Agilent Technologies, Inc.: Form 10-Q for the period ended Jul 31, 2026

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding growth opportunities, including for and in our end markets, new product and service introductions, the position and strength of our businesses, products and services, market demand for and adoption of our products and solutions, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on enhancing our customers’ experience, delivering differentiated product solutions and driving productivity improvements, leveraging our product platforms to maximize growth, our investments, including in manufacturing infrastructure, research and development and expanding and improving our applications and solutions portfolios, expanding our position in developing countries and emerging markets, our contributions to our defined benefit plans, our hedging programs and other actions to offset the effects of foreign currency and interest rate movements, our future effective tax rate, unrecognized tax benefits, reimbursement incentives, our ability to satisfy our liquidity requirements, including through cash generated from operations, the potential impact of adopting new accounting pronouncements, indemnification obligations, our sales, our purchase commitments, our capital expenditures, the integration, effects and timing of our acquisitions and other transactions, expense reduction and other results from our restructuring programs and other cost saving initiatives, our stock repurchase program and dividends, the effects of geopolitical tensions, macroeconomic and market conditions, including relating to or arising from changes to tariffs, import/export or trade policies, the recovery and health of our end markets, seasonality, mix, future financial results, our operating margin, our geographical diversification, interest rates, inflationary pressures and local regulations and restrictions, that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations, comprehensive income (loss) or cash flows. Our fiscal year end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal periods.

Executive Summary

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

Acquisition of Biocare. On June 24, 2026, we acquired 100 percent of the outstanding capital stock of BC Midco I, Inc. (“Biocare”) for a net consideration paid of $950 million. Biocare is a leading provider of clinical and research solutions and is included within our Life Sciences and Diagnostics Markets segment. The acquisition of Biocare expands our pathology portfolio enabling us to better serve our pathology customers across clinical and research settings. As a result of the acquisition, Biocare became a wholly-owned subsidiary of Agilent. Accordingly, the results of Biocare are included in Agilent's condensed consolidated financial statements from the acquisition date.

2032 Senior Notes. On June 25, 2026, we issued $600 million in aggregate principal amount senior notes ("2032 senior notes"). The 2032 senior notes were issued at 99.968 percent of their principal amount. The 2032 senior notes will mature on January 15, 2032, and bear interest at a fixed rate of 4.90 percent per annum. The interest is payable semi-annually in arrears on January 15 and July 15 of each year and payments will commence on January 15, 2027.

Global Tariffs. On February 20, 2026, the U.S. Supreme Court invalidated certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), and the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to refund such tariffs, subject to potential appeal. On April 20, 2026, CBP launched an online portal for submitting IEEPA tariff refund requests. While we have submitted additional claims for refunds related to certain eligible tariffs paid, the timing and approval of any remaining refunds are uncertain and contingent upon further legal, regulatory, and administrative developments. Management continues to assess the recoverability of tariffs paid and will continue to recognize any recoveries in accordance with the gain contingency model when it is realized or realizable upon formal acceptance of refund claims submitted.

While tariffs remain dynamic, we have mitigated the adverse impact related to our cost of revenue during the three and nine months ended July 31, 2026 through our continued strategies such as supply chain optimization, targeted pricing actions, and other cost-efficiency initiatives to protect margins and sustain long-term growth. We will continue to monitor judicial rulings and evolving trade dynamics closely, as they may influence future revenue and operational efficiency.

Middle East Conflict. The continued geopolitical tensions in the Middle East and surrounding regions have increased global economic uncertainty and disruptions to global energy supply chains resulting in inflationary pressures. The Middle East conflict did not have a material impact on our results of operations through the third quarter of fiscal year 2026 as a result of leveraging a series of mitigation strategies developed in response to the ongoing tariff pressures. As the situation remains dynamic, we continue to monitor the potential impact that such geopolitical tensions may have on our business.

Actual Results

Net revenue of $1,878 million and $5,511 million for the three and nine months ended July 31, 2026 increased 8 percent in both periods when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year. For the three and nine months ended July 31, 2026, revenue growth came from all of our segments, all geographic regions and most of our key end markets we serve when compared to the same periods last year.

Revenue generated by our Life Sciences and Diagnostics Markets segment for the three and nine months ended July 31, 2026 increased 11 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Revenue generated by our Agilent CrossLab segment for the three and nine months ended July 31, 2026 increased 6 percent and 7 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had a 1 percentage point and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Revenue generated by our Applied Markets segment for the three and nine months ended July 31, 2026 increased 7 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026, had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Net income for the three and nine months ended July 31, 2026 was $362 million and $1,006 million, respectively, compared to net income of $336 million and $869 million for the corresponding periods last year. In the nine months ended July 31, 2026, cash provided by operations was $1,064 million compared to cash provided by operations of $1,014 million in the same period last year.

Dividends. During the three and nine months ended July 31, 2026, we paid cash dividends of $0.255 per common share or $72 million and $0.765 per common share or $216 million, respectively, on the company's common stock. During the three and nine months ended July 31, 2025, we paid cash dividends of $0.248 per common share or $71 million and $0.744 per common share or $212 million, respectively, on the company's common stock. The timing and amounts of any future dividends are subject to determination and approval by our board of directors.

