chemical/advanced materials and environmental/forensics, while food market declined modestly. Segment operating margins showed mixed trends: Life Sciences and Diagnostics operating margin improved 10 bps to 19.1%, Agilent CrossLab margins contracted slightly to 31.8% (down 30 bps), and Applied Markets margin expanded 220 bps to 24.6%.
Management remains optimistic about long-term growth in key end markets, citing normalized capital spending among most customers except those reliant on U.S. federal government funding. Tariff and Middle East conflict risks are being managed through supply chain optimization, pricing actions, and cost-efficiency initiatives. The company continues to invest in R&D, manufacturing capacity (notably the Frederick, Colorado expansion for advanced therapeutics), and expanding presence in developing markets. The pending acquisition of Biocare for $950 million is expected to close by late FY2026. No specific numerical guidance was provided for upcoming quarters.
Cash and cash equivalents stood at $1,807M as of April 30, 2026, nearly unchanged from $1,789M at October 31, 2025. Total debt was $3,355M, comprising $304M in short-term debt (including $300M of 2026 senior notes reclassified to current) and $3,051M in long-term debt. The debt level is stable, with minimal net change from small repayments of government-sponsored loans. Inventory increased to $1,089M from $1,025M, reflecting higher finished goods and purchased parts. Deferred revenue (contract liabilities) rose to $855M from $803M, driven by net deferrals.
No material purchase commitments were disclosed in the Notes. The only contractual obligations noted are standard warranties ($29M accrual), bank guarantees ($41M outstanding), and operating lease liabilities ($187M). The pending acquisition of Biocare for ~$950M in cash represents a significant future cash outflow, but is not yet reflected as a commitment.
Share repurchases totaled $217M (1.6M shares) in the first half of fiscal 2026, with $1,732M remaining under the 2024 repurchase program. Quarterly dividends of $0.255 per share were declared and paid, totaling $144M for the six months, up from $0.248 per share in the prior year. Debt activity was minimal: $3M in repayments of interest-free government loans. No new debt was issued, and no borrowings were outstanding under the commercial paper or credit facilities. Capital expenditures are not detailed in the Notes but are reported in the cash flow statement ($169M for six months).
Segment revenue and operating income are disclosed with full geographic breakdown. For Q2 FY2026, Life Sciences and Diagnostics Markets generated $732M revenue and $161M operating income; Agilent CrossLab $759M and $242M; Applied Markets $344M and $80M. Revenue by region shows Americas leading at $764M (42%), followed by Asia Pacific $553M (30%) and Europe $518M (28%). The Notes also provide revenue by end market (Pharma & Biotech $663M, Diagnostics & Clinical $295M, etc.) and by type (Instrumentation $618M, Non-instrumentation $1,217M).
Overall, the Notes highlight stable balance sheet strength, continued buyback execution, and detailed segment performance with geographic granularity.
Operating cash flow (CFO) of $545M was below net income of $644M, resulting in a CFO/NI ratio of 0.85. The primary driver of the divergence was a significant working capital outflow of $295M in 'Other assets and liabilities', partially offset by depreciation ($134M) and deferred taxes ($57M). Inventory increased by $85M, while accounts payable provided $54M.
Capital expenditures (capex) totaled $169M, representing 31% of CFO, down from 32% in the prior period. The company generated CFO that covered capital returns ($217M repurchases + $144M dividends = $361M) with a coverage ratio of 1.5x.
Notable financing activities included $217M in share repurchases and $144M in dividends. A $295M outflow in other assets and liabilities suggests potential buildup in other current assets or prepayments, which should be monitored for sustainability.