Exchange: LSE | Sector: Healthcare | Industry: Medical Pharmaceuticals
Q3 2025
Published: Aug 27, 2025
Earnings Highlights
Revenue of $1.74B up 10.1% year-over-year
EPS of $1.18 increased by 21.7% from previous year
Gross margin of 52.6%
Net income of 336.00M
"No transcript quotes available in provided data." - N/A
Agilent Technologies Inc (0HAV.L) QQ3 2025 Financial Analysis: Solid Q3 Performance, Stable Margin Power, and Robust Free Cash Flow in a Dynamic Lab Instrument Market
Executive Summary
Agilent Technologies Inc delivered a solid Q3 2025 (calendar Q3) performance, with revenue of $1.738 billion, up 10.1% year-over-year and 4.2% quarter-over-quarter. The company posted a gross profit of $914 million and a gross margin of 52.6%, producing an operating income of $360 million and an operating margin of 20.7%. Net income reached $336 million, translating to a net margin of 19.3% and earnings per diluted share of $1.18. EBITDA stood at $137 million, reflecting a lean operating expense structure relative to revenue. Free cash flow (FCF) was reported at $573 million, supported by a positive operating cash flow of $362 million and a cash balance of approximately $1.54 billion at period-end. Net debt stood at about $1.87 billion against total liquidity, underscoring a healthy balance sheet and strong cash generation that provides optionality for deleveraging, buybacks, and continued R&D investment.
The quarterly results were driven by a favorable revenue mix and disciplined cost management. R&D spend was $111 million in the quarter, contributing to ongoing innovation in Life Sciences and Diagnostics/Genomics while SG&A was $431 million, yielding a robust operating margin. The company maintained a balance sheet with current assets of $4.25 billion and current liabilities of $1.89 billion, yielding a healthy current ratio (~2.25) and a quick ratio well above risk thresholds. Management commentary (where available) was not included in the provided transcript data; thus, the analysis combines the disclosed financials with sector dynamics to infer strategic implications. Overall, Agilent’s QQ3 2025 results reinforce its position as a diversified, cash-generating provider in the laboratory instrumentation space, with meaningful growth drivers in high-margin service and consumables and a multi-segment portfolio that supports resilience against cyclicality.
Key Performance Indicators
Revenue
1.74B
QoQ: 4.20% | YoY:10.14%
Gross Profit
914.00M
52.59% margin
QoQ: 5.54% | YoY:6.90%
Operating Income
360.00M
QoQ: 20.00% | YoY:8.11%
Net Income
336.00M
QoQ: 56.28% | YoY:19.15%
EPS
1.18
QoQ: 57.33% | YoY:21.65%
Revenue Trend
Margin Analysis
Key Insights
Net Cash Provided by Operating Activities: $362M; Capex: $211M (Investments in PP&E $97M recorded separately); Free Cash Flow: $573M (note: reported FCF figure may reflect rounding or items outside standard CFO-Capex math in the dataset).
Cash and Cash Equivalents: ~$1.535B; Total Debt: ~$3.409B; Net Debt: ~$1.874B; Current Assets: $4.253B; Current Liabilities: $1.892B; Current Ratio: ~2.25; Quick Ratio: ~1.71.
Stockholders’ Equity: ~$6.37B; Goodwill/Intangibles: ~$4.944B; Total Assets: ~$12.226B.
Cash Flow and Balance Sheet:
- Net Cash Provided by Operating Activities: $362M; Capex: $211M (Investments in PP&E $97M recorded separately); Free Cash Flow: $573M (note: reported FCF figure may reflect rounding or items outside standard CFO-Capex math in the dataset).
- Cash and Cash Equivalents: ~$1.535B; Total Debt: ~$3.409B; Net Debt: ~$1.874B; Current Assets: $4.253B; Current Liabilities: $1.892B; Current Ratio: ~2.25; Quick Ratio: ~1.71.
- Stockholders’ Equity: ~$6.37B; Goodwill/Intangibles: ~$4.944B; Total Assets: ~$12.226B.
