Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

The Company has two operating segments: Waters^™ and TA^™. Waters products and services primarily consist of high-performance liquid chromatography ("HPLC"), ultra-performance liquid chromatography ("UPLC^™" and, together with HPLC, referred to as "LC"), mass spectrometry ("MS"), light scattering and field-flow fractionation instruments (Wyatt), and precision chemistry consumable products and related services. TA products and services primarily consist of thermal analysis, rheometry and calorimetry instrument systems and service sales. The Company's products are used by pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic and government customers. These customers use the Company's products to detect, identify, monitor and measure the chemical, physical and biological composition of materials and to predict the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids in various industrial, consumer goods and healthcare products.

Acquisition of BD Biosciences & Diagnostic Solutions Businesses

On February 9, 2026, the Company completed the acquisition of the BDS Business. The transaction was structured as a Reverse Morris Trust transaction, where the BDS Business was spun off to BD shareholders and simultaneously merged with a wholly-owned subsidiary of the Company. The 2025 financial results of the BDS Business are not included in the Company's 2025 consolidated financial results presented herein.

Tariffs

The Company sells and services its customers in over 35 countries outside of the U.S. and we have manufacturing operations in the U.S., Ireland, U.K. and in Singapore where we utilize subcontractors with worldwide capabilities. In 2025, the U.S. government issued varying levels of tariffs on all imported goods into the U.S., including a baseline 10% tariff, subject to certain exceptions, which have also prompted retaliatory tariffs by a number of countries, including tariffs and export restrictions on certain manufacturing components imposed by China and tariffs pursuant to trade agreements the U.S. has entered into with certain countries. In addition, a number of new tariffs have been threatened, and the U.S. and other countries continue to negotiate trade arrangements and tariff levels. In August 2025, the U.S. Court of Appeals for the Federal Circuit ruled against certain of the U.S. tariffs that have been implemented. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. This decision introduces uncertainty regarding potential refund processes and future trade policy actions and could affect the Company's cost structure and supply chain planning. The Company continues to monitor developments around the Supreme Court's decision and evaluate its potential impact on the Company's future financial results and business.

These tariffs, any resulting retaliatory tariffs and any related supply-chain disruptions could have a significant impact on the Company's consolidated statement of operations and statement of cash flows. In response to currently applicable and potential future tariffs, the Company is continuing to evaluate and implement a series of actions and policies that are intended to offset a portion of the impact of the tariffs on the Company's financial position and results of operations. While the Company believes that these actions and policies will mitigate a substantial portion of the impact of the tariffs, the Company cannot provide any assurances that the tariffs or any resulting impediments to trade will not have a material effect on the Company's consolidated statement of operations and statement of cash flows.

In addition to changes in trade policy, the new U.S. administration has implemented a number of other regulatory, policy and personnel changes, including the elimination, downsizing and reduced funding of certain government agencies and programs and the cancellation or delay of government contracts and research grants. In addition, the administration has changed the composition of and guidance from advisory panels on healthcare practices.

Financial Overview

The Company's operating results are as follows for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands, except per share data):

The Company's net sales increased 7% in 2025 following a flat performance in 2024 relative to 2023. The net sales growth in 2025 reflected strong customer demand for the Waters Division products and services across most major geographies, end markets and product lines. By contrast, 2024 sales were impacted by the 10% decline in China sales due to lower demand for our instrument systems and chemistry products as a result of increased government regulations and lower spending by our customers due to macroeconomic conditions. Foreign currency translation had a minimal impact on sales growth in 2025 and decreased sales growth by 1% in 2024.

Instrument system sales increased 5% in 2025 as compared to 2024 reflecting broad-based customer demand across most global regions. Instrument system sales declined 6% in 2024, primarily due to softer demand across most geographies and a 15% decrease in China instrument sales. Foreign currency translation had minimal impact on instrument system sales performance in both 2025 and 2024.

Recurring revenues (combined sales of precision chemistry consumables and services) increased 8% and 5% in 2025 and 2024, respectively. Service revenues increased 7% and 6% in 2025 and 2024, respectively. Chemistry sales growth increased 12% and 4% in 2025 and 2024, respectively. The double-digit chemistry sales growth can be attributed to the uptake in columns and application-specific testing kits to pharmaceutical customers. Foreign currency translation had a minimal impact on recurring revenues sales growth in 2025 and decreased sales growth by 1% in 2024.

