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DATE

Wednesday, May 27, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Padraig McDonnell
  • Chief Financial Officer — Adam S. Elinoff
  • President, Life Sciences and Diagnostics Markets Group — Simon May
  • President, Agilent CrossLab Group — Angelica Riemann
  • President, Applied Markets Group — Mike Zhang
  • Investor Relations — Tejas Rajeev Savant

TAKEAWAYS

  • Total Revenue -- $1.83 billion, reflecting 6.3% core growth and a 3.7% favorable currency impact, surpassing the high end of guidance by 80 basis points.
  • Operating Margin -- 26.4%, increasing 130 basis points year over year and 180 basis points sequentially, clearly outperforming prior guidance.
  • EPS -- $1.49, up 14%, exceeding the top end of guidance by $0.07 per share.
  • Pharma Revenue Growth -- 6%, with low double-digit expansion in biotech and initial signs of recovery in small to mid-cap customers.
  • Chemical and Advanced Materials (CAM) Revenue -- Grew 8%, driven by strong semiconductor demand and chemical CapEx activity in the Americas.
  • Diagnostics and Clinical Revenue -- Expanded 11%, underpinned by new cancer diagnostics offerings and strong Omnis family traction.
  • Forensics Revenue -- Surged more than 50%, aided by TSA security contract deployment at high-profile U.S. events and multiple large Asian and European tenders.
  • Instrument Revenue -- Grew high single digits, with low double-digit gains in LC, LCMS, and GC, attributed to replacement cycles and new product launches.
  • Consumables Growth -- Altura Ultro Inert LC columns climbed over 50% sequentially, reaching 75% penetration of top 20 biopharma accounts.
  • Digital Orders -- Increased 9%, including over 20% growth outside China, driven by expanded e-commerce capabilities.
  • China Revenue -- Declined 9%, with the region roughly flat for the first half, affected by delayed government funding and Lunar New Year impacts.
  • Operating Cash Flow -- $277 million, including a tax deposit expected to be mostly offset by a refund near fiscal year-end.
  • Capital Expenditures -- $76 million invested, with full-year CapEx guidance lowered by $50 million to $450 million.
  • Share Repurchases and Dividends -- $65 million in buybacks and $72 million paid in dividends during the quarter.
  • Net Leverage Ratio -- 0.7 turns, sustaining a strong balance sheet position.
  • Biocare Acquisition -- Announced, integration preparations underway, not yet included in financial guidance.
  • Updated Full-Year Revenue Guidance -- Now $7.39 billion to $7.49 billion, representing 4.5%-6.0% core growth, with a midpoint raised by 30 basis points and a 1.8% currency tailwind expected.
  • Full-Year EPS Guidance -- Raised to $6.00-$6.10, increasing $0.08 at the midpoint, targeting 7%-9% earnings growth.
  • Full-Year Operating Margin Expansion Target -- Increased to an 85 basis-point improvement at the revenue guidance midpoint.
  • Q3 Revenue Guidance -- Projected at $1.83 billion to $1.85 billion, or approximately 4.4%-5.9% core growth, with EPS anticipated between $1.48 and $1.50.
  • Segment Performance — AMG -- Applied Markets Group revenue advanced 11% core, benefiting from spectroscopy and the TSA contract.
  • Segment Performance — LDG -- Life Sciences and Diagnostics Group grew 9% core, supported by strong LC/LCMS and cancer diagnostics demand.
  • Segment Performance — ACG -- CrossLab Group rose 2% core, in line with guidance, impacted by Lunar New Year and prior pre-tariff stocking in China.
  • Geography — The Americas -- Delivered 11% revenue growth, with broad-based strength except for academic and government segments.
  • Book-to-Bill Ratio -- Remained above 1.0 for the ninth consecutive quarter, signaling ongoing demand visibility in instruments.
  • Ignite Operating System Impact -- Strategic pricing contributed roughly 200 basis points in Q2, topping the original full-year goal of 100 basis points; operating profit fully offset incremental trade tariffs.
  • Advanced Therapeutics Division -- High single-digit growth in the quarter, with mid-teens growth expected for the year and additional capacity coming online in FY 2027.

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RISKS

  • Food segment guidance reduced due to "delays in government funding in China and India." and exposure to "inflationary headwinds related to the Middle East conflict."
  • China revenue fell 9%, with management referencing the region as "muted in the quarter," affected by slower biotech funding and delayed stimuli.
  • Academic and government end market declined 5%, with "tightened and delayed government spend" particularly noted in China and ongoing uncertainty in U.S. grant funding.

SUMMARY

Agilent Technologies (A +0.66%) delivered above-guidance revenue of $1.83 billion, 6.3% core growth, and significant margin expansion as the Ignite operating system generated operational efficiencies and strategic pricing leverage. Product innovation and an active instrument replacement cycle, highlighted by double-digit LC/LCMS and GC growth, drove market share gains across key geographies and end markets. New guidance incorporates raised full-year targets for revenue, EPS, and margin improvement, with leadership citing resilience in core businesses and favorable mix despite persistent headwinds in China, food, and government funding. The integration of Biocare and ongoing digital and supply chain initiatives position the company for continued gains, though management now expects headwinds in specific geographies and segments as funding delays, inflation, and geopolitical factors weigh on certain markets.

  • The rollout of next-generation instrumentation, including the 9.5k triple quad ICPMS and updated GC platforms, directly addresses customer pain points in throughput, automation, and operating cost, with rapid adoption linked to customer feedback.
  • Management highlighted, "AI is a key FY 2026 enterprise focus area for us" and expects artificial intelligence initiatives to contribute both to operational capabilities and to demand from pharma and diagnostics customers as drug development and manufacturing become more data-intensive.
  • Forensics and TSA-related deployments generated over 50% growth for the quarter, with $5 million in TSA contract revenue recognized, and the pipeline for aviation security tenders remains active.
  • Segment-specific growth drivers include mid-teens expectations for the advanced therapeutics division and a robust instrument order book that extended the string of book-to-bill ratio above 1.0 for nine consecutive quarters.

INDUSTRY GLOSSARY

  • Ignite operating system: Agilent's enterprise-wide initiative embedding strategic pricing, productivity actions, digital transformation, and supply chain agility to drive structural financial and operational improvements.
  • LC/LCMS/GC: Refers to liquid chromatography, liquid chromatography mass spectrometry, and gas chromatography—critical analytical instruments for life sciences, diagnostics, and materials research.
  • TSA security contract: Transportation Security Administration contract for deployment of Agilent’s bulk alarm resolution technology at airport security checkpoints, contributing to forensics revenue and market visibility.
  • Book-to-bill ratio: The ratio of orders received to revenue recognized in a period, used as a demand indicator for recurring equipment sales.
  • CDMO: Contract Development and Manufacturing Organization; Agilent describes its "advanced therapeutics division" as a specialty CDMO for peptides, oligonucleotides, and related modalities.
  • CapEx: Capital expenditures on infrastructure, equipment, and innovation capacity, cited as strategic investment in expanding production and supporting market demand.

