Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

Three Months Ended
January 31,
20252024
Net revenue:
Products$1,200$1,209
Services and other481449
Total net revenue1,6811,658
Costs and expenses:
Cost of products535514
Cost of services and other247236
Total costs782750
Research and development113128
Selling, general and administrative410396
Total costs and expenses1,3051,274
Income from operations376384
Interest income1518
Interest expense(28)(22)
Other income (expense), net423
Income before taxes367403
Provision for income taxes4955
Net income$318$348
Net income per share:
Basic$1.12$1.19
Diluted$1.11$1.18
Weighted average shares used in computing net income per share:
Basic285293
Diluted287294

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(Unaudited)

Three Months Ended
January 31,
20252024
Net income$318$348
Other comprehensive income (loss):
Unrealized gain (loss) on derivative instruments, net of tax expense (benefit) of $3 and $(3)11(7)
Amounts reclassified into earnings related to derivative instruments, net of tax expense (benefit) of $(1) and $(1)(2)(2)
Foreign currency translation, net of tax expense (benefit) of $0 and $0(85)21
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net gain (loss), net of tax expense (benefit) of $0 and $(1)—(1)
Other comprehensive income (loss)(76)11
Total comprehensive income$242$359

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value and share data)

(Unaudited)

January 31, 2025October 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$1,467$1,329
Accounts receivable, net1,3281,324
Inventory997972
Other current assets315334
Total current assets4,1073,959
Property, plant and equipment, net1,8161,778
Goodwill4,4294,477
Other intangible assets, net514547
Long-term investments173175
Other assets875910
Total assets$11,914$11,846
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$547$540
Employee compensation and benefits258368
Deferred revenue612544
Short-term debt1645
Other accrued liabilities436398
Total current liabilities1,8691,895
Long-term debt3,3473,345
Retirement and post-retirement benefits120130
Other long-term liabilities551578
Total liabilities5,8875,948
Commitments and contingencies (Note 12)
Total equity:
Stockholders’ equity:
Preferred stock; $0.01 par value; 125,000,000 shares authorized; none issued and outstanding at January 31, 2025 and October 31, 2024——
Common stock; $0.01 par value; 2,000,000,000 shares authorized; 285,232,190 shares at January 31, 2025 and 285,193,011 shares at October 31, 2024 issued and outstanding33
Additional paid-in-capital5,4895,450
Retained earnings916750
Accumulated other comprehensive loss(381)(305)
Total stockholders' equity6,0275,898
Total liabilities and stockholders' equity$11,914$11,846

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)

Three Months Ended
January 31,
20252024
Cash flows from operating activities:
Net income$318$348
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization7262
Share-based compensation4044
Deferred taxes expense (benefit)(10)—
Excess and obsolete inventory related charges1011
Net (gain) loss on equity securities(1)(3)
Asset impairment charges—8
Other non-cash (income) expense, net—(6)
Changes in assets and liabilities:
Accounts receivable, net(30)10
Inventory(40)(9)
Accounts payable384
Employee compensation and benefits(104)(104)
Other assets and liabilities17340
Net cash provided by operating activities431485
Cash flows from investing activities:
Payments to acquire property, plant and equipment(97)(90)
Payments in exchange for convertible note(1)(5)
Payments to acquire businesses and intangible assets, net of cash acquired4—
Net cash used in investing activities(94)(95)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans3034
Payments of taxes related to net share settlement of equity awards(22)(25)
Payments for repurchase of common stock(90)—
Payments of dividends(71)(69)
Proceeds from issuance of long-term debt4—
Repayments of long-term debt(1)(180)
Net proceeds from (repayments of) short-term debt(30)—
Net cash used in financing activities(180)(240)
Effect of exchange rate movements(19)7
Net increase (decrease) in cash, cash equivalents and restricted cash138157
Cash, cash equivalents and restricted cash at beginning of period1,3321,593
Cash, cash equivalents and restricted cash at end of period$1,470$1,750
Supplemental cash flow information:
Income tax paid, net of refunds received$19$24
Interest payments, net of capitalized interest$3$14
Net change in property, plant and equipment included in accounts payable and accrued liabilities-increase (decrease)$8$(16)

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(in millions, except number of shares in thousands and per share data)

(Unaudited)

Common StockAccumulated Other Comprehensive Loss
Three Months Ended January 31, 2025Number of SharesPar ValueAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
Balance as of October 31, 2024285,193$3$5,450$750$(305)$5,898
Components of comprehensive income, net of tax:
Net income———318—318
Other comprehensive income (loss)————(76)(76)
Total comprehensive income242
Cash dividends declared ($0.248 per common share)———(71)—(71)
Share-based awards issued, net of tax of $22689—8——8
Repurchase of common stock, including excise taxes(650)—(9)(81)—(90)
Share-based compensation——40——40
Balance as of January 31, 2025285,232$3$5,489$916$(381)$6,027
Common StockAccumulated Other Comprehensive Loss
Three Months Ended January 31, 2024Number of SharesPar ValueAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
Balance as of October 31, 2023292,123$3$5,387$782$(327)$5,845
Components of comprehensive income, net of tax:
Net income———348—348
Other comprehensive income (loss)————1111
Total comprehensive income359
Cash dividends declared ($0.236 per common share)———(69)—(69)
Share-based awards issued, net of tax of $25919—9——9
Share-based compensation——44——44
Balance as of January 31, 2024293,042$3$5,440$1,061$(316)$6,188

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Agilent Technologies, Inc. ("we," "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

New Segment Structure. In November 2024, we announced a change in our organizational structure to support our market-focused, customer-centric strategy. Our former Diagnostics and Genomics segment combined with our liquid chromatography and liquid chromatography mass spectrometry instrument platforms to form our new Life Sciences and Diagnostics Markets segment. Our chemistries and supplies, laboratory automation, and software and informatics divisions moved from our former Life Sciences and Applied Markets segment to our Agilent CrossLab segment. The remaining divisions in our former Life Sciences and Applied Markets segment which includes our gas chromatography, gas chromatography mass spectrometry, remarketed instruments, spectroscopy and vacuum divisions form our new Applied Markets segment. We are reporting under this new structure beginning with this Quarterly Report on Form 10-Q for the period ended January 31, 2025.