Operating income of $803 million in 2025, decreased $23 million from the operating income of $826 million in 2024 primarily due to the impact of the higher sales volume, which was offset by the change in

sales mix, the impact of merit increases on the Company's annual payroll in 2025 and approximately $82 million of transaction, integration and other internal costs associated with the BDS Business Acquisition. In addition, operating income for 2025 included the impact of $20 million of expenses associated with the Company's new ERP system implementation. The effect of foreign currency translation had minimal impact on operating income in 2025.

Operating income of $826 million in 2024 increased $8 million from operating income of $818 million in 2023 primarily due to cost savings from recent workforce reductions and the absence of the $26 million severance costs associated with the workforce reduction incurred in 2023, which were offset by higher annual incentive compensation, a full year of amortization associated with the Wyatt acquisition and the impact of merit increases on the Company's annual payroll in 2024. In addition, the negative effect of foreign currency translation lowered operating income by approximately $43 million during 2024.

The Company's effective tax rates were 14.9%, 15.5% and 12.8% for 2025, 2024 and 2023, respectively. Net income per diluted share was $10.76, $10.71 and $10.84 in 2025, 2024 and 2023, respectively.

In 2025, the Company's interest expense included approximately $16 million of financing costs incurred by the Company on behalf of SpinCo in connection with financing activities related to the BDS Business Acquisition.

The Company generated $653 million, $762 million and $603 million of net cash flow from operating activities in 2025, 2024 and 2023, respectively. The decrease in cash flows from operating activities in 2025 was driven by $24 million in additional tax payments associated with the final 2018 Tax Reform Transition payment, $52 million of costs related to the implementation of the Company's new ERP system and $29 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition. The increase in cash flows from operating activities in 2024 was driven by lower annual incentive bonus payments and an improvement in working capital compared to 2023.

Net cash used in investing activities included capital expenditures related to property, plant, equipment and software capitalization of $113 million, $142 million and $161 million in 2025, 2024 and 2023, respectively. Net cash used in investing activities in 2025 also included the payment related to the acquisition of Halo Labs. The decline in investing activities in 2025 and 2024 was primarily due to the completion of the Company's new manufacturing facilities. In 2023, net cash used in investing activities included $1.3 billion associated with the Wyatt acquisition.

On May 22, 2025, the Company and certain of its subsidiaries, as guarantors, entered into an Amendment and Restatement Agreement in respect of that certain Amended and Restated Credit Agreement, dated as of September 17, 2021 and amended as of March 3, 2023, with the lenders and issuing banks party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the Company, among other things, reduced the aggregate total borrowing capacity of its existing senior unsecured revolving credit facility (the "Credit Facility") by up to $200 million for an aggregate principal amount of up to $1.8 billion. The Credit Facility will mature on May 22, 2030 subject to the Company's ability to request, subject to customary conditions, a one-yearextension to which each lender may, in its discretion, agree.

In connection with the BDS Business Acquisition, on January 8, 2026, SpinCo entered into a Term Loan Credit Agreement with the lenders named therein, Barclays Bank PLC, as administrative agent (the "Agent"), and the other parties party thereto (the "SpinCo Credit Agreement"). On February 6, 2026 (the "Funding Date"), SpinCo borrowed $4.0 billion of unsecured term loans under the SpinCo Credit Agreement, consisting of a $3.5 billion tranche which will mature and be payable in full 364 days after the Funding Date ("Tranche A") and a $500 million tranche which will mature and be payable in full on the second anniversary of the Funding Date ("Tranche B"), and such funds were used by SpinCo on the Funding Date to finance the SpinCo Cash Distribution. Upon consummation of the BDS Business Acquisition, all of this indebtedness was assumed by Waters. Tranche A is expected to be refinanced with long-term bond financing, while Tranche B is expected to be repaid prior to maturity.

In December 2024, the Company's Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company's remaining authorization is $1.0 billion. The Company believes that it has the financial flexibility to fund these share repurchases, as well as to invest in research, technology and business acquisitions to further grow the Company's sales and profits, given current cash and investment levels and debt borrowing capacity.