2023 Repurchase Program. In September of 2025, we completed the 2023 repurchase program. During the three and nine months ended July 31, 2025, we repurchased and retired 737,474 shares for $85 million, excluding applicable excise taxes and 2.734 million shares for $340 million, excluding applicable excise taxes, respectively, under this authorization.

2024 Repurchase Program. On May 29, 2024, we announced that our board of directors had approved a share repurchase program (the "2024 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2024 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2024 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2024 repurchase program became effective on August 1, 2024 and commenced in September 2025 upon the completion of our 2023 repurchase program. During the three and nine months ended July 31, 2026, we repurchased and retired 612,270 shares for $78 million, excluding excise taxes and 2.212 million shares for $295 million excluding excise taxes, respectively, under this authorization. As of July 31, 2026, we had remaining authorization to repurchase up to approximately $1,654 million of our common stock under the 2024 repurchase program.

Excise Taxes on Shares Repurchased. During the nine months ended July 31, 2026, we recorded the applicable excise taxes payable of approximately $2 million and paid excise taxes of approximately $3 million related to the shares repurchased in fiscal year 2025. During the nine months ended July 31, 2025, we recorded the applicable excise taxes payable of approximately $2 million and paid excise taxes of approximately $10 million related to the shares repurchased in fiscal year 2024.

Looking Forward. Our primary focus remains on enhancing our customers’ experience, delivering differentiated product solutions and driving productivity improvements. Following an extended period of constrained capital spending, customer capital budget availability has largely normalized, supporting improved investment activity across our key end markets. We remain optimistic about the long-term health and growth prospects of these markets. While tariffs and the Middle East conflict remain dynamic, we have mitigated the adverse impact related to our costs of revenue during the three and nine months ended July 31, 2026 through our continued mitigation strategies such as supply chain optimization, targeted pricing actions, and other cost-efficiency initiatives to protect margins and sustain long-term growth. We will continue to monitor judicial rulings and evolving trade dynamics closely, as they may influence future revenue and operational efficiency.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles ("GAAP") in the U.S. The preparation of condensed consolidated financial statements in conformity with GAAP in the U.S. requires management to make estimates, judgments and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, retirement and postretirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes. There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made and if different estimates that reasonably could have been used or changes in the accounting estimate that are reasonably likely to occur could materially change the financial statements.

Adoption of New Pronouncements

See Note 2, "New Accounting Pronouncements," to the condensed consolidated financial statements for a description of new accounting pronouncements.

Restructuring and Other Related costs

Summary of Restructuring Plans. In fiscal years 2026 and 2025, we announced two separate restructuring plans designed to optimize our management structure to better serve our customers. These actions impact all three of our business segments. The costs associated with these restructuring plans were not allocated to our business segments' results; however, each business segment will benefit from the future cost savings from these actions. When completed, the restructuring programs are expected to result in the reduction in annual cost of revenue and operating expenses over the three business segments.

A summary of our aggregate liability relating to the fiscal year 2026 and 2025 restructuring plans and the total restructuring expense since inception of the plans are shown in the table below:

(in millions)

The aggregate restructuring liability of $13 million at July 31, 2026, is recorded in other accrued liabilities on the condensed consolidated balance sheet and reflects estimated future cash outlays.

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

(in millions)

39

Fiscal Year 2026 Plan ("FY26 Plan")

In the third quarter of fiscal year 2026, we implemented a new restructuring plan designed to optimize our management structure to better serve our customers. The expense associated with this workforce reduction includes severance and other personnel-related costs. We expect to substantially complete these restructuring activities by the first quarter of fiscal year 2027. When completed, the restructuring program is estimated to result in the reduction of approximately $30 million to $35 million in annual cost of revenue and operating expenses over our three business segments.

In connection with the FY26 Plan, we have recorded approximately $15 million in restructuring and other related costs in both the three and nine months ended July 31, 2026.

A summary of the FY26 Plan activity is shown in the table below:

(in millions)

Fiscal Year 2025 Plan ("FY25 Plan")

In the second quarter of fiscal year 2025, we announced a restructuring plan designed to optimize our management structure to better serve our customers. The expenses associated with this workforce reduction include severance and other personnel-related costs. We expect to substantially complete these restructuring activities by the end of fiscal year 2026. When completed, the restructuring program is estimated to result in the reduction of approximately $90 million to $95 million in annual cost of revenue and operating expenses over our three business segments.

In connection with the FY25 Plan, we have recorded approximately zero and $28 million, respectively, in restructuring and other related costs in the three and nine months ended July 31, 2026.

A summary of the FY25 Plan activity is shown in the table below:

(in millions)

40

Foreign Currency

Our revenue, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. The overall effect of changes in foreign currency exchange rates had a 2 percentage point favorable impact on revenue growth for the nine months ended July 31, 2026 when compared to the same period last year. Typically, when movements in foreign currency exchange rates have a positive impact on revenue, they will also have a negative impact by increasing our costs and expenses or vice versa. We calculate the impact of movements in foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods. We hedge revenue, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short-term and anticipated basis. We do experience some fluctuations within individual lines of the condensed consolidated statement of operations and balance sheet because our hedging program is not designed to offset the currency movements in each category of revenue, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (up to a rolling twelve-month period). We may also hedge equity balances denominated in foreign currency on a long-term basis. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Results from Operations

Net Revenue

(in millions)

Net revenue for the three and nine months ended July 31, 2026 increased 8 percent in both periods when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year. For the three and nine months ended July 31, 2026, revenue growth came from all of our segments, all geographic regions and most of our key end markets we serve when compared to the same periods last year.

