Item 8. Financial Statements and Supplementary Data

Financial Statements and Supplementary Data

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in

Rules 13a-15(f)

and

15d-15(f)

under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control — Integrated Framework (2013), our management, including our chief executive officer and chief financial officer, concluded that our internal control over financial reporting was effective as of December 31, 2025.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Waters Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Waters Corporation and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in

Internal Control—Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in

Internal Control—Integrated Framework

(2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Product Revenue Recognition

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. The Company recognizes revenue on product sales at the time control of the product transfers to the customer. Certain of the Company’s customers have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. Product sales totaled $2.0 billion for the year ended December 31, 2025.

The principal consideration for our determination that performing procedures relating to product revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s product revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to product revenue recognition. These procedures also included, among others, (i) evaluating the recognition of revenue for a sample of transactions by obtaining and inspecting source documents, such as invoices, customer purchase orders, and shipping documents, and (ii) obtaining and inspecting evidence of remittance of cash payment from customers, as applicable, related to product revenue.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 23,

We have served as the Company’s auditor since 1994.

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		December 31,
		2025				2024
		(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents		$	587,831			$	325,355
Accounts receivable, net			828,844				733,365
Inventories			572,371				477,261
Other current assets			158,599				133,130
Total current assets			2,147,645				1,669,111
Property, plant and equipment, net			642,046				651,200
Intangible assets, net			558,179				567,906
Goodwill			1,340,081				1,295,720
Operating lease assets			80,764				74,193
Other assets			307,835				295,665
Total assets		$	5,076,550			$	4,553,795
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and debt		$	460,000			$	—
Accounts payable			103,778				99,931
Accrued employee compensation			99,654				93,969
Deferred revenue and customer advances			266,540				250,807
Current operating lease liabilities			31,091				25,537
Accrued income taxes			35,530				158,658
Accrued warranty			12,261				11,602
Other current liabilities			230,645				149,254
Total current liabilities			1,239,499				789,758
Long-term liabilities:
Long-term debt			947,445				1,626,488
Long-term portion of retirement benefits			43,918				44,611
Long-term income tax liabilities			34,075				30,318
Long-term operating lease liabilities			52,548				50,317
Other long-term liabilities			197,823				183,796
Total long-term liabilities			1,275,809				1,935,530
Total liabilities			2,515,308				2,725,288
Commitments and contingencies (Notes 8, 9, 10, 11, 12 and 16)
Stockholders’ equity:
Preferred stock, par value $0.01 per share, 5,000 shares authorized, none issued at December 31, 2025 and December 31, 2024			—				—
Common stock, par value $0.01 per share, 400,000 shares authorized, 163,162 and 162,962 shares issued, 59,549 and 59,388 shares outstanding at December 31, 2025 and December 31, 2024, respectively			1,632				1,630
Additional paid-in capital			2,416,237				2,341,298
Retained earnings			10,431,284				9,788,655
Treasury stock, at cost, 103,613 and 103,574 shares at December 31, 2025 and December 31, 2024, respectively			(10,162,460	)			(10,147,793	)
Accumulated other comprehensive loss			(125,451	)			(155,283	)
Total stockholders’ equity			2,561,242				1,828,507
Total liabilities and stockholders’ equity		$	5,076,550			$	4,553,795

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

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended December 31,
		2025				2024				2023
		(In thousands, except per share data)
Revenues:
Product sales		$	1,977,100			$	1,844,176			$	1,903,050
Service sales			1,188,186				1,114,211				1,053,366
Total net sales			3,165,286				2,958,387				2,956,416
Costs and operating expenses:
Cost of product sales			820,267				747,920				766,374
Cost of service sales			468,555				452,281				428,849
Selling and administrative expenses			830,374				690,148				736,014
Research and development expenses			195,711				183,027				174,945
Purchased intangibles amortization			47,791				47,090				32,558
Litigation provisions			—				11,568				—
Total costs and operating expenses			2,362,698				2,132,034				2,138,740
Operating income			802,588				826,353				817,676
Other income, net			3,061				776				807
Interest expense			(69,548	)			(89,677	)			(98,861	)
Interest income			18,777				17,416				16,621
Income before income taxes			754,878				754,868				736,243
Provision for income taxes			112,249				117,034				94,009
Net income		$	642,629			$	637,834			$	642,234
Net income per basic common share		$	10.80			$	10.75			$	10.87
Weighted-average number of basic common shares			59,509				59,333				59,076
Net income per diluted common share		$	10.76			$	10.71			$	10.84
Weighted-average number of diluted common shares and equivalents			59,706				59,552				59,270

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

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Year Ended December 31,
		2025				2024				2023
		(In thousands)
Net income		$	642,629			$	637,834			$	642,234
Other comprehensive income (loss):
Foreign currency translation			28,858				(26,565	)			17,761
Unrealized (losses) gains on derivative instruments before reclassifications			(1,743	)			4,116				(2,648	)
Amounts reclassified to interest income			(468	)			(1,281	)			(326	)
Unrealized (losses) gains on derivative instruments before income taxes			(2,211	)			2,835				(2,974	)
Income tax benefit (expense)			530				(680	)			714
Unrealized (losses) gains on derivative instruments, net of tax			(1,681	)			2,155				(2,260	)
Retirement liability adjustment before reclassifications			3,678				3,828				(10,153	)
Amounts reclassified to other income, net			(2	)			448				(98	)
Retirement liability adjustment before income taxes			3,676				4,276				(10,251	)
Income tax (expense) benefit			(1,021	)			(1,029	)			2,202
Retirement liability adjustment, net of tax			2,655				3,247				(8,049	)
Other comprehensive income (loss)			29,832				(21,163	)			7,452
Comprehensive income		$	672,461			$	616,671			$	649,686

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

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year Ended December 31,
		2025				2024				2023
		(In thousands)
Cash flows from operating activities:
Net income		$	642,629			$	637,834			$	642,234
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation			54,127				44,709				36,868
Deferred income taxes			(14,657	)			(877	)			(1,197	)
Depreciation			88,144				87,018				84,625
Amortization of intangibles			118,093				104,807				81,280
Other adjustments			(2,398	)			—				(742	)
Change in operating assets and liabilities, net of acquisitions:
(Increase) decrease in accounts receivable			(55,498	)			(66,240	)			49,179
(Increase) decrease in inventories			(65,933	)			20,943				(45,443	)
Increase in other current assets			(33,282	)			(9,537	)			(43,164	)
Decrease (increase) in other assets			21,726				4,654				(26,264	)
(Decrease) increase in accounts payable and other current liabilities			(89,012	)			61,585				(79,524	)
Increase in deferred revenue and customer advances			957				6,165				10,433
Decrease in other liabilities			(12,341	)			(128,938	)			(105,476	)
Net cash provided by operating activities			652,555				762,123				602,809
Cash flows from investing activities:
Additions to property, plant, equipment and software capitalization			(112,745	)			(142,481	)			(160,632	)
Asset and business acquisitions, net of cash acquired			(35,053	)			—				(1,282,354	)
Proceeds from (investments in) equity investments, net			(7,295	)			(1,489	)			742
Purchases of investments			—				(3,729	)			(1,791	)
Maturities and sales of investments			—				4,610				1,770
Proceeds from sale of assets			2,840				—				—
Net cash used in investing activities			(152,253	)			(143,089	)			(1,442,265	)
Cash flows from financing activities:
Proceeds from debt issuances			70,000				170,000				1,450,040
Payments on debt			(290,000	)			(900,000	)			(670,040	)
Payments of debt issuance costs			(23,321	)			—				(400	)
Proceeds from stock plans			20,790				30,366				29,792
Purchases of treasury shares			(14,667	)			(13,541	)			(70,277	)
(Payments for) proceeds from derivative contracts			(7	)			16,500				15,836
Net cash (used in) provided by financing activities			(237,205	)			(696,675	)			754,951
Effect of exchange rate changes on cash and cash equivalents			(621	)			7,920				(948	)
Increase (decrease) in cash and cash equivalents			262,476				(69,721	)			(85,453	)
Cash and cash equivalents at beginning of period			325,355				395,076				480,529
Cash and cash equivalents at end of period		$	587,831			$	325,355			$	395,076
Supplemental cash flow information:
Interest paid		$	44,648			$	92,096			$	94,099
Income taxes paid		$	244,236			$	183,341			$	243,316

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

WATERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

		Number of Common Shares				Common Stock				Additional Paid-In Capital				Retained Earnings				Treasury Stock				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
		(In thousands)
Balance December 31, 2022			162,425			$	1,624			$	2,199,824			$	8,508,587			$	(10,063,975	)		$	(141,572	)		$	504,488
Net income			—				—				—				642,234				—				—				642,234
Other comprehensive income			—				—				—				—				—				7,452				7,452
Issuance of common stock for employees:
Employee Stock Purchase Plan			41				—				11,124				—				—				—				11,124
Stock options exercised			100				1				17,635				—				—				—				17,636
Treasury stock			—				—				—				—				(70,277	)			—				(70,277	)
Stock-based compensation			143				2				37,682				—				—				—				37,684
Balance December 31, 2023			162,709			$	1,627			$	2,266,265			$	9,150,821			$	(10,134,252	)		$	(134,120	)		$	1,150,341
Net income			—				—				—				637,834				—				—				637,834
Other comprehensive loss			—				—				—				—				—				(21,163	)			(21,163	)
Issuance of common stock for employees:
Employee Stock Purchase Plan			36				—				9,778				—				—				—				9,778
Stock options exercised			98				1				21,203				—				—				—				21,204
Treasury stock			—				—				—				—				(13,541	)			—				(13,541	)
Stock-based compensation			119				2				44,052				—				—				—				44,054
Balance December 31, 2024			162,962			$	1,630			$	2,341,298			$	9,788,655			$	(10,147,793	)		$	(155,283	)		$	1,828,507
Net income			—				—				—				642,629				—				—				642,629
Other comprehensive income			—				—				—				—				—				29,832				29,832
Issuance of common stock for employees:
Employee Stock Purchase Plan			35				—				11,005				—				—				—				11,005
Stock options exercised			51				1				10,443				—				—				—				10,444
Treasury stock			—				—				—				—				(14,667	)			—				(14,667	)
Stock-based compensation			114				1				53,491				—				—				—				53,492
Balance December 31, 2025			163,162			$	1,632			$	2,416,237			$	10,431,284			$	(10,162,460	)		$	(125,451	)		$	2,561,242

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 Description of Business and Organization

Waters Corporation (the “Company,” “we,” “our,” or “us”), a global leader in analytical instruments and software, has pioneered innovations in chromatography, mass spectrometry and thermal analysis serving life, materials and food sciences for more than 65 years. The Company primarily designs, manufactures, sells and services high-performance liquid chromatography (“HPLC”), ultra-performance liquid chromatography (“UPLC” and together with HPLC, referred to as “LC”) and mass spectrometry (“MS”) technology systems and support products, including chromatography columns, other consumable products and comprehensive post-warranty service plans. These systems are complementary products that are frequently employed together

(“LC-MS”)

and sold as integrated instrument systems using common software platforms. LC is a standard technique and is utilized in a broad range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a full range of compounds. MS technology, principally in conjunction with chromatography, is employed in drug discovery and development, including clinical trial testing, the analysis of proteins in disease processes (known as “proteomics”), nutritional safety analysis and environmental testing.

LC-MS

instruments combine a liquid phase sample introduction and separation system with mass spectrometric compound identification and quantification. In addition, the Company designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA Instruments product line. These instruments are used in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals and viscous liquids for various industrial, consumer goods and healthcare products, as well as for life science research. The Company is also a developer and supplier of advanced software-based products that interface with the Company’s instruments, as well as other manufacturers’ instruments.

Acquisition of BD Biosciences & Diagnostic Solutions Businesses

On February 9, 2026, the Company completed the acquisition (the “BDS Business Acquisition”) of the Biosciences & Diagnostic Solutions business (the “BDS Business”) of Becton, Dickinson and Company (“BD”). 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. 

2 Basis of Presentation and Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) 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 at the dates of the financial statements. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, goodwill and intangible assets, income taxes and inventory valuation. 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.

Risks and Uncertainties

The Company is subject to risks common to companies in the analytical instrument industry, including, but not limited to, global economic and financial market conditions, fluctuations in foreign currency exchange rates, fluctuations in customer demand, development by its competitors of new technological innovations, costs of developing new technologies, levels of debt and debt service requirements, risk of disruption, dependence on key

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

personnel, protection and litigation of proprietary technology, shifts in taxable income between tax jurisdictions and compliance with regulations of the U.S. Food and Drug Administration and similar foreign regulatory authorities and agencies.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries, which are wholly owned. The Company consolidates entities in which it owns or controls 50% or more of the voting shares. All inter-company balances and transactions have been eliminated.