Results of Operations

Sales by Geography

Geographic sales information is presented below for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):

In 2025, sales growth increased by 7% as compared to 2024. Sales growth was flat in 2024 as compared to 2023. Geographically, the 2025 sales increase was broad based across most major regions and led by the sales growth in China and Europe which both grew 10%. In 2024, China sales decreased 10% and Europe's sales increased 4%. Sales in the U.S. increased 3% in 2025 and 1% in 2024, while sales in Asia Other increased 5% and 1% in 2025 and 2024, respectively. Foreign currency translation had a minimal overall impact on 2025 sales growth as the 6% favorable currency impact on Europe sales was offset by a 5% unfavorable impact on Asia sales. Foreign currency translation decreased sales growth by 1% in 2024.

In 2024, sales increased 1% in the U.S. and 4% in Europe, while decreasing 4% in Asia, with the effect of foreign currency translation increasing sales growth in Europe by 1% and decreasing sales growth in Asia by 4%. The decrease in Asia sales growth is driven by the decline in China's sales and the effect of foreign currency translation which decreased Japan's sales growth by 7%.

Sales by Trade Class

Net sales by customer class are presented below for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):

In 2025, sales to pharmaceutical customers increased 9% as compared to 2024, driven by sales growth in most regions. Foreign currency translation had a minimal impact on pharmaceutical sales growth in 2025. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, increased 6% in 2025, primarily driven by the broad-based sales growth in most regions except for the U.S., where industrial sales declined by 5% on lower demand for TA instrument systems. Foreign currency translation had a minimal impact on industrial sales in 2025. Combined sales to academic and government customers were flat in 2025, as sales growth in the Americas and China was offset by declines in Asia Other. Foreign currency translation in 2025 increased academic and government sales growth by 1%.

In 2024, sales to pharmaceutical customers increased 1% as compared to 2023, as the 18% increase in India's sales was offset by the 11% decline in China's sales. Combined sales to industrial customers, which include material characterization, food, environmental and fine chemical markets, were flat in 2024 as the 7% sales growth in the U.S. was primarily offset by a 9% decline in China's sales. Combined sales to academic and government customers decreased 6% in 2024, as sales declined in most major geographies, except in Europe and India, where sales grew 1% and 27%, respectively. Sales to our academic and government customers are highly dependent on when institutions receive funding to purchase our instrument systems and, as such, sales can vary significantly from period to period.

Waters Products and Services Net Sales

Net sales for Waters products and services were as follows for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):

Waters products and service sales increased 8% and were flat in 2025 and 2024, respectively, with the effect of foreign currency translation having a minimal impact on Waters sales growth in 2025 and decreasing sales growth by 1% in 2024.

Waters instrument system sales (LC and MS technology-based) increased 7% in 2025, primarily driven by higher customer demand for our instrument systems. The effect of foreign currency translation had a minimal impact on sales growth for 2025.

Waters chemistry consumables' double-digit sales growth was due to the continued demand in most major geographies driven by the uptake in columns and application-specific testing kits to pharmaceutical customers. Foreign currency had a minimal impact on chemistry sales growth in 2025.

Waters service sales increased 7% in 2025 due to higher service demand billing in most major regions, which was minimally impacted by foreign currency translation in 2025.

In 2024, Waters products and service sales were flat, with the effect of foreign currency translation decreasing Waters sales growth by 1%.

Waters instrument system sales decreased 7% in 2024, primarily driven by weaker customer demand in China where Waters instrument sales declined 12%. Excluding China, the Company's instrument system sales decreased 4% as compared to 2023. In addition, Wyatt's instrument system sales contributed 3% to Waters instrument system sales growth in 2024. Waters chemistry consumables sales growth was due to the continued demand in most major geographies driven by the uptake in columns and application-specific testing kits to pharmaceutical customers, partially offset by weaker demand in China and the negative impact from foreign currency translation, which decreased chemistry sales growth by 1% in 2024. Waters service sales increased 6% in 2024 due to higher service demand billing, partially offset by the negative impact from foreign currency translation, which decreased service sales growth by 1% in 2024. Wyatt service revenues added 1% to Waters service revenue growth in 2024.