Revenue from products for the three and nine months ended July 31, 2026 increased 8 percent in both periods when compared to the same periods last year. In the three months ended July 31, 2026, product revenue increased in most of our businesses led by strong revenue growth from our Agilent Advanced Therapeutics (formerly known as our specialty contract development and manufacturing organization ("CDMO") business), consumables and liquid chromatography mass spectrometry businesses when compared to the same period last year. In the nine months ended July 31, 2026, product revenue increased in most of our businesses led by strong revenue growth in our liquid chromatography, Agilent Advanced Therapeutics, consumables and spectroscopy businesses when compared to the same period last year.

Services and other revenue for the three and nine months ended July 31, 2026 increased 7 percent and 9 percent, respectively, when compared to the same periods last year. Services and other revenue consist of contract repair, preventative maintenance, compliance services, relocation services, installation services and consulting services related to the companion diagnostics and our Agilent Advanced Therapeutics businesses. For the three and nine months ended July 31, 2026, service revenue increases reflected strong growth from contract repair, consulting and compliance services.

Net Revenue By Segment

(in millions)

Revenue in the Life Sciences and Diagnostics Markets segment for the three and nine months ended July 31, 2026 increased 11 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year. For the three and nine months ended July 31, 2026, revenue growth was strong in the pharmaceutical and the diagnostics and clinical markets partially offset by declines in revenue in the academia and government market when compared to the same periods last year. Within applied markets, we saw strong revenue growth in the chemical and advanced materials market partially offset by declines in the food market when compared to the same periods last year.

Revenue in the Agilent CrossLab segment for the three and nine months ended July 31, 2026 increased 6 percent and 7 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had a 1 percentage point and a 2 percentage point favorable impact, respectively, when compared to the same periods last year. For the three months ended July 31, 2026, we saw revenue growth across most of our end markets led by strong growth in the pharmaceutical and the chemical and advanced materials markets partially offset by a slight decline in academia and government market when compared to the same period last year. For the nine months ended July 31, 2026, we saw revenue growth across all of our end markets led by strong growth in the pharmaceutical, chemical and advanced materials markets and in the environmental and forensics market when compared to the same period last year.

Revenue in the Applied Markets segment for the three and nine months ended July 31, 2026 increased 7 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year. For the three months ended July 31, 2026, we saw strong revenue growth in both the chemical and advanced materials market and in the environmental and forensics market when compared to the same period last year. Within life sciences markets, we saw strong revenue growth in the pharmaceutical market when compared to the same period last year. For the nine months ended July 31, 2026, we saw significant revenue growth in both the chemical and advanced materials and environmental and forensics markets partially offset by a decline in the food market when compared to the same period last year. Revenue growth within the life sciences markets was led by strong growth in the pharmaceutical market.

Operating Results

(in millions, except margin data)

42

Total gross margin for the three and nine months ended July 31, 2026 increased 4 percentage points and 2 percentage points, respectively, when compared to the same periods last year. Gross margin for the three and nine months ended July 31, 2026 was overall favorably impacted by higher sales volume, a net benefit from tariff refunds, targeted price increases, favorable business mix, lower intangible amortization expense and lower restructuring expense partially offset by wage increases and higher variable pay when compared to the same periods last year.

Research and development expenses for the three and nine months ended July 31, 2026 increased 10 percent and 9 percent, respectively, when compared to the same periods last year. Research and development expenses for the three months ended July 31, 2026 increased due to higher costs from transformational initiatives, wage increases, higher variable pay, restructuring expense and the unfavorable impact of currency movements partially offset by lower acquisition and integration costs and savings from restructuring programs. Research and development expenses for the nine months ended July 31, 2026 increased due to higher costs from transformational initiatives, wage increases, higher variable pay and the unfavorable impact of currency movements partially offset by lower acquisition and integration costs and savings from restructuring programs.

Selling, general and administrative expenses for the three and nine months ended July 31, 2026 increased 14 percent and 11 percent, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three months ended July 31, 2026 increased primarily due to higher costs from transformational initiatives, higher variable pay and wage increases when compared to the same period last year. Selling, general and administrative expenses for the nine months ended July 31, 2026 increased primarily due to higher corporate costs, variable pay, wage increases, higher costs from transformational initiatives, commissions and the unfavorable impact of currency movements partially offset by lower restructuring expenses and savings from restructuring programs when compared to the same period last year.

Total operating margin for the three and nine months ended July 31, 2026 increased 3 percentage points and 1 percentage point, respectively, when compared to the same periods last year. Operating margin for the three months ended July 31, 2026 was favorably impacted primarily by higher sales volume, a net benefit from tariff refunds, and lower restructuring expenses partially offset by higher wages, variable pay and higher costs from transformational initiatives. Operating margin for the nine months ended July 31, 2026 was impacted primarily by higher sales volume, a net benefit from tariff refunds and lower restructuring expenses partially offset by higher wages, variable pay and corporate costs. For the three and nine months ended July 31, 2026, the net impact of tariff refunds imposed under the International Emergency Economic Powers Act contributed approximately 1 percentage point and less than 1 percentage point, respectively, to operating margin improvement.

