Robert W. McMahon
Senior Vice President, Chief Financial Officer at Agilent Technologies
Thanks, Mike, and good afternoon everyone and my remarks today, I'll provide some additional details on revenue, take you through the income statement and some other key financial metrics. I'll then finish up with our improved outlook for the full year and our guidance for the second quarter. Unless otherwise noted, my remarks will focus on non-GAAP results, as Mike described we posted very strong results in Q1 and exceeded expectations, revenue was $1.67 billion, up a reported 8.1%. Core growth was even better at 8.9% as we overcame a greater than expected negative exchange rate impact of 1.3 points while M&A added half a point to growth.
Q1 core growth was 170 basis points higher than the top end of our guidance. In addition, after adjusting for the one point headwind due to COVID-19 revenues. Our core growth outside of COVID was roughly 10% and as Mike said, order growth was even better. Again a very strong start to the year. Now moving to our end market performance, our results were driven by a continuation of strong growth in Pharma led by Biopharma while momentum in Chemical and Energy and our strong results and Diagnostics and clinical also led the way for us in Q1. Our largest market, Pharma grew 17% during that quarter. On top of 20% growth last year.
The Small Molecule sub segment delivered high single-digit growth while Large Molecule continue to strong performance growing 32%. We are seeing our ongoing investments in Biopharma, paying off it's demand was strong throughout the quarter. We continue to believe in the long-term growth potential of the Pharma market and that our business will drive above market growth. Chemical and Energy continue to show strength growing 15% during the quarter. Growth in Chemicals and Advanced Materials led the way, and we expect continued growth in this business.
Diagnostics in Clinical grew 11% on top of 9% growth last year with all three business groups again, expanding revenues nicely during the quarter. Our expansion of LC/MS equipment into the clinical space continues to do well and our growth in China was particularly strong, increasing more than 30% as we continue to penetrate this market. The academia and government market was flat in Q1. The business remained resilient despite Omicron impacts in the U.S. as some universities delayed in person learning in the period following the holiday break in December and reduced lab activity in January. We have seen lab activity improve in the February and believe the funding environment remains positive. The Food segment declined low single digits against a very strong 22% growth comparison from last year.
The Americas were a bright spot for us growing in the mid teens, while Europe was flat and China was down due to a difficult comparisons and Lunar New Year timing. Closing out the performance of the markets, Environmental and Forensics, our smallest market was down 11%. For Agilent overall on a geographic basis, all regions again grew in Q1, led by Americas at 13% and Europe at 6%. China grew 3% on top of 25% in Q1 last year. In addition to the effect of Lunar New Year timing, which should benefit us in Q2.
Now turning to the rest of the P&L. First quarter gross margin was 56.1%, up 30 basis points from a year ago. Our team has done a good job increasing productivity and pricing has helped offset higher input and logistics costs. Operating margins of 26.3% increased to 80 basis points even as we have increased our R&D investments. Our investments in digital technology for our internal operations also continue to pay off as we leverage our infrastructure across the company using our One Agilent approach.
Our tax rate of 14.25% came in as expected, and we had 303 million diluted shares outstanding slightly lower than projected. Putting it all together, we delivered EPS of $1.21, up 14% versus last year after growing 31% in Q1 of fiscal 2021. We continue to produce strong operational cash flow generating $255 million in the quarter beating our forecast. We also invested $75 million in capital expenditures during Q1. And during the quarter, we took advantage of market volatility to repurchase $447 million worth of shares, and we also paid out $63 million in dividends returning a combined total of $510 million to shareholders. Our balance sheet remains very healthy with a net leverage ratio of 0.9 times, and given current market conditions, we expect to continue to be aggressive in deploying capital.
Now let's move on to our improved full year guidance and our outlook for the second quarter. As Mike indicated, we are raising our full year core revenue growth to an expected range of 7% to 8%, up from our initial guide in November of 5.5% to 7%. Excluding the COVID-related half point headwind this year, our new full year core revenue growth results in 7.5% to 8.5%. This new guidance takes into account our strong Q1 results and an improved outlook for the rest of the year on a core basis. While we've increased our core growth expectations, the dollar has strengthened considerably, doubling the estimated exchange rate headwinds from our initial guide to $110 million for the year while M&A impact remains relatively unchanged.
Putting it all together, we're expecting full year revenues to be between $6.67 billion and $6.73 billion. In addition, we've increased our EPS guidance for the full year to $4.80 to $4.90 per share up from the previous range of $4.76 to $4.86, and representing 11% to 13% growth versus fiscal year 2021. For Q2, we're expecting revenue to range from $1.595 billion to $1.625 billion. This represents core growth between 7% and 9% after adjusting for an expected 0.5 point impact related to COVID year-on-year. And we expect reported growth in the range of 4.6% to 6.6%.
Exchange rates are expected to have a negative impact of about 2.3% in the quarter while M&A is expected to contribute 0.3 points to growth. In closing out our Q2 guidance, non-GAAP EPS is expected to be in the range of $1.10 to $1.12 up 13% to 15% versus the prior year. This is based on a 14.25% tax rate and 303 million diluted shares outstanding. Again, the Agilent team performed extremely well in Q1, and with the solid growth we're seeing in orders and the team's willingness and ability to take on every challenge that comes their way, I'm confident that Q2 and our full year results will also be strong.
With that, Parmeet, back to you for the Q&A.