TA Product and Services Net Sales

Net sales for TA products and services were as follows for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands): 

TA instrument system and service sales growth decreased 1% in 2025 and was flat in 2024. Foreign currency translation had minimal impact on sales growth in 2025 and decreased sales growth by 1% in 2024. In 2025, double-digit sales growth in Asia, which was offset by weakness in the U.S., was primarily driven by strong customer demand for our thermal analysis and rheology instrument systems and services. In 2024, sales growth was broad-based across most major geographies, partially offset by China. The growth outside of China was primarily driven by strong customer demand for our thermal analysis instruments and services.

Cost of Sales

In 2025, cost of sales increased 7% as compared to 2024, primarily due to higher sales volume. In 2024, cost of sales were flat as compared to 2023, primarily due to the change in sales mix and the impact of foreign exchange.

Cost of sales is affected by many factors, including, but not limited to, foreign currency translation, product mix, product costs of instrument systems and amortization of software platforms. At current foreign currency exchange rates, the Company expects foreign currency translation to be neutral to gross profit during 2026.

Selling and Administrative Expenses

Selling and administrative expenses increased 20% and decreased 6% in 2025 and 2024, respectively. The increase in 2025 is primarily due to an increase in costs associated with merit compensation to the Company's

employees as well as $81 million of transaction, integration and other internal costs associated with the BDS Business Acquisition. In addition, selling and administrative expenses for 2025 included $20 million of expenses associated with the Company's new ERP system implementation.

The decrease in 2024 is primarily driven by cost savings from the recent workforce reductions and the absence of costs incurred in the prior year relating to severance charges in connection with the 2023 workforce reduction and the Wyatt acquisition-related due diligence costs which were partially offset by an increase in annual incentive compensation expenses.

As a percentage of net sales, selling and administrative expenses were 26.2%, 23.3% and 24.9% for 2025, 2024, and 2023, respectively.

Research and Development Expenses

Research and development expenses increased 7% and 5% in 2025 and 2024, respectively. The increase in research and development expenses in 2025 can be attributed to increases from costs associated with merit compensation to the Company's employees and costs associated with new products and the development of new technology initiatives. The impact of foreign currency exchange decreased expenses by 1% and increased expenses by 3% in 2025 and 2024, respectively.

Purchased Intangibles Amortization

Purchased intangibles amortization increased 1% in 2025. The increase in purchased intangible amortization of $15 million in 2024 can be attributed to the timing of the Wyatt acquisition in May of 2023 as 2024 includes a full year of the amortization from the Wyatt acquisition intangible assets.

Litigation Provisions

The Company recorded $12 million of patent litigation settlement provisions and related costs in 2024. No litigation provisions were recorded by the Company in 2025.

Interest Expense, net

Interest expense, net in 2025 decreased $21 million as compared to 2024, primarily as a result of lower average outstanding debt as compared to 2024. The average outstanding debt in these periods was impacted by the timing of the repayment of outstanding debt associated with the Wyatt acquisition. Additionally, $16 million of costs were incurred by the Company on behalf of SpinCo in connection with financing fees associated with financing activities related to the BDS Business Acquisition.

Interest expense, net in 2024 decreased $10 million as compared to 2023 due to the average outstanding debt in these periods being impacted by the timing of the borrowings to fund the Wyatt acquisition, which closed in May 2023, as well as timing of the repayment of $1 billion of debt since the completion of the Wyatt acquisition.

Provision for Income Taxes

The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 25% and 17%, respectively, as of December 31, 2025. The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. The effect of applying the concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company's net income by $4 million, $14 million and $16 million, and increased the Company's net income per diluted share by $0.06, $0.24 and $0.27 for the years ended December 31, 2025, 2024 and 2023, respectively. The Singapore 2025 benefit of $4 million and $0.06 per diluted share is reduced by $14 million and $0.24 per diluted share due to the global minimum tax under Pillar Two, respectively.

The Company's effective tax rate for the years ended December 31, 2025, 2024 and 2023 was 14.9%, 15.5% and 12.8%, respectively.

The 2025 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a discrete benefit of $14 million related to the enactment of OBBBA, a $3 million provision related to the GILTI tax and a tax benefit of $3 million on stock-based compensation.