Income from operations for the three and nine months ended July 31, 2026 increased $84 million or 23 percent and increased $160 million or 15 percent, respectively, on a corresponding revenue increase of $140 million and $424 million, respectively.

At July 31, 2026, our headcount was approximately 18,200 as compared to 18,000 at July 31, 2025. The increase in headcount is primarily due to our recent acquisition.

Other income (expense), net

For the three months ended July 31, 2026, other income (expense), net of $14 million income includes a net loss of $3 million on equity securities and income of $14 million related to the defined benefit retirement and postretirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $4 million. The costs associated with these services are reported within income from operations.

For the nine months ended July 31, 2026, other income (expense), net of $56 million income includes a net loss of $2 million on equity securities and income of $46 million related to the defined benefit retirement and postretirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $10 million. The costs associated with these services are reported within income from operations.

For the three months ended July 31, 2025, other income (expense), net of $18 million income includes income of $15 million related to the defined benefit retirement and postretirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $3 million. The costs associated with these services are reported within income from operations.

For the nine months ended July 31, 2025, other income (expense), net of $3 million expense includes a net loss of $28 million on equity securities, $15 million loss on impairment of investments and income of $41 million related to the defined benefit retirement and postretirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and prior service credits). The provision of site service costs to, and lease income from Keysight Technologies, Inc. contributed income of $9 million. The costs associated with these services are reported within income from operations. For the nine months ended July 31, 2025, other income (expense), net also includes expense of $14 million related to the settlement loss of our Netherlands defined benefit pension plan.

Income Taxes

For the three and nine months ended July 31, 2026, our income tax expense was $82 million with an effective tax rate of 18.5 percent and $210 million with an effective tax rate of 17.3 percent, respectively. For the three and nine months ended July 31, 2026, there were no significant discrete items.

For the three and nine months ended July 31, 2025, our income tax expense was $30 million with an effective tax rate of 8.2 percent and $124 million with an effective tax rate of 12.5 percent, respectively. For the three and nine months ended July 31, 2025, our effective tax rate and the resulting provision for income taxes were impacted by the tax benefit of $28 million related to the release of tax reserves due to a remeasurement of the liability.

In the U.S., tax years remain open back to the year 2022 for federal income tax purposes and 2021 for significant states. In other major jurisdictions where we conduct business, the tax years generally remain open back to the year 2016.

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

The Organization for Economic Co-operation and Development ("OECD") has introduced rules to establish a global minimum tax rate of 15 percent, commonly referred to as the Pillar Two rules. We have considered the impact of currently enacted Pillar Two rules, and our income taxes have increased due to top-up taxes. Additionally, the United States enacted the One Big Beautiful Bill Act ("OBBBA") on July 4, 2025, including adjustments to effective tax rates on certain types of income and an elective deduction for domestic Research and Development (R&D), which are applicable to Agilent in fiscal years 2026 and 2027. The OBBBA did not have a material impact on our effective tax rate or cash flow for the three and nine months ended July 31, 2026.

Segment Overview

We have three business segments - Life Sciences and Diagnostics Markets, Agilent CrossLab and Applied Markets, each of which comprises a reportable segment.

Life Sciences and Diagnostics Markets

Our Life Sciences and Diagnostics Markets segment is comprised of seven areas of activity. We provide active pharmaceutical ingredients for oligo-based therapeutics as well as solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our liquid chromatography and liquid chromatography mass spectrometry businesses enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level. Second, our electrophoresis and cell phenotyping business delivers end-to-end workflow solutions (including instruments, reagents, consumables, and software) for nucleic acid quality control and multiparametric cell analysis. These offerings support next-generation sequencing accuracy and enable live-cell imaging, metabolism analysis, and flow cytometry across clinical and life science research applications. Third, our cell imaging and metabolism business provides integrated instruments, reagents, software, and labware for automated imaging, metabolic analysis, plate reading, and dispensing, supporting applications across immunology, oncology, drug discovery, and translational research. Fourth, our Agilent Advanced Therapeutics business (formerly known as our specialty contract development and manufacturing organization ("CDMO") business) provides good manufacturing practice compliant services and manufacturing of synthesized oligonucleotides used as active pharmaceutical ingredients in nucleic acid-based drugs, alongside capabilities in microbial fermentation, bioreagents, highly potent active pharmaceutical ingredients, peptide purification and broader nucleic acid biomanufacturing. Fifth, our pathology solutions business delivers products for cancer diagnostics and anatomic pathology workflows, including immunohistochemistry, in situ hybridization, hematoxylin and eosin, and special staining. The portfolio also includes clinical flow cytometry reagents and bulk antibodies, as well as assay development services for in vitro diagnostics, biotechnology, and pharmaceutical customers. Sixth, we also collaborate with several major pharmaceutical companies to develop new potential tissue pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Finally, our genomics business provides reagents for next-generation sequencing and array workflows, along with solutions that enable clinical labs to identify disease-associated DNA variants and inform cancer therapy.

