Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
WAT (Waters Corporation) reported a dramatic revenue surge of +91.4% YoY to $1.267B in Q2 2026, driven largely by a major acquisition that also inflated costs, flipping operating income to a -$47M loss and net income to -$72M compared to strong profitability in the prior year period.
Revenue
$1.27B
+91.39% YoY
EPS (Diluted)
-$0.87
-142.86% YoY
Operating Income
-$47M
-130.97% YoY
Source: SEC XBRL
Waters (WAT) reported Q1 FY2026 revenue of $1.27B, up 91.4% year over year. Operating margin was -3.7%, against 22.9% a year earlier. Operating cash flow was negative $3M. WAT's fiscal Q1 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 3.05 | 3.04 | Beat +0.4% |
| Mar 2026This filing | 2.70 | 2.36 | Beat +14.4% |
| Dec 2025 | 4.53 | 4.55 | Miss -0.5% |
| Sep 2025 | 3.40 | 3.24 | Beat +5.1% |
Adjusted (non-GAAP) EPS of $2.70 versus the $2.36 analyst consensus — a +14.4% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was -$0.87.
Compiled by AI from this SEC filing
Revenue jumped 91.4% year-over-year from $662M to $1.267B in Q2 2026, a scale of growth that strongly suggests a transformative acquisition rather than organic expansion, as organic growth at this magnitude would be extraordinary for an analytical instruments company.
Source: 10-Q Income Statement (XBRL Financial Data)
Operating income swung from a positive $152M in Q2 2025 to a loss of -$47M in Q2 2026 (a -130.9% decline), while net income fell from $121M to -$72M (-159.5%), indicating that acquisition-related costs, amortization, and integration expenses are significantly weighing on earnings.
Source: 10-Q Income Statement (XBRL Financial Data)
SG&A expenses rose 122.4% YoY to $387M and R&D expenses increased 104.3% to $96M, both growing faster than revenue, reflecting the cost structure absorbed from an acquired business and elevated integration spending that compressed margins.
Source: 10-Q Income Statement (XBRL Financial Data)
Total assets ballooned 434.3% YoY to $24.531B from $4.592B, while stockholders' equity surged 679.4% to $15.292B and long-term debt rose 257.8% to $4.855B, indicating a large acquisition was funded through a combination of equity issuance and debt.
Source: 10-Q Balance Sheet (XBRL Financial Data)
Operating cash flow collapsed from $260M in Q2 2025 to nearly zero at -$3M in Q2 2026, reflecting the earnings deterioration and likely elevated working capital requirements post-acquisition, while investing cash flow turned positive at $95M, possibly from asset divestitures related to the deal.
Source: 10-Q Cash Flow Statement (XBRL Financial Data)
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
The dramatic expansion in total assets (+434% to $24.531B), liabilities (+251% to $9.239B), and operating cost base suggests WAT completed a very large acquisition. Failure to successfully integrate the acquired business could result in prolonged operating losses, as evidenced by the current -$47M operating loss. Integration challenges including systems, personnel, and culture could extend the period of margin compression.
Source: 10-Q Balance Sheet & Income Statement (XBRL Financial Data)
Operating margin collapsed from +22.96% to -3.71% YoY, and net margin stands at -5.68%. With SG&A at $387M representing approximately 30.5% of revenue and R&D at $96M (7.6% of revenue), the combined cost burden is substantial. If revenue synergies from the acquisition do not materialize quickly, sustained losses could pressure the balance sheet.
Source: 10-Q Income Statement (XBRL Financial Data)
Long-term debt increased 257.8% YoY to $4.855B, and total liabilities stand at $9.239B. While the debt-to-equity ratio of 0.60 appears manageable given the equity base, the near-zero operating cash flow (-$3M) raises questions about near-term debt service capacity without improvement in operating performance.
Source: 10-Q Balance Sheet & Cash Flow Statement (XBRL Financial Data)
The 434% surge in total assets to $24.531B almost certainly includes a large amount of goodwill and acquired intangible assets from the acquisition. If the acquired business underperforms relative to acquisition-date projections, WAT could face material impairment charges that would further damage earnings and book value.
Source: 10-Q Balance Sheet (XBRL Financial Data)
Although the current ratio of 1.79 is adequate, current liabilities more than doubled to $2.273B while operating cash flow turned negative. Cash and equivalents of only $462M relative to $2.273B in current liabilities and near-zero cash generation from operations could create liquidity stress if business conditions deteriorate.
Source: 10-Q Balance Sheet & Cash Flow Statement (XBRL Financial Data)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.27 $B | 0.66 $B | +91.39% |
Operating Income $M | -47.00 $M | 151.75 $M | -130.97% |
Net Income $M | -72.00 $M | 121.00 $M | -159.50% |
EPS (Basic) $ | -0.87 $ | 2.04 $ | -142.65% |
EPS (Diluted) $ | -0.87 $ | 2.03 $ | -142.86% |
R&D Expense $M | 96.00 $M | 46.62 $M | +105.91% |
SG&A Expense $M | 387.00 $M | 174.88 $M | +121.29% |
Answers draw on this SEC filing and the data on this page
Waters Corporation’s Q2 FY2026 revenue more than doubled, but surging expenses resulted in a net loss and significant balance sheet expansion from a likely acquisition.
Waters Corporation (WAT) delivered 7.0% revenue growth to $3.17B in FY2025, but operating income declined 2.9% due to a sharp 20.3% surge in SG&A expenses, while net income edged up just 0.8% to $642.6M.
Other companies in Life Sciences Tools & Services