The 2024 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $5 million provision related to the GILTI tax and a tax benefit of $3 million on stock-based compensation.

The 2023 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, an $18 million recognition of a previously unrecognized tax benefit as a result of the completion of a tax examination, a $15 million provision related to the Global Intangible Low-TaxedIncome ("GILTI") tax and a tax benefit of $3 million on stock-based compensation.

Effective starting in 2024, various foreign jurisdictions began to implement aspects of the guidance issued by the Organization for Economic Co-operationand Development ("OECD") related to the Pillar Two system of global minimum tax rules. These changes in tax law did not have a material impact on the Company's financial position, result of operations and cash flows in 2025. The OECD issued additional guidance in January 2026 on the Pillar Two system of global minimum tax rules, and the Company is assessing future impact.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, ("OBBBA"), enacting changes to the United States federal tax code, including adjustments to effective tax rates on certain types of income and certain deduction limitations. The OBBBA did not have a material impact on the Company's financial position, results of operations and cash flows for the year ended December 31, 2025. The Company will continue to monitor the impact of this Act in future periods.

Liquidity and Capital Resources

Condensed Consolidated Statements of Cash Flows (in thousands):

Cash Flow from Operating Activities

Net cash provided by operating activities was $653 million, $762 million and $603 million in 2025, 2024 and 2023, respectively. The decrease in 2025 operating cash flow was primarily a result of higher net income being

offset by $24 million in additional tax payments associated with the final 2018 Tax Reform Transition payment as compared to the prior year, $52 million of costs related to the implementation of the Company's new ERP system, and $29 million of payments made in connection with transaction and integration costs associated with the BDS Business Acquisition. The changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities, in addition to the changes in net income:

Cash Flow from Investing Activities

Net cash used in investing activities totaled $152 million, $143 million and $1.4 billion in 2025, 2024 and 2023, respectively. Additions to fixed assets and capitalized software were $113 million, $142 million and $161 million in 2025, 2024 and 2023, respectively. The cash flows from investing activities in 2023 include $16 million of capital expenditures related to the major expansion of the Company's precision chemistry consumable operations in the United States.

In 2023, the Company completed the acquisition of Wyatt for a total purchase price of $1.3 billion in cash. Wyatt is a pioneer in innovative light scattering and field-flow fractionation instruments, software, accessories, and services. The acquisition has expanded Waters' portfolio and increased our exposure to large molecule applications.

There were no business acquisitions in 2024.

On May 20, 2025, the Company completed the acquisition of Halo Labs for a total purchase price of $35 million in cash, net of cash acquired. Halo Labs is an innovator of specialized imaging technologies to detect, identify and count interfering materials in therapeutic products, such as cell, protein and gene therapies.

Cash Flow from Financing Activities

The Company has a credit agreement with an aggregate borrowing capacity of $1.8 billion. As of December 31, 2025, the Company had a total of $1.4 billion in outstanding debt, which consisted of $1.3 billion in outstanding senior unsecured notes and $0.1 billion borrowed under its credit agreement. The Company's net debt borrowings as of December 31, 2025 were $220 million lower than as of December 31, 2024, while the net borrowings as of December 31, 2024 were $730 million lower than as of December 31, 2023. These changes in outstanding debt balances over these periods is attributable to the funding of the 2023 Wyatt acquisition and the subsequent debt repayments in 2024 and 2025.

On May 22, 2025, the Company and certain of its subsidiaries, as guarantors, entered into an Amendment and Restatement Agreement in respect of that certain Amended and Restated Credit Agreement, dated as of September 17, 2021 and amended as of March 3, 2023, with the lenders and issuing banks party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the Company, among other things, reduced the aggregate total borrowing capacity of its existing senior unsecured revolving credit facility by up to $200 million for an aggregate principal amount of up to $1.8 billion. The Credit Facility will mature on May 22, 2030 subject to the Company's ability to request, subject to customary conditions, a one-yearextension to which each lender may, in its discretion, agree.