Net Revenue

(in millions)

Life Sciences and Diagnostics Markets segment revenue for the three and nine months ended July 31, 2026 increased 11 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Geographically, revenue for the three months ended July 31, 2026 increased 17 percent in the Americas with no currency impact, was flat in Europe with no currency impact and increased 14 percent in Asia Pacific with no currency impact compared to the same period last year. For the three months ended July 31, 2026, the revenue increase in the Americas was driven by strong growth across almost all of our businesses and revenue from our Biocare acquisition, with moderate revenue growth in our liquid chromatography business, modest growth in our pathology business and a significant decline in our liquid chromatography mass spectrometry business. Revenue in Europe was driven by strong growth in our genomics business, moderate growth in our cell imaging and metabolism business and modest growth in our pathology business offset by declines in our liquid chromatography, liquid chromatography mass spectrometry, electrophoresis and cell phenotyping and companion diagnostics businesses. Revenue increased in Asia Pacific due to strong growth from our liquid chromatography, liquid chromatography mass spectrometry, electrophoresis and cell phenotyping and genomics businesses, flat growth in our pathology business, partially offset by declines in our cell imaging and metabolism business.

Revenue for the nine months ended July 31, 2026 increased 9 percent in the Americas with a 1 percentage point favorable currency impact, increased 9 percent in Europe with a 5 percentage point favorable currency impact and increased 11 percent in Asia Pacific with a 1 percentage point favorable currency impact compared to the same period last year. For the nine months ended July 31, 2026, the revenue increase in the Americas was driven by strong growth across most of our businesses with moderate growth in our pathology business, flat growth in our electrophoresis and cell phenotyping business partially offset by declines in revenue from our cell imaging and metabolism and liquid chromatography mass spectrometry businesses. Revenue increased in Europe driven by strong growth in our pathology and companion diagnostic businesses, moderate growth in our electrophoresis and cell phenotyping and liquid chromatography businesses and modest growth in our genomics business partially offset by declines in our cell imaging and metabolism and liquid chromatography mass spectrometry businesses. Revenue increased in Asia Pacific due to strong growth from our liquid chromatography, liquid chromatography mass spectrometry and electrophoresis and cell phenotyping businesses, moderate growth in our pathology business partially offset by declines in revenue from our cell imaging and metabolism and genomics businesses.

For the three months ended July 31, 2026, revenue growth was strong in the pharmaceutical and the diagnostics and clinical markets partially offset by declines in revenue in the academia and government market when compared to the same period last year. Strong revenue growth in the pharmaceutical market was led by revenue from our liquid chromatography, liquid chromatography mass spectrometry and our Agilent Advanced Therapeutics businesses. Revenue growth was strong in the diagnostics and clinical market led by revenue from our genomics and companion diagnostics businesses with modest growth in our pathology business. The decline in revenue in the academia and government market was driven by revenue declines in our cell analysis, liquid chromatography and liquid chromatography mass spectrometry businesses. Within applied markets, we saw strong revenue growth in the chemical and advanced materials market led by revenue from our liquid chromatography business when compared to the same period last year.

For the nine months ended July 31, 2026, revenue growth was strong in the pharmaceutical and the diagnostics and clinical markets partially offset by declines in revenue in the academia and government market when compared to the same period last year. Strong revenue growth in the pharmaceutical market was led by revenue from our liquid chromatography, liquid chromatography mass spectrometry and our Agilent Advanced Therapeutics businesses. Revenue growth was strong in the diagnostics and clinical market led by revenue from our pathology, genomics and companion diagnostics businesses. The decline in revenue in the academia and government market was driven by revenue declines in our cell analysis, liquid chromatography and liquid chromatography mass spectrometry businesses. Within applied markets, we saw strong revenue growth in the chemical and advanced materials market led by revenue from our liquid chromatography and liquid chromatography mass spectrometry businesses when compared to the same period last year.

Looking Forward. While tariffs and the Middle East conflict remain dynamic, we have mitigated the adverse impact related to our costs of revenue during the three and nine months ended July 31, 2026. We remain optimistic about long-term growth in our end markets and continue investing to enhance our applications and solutions portfolio. The rising demand for several of the modalities provided by our Agilent Advanced Therapeutics business positions us well to serve expanding customer demand. By leveraging our liquid chromatography and liquid chromatography mass spectrometry platforms, we are driving growth across key markets and remain optimistic about long-term life sciences opportunities. Our diagnostic and clinical markets continue to grow with the OMNIS platforms. We will continue investing in research and development, advancing our applications and solutions portfolio, and expanding our position in developing and emerging markets.

Operating Results

(in millions, except margin data)

Gross margin for products and services for the three and nine months ended July 31, 2026, increased 5 percentage points and 1 percentage point, respectively, when compared to the same periods last year. Gross margin for the three and nine months ended July 31, 2026 was impacted mainly by higher sales volume, price increases, a net benefit from tariff refunds, favorable business mix (net of lower gross margin from our Agilent Advanced Therapeutics business), lower warranty expenses and savings from restructuring programs partially offset by wage increases and higher variable pay.

Research and development expenses for the three and nine months ended July 31, 2026, increased 9 percent and 7 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and nine months ended July 31, 2026 increased primarily due to wage increases, higher variable pay and the unfavorable impact of currency movements, partially offset by savings from restructuring programs.

Selling, general and administrative expenses for the three and nine months ended July 31, 2026, increased 8 percent and 7 percent, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three and nine months ended July 31, 2026, increased due to wage increases, higher variable pay, commissions and the unfavorable impact of currency movements partially offset by savings from restructuring programs.