Earnings trends are consistent with a steadier microbiology and genomics instrument demand environment, with margin resilience supported by a favorable mix and ongoing cost discipline. The quarter demonstrates strong cash generation, enabling deleveraging and potential capital allocation to growth initiatives and shareholder returns.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.74B
10.14%
4.20%
Gross Profit
914.00M
6.90%
5.54%
Operating Income
360.00M
8.11%
20.00%
Net Income
336.00M
19.15%
56.28%
EPS
1.18
21.65%
57.33%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No transcript quotes are available in the provided data. Management themes and quotes could not be extracted without the earnings call transcript. Given this, the analysis relies on disclosed financials and general market dynamics to infer strategic implications. If a transcript becomes available, the highlights could include: strategy updates (instrument diversification, service-led growth), operational efficiency measures, and market condition commentary (laboratory budgets, capital cycles, and regulatory/compliance factors).
No transcript quotes available in provided data.
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No transcript quotes available in provided data.
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Forward Guidance
There is no explicit forward-looking guidance provided in the supplied data. Based on the QQ3 2025 results and industry context, the following qualitative outlook is reasonable:
- Revenue trajectory: Moderate growth through the balance of 2025 and into 2026 driven by continued demand for life sciences instrumentation, expanding Diagnostics/Genomics workflows, and expansion of cross-selling through CrossLab services. Expected to be supported by a continued mix shift toward higher-margin products and service solutions.
- Margins: Gross margins in the low-to-mid 50% range appear sustainable given the current product mix; operating margins around 20% could be maintained with ongoing cost discipline and R&D investments balanced against revenue growth.
- Cash flow and capital allocation: Strong FCF generation supports debt deleveraging and potential shareholder-friendly actions (dividends, buybacks) while funding R&D and capacity expansion. Watch for working capital dynamics and any shift in customer buying patterns that could affect cash conversion.
- Key risk factors: currency volatility (given the LSE listing and USD reporting), macro weakness affecting lab budgets, supply chain constraints, and competitive intensity from large peers in the lab instrumentation space. Investors should monitor quarterly revenue mix by segment, R&D efficiency, and changes in working capital headwinds or tailwinds.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HAV.L Focus
52.59%
N/A
N/A
N/A
0HBH.L
32.80%
24.70%
4.61%
19.91%
0EDE.L
56.50%
30.60%
7.63%
21.17%
0R2M.L
83.50%
33.20%
4.57%
21.01%
0HOY.L
62.90%
16.00%
2.26%
65.35%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Agilent sits in a favorable position within the healthcare diagnostics and life sciences instrument space. The QQ3 2025 results show disciplined margin management, strong cash flow, and a robust balance sheet that supports deleveraging and strategic investments. The company’s diversified portfolio and service-centric growth potential underpin a constructive long-term investment thesis. Key catalysts include continued demand for genomics and diagnostics platforms, CrossLab service expansion, and potential capital allocation to fund R&D and selective acquisitions. Risks to monitor include macro-driven capex cycles, FX headwinds, and competitive intensity. Investors should watch quarterly segment mix, invoicing liquidity, and any updated management guidance on longer-term targets and capital deployment priorities.
Key Investment Factors
Growth Potential
Growth potential centers on expanding service-based revenues (CrossLab), higher-margin consumables, and genomics/diagnostics platforms. The diversified portfolio supports steady top-line growth and improved cash flow, with potential acceleration from instrument lifecycle refresh cycles and emerging market adoption.
Profitability Risk
Key risks include cyclicality in lab capital budgets, currency exposure and translation effects, ongoing competitive pressure from larger ecosystem players, and a high level of intangibles/goodwill that could pose impairment risk in a stressed scenario. Debt levels, while manageable given cash flow, require ongoing monitoring.
Financial Position
Strong liquidity with ~$1.54B cash, solid current ratio (~2.25), and substantial free cash flow support leverage management. Long-term debt remains the principal liability, with net debt around ~$1.87B against equity of ~$6.37B, underpinning a solid balance sheet capable of funding R&D and strategic investments.
SWOT Analysis
Strengths
Solid gross margin (~52-53%) and healthy operating margin (~20%) in QQ3 2025
Robust free cash flow generation and strong operating cash flow