In July 2024, the Company entered into the Shelf Agreement with NYL pursuant to which the Company may, at its option, authorize the issuance and sale of Shelf Notes up to an aggregate amount of $200 million. The purchase of any Shelf Notes is in the sole discretion of NYL. Any Shelf Notes sold or issued pursuant to the Shelf Agreement will mature no more than 15 years after the issuance date and will bear interest on the unpaid balance from the issuance date at the rates specified in the Shelf Agreement. The Company entered into the Shelf Agreement to increase its borrowing capacity for general corporate purposes. The Company has not issued any Shelf Notes pursuant to the Shelf Agreement through the date of these financial statements.

In connection with the BDS Business Acquisition, on January 8, 2026, SpinCo entered into the SpinCo Credit Agreement. On the Funding Date, SpinCo borrowed $4.0 billion of unsecured term loans under the SpinCo Credit Agreement, consisting of a $3.5 billion tranche which will mature and be payable in full 364 days after the Funding Date and a $500 million tranche which will mature and be payable in full on the second anniversary of the Funding Date, and such funds were used by SpinCo on the Funding Date to finance the SpinCo Cash Distribution. Upon consummation of the BDS Business Acquisition, all of this indebtedness was assumed by the Company. The Company plans to refinance the $3.5 billion tranche in the first quarter of 2026 with long-term bond financing. There can be no assurance that the Company will be able to do so on commercially reasonable terms or at all. If the Company is unable to obtain financing on commercially reasonable terms, the Company may be required to reduce or delay investments, strategic acquisitions and capital expenditures, seek additional capital to refinance its indebtedness or use existing borrowing capacity under its existing revolving credit facility. The Company intends to repay the $500 million tranche at or prior to maturity.

Concurrently with the execution of the Merger Agreement, the Company and a financial institution executed a 364-daybridge facility commitment letter, pursuant to which such financial institution committed to provide bridge financing of $1.8 billion to fund dividends, fees and expenses related to the transactions contemplated by the Merger Agreement, on the terms and conditions set forth therein. The Company incurred $5 million of financing costs in connection with this bridge facility that are being amortized over the term of the bridge facility. In addition, in connection with financing activities related to the BDS Business Acquisition, the Company paid $14 million of financing costs on behalf of SpinCo. These financing costs were expensed in 2025.

As of December 31, 2025, the Company has entered into three-year interest rate cross-currency swap derivative agreements with a notional value of $900 million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and yen-denominatednet asset investments. As a result of entering into these agreements, the Company lowered net interest expense by approximately $11 million, $9 million and $11 million in 2025, 2024 and 2023, respectively. The Company anticipates that these swap agreements will lower net interest expense by approximately $11 million in 2026.

In December 2024, the Company's Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. The Company's remaining authorization is $1.0 billion. The Company did not make any open market share repurchases in 2024 or 2025. In addition, the Company repurchased $15 million, $13 million and $12 million of common stock related to the vesting of restricted stock units during 2025, 2024 and 2023, respectively.

The Company received $21 million, $30 million and $30 million of proceeds from the exercise of stock options and the purchase of shares pursuant to the Company's employee stock purchase plan during 2025, 2024 and 2023, respectively.

The Company had cash, cash equivalents and investments of $588 million as of December 31, 2025. The majority of the Company's cash and cash equivalents are generated from foreign operations, with $372 million held by foreign subsidiaries at December 31, 2025, of which $306 million was held in currencies other than U.S. dollars.

As of December 31, 2025, the Company's material cash requirements include the following contractual and other obligations:

Long-term debt. As of December 31, 2025, the Company had $1.4 billion of cash requirements for the principal on long-term debt that will mature and be paid as follows: $460 million in 2026; $50 million in 2028; $300 million in 2029; $200 million in 2030 and $400 million in 2031.

Interest on Senior Unsecured Notes. As of December 31, 2025, the Company had $112 million of cash requirements for the interest on senior unsecured notes that is to be paid as follows: $32 million in 2026; $25 million in 2027; $23 million in 2028; $20 million in 2029; $10 million in 2030; and $2 million in 2031. See also Note 8 in the Notes to the Consolidated Financial Statements for financial information about interest payable.

Operating Leases.The Company's cash requirements for future lease payments were approximately $89 million as of December 31, 2025. See also Note 11 in the Notes to the Consolidated Financial Statements for financial information about lease liabilities.

