Form 10-K for the fiscal year ended October 31, 2024

Press release·03/03/2025 10:41:35

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Agilent Technologies, Inc. filed its annual report for the fiscal year ended October 31, 2024. The company reported total revenue of $6.3 billion, a 10% increase from the previous year. Net income was $1.1 billion, or $3.83 per diluted share, compared to $944 million, or $3.23 per diluted share, in the prior year. The company’s gross margin was 64.1%, up from 62.5% in the prior year, driven by higher revenue and improved operating leverage. Agilent’s operating expenses increased 12% to $2.3 billion, primarily due to investments in research and development and sales and marketing initiatives. The company’s cash and cash equivalents totaled $2.4 billion as of October 31, 2024, and it generated $1.4 billion in cash from operations during the year. Agilent’s board of directors declared a quarterly dividend of $0.20 per share, payable on January 15, 2025.

Overview and Executive Summary

Agilent Technologies Inc. (“Agilent” or the “company”) is a global leader in life sciences, diagnostics and applied chemical markets. The company provides application-focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

In fiscal year 2024, Agilent reorganized its operating segments to move its cell analysis business from the life sciences and applied markets segment to the diagnostics and genomics segment. The company now has three business segments: life sciences and applied markets, diagnostics and genomics, and Agilent CrossLab.

Agilent also acquired BIOVECTRA, a contract development and manufacturing organization, for $915 million in cash. The company issued $600 million in 2027 senior notes and $600 million in 2034 senior notes to help finance this acquisition and other activities.

Financial Performance

Agilent’s net revenue declined 5% to $6,510 million in fiscal year 2024 compared to the prior year. This was primarily due to lower sales in the life sciences and applied markets and diagnostics and genomics segments, especially in the pharmaceutical market, as customers continued to face capital expenditure pressures.

However, the Agilent CrossLab segment saw revenue growth of 5% in 2024. This segment provides a broad range of services and consumables to support the company’s instruments and equipment.

Despite the revenue decline, Agilent’s net income increased to $1,289 million in 2024, up from $1,240 million in 2023. This was driven by cost-saving initiatives and higher interest income.

The company’s gross margin improved to 54.3% in 2024, up from 50.7% in 2023, as it benefited from lower impairment charges, targeted price increases, and reduced shipping and logistics costs. Operating margin also increased to 22.9% in 2024 compared to 19.8% in 2023.

Segment Performance

The life sciences and applied markets segment, which includes instruments, consumables and software for analytical and diagnostic applications, saw an 8% revenue decline in 2024. This was driven by weakness across all end markets, particularly in the pharmaceutical, chemicals and food sectors.

The diagnostics and genomics segment, which includes cell analysis, contract manufacturing, pathology solutions and genomics, experienced a 6% revenue decline in 2024. This was mainly due to lower sales in the pharmaceutical market for the cell analysis and nucleic acid solutions businesses.

In contrast, the Agilent CrossLab segment, which provides a broad range of services and consumables, grew revenue by 5% in 2024. This was driven by strong demand for repair, maintenance and other services across all regions and end markets.

Strengths and Weaknesses

A key strength for Agilent is the diversity of its product and service offerings, which span multiple end markets including life sciences, diagnostics, chemicals and more. This helps to mitigate the impact of weakness in any one market segment.

The company’s Agilent CrossLab business, with its focus on services and consumables, provides a more stable revenue stream and higher margins compared to the capital equipment sales in the other segments.

However, Agilent remains exposed to the capital expenditure cycles of its customers, particularly in the pharmaceutical market. The continued pressure on customer budgets led to revenue declines in the life sciences and applied markets and diagnostics and genomics segments in 2024.

The company’s reliance on acquisitions, such as the BIOVECTRA purchase, to drive growth also introduces integration and execution risks that need to be managed.

Outlook and Future Prospects

Looking ahead, Agilent expects a gradual and steady recovery in its key end markets, though the timing and pace of the recovery remains uncertain. The company will continue to focus on enhancing the customer experience, delivering innovative products and services, and driving productivity improvements.

Agilent remains optimistic about the long-term health of its markets and plans to invest in expanding and improving its applications and solutions portfolio. The company is also well-positioned to benefit from growth trends in areas like cell analysis, nucleic acid solutions and contract manufacturing for the pharmaceutical industry.

However, the company will need to navigate ongoing inflationary pressures and manage its cost structure accordingly. Agilent plans to mitigate these impacts through targeted pricing strategies and various cost-saving initiatives.

Overall, Agilent appears to be weathering the current market challenges reasonably well. Its diversified business model, focus on services and consumables, and strategic investments position the company for potential recovery and long-term growth, though near-term headwinds remain.