Operating margin for products and services for the three and nine months ended July 31, 2026 increased 6 percentage points and 2 percentage points, respectively, when compared to the same periods last year. Operating margin for products and services for the three and nine months ended July 31, 2026, was impacted mainly by higher sales volume, price increases, a net benefit from tariff refunds, favorable business mix (net of lower gross margin from our Agilent Advanced Therapeutics business) and lower warranty expenses partially offset by wage and commission increases and higher variable pay.

Income from operations for the three and nine months ended July 31, 2026 increased $58 million or 49 percent and increased $82 million or 22 percent, respectively, on a corresponding revenue increase of $76 million and $186 million, respectively.

Agilent CrossLab

Our Agilent CrossLab segment provides an extensive services and consumables portfolio that spans the entire lab, in addition to software and laboratory automation solutions, which are designed to improve customer outcomes and represents a broad range of offerings designed to serve customer needs across end-markets and applications. Our services portfolio includes repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements. Our consumables portfolio is designed to improve customer outcomes. Most of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries to supplies. Key product categories in consumables include gas chromatography and liquid chromatography columns, sample preparation products, custom chemistries, and a large selection of laboratory supplies. Software and informatics solutions include software for instrument control, data acquisition, data analysis, secure storage of results, and laboratory information and workflow management. This software facilitates the compliant use of instruments in pharmaceutical quality assurance and quality control environments. The OpenLab laboratory software suite is a scalable, open software platform that enables customers to capture, analyze, and share scientific data throughout the lab and across the enterprise. Laboratory automation offers automated sample preparation solutions, including liquid handling, plate management, consumables and scheduling software. These solutions range from standalone automation platforms to integrated workflow solutions with seamless integration to our instrumentation.

Net Revenue

(in millions)

Agilent CrossLab segment revenue for the three and nine months ended July 31, 2026 increased 6 percent and 7 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had a 1 percentage point and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Geographically, revenue for the three months ended July 31, 2026 increased 6 percent in the Americas with a 1 percentage point favorable currency impact, increased 4 percent in Europe with an 1 percentage point favorable currency impact and increased 7 percent in Asia Pacific with no currency impact compared to the same period last year. For the three months ended July 31, 2026, revenue growth in the Americas was broad based and led by our consumables business when compared to the same period last year. Revenue growth in Europe was driven by strength in our consumables businesses partially offset by decline in our software and informatics business when compared to the same period last year. Revenue growth in Asia Pacific was driven by higher demand in China within consumables and repair, maintenance and compliance services businesses when compared to the same period last year.

Revenue for the nine months ended July 31, 2026 increased 6 percent in the Americas with a 1 percentage point favorable currency impact, increased 11 percent in Europe with a 7 percentage point favorable currency impact and increased 5 percent in Asia Pacific with a 1 percentage point favorable currency impact compared to the same period last year. For the nine months ended July 31, 2026, revenue growth in Americas was driven by strength in all our businesses compared to the same period last year. Revenue growth in Europe was driven by strength in our repair, maintenance and compliance services and consumables businesses when compared to the same period last year. Revenue growth in Asia Pacific was driven by our repair, maintenance and compliance services and consumables businesses when compared to the same period last year.

For the three months ended July 31, 2026, revenue growth was strong in the pharmaceutical and the chemical and advanced materials markets, moderate in the environmental and forensics and diagnostics and clinical markets and modest in the food market partially offset by moderate revenue decline in our academia and government markets when compared to the same period last year. Strong revenue growth in the pharmaceutical market was driven by strength in our repair, maintenance and compliance services and consumables businesses partially offset by weakness in our software and informatics business. Strong revenue growth in the chemical and advanced materials was driven by our consumables and repair, maintenance and compliance services businesses when compared to the same period last year. Moderate revenue growth in the environmental and forensics and modest revenue growth in the food market was driven by an increase in the consumables business when compared to the same period last year. Moderate revenue decline in the academia and government markets was driven by our repair, maintenance and compliance services business partially offset by strength in our software and informatics business when compared to the same period last year.

For the nine months ended July 31, 2026, revenue growth was strong in our pharmaceutical and chemical and advanced materials, environmental and forensics and diagnostics and clinical markets, moderate in food market and modest in our academia and government market when compared to the same period last year. Strong revenue growth in the pharmaceutical, chemical and advanced materials and environmental and forensics markets was driven by our repair, maintenance and compliance services and consumables businesses when compared to the same period last year. Strong revenue growth in the diagnostics and clinical market was driven by strength in all businesses when compared to the same period last year. Moderate revenue growth in the food market was driven by strength in our repair, maintenance and compliance services and consumables businesses partially offset by weakness in our software and informatics business when compared to the same period last year. Modest revenue growth in the academia and government markets was driven by our software and informatics, and consumables businesses partially offset by repair, maintenance and compliance services business when compared to the same period last year.

Looking Forward. While tariffs and the Middle East conflict remain dynamic, we have mitigated the adverse impact related to our costs of revenue during the three and nine months ended July 31, 2026. Agilent CrossLab is well positioned to continue its success in our key end markets by supporting a growing installed base of instruments. Digital and remote capabilities will continue to be a key factor in improving the service quality and the customers' experience. Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

Operating Results

(in millions, except margin data)

Gross margin for the three and nine months ended July 31, 2026 increased 2 percentage points and was relatively flat, respectively, when compared to the same periods last year. Gross margin for the three months ended July 31, 2026 was impacted by higher sales volume, price increases, a net benefit from tariff refunds and lower corporate costs partially offset by wage increases, higher variable pay and higher period cost. Gross margin for the nine months ended July 31, 2026 was impacted by higher sales volume, price increases, a net benefit from tariff refunds and lower corporate costs offset by wage increases, higher variable pay and higher period cost.