Translation of Foreign Currencies

The functional currency of each of the Company’s foreign operating subsidiaries is the local currency of its country of domicile, except for the Company’s subsidiaries in Hong Kong and Singapore, where the underlying transactional cash flows are denominated in currencies other than the respective local currency of domicile. The functional currency of the Hong Kong and Singapore subsidiaries is the U.S. dollar, based on the respective entity’s cash flows.

For the Company’s foreign operations, assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the balance sheet date, while revenues and expenses are translated at average exchange rates prevailing during the respective period. Any resulting translation gains or losses are included in accumulated other comprehensive loss in the consolidated balance sheets.

The Company’s net sales derived from operations outside the United States were 69%, 68% and 69% in 2025, 2024 and 2023, respectively. Gains and losses from foreign currency transactions are included primarily in cost of sales in the consolidated statements of operations. In 2025, 2024 and 2023, foreign currency transactions resulted in net losses of $28 million, $36 million and $16 million, respectively.

Seasonality of Business

The Company typically experiences seasonality in its orders that is reflected as an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of customers that tend to exhaust their spending budgets by calendar

year-end.

Cash and Cash Equivalents

Cash equivalents represent highly liquid investments, with original maturities of 90 days or less, primarily in bank deposits, U.S. treasury bill money market funds and commercial paper.

The Company maintains cash balances in various operating accounts in excess of federally insured limits, and in foreign subsidiary accounts in currencies other than the U.S. dollar. As of December 31, 2025 and 2024, $372 million out of $588 million and $275 million out of $325 million, respectively, of the Company’s total cash, cash equivalents and investments were held by foreign subsidiaries. In addition, $306 million out of $588 million and $226 million out of $325 million of cash, cash equivalents and investments were held in currencies other than the U.S. dollar at December 31, 2025 and 2024,

respectively.

Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company has very limited use of rebates and other cash considerations payable to customers and, as a result, the transaction price

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

determination does not have any material variable consideration. The Company does not consider there to be significant concentrations of credit

risk

with respect to trade receivables due to the short-term nature of the balances, the Company having a large and diverse customer base, and the Company having a strong historical experience of collecting receivables with minimal defaults. As a result, credit risk is considered low across territories and trade receivables are considered to be a single class of financial asset. The allowance for credit losses is based on a number of factors and is calculated by applying a historical loss rate to trade receivable aging balances to estimate a general reserve balance along with an additional adjustment for any specific receivables with known or anticipated issues affecting the likelihood of recovery. Past due balances with a probability of default based on historical data as well as relevant available forward-looking information are included in the specific adjustment. The historical loss rate is reviewed on at least an annual basis and the allowance for credit losses is reviewed quarterly for any required adjustments. The Company does not have any off-balance sheet credit exposure related to its customers.

Trade receivables related to instrument sales are collateralized by the instrument that is sold. If there is a risk of default related to a receivable that is collateralized, then the fair value of the collateral is calculated and adjusted for the cost to

re-possess,

refurbish and

re-sell

the instrument. This adjusted fair value is compared to the receivable balance and the difference would be recorded as the expected credit loss.

The following is a summary of the activity of the Company’s allowance for credit losses for the twelve months ended December 31, 2025, 2024 and 2023 (in thousands):

		Balance at Beginning of Period				Additions				Deductions and Other				Balance at End of Period
Allowance for Credit Losses
December 31, 2025		$	14,269			$	5,834			$	(8,029	)		$	12,074
December 31, 2024		$	19,335			$	3,198			$	(8,264	)		$	14,269
December 31, 2023		$	14,311			$	8,120			$	(3,096	)		$	19,335

Concentration of Credit Risk

The Company sells its products and services to a significant number of large and small customers throughout the world, with net sales to the pharmaceutical industry of approximately 59%, 58% and 57% in 2025, 2024 and 2023, respectively. None of the Company’s individual customers accounted for more than 2% of annual Company sales in 2025, 2024 or 2023. The Company performs continuing credit evaluations of its customers and generally does not require collateral, but in certain circumstances may require letters of credit or deposits. Historically, the Company has not experienced significant credit losses.

Inventory

The Company values all of its inventories at the lower of cost or net realizable value on a

first-in,

first-out

basis (“FIFO”).

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 accounting standards for income taxes require that a company continually evaluate 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.

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.

Leases

The Company’s lease portfolio consists primarily of operating leases. The Company’s operating leases consist of property leases for sales, demonstration, laboratory, warehouse and office spaces, automotive leases for sales and service personnel and equipment leases, primarily used in our manufacturing and distribution operations. The Company categorizes leases as either operating or finance leases at the commencement date of the lease. The Company does not have any material financing leases.

The Company makes variable lease payments that do not depend on a rate or index, primarily for items such as real estate taxes and other expenses. These expenses are recorded as variable costs in the period incurred. For the years ended December 31, 2025, 2024 and 2023, variable costs incurred were not material.

The Company’s lease agreements may include tenant improvement allowances, rent holidays, and/or contingent rent provisions as well as a certain number of these leases contain rental escalation clauses that are either fixed or adjusted periodically for inflation of market rates which are factored into our determination of lease payments at lease inception. The Company’s leases also sometimes include renewal options and/or termination options which are included in the determination of the lease term when they are reasonably certain to be exercised.

The Company has lease agreements which contain lease and

non-lease

components, which are accounted for as a single lease component for all underlying classes of assets.

For leases with terms greater than 12 months, the Company records a

right-of-use

asset and lease liability at the present value of lease payments over the term of the leases and records rent expense on a straight-line basis over the lease term. The Company has elected not to apply the recognition requirements to short-term leases with terms less than 12 months. For short-term leases, the Company recognizes lease payments in net income on a straight-line basis over the term of the lease. For the years ended December 31, 2025, 2024 and 2023,

costs incurred related to short-term leases were not material.

When available, the Company uses the rate implicit in the lease to discount lease payments to determine the present value of the lease liabilities; however, most of the leases do not provide a readily determinable implicit rate and, as required by the accounting guidance, the Company estimates its incremental secured borrowing rate to discount the lease payments based on information available at lease commencement (or, for the leases in existence on the adoption date, the January 1, 2019 information). The Company’s incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term to the lease payments in a similar economic environment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Expenditures for maintenance and repairs are charged to expense, while the costs of significant improvements are capitalized. Depreciation is provided using the straight-line method over the following estimated useful lives: buildings —

fifteen

to

thirty-nine

years; building improvements —

five

to ten years; leasehold improvements — the shorter of the economic useful life or life of lease; and production and other equipment —

three

to ten years. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are eliminated from the consolidated balance sheets and related gains or losses are reflected in the consolidated statements of operations.

Asset Impairments

The Company reviews its long-lived assets for impairment at the asset group level in accordance with the accounting standards for property, plant and equipment. Whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable, the Company evaluates the recoverability of the carrying value of the asset based on the expected future cash flows, relying on a number of factors, including, but not limited to, operating results, business plans, economic projections and anticipated future cash flows. If the asset is deemed not recoverable, it is written down to fair value and the impairment is recorded in the consolidated statements of operations.

Business Combinations and Asset Acquisitions

As of the acquisition date the results of the acquiree are included in the Company’s consolidated results and the purchase price is allocated to tangible and intangible assets and assumed liabilities based on their estimated fair values. Any excess of the fair value consideration transferred over the estimated fair values of the net assets acquired is recognized as goodwill.

Acquired in-process research

and development (“IPR&D”) included in a business combination is capitalized as an indefinite-lived intangible asset. Development costs incurred after the acquisition are expensed as incurred and acquired IPR&D is tested for impairment annually until completion of the acquired programs. Upon commercialization, this indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life, subject to periodic impairment reviews. If the research and development project is abandoned, the indefinite-lived asset is charged to expense. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred.

The Company also acquires intellectual property through licensing arrangements. These arrangements often require upfront payments and may include additional milestone or royalty payments, contingent upon certain future events. IPR&D acquired in an asset acquisition (as opposed to a business combination) is expensed immediately unless there is an alternative future use. Subsequent payments made for the achievement of milestones are evaluated to determine whether they have an alternative future use or should be expensed. Payments made to third parties subsequent to commercialization are capitalized and amortized over the remaining useful life of the related asset, and are classified as intangible assets.

Goodwill and Other Intangible Assets

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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-not

that 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, respectively. 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.

Software Development Costs

The Company capitalizes internal and external software development costs for products offered for sale in accordance with the accounting standards for the costs of software to be sold, leased, or otherwise marketed. Capitalized costs are amortized to cost of sales over the period of economic benefit, which approximates a straight-line basis over the estimated useful lives of the related software products, generally

three

to ten years. The Company capitalized $54 million, $34 million and $44 million of direct expenses that were related to the development of software in 2025, 2024 and 2023, respectively. Net capitalized software included in intangible assets totaled $171 million and $154 million at December 31, 2025 and 2024, respectively. See Note 7, “Goodwill and Other Intangibles”.

The Company capitalizes software development costs for internal use. Capitalized internal software development costs are amortized over the period of economic benefit, which approximates a straight-line basis over ten years. Net capitalized internal software included in property, plant and equipment totaled $63 million and $56

million at December 31, 2025 and 2024, respectively. Additionally, net capitalized internal software included in other assets totaled $37 million and $2 million at December 31, 2025 and 2024, respectively.

Fair Value Measurements

In accordance with the accounting standards for fair value measurements and disclosures, certain of the Company’s assets and liabilities are measured at fair value on a recurring basis as of December 31, 2025 and 2024. Fair values determined by Level 1 inputs utilize observable data, such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the reporting entity to develop its own assumptions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2025 (in thousands):

		Total at December 31, 2025				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Waters 401(k) Restoration Plan assets		$	30,834			$	30,834			$	—			$	—
Foreign currency exchange contracts			329				—				329				—
Interest rate cross-currency swap agreements			346				—				346				—
Interest rate swap cash flow hedge			34				—				34				—
Total		$	31,543			$	30,834			$	709			$	—
Liabilities:
Foreign currency exchange contracts		$	248			$	—			$	248			$	—
Interest rate cross-currency swap agreements			50,493				—				50,493				—
Interest rate swap cash flow hedge			2,384				—				2,384				—
Total		$	53,125			$	—			$	53,125			$	—

The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2024 (in thousands):

		Total at December 31, 2024				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Waters 401(k) Restoration Plan assets		$	30,137			$	30,137			$	—			$	—
Foreign currency exchange contracts			482				—				482				—
Interest rate cross-currency swap agreements			26,196				—				26,196				—
Interest rate swap cash flow hedge			503				—				503				—
Total		$	57,318			$	30,137			$	27,181			$	—
Liabilities:
Foreign currency exchange contracts		$	261			$	—			$	261			$	—
Interest rate swap cash flow hedge			641				—				641				—
Total		$	902			$	—			$	902			$	—

Fair Value of 401(k) Restoration Plan Assets

The 401(k) Restoration Plan is a nonqualified defined contribution plan, and the assets were held in registered mutual funds and have been classified as Level 1. The fair values of the assets in the plan are determined through market and observable sources from daily quoted prices on nationally recognized securities exchanges.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value of Cash Equivalents, Foreign Currency Exchange Contracts, Interest Rate Cross-Currency Swap Agreements and Interest Rate Swap Cash Flow Hedges

The fair values of the Company’s cash equivalents, foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap cash flow hedges are determined through market and observable sources and have been classified as Level 2. These assets and liabilities have been initially valued at the transaction price and subsequently valued, typically utilizing third-party pricing services. The pricing services use many inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, current spot rates and other industry and economic events. The Company validates the prices provided by third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources.

Fair Value of Other Financial Instruments

The Company’s accounts receivable and accounts payable are recorded at cost, which approximates fair value due to their short-term nature. The carrying value of the Company’s variable interest rate debt approximates fair value due to the variable nature of the interest rate. The carrying value of the Company’s fixed interest rate debt was $1.3 billion at both December 31, 2025 and 2024. The fair value of the Company’s fixed interest rate debt was estimated using discounted cash flow models, based on estimated current rates offered for similar debt under current market conditions for the Company. The fair value of the Company’s fixed interest rate debt was estimated to be $1.2 billion and $1.1 billion at December 31, 2025 and 2024, respectively, using Level 2 inputs.

Derivative Transactions

The Company is a global company that operates in over 35 countries and, as a result, the Company’s net sales, cost of sales, operating expenses and balance sheet amounts are significantly impacted by fluctuations in foreign

currency exchange rates. The Company is exposed to currency price risk on foreign currency exchange rate fluctuations when it translates its

non-U.S.

dollar foreign subsidiaries’ financial statements into U.S. dollars and when any of the Company’s subsidiaries purchase or sell products or services in a currency other than its own currency.