Full Conference Call Transcript

Tejas Rajeev Savant: Thank you, Corina, and welcome everyone to Agilent's conference call for the rest of the year? second quarter of fiscal year 26. With me on the line are CEO, Padraig McDonnell and CFO, Adam S. Elinoff. Joining for the rest of the year? Q&A will be Simon May, president of the Life Sciences and Diagnostics Markets Group Angelica Riemann, president of the Agilent CrossLab Group and Mike Zhang, president of the Applied Markets Group. This presentation is being webcast live. The press release for our second quarter financial results, investor presentation, and information to supplement today's discussion, along with a recording of this webcast are available on our website at investor.agilent.com. Today's comments will refer to non GAAP financial measures.

Non GAAP measures are supplemental and should not be considered a substitute for GAAP results. You will find the most directly comparable GAAP financial metrics and reconciliations in the press release and on our website. Unless otherwise noted, financial metrics are year over year. all references to increases or decreases in, and references to revenue growth are on a core or organic constant currency basis. All references to profitability metrics are on a non GAAP basis. Core or organic constant currency revenue growth is adjusted for the rest of the year? impact of currency exchange rates, and any acquisitions and divestitures completed within the past 12 months. Guidance is based on forecasted exchange rates.

During this call, we will make forward looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. Agilent assumes no obligation to update them. Please refer to the company's recent SEC filings for a more detailed description of the risks and other factors that would cause our performance to differ from these forward looking statements. And now I would like to turn the call over to Padraig.

Padraig McDonnell: Thanks, Tejas. Welcome, everyone. We delivered an excellent second quarter with stronger than expected revenue growth, significant margin expansion, and double digit EPS growth. Importantly, the quarter demonstrates that the operational and P&L benefits from our Ignite operating system are increasingly becoming structurally embedded in the business. For the second quarter, Agilent reported $1.83 billion in revenue, growing 6.3% on a core basis and exceeding the high end of our guidance by 80 basis points. The strength was broad based across our largest end markets and supported by continued replacement site momentum, innovation led share gains, and improving operational execution.

Operating margin of 26.4% for the rest of the year? quarter represents a year over year improvement of 130 basis points and a 180 basis points on a sequential basis. Well above our guidance despite the macro and geopolitical environment. Earnings per share of $1.49 represents 14% year over year growth which also exceeded the top end of our guidance by $0.07. We delivered at or above our long term plan on all metrics. Revenue growth, margin expansion, and EPS growth. As we enter the second half, I want to highlight the key dimensions of our strategy that are driving our performance.

First, we continue to build on the extraordinary level of customer intimacy and trust that we have worked hard to gain and differentiates us from the competition. This differentiation is increasingly translating into share gains across the key workflows and geographies. Second, DATROS translates into insights that inform our innovation flywheel leading to products and services that drive success for our customers and Agilent. That includes the exciting launches coming up next week at the 74th American Society for Mass Spectrometry Annual Conference in San Diego. Next, we have increased capabilities and the level of talent throughout the organization, improving speed, agility, and operational discipline. This is driving a step function improvement in execution.

And finally, the significant benefits of Ignite are increasingly plain to see. These include strategic pricing that is aiding our top line momentum, productivity initiatives such as simplifying our structure, and generating greater value through strategic relationship management. A centralized focus on project outcomes that drives business results. An increasing supply chain agility and operational discipline that is strengthening margins and business resiliency while providing flexibility to fund our most critical innovation efforts. With our diversified and geographically balanced portfolio, and healthy momentum across key end markets, the strong foundation we have built through Ignite provides us with the resiliency to compound our success and deliver results in any environment.

Importantly, we expect these operational improvements to increasingly support higher quality and durable earnings growth. Before getting into the specifics of our second quarter results, I want to spend time on the key growth drivers going forward. These include superior commercial execution combined with improvements we are seeing across our end markets, the instrument replacement cycle, our exciting slate of launches at ASMS, and our recent agreement to acquire Biocare. And how Ignite is fueling Agilent's performance. We are seeing continued health in our key end markets. Aligned with our expectations at the start of the year. Combined with commercial execution, our differentiated portfolio, and best in class service, that health is driving our results.

Pharma continues to deliver with 6% growth in the quarter, This includes another quarter of low double digit growth in biotech led by large caps, while positive demand signals from small to mid caps begin to emerge. Chemical and advanced materials grew a robust 8%, It was fueled by strong semiconductor demand and healthy chemical CapEx investments in The Americas. Diagnostics and clinical grew 11% driven by the strong performance of expanding cancer and diagnostics offerings. And finally, our unique technology is helping us win outsized shares of forensics. Where we deliver greater than 50% growth in the quarter.

That includes the TSA security contract, we mentioned during the last call, as well as multiple competitive large tender wins in Asia and Europe. Regarding the TSA contract, we are delighted to be able to share more details as you might have seen in our recent press release. The TSA would apply our new bulk alarm resolution technology at airport security checkpoints at the FIFA World Cup host cities in The US. This unique technology provides the ability to screen larger quantities of liquids powders, and solids. With the implementation going very well, we are excited about the opportunities to apply this technology more broadly. We also had another very strong quarter of instrument revenue.

Resulting in high single digit growth This included market leading low double digit growth in LC and LCMS, and in GC. Our replacement site momentum continued. That plus share gains driven by the customer centric innovation that is embedded in our new Infinity III LC and our 8.85 thousand GC. Are delivering exceptional growth. As customers are looking to upgrade their fleets you see how new instruments solve their most challenging workflow problems, while improving efficiencies. Looking ahead, we see continued instrument strength, Our commercial excellence delivered a book-to-bill above 1.0 again this quarter, marking the ninth consecutive quarter where instrument orders met or exceeded revenue.

Even as recent launches like the Infinity III LC, and Omnis family continue to drive growth, we are looking forward to our next wave of innovation that will further support our durable growth. Strengthen our install base, and support recurring consumables and services pull through. We will showcase these new launches at ASMS next week. and starting in spectroscopy with a revolutionary new 9.5 thousand triple quad ICPMS. This launch brings advanced triple quad capabilities to a broader customer base by directly addressing key customer pain points around throughput. Workflow complexity, and operating costs.

The 9.5 thousand solves these challenges with a patented dual cell system, that provides increased throughput, a revolutionary air mode that eliminates the need for dedicated oxygen gas, lowering operating costs; an intelligent OpenLab ICPMS that reduces complexity and automates method migration lowering the technical expertise required to operate the system. This versatile instrument will be relevant across our customer base in advanced materials, mining, food, and environmental labs. Importantly, the innovations embedded in the 9.5 thousand were a direct result of customer feedback about their most pressing problems, and will serve as a differentiated architecture for ICPMS growth well into the future. Moving to our gas phase business. We are launching the upgraded flagship GCs.