Research and development expenses for the three and nine months ended July 31, 2026 increased 9 percent and 6 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and nine months ended July 31, 2026 increased due to wage increases, higher variable pay and unfavorable impact of currency movements partially offset by savings from restructuring programs.

Selling, general and administrative expenses for the three and nine months ended July 31, 2026 increased 10 percent and 8 percent, respectively, when compared to the same periods last year. For the three and nine months ended July 31, 2026, selling, general and administrative expenses increased due to wage increases, higher variable pay, commissions and the unfavorable impact of currency movements partially offset by savings from restructuring programs.

Operating margin for products and services for the three and nine months ended July 31, 2026 increased 1 percentage point and was relatively flat, respectively, when compared to the same periods last year. Operating margin for the three months ended July 31, 2026 was impacted primarily by higher sales volume and a net benefit from tariff refunds partially offset by wage increases, higher variable pay and unfavorable impact of currency movements. Operating margin for the nine months ended July 31, 2026 was impacted primarily by higher sales volume and a net benefit from tariff refunds offset by wage increases and higher variable pay.

Income from operations for the three and nine months ended July 31, 2026 increased $22 million or 9 percent and increased $52 million or 7 percent, respectively, on a corresponding revenue increase of $42 million and $150 million, respectively.

Applied Markets

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

Net Revenue

(in millions)

Applied Markets segment revenue for the three and nine months ended July 31, 2026 increased 7 percent and 9 percent, respectively, when compared to the same periods last year. The overall effect of foreign currency movements on revenue growth for the three and nine months ended July 31, 2026 had no currency impact and a 2 percentage point favorable impact, respectively, when compared to the same periods last year.

Geographically, revenue for the three months ended July 31, 2026 increased 11 percent in the Americas with no currency impact, increased 3 percent in Europe with no currency impact and increased 6 percent in Asia Pacific with no currency impact when compared to the same period last year. Revenue growth in the Americas was driven by strength in our spectroscopy, gas chromatography, remarketed instruments and vacuum businesses when compared to the same period last year. Revenue growth in Europe was driven by strength in our vacuum and spectroscopy business when compared to the same period last year. Revenue growth in Asia Pacific was driven by higher demand in China within our gas chromatography mass spectrometry, vacuum, remarketed instruments and gas chromatography businesses when compared to the same period last year.

Revenue for the nine months ended July 31, 2026 increased 15 percent in the Americas with a 1 percentage point favorable currency impact, increased 12 percent in Europe with an 5 percentage point favorable currency impact and increased 4 percent in Asia Pacific with a 1 percentage point favorable currency impact when compared to the same period last year. Revenue growth in the Americas was driven by strength in our spectroscopy, remarketed instruments, gas chromatography and vacuum businesses. Revenue growth in Europe was driven by strength across all our businesses led by our gas chromatography business when compared to the same period last year. Revenue growth in Asia Pacific was driven by strength in our remarketed instruments, vacuum, gas chromatography and spectroscopy businesses partially offset by weakness in our gas chromatography mass spectrometry business when compared to the same period last year

For the three months ended July 31, 2026, revenue growth was strong in the chemical and advanced materials market, environmental and forensics and flat in the food market when compared to the same period last year. Strong revenue growth in the chemical and advanced materials market was driven by strength in our spectroscopy, vacuum and gas chromatography mass spectrometry businesses partially offset by weakness in our gas chromatography business when compared to the same period last year. Strong revenue growth in the environmental and forensics market was driven by strength in our remarketed instruments and gas chromatography mass spectrometry businesses. Food was flat driven by strength in our spectroscopy business offset by weakness in gas chromatography mass spectrometry businesses. Within our life science markets, we saw strong revenue growth in the pharmaceutical market led by revenue from our gas chromatography, remarketed instruments and vacuum businesses when compared to the same period last year.

For the nine months ended July 31, 2026, revenue growth was strong in the chemical and advanced materials market, and the environmental and forensics market and declined modestly in the food market. Strong revenue growth in the chemical and advanced materials market was driven by strength in our spectroscopy, vacuum, gas chromatography mass spectrometry, remarketed instruments and gas chromatography businesses when compared to the same period last year. Strong revenue growth in the environmental and forensics market was driven by strength in our spectroscopy, remarketed instruments, gas chromatography and vacuum businesses partially offset by weakness in our gas chromatography mass spectrometry business when compared to the same period last year. Modest revenue decline in the food market was driven by weakness in our gas chromatography mass spectrometry and gas chromatography businesses partially offset by strength in remarketed instruments and spectroscopy businesses when compared to the same period last year. Within our life science markets, we saw strong revenue growth in the pharmaceutical market led by revenue from our gas chromatography, remarketed instruments and vacuum businesses when compared to the same period last year.

Looking Forward. While tariffs and the Middle East conflict remain dynamic, we have mitigated the adverse impact related to our costs of revenue during the three and nine months ended July 31, 2026. We remain optimistic about our long-term growth opportunities in the applied markets as our broad portfolio of products and solutions are well suited to address customer needs. We will continue to invest in expanding and improving our application-focused solutions that include instruments and software.

