Agilent Technologies NYSE: A executives outlined continued growth momentum, driven by improving end markets, market-share gains, instrument replacement cycles and operational changes under the company’s Ignite transformation program, during a J.P. Morgan conference discussion.
Chief Executive Officer Padraig McDonnell said Ignite has evolved from a transformation initiative into an operating system for resource allocation, operations and innovation. He said Agilent’s growth has improved from roughly flat two years ago to nearly 10% to 11%, while operating margin expanded by more than 100 basis points despite tariff headwinds. Earnings per share, which declined 3% two years ago, grew 6% in 2025 and is now growing 10%, he said.
China, replacement cycles support growth
McDonnell said China delivered broad-based strength in the fiscal third quarter, including double-digit growth in pharma and food and high-teens growth in advanced materials. The company attributed the performance both to improving conditions and to its long-standing direct presence in China, including local manufacturing, technical teams and a sizable installed base.
Although Agilent is not calling an inflection point in China, McDonnell said it expects the country to be a mid- to high-single-digit long-term growth market. He pointed to investment in pharmaceuticals, chemicals, advanced materials, semiconductors, batteries, food and environmental testing. The company recently opened an innovation center in China focused on physical automation, he said.
Management also highlighted ongoing replacement cycles in liquid chromatography, or LC, and gas chromatography, or GC. McDonnell said LC posted double-digit growth during the latest quarter and that Agilent is less than halfway through its LC replacement cycle, which the company estimates could add 200 to 300 basis points to the overall business. China represents one area where fleets are older and replacements could accelerate, he added.
Agilent estimates it is about one-quarter through its GC replacement cycle, which McDonnell said could contribute roughly 100 basis points of growth to the overall business. The company sees opportunities across chemical and energy customers, food and environmental testing, semiconductor fabs and suppliers of high-purity chemicals.
Automation and scientific intelligence
McDonnell said Agilent is concentrating investment on autonomous laboratories and scientific intelligence, with artificial intelligence serving as a key enabler. He described analytical tools as the “eyes” of a laboratory, physical automation as the “hands,” and an agentic layer as the “brain” directing experiments.
According to McDonnell, AI could expand demand for testing and drug-release work as pharmaceutical customers seek to shorten clinical-trial timelines and develop more molecules. Agilent has established an autonomous lab group under Chief Technology Officer August Specht that works alongside the company’s AI organization. Management said it expects future opportunities in automation-ready instruments, physical automation, software and partnerships, as well as selective acquisitions.
Advanced therapeutics expansion remains on track
Agilent’s advanced therapeutics specialty CDMO business grew 30% in the fiscal third quarter, in line with company expectations. Management expects growth to be flat in the fourth quarter due to regulatory filing timing and a comparison with growth above 40% in the prior year. Over the long term, the company expects mid-teens growth for the business.
Chief Financial Officer Adam Elinoff said Train C is expected to begin operations in spring 2027 and is 75% booked for next year. Train C is expected to take six to eight quarters to reach full capacity, while Train D is expected to come online a couple of quarters later and require another six to eight quarters to ramp. At full capacity, the two trains could roughly double revenue from the site to about $300 million, he said.
Elinoff said the CDMO customer base has become more diversified. In 2019, three customers represented 80% of demand; now, three customers account for less than 50%. In 2025, the business was 60% commercial and 40% clinical, with commercial activity increasing. Management said recent clinical-trial news had not affected its 2027 forecast and reiterated confidence in the siRNA market.
Train C’s ramp will be dilutive to margins in 2027 because of hiring and depreciation ahead of full utilization, Elinoff said. However, he said Agilent remains committed to delivering 50 to 100 basis points or more of long-term annual operating-margin expansion through Ignite-related efficiencies.
Reshoring orders and capital allocation
McDonnell said Agilent has begun booking its first reshoring and onshoring orders, with five of the top 10 pharmaceutical companies placing orders. The company continues to see a $300 million opportunity from reshoring by 2030, representing about one-third of an estimated $1 billion market opportunity. Most orders so far have come from greenfield sites, with procurement generally occurring six to 18 months before a site launch, he said.
Management expects reshoring benefits to begin appearing in the first fiscal quarter and beyond. The opportunity spans LC, GC, spectroscopy, services and consumables, according to McDonnell.
On capital allocation, executives said they intend to prioritize internal innovation, strategic capacity investments and disciplined acquisitions. McDonnell cited Biocare as an example of an acquisition that expands recurring revenue and strengthens Agilent’s pathology franchise. He said the company would not pursue a transformative deal, instead focusing on targeted additions that fill technology gaps, add recurring revenue or software capabilities, and support the company’s analytical and autonomous-laboratory strategy.
About Agilent Technologies (NYSE:A)
Agilent Technologies, Inc is a global provider of analytical instruments, laboratory software, consumables and services used by organizations in the life sciences, diagnostics, pharmaceutical, chemical, environmental and food industries. Its solutions help customers analyze the composition and quality of substances, develop and manufacture products, and conduct research and testing.
The company's offerings include liquid and gas chromatography systems, mass spectrometry instruments, spectroscopy and atomic analysis equipment, automated electrophoresis systems, laboratory informatics software, columns and other consumables.
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