These launches further strengthen our position in high productivity analytical workflows where our customers increasingly prioritize efficiency, automation, and total cost of ownership. Highlights of our new GCs include improved performance with up to 30% faster oven cool down and higher throughput. Built in intelligence features to monitor performance, track parameters, and assist in proactive maintenance, and the technology to conserve or eliminate helium gas. With real time gas and power usage tracking. We have been a long standing leader in providing helium alternatives for GCs in response to customer needs in the current helium supply environment these productivity and resource efficiency benefits are becoming increasingly valuable for our customers. Turning to our consumables portfolio.

Our Altura Ultro Inert LC columns continue to see strong traction. They grew more than 50% sequentially, reaching 75% of the top 20 biopharma accounts. This rapid adoption reinforced the strength of innovation engine, and unified commercial organization. We will continue to build on that strong initial momentum with additional waves of column launches. Our newest Altura columns debuting at ASMS are targeted to address workflows for protein and peptide therapeutics, large oligos, gene therapy, and vaccines. On the software front, we are also expanding our capabilities in OpenLab CDS with version 3.0. This important release provides a unified platform to support analysis for chromatography, mass spec, and spectroscopy systems across our portfolio.

Including for the rest of the year? first time our high resolution Mass Spec. The continued expansion of OpenLab further Strengthens Workflow Integration Across Our Portfolio, And Enhances The Strategic Value Of Our install base. We are also delighted to announce That We Are Building Upon Our Long History In China with the launch of our China Innovation Center. Leveraging the country's deep base of technical talent, and a vibrant innovation ecosystem, we intend to strengthen our R&D capabilities across multiple emerging areas. Including digital, AI, and automation to better support our customers. We are particularly excited about automation. Where we see excellent potential to build on our in house capabilities with unique automation development expertise in China.

Turning to the 4 pillar of our strategy, I want to provide an update on the impact of our Ignite operating system that is building enterprise capabilities and driving a culture of accountability and execution excellence. Ignite had a significant impact on the business, on both the top and bottom lines during the quarter, and is poised to deliver compounding benefits in the years to come. Our strategic pricing capability delivered approximately 200 basis points of pricing in Q2, putting us on a path to exceed our initial full year goal of 100 basis points. We also reached an important milestone during Q2. With the tariff task force achieving full mitigation of the incremental tariffs that began in late spring.

The combination of strategic manufacturing moves and targeted price adjustments have now fully offset the operating profit impact of these tariffs. This task force also helped us build a playbook for addressing trade and geopolitical challenges. Which has been a critical resource in navigating the current Middle East conflict. Our digital initiative is driving accelerated growth of our e commerce platform, delivering ease of use for customers and lower cost per transaction for Agilent. In Q2, new digital orders grew 9%, including more than 20% ex China. Ignite has transformed our supply chain capabilities, making it a competitive advantage.

A recent example of this is our quick response to the logistics challenges and material shortages arising out of the conflict in The Middle East. Ignite is providing incremental procurement savings, and supply chain resilience that gives us confidence as we work to absorb inflationary cost pressures during the remainder of the year. On the M&A front, we were excited to announce the Biocare acquisition in March. I am confident that the robust long term growth strong strategic fit, opportunities for synergy realization make the financial returns on this transaction highly attractive. Ignite is driving our pre close preparations for the rest of the year?

Biocare integration, ensuring we are ready to hit the ground running as soon as the transaction closes. I look forward to welcoming our new colleagues to Agilent later this year. While it is been tremendously satisfying to see Ignite's impact to date, there is a lot more to come. This includes our push for manufacturing excellence, where we are being front footed in building resilience across our business, and setting up the organization to deliver durable long term growth. We built our AI enabled supply chain control tower to create greater prediction and adaptive calibration of our supply and demand plans, leading to inherent resiliency, faster issue response times, and much higher schedule attainment.

After implementing this new capability, we have seen continued meaningful improvements in scheduled plan attainments, order conversion ratios, and overall cycle times. We have also reconfigured our operations organization to add greater depth in planning, lean manufacturing, and digital engineering. All of this contributes to improved delivery, greater agility, and optimized cost structure. That, in turn, reduced manufacturing overhead by more than 50 basis points versus last year. The 9.5 thousand ICPMS we are featuring at ASMS is a great demonstration of how our Ignite operating system is accelerating our innovation expediting the launch by a full quarter. Our optimized approach to innovation enable faster decisions and more focused capital allocation.

We clearly established the 9.5 thousand as the top priority, and dynamically reallocated resources to accelerate timelines and outcomes. We reinforced this through focused discipline, cross functional execution across sales, R&D, and manufacturing teams. The teams work closely to accelerate technology transfer and improve yields, pulling our production readiness forward. Last but not least, AI is a key FY 2026 enterprise focus area for us. AI has the potential to be a tremendous growth driver for the rest of the year? life sciences industry. Pharma customers are leaning into AI to accelerate drug development, and reduce the odds of expensive late stage failures. There is a growing need for a large scale multimodal datasets.

To train AI models, which will require significant investments in the wet lab. By moving the needle on drug development ROI, AI holds the promise of putting our largest customer constituency on a better footing. And a higher number of approvals coming through the drug pipeline should be a strong tailwind for us giving our leading position in downstream manufacturing QAQC workflows. In light of the regulatory and patient safety aspects of commercial scale drug manufacturing, we believe this part of the value chain will meaningfully benefit from AI use upstream. Beyond being accretive to our top line in the medium term, we are also deploying AI within our own business.

I look forward to sharing more details on our AI efforts very soon. Now let me share some additional details on our Q2 results, starting with our end markets. As I mentioned earlier, pharma grew 6% this quarter, marking the fifth consecutive quarter of growth in the mid single digit to low double digit range. Within pharma, biotech grew low double digits for the rest of the year? third consecutive quarter, while small molecule grew low single digits. Our GLP-1 momentum continues, delivering about 20% growth year to date, with a robust contribution from the analytical lab business in the second quarter, We also remain engaged with our large pharma customers about their plans to reassure operations to The U.

S. We continue to expect initial orders at the end of our fiscal year with revenue starting in FY 27. CAM grew 8% and C&EM grew 11%. Both exceeding expectations. Environmental forensics delivered 13% growth compared to the low single digit guide, with the upside in forensics, as I mentioned earlier. Environmental delivered low single digit growth against a challenging double digit year over year compare. Food, our second smallest end market, declined 3% with softer than expected results in Asia, due to funding delays in China and India. Academia and government, our smallest end market, declined 5% in line with expectations.

Most importantly, our customer centric approach is working, and we continue to win against the competition in all major geographies with share expansion, again, validated by industry market share data. Turning to updated guidance. Building on an excellent second quarter, and with the outlook for end markets broadly consistent with our original expectations, we now expect core growth of 4.5% to 6.0% for the rest of the year? full year. At the midpoint, this represents an increase of 30 basis points versus our prior guide. We are also increasing our expectations on the bottom line. With updated EPS guidance of $6.00 to $6.10 for the rest of the year? full year, an increase of $0.08 at the midpoint.

And with that, let me hand it over to Adam, who will provide additional details on the quarter. Our financial outlook for the rest of the year? remainder of the year.

Adam S. Elinoff: Thanks, Padraig. Good afternoon, everyone. In my comments today, I will provide additional details on revenue in the quarter, as well as walk through the income statement and cover other key financial metrics. I will then cover our updated full year and third quarter guidance. Revenue was $1.83 billion. Starting with Q2. On a core or organic constant currency basis, we posted growth of 6.3%. While reported growth was 10%. Currency had a favorable impact of 3.7%, a slightly larger tailwind than our February guidance. At a business segment level, AMG revenue grew 11% in the quarter on a core basis, well ahead of expectations.

Growth was again led by double digit performance in spectroscopy, That business continues to see strong demand for its market leading tools, to support semiconductor production at the fabs and with their downstream supply chain. During the quarter, AMG also benefited from the TSA airport security contract that Padraig discussed earlier. LDG revenue grew 9% on a core basis. Nicely ahead of expectations. Low double digit growth in LC and LCMS and in our cancer diagnostics business drove the upside. We also saw high single digit growth from specialty CDMO. Which we recently rebranded as our advanced therapeutics division. We continue to expect our advanced therapeutics division to deliver mid teens growth in fiscal year 26.

With our production schedule set up to deliver a pickup in growth in the second half. Notably, we recently achieved mechanical completion of our train c build out. Positioning us well to begin revenue generation at the new facility next spring. Our cancer diagnostics business including our clinical pathology products, and companion diagnostic services, grew low double digits this quarter. This growth was led by the performance of our new Omnis family, which continues to gain traction. We also saw strong double digit growth in pathology reagents driven by our expanding instrument installed base. This business is performing extremely well and will get even stronger with the addition of Biocare's clinically focused antibody menu.

ACG grew 2% in the quarter on a core basis. In line with guidance due to Lunar New Year timing and a challenging consumables compare driven by pre tariff stocking in China last year. Ex China, ACG grew at the high end of mid single digits and consumables grew high single digits. On a geographic basis, we saw our strongest results in The Americas. with 11% revenue growth. We saw broad high single digit plus results in all end markets except academic and government. Europe and Asia ex China revenue grew high single digits. With excellent diagnostics momentum in Europe, while pharma and semiconductor investments were strong in Asia ex China. China declined 9%.

A bit more than we had expected. On a first half basis, China was roughly flat, very much in line with our full year guide. Q2 gross margins were 55.0%, On a year over year basis, gross margins increased by 90 basis points from nice leverage on incremental volumes Ignite momentum, and favorable regional mix. Operating margin was 26.4%. An increase of 130 basis points year over year. Well ahead of guidance driven by our healthy gross margin performance and continued realization of Ignite operating system efficiencies. Moving below the line, we had $11 million of other income. While our tax rate of 14.5% was as expected. Finally, we had 283 million diluted shares outstanding in the quarter.

In line with expectations. Putting it all together, Q2 earnings per share were $1.49 and grew 14%. A reflection of our superior execution and operational excellence. Now let me turn to cash flow and the balance sheet. Operating cash flow was $277 million in the quarter, and we invested $76 million in capital expenditures. Q2 cash flow reflects a tax deposit that will largely be offset by a related refund anticipated around the end of the fiscal year. We purchased $65 million in shares and paid $72 million in dividends in Q2. And we ended the quarter with a net leverage ratio of 0.7 turns. Maintaining our strong balance sheet.

Now let me share some additional details on the updated outlook for the rest of the year? year and the guidance for the rest of the year? third quarter. Based on the strong performance, we now expect fiscal year 26 revenue to be in the range of $7.39 billion to $7.49 billion on a reported basis. This range represents growth of 4.5% to 6.0% on a core or organic constant currency basis. An increase of 30 basis points at the midpoint versus the prior guide. Currency is now expected to be a 1.8% tailwind during the year. Turning to our end markets, business segment, and geographic growth assumptions.

We continue to expect high single digit growth in pharma and a low single digit decline in academic and government. Based on strong results in the first half, and our outlook for the rest of the year? remainder of the year, we are raising our expectations for chemicals and advanced materials as well as diagnostics and clinical. From mid single digit to mid to high single digit growth. With our momentum in forensics providing upside, we are raising our guidance for environmental and forensics. From low single digit to low to mid single digit growth.

In food, we are lowering our guide from roughly flat to a low single digit decline due to delays in government funding in China and India. And inflationary headwinds related to the Middle East conflict. We now expect mid single digit growth for all 3 business segments increasing AMG from low single digit to mid single digit. To reflect the strong Q2 performance. Regionally, our only update to our prior full year guidance is in Asia ex China. Where we are increasing our assumptions from mid single digit to mid to high single digit growth.

Moving down the P&L, we are also raising our full year operating margin expansion target to 85 basis points at the midpoint of our revenue guidance. Driven by continued operational momentum. Our expected tax rate is unchanged at 14 and a half percent, and we now expect $31 million in other income. And 283 million diluted shares outstanding for the rest of the year? year. Fiscal year 26 earnings per share are now expected to be between $6.00 and $6.10, an increase of $0.08 at the midpoint, representing earnings growth of 7% to 9%. For your modeling, let me share some additional expectations we have incorporated into our guidance for the rest of the year? year.

The Middle East conflict in the demand for memory chips puts upward pressure on our costs, we are confident that the Ignite operating system will deliver meaningful efficiencies and help absorb those inflationary impacts within our H2 outlook. There is no change to our operating cash flow range of $1.2 billion to $1.7 billion. And we are now expecting to invest approximately $450 million in capital expenditures. down $50 million versus our prior guidance. Now moving to the third quarter. We expect our reported revenue to be in the range of $1.83 billion to $1.85 billion This represents growth of roughly 4.4% to 5.9% on a core or organic constant currency basis.

While currency is expected to be approximately a 0.6% tailwind. Our guide assumes 283 million diluted shares outstanding in the third quarter, EPS guidance for the rest of the year? quarter is $1.48 to $1.50. Representing growth of 8% to 9%. While our second half core growth guidance is roughly similar to our first half performance, it comes against the backdrop of increasingly tougher comps. The sequential quarterly 2 year stack growth implied by our guidance demonstrates our accelerating momentum through the year. As shown in slide 10 of our presentation. Finally, I wanted to be clear that our guide does not include the impact of Biocare nor any benefit from potential tariff refunds.

With that, I will turn the call back over to Padraig for closing comments.

Padraig McDonnell: Thanks, Adam. I could not be prouder of the way our team executed in the second quarter. Once again demonstrating our ability to perform in all market environments. In the near term, our improved full year outlook reflects healthy demand in our key end markets and stronger underlying operational performance across the business. Includes pricing realization, productivity gains, and replacement cycle momentum. Longer term, our broad and diverse portfolio across end markets and geographies provide differentiated resiliency and enables multiple avenues to success. With a market leading services team that cultivates unparalleled customer intimacy.

A deep bench of talent, an impressive cadence of innovation launches, and our Ignite operating system that has come into its own and is delivering compounding results. Agilent will continue to sustainably outperform the competition. Before we close, I want to take a moment to thank our customers for the rest of the year?ir trust and express my gratitude to the Agilent team for delivering fantastic results. And with that, I will turn the call back to Tejas for the rest of the year? Q&A. Tejas?

Tejas Rajeev Savant: Thanks, Padraig. Karina, can you please share the instructions for the rest of the year? Q&A?

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star-9 to raise your hand, and star-6 to unmute. Your first question comes from the line of Vijay Kumar with Evercore. Your line is open. Please go ahead.

Analyst (Vijay Kumar): Hi, guys. Thank you for taking my question. And, Padraig, congrats on fine print share Maybe on my first 1 on, if you look at some of the moving pieces here in CAM was stand out for us. On the instrument side, LCMS, GC, double digits was standout. It looks like overall instruments, high singles implies the cell analysis was still down. So maybe talk about is that A&G, what are you seeing in A and G trends and on the CAM side? And I know with the Middle East situation, there is been some talks about end market concerns. Maybe talk about how CAM progressed and your confidence in that CAM outlook.

Padraig McDonnell: Great. Thanks, Vijay. And of all, we are delighted with the results, a really strong result from the team where we are taking share across the board. And Ignite really running on all cylinders. But CAM was 8% growth in Q2. That beat our mid single digit guide, plus mid single digit guide. We are mid single digits in chemicals. High middle single digits and low double digits in advanced materials. And we had actually low teens CAM growth ex China. So after a strong high single digit growth in H1, we are going to see how it plays out with The Middle East going forward on it. And it is really driven by a number of things.

I think increased CapEx spending, likely returns late in the calendar year, we are seeing that continue investment in the semiconductor space continues to be a real sweet spot for us. And what we are seeing is also is, you know, substantial leadership in our key platforms. Now, when you look ahead, when you look and see what are multiple factors, I think the chemical sector driven by demand from downstream material industries like semiconductors, and batteries continued investment in semiconductor and investment in supply chains. So overall, really strong across the board. And, you know, we do not read too much into The Middle East in terms of what is happening. We are going to see how that goes.

But we are seeing good momentum in our funnels continuing on the CAM side. And I think on the academia and government, I think you had a question in there. You know, we expected a decline. We had a decline of minus 5% in Q2. Americas was flat. Americas instruments comp start to ease actually, and we see return to stability on that side. And, you know, you see that the OMB requirement to fully redistribute appropriate funds is starting to happen. So, overall, we see it continuing as a kind of a steady state. And we see ongoing kind of, I would say, ongoing muted in A&G, but overall, I think an extremely strong result.

Analyst (Vijay Kumar): that is helpful. Maybe, Adam, 1 for you on the margins. Pretty impressive margin print here. It looks like, volumes were slightly above the high end of your guidance. But the leverage was pretty impressive. And how much was pricing? Maybe talk about what drove margins and how you are thinking about progression here. It looks like Q4 we are looking at pretty big quarter for margins, maybe visibility into Q4 ramp.

Adam S. Elinoff: Yeah. So thanks, Vijay. A couple points. So the margin beat this quarter was driven by a couple things. 1, Ignite, and I say that in the broadest sense of the word. So that includes pricing. So you heard over 200, bps of pricing in there. As well as execution excellence from the team in structural improvements we are seeing. You know, we talked about in the script. Specifically in operations as well as productivity from our procurement team. So all of the Ignite savings, you are really starting to see run through the P&L now. Then there is volume leverage.

The other piece I would point out is the geographic mix as we had a larger skew in Q2 toward The Americas, which helps our margin. And then if we look ahead, what you see is 2 things. 1, you see a flat sequential Q2 to Q3, and that is really driven by a couple of pieces. 1, you see the favorability that we have in Ignite. And once again, that is the broadest sense of the Ignite operating system there. And then that is partially offset by some inflationary pressure that we are seeing and geographic mix kind of returning back and a little bit more of a normalized mix.

But then what you see is the expansion happening again from Q3 to Q4, up about 120 bps, which is very normal from what we have seen in previous quarters. When I kind of look at it and take a step back, our H1 to H2 ramp is about 53 from an operating profit perspective. And this is very much normalized to what we would normally see H1 to H2. So the ramp here is fully in line with historical norms. So feel very confident about it and really excited about the second half of the year.

Analyst (Vijay Kumar): Understood. Thank you.

Operator: Your next question comes from the line of Patrick Donnelly with Citi. Your line is open. Please go ahead.

Analyst (Patrick Donnelly): Hey, guys. Thank you for taking the questions. Maybe 1 on the on the specialty CDMO. I guess it is advanced therapeutics now. It sounds like high single digit growth in the quarter. You know, pretty healthy there. Obviously, talking still about the mid teens. I think you talked about the production schedule has this uptick in H2. Can you just talk about the visibility? Is that all kind of contracted and covered at this point? It sounds like train c next spring, so maybe not this year.

Just talk about the visibility on the second half uptick of that business, what you saw in the quarter, you know, how much go forward revenue is covered by some of the contracts and that you have in place here.

Padraig McDonnell: Yeah. Thanks, Patrick, and thanks for the rest of the year? question. So I will start off, and I will hand it over to Simon for more details. So just to kind of ground people, we are a specialty CDMO business focused on siRNA peptides GLP ones, of course, high potency APIs. And the Q2 growth at the high end of high single digits was within expectations with back cadence resulting in a normal quarter to quarter variance. We see that over and over again. We continue to expect to see mid teens growth guide FY 26 based on our production schedules and demand dynamics. But Simon, some more color on the trends, etcetera?

Simon May: Yeah. Thanks, Padraig. This is Simon. Just to add a little bit more color there. The short answer to the question is we have got really strong visibility in the second half of the year. And the phasing of production schedules point towards very strong year over year growth in the third quarter. And in the fourth quarter, We have got a tough compare in the fourth quarter, but it all adds up still to mid teens growth for the rest of the year? year is what we are projecting. And then as you heard already in the script, we had a major milestone here in the second quarter with the mechanical completion of train c.

Very pleasing to see that, and we remain on schedule there for go live in the spring of 27. And we are a little further out there with demand into 2027, some very encouraging signs already with train c in particular. We have got a strong line of sight to demand there for the rest of the year? bulk of FY 2027. But as is always the case, the further out you get in the timing, you know, the production schedules and the bookings, they proceed accordingly.

Analyst (Patrick Donnelly): Okay. that is really helpful. And then and, Padraig, maybe 1 on the instrument strengths, just following up there. You know, nice to see low double digit growth in LC/LCMS. Can you just talk about what markets you are seeing that strength in? You know, you guys have the replacement cycle going. How much of it is replacement cycle, share gains, What are you hearing from the field on the instruments, and how durable is this kind of low double digits for the rest of the year? LCMS? Program?

Padraig McDonnell: Thanks. Yeah. Yeah. So look, I think continue to see strong momentum on the LCMS and GC, low double digits for both businesses. And we expect the LC replacement cycle to be a 200-300 bps tailwind to the LC growth. And, you know, we have seen the normal trajectory of the replacement cycle, but continued momentum and funnels are up really strong. I will say it was actually the best market share data I have seen in what we are seeing. So not only are we replacing, but we are also taking share in competitive accounts, which, again, continues to momentum. If you kind of break it down, I think it is really driven by 3 factors.

I think, underinvestment, fleets are aged, you know, you see US and Europe CapEx conditions are favorable. And, of course, customer focused innovations are compelling reasons to replace. So, we expect that to continue. And, you know, we are seeing it across all markets, and I really wanna call out our GC replacement cycle as well. it is sometimes under talked about but on our GC, we are low double digit growth. it is a longer lived nature of GC. You see a typical lifespan of 10 years. And we see, you know, relatively LC the replacement cycle will drive more moderate annual uplift over a longer period of time, but very, very compounding.

And we expect that to be a 100 bps of a tailwind. So, you know, instruments are really good, funnels are really strong, CapEx is are being released, none of this will be possible without a commercial team that can really execute on these innovations. Great.

Analyst (Patrick Donnelly): Really appreciate it.

Operator: Your next question comes from the line of Tycho Peterson with Jefferies. Your line is open. Please go ahead.

Analyst (Tycho Peterson): Hey. Thanks. Padraig, I wanna probe a more on the semi strength. You know, this is something you have not talked a ton about, but maybe just quantify the size of the semi business today. I think you are more levered to logic than memory, if that is right. But just talk a little bit about sustainability of double digit growth in spectroscopy. How we should think about, you know, new fab construction and pricing power. I think they are to be a fair amount of pricing power in this market right now.

Padraig McDonnell: Yeah. I mean, there is really strong pricing power, and of course, we have been used system being released at a SMS that is gonna start its own replacement cycle in this area, which driven by the technology with new capabilities You know, our advanced materials market, you split it out on the chemical and advanced materials, semiconductor is about 30% of that market. As we look at it, and we are seeing continued growth on it. And we are seeing it in the fabs but also in the high purity chemical companies around fabs. That need these systems as well-to-do it. So, we are seeing it across the board.

We have actually saw that over a number of years, Tycho, as you see CapEx being the deployed, our systems are you know, being placed inside a you know, and then, of course, are qualified with the fabs going forward. So, that as that cycle continues to move, you are going to see that business continue to grow on it. So, we are very optimistic.

Analyst (Tycho Peterson): And then on chemical, you did kinda buck the trend here. I know Vijay kind of asked a question earlier, but are you kind of not seeing what others are on chemical side because of the GC replacement cycle? Is that kind of the right way to think about it?

Padraig McDonnell: Yeah. I think it is a mixture of both. You know, I think we have seen strong CapEx demand, you know, the GC replacement cycle certainly a tailwind we are seeing. We are we are very, very competitive with the new innovations that we bring across. But we have not seen a slowdown in that area. You know, people are still have aging fleets to need them replaced and so on. And, of course, it is kind of a bifurcation. So chemical sector is driven downstream on the materials, on semiconductors, batteries, and advanced polymers. And, of course, we continue to see that see that continue. And the replacement momentum after several years of underinvestment in CapEx.

So we do not see any of that stopping anytime soon.

Analyst (Tycho Peterson): Okay. Thank you. Thanks, Tycho.

Operator: Your next question comes from the line of Puneet Souda with Leerink. Your line is open. Please go ahead.

Analyst (Puneet Souda): Yeah. Hi, Padraig. Thanks for taking my questions. First 1, you know, just given the if I could continue to follow-up on the semi side and the CAM side. Can you elaborate how CAM improved throughout the quarter? Your confidence here, is this more semi driven or instrumentation versus the, you know, overall improvement in chemical. Obviously, there was a I mean, start of the conflict, but then the conflict has eased a bit. Maybe just talk about how the how the trend line has been and what gives you continued more confidence in that core oil and gas business as well.

Padraig McDonnell: Yeah. Look. Our momentum has been really, really steady and increasing. You know, and we are very, very pleased with that high single digits in Q2. And if you think about it, our differentiation in terms of the technologies are driving share gains in advanced materials where we saw low double digit growth. And, you know, of course, inflationary pressures from The Middle East may affect capital spend, but we expect a strong recovery to be even accelerated before that, but we are not seeing that on our numbers. And just to kind of ground people, you know, we are number 1 in the CAM market by far. We have substantial leadership positions.

In GC and GCMS and spectroscopy, and we are pleased with the really strong performance. Now, CAM customers tend to be more cautious dynamic macro environment, so we are watching closely on the inflationary pressures that may have on our customers. But I would say, overall, if put it together, there is a degree of prudence embedded in our H2 outlook. We grow at accelerating from high single digits to mid single digits in H2, but still very robust.

Analyst (Puneet Souda): Got it. And then a broader question for you on the Agilent's, you know, differentiation you are clearly outperforming versus rest of the broader tools market, the diverse market? Your diversification beyond health care seems to be helping you. But could you take a minute and provide a view into the pharma and the biotech business, how you are serving those customers from discovery versus more preclinical Are you positioned more into the later stages? Of drug development that is actually helping as capital funding is returning into the biotech And maybe if you could, along those lines, talk a little bit about the you know, biotech follow on and capital raises. How is that flowing into your business?

Thank you.

Padraig McDonnell: Yeah. So I take the first 1 in general. I mean, what is different? I think you see these numbers and you see the 140 bps year over year operating margin expansion, 14% EPS growth. You are really seeing driven by a number of factors. Replacement cycle continues to grow, but winning teams and being able to take market share in that environment Innovations are really resonating. Infinity Tree Pro IQ LCMS the upcoming launches at AMS will only drive that forward. And the share gains in this environment is really important. So that drives a lot of capacity as well. And I would say, you know, services remains a key differentiator for us.

You know, our scale around service is super important. But when you look at our kind of operating system at Ignite, I do want to take a minute on this 1, it is a compounding effect that you see in the numbers this quarter, all 3 metrics above and this is not a coincidence. And what happens when transformation is done right when capabilities are not just piloted or incubated, but deeply embedded in the system, that is what you are going to see compound over time. On the pharma side, you know, I think what you are what you are seeing is really strong replacement cycle.

