Agilent Technologies reported strong fiscal third-quarter 2026 revenue growth and substantial operating-margin expansion, prompting the life sciences and diagnostics company to raise its full-year revenue, profitability and earnings expectations.
Quarterly revenue increased 8.1% year-over-year to $1.88 billion.
Core revenue, which provides a view of underlying business performance excluding certain acquisition, divestiture and currency effects, increased 7.3%.
The quarter also demonstrated significant operating leverage as revenue growth translated into substantially higher margins.
GAAP operating margin expanded 290 basis points year-over-year to 23.6%.
Non-GAAP operating margin increased even more sharply, rising 320 basis points to 28.3%.
Part of the improvement came from tariff refunds received during the period.
Agilent said the refunds provided an approximately 110-basis-point net benefit to its non-GAAP operating margin.
Even excluding that benefit, the results indicate meaningful underlying margin improvement as the company benefited from stronger revenue, cost management and operating leverage.
Non-GAAP net income reached $459 million during the quarter.
That figure included a $17 million net benefit associated with tariff refunds.
Non-GAAP diluted earnings per share increased 18% year-over-year to $1.62, including approximately $0.06 per share attributable to the tariff-refund benefit.
Excluding the refunds, non-GAAP EPS would have been approximately $1.56.
GAAP diluted EPS increased 8% to $1.28.
The faster growth in adjusted EPS compared with revenue demonstrates the impact of Agilent’s expanding operating margins.
The strongest growth came from Agilent’s Life Sciences and Diagnostics Markets business.
Segment revenue increased 11% on a reported basis and 10% on a core basis to $746 million.
The segment’s operating margin reached 23.5%, up sharply from 17.6% in the prior-year period.
That represents an improvement of approximately 590 basis points year-over-year.
The combination of double-digit core growth and significantly higher profitability made Life Sciences and Diagnostics Markets an important contributor to the company’s overall third-quarter performance.
The business serves pharmaceutical, biotechnology, clinical diagnostic and other laboratory customers with instruments, consumables, software and related technologies.
Demand across those markets can be influenced by pharmaceutical research spending, biopharma development activity, laboratory utilization and capital investment in analytical equipment.
Stronger activity in the segment helped Agilent generate growth well above its consolidated rate during the quarter.
The margin expansion is particularly significant because improvements in profitability can amplify the financial impact of revenue growth.
Agilent generated an additional $140 million of revenue compared with the prior-year quarter while also converting a larger percentage of sales into operating income.
The tariff refunds provided an incremental boost, but they accounted for only part of the 320-basis-point improvement in non-GAAP operating margin.
The remaining expansion reflects stronger underlying operating performance.
Agilent’s results also demonstrate the recurring financial contribution from its installed base of instruments and laboratory systems.
Beyond sales of analytical equipment, the company generates revenue from consumables, services and other products required to operate and maintain those systems.
That mix can provide greater stability than relying entirely on new instrument purchases.
The strong fiscal third quarter increased management’s confidence in the remainder of the year.
Agilent raised its fiscal 2026 revenue guidance to a range of $7.49 billion to $7.51 billion.
At the midpoint, the updated outlook implies approximately $7.50 billion of annual revenue.
The company now expects full-year core revenue growth of approximately 5.8% to 6%.
Agilent also raised its earnings expectations.
Full-year non-GAAP diluted EPS is now projected at $6.18 to $6.21.
The midpoint of approximately $6.195 represents a $0.15 increase from the midpoint of the company’s previous forecast.
The higher earnings outlook reflects both stronger operating performance and increased margin expectations.
Management also raised its full-year operating-margin outlook, indicating that the profitability gains demonstrated during the third quarter are expected to continue through the remainder of fiscal 2026.
The improvement is important for Agilent because life sciences and laboratory technology companies have been navigating varying levels of capital spending among pharmaceutical, biotechnology and academic customers.
Higher margins give the company greater flexibility to continue investing in product development, commercial expansion and other growth initiatives even if individual end markets remain uneven.
The third-quarter performance suggests that Agilent is benefiting from improving demand while also maintaining discipline around costs.
Life Sciences and Diagnostics Markets was particularly notable because its approximately 590-basis-point operating-margin expansion substantially exceeded the improvement reported for the company overall.
That gives Agilent another potential source of earnings growth if the segment can maintain stronger revenue trends and operating efficiency.
The tariff refund represents an important consideration when evaluating the quarter.
The $17 million benefit increased non-GAAP net income and contributed approximately $0.06 to adjusted EPS.
It also provided approximately 110 basis points of benefit to non-GAAP operating margin.
However, Agilent’s non-GAAP operating margin increased 320 basis points overall, meaning a majority of the year-over-year expansion came from factors beyond the refund.
Similarly, non-GAAP EPS would still have shown meaningful year-over-year growth without the tariff benefit.
That underlying performance helps explain why management was comfortable raising the company’s full-year outlook rather than treating the quarter’s profitability entirely as a temporary benefit.
At $1.88 billion of quarterly revenue, Agilent is also entering the final portion of its fiscal year with solid top-line momentum.
The 7.3% increase in core revenue indicates that growth was not dependent solely on currency movements or portfolio changes.
Combined with the 28.3% non-GAAP operating margin and 18% adjusted EPS growth, the results show improved performance across both the top and bottom lines.
The company’s revised guidance suggests management expects that momentum to continue.
At the midpoint of the new range, Agilent expects approximately $7.50 billion of fiscal 2026 revenue and approximately $6.20 of non-GAAP EPS.
The company is therefore positioned to finish the year with stronger revenue growth, higher operating margins and greater earnings than previously anticipated.
Overall, Agilent’s fiscal third quarter was characterized by accelerating core growth, particularly strong performance in Life Sciences and Diagnostics Markets and substantial operating leverage.
Revenue increased 8.1% to $1.88 billion, non-GAAP operating margin reached 28.3%, non-GAAP net income rose to $459 million and adjusted EPS increased 18% to $1.62.
While tariff refunds provided a measurable benefit to the results, the underlying business also demonstrated significant margin improvement.
That combination prompted Agilent to raise its fiscal 2026 revenue, operating-margin and EPS expectations as it enters the final quarter of the year with stronger financial momentum.
KEY QUOTES:
“We are seeing improving end markets, stronger demand in key regions, and excellent customer response to our innovative product launches.”
Padraig McDonnell, Chief Executive Officer of Agilent Technologies