Following this re-organization, we have three business segments - Life Sciences and Diagnostics Markets, Agilent CrossLab and Applied Markets, each of which comprise a reportable segment. All historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes.

Basis of Presentation. We have prepared the accompanying financial data for the three months ended January 31, 2025 and 2024 pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The October 31, 2024 condensed balance sheet data was derived from audited financial statements but does not include all the disclosures required in audited financial statements by U.S. GAAP. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair statement of our condensed consolidated balance sheets as of January 31, 2025 and October 31, 2024, condensed consolidated statement of comprehensive income (loss) for the three months ended January 31, 2025 and 2024, condensed consolidated statement of operations for the three months ended January 31, 2025 and 2024, condensed consolidated statement of cash flows for the three months ended January 31, 2025 and 2024 and condensed consolidated statement of equity for the three months ended January 31, 2025 and 2024.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, valuation of goodwill and purchased intangible assets, inventory valuation, retirement and post-retirement benefit plan assumptions and accounting for income taxes.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Restricted Cash and Restricted Cash Equivalents. Restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. A reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets follows:

January 31,October 31,
20252024
(in millions)
Cash and cash equivalents$1,467$1,329
Restricted cash included in other assets33
Total cash, cash equivalents and restricted cash$1,470$1,332

Leases. As of January 31, 2025 and October 31, 2024, operating lease right-of-use assets where we are the lessee were $172 million and $177 million, respectively, and were included within other assets in the accompanying condensed consolidated balance sheets. The associated operating lease liabilities were $177 million and $184 million as of January 31, 2025 and October 31, 2024, respectively, and were included in other accrued liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets.

Variable Interest Entities. We make a determination upon entering into an arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). We evaluate our investments in privately held companies on an ongoing basis. We have determined that as of January 31, 2025 and October 31, 2024, there were no VIEs required to be consolidated in our consolidated financial statements because we do not have a controlling financial interest in any of the VIEs in which we have invested nor are we the primary beneficiary. We account for these investments under either the equity method or as equity investments without readily determinable fair value ("RDFV"), depending on the circumstances. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs and vice-versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

As of both January 31, 2025 and October 31, 2024, the total carrying value of investments and loans in privately held companies considered as VIEs was $79 million. The maximum exposure is equal to the carrying value because we do not have future funding commitments. The investments are included on the long-term investments line and the loans on the other current assets and other assets lines (depending upon tenure of loan) on the condensed consolidated balance sheets.

Fair Value of Financial Instruments. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments which are readily determinable, and which are not accounted under the equity method are reported at fair value using quoted market prices for those securities when available with gains and losses included in net income. The fair value of long-term equity investments which are not readily determinable, and which are not accounted under the equity method are reported at cost with adjustments for observable changes in prices or impairments included in net income. As of January 31, 2025 and October 31, 2024, the fair value of the commercial paper approximates its carrying value. As of January 31, 2025, the fair value of our senior notes was $3,074 million with a carrying value of $3,326 million. This compares to the fair value of our senior notes of $3,083 million with a carrying value of $3,326 million as of October 31, 2024. The change in the fair value compared to carrying value in the three months ended January 31, 2025 is primarily due to increased market interest rates. The fair value was calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance. The fair value of foreign currency contracts used for hedging purposes is estimated internally by using inputs tied to active markets. These inputs, for example, interest rate yield curves, foreign exchange rates, and forward and spot prices for currencies are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. See also Note 9, "Fair Value Measurements" for additional information on the fair value of financial instruments and contingent consideration.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

2. NEW ACCOUNTING PRONOUNCEMENTS

There were no additions to the new accounting pronouncements not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our condensed consolidated financial statements upon adoption.

3. REVENUE

The following table presents the company’s total revenue and segment revenue disaggregated by geographical region:

Three Months Ended Jan 31,
20252024
Life Sciences and Diagnostics MarketsAgilent CrossLabApplied MarketsTotalLife Sciences and Diagnostics MarketsAgilent CrossLabApplied MarketsTotal
(in millions)
Revenue by Region
Americas$312$261$96$669$283$253$94$630
Europe1901888546318418589458
Asia Pacific145247157549153248169570
Total$647$696$338$1,681$620$686$352$1,658

The following table presents the company’s total revenue disaggregated by end markets and by revenue type:

Three Months Ended
Jan 31,
20252024
(in millions)
Revenue by End Markets
Pharmaceutical and Biopharmaceutical$585$565
Diagnostics and Clinical240228
Academic and Government137150
Chemicals and Advanced Materials379392
Food168157
Environmental and Forensics172166
Total$1,681$1,658
Revenue by Type
Instrumentation$625$630
Non-instrumentation and other1,0561,028
Total$1,681$1,658

Revenue by region is based on the ship to location of the customer. Revenue by end market is determined by the market indicator of the customer and by customer type. Instrumentation revenue includes sales from instruments, remarketed instruments and third-party products. Non-instrumentation revenue includes sales from contract and per incident services, companion diagnostics, contract development and manufacturing, spare parts, consumables, reagents, vacuum pumps, subscriptions, software licenses and associated services.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Contract Balances

Contract Assets

Contract assets (unbilled accounts receivable) primarily relate to the company's right to consideration for work completed but not billed at the reporting date. The unbilled receivables are reclassified to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the condensed consolidated balance sheets. The balances of contract assets as of January 31, 2025 and October 31, 2024, were $248 million and $247 million, respectively.

Contract Liabilities

The following table provides information about contract liabilities (deferred revenue) and the changes in the balances during the three months ended January 31, 2025:

Contract Liabilities
(in millions)
Ending balance as of October 31, 2024$701
Net revenue deferred in the period312
Revenue recognized that was included in the contract liability balance at the beginning of the period(230)
Change in deferrals from customer cash advances, net of revenue recognized14
Currency translation and other adjustments(15)
Ending balance as of January 31, 2025$782

During the three months ended January 31, 2024 revenue recognized that was included in the contract liability balance at October 31, 2023 was $229 million.

Contract liabilities primarily relate to multiple element arrangements for which billing has occurred but transfer of control of all elements to the customer has either partially or not occurred at the balance sheet date. This includes cash received from customers for products and related installation and services in advance of the transfer of control. Contract liabilities are classified as either current in deferred revenue or long-term in other long-term liabilities in the condensed consolidated balance sheets based on the timing of when we expect to complete our performance obligation.

Contract Costs

Incremental costs of obtaining a contract with a customer are recognized as an asset if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. The change in total capitalized costs to obtain a contract was immaterial during the three months ended January 31, 2025, and was included in other current and long-term assets on the condensed consolidated balance sheet. We have applied the practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include the company's internal sales force compensation program, as we have determined that annual compensation is commensurate with annual sales activities.

Transaction Price Allocated to the Remaining Performance Obligations

We have applied the practical expedient in ASC 606-10-50-14 and have not disclosed information about transaction price allocated to remaining performance obligations that have original expected durations of one year or less.

The estimated revenue expected to be recognized for remaining performance obligations that have an original term of more than one year, as of January 31, 2025, was $408 million, the majority of which is expected to be recognized over the next 12 months. Remaining performance obligations primarily include extended warranty, customer manufacturing contracts, software maintenance contracts and revenue associated with lease arrangements.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

4. SHARE-BASED COMPENSATION

We account for share-based awards in accordance with the provisions of the authoritative accounting guidance which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors including employee stock options, restricted stock units, employee stock purchases made under our employee stock purchase plan ("ESPP") and performance share awards granted to selected members of our senior management under the long-term performance plan (“LTPP”) based on estimated fair values.

We have two LTPP performance stock award programs, which are administered under the 2018 Stock Plan, for our executive officers and other key employees. Participants in our LTPP Total Stockholders’ Return (“TSR”) and LTPP Earnings Per Share (“EPS”) programs are entitled to receive shares of the company's stock after the end of a three-year period, if specified performance targets for the programs are met. The LTPP-TSR awards are generally designed to meet the criteria of a performance award with the performance metrics and peer group comparison based on the TSR set at the beginning of the performance period. The LTPP-EPS awards are based on the company’s EPS performance over a three-year period. The performance targets for the LTPP-EPS for year 2 and year 3 of the performance period are set in the first quarter of year 2 and year 3, respectively. For LTPP awards granted in fiscal year 2025, final payout of fiscal year 2025 awards will be further adjusted on achievement of predefined operating margin targets for fiscal year 2027. All LTPP awards are subject to a one-year post-vest holding period.

The final LTPP award may vary from 0 percent to 200 percent of the target award. We consider the dilutive impact of these programs in our diluted net income per share calculation only to the extent that the performance conditions are expected to be met. Restricted stock units generally vest, with some exceptions, at a rate of 25 percent per year over a period of four years from the date of grant.

Stock options granted under the 2018 Stock Plan may be either "incentive stock options", as defined in Section 422 of the Internal Revenue Code, or non-statutory. Options generally vest at a rate of 25 percent per year over a period of four years from the date of grant with a maximum contractual term of ten years. The exercise price for stock options is generally not less than 100 percent of the fair market value of our common stock on the date the stock award is granted. We issue new shares of common stock when employee stock options are exercised.

The impact on our results for share-based compensation was as follows:

Three Months Ended
January 31,
20252024
(in millions)
Cost of products and services$12$14
Research and development56
Selling, general and administrative2424
Total share-based compensation expense$41$44

At January 31, 2025 and October 31, 2024, no share-based compensation was capitalized within inventory.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

The following assumptions were used to estimate the fair value of awards granted.

Three Months Ended
January 31,
20252024
Stock Option Plans:
Weighted average risk-free interest rate4.1%4.4%
Dividend yield0.7%0.8%
Weighted average volatility29%29%
Expected life5.5 years5.5 years
LTPP:
Volatility of Agilent shares30%28%
Volatility of selected peer-company shares16%-62%16%-70%
Pair-wise correlation with selected peers29%30%
Post-vest holding restriction discount for all executive awards6.7%6.4%

The fair value of share-based awards for our employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the LTPP (TSR) were valued using a Monte Carlo simulation model. The Monte Carlo simulation fair value model requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. For the volatility of our LTPP (TSR) grants, we used our own historical stock price volatility.

The ESPP allows eligible employees to purchase shares of our common stock at 85 percent of the price at purchase and uses the purchase date to establish the fair market value.

We use historical volatility to estimate the expected stock price volatility assumption for employee stock option awards. In reaching the conclusion, we have considered many factors including the extent to which our options are currently traded and our ability to find traded options in the current market with similar terms and prices to the options we are valuing. In estimating the expected life of our options granted, we considered the historical option exercise behavior of our executives, which we believe is representative of future behavior.

The estimated fair value of restricted stock units and LTPP (EPS) awards is determined based on the market price of our common stock on the date of grant adjusted for expected dividend yield. The compensation cost for LTPP (EPS) reflects the cost of awards that are probable to vest at the end of the performance period.

All LTPP awards granted to our senior management employees have a one-year post-vest holding restriction. The estimated discount associated with post-vest holding restrictions is calculated using the Finnerty model. The model calculates the potential lost value if the employees were able to sell the shares during the lack of marketability period, instead of being required to hold the shares. The model used the same historical stock price volatility and dividend yield assumption used for the Monte Carlo simulation model and an expected dividend yield to compute the discount.

5. INCOME TAXES

For the three months ended January 31, 2025, our income tax expense was $49 million with an effective tax rate of 13.4 percent. For the three months ended January 31, 2025, there were no significant discrete items.

For the three months ended January 31, 2024, our income tax expense was $55 million with an effective tax rate of 13.6 percent. For the three months ended January 31, 2024, there were no significant discrete items.

In the U.S., tax years remain open back to the year 2021 for federal income tax purposes and 2020 for significant states. In other major jurisdictions where we conduct business, the tax years generally remain open back to the year 2014.

With these jurisdictions and the U.S., it is reasonably possible that some tax audits may be completed over the next twelve months. However, management is not able to provide a reasonably reliable estimate of the timing of any other future tax payments or change in unrecognized tax benefits, if any.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

6. NET INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:

Three Months Ended
January 31,
20252024
(in millions)
Numerator:
Net income$318$348
Denominator:
Basic weighted-average shares285293
Potential common shares— stock options and other employee stock plans21
Diluted weighted-average shares287294

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. In addition, we exclude from the calculation of diluted earnings per share stock options, ESPP, LTPP and restricted stock awards whose combined exercise price and unamortized fair value were greater than the average market price of our common stock because their effect would also be anti-dilutive.

For the three months ended January 31, 2025 and 2024, potential common shares excluded from the calculation of diluted earnings per share were not material.

7. INVENTORY

Inventory as of January 31, 2025 and October 31, 2024 consisted of the following:

January 31, 2025October 31, 2024
(in millions)
Finished goods$532$523
Purchased parts and fabricated assemblies465449
Inventory$997$972

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments during the three months ended January 31, 2025:

Life Sciences and Diagnostics MarketsAgilent CrossLabApplied MarketsTotal
(in millions)
Goodwill as of October 31, 2024$3,000$1,168$309$4,477
Foreign currency translation impact(22)(4)(5)(31)
Goodwill arising from acquisitions and adjustments(17)——(17)
Goodwill as of January 31, 2025$2,961$1,164$304$4,429

In the first quarter of fiscal year 2025, we reorganized our operating segments; see Note 17, "Segment Information" for more information about our segment reorganization. As a result, we used the relative fair value allocation approach to reassign $1.274 billion of goodwill from our Applied Markets segment (formerly Life Sciences and Applied Markets segment) to our Agilent CrossLab and Life Sciences and Diagnostics Markets segments (formerly Diagnostics and Genomics segment). Of the $1.274 billion goodwill reallocated, $365 million was reassigned to our Life Sciences and Diagnostics Markets segment and $909 million was reassigned to our Agilent CrossLab segment. Goodwill balances as of October 31, 2024 have been recast to conform to this new presentation. As a result of the reorganization, our reporting units are: Life Sciences and Diagnostics Markets, Agilent CrossLab and Applied Markets. In addition, we performed a quantitative goodwill impairment test, and the results of the analysis indicated that the fair values for all three of our reporting units were in excess of their carrying values by substantial amounts; therefore, no impairment was indicated.

The component parts of other intangible assets as of October 31, 2024 and January 31, 2025 are shown in the table below:

Other Intangible Assets
Gross Carrying AmountAccumulated AmortizationNet Book Value
(in millions)
As of October 31, 2024
Purchased technology$1,484$1,169$315
Trademark/Tradename19917425
Customer relationships291107184
Backlog9—9
Third-party technology and licenses331914
Total intangible assets$2,016$1,469$547
As of January 31, 2025
Purchased technology$1,481$1,185$296
Trademark/Tradename19917623
Customer relationships286113173
Backlog918
Third-party technology and licenses331914
Total intangible assets$2,008$1,494$514

During the three months ended January 31, 2025, we recorded measurement period adjustments to decrease goodwill by $17 million primarily to reduce other liabilities and to increase other intangible assets by $2 million related to our acquisition of BIOVECTRA. During the three months ended January 31, 2025, other intangible assets in total decreased $7 million due to the impact of foreign currency.

In general, for U.S. federal tax purposes, goodwill from asset purchases is amortizable; however, any goodwill created as part of a stock acquisition is not deductible.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible assets and goodwill is indicated. During the three months ended January 31, 2025, we did not identify any triggering events or circumstances which would indicate an impairment of goodwill or indefinite-lived intangible assets.

During the three months ended January 31, 2024, we recorded an impairment of in-process research and development of $6 million in research and development in the condensed consolidated statement of operations related to a project in our Applied Markets segment. During the three months ended January 31, 2024 we did not identify any triggering events or circumstances which would indicate an impairment of goodwill.

For the three months ended January 31, 2025 and 2024, amortization expense of intangible assets was $28 million and $26 million, respectively.

Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year 2025 and for each of the next five fiscal years and thereafter is estimated below:

Estimated future amortization expense:
(in millions)
Remainder of 2025$76
2026$74
2027$71
2028$64
2029$60
2030$51
Thereafter$118

9. FAIR VALUE MEASUREMENTS

The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The guidance establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2- applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data.

Level 3- applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2025 were as follows:

Fair Value Measurement at January 31, 2025 Using
January 31, 2025Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(in millions)
Assets:
Short-term
Cash equivalents (money market funds)$871$871$—$—
Derivative instruments (foreign exchange contracts)17—17—
Long-term
Trading securities4242——
Other investments31—31—
Total assets measured at fair value$961$913$48$—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)$4$—$4$—
Long-term
Deferred compensation liability42—42—
Total liabilities measured at fair value$46$—$46$—

Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2024 were as follows:

Fair Value Measurement at October 31, 2024 Using
October 31, 2024Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
(in millions)
Assets:
Short-term
Cash equivalents (money market funds)$800$800$—$—
Derivative instruments (foreign exchange contracts)14—14—
Long-term
Trading securities4343——
Other investments31—31—
Total assets measured at fair value$888$843$45$—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)$12$—$12$—
Long-term
Deferred compensation liability43—43—
Total liabilities measured at fair value$55$—$55$—

Our money market funds and trading securities are generally valued using quoted market prices and therefore are classified within level 1 of the fair value hierarchy. Our derivative financial instruments are classified within level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Other investments represent shares we own in a special fund that targets underlying investments of approximately 40 percent in debt securities and 60 percent in equity securities. These shares have been classified as level 2 because, although the shares of the fund are not traded on any active stock exchange, each of the individual underlying securities are or can be derived from similar securities traded on an active market and hence we have a readily determinable value for the underlying securities, from which we are able to determine the fair market value for the special fund itself.

Trading securities, which are comprised of mutual funds, bonds and other similar instruments, other investments and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income. Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss) within stockholders' equity. Realized gains and losses from the sale of these instruments are recorded in net income.

Gains and losses reflected in other income (expense), net for our equity investments with readily determinable fair value ("RDFV") and equity investments without RDFV are summarized below:

Three Months Ended
January 31,
20252024
(in millions)
Net gain (loss) recognized during the period on equity securities$1$3
Less: Net gain (loss) on equity securities sold during the period$—$—
Unrealized gain (loss) on equity securities$1$3

Impairment of Investments. There were no impairments of investments for the three months ended January 31, 2025 and 2024.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

For the three months ended January 31, 2025, there were no impairments of long-lived assets held and used. For the three months ended January 31, 2024, long-lived assets held and used with a carrying value of $8 million were written down to their fair value of zero resulting in an impairment charge of $8 million.