You are seeing of course, we have a tailwind with GLP-1s in those areas. You know, and of course, the innovation is resonating. And you look at the drivers in pharma, you know, you see redistribution of supply chains, expansion of biologics, and of course, you see many other really helping. But what I would say is that we are very much downstream in QAQC. We are development as well. So we are right in that sweet spot for reshoring. Replacement cycle, and any capacity or supply chain resilience around. So, I feel really good about that.

Of course, mid sized biotech is a little bit challenged, as you see, but you see the number of deals that are happening from an investment point of view, and we expect that to improve as well. So overall, really, really positive.

Analyst (Puneet Souda): Thank you.

Operator: Your next question comes from the line of Daniel Brennan with TD Cowen. Your line is open. Please go ahead.

Analyst (Dan Brennan): Thank you. Congrats on the quarter. Maybe just on diagnostics. I mean, super strong quarter. You know, you highlighted the Omnis and some other things. I know you bumped the guide a bit, but it does imply a decel versus what you just printed. Mike, was there anything unusual in this quarter on the Omnis that is not going to repeat? Or kind of walk us through a little bit because it was so exceptional.

Padraig McDonnell: Yeah, it was exceptional, Dan. Thanks for the rest of the year? question. You know, we grew 11% in the quarter, well ahead of mid to high digits guidance on the side and very durable in that way. But I am going to bring in Simon to give more color on what he is seeing on the Omnis, etcetera.

Simon May: Thanks, Padraig. Simon again here. I think in diagnostics, we have got 2 or 3 dynamics going on. First and foremost, we have identified this as 1 of our enterprise growth opportunities, and we have been focusing and investing there accordingly over the past 12, 18 months now. The Omnis family continues to ramp very well. We are very pleased with the trajectory that we are seeing there across all regions. And we are also now starting to see similar growth in our assay attachment. It was a very pleasing quarter from that perspective because we saw double digit growth in both instruments and assays. We also continue to do very well in companion. We have got great capabilities there.

And we are seeing a lot of demand in modalities like antibody drug conjugates. So across the spectrum of our pathology and companion diagnostics business, I think we have got strong execution. And as mentioned, we have got durable market dynamics and a bit of a tailwind right now.

Analyst (Dan Brennan): Perfect. And maybe as a follow-up, Padraig, you highlighted that slide in the deck. Maybe it is slide 10 on the comps. So you are bumping the guide, but you are saying, hey, Comps get harder, but we are up against that, and we feel good. Can you just elaborate a little bit on within the guide? Because people stare at that. Mike, where do you think ideally, you have left a little cushion because the comps are getting more difficult and, you know, Wall Street's intoxicated on beats. So just walk us through a little bit more on the guide and how we should think about the back half of the Thank you. Yeah.

Padraig McDonnell: Gonna start off and hand it over to Adam. You know, when you see the top line strengths, the confidence in Ignite drives incremental outlook for revenue growth, margin expansion, EPS. So 30 bps increase in the core growth side, 10 bps increase on the year over year margin expansion. EPS up $0.08. So I think the strong H2 results are really creating momentum out of it. But, Adam, do you want to give some more detail about what we are seeing and what we are we are taking into account?

Adam S. Elinoff: Yeah. So thanks for the rest of the year? question. I would look at it a couple ways. So first of all, 1, as you said, the compares get more challenging in h 2. But you do have so you do have to look at that stacked growth view. But then when I think about it, you know, the 4 kind of drivers that are going to give me confidence going into it is, 1, the execution excellence. 2, you see we have market momentum. 3, the structural improvements that we have embedded through IGNITE, they are in place, they are going to continue to compound. And then 4 is innovation, and you see that coming out shortly.

And so those 4 are going to help kind of drive us, through the second half of the year and what gives me confidence. Then when I think about the guide, I will just give you kind of how I think about kind of potential upsides and downsides for the rest of the year? full year of the guide. Recall the last time we talked about it, there were kind of 3 the first being small and mid cap. The second being academia and government, and the third being a China stimulus.

Well, China stimulus is now looking like the orders will happen toward the end of the year, but the revenue will come in the first part of next year. So we will we are taking that as an upside or a downside off the table. And then where we would be left with is a small and mid cap on what, like, had talked about. We are seeing all the green shoots there, and it just has to convert into revenue. Second is academia and government continuing to stabilize. We saw it in The US. We see the right signs there. So there is we are, you know, cautiously optimistic as well there.

And then you see the Middle East start to normalize. that is a potential source for upside as well as tariff refunds. So they are not embedded in our guide right now, but we get tariff refund, that can also help. So overall, I just wanna say in your confident going into the second half of the year, and you know, the stat comps kind of tell the story.

Analyst (Dan Brennan): Terrific. Thank you.

Operator: Your next question comes from the line of Mike Michael Ryskin with Bank of America. Mr. Ryskin, your line is open. Please go ahead.

Analyst (Michael Ryskin): Hey. Hey. Hopefully, you guys can hear me. Thanks for thanks for the rest of the year? question. I want to follow-up on China. I think you called out a 9% decline I want to follow-up on China. I think you called out a 9 decline in the quarter. Maybe first half is in line, but anything specific to call out, you talked about slower funding. Delays in funding in China. Anything more specific than that? Is it really that focused? Yeah.

Padraig McDonnell: Thanks, Michael. So, you know, we first of all, I think we see the China market stable doing around 300 million per quarter. You know, we saw larger than expected softness due to the Lunar New Year. But h 1 was flattish. We remain confident in our flattish guide. You know, I think when you look at it, I think we are under indexed to DX And Pharma And Over Indexed To Applied As A Company In China. But I think biotech is still as overall is still a small chair of the overall China pharma market. was nice, growing in high teens, which was a really bright spot for us, shows the innovation that is happening in pharma etcetera.

You know, when you look at China overall, we are making an investment in innovation. We are very highly committed to China. The speed of innovation there is really important. And, of course, the stimulus will come in at the start of next year. And I think, overall, I think we continue to be optimistic We expect mid to mid single to high single digit growth for the rest of the year? long term. And the reasons why we feel that actually is not just because what we are seeing currently, but we have the largest installed base, the pace of innovation everybody can read the details on that.

We are fully aligned with the China 5 year plan around AI, healthcare, green and sustainable developments, and, of course, new regulations around PFAS. So overall, I would say pretty muted in the quarter, but I would say very, very stable, and we are continuing to have a great team and really work really working with our customers there.

Analyst (Michael Ryskin): Okay. Okay. And then maybe for my follow-up, I think on the last question, you kind of talking about US academic. Stabilizing, if I understood correctly, as 1 of the areas of upside for the rest of the year? If you could talk about A and G a little bit more globally, including China, just sort of what you are seeing there and what the assumptions for the rest of the year? rest of the year are? Thanks.

