Waters Corporation (NYSE:WAT) Q4 2022 Earnings Call Transcript

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Amol Chaubal: Yes. I mean not much COVID in the numbers, right? So it’s pretty clean in that sense. So, I would say a bit prudence there. And then here on the second piece, I mean, light scattering is further along in terms of upstream adoption in large molecule setting. I mean, as Geof mentioned, customers are eager to take it downstream. And now with this, and with our Empower platform, we will be able to accelerate that journey.

Udit Batra: And then just one last thing. I’ve used light scattering myself in my Ph.D., I didn’t want to let the call finish without stating this. And I was reviewing my Ph.D. thesis before this call. And you know what, of course, it’s great. And for the life , I don’t understand all the equations that I was using to analyze it. So, we’re super excited even at a personal level to get access to the technology.

Dan Brennan: Great. And then just maybe one on the instrument outlook. Listen, kudos, the growth has been outstanding. Just wondering on the 5% instrument outlook, I mean investors have become accustomed to Waters’ exceeding the numbers that you put out, and there’s still a lot of really positive momentum there. It looks like it’s around an 8% four-year CAGR, if you want to look at that. Just kind of give us a sense what’s baked in on the 5%, Udit, maybe for mass spec specifically? And is there €“ like that 8% CAGR, I know you’ve kind of talked about the 3% to 4% long-term trend, and you’re trying to be prudent here, but just maybe give us a sense on what the mass spec contribution is? And to the extent we were to get 12 months out, and you were to be stronger than that? Like where do you think the biggest opportunity would be for that? Thank you.

Udit Batra: Dan, same thing, right? I mean we don’t expect mass spec to fall off a cliff. I mean the applications are tremendous. The 5%-ish, I mean, the math is pretty simple, right? I mean, 3% to 4% long-term growth, 100 basis points of pricing in addition to the past and about 100 basis points of commercial execution and innovation in that number. And you can imagine, I mean, look, coming off such really, really strong growth over the last two years, we think the growth will start to normalize. Now that said, there’s also a bit of prudence with China built in, right. I mean China is one of our fastest-growing markets. And I think, at this point in time, we feel comfortable saying, look, it’s a high single-digit market by the end of the year. If the recovery goes faster, of course, there’s upside and if they is more traction for new products, there is upside, right. So, I think it’s a great place to start the year, and we’ll keep you posted as more facts emerge.

Operator: The next question is coming from Derik De Bruin, Bank of America. Your line is open.

Derik De Bruin: Hi, good morning. And thank you for taking my question. Can we talk a little bit about the pharma business, please? The 6% growth in the quarter, a little bit lower than we were looking for. Can you unpack that, talk about what was the potential impact from China? What are you seeing in demand at CROs and CDMOs, I mean that’s been a driver? Have they pulled back on capital spending at all? And just, sort of your major peer in LC has talked about some of the slowing of the replacement cycle in LC and pharma in the second half of the year. Just sort of wondering what you’re going to bake in for that? So, just a little bit more color on your pharma business, please. Thank you.

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