For the three months ended January 31, 2025 and 2024, there were no impairments of long-lived assets held for sale.

Non-Marketable Equity Securities

For the three months ended January 31, 2025, the unrealized gain (loss) on our non-marketable equity securities without readily determinable fair values was comprised of $1 million of downward adjustments and no upward adjustments which were included in net income as adjustments to the carrying value.

For the three months ended January 31, 2024, there were no unrealized gain (loss) adjustments to the carrying value of non-marketable securities without readily determinable fair value based on an observable market transaction.

As of January 31, 2025, the cumulative net gain (loss) on our non-marketable equity securities without readily determinable fair values was comprised of $40 million upward adjustments and $31 million downward adjustments, and the carrying amount was $100 million.

As of January 31, 2024, the cumulative net gain (loss) on our non-marketable equity securities without readily determinable fair values was comprised of $38 million upward adjustments and $29 million downward adjustments, and the carrying amount was $102 million.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

10. DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance and are assessed for effectiveness against the underlying exposure every reporting period. For open contracts as of January 31, 2025, changes in the time value of the foreign exchange contract are excluded from the assessment of hedge effectiveness and are recognized in cost of sales over the life of the foreign exchange contract. The changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income (loss). Amounts associated with cash flow hedges are reclassified to cost of sales in the condensed consolidated statement of operations when the forecasted transaction occurs. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income (loss) will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense), net in the condensed consolidated statement of operations in the current period. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in cost of sales over the life of the option contract. For the three months ended January 31, 2025 and 2024, ineffectiveness and gains and losses recognized in other income (expense), net due to de-designation of cash flow hedge contracts were not significant.

In February 2016, Agilent executed three forward-starting pay fixed/receive variable interest rate swaps for the notional amount of $300 million in connection with future interest payments to be made on our 2026 senior notes issued on September 15, 2016. These derivative instruments were designated and qualified as cash flow hedges under the criteria prescribed in the authoritative guidance. The swap arrangements were terminated on September 15, 2016 with a payment of $10 million, and we recognized this as a deferred loss in accumulated other comprehensive income (loss) which is being amortized to interest expense over the life of the 2026 senior notes. The remaining loss to be amortized related to the interest rate swap agreements at January 31, 2025 was $2 million.

In August 2019, Agilent executed treasury lock agreements for $250 million in connection with future interest payments to be made on our 2029 senior notes issued on September 16, 2019. We designated the treasury lock as a cash flow hedge. The treasury lock contracts were terminated on September 6, 2019, and we recognized a deferred loss of $6 million in accumulated other comprehensive income (loss) which is being amortized to interest expense over the life of the 2029 senior notes. The remaining loss to be amortized related to the treasury lock agreements at January 31, 2025 was $3 million.

Net Investment Hedges

We enter into foreign exchange contracts to hedge net investments in foreign operations to mitigate the risk of adverse movements in exchange rates. These foreign exchange contracts are carried at fair value and are designated and qualify as net investment hedges under the criteria prescribed in the authoritative guidance. Changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income (loss) - translation adjustment and are assessed for effectiveness against the underlying exposure every reporting period. If the company’s net investment changes during the year, the hedge relationship will be assessed and de-designated if the hedge notional amount is outside of prescribed tolerance with a gain/loss reclassified from other comprehensive income (loss) to other income (expense) in the current period. For the three months ended January 31, 2025, ineffectiveness and the resultant effect of any gains or losses recognized in other income (expense) due to de-designation of the hedge contracts were not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in value of the derivative instruments are recognized in other income (expense), net in the condensed consolidated statement of operations, in the current period, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions which are selected based on their credit ratings and other factors. We have established policies and procedures for mitigating credit risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties.

A number of our derivative agreements contain threshold limits to the net liability position with counterparties and are dependent on our corporate credit rating determined by the major credit rating agencies. The counterparties to the derivative instruments may request collateralization, in accordance with derivative agreements, on derivative instruments in net liability positions.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2025, was approximately $2 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2025.

The number of open foreign exchange forward contracts and aggregated notional amounts by designation as of January 31, 2025 were as follows:

Number of Open Forward ContractsAggregate Notional Amount USD
Buy/(Sell)
($ in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange forward contracts330$(541)
Net Investment Hedges
Foreign exchange forward contracts3$(33)
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts195$(19)

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheets in accordance with the authoritative guidance.

The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheets as of January 31, 2025, and October 31, 2024, were as follows:

Fair Values of Derivative Instruments
Asset DerivativesLiability Derivatives
Fair ValueFair Value
Balance Sheet LocationJanuary 31, 2025October 31, 2024Balance Sheet LocationJanuary 31, 2025October 31, 2024
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets$14$4Other accrued liabilities$2$2
Net investment hedges
Foreign exchange contracts
Other current assets$2$—Other accrued liabilities$—$—
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets$1$10Other accrued liabilities$2$10
Total derivatives$17$14$4$12

The effects of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows:

Three Months Ended
January 31,
20252024
(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income (loss)$14$(10)
Gain (loss) reclassified from accumulated other comprehensive income (loss) into cost of sales$3$3
Gain on time value of forward contracts recorded in cost of sales$1$2
Net Investment Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income (loss) - translation adjustment$2$—
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net$(2)$(2)

At January 31, 2025, the amount of existing net gain that is expected to be reclassified from accumulated other comprehensive income (loss) is $20 million. Within the next twelve months it is estimated that $9 million of gain included

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

within the net amount of accumulated other comprehensive income (loss) will be reclassified to cost of sales in respect of cash flow hedges.

11. RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

Components of net periodic benefit cost (income). For the three months ended January 31, 2025 and 2024, our net pension and post retirement benefit cost (income) were comprised of the following:

Three Months Ended Jan 31,
U.S. Defined Benefit PlansNon-U.S. Defined Benefit PlansU.S. Post Retirement Benefit Plans
202520242025202420252024
(in millions)
Service cost—benefits earned during the period$—$—$5$5$—$—
Interest cost on benefit obligation5566—1
Expected return on plan assets(6)(5)(11)(9)(1)(1)
Amortization of net actuarial (gain) loss—1(6)(4)——
Total net periodic benefit cost (income)$(1)$1$(6)$(2)$(1)$—
Settlement (gain) loss$—$—$14$—$—$—

The service cost component is recorded in cost of sales and operating expenses in the condensed consolidated statement of operations. All other cost components are recorded in other income (expense), net in the condensed consolidated statement of operations.

During the three months ended January 31, 2025, we transferred all the assets and obligations of our Netherlands defined benefit plan to an unaffiliated insurance company under a buy-out contract. The settlement resulted in a net loss of $14 million, which is included in other income (expense), net in the condensed consolidated statement of operations. The settlement loss includes the recognition of previously unrecognized actuarial losses that were included in accumulated other comprehensive income.

Employer contributions and expected future employer contributions for the remainder of the year were as follows:

Three Months EndedEmployer Contributions
Jan 31,For Remainder of Year
202520242025
(in millions)
U.S. defined benefit plans$—$—$—
Non-U.S. defined benefit plans$6$6$12

12. WARRANTIES AND CONTINGENCIES

Warranties

We accrue for standard warranty costs based on historical trends in actual warranty charges over the past 12 months. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost over the period. The standard warranty accrual balances are held in other accrued and other long-term liabilities on our condensed consolidated balance sheets. Our standard warranty terms typically extend to one year from the date of delivery, depending on the product.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

A summary of the standard warranty accrual activity is shown in the table below:

Three Months Ended
January 31,
20252024
(in millions)
Standard warranty accrual, beginning balance$30$29
Accruals for warranties including change in estimates1215
Settlements made during the period(13)(14)
Standard warranty accrual, ending balance$29$30
Accruals for warranties due within one year$29$30

Bank Guarantees

Guarantees consist primarily of outstanding standby letters of credit and bank guarantees and were approximately $37 million as of January 31, 2025 and October 31, 2024, respectively. A standby letter of credit is a guarantee of payment issued by a bank on behalf of us that is used as payment of last resort should we fail to fulfill a contractual commitment with a third party. A bank guarantee is a promise from a bank or other lending institution that if we default on a loan, the bank will cover the loss.

Contingencies

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, intellectual property, commercial, real estate, environmental and employment matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, condensed consolidated financial condition, results of operations or cash flows.

13. RESTRUCTURING AND OTHER RELATED COSTS

Summary of Restructuring Plans. In fiscal years 2024 and 2023, we announced restructuring plans that were both designed to reduce costs and expenses in response to macroeconomic conditions. These actions impact all three of our business segments. The costs associated with these restructuring plans were not allocated to our business segments' results; however, each business segment will benefit from the future cost savings from these actions. When completed, the restructuring programs are expected to result in the reduction in annual cost of sales and operating expenses over the three business segments.

A summary of our aggregate liability relating to both restructuring plans and the total restructuring expense since inception of those plans are shown in the table below:

Workforce Reduction Total
(in millions)
Balance at October 31, 2024$13
Income statement expense1
Cash payments(9)
Balance at January 31, 2025$5
Total restructuring expense since inception of all plans:
Fiscal Year 2023 Plan$50
Fiscal Year 2024 Plan73
Total restructuring expense since inception of all plans$123

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

The aggregate restructuring liability of $5 million at January 31, 2025, is recorded in other accrued liabilities on the condensed consolidated balance sheet and reflects estimated future cash outlays.

A summary of the charges in the condensed consolidated statement of operations resulting from both restructuring plans is shown below:

Three Months EndedThree Months Ended
Jan 31,Jan 31,
20252024
(in millions)
Cost of products and services$—$—
Research and development—2
Selling, general and administrative11
Total restructuring costs$1$3

Fiscal Year 2024 Plan ("FY24 Plan"). In the third quarter of fiscal year 2024, we announced a restructuring plan designed to reduce costs and expenses in response to macroeconomic conditions. The costs associated with this workforce reduction include severance and other personnel-related costs. While the majority of the workforce reduction was completed by the end of fiscal year 2024, we expect to substantially complete the remaining restructuring activities by the second quarter of fiscal year 2025.

In connection with the FY24 Plan, we have recorded approximately $1 million in restructuring and other related costs due to changes in estimate in the three months ended January 31, 2025.

A summary of the FY24 Plan activity is shown in the table below:

Workforce Reduction
(in millions)
Balance at October 31, 2024$11
Income statement expense1
Cash payments(8)
Balance at January 31, 2025$4
Total restructuring expense since inception of FY 24 Plan$73

Fiscal Year 2023 Plan ("FY23 Plan"). We have substantially completed all workforce management actions in connection with the FY23 Plan. During the three months ended January 31, 2025, we settled cash payments of $1 million, and the remaining accrual of $1 million will be settled in our second quarter of fiscal year 2025.

14. SHORT-TERM DEBT

Credit Facilities

On June 7, 2023, we entered into a credit agreement with a group of financial institutions which provides for a $1.5 billion five-year unsecured credit facility that will expire on June 7, 2028 and an incremental revolving credit facility in an aggregate amount of up to $750 million. During the three months ended January 31, 2025, we made no borrowings or repayments under these credit facilities. As of both January 31, 2025 and October 31, 2024, we had no borrowings outstanding under either the credit facility or the incremental revolving credit facility.

On June 2, 2023, we entered into an Uncommitted Money Market Line Credit agreement with Societe Generale which provides for an aggregate borrowing capacity of $300 million. The credit facility is an uncommitted short-term cash advance facility where each request must be at least $1 million. The interest rate is set by the lender at the time of the borrowing and is

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

fixed for the duration of the advance. During the three months ended January 31, 2025, we made no borrowings or repayments under this credit facility. As of both January 31, 2025 and October 31, 2024, we had no borrowings outstanding under the credit facility.

We were in compliance with the covenants for the credit facilities during the three months ended January 31, 2025.

Commercial Paper

Under our U.S. commercial paper program, the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.5 billion with up to 397-day maturities. At any point in time, the company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the three months ended January 31, 2025, we borrowed $301 million and repaid $331 million under our commercial paper program. As of January 31, 2025 we had borrowings of $10 million outstanding under our U.S. commercial paper program and a weighted average annual interest rate of 4.45 percent. As of October 31, 2024 we had borrowings of $40 million outstanding under our U.S. commercial paper program and had a weighted average annual interest rate of 4.92 percent.

Other Loans

In connection with the BIOVECTRA acquisition, we have two interest-free loans from the Strategic Innovation Fund ("SIF"). The loans are repayable in quarterly and yearly installments through 2040 at a weighted average imputed interest rate of 4.7 percent. In addition, we have two interest-free loans with the Atlantic Canada Opportunities Agency (“ACOA”). The loans are repayable in monthly installments through 2029 at a weighted average imputed interest rate of 4.5 percent. As of January 31, 2025 and October 31, 2024, the current portion of these loans of $6 million and $5 million, respectively, was recorded in short-term debt.

15. LONG-TERM DEBT

Senior Notes

The following table summarizes the company’s long-term senior notes:

January 31, 2025October 31, 2024
Amortized PrincipalAmortized Principal
(in millions)
2026 Senior Notes$299$299
2027 Senior Notes596596
2029 Senior Notes496496
2030 Senior Notes497497
2031 Senior Notes845845
2034 Senior Notes593593
Total Senior Notes$3,326$3,326

All outstanding notes listed above are unsecured and rank equally in right of payment with all of Agilent’s other senior unsecured indebtedness. There have been no other changes to the principal, maturity, interest rates and interest payment terms of the Agilent senior notes, detailed in the table above, in the three months ended January 31, 2025, as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Other Loans

In connection with the BIOVECTRA acquisition, we have two interest-free loans from the Strategic Innovation Fund ("SIF"). The loans are repayable in quarterly and yearly installments through 2040 at a weighted average imputed interest rate of 4.7 percent. In addition, we have two interest-free loans with the Atlantic Canada Opportunities Agency (“ACOA”). The loans are repayable in monthly installments through 2029 at a weighted average imputed interest rate of 4.5 percent. As of January 31, 2025 and October 31, 2024, the non-current portion of these loans of $21 million (including additional draw and measurement period adjustment) and $19 million, respectively, was recorded in long-term debt.

16. STOCKHOLDERS' EQUITY

Stock Repurchase Programs

On January 9, 2023, we announced that our board of directors had approved a share repurchase program (the "2023 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2023 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2023 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2023 repurchase program commenced on March 1, 2023.

During the three months ended January 31, 2024, we repurchased and retired no shares under this authorization. During the three months ended January 31, 2025, we repurchased and retired 649,857 shares for $90 million under this authorization. As of January 31, 2025, we had remaining authorization to repurchase up to approximately $284 million of our common stock under the 2023 repurchase program.

On May 29, 2024, we announced that our board of directors had approved a new share repurchase program (the "2024 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2024 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2024 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2024 repurchase program became effective on August 1, 2024 and will commence upon the termination of our 2023 repurchase program.

Cash Dividends on Shares of Common Stock

During the three months ended January 31, 2025, we paid cash dividends of $0.248 per common share or $71 million on the company's common stock. During the three months ended January 31, 2024, we paid cash dividends of $0.236 per common share or $69 million on the company's common stock.

On February 19, 2025, our board of directors declared a quarterly dividend of $0.248 per share of common stock or approximately $71 million which will be paid on April 23, 2025 to all shareholders of record at the close of business on April 1, 2025.

The timing and amounts of any future dividends are subject to determination and approval by our board of directors.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component and related tax effects were as follows:

Net defined benefit pension cost and post retirement plan costs
Three Months Ended January 31, 2025Foreign currency translationPrior service creditsActuarial LossesUnrealized gains (losses) on derivativesTotal
(in millions)
As of October 31, 2024$(323)$121$(112)$9$(305)
Other comprehensive income (loss) before reclassifications(85)——14(71)
Amounts reclassified out of accumulated other comprehensive income (loss)———(3)(3)
Tax (expense) benefit———(2)(2)
Other comprehensive income (loss)(85)——9(76)
As of January 31, 2025$(408)$121$(112)$18$(381)

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended January 31, 2025 and 2024 were as follows (in millions):

Details about accumulated other comprehensive income (loss) componentsAmounts Reclassified from other comprehensive income (loss)Affected line item in statement of operations
Three Months Ended
January 31,
20252024
Foreign currency translation$—$8Other income (expense), net
—8Total before income tax
——(Provision) benefit for income tax
—8Total net of income tax
Unrealized gain (loss) on derivatives33Cost of products
33Total before income tax
(1)(1)(Provision) benefit for income tax
22Total net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net gain (loss)—3Other income (expense), net
—3Total before income tax
—(1)(Provision) benefit for income tax
—2Total net of income tax
Total reclassifications for the period$2$12

Amounts in parentheses indicate reductions to income and increases to other comprehensive income (loss).

Reclassifications out of accumulated other comprehensive income (loss) of actuarial net gain (loss) in respect of retirement plans and post retirement pension plans are included in the computation of net periodic benefit cost (income) (see Note 11, "Retirement Plans and Post Retirement Pension Plans").

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

17. SEGMENT INFORMATION

Description of segments. We are a global leader in life sciences, diagnostics and applied markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

In November 2024, we announced a change in our organizational structure to support our market-focused, customer-centric strategy. Our former Diagnostics and Genomics segment combined with our liquid chromatography and liquid chromatography mass spectrometry instrument platforms to form our new Life Sciences and Diagnostics Markets segment. Our chemistries and supplies, laboratory automation, and software and informatics divisions moved from our former Life Sciences and Applied Markets segment to our Agilent CrossLab segment. The remaining divisions in our former Life Sciences and Applied Markets segment which includes our gas chromatography, gas chromatography mass spectrometry, remarketed instruments, spectroscopy and vacuum divisions form our new Applied Markets segment. All historical financial segment information has been recast to conform to this new presentation.

Following this re-organization, we have three business segments - Life Sciences and Diagnostics Markets, Agilent CrossLab and Applied Markets, each of which comprise a reportable segment. The three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

A description of our three reportable segments is as follows:

Our Life Sciences and Diagnostics Markets segment is comprised of seven areas of activity. We provide active pharmaceutical ingredients ("APIs") for oligo-based therapeutics as well as solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our liquid chromatography ("LC") and liquid chromatography mass spectrometry ("LCMS") businesses enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level. Second, our cell analysis business includes instruments, reagents, software, and labware associated with unique live-cell analysis platforms in addition to mainstream flow cytometers, plate-readers, and plate washers/dispensers which are used across a broad range of applications. Third, our contract development and manufacturing organization ("CDMO") business provides services related to and the production of synthesized oligonucleotides under pharmaceutical good manufacturing practices conditions for use as API in a class of drugs that utilize nucleic acid molecules for disease therapy. BIOVECTRA capabilities include microbial fermentation, bioreagents, highly potent active pharmaceutical ingredients, peptide purification and biomanufacturing capabilities in several nucleic acid modalities. Together, our BIOVECTRA and nucleic acid solutions businesses comprise our CDMO offerings to our customers providing clinical-to-commercial scale production capabilities. Fourth, our pathology solutions business is focused on product offerings for cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry, in situ hybridization, hematoxylin and eosin staining and special staining. This business further provides clinical flow cytometry reagents for routine cancer diagnostics. This business also provides bulk antibodies as raw materials and associated assay development services to in vitro diagnostics manufacturers, biotechnology and pharmaceutical companies. Fifth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Sixth, our genomics business includes reagents to support next-generation sequencing ("NGS") workflows and arrays. This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy. Finally, our biomolecular analysis business provides complete workflow solutions, including instruments, consumables and software, for quality control analysis of nucleic acid samples. Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques including NGS, utilized in clinical and life science research applications.

Our Agilent CrossLab segment provides an extensive services and consumables portfolio that spans the entire lab, in addition to software and laboratory automation solutions, which are designed to improve customer outcomes and represents a broad range of offerings designed to serve customer needs across end-markets and applications. Our services portfolio includes repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements. Our consumables portfolio is designed to improve customer outcomes. Most of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

to supplies. Key product categories in consumables include gas chromatography ("GC") and liquid chromatography ("LC") columns, sample preparation products, custom chemistries, and a large selection of laboratory supplies. Software and informatics solutions include software for instrument control, data acquisition, data analysis, secure storage of results, and laboratory information and workflow management. This software facilitates the compliant use of instruments in pharmaceutical quality assurance and quality control environments. The OpenLab laboratory software suite is a scalable, open software platform that enables customers to capture, analyze, and share scientific data throughout the lab and across the enterprise. Laboratory automation offers automated sample preparation solutions, including liquid handling, plate management, consumables and scheduling software. These solutions range from standalone automation platforms to integrated workflow solutions with seamless integration to our instrumentation.

Our Applied Markets segment provides application-focused solutions that include instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products. Our gas chromatography ("GC") and gas chromatography mass spectrometry ("GCMS") businesses enable customers to perform a wide variety of testing including measuring volatile and semi-volatile contaminants to assess the safety of our foods, quality of water and consumer products while also enabling testing of fuels and purity of chemicals. Our inductively coupled plasma mass spectrometry, inductively coupled plasma optical emission spectrometry, atomic absorption and microwave plasma-atomic emission spectrometry instruments are vital for our customers to measure metals and elemental signatures in their samples and find uses in the food safety, environmental quality, chemicals manufacture, advanced materials, energy and forensics markets. Our molecular spectroscopy business including the raman, fluorescence and infrared spectroscopy instruments offer both in-field and in-lab testing solutions in a diverse variety of applications including airport security, explosives testing, narcotics, food quality and chemical characterization. Our vacuum business develops cutting edge products and technologies to test vacuum environments and find uses in a diverse variety of industries including semi-conductor, batteries, chemical manufacturing and advanced materials development. Finally, our remarketed instruments business refurbishes and resells certified pre-owned instruments to value-oriented customers who would like Agilent quality and performance at a budget conscious price.

A significant portion of the segments' expenses arises from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include finance, tax, treasury, legal, real estate, insurance services, workplace services, human resources, information technology services, corporate development and other corporate infrastructure expenses, costs of centralized research and development and joint sales and marketing costs. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. In addition, we do not allocate certain costs to the operating margin for each segment because management does not include this information in its measurement of the performance of the operating segments. Unallocated costs consist of asset impairments, amortization of acquisition-related intangible assets, acquisition and integration costs, transformational initiatives expenses, restructuring and other related costs, business exit and divestiture costs and certain other charges. Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers, site consolidations, legal entity and other business reorganizations, in-sourcing or outsourcing of activities.

The following tables reflect the results of our reportable segments under our management reporting system. The performance of each segment is measured based on several metrics, including segment income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

The profitability of each of the segments is measured after excluding items such as transformational initiatives, acquisition and integration costs, amortization of intangible assets related to business combinations, interest income, interest expense and other items as noted in the reconciliations below:

Three Months Ended
January 31,
20252024
(in millions)
Net Revenue:
Life Sciences and Diagnostics Markets$647$620
Agilent CrossLab696686
Applied Markets338352
Total net revenue$1,681$1,658
Segment Income From Operations:
Life Sciences and Diagnostics Markets$117$114
Agilent CrossLab221222
Applied Markets8492
Total segment income from operations$422$428

The following table reconciles reportable segments' income from operations to Agilent’s total enterprise income before taxes:

Three Months Ended
January 31,
20252024
(in millions)
Total reportable segment income from operations$422$428
Unallocated costs:
Amortization of intangible assets related to business combinations(28)(26)
Acquisition and integration costs(9)(2)
Transformational initiatives(6)(3)
Asset impairment—(8)
Restructuring and other related costs(1)(3)
Other(2)(2)
Total unallocated costs(46)(44)
Income from operations376384
Interest income1518
Interest expense(28)(22)
Other income (expense), net423
Income before taxes, as reported$367$403

The following table reflects segment and unallocated assets. Segment assets include allocations of corporate assets, goodwill, net other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, short-term and long-term investments, deferred tax assets, right-of-use assets and other assets.

January 31, 2025October 31, 2024
(in millions)
Assets:
Life Sciences and Diagnostics Markets$5,790$5,866
Agilent CrossLab2,4212,360
Applied Markets873872
Unallocated Assets2,8302,748
Total assets$11,914$11,846

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