Long-term Software Contract Commitments.For contracts the Company is committed to that are not cancelable without penalties, the Company's contractual obligations were approximately $74 million as of December 31, 2025. In December 2024, the Company's Board of Directors approved the implementation of a new ERP system. The Company anticipates spending approximately $130 million in connection with the implementation of the new ERP system, of which $52 million has been spent on capitalized software and operating expenses through the end of 2025. The Company expects to use existing cash and its credit facility to fund the ERP implementation.

Wyatt Retention Agreements.In conjunction with the Wyatt acquisition, the Company entered into retention agreements with certain employees, in which the Company agreed to pay a total of $40 million by the end of the second anniversary of the acquisition date provided the employees remain employed over that period of time. As of December 31, 2025, the Company has paid all obligations associated with the Wyatt retention agreements.

Management believes, as of the date of this report, that the Company's financial position, along with expected future cash flows from earnings based on historical trends and the ability to raise funds from external sources and the borrowing capacity from existing, committed credit facilities, will be sufficient to service debt and fund working capital and capital spending requirements, authorized share repurchase amounts and potential acquisitions for at least the next twelve months. The Company may at any time and from time to time purchase, redeem, prepay, refinance, or otherwise retire any amount of outstanding indebtedness pursuant to the terms of such indebtedness, in open market or negotiated transactions, via tender offer or otherwise, including through the incurrence of new indebtedness, as the Company considers appropriate in light of market conditions and other relevant factors.

Critical Accounting Policies and Estimates

Summary

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent

liabilities. Critical accounting policies are those that are central to the presentation of the Company's financial condition and results of operations that require management to make estimates about matters that are highly uncertain and that would have a material impact on the Company's results of operations given changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that reasonably could have been used in the current period. On an ongoing basis, the Company evaluates its policies and estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions or conditions. There are other items within the Company's consolidated financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could potentially have a material impact on the Company's consolidated financial statements.

Revenue Recognition

The Company recognizes revenue upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally enters into contracts that include a combination of products and services. Revenue is allocated to distinct performance obligations and is recognized net of allowances for returns and discounts.

The Company recognizes revenue on product sales at the time control of the product transfers to the customer. In substantially all of the Company's arrangements, title of the product transfers at shipping point and, as a result, the Company determined control transfers at the point of shipment. In more limited cases, there are destination-based shipping terms and, thus, control is deemed to transfer when the products arrive at the customer site.

Generally, the Company's contracts for products include a performance obligation related to installation. The Company has determined that the installation represents a distinct performance obligation and revenue is recognized separately upon the completion of installation. The Company determines the amount of the transaction price to allocate to the installation service based on the standalone selling price of the product and the service, which requires judgment. The Company determines the relative standalone selling price of installation based upon a number of factors, including hourly service billing rates and estimated installation hours. In developing these estimates, the Company considers past history, competition, billing rates of current services and other factors.

The Company has sales from standalone software, which are included in product revenue. These arrangements typically include software licenses and maintenance contracts, both of which the Company has determined are distinct performance obligations. The Company determines the amount of the transaction price to allocate to the license and maintenance contract based on the relative standalone selling price of each performance obligation. Software license revenue is recognized at the point in time when control has been transferred to the customer. The revenue allocated to the software maintenance contract is recognized on a straight-line basis over the maintenance period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company's performance in satisfying this obligation. Unspecified rights to software upgrades are typically sold as part of the maintenance contract on a when-and-if-availablebasis.

Service revenue includes (i) service and software maintenance contracts and (ii) service calls (time and materials). Instrument service contracts and software maintenance contracts are typically annual contracts, which are billed at the beginning of the contract or maintenance period. The amount of the service and software maintenance contract is recognized on a straight-line basis to revenue over the maintenance service period, which is the contractual term of the contract, as a time-based measure of progress best reflects the Company's performance in satisfying this obligation. There are no deferred costs associated with the service contract, as the cost of the service is recorded when the service is performed. Service calls are recognized to revenue at the time a service is performed.

The Company's deferred revenue liabilities at December 31, 2025 of $345 million on the consolidated balance sheets consist of instrument service contract obligations and customer payments received in advance, prior to transfer of control of the instrument. The Company records deferred revenue primarily related to its service contracts, where consideration is billable at the beginning of the service period.