The Company’s principal strategies in managing exposures to changes in foreign currency exchange rates are to (1) naturally hedge the foreign-currency-denominated liabilities on the Company’s balance sheet against corresponding assets of the same currency, such that any changes in liabilities due to fluctuations in foreign currency exchange rates are typically offset by corresponding changes in assets and (2) mitigate foreign exchange risk exposure of international operations by hedging the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated and

yen-denominated

net asset investments. The Company presents the derivative transactions in financing activities in the statement of cash flows.

Foreign Currency Exchange Contracts

The Company does not specifically enter into any derivatives that hedge foreign-currency-denominated operating assets, liabilities or commitments on its balance sheet, other than a portion of certain third-party accounts receivable and accounts payable, and the Company’s net worldwide intercompany receivables and payables, which are eliminated in consolidation. The Company periodically aggregates its net worldwide balances by currency and then enters into foreign currency exchange contracts that mature within 90 days to hedge a portion of the remaining balance to minimize some of the Company’s currency price risk exposure. The foreign currency exchange contracts are not designated for hedge accounting treatment. Principal hedged currencies include the euro, Japanese yen, British pound, Mexican peso and Brazilian real.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash Flow Hedges

The Company’s Credit Facility is a variable borrowing and has interest payments based on a contractually specified interest rate index. The contractually specified index on the Credit Facility is the

1-month,

3-month

or

6-month

Term SOFR. The variable rate interest payments create interest risk for the Company as interest payments will fluctuate based on changes in the contractually specified interest rate index over the life of the Credit Facility. In order to reduce interest rate risk, the Company has entered into interest rate swaps with an aggregate notional value of $150 million to effectively lock in the forecasted interest payments on the variable rate borrowing over its term. The interest rate swaps represent cash flow hedges and are assessed for hedge effectiveness each reporting period. When the hedge relationship is highly effective at achieving offsetting changes in cash flows, the Company will record the entire change in fair value of the interest rate swaps in accumulated other comprehensive loss. The amount in accumulated other comprehensive loss is reclassified to income in the period that the underlying transaction impacts consolidated income. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be

de-designated,

and amounts accumulated in other comprehensive loss will be reclassified to income in the current period. Interest settlements due to benchmark interest rate changes are recorded in interest income or interest expense. For the twelve months ended December 31, 2025, the Company did not have any cash flow hedges that were deemed ineffective.

Interest Rate Cross-Currency Swap Agreements

As of December 31, 2025, the Company had entered into interest rate cross-currency swap derivative agreements with durations up to three years with an aggregate 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-denominated

net asset investments. Under hedge accounting, the change in fair value of the derivative that relates to changes in the foreign currency spot rate are recorded in the currency translation adjustment in other comprehensive income and remain in accumulated other comprehensive loss in stockholders’ equity until the sale or substantial

liquidation of the foreign operation. The difference between the interest rate received and paid under the interest rate cross-currency swap derivative agreement is recorded in interest income in the statement of operations.

The Company’s foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges included in the consolidated balance sheets are classified as follows (in thousands):

		December 31, 2025								December 31, 2024
		Notional Value				Fair Value				Notional Value				Fair Value
Foreign currency exchange contracts:
Other current assets		$	39,053			$	329			$	14,999			$	482
Other current liabilities		$	18,979			$	248			$	24,749			$	261
Interest rate cross-currency swap agreements:
Other assets		$	20,000			$	346			$	625,000			$	26,196
Other liabilities		$	880,000			$	50,493			$	—			$	—
Accumulated other comprehensive (loss) income						$	(53,730	)			—			$	32,979
Interest rate swap cash flow hedges:
Other assets		$	50,000			$	34			$	100,000			$	503
Other liabilities		$	100,000			$	2,384			$	50,000			$	641
Accumulated other comprehensive (loss) income						$	(2,350	)			—			$	(138	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a summary of the activity included in the consolidated statements of operations and statements of comprehensive income related to the foreign currency exchange contracts, interest rate cross-currency swap agreements and interest rate swap agreements designated as cash flow hedges (in thousands):

		Financial Statement Classification				Year Ended December 31,
		2025				2024				2023
Foreign currency exchange contracts:
Realized (losses) gains on closed contracts			Cost of sales			$	(1,780	)		$	850			$	224
Unrealized (losses) gains on open contracts			Cost of sales				(140	)			245				(156	)
Cumulative net pre-tax (losses) gains			Cost of sales			$	(1,920	)		$	1,095			$	68
Interest rate cross-currency swap agreements:
Interest earned			Interest income			$	10,920			$	10,110			$	10,974
Unrealized (losses) gains on open contracts (1 )			Accumulated other comprehensive loss			$	(86,709	)		$	40,954			$	(18,001	)
Interest rate swap cash flow hedges:
Interest earned			Interest income			$	468			$	1,281			$	326
Unrealized losses on open contracts			Accumulated other comprehensive loss			$	(2,211	)		$	(2,835	)		$	(2,974	)

(1)	Unrealized (losses) gains on open contracts from interest rate cross-currency swap agreements fluctuated year over year primarily due to changes in foreign exchange rates, which resulted in period-to-period variability.

Stockholders’ Equity

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. During 2023, the Company repurchased 0.2 million shares of the Company’s outstanding common stock at a cost of $58 million, under authorized share repurchase programs. The Company did not make any open market share repurchases in 2025 and 2024. In addition, the Company repurchased $15 million, $13 million and $12

million of common stock related to the vesting of restricted stock units during the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the Company has a total of $1.0 billion authorized for future repurchases.

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. Certain of the Company’s customers have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. All incremental costs of obtaining a contract are expensed as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less. Shipping and handling costs are included as a component of cost of sales. In situations where the control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. Accordingly, such costs are recognized when control of the related goods is transferred to the customer. In more rare situations, the Company has revenue associated with products

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

that contain specific customer acceptance criteria and the related revenue is not recognized before the customer acceptance criteria are satisfied. The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions and collected by the Company from a customer.

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-available

basis.

Payment terms and conditions vary among the Company’s revenue streams, although terms generally include a requirement of payment within 30 to 60 days of product shipment. Prior to providing payment terms to customers, an evaluation of their credit risk is performed. Returns and customer credits are infrequent and insignificant and are recorded as a reduction to sales. Rights of return are not included in sales arrangements and, therefore, there is minimal variable consideration included in the transaction price of our products.

Service revenue includes (1) service and software maintenance contracts and (2) 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.

Product Warranty Costs

The Company accrues estimated product warranty costs at the time of sale, which are included in cost of sales in the consolidated statements of operations. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. The amount of the accrued warranty liability is based on historical information, such as past experience, product failure rates, number of units repaired and estimated costs of material and labor. The liability is reviewed for reasonableness at least quarterly.

The following is a summary of the activity of the Company’s accrued warranty liability for the twelve months ended December 31, 2025, 2024 and 2023 (in thousands):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		Balance at Beginning of Period				Accruals for Warranties				Settlements Made				Balance at End of Period
Accrued warranty liability:
December 31, 2025		$	11,602			$	7,301			$	(6,642	)		$	12,261
December 31, 2024		$	12,050			$	7,214			$	(7,662	)		$	11,602
December 31, 2023		$	11,949			$	7,727			$	(7,626	)		$	12,050

Research and Development Expenses

Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract services and other outside costs. Research and development expenses are expensed as incurred.

Stock-Based Compensation

The Company has two stock-based compensation plans, which are described in Note 13, “Stock-Based Compensation”.

Earnings Per Share

In accordance with the earnings per share accounting standards, the Company presents two earnings per share (“EPS”) amounts. Income per basic common share is based on income available to common shareholders and the weighted-average number of common shares outstanding during the periods presented. Income per diluted common share includes additional dilution from potential common stock, such as stock issuable pursuant to the exercise of stock options outstanding.

Retirement Plans

The Company sponsors various retirement plans, which are described in Note 16, “Retirement Plans”.

Comprehensive Income

The Company accounts for comprehensive income in accordance with the accounting standards for comprehensive income, which establish the accounting rules for reporting and displaying comprehensive income. These standards require that all components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.

Restructuring

In March 2024, the Company implemented a reduction in workforce that impacted approximately 2% of the Company’s employees, primarily in China, where there had been a significant decline in sales as a result of lower customer demand. As a result, the Company incurred approximately $9 million of severance-related costs. During 2024, the Company paid $15 million of severance-related costs in connection with the workforce reduction that occurred in March 2024 and July 2023.

The accrued restructuring activity and payments were immaterial during the year ended December 31, 2025.

Recently Adopted Accounting Standards

In

November 2023

, accounting guidance was issued that requires additional disclosures of reportable segment information. The guidance requires that public entities disclose, on an annual and interim basis

(1) significant

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss,

(2)

an amount for other segment items by reportable segment and a description of its composition (the other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss),

(3)

provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic

in interim periods,

(4)

clarify that if the CODM uses more than

one

measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report

one

or more of those additional measures of segment profit. However, at least

one

of the reported segment profit or loss measures (or the single reported measure, if only

one

is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements,

(5)

the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment

profit or loss in assessing segment performance and deciding how

to allocate resources, and (6) if a public entity has a single reportable segment to provide all the disclosures required by the amendments in this update and all existing segment disclosures in Topic 280. The amendments in this update do not change how operating segments are identified or aggregated nor how the quantitative thresholds are applied to determine its reportable segments. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in this update should be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company adopted this accounting standard update for the year ended December 31, 2024.

In December 2023, accounting guidance was issued to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update change disclosure requirements related to the rate reconciliation, income taxes paid and other disclosures. For the rate reconciliation the amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. For income taxes paid the amendments require that all entities disclose on an annual basis the following information; (1) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, (2) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). Finally, for other disclosures the amendments require that all entities disclose the following information: (1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (2) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. This update also eliminates the requirement for all entities to (1) disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or (2) make a statement that an estimate of the range cannot be made. As well as removing the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. The amendments in this update are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis and retrospective application is permitted. The Company has adopted this accounting standard update on a prospective basis and included the disclosures in Note

9 “Income Taxes”.

Recently Issued Accounting Standards

In November 2024, accounting guidance was issued to improve disclosures of expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

employee compensation, depreciation, amortization, and deplet

ion)

in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This incremental information will allow investors to better understand the components of an entity’s expenses, make their own judgements about the entity’s performance, and more accurately forecast expenses which will allow investors to better assess an entity’s prospects for future cash flows. The amendments in this update require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity (1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(d), (2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements, (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this update or (2) retrospectively to any or all prior periods presented in the financial statements. The Company does not believe this accounting standard update will have a material impact on the Company’s financial position, results of operations and cash flows. The Company is currently evaluating the impact the adoption of this accounting standard update will have on our footnote disclosures.

In September 2025, accounting guidance was issued to amend the existing guidance for accounting for software costs to reflect current software development practices, including iterative and agile methodologies, by removing references to development stages. Under the new standard, entities will begin to capitalize eligible software costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this standard are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. The amendments may be applied either prospectively, retrospectively, or utilizing a modified transition approach. The Company is currently evaluating the impact the adoption of this accounting standard update will have on our consolidated financial statements and footnote disclosures.

In November 2025, accounting guidance was issued, which includes amendments to more closely align hedge accounting with the economics of an entity’s risk management activities. The amendment enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: (1) similar risk assessment for cash flow hedges, (2) hedging forecasted interest payments on choose-your-rate debt instruments, (3) cash flow hedges of nonfinancial forecasted transactions, (4) net written options as hedging instruments, and (5) foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this accounting standard update will have on our consolidated financial statements and footnote disclosures.

3 Revenue Recognition

The Company’s deferred revenue liabilities in the consolidated balance sheets consist of the obligation on instrument service contracts 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a summary of the activity of the Company’s deferred revenue and customer advances for the twelve months ended December 31, 2025, 2024 and 2023 (in thousands): 

		December 31,
		2025				2024				2023
Balance at the beginning of the period		$	320,046			$	323,516			$	285,175
Recognition of revenue included in balance at beginning of the period			(275,549	)			(265,167	)			(240,808	)
Revenue deferred during the period, net of revenue recognized			300,224				261,697				279,149
Balance at the end of the period		$	344,721			$	320,046			$	323,516

The Company classified $

million and $

million of deferred revenue and customer advances in other long-term liabilities at December 31, 2025 and 2024, respectively.

The amount of unfulfilled performance obligations as of December 31, 2025, and the time such amounts are expected to be recognized in the future, is as follows (in thousands):

		December 31, 2025
Unfulfilled performance obligations expected to be recognized in:
One year or less		$	280,276
13-24 months			39,968
25 months and beyond			38,213
Total		$	358,457

4 Inventories

Inventories are classified as follows (in thousands):

		December 31, 2025				December 31, 2024
Raw materials		$	234,633			$	227,032
Work in progress			28,157				21,801
Finished goods			309,581				228,428
Total inventories		$	572,371			$	477,261

During 2025, 2024 and 2023, the Company recorded inventory-related excess and obsolescence provisions of $6 million, $14 million and $11 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

5 Property, Plant and Equipment

Property, plant and equipment consist of the following (in thousands):

		December 31,
		2025				2024
Land and land improvements		$	43,768			$	40,945
Buildings and leasehold improvements			566,102				547,666
Production and other equipment			824,229				752,872
Construction in progress			48,206				39,180
Total property, plant and equipment			1,482,305				1,380,663
Less: accumulated depreciation and amortization			(840,259	)			(729,463	)
Property, plant and equipment, net		$	642,046			$	651,200

During 2025, 2024 and 2023, the Company retired and disposed of approximately $15 million, $108 million and $48 million of property, plant and equipment, respectively, most of which was fully depreciated and no longer in use. Gains or losses on disposals were immaterial for the years ended December 31, 2025, 2024 and 2023.

6 Acquisitions

On May 20, 2025, the Company acquired all of the outstanding equity interests of Optofluidics, Inc., and its wholly owned operating subsidiary, Halo Labs LTD (collectively, “Halo Labs”), for $35

million, net of cash acquired. There is no contingent consideration related to this acquisition.

Halo Labs offers high throughput biopharmaceutical formulation, stability and product quality control tools for aggregate and subvisible particle analysis through the use of custom optics and image processing techniques. As a result of the acquisition, the results of Halo Labs are included in the Company’s consolidated financial statements from the acquisition date.

The Company allocated $

13 million of the purchase price to intangible assets comprised of developed technology and customer relationships. The developed technology will be amortized over ten years, and the customer relationships will be amortized over five years. The Company allocated $24

million of the purchase price to goodwill, which is not deductible for tax purposes and has been allocated to the Waters operating segment. The principal factor that resulted in recognition of goodwill in the acquisition was that the purchase price was based, in part, on cash flow projections assuming the integration of any acquired technology, distribution channels and products with the Company’s products, which are higher than if the acquired companies’ technology, customer access or products were utilized on a stand-alone basis.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The assets and liabilities

acquired were valued with input from valuation s

pec

ialists. The Company used various income-approach valuation techniques, which use Level 3 inputs, in determining the fair value of the assets and liabilities acquired.

The following table presents the fair values as of the acquisition date of all of the assets and liabilities owned and recorded in connection with the acquisition of Halo Labs assumed on the closing date of May 20, 2025 (in thousands):

Purchase Price
Cash paid		$	35,815
Less: cash acquired			(762	)
Net cash consideration			35,053
Identifiable Net Assets (Liabilities) Acquired
Accounts receivable			962
Inventory			1,296
Prepaid, property, plant and equipment, operating lease and other assets			2,415
Intangible assets			13,400
Accounts payable and accrued expenses			(1,966	)
Operating lease liabilities, deferred revenue and other liabilities			(2,004	)
Tax liabilities			(2,821	)
Total identifiable net assets acquired			11,282
Goodwill			23,771
Net cash consideration		$	35,053

The amounts of revenue and earnings of Halo Labs since the acquisition date included in the consolidated statements of operations for the year ended December 31, 2025 were immaterial. The pro forma effect on the ongoing operations of the Company as though this acquisition had occurred on January 1, 2024 was immaterial to the consolidated financial statements.

On May 16, 2023, the Company acquired all of the issued and outstanding equity interests of Wyatt for $1.3 billion, net of cash acquired. 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.

Unaudited Pro Forma Financial Information

The following unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the actual results of operations that actually would have been realized had the entities been a single company as of January 1, 2022 or the future operating results of the combined entity. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs that the Company may incur related to the acquisition as part of combining the operations of the companies.

The following unaudited pro forma information shows the results of the Company’s operations for the twelve months ended December 31, 2023, as if the Wyatt acquisition had occurred on January 1, 2022 (in thousands):

		December 31, 2023
Revenue		$	2,995,001
Net income			658,431

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

To reflect the acquisition of Wyatt as if it had occurred on January 1, 2022, the unaudited pro forma information includes adjustments to reflect, among other things, the incremental intangible asset amortization to be incurred based on the values of each identifiable intangible asset of Wyatt and the interest expense from debt financings obtained to partially fund the cash consideration transferred. Pro forma adjustments were tax effected at the Company’s historical statutory rates in effect for the respective periods.

Pro forma net income for the twelve months ended December 31, 2023, was adjusted to exclude certain non-recurring expenses related to transaction costs incurred and the fair value adjustment of inventory. These non-recurring expenses were reclassified to the prior period and included in the pro forma net income for the twelve months ended December 31, 2023.

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, in two equal installments upon the first and second anniversary of the acquisition date. As these employees are earning their individual cash award by providing service over the two-year period that benefits the Company, the $40 million will be recognized within total costs and operating expenses in the consolidated statements of operations over the two-year service period. The Company has recorded $4

million, $18 million and

$

million of expense in the consolidated statement of operations for the twelve months ended December 31, 2025, 2024 and 2023, respectively.

7  Goodwill and Other Intangibles

The carrying amount of goodwill was $

1.3

billion at both December 31, 2025 and 2024.

The Company’s intangible assets included in the consolidated balance sheets are detailed as follows (dollars in thousands):

		December 31, 2025												December 31, 2024
		Gross Carrying Amount				Accumulated Amortization				Weighted- Average Amortization Period				Gross Carrying Amount				Accumulated Amortization				Weighted- Average Amortization Period
Capitalized software		$	793,622			$	622,970				5 years			$	662,085			$	508,339				5 years
Purchased intangibles			632,017				295,564				10 years				610,351				241,093				10 years
Trademarks			9,680				—								9,680				—
Licenses			15,611				11,750				7 years				14,549				9,628				7 years
Patents and other intangibles			135,645				98,113				8 years				117,781				87,480				8 years
Total		$	1,586,575			$	1,028,397				7 years			$	1,414,446			$	846,540				7 years

The Company capitalized $83 million, $40 million and $468 million of intangible assets for the years ended December 31, 2025, 2024 and 2023, respectively.

The gross carrying value of intangible assets and accumulated amortization for intangible assets increased by $89 million and $65 million, respectively, in the year ended

December 31, 2025 due to the effects of foreign currency translation.

Amortization

expense for intangible assets was $118 million, $105 million and $81 million for the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense for intangible assets is estimated to be $121 million per year for each of the next five years.

8 Debt

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 (the “Amendment”) in respect of that certain Amended and Restated Credit Agreement, dated as of September 17, 2021 and amended as of March 3, 2023 (the “Existing Credit Agreement”, and as amended by the Amendment, the “Amended Credit Agreement”), 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. As of December 31, 2025 and December 31, 2024, the Credit Facility had a total of $0.1 billion and $0.4 billion outstanding, respectively.

The Credit Facility will mature on May 22, 2030 subject to the Company’s ability to request, subject to customary conditions, a

one-year

extension to which each lender may, in its discretion, agree. The Company may, subject to customary conditions, also request additional incremental revolving or term loan commitments from the lenders in an aggregate principal amount not to exceed $750 million to which each lender may,

in its discretion,

agree, provided that the aggregate amount of all commitments, including any such incremental commitments, under the Amended Credit Agreement does not exceed $2.55 billion at any time. Up to $50 million of the Credit Facility is available in the form of letters of credit.

Interest on borrowings under the Credit Facility will accrue at an applicable rate equal to either Term SOFR plus an applicable spread or an alternate base rate plus an applicable spread, in each case based on the lower of the applicable rates determined as set forth in the Amended Credit Agreement based on the Company’s leverage ratio (determined as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to the Amended Credit Agreement) or, when established, the Company’s public debt ratings by certain credit rating agencies applicable on such date. These applicable spreads range from 80 basis points to 112.5 basis points over Term SOFR and 0 basis points to 12.5 basis points over the alternate base rate, in each case, as determined in accordance with the provisions of the Amended Credit Agreement. The Company has agreed to pay a facility fee at specified rates as set forth in the Amended Credit Agreement based on either its leverage ratio (determined as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to the Amended Credit Agreement) or the Company’s public debt ratings applicable on such date, as applicable, ranging from 7.5 basis points to 22.5 basis points per annum, on the aggregate commitments of the lenders. The facility fee is payable on a quarterly basis. The Company has the right to prepay borrowings under the Credit Facility at any time, in whole or in part and without premium or penalty (other than, if applicable, any breakage costs). The Company may also reduce its commitments under the Credit Facility at any

time.

The Company may use borrowings under the Credit Facility, which may be in United States dollars or the euro equivalent thereof, for general corporate purposes including repayment of debt, financing of acquisitions,

payment of related fees and expenses, equity repurchases and working capital. Certain of the Company’s subsidiaries guarantee its obligations under the Amended Credit Agreement. Those guarantees will automatically terminate, and those subsidiaries will be automatically released from those guarantees, if those subsidiaries cease to guarantee the Company’s senior unsecured notes and do not guarantee any other senior debt of the Company.

The Amended Credit Agreement contains affirmative and negative covenants, including limitations on subsidiary debt, liens, sale and leaseback transactions, mergers and certain restrictive agreements, as well as a financial covenant to not permit a leverage ratio as of the end of any fiscal quarter to exceed 3.50 to 1.00 (which

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

may be increased to 4.25 to 1.00 at the Company’s election as of the last day of the fiscal quarter during which the Company’s closing of a material acquisition for which the aggregate consideration involves cash in the amount of $

million or more) and a financial covenant to not permit an interest coverage ratio as of the end of any fiscal quarter for the period of four consecutive fiscal quarters then ended to be less than 3.50 to 1.00. The Credit Facility contains certain representations, warranties and events of default (which are, in some cases, subject to certain exceptions, thresholds and grace periods) including, but not limited to,

non-payment

of principal and interest, failure to perform or observe covenants, breaches of representations and warranties and certain bankruptcy-related events.

As of both December 31, 2025 and 2024, the Company had a total of $1.3 billion of outstanding senior unsecured notes. Interest on the fixed rate senior unsecured notes is payable semi-annually each year. The Company may prepay all or some of the senior unsecured notes at any time in an amount not less than

% of the aggregate principal amount outstanding. In the event of a change in control of the Company (as defined in the note purchase agreement), the Company may be required to prepay the senior unsecured notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. These senior unsecured notes require that the Company comply with an interest coverage ratio test of not less than 3.50:1 for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter. In addition, these senior unsecured notes include customary negative covenants, affirmative covenants, representations and warranties and events of default.

Concurrently with the execution of the merger agreement related to the BDS Business Acquisition (the “Merger Agreement”), the Company and a financial institution executed a 364-day bridge 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. As of December 31, 2025,

no

amounts related to the bridge facility have been drawn. The Company incurred

$

million of financing costs that are being amortized over the term of the bridge facility. In addition, in connection with the Merger, the Company incurred

$

million of financing costs on behalf of SpinCo. These financing costs were expensed in the year ended December 31, 2025.

The Company had the following outstanding debt at December 31, 2025 and 2024 (in thousands):

		December 31, 2025				December 31, 2024
Senior unsecured notes - Series K - 3.44%, due May 2026		$	160,000			$	—
Senior unsecured notes - Series L - 3.31%, due September 2026			200,000				—
Senior unsecured notes - Series N - 1.68%, due March 2026			100,000				—
Total notes payable and debt, current			460,000				—
Senior unsecured notes - Series K - 3.44%, due May 2026			—				160,000
Senior unsecured notes - Series L - 3.31%, due September 2026			—				200,000
Senior unsecured notes - Series M - 3.53%, due September 2029			300,000				300,000
Senior unsecured notes - Series N - 1.68%, due March 2026			—				100,000
Senior unsecured notes - Series O - 2.25%, due March 2031			400,000				400,000
Senior unsecured notes - Series P - 4.91%, due May 2028			50,000				50,000
Senior unsecured notes - Series Q - 4.91%, due May 2030			50,000				50,000
Credit agreement			150,000				370,000
Unamortized debt issuance costs			(2,555	)			(3,512	)
Total long-term debt			947,445				1,626,488
Total debt		$	1,407,445			$	1,626,488

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2025 and 2024, the Company had a total amount available to borrow under the Credit Facility of $1.6 billion and $1.6 billion, respectively, after outstanding letters of credit. The weighted-average interest rates applicable to the senior unsecured notes and credit agreement borrowings collectively were 3.35% and 3.72% at December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company was in compliance with all debt covenants.

The Company and its foreign subsidiaries also had available short-term lines of credit totaling $110 million and $111 million at December 31, 2025 and December 31, 2024, respectively, for the purpose of short-term borrowing and issuance of commercial guarantees. None of the Company’s foreign subsidiaries had outstanding short-term borrowings as of December 31, 2025 or December 31, 2024.

Annual maturities of debt outstanding at December 31, 2025 are as follows (in thousands):

		Total
2026		$	460,000
2027			—
2028			50,000
2029			300,000
2030			200,000
Thereafter			400,000
Total		$	1,410,000

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 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 plans to repay the $500 million tranche at or prior to maturity.

9 Income Taxes

Income tax data for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

		Year Ended December 31,
		2025				2024				2023
The components of income before income taxes are as follows:
Domestic		$	57,267			$	121,630			$	74,119
Foreign			697,611				633,238				662,124
Total		$	754,878			$	754,868			$	736,243

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		Year Ended December 31,
		2025				2024				2023
The components of the income tax provision were as follows:
Federal		$	8,997			$	20,609			$	178
State			4,838				6,395				6,427
Foreign			113,071				90,907				88,601
Total current tax provision		$	126,906			$	117,911			$	95,206
Federal		$	(18,553	)		$	(383	)		$	(2,457	)
State			(564	)			303				(3,029	)
Foreign			4,460				(797	)			4,289
Total deferred tax provision			(14,657	)			(877	)			(1,197	)
Total provision		$	112,249			$	117,034			$	94,009

		Year Ended December 31,
		2025
Income tax payments (net of refunds received):
U.S. Federal			138,007
U.S. State and Local			6,376
Non-U.S.
Ireland			59,221
Other Non-U.S.			40,632
Total income taxes paid, (net of refunds received)		$	244,236

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate for the year ended December 31, 2025 was as follows:

		Year Ended December 31,
		2025				%
U.S. federal statutory tax rate		$	158,524				21.0	%
State and local income taxes, net of federal income tax effect (a)			1,043				0.1	%
Foreign tax effects
Ireland
Statutory tax rate difference between Ireland and United States			(36,662	)			(4.9	%)
Nondeductible interest expense			9,861				1.3	%
Other			(499	)			(0.1	%)
Singapore
Statutory tax rate difference between Singapore and United States			(7,459	)			(1.0	%)
Local taxes at a rate different than the statutory rate (b)			(3,380	)			(0.4	%)
Other			3,448				0.5	%
Other foreign jurisdictions			13,416				1.8	%
Effect of cross-border tax laws
Global intangible low-taxed income, net of foreign tax credits			3,470				0.5	%
Other, net of foreign tax credits			(1,368	)			(0.2	%)
Tax credits
Foreign tax credits			(29,952	)			(4.0	%)
Other			(6,659	)			(0.9	%)
Nontaxable or nondeductible items
Other			9,578				1.3	%
Changes in unrecognized tax benefits			(2,306	)			(0.3	%)
Other adjustments			1, 1 9 4				0. 2	%
Effective income tax rate		$	112,249				14.9	%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(a)	State taxes in California, Pennsylvania , Minnesota, New Jersey and New York made up the majority (greater than 50 percent) of the tax effect in this category.

(b)	The tax expense (benefit) related to the concessionary tax rate in Singapore was reduced by $14 million due to the global minimum tax under Pillar Two.

The differences between income taxes computed at the United States statutory rate and the provision for income taxes are summarized as follows for the years ended December 31, 2024 and December 31, 2023 (in thousands):

		Year Ended December 31,
		2024				2023
Federal tax computed at U.S. statutory income tax rate		$	158,522			$	154,611
GILTI, net of foreign tax credits			4,820				15,103
Uncertain tax positions			5,024				(16,211	)
State income tax, net of federal income tax benefit			6,078				2,880
Net effect of foreign operations			(47,732	)			(48,587	)
Effect of stock-based compensation			(2,155	)			(2,262	)
Other, net			(7,523	)			(11,525	)
Provision for income taxes		$	117,034			$	94,009

The Company’s effective tax rate was

14.9

%,

15.5

% and

12.8

% for the years ended December 31, 2025, 2024 and 2023

, respectively.

The decrease in the Company’s effective tax in 2025 can primarily be attributed to the jurisdictional mix of earnings.

The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to differences in the proportionate amounts of

pre-tax

income recognized in jurisdictions with different effective tax rates and the items discussed below.

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 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.

During

2025, the Company’s 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, including the impact of capitalizing research and development expenditures pursuant to IRC Section 174, and a tax benefit of $3 million on stock-based compensation.

During 2024, the Company’s effective tax rate differed from

the

% U.S. statutory tax rate primarily due to the jurisdictional

mix of earnings, a $5 million provision related to the GILTI tax, including the impact of capitalizing research and development expenditures pursuant to IRC Section 174, and a tax benefit of $3 million on stock-based compensation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The 2023 effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings,

a

n

$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 GILTI tax, including the impact of capitalizing research and development expenditures pursuant to IRC Section 174 and a tax benefit of $3 million

on stock-based compensation.

The tax effects of temporary differences and carryforwards which give rise to deferred tax assets and deferred tax liabilities are summarized as follows (in thousands):

		December 31,
		2025				2024
Deferred tax assets:
Net operating losses and credits		$	146,742			$	118,854
Operating leases			17,971				16,573
Amortization			12,047				9,006
Stock-based compensation			6,913				6,343
Deferred compensation			18,931				20,515
Deferred revenue			14,516				15,707
Capitalized Section 174 Expenditures			63,535				51,514
Other			15,120				20,295
Total deferred tax assets			295,775				258,807
Valuation allowance			(140,377	)			(119,464	)
Deferred tax assets, net of valuation allowance			155,398				139,343
Deferred tax liabilities:
Capitalized software			(30,942	)			(29,309	)
Operating leases			(17,775	)			(16,312	)
Indefinite-lived intangibles			(43,883	)			(29,924	)
Deferred tax liability on foreign earnings			(5,608	)			(20,278	)
Total deferred tax liabilities			(98,208	)			(95,823	)
Net deferred tax assets		$	57,190			$	43,520

The

Company has gross foreign net operating losses of $595 million, of which $200 million do not expire under current laws

and

$395 million start expiring in 2026. As of December 31, 2025, the Company has provided a deferred tax valuation allowance of $140 million, of which $134 million relates to certain foreign net operating losses. The Company’s net deferred tax assets associated with net operating losses and tax credit carryforwards are approximately $12

million as of December 31, 2025, which represent the future tax benefit of foreign net operating loss carryforwards and tax credit carryforwards.

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 reporting positions on the presumption that all concerned tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those reporting positions for the time value of money. The Company continues to classify interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a summary of the activity of the Company’s gross unrecognized tax benefits, excluding interest and penalties, for the year ended December 31, 2025, 2024 and 2023 (in thousands):

		2025				2024				2023
Balance at the beginning of the period		$	17,657			$	14,323			$	29,019
Net reductions for settlement of tax audits			(892	)			—				(17,651	)
Net reductions for lapse of statutes taken during the period			(790	)			(616	)			(512	)
Net (reductions) additions for tax positions taken during the prior period			(1,832	)			3,407				2,473
Net additions for tax positions taken during the current period			1,068				543				994
Balance at the end of the period		$	15,211			$	17,657			$	14,323

As of 2025, the total amount of gross unrecognized tax benefits was $15 million, all of which, if recognized, would impact the Company’s effective tax rate. The Company is subject to various foreign audits and inquiries, and we currently do not expect any material adjustments.

With limited exceptions, the Company is no longer subject to tax audit examinations in significant jurisdictions for the years ended on or before December 31, 2020. The Company continuously monitors the lapsing of statutes of limitations on potential tax assessments for related changes in the measurement of unrecognized tax benefits, related net interest and penalties and deferred tax assets and liabilities.

		Balance at Beginning of Period				Charged to Provision for Income Taxes*				Other**				Balance at End of Period
Valuation allowance for deferred tax assets:
2025		$	119,464			$	5,897			$	15,016			$	140,377
2024		$	57,873			$	64,310			$	(2,719	)		$	119,464
2023		$	54,300			$	1,467			$	2,106			$	57,873

*	These amounts have been recorded as part of the income statement provision for income taxes. The income statement effects of these amounts have largely been offset by amounts related to changes in other deferred tax balance sheet accounts. The increase in the 2024 charge to the provision for income taxes can be attributed to an increase in foreign net operating losses.

**	The changes in the valuation allowance during the years ended December 31, 2025, 2024 and 2023 are primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward.

10 Litigation

From time to time, the Company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business. The Company believes it has meritorious arguments in its current litigation matters and believes any outcome, either individually or in the aggregate, will not be material to the Company’s financial position, results of operations or cash flows. During the year ended December 31, 2024, the Company recorded $12 million of patent litigation settlement

provisions

and related costs. No

litigation provisions were recorded and no litigation payments were made by the Company during the year ended December 31, 2025.

11 Leases

As of December 31, 2025 and 2024, the Company had lease agreements that expire at various dates through 2035, with weighted-average

remaining

lease terms of 3.7 years and 3.6 years, respectively. Rental expense was $41 million, $39 million and $38

million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025 and 2024, the weighted-average discount rates used to determine the present value of lease liabilities were

3.92

% and

4.41

%, respectively. During the years ended December 31, 2025, 2024 and

2023,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

cash

paid for amounts included in the measurement of

lease liabilities in operating activities in the statement of cash flows was $

million, $

million and $

million, respectively.

The Company recorded a $19

million and a

$

million increase in right-of-use assets in exchange for new operating lease liabilities during the years ended December 31, 2025 and 2023, respectively. The Company recorded a

$

million decrease in right-of-use assets in exchange for new operating lease liabilities during the year ended December 31, 2024.

The Company’s

right-of-use

lease assets and lease liabilities included in the consolidated balance sheets are classified as follows (in thousands):

\				December 31,
		Financial Statement Classification		2025				2024
Assets:
Property operating lease assets		Operating lease assets		$	44,486			$	43,622
Automobile operating lease assets		Operating lease assets			36,020				30,013
Equipment operating lease assets		Operating lease assets			258				558
Total lease assets				$	80,764			$	74,193
Liabilities:
Current operating lease liabilities		Current operating lease liabilities		$	31,091			$	25,537
Long-term operating lease liabilities		Long-term operating lease liabilities			52,548				50,317
Total lease liabilities				$	83,639			$	75,854

Undiscounted future minimum rents payable as of December 31, 2025 under

non-cancelable

leases with initial terms exceeding one year reconcile to lease liabilities included in the consolidated balance sheet as follows (in thousands):

2026		$	33,475
2027			22,727
2028			14,926
2029			10,154
2030			3,259
2031 and thereafter			4,805
Total future minimum lease payments			89,346
Less: amount of lease payments representing interest			(5,707	)
Present value of future minimum lease payments			83,639
Less: current operating lease liabilities			(31,091	)
Long-term operating lease liabilities		$	52,548

12 Other Commitments and Contingencies

The Company licenses certain technology and software from third parties in the ordinary course of business.

The Company reviews its third party license and software arrangements in accordance with the accounting standards for internal-use software and hosting arrangements, including identifying service contracts and capitalizing certain implementation costs.

Future minimum fees payable under existing technology and software license agreements as of December 31, 2025 are $74 million for the years ended December 31, 2025 and thereafter. The software license agreements are long-term contracts and are not cancellable by the Company until the expiration

of their initial term. The amounts owed under these contracts are included in both other assets and other

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

long-term liabilities on the Company’s consolidated balance sheet as of December 31, 2025. In December 2024, the Company’s Board of Directors approved the implementation of a new worldwide enterprise resource planning system (“ERP”). The Company anticipates spending approximately $130 million on the ERP implementation, of which $52 million has been spent through the end of 2025. The Company expects to use existing cash and its credit facility to fund the ERP implementation. For the twelve months ended December 31, 2025, the Company has incurred $32 million of capitalized costs included in other assets and $20 million of operating costs included in the consolidated statement of operations for the ERP system implementation.

The Company enters into standard indemnification agreements in its ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to its current products, as well as claims relating to property damage or personal injury resulting from the performance of services by the Company or its subcontractors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Historically, the Company’s costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and management accordingly believes the estimated fair value of these agreements is immaterial.

The Merger Agreement contains specified termination rights that requires the Company to pay BD a termination fee of

$733

million if the Merger Agreement is terminated under certain circumstances. As the BDS Business Acquisition closed on February 9, 2026,

no

termination fee is payable.

13 Stock-Based Compensation

In

May 2020, the Company’s shareholders approved the Company’s 2020 Equity Incentive Plan (“2020 Plan”). As of December 31, 2025, the 2020 Plan has

5.8

million shares available for grant in the form of incentive or

non-qualified

stock options, stock appreciation rights (“SARs”), restricted stock or other types of awards (e.g. restricted stock units and performance stock units). The Company issues new shares of common stock upon exercise of stock options, restricted stock unit conversion or performance stock unit conversion. Under the 2020 Plan, the exercise price for stock options may not be less than the fair market value of the underlying stock at the date of grant. The 2020 Plan is scheduled to terminate on May 13, 2030. Options generally will expire no later than

ten years

after the date on which they are granted and will become exercisable as directed by the Compensation Committee of the Board of Directors and generally vest in equal annual installments over a

five-year

period. A SAR may be granted alone or in conjunction with an option or other award. Shares of restricted stock, restricted stock units and performance stock units may be issued under the 2020 Plan for such consideration as is determined by the Compensation Committee of the Board of Directors. As of December 31, 2025, the Company had stock options, restricted stock and restricted and performance stock unit awards outstanding.

In

May 2009, the Company’s shareholders approved the 2009 Employee Stock Purchase Plan, under which eligible employees may contribute up to

% of their earnings toward the quarterly purchase of the Company’s common stock. The plan makes available

0.8

million shares of the Company’s common stock, and as of December 31, 2025,

0.8

million shares have been issued under the plan. Each plan period lasts

three months

beginning on January

, April 1, July 1 and October 1 of each year.

The purchase price for each share of stock is the lesser of 90% of the market price on the first day of the plan period or 100% of the market price on the last day of the plan period.

Stock-based compensation expense related to this plan was $

million for each of the years ended December 31, 2025, 2024 and 2023.

The Company accounts for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all share-based payments to employees be recognized in the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

statements of operations, based on their grant date fair values. The Company recognizes the expense using the straight-line attribution method. The stock-based compensation expense recognized in the consolidated statements of operations is based on awards that ultimately are expected to vest; therefore, the amount of expense has been reduced for estimated forfeitures. Forfeitures are estimated based on historical experience. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. In addition, if the Company employs different assumptions in the application of these standards, the compensation expense that the Company records in the future periods may differ significantly from what the Company has recorded in the current period.

The consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023 include the following stock-based compensation expense related to stock option awards, restricted stock awards, restricted stock unit awards, performance stock unit awards and the employee stock purchase plan (in thousands):

		2025				2024				2023
Cost of sales		$	3,539			$	2,587			$	2,014
Selling and administrative expenses			42,742				36,160				31,012
Research and development expenses			7,846				5,962				3,842
Total stock-based compensation		$	54,127			$	44,709			$	36,868

Stock Options

In determining the fair value of the stock options, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected stock option lives. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. The Company uses implied volatility on its publicly traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on historical experience for the population of

non-qualified

stock option exercises. The risk-free interest rate is the yield currently available on U.S. Treasury

zero-coupon

issues with a remaining term approximating the expected term used as the input to the Black-Scholes model. The relevant data used to determine the value of the stock options granted during the twelve months ended December 31, 2025, 2024 and 2023 are as follows:

Options Issued and Significant Weighted-Average Assumptions Used to Estimate Option Fair Values		2025				2024				2023
Options issued in thousands			75				128				132
Risk-free interest rate			4.3	%			4.1	%			3.9	%
Expected life in years			6				6				6
Expected volatility			30.7	%			31.9	%			31.1	%
Expected dividends			—				—				—

Weighted-Average Exercise Price and Fair Value of Options on the Date of Grant		2025				2024				2023
Exercise price		$	394.94			$	325.45			$	331.76
Fair value		$	152.87			$	127.93			$	126.73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes stock option activity for the plans for the twelve months ended December 31, 2025 (in thousands, except per share data):

		Number of Shares				Exercise Price per Share												Weighted- Average Exercise Price per Share
Outstanding at December 31, 2024			593			$	128.93				to			$	371.64			$	284.74
Granted			75			$	368.26				to			$	414.09			$	394.94
Exercised			(51	)		$	128.93				to			$	345.68			$	213.15
Canceled			(11	)		$	279.90				to			$	374.82			$	335.50
Outstanding at December 31, 2025			606			$	136.43				to			$	346.56			$	303.53

The following table details the options outstanding at December 31, 2025 by range of exercise prices (in thousands, except per share data):

Exercise Price Range		Number of Shares Outstanding				Weighted- Average Exercise Price				Remaining Contractual Life of Options Outstanding				Number of Shares Exercisable				Weighted- Average Exercise Price
$136.43 to $280.80			206			$	235.21				4.2				184			$	230.73
$280.81 to $323.65			201			$	318.12				6.9				87			$	316.13
$323.66 to $346.56			199			$	359.52				8.2				53			$	342.05
Total			606			$	303.53				6.4				324			$	271.74

During 2025, 2024 and 2023, the total intrinsic value of the stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee to exercise the options) was $9 million, $14 million and $11 million, respectively. The total cash received from the exercise of these stock options was $10 million, $21 million and $18 million for the years ended December 31, 2025, 2024 and 2023, respectively.

T

he aggregate intrinsic value of the outstanding stock options at December 31, 2025 was $48 million. There were 0.3 million options exercisable at December 31, 2025, 2024 and 2023. The weighted-average exercise

prices of options exercisable at December 31, 2025, 2024 and 2023 were $

271.74

, $

251.63

and $

223.37

, respectively. The weighted-average remaining contractual life of the exercisable outstanding stock options at December 31, 2025 was

5.2

years. The aggregate intrinsic value of stock options exercisable as of December 31, 2025 was $

million.

At December 31, 2025, the Company had 0.6 million stock options that are vested and expected to vest. The intrinsic value, weighted-average exercise price and remaining contractual life of the vested and expected to vest stock options were $47 million, $302.88 and 6.3 years, respectively, at December 31, 2025.

The amount of compensation costs recognized for the years ended December 31, 2025, 2024 and 2023 on the stock options expected to vest were $13 million, $11 million and $10 million, respectively. As of December 31, 2025, there were $24 million of total unrecognized compensation costs related to unvested stock option awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 3 years.

Restricted Stock

During the each of the years ended December 31, 2025, 2024 and 2023, the Company granted three thousand shares of restricted stock. The weighted-average fair value per share on the grant date of the restricted stock granted in 2025, 2024 and 2023 was $368.26, $329.00 and $341.04, respectively. The Company has recorded

$

million of compensation expense in each of the years ended December 31, 2025, 2024

and 2023 related to the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

restricted stock

grants. As of December 31, 2025, the Company had

three

thousand unvested shares of restricted stock outstanding, which have been fully expensed.

Restricted Stock Units

The following table summarizes the unvested restricted stock unit award activity for the twelve months ended December 31, 2025 (in thousands, except per share data):

		Shares				Weighted-Average Grant Date Fair Value per Share
Unvested at December 31, 2024			261			$	316.27
Granted			111			$	377.02
Vested			(78	)		$	299.59
Forfeited			(24	)		$	337.88
Unvested at December 31, 2025			270			$	344.22

Restricted stock units are generally granted annually in February and vest in equal annual installments over a five-year period. The amount of compensation costs recognized for the years ended December 31, 2025, 2024 and 2023 on the restricted stock units expected to vest were $27 million, $22 million and $19 million, respectively. As of December 31, 2025, there were $66 million of total unrecognized compensation costs related to the restricted stock unit awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 3.3 years.

Performance Stock Units

The Company’s performance stock units are equity compensation awards with a market vesting condition based on the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the components of the S&P Health Care Index. TSR is the change in value of a stock price over time, including the reinvestment of dividends. The vesting schedule ranges from 0% to 200% of the target shares awarded. Beginning with the grants made in 2020, the vesting conditions for performance stock units now include a performance condition based on future sales

growth.

In

determining the fair value of the performance stock units, the Company makes a variety of assumptions and estimates, including volatility measures, expected yields and expected terms. The fair value of each performance stock unit grant was estimated on the date of grant using the Monte Carlo simulation model. The Company uses implied volatility on its publicly traded options as the basis for its estimate of expected volatility. The Company believes that implied volatility is the most appropriate indicator of expected volatility because it is generally reflective of historical volatility and expectations of how future volatility will differ from historical volatility. The expected life assumption for grants is based on the performance period of the underlying performance stock units. The risk-free interest rate is the yield currently available on U.S. Treasury

zero-coupon

issues with a remaining term approximating the expected term used as the input to the Monte Carlo simulation model. The correlation coefficient is used to model the way in which each company in the S&P Health Care

Index tends to move in relation to each other during the performance period.

The relevant data used to determine the value of the performance stock units granted during the years ended December 31, 2025, 2024 and 2023 are as follows:

Performance Stock Units Issued and Significant Assumptions Used to Estimate Fair Values		2025				2024				2023
Performance stock units issued in thousands			48				43				45
Risk-free interest rate			4.1	%			4.7	%			4.8	%
Expected life in years			2.9				2.9				2.9
Expected volatility			32.5	%			30.4	%			33.3	%
Average volatility of peer companies			30.6	%			29.6	%			32.8	%
Correlation Coefficient			32.1	%			33.4	%			38.2	%
Expected dividends			—				—				—

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the unvested performance stock unit award activity for the twelve months ended December 31, 2025 (

in

thousands, except per share data):

		Shares				Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2024			110			$	331.55
Granted			48			$	425.93
Vested			(34	)		$	321.46
Forfeited			(4	)		$	352.98
Change in performance shares in the year due to exceeding performance targets			2			$	416.78
Unvested at December 31, 2025			122			$	373.63

The amount of compensation costs recognized for the years ended December 31, 2025, 2024 and 2023 on the performance stock units expected to vest were $13 million, $9 million and $5 million, respectively. As of December 31, 2025, there were $20 million of total unrecognized compensation costs related to the performance stock unit awards that are expected to vest. These costs are expected to be recognized over a weighted-average period of 1.9 years.

14 Earnings Per Share

Basic and diluted EPS calculations are detailed as follows (in thousands, except per share data):

		Year Ended December 31, 2025
		Net Income				Weighted-Average Shares				Per Share
		(Numerator)				(Denominator)				Amount
Net income per basic common share		$	642,629				59,509			$	10.80
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities			—				197				(0.04	)
Net income per diluted common share		$	642,629				59,706			$	10.76

		Year Ended December 31, 2024
		Net Income				Weighted-Average Shares				Per Share
		(Numerator)				(Denominator)				Amount
Net income per basic common share		$	637,834				59,333			$	10.75
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities			—				219				(0.04	)
Net income per diluted common share		$	637,834				59,552			$	10.71

		Year Ended December 31, 2023
		Net Income				Weighted-Average Shares				Per Share
		(Numerator)				(Denominator)				Amount
Net income per basic common share		$	642,234				59,076			$	10.87
Effect of dilutive stock option, restricted stock, performance stock unit and restricted stock unit securities			—				194				(0.03	)
Net income per diluted common share		$	642,234				59,270			$	10.84

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the years ended December 31, 2025, 2024 and 2023, the Company had 79 thousand, 79 thousand and 245 thousand stock options that were antidilutive, respectively, due to having higher exercise prices than the Company’s average stock price during the period. These securities were not included in the computation of diluted EPS. The effect of dilutive securities was calculated using the treasury stock method.

15 Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are detailed as follows (in thousands):

		Currency Translation				Unrealized (Loss) Income on Retirement Plans				Unrealized Loss on Derivative Instruments				Accumulated Other Comprehensive Loss
Balance at December 31, 2023		$	(128,359	)		$	(3,501	)		$	(2,260	)		$	(134,120	)
Other comprehensive (loss) income, net of tax			(26,565	)			3,247				2,155				(21,163	)
Balance at December 31, 2024		$	(154,924	)		$	(254	)		$	(105	)		$	(155,283	)
Other comprehensive income (loss), net of tax			28,858				2,655				(1,681	)			29,832
Balance at December 31, 2025		$	(126,066	)		$	2,401			$	(1,786	)		$	(125,451	)

16 Retirement Plans

U.S. employees are eligible to participate in the Waters Employee Investment Plan, a 401(k) defined contribution plan, immediately upon hire. Employees may contribute up to 60% of eligible pay on a

pre-tax

or

post-tax

basis and the Company makes matching contributions of 100% for contributions up to 6% of eligible pay. The Company also sponsors a 401(k) Restoration Plan, which is a nonqualified defined contribution plan. Employees are 100% vested in employee and Company matching contributions for both plans. For the years ended December 31, 2025, 2024 and 2023, the Company’s matching contributions amounted to $22 million, $20 million and $22 million, respectively.

The Company also sponsors other employee benefit plans in the U.S., including a retiree healthcare plan, which provides reimbursement for medical expenses and is contributory. There are various employee benefit plans outside the United States (both defined benefit and defined contribution plans). Certain

non-U.S.

defined benefit plans

(“Non-U.S.

Pension Plans”) are included in the disclosures below, which are required under the accounting standards for retirement benefits.

The Company contributed $20 million, $18 million and $18 million in the years ended December 31, 2025, 2024 and 2023, respectively, to the

non-U.S.

plans (primarily defined contribution plans) which are currently outside of the scope of the required disclosures. The eligibility and vesting of

non-U.S. plans

are consistent with local laws and regulations.

The net periodic pension cost is made up of several components that reflect different aspects of the Company’s financial arrangements as well as the cost of benefits earned by employees. These components are determined using the projected unit credit actuarial cost method and are based on certain actuarial assumptions. The Company’s accounting policy is to reflect in the projected benefit obligation all benefit changes to which the Company is committed as of the current valuation date; use a market-related value of assets to determine pension expense; amortize increases in prior service costs on a straight-line basis over the expected future service of active participants as of the date such costs are first recognized; and

amortize cumulative actuarial gains and losses in excess of 10% of the larger of the market-related value of plan assets and the projected benefit obligation over the expected future service of active participants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summary data for the U.S. Retiree Healthcare Plan and

Non-U.S. Pension

Plans are presented in the following tables, using the measurement dates of December 31, 2025 and 2024, respectively.

The reconciliation of the projected benefit obligations for the plans at December 31, 2025 and 2024 is as follows (in thousands):

		2025								2024
		U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans
Projected benefit obligation, January 1		$	25,851			$	83,881			$	25,742			$	92,391
Service cost			427				3,572				340				3,398
Employee contributions			994				608				1,037				554
Interest cost			1,393				2,585				1,282				2,610
Actuarial losses (gains)			758				(6,410	)			(690	)			(2,124	)
Benefits paid			(2,163	)			(1,933	)			(1,860	)			(2,834	)
Plan amendments			—				—				—				(965	)
Plan settlements			—				(701	)			—				(3,288	)
Currency impact			—				9,037				—				(5,861	)
Projected benefit obligation, December 31		$	27,260			$	90,639			$	25,851			$	83,881

The reconciliation of the fair value of the plan assets at December 31, 2025 and 2024 is as follows (in thousands):

		2025								2024
		U.S. Retiree				Non-U.S.				U.S. Retiree				Non-U.S.
		Healthcare				Pension				Healthcare				Pension
		Plan				Plans				Plan				Plans
Fair value of plan assets, January 1		$	19,780			$	80,750			$	18,153			$	86,587
Actual return on plan assets			2,251				(144	)			1,764				2,201
Company contributions			809				3,129				686				3,083
Employee contributions			994				608				1,037				554
Plan settlements			—				(701	)			—				(3,288	)
Benefits paid			(2,163	)			(1,933	)			(1,860	)			(2,834	)
Currency impact			—				9,318				—				(5,553	)
Fair value of plan assets, December 31		$	21,671			$	91,027			$	19,780			$	80,750

The

summary of the funded status for the plans at December 31, 2025 and 2024 is as follows (in thousands):

		2025								2024
		U.S. Retiree				Non-U.S.				U.S. Retiree				Non-U.S.
		Healthcare				Pension				Healthcare				Pension
		Plan				Plans				Plan				Plans
Projected benefit obligation		$	(27,260	)		$	(90,639	)		$	(25,851	)		$	(83,881	)
Fair value of plan assets			21,671				91,027				19,780				80,750
Funded status		$	(5,589	)		$	388			$	(6,071	)		$	(3,131	)

The change in the Company’s projected benefit obligation for the year ended December 31, 2025 was primarily due to net actuarial gains that arose during the year driven by an increase in discount rates, differences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

between expected and actual return on plan assets, and fluctuations in foreign currency exchange rates during the year. The change in the Company’s projected benefit obligation for the year ended December 31, 2024 was primarily due to net actuarial gains that arose during the year driven by an increase in discount rates, differences between expected and actual return on plan assets, and fluctuations in foreign currency exchange rates during the year.

The summary of the amounts recognized in the consolidated balance sheets for the plans at December 31, 2025 and 2024 is as follows (in thousands):

		2025								2024
		U.S. Retiree				Non-U.S.				U.S. Retiree				Non-U.S.
		Healthcare				Pension				Healthcare				Pension
		Plan				Plans				Plan				Plans
Long-term assets		$	—			$	8,310			$	—			$	5,109
Current liabilities			—				(301	)			—				—
Long-term liabilities			(5,589	)			(7,621	)			(6,071	)			(8,240	)
Net amount recognized at December 31		$	(5,589	)		$	388			$	(6,071	)		$	(3,131	)

The accumulated benefit obligation for all defined benefit pension plans was $80 million and $74 million at December 31, 2025 and 2024, respectively.

The summary of the

Non-U.S.

Pension Plans that have accumulated benefit obligations in excess of plan assets at December 31, 2025 and 2024 is as follows (in thousands):

		2025				2024
Accumulated benefit obligations		$	42,957			$	38,076
Fair value of plan assets		$	39,342			$	33,998

The summary of the

Non-U.S.

Pension Plans that have projected benefit obligations in excess of plan assets at December 31, 2025 and 2024 is as follows (in thousands):

		2025				2024
Projected benefit obligations		$	47,518			$	42,238
Fair value of plan assets		$	39,596			$	33,998

The summary of the components of net periodic pension costs for the plans for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

		2025								2024								2023
		U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans
Service cost		$	427			$	3,572			$	340			$	3,398			$	275			$	3,073
Interest cost			1,393				2,585				1,282				2,610				1,262				2,797
Expected return on plan assets			(1,221	)			(2,978	)			(1,120	)			(2,825	)			(978	)			(2,653	)
Settlement loss			—				(4	)			—				552				—				221
Net amortization:
Prior service credit			—				(45	)			(17	)			(73	)			(19	)			(105	)
Net actuarial loss (gain)			—				47				—				(14	)			—				(195	)
Net periodic pension cost		$	599			$	3,177			$	485			$	3,648			$	540			$	3,138

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The summary of the changes in amounts recognized in other comprehensive income (loss) for the plans for the years ended December 31,

2025

, 2024 and 2023 is as follows (in thousands):

		2025								2024								2023
		U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans
Prior service cost		$	—			$	—			$	—			$	965			$	—			$	—
Net gain (loss) arising during the year			271				3,287				1,333				1,500				(699	)			(9,396	)
Amortization:
Prior service credit			—				(45	)			(17	)			(73	)			(19	)			(105	)
Net loss			—				43				—				538				—				26
Currency impact			—				120				—				30				—				(58	)
Total recognized in other comprehensive income (loss)		$	271			$	3,405			$	1,316			$	2,960			$	(718	)		$	(9,533	)

The components of net periodic benefit cost other than the service cost component are included in other income, net in the consolidated statements of operations.

T

he

summary of the amounts included in accumulated other comprehensive loss in stockholders’ equity for the plans at December 31, 2025 and 2024 is as follows (in thousands):

		2025								2024
		U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans
Net actuarial gain (loss)		$	640			$	2,190			$	369			$	(1,153	)
Prior service credit			—				778				—				716
Total		$	640			$	2,968			$	369			$	(437	)

The plans’ investment asset mix is as follows at December 31, 2025 and

2024

:

		2025								2024
		U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans				U.S. Retiree Healthcare Plan				Non-U.S. Pension Plans
Equity securities			65	%			6	%			65	%			6	%
Debt securities			35	%			16	%			35	%			17	%
Cash and cash equivalents			0	%			1	%			0	%			1	%
Insurance contracts and other			0	%			77	%			0	%			76	%
Total			100	%			100	%			100	%			100	%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The plans’ investment policies include the following asset allocation

guidelines:

		U.S. Retiree Healthcare Plan								Non-U.S. Pension Plans Policy Target
		Policy Target				Range
Equity securities			65	%			30% - 90%				18	%
Debt securities			35	%			20% - 50%				22	%
Cash and cash equivalents			0	%			0% - 10%				4	%
Insurance contracts and other			0	%			0% - 10%				56	%

The asset allocation policy for the U.S. Retiree Healthcare Plan was developed in consideration of the following long-term investment objectives: achieving a return on assets consistent with the investment policy, achieving portfolio returns which compare favorably with those of other similar plans, professionally managed portfolios and of appropriate market indexes and maintaining sufficient liquidity to meet the obligations of the plan. Within the equity portfolio of the U.S. Retiree Healthcare Plan, investments are diversified among market capitalization and investment strategy, and targets a 45% allocation of the equity portfolio to be invested in financial markets outside of the United States. The Company does not invest in its own stock within the U.S. Retiree Healthcare Plan’s assets.

Plan assets are measured at fair value using the following valuation techniques and inputs:

Level 1:		The fair value of these types of investments is based on market and observable sources from daily quoted prices on nationally recognized securities exchanges.
Level 2:		The fair value of these types of investments utilizes data points other than quoted prices in active markets that are observable either directly or indirectly.
Level 3:		These bank and insurance investment contracts are issued by well-known, highly-rated companies. The fair value disclosed represents the present value of future cash flows under the terms of the respective contracts. Significant assumptions used to determine the fair value of these contracts include the amount and timing of future cash flows and counterparty credit risk.

There have been no changes in the above valuation techniques associated with determining the value of the plans’ assets during the years ended December 31, 2025 and 2024.

The fair value of the Company’s retirement plan assets are as follows at December 31, 2025 (in thousands):

		Total at December 31, 2025				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
U.S. Retiree Healthcare Plan:
Mutual funds (a)		$	21,671			$	21,671			$	—			$	—
Total U.S. Retiree Healthcare Plan			21,671				21,671				—				—
Non-U.S. Pension Plans:
Cash equivalents (b)			982				982				—				—
Mutual funds (c)			19,828				19,828				—				—
Bank and insurance investment contracts (d)			70,217				—				—				70,217
Total Non-U.S. Pension Plans			91,027				20,810				—				70,217
Total fair value of retirement plan assets		$	112,698			$	42,481			$	—			$	70,217

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair value of the Company’s retirement plan assets are as follows at December 31, 2024 (in thousands):

		Total at December 31, 2024				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
U.S. Retiree Healthcare Plan:
Mutual funds (e)		$	19,780			$	19,780			$	—			$	—
Total U.S. Retiree Healthcare Plan			19,780				19,780				—				—
Non-U.S. Pension Plans:
Cash equivalents (b)			910				910				—				—
Mutual funds (f)			18,413				18,413				—				—
Bank and insurance investment contracts (d)			61,427				—				—				61,427
Total Non-U.S. Pension Plans			80,750				19,323				—				61,427
Total fair value of retirement plan assets		$	100,530			$	39,103			$	—			$	61,427

a)	The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: 41% in the common stock of large-cap U.S. companies, 24% in the common stock of international growth companies and 35% in fixed income bonds of U.S. companies and the U.S. government.

b)	Primarily represents deposit account funds held with various financial institutions.

c)	The mutual fund balance in the Non-U.S. Pension Plans is primarily invested in the following categories: 66% in international bonds, 28% in the common stock of international companies and 6% in various other global investments.

d)	Amount represents bank and insurance guaranteed investment contracts.

e)	The mutual fund balance in the U.S. Retiree Healthcare Plan is invested in the following categories: 47% in the common stock of large-cap U.S. companies, 18% in the common stock of international growth companies and 35% in fixed income bonds of U.S. companies and the U.S. government.

f)	The mutual fund balance in the Non-U.S. Pension Plans is invested in the following categories: 71% in international bonds, 25% in the common stock of international companies and 4% in various other global investments.

The following table summarizes the changes in fair value of the Level 3 retirement plan assets for the years ended December 31, 2025 and 2024 (in thousands):

		Insurance Guaranteed Investment Contracts
Fair value of assets, December 31, 2023		$	66,191
Net purchases (sales) and appreciation (depreciation)			(4,764	)
Fair value of assets, December 31, 2024			61,427
Net purchases (sales) and appreciation (depreciation)			8,790
Fair value of assets, December 31, 2025		$	70,217

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted-average assumptions used to determine the benefit obligation in the consolidated balance sheets at December 31, 2025, 2024 and 2023 are as follows:

		2025								2024								2023
		U.S.				Non-U.S.				U.S.				Non-U.S.				U.S.				Non-U.S.
Discount rate			5.30	%			3.47	%			5.62	%			3.00	%			5.18	%			2.97	%
Increases in compensation levels			*	*			2.88	%			*	*			2.92	%			*	*			2.90	%
Interest crediting rate			5.25	%			1.93	%			5.25	%			2.09	%			5.25	%			2.05	%

**	Not applicable

The weighted-average assumptions used to determine the net periodic pension cost for the years ended December 31, 2025, 2024 and 2023 are as follows:

		2025								2024								2023
		U.S.				Non-U.S.				U.S.				Non-U.S.				U.S.				Non-U.S.
Discount rate			5.62	%			3.90	%			5.18	%			3.58	%			5.42	%			4.70	%
Return on plan assets			6.25	%			4.03	%			6.25	%			3.80	%			6.25	%			3.95	%
Increases in compensation levels			*	*			3.81	%			*	*			3.74	%			*	*			4.32	%
Interest crediting rate			5.25	%			1.87	%			5.25	%			2.03	%			5.25	%			1.47	%

**	Not applicable

To develop the expected long-term rate of return on assets assumption, the Company considered historical returns and future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio and historical expenses paid by the plan. A

one-quarter

percentage point increase in the assumed long-term rate of return on assets would decrease the Company’s net periodic benefit cost by

less than $1 million

.

A one-quarter

percentage point increase in the discount rate would decrease the Company’s net periodic benefit cost by less than $1 million.

During fiscal year 2026, the Company expects to contribute a total of approximately $

million to $

million to the Company’s defined

benefit

plans. Estimated future benefit payments from the plans as of December 31, 2025 are as follows (in thousands):

		U.S. Retiree Healthcare Plans				Non-U.S. Pension Plans				Total
2026		$	2,277			$	5,168			$	7,445
2027			2,351				4,026				6,377
2028			2,437				5,487				7,924
2029			2,535				4,743				7,278
2030			2,655				4,775				7,430
2031 - 2035			14,265				29,290				43,555

17 Business Segment Information

The accounting standards for segment reporting establish standards for reporting information about operating segments in annual financial statements and require selected information for those segments to be presented in interim financial reports of public business enterprises. They also establish standards for related disclosures about products and services, geographic areas and major customers. The Company’s Chief Executive Officer is the CODM. The CODM evaluates the business based on our two operating segments: Waters and TA.

The Waters operating segment is primarily in the business of designing, manufacturing, selling and servicing LC and MS instruments, columns and other precision chemistry consumables that can be integrated and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

used along with other analytical instruments. The TA operating segment is primarily in the business of designing, manufacturing, selling and servicing thermal analysis, rheometry and calorimetry instruments. The Company’s two operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution; and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes. Please refer to

the consolidated balance sheets

and

consolidated statements of operations for financial information regarding the one reportable segment of the Company.

Net sales for the Company’s products and services are as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands):

		2025				2024				2023
Product net sales:
Waters instrument systems		$	1,101,826			$	1,032,493			$	1,108,702
Chemistry consumables			631,458				565,481				541,469
TA instrument systems			243,816				246,202				252,879
Total product sales			1,977,100				1,844,176				1,903,050
Service net sales:
Waters service			1,080,162				1,006,447				951,419
TA service			108,024				107,764				101,947
Total service sales			1,188,186				1,114,211				1,053,366
Total net sales		$	3,165,286			$	2,958,387			$	2,956,416

Net sales are attributable to geographic areas based on the region of destination. Geographic sales information is presented below for the years ended December 31, 2025, 2024 and 2023 (in thousands):

		2025				2024				2023
Net Sales:
Asia:
China		$	437,468			$	396,599			$	440,707
Asia Other			602,929				572,623				567,118
Total Asia			1,040,397				969,222				1,007,825
Americas:
United States			965,782				933,926				927,982
Americas Other			195,731				181,854				180,591
Total Americas			1,161,513				1,115,780				1,108,573
Europe			963,376				873,385				840,018
Total net sales		$	3,165,286			$	2,958,387			$	2,956,416

None of the Company’s individual customers accounts for more than 2% of annual Company sales. Net sales by customer class are as

follows

for the years ended December 31, 2025, 2024 and 2023 (in thousands):

		2025				2024				2023
Pharmaceutical		$	1,873,362			$	1,718,899			$	1,696,875
Industrial			961,154				908,486				909,003
Academic and government			330,770				331,002				350,538
Total net sales		$	3,165,286			$	2,958,387			$	2,956,416

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net sales for the Company recognized at a point in time versus over time are as follows for the years ended December 31, 2025, 2024 and

2023

(in thousands):

		2025				2024				2023
Net sales recognized at a point in time:
Instrument systems		$	1,345,642			$	1,278,695			$	1,361,581
Chemistry consumables			631,458				565,481				541,469
Service sales recognized at a point in time (time & materials)			387,686				369,149				372,530
Total net sales recognized at a point in time			2,364,786				2,213,325				2,275,580
Net sales recognized over time:
Service and software maintenance sales recognized over time (contracts)			800,500				745,062				680,836
Total net sales		$	3,165,286			$	2,958,387			$	2,956,416

Long-lived assets information at December 31, 2025, 2024 and 2023 is presented below (in thousands):

		December 31,
		2025				2024				2023
Long-lived assets:
United States		$	419,827			$	445,883			$	440,993
Americas Other			1,728				1,971				2,632
Total Americas			421,555				447,854				443,625
Europe			198,330				176,310				167,948
Asia			22,161				27,036				27,500
Total long-lived assets		$	642,046			$	651,200			$	639,073

The Americas Other category includes Canada, Latin America and Puerto Rico. Long-lived assets exclude goodwill, other intangible assets and other assets.

The Company’s segment performance measure is net income attributable to Waters shareholders, which is used by our CODM when assessing performance and allocating capital and resources to our business. Significant segment expenses are presented in the Company’s consolidated statements of operations. Additional disaggregated significant segment expenses, that are not separately presented on the Company’s consolidated statements of operations, are presented below.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The significant segment expenses, revenues and net income of the Company’s one reportable segment are as follows for the years

ended

December 31, 2025, 2024 and 2023 (in thousands): 

		2025				2024				2023
Total sales, net		$	3,165,286			$	2,958,387			$	2,956,416
Less:
Labor costs within selling and administrative and research and development expenses			(645,147	)			(596,381	)			(605,884	)
Material purchases			(538,790	)			(556,123	)			(551,005	)
Labor costs within product and service cost of sales			(387,970	)			(350,978	)			(358,788	)
Other segment expenses			(790,791	)			(628,552	)			(623,063	)
Interest expense and other income, net			(47,710	)			(71,485	)			(81,433	)
Provision for income taxes			(112,249	)			(117,034	)			(94,009	)
Net income		$	642,629			$	637,834			$	642,234

The other segment expenses include ERP implementation costs, transaction costs, depreciation and amortization expenses, facilities and information technology costs, travel, freight, professional fees and all other costs.

18 Unaudited Quarterly Results

The Company’s unaudited quarterly results are summarized below (in thousands, except per share data):

		First				Second				Third				Fourth
2025		Quarter				Quarter				Quarter				Quarter				Total
Net sales		$	661,705			$	771,332			$	799,887			$	932,362			$	3,165,286
Costs and operating expenses:
Cost of sales			276,745				321,407				327,806				362,864				1,288,822
Selling and administrative expenses			174,881				201,257				214,229				240,007				830,374
Research and development expenses			46,622				48,548				53,643				46,898				195,711
Purchased intangibles amortization			11,712				11,907				12,095				12,077				47,791
Total costs and operating expenses			509,960				583,119				607,773				661,846				2,362,698
Operating income			151,745				188,213				192,114				270,516				802,588
Other income (expense), net			1,524				(676	)			(70	)			2,283				3,061
Interest expense			(14,270	)			(14,354	)			(26,637	)			(14,287	)			(69,548	)
Interest income			3,889				4,507				4,712				5,669				18,777
Income before income taxes			142,888				177,690				170,119				264,181				754,878
Provision for income taxes			21,507				30,579				21,196				38,967				112,249
Net income		$	121,381			$	147,111			$	148,923			$	225,214			$	642,629
Net income per basic common share			2.04				2.47				2.50				3.78				10.80
Weighted-average number of basic common shares			59,439				59,515				59,528				59,546				59,509
Net income per diluted common share			2.03				2.47				2.50				3.77				10.76
Weighted-average number of diluted common shares and equivalents			59,711				59,656				59,622				59,763				59,706

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		First				Second				Third				Fourth
2024		Quarter				Quarter				Quarter				Quarter				Total
Net sales		$	636,839			$	708,529			$	740,305			$	872,714			$	2,958,387
Costs and operating expenses:
Cost of sales			261,786				288,244				301,655				348,516				1,200,201
Selling and administrative expenses			174,536				173,247				169,097				173,268				690,148
Research and development expenses			44,595				46,182				45,336				46,914				183,027
Purchased intangibles amortization			11,834				11,744				11,759				11,753				47,090
Litigation provisions			10,242				—				1,326				—				11,568
Total costs and operating expenses			502,993				519,417				529,173				580,451				2,132,034
Operating income			133,846				189,112				211,132				292,263				826,353
Other income (expense), net			2,259				(302	)			(338	)			(843	)			776
Interest expense			(25,520	)			(23,726	)			(21,435	)			(18,996	)			(89,677	)
Interest income			4,271				4,328				4,258				4,559				17,416
Income before income taxes			114,856				169,412				193,617				276,983				754,868
Provision for income taxes			12,660				26,675				32,114				45,585				117,034
Net income		$	102,196			$	142,737			$	161,503			$	231,398			$	637,834
Net income per basic common share			1.73				2.41				2.72				3.90				10.75
Weighted-average number of basic common shares			59,232				59,339				59,367				59,386				59,333
Net income per diluted common share			1.72				2.40				2.71				3.88				10.71
Weighted-average number of diluted common shares and equivalents			59,431				59,451				59,504				59,645				59,552

The Company typically experiences an increase in sales in the fourth quarter, as a result of purchasing habits for capital goods of customers that tend to exhaust their spending budgets by calendar year-end. Selling and administrative expenses are typically higher after the first quarter in each year as the Company’s annual payroll merit increases take effect.

19 Subsequent Events

Acquisition of BD Biosciences & Diagnostic Solutions Businesses

On February 9, 2026, the Company completed the BDS Business Acquisition for a total purchase price, including assumed debt, of

$16.8 billion. This transformative combination establishes an innovative global leader in life sciences and diagnostics, enhancing the Company’s scale, broadening its capabilities and expanding its presence across attractive end markets.

The transaction is structured as a Reverse Morris Trust transaction, where BD’s Biosciences & Diagnostic Solutions business will be spun off to BD shareholders and simultaneously merged with a wholly owned subsidiary of the Company.

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

$

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 Waters.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with the BDS Business Acquisition, and in addition to the $4 billion of debt assumed by Waters upon completion of the BDS Business Acquisition, the Company and a financial institution executed a 364-day bridge 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 BDS Business Acquisition. The bridge facility was cancelled on the closing date of the BDS Business Acquisition. As a result of the cancellation of the bridge facility, the remaining financing costs of $

million that were being amortized over the term of the bridge facility were recorded as interest expense in February 2026.

In addition, in connection with the acquisition of the BDS Business, the Company has incurred approximately

$97 million of transaction, integration, financing and other internal costs for the year ended December 31, 2025. As a result of the closing on February 9, 2026, the Company incurred additional transaction related expenses of $48

million of which were recorded as selling and administrative expenses in February 2026.

As of the date of this filing, the accounting for the BDS Business Acquisition has not been completed, which includes the measurement of certain intangible assets and goodwill. The Company is still evaluating the allocation of the preliminary purchase price consideration and pro forma results of operations. Following the closing of the BDS Business Acquisition in February 2026, the Company has reorganized the existing and new business units into the following four segments: Waters Analytical Sciences, Waters Biosciences, Waters Advanced Diagnostics and Waters Materials Sciences. The Company will evaluate its business activities as currently organized to determine its operating segments and

reporting

segments for future reporting periods.

Derivative Transactions

The variable rate interest payments on the debt associated with the BDS Business Acquisition will create interest risk for the Company as interest payments will fluctuate based on changes in the contractually specified interest rate index over the life of the debt. In order to reduce interest rate risk associated with the variability in interest cash flows paid on the debt attributable to changes in SOFR rates during the forecasted period of the debt, the Company entered into interest rate swap agreements. The agreements have a duration of 7 years to 10 years, and an aggregate notional value of $1 billion. The Company expects to designate the derivatives as a cash flow hedge under hedge accounting.

In January 2026, the Company entered into a derivative agreement with a duration up to four years, and a notional value of $

million to hedge the variability in the movement of foreign currency exchange rates on a portion of its euro-denominated net asset investments. The Company expects to designate the derivative as an interest rate cross-currency swap under hedge accounting.