Padraig McDonnell: Yes. I mean China A and G is very soft in the quarter on tightened and delayed government spend leading to lower academia stimulus. So I think that is what we are seeing. As I said, Americas was roughly flat. I think everywhere else is reasonably muted. And in Europe, actually, recovering on key markets. We are seeing reasonable business at Germany, UK, Spain. And then I think the Ukraine war impact is now budgeted in. And, I think, overall, I think, just to put it into context, US is about 3% to 4% of sales, and there is a lot of uncertainty around multi year grants and higher concentration of funding.

But, of course, you can see that we are working through that at the moment.

Analyst (Michael Ryskin): Yeah. Thanks.

Operator: Reminder, if you would like to ask a please raise your hand now. If you have dialed in to today's call, please press star by the number 9 on your telephone keypad. At this time, Your next question comes from the line of Daniel Leonard with RBC. Your line is open. Please go ahead.

Analyst (Dan Leonard): Thank you very much. I will keep it to 1. I have a question on spectroscopy. What is a replacement cycle look like there, especially on the back of a double digit growth rate? So you have a new product launching. You expect that it is going to drive a replacement cycle. Is that accelerate the growth rate further? And what would be the just kind of the framing around that? Thank you.

Padraig McDonnell: Yeah. I am gonna bring in Mike Zhang here to talk about that. Spectroscopy business.

Analyst: Yeah. Padraig, again, thank you, Daniel, for the rest of the year? great question. You are tremendous momentum. We are seeing the momentum from multiple fronts. First of all, obviously, the momentum in semiconductors. And also data center. A lot of capacity built up. it is a global based, so very, very exciting. there is also, I think, about a very diverse, you know, upstream,, downstream applications. So a lot of, you know, but there is also a lot of pent up demand because we know in the last several years, you know,, the replacement cycle is kind of muted. But we see now because of the new demand, are we are seeing acceleration.

I think this is just the beginning. I think we have a lot of momentum moving ahead. I think a lot of,, for us to expect, and then we and then we are also really want to highlight very trusted partner by the customer. We are the absolute leader in the market. So and also now with the new innovation of product, coming out. So multiple fronts, we had exciting momentum, and I think this will continue on. Got it.

Analyst (Mike Zhang): Thanks, Mike.

Operator: Your next question comes from the line of Luke Surgatt. From Barclays. Mr. Surgott, your line is open. Please go ahead.

Analyst: Great. Thanks. This is pretty complicated there with that star-6. Just follow-up here on the margin commentary. Can you guys had a really strong quarter like Doc was talking about on margin, getting the volume leverage. But then you are talking about some increased investment there or, like, pull forward on the ICP-MS launch? Mike, can you just talk about where you know, how much is you are being pulled forward on these investments and how that kind of shakes out? Just trying to think about from exit rate margin opportunity and then as you kind of roll forward into a more normalized business environment through next year?

Adam S. Elinoff: Talking about, it is really it was a pull forward in the innovation. And how we focused our investment. So it was not necessarily a pull forward in investment. The investments were always planned as we talked about at the beginning of the year we were gonna take some of our margin improvement, invest in innovation. So it really was not a timing issue around the investment itself. And then if you think about for the rest of the year? full year, you know, we are guiding a full year increase of about 85 bps at the midpoint.

And once again, that incorporates several things. it is the structural improvements from Ignite, the volume leverage that we expect to get offset by inflation, and that is inflation kind of in the broad sense as well as some of the logistical Middle East costs in the AI and chip costs that we are seeing, as well as then those growth investments. And so to your to your question, it was always incorporated into our initial guide, and we are raising our margin guide for the rest of the year? full year up 10 bps at the midpoint.

Analyst: Great. Thanks.

Operator: Your next question comes from the line of Catherine Schulte with Baird. Your line is open. Please go ahead.

Analyst (Catherine Schulte): Hey, guys. Thanks for the rest of the year? questions. On food, just given that was the 1 part of the guide that came down. You talked about delays in China and India. Can you just unpack a bit what you are seeing there and how you expect that to play out going forward?

Padraig McDonnell: Yeah, no, so I think thanks for the rest of the year? question. I want to follow-up on China. I think you called out a 9% decline question. The food market business declined minus 3% in Q2, and that was against the mid single digit guide. Really around delayed government spending in Asia. Was the primary driver of the shortfall versus expectations. America and Europe grew together in high single digits during the quarter. And, you know, for FY 2026, the reduced guidance from flat to low single-digit, negative low single digits. We are set up, I think, in Q in FY 2027 to see the China stimulus.

But the China stimulus from last year really set up a tough comp for us in FY 2026 and slower government funding. And, of course, pressure from the Middle East conflict on food shipments and testing in Asia. An incremental challenge. But I would say overall, you know, what you are seeing driving this market for us is that you know, we are ever changing food safety regulations. They are not going to change You are going to see customer demand continue for healthier, sustainable alternative foods. And of course, contract labs seeing increased sample volumes.

So I think that is where we are right in our sweet spot with verified workflows You know, emerging PFAS in food is gonna continue. it is actually a really strong growth area over time. And, of course, protection of core food safety and quality testing. So overall, a challenging quarter, but I think the long term looks very strong.

Analyst (Catherine Schulte): Alright. Thank you.

Operator: Your next question comes from the line of Casey Woodring with JPMorgan. Your line is open. Please go ahead.

Analyst (Casey Woodring): Great. Thank you for taking my questions, and congrats on the quarter. Yes, I will just ask my 2 upfront. First is just would be curious to hear how much that forensic TSA 1-timer you called out was in the quarter. Was that baked into the guide? And then second on chemical within CAM, not to beat a dead horse, but would also be curious to hear if the strong CapEx in chemical is limited to The U. S. Or if that is more broad based than Europe and Asia as well, and maybe just unpack what you are seeing ex US and that business and what your chemical exposure is ex US. Thank you.

Padraig McDonnell: Yeah. So first of all, I am gonna bring Mike in to talk about TSA business because it is something that is we are really, really about, and I will come back and I will talk about CAM. Yeah. Definitely. You know, TSA, this solution is highly differentiated. And it provides unprecedented precision but also the efficient throughput. We have been successfully working with TSA, and we have successfully deployed the first contractor ahead of the FIFA World Cup. 2026. The successful deployment of the first contract, and a continuous collaboration really positions us in a very strong position for future and addendums. So, overall, I think this is exciting new opportunity for us. Yeah.

And we, you know, we called out a $9 million TSA win last quarter with forensics. We recognized 5 million of that this quarter. And we are we are really well positioned to continue to secure larger aviation security tenders as we go forward. And, you know, it is important to also kind of continue that is going to have continued tech refresh in it as well. When you go back to CAM as well, it is not 1 region. We are seeing it across all regions. So, I think we feel really strong about our funnels as well geographically too.

Analyst (Casey Woodring): Alright. Great. Thank you.

Operator: This is all the time we have for questions today. I will turn the call back over to mister Tejas for closing remarks.

Tejas Rajeev Savant: Thank you, everyone, for joining us. We look forward to speaking with many of you in the weeks ahead.

Operator: This concludes today's call. You for attending. You may now disconnect.