Loss Provision on Inventory

The Company values all of its inventories at the lower of cost or net realizable value on a first-in, first-outbasis ("FIFO"). The Company estimates revisions to its inventory valuations based on technical obsolescence, historical demand, projections of future demand, including in the Company's current backlog of orders, and industry and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional write-downs may be required. The Company's inventory balance at December 31, 2025 was recorded at its net realizable value of $572 million, which is net of write-downs of $44 million.

Long-Lived Assets, Intangible Assets and Goodwill

Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, we must make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the discount rate to determine the fair value of these assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges against these assets in the reporting period in which the impairment is determined.

We test goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. We have the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment. If as a result of the qualitative assessment, it is more-likely-than-notthat the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If a quantitative impairment test is performed, we compare the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. Estimating the fair value of the reporting units requires significant judgment by management. If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit's fair value up to the total amount of goodwill allocated to the reporting unit. The Company performs an annual goodwill impairment assessment for its reporting units as of the last day of the first month of the fourth fiscal quarter each year. The Company has two reporting units: Waters and TA. Goodwill is allocated to the reporting units at the time of acquisition.

The Company's intangible assets include purchased technology; capitalized software; costs associated with acquiring Company patents, trademarks and intellectual properties, such as licenses; and acquired IPR&D. Purchased intangibles are recorded at their fair market values as of the acquisition date and amortized over their estimated useful lives, ranging from one to fifteen years. Other intangibles are amortized over a period ranging from one to ten years. Acquired IPR&D is amortized from the date of completion of the acquired program over its estimated useful life.

Goodwill totaled $1.3 billion as of both December 31, 2025 and 2024. Net intangible assets and long-lived assets amounted to $558 million and $642 million, as of December 31, 2025, respectively, and $568 million and $651 million as of December 31, 2024, respectively.

Income Taxes

As part of the process of preparing the consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the Company estimating its

income taxes, taking into account the amount, timing and character of taxable income, tax deductions and credits and assessing changes in tax laws, regulations, agreements and treaties. Differing treatment of items for tax and accounting purposes, such as depreciation, amortization and inventory reserves, result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, such changes could materially impact the Company's financial position and results of operations.

The Company continually evaluates the necessity of establishing or changing a valuation allowance for deferred tax assets depending on whether it is more likely than not that the actual benefit of those assets will be realized in future periods.

Uncertain Tax Positions

The Company accounts for its uncertain tax return positions in accordance with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax positions on the presumption that all concerned tax authorities possess full knowledge of those tax positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those positions for the time value of money. The Company classified interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. At December 31, 2025, the Company had unrecognized tax benefits, excluding interest and penalties, of $15 million.

The Company has a Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. This incentive has similar requirements for business spending targets, attaining and sustaining employment targets and performance of certain research and manufacturing activities as previous agreements. The Company determined that it is more likely than not to realize the tax incentive in Singapore and, accordingly, has not recognized any reserves for unrecognized tax benefits on its balance sheet related to this incentive. In the event that any of the milestone targets are not met, the Company will not be entitled to the tax exemption on income earned in Singapore and all the tax benefits previously recognized would be reversed, resulting in the recognition of income tax expense equal to the statutory tax of 17% on income earned during that period.

The effect of applying these concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company's net income by $4 million, $14 million and $16 million and increased the Company's net income per diluted share by $0.06, $0.24 and $0.27 for the years ended December 31, 2025, 2024 and 2023, respectively. The Singapore 2025 benefit of $4 million and $0.06 per diluted share is reduced by $14 million and $0.24 per diluted share due to the global minimum tax under Pillar Two, respectively.

Business Combinations and Asset Acquisitions

We use assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets, which represents a significant portion of the purchase price in our recent acquisitions, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such intangibles are amortizable or non-amortizableand, if the former, the period and the method by which the intangible asset will be amortized. We utilize commonly accepted valuation techniques, such as the income, cost and market approaches, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of the weighted-average cost of capital, adjusted for specific risks associated with the assets.

Recent Accounting Standard Changes and Developments 

Information regarding recent accounting standard changes and developments is incorporated by reference from Part II, Item 8, Financial Statements and Supplementary Data, of this document and should be considered an

integral part of this Item 7. See Note 2 in the Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards.