Agilent Technologies, Inc. (NYSE:A) Q4 2022 Earnings Call Transcript

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Mike McMullen: Yes. So thanks for that, Derik. And as you know, we’ve got this Build and Buy growth strategy and one aspect of it is to look for opportunities for us to add great new businesses and team to Agilent through the use of our balance sheet. And as you may recall, some of our calls in the early part of ’22, wow, these — and finished out when these valuations were really out of site. And we saw that both in the public, but also in the private space. And things are starting to actually moderate down. So nothing at all to announce, but I’d say that the activities are — we are very active here, and we’re getting to places where you can see deals happening that would work for shareholders.

Operator: We’ll go next now to Jack Meehan of Nephron.

Jack Meehan : I wanted to keep going on the instrument side. I was wondering if you could comment on cancellation trends. So just in context of the broader macro uncertainty, is that showing up anywhere in your instrument backlog?

Mike McMullen: Yes, Jack, thanks for that question because one of the reasons why we have the confidence we have with the outlook we’ve guided to — and when Bob talks about elevated backlogs, it’s a healthy backlog. In that we have no significant change. There’s no significant order cancellations, remain very low. So the orders we have in backlog will ship and we feel really good about the — if you will, the quality of our backlog.

Robert McMahon : Yes, Jack, just to build on that, the other piece — the first piece of that would be our orders being pushed out, and we’re not even seeing that either. So we’re not seeing any push out of orders as well as any cancellations.

Jack Meehan : Awesome. Okay. And then kind of the other pressure area we’ve been monitoring is more in the bioprocessing side, just stocking trends at customers. I know you compete sort of adjacent to some of these markets on large molecule. Are you seeing any destocking activity in any of the markets that you serve?

Mike McMullen: No, no. Thanks for that question, Jack, because we’ve been reading some of the print as well, and we’re saying, well, that’s really not what we all were seeing with our business. So you saw — and Jacob, we posted what double-digit 15% growth in CSD. We saw low teens growth in the genomics area, which would be the area you might see those things. And so it’s not a concern for our ongoing business.

Operator: We’ll go next now to Patrick Donnelly of Citi.

Patrick Donnelly : Maybe following up another one on the instrument side. I know you aren’t going to give a hard number on the backlog. You did mention it was still elevated, Mike, and obviously gives us some good visibility into next year. I mean, any way you can frame kind of what it looks like today going into kind of a year compared to historicals? And then just on the order growth, what did that look like in the quarter? Obviously, the past few quarters, you called out outgrew revenue nicely. I’m just trying to get a feel for that, maybe if you have it on a geographic basis as well, that would be helpful?

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