Operating Results

(in millions, except margin data)

Gross margin for the three and nine months ended July 31, 2026, increased 4 percentage points and 2 percentage points, respectively, when compared to the same periods last year. Gross margin for the three and nine months ended July 31, 2026 increased due to higher sales volume, a net benefit from tariff refunds, lower corporate costs and savings from restructuring programs partially offset by higher variable pay and warranty expenses when compared to the same period last year.

Research and development expenses for the three and nine months ended July 31, 2026, increased 4 percent in both periods when compared to the same periods last year. Research and development expenses for the three and nine months ended July 31, 2026 increased due to higher variable pay and unfavorable impact of currency movements partially offset by savings from restructuring programs when compared to the same period last year.

Selling, general and administrative expenses for the three and nine months ended July 31, 2026, increased 11 percent and 9 percent, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three and nine months ended July 31, 2026 increased due to higher variable pay, sales commissions and the unfavorable impact of currency movements partially offset by savings from restructuring programs when compared to the same period last year.

Operating margin for the three and nine months ended July 31, 2026 increased 3 percentage points in both periods when compared to the same periods last year. Operating margin for the three and nine months ended July 31, 2026 higher sales volume, a net benefit from tariff refunds, lower corporate costs partially offset by higher variable pay and unfavorable impact of currency when compared to the same period last year.

Income from operations for the three and nine months ended July 31, 2026, increased $15 million or 22 percent and increased $45 million or 21 percent, respectively, on a corresponding revenue increase of $22 million and $88 million, respectively.

FINANCIAL CONDITION

Liquidity and Capital Resources

We believe our cash and cash equivalents, cash generated from operations, and ability to access capital markets and credit lines will satisfy, for at least the next twelve months and beyond, our liquidity requirements, both globally and domestically, including the following: working capital needs, capital expenditures, business acquisitions, stock repurchases, cash dividends, contractual obligations, commitments, principal and interest payments on debt, and other liquidity requirements associated with our operations.

Our financial position as of July 31, 2026 consisted of cash and cash equivalents of $1,758 million as compared to $1,789 million as of October 31, 2025.

We may, from time to time, retire certain outstanding debt of ours through open market cash purchases, privately-negotiated transactions or otherwise. Such transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $1,064 million for the nine months ended July 31, 2026 compared to net cash provided by operating activities of $1,014 million for the same period in 2025. In the nine months ended July 31, 2026, we paid approximately $150 million under our variable and incentive pay programs as compared to $98 million paid for the same period in 2025. Net cash paid for income taxes in the nine months ended July 31, 2026 was $376 million compared to net cash paid for income taxes of $304 million for the same period in 2025.

In the nine months ended July 31, 2026, accounts receivable provided cash of $16 million compared to cash used of $44 million for the same period in 2025. Days’ sales outstanding ("DSO") as of July 31, 2026 was 71 days when compared to 72 days as of July 31, 2025. Cash used by inventory was $110 million for the nine months ended July 31, 2026 compared to cash used of $72 million for the same period in 2025. Inventory days on hand was 120 days as of July 31, 2026 compared to 107 days as of July 31, 2025. The increase in inventory days on hand reflects strategic inventory purchases to mitigate tariff-related risks, enhance supply assurance, and support ongoing supply chain management efforts. In the nine months ended July 31, 2026, accounts payable provided cash of $41 million compared to cash used of $13 million for the same period in 2025.

We contributed approximately $18 million to our defined benefit plans in both the nine months ended July 31, 2026 and 2025. Our annual contributions are highly dependent on the relative performance of our assets versus our projected liabilities, among other factors. We expect to contribute approximately $4 million to our defined benefit plans during the remainder of 2026.

Net Cash Used in Investing Activities

Net cash used in investing activities was $1,202 million for the nine months ended July 31, 2026 as compared to net cash used in investing activities of $304 million in the same period of 2025.

Investments in property, plant and equipment were $249 million for the nine months ended July 31, 2026 compared to $314 million in the same period of 2025. We expect that total capital expenditures for the current year will be approximately $450 million. These continued investments in property plant and equipment are primarily due to the planned expansion of our advanced therapeutics manufacturing capacity in Frederick, Colorado. Some of our investment may be eligible to qualify for reimbursement incentives, which will not fully be known until the expansion and reimbursement process are complete.

During the nine months ended July 31, 2026, we invested $950 million net of cash acquired for our acquisition of Biocare compared to net cash received of $4 million related to a measurement period adjustment for our BIOVECTRA acquisition in the same period of 2025.

Net Cash Used in Financing Activities

Net cash provided by financing activities for the nine months ended July 31, 2026 was $105 million compared to net cash used in financing activities of $515 million for the same period of 2025.

Treasury Stock Repurchases. In September of 2025, we completed the 2023 repurchase program. During the nine months ended July 31, 2025, we repurchased and retired 2.734 million shares for $340 million, excluding applicable excise taxes under this authorization.

On May 29, 2024, we announced that our board of directors had approved a new share repurchase program (the "2024 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2024 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date. The 2024 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. The 2024 repurchase program became effective on August 1, 2024 and commenced in September 2025 upon the completion of our 2023 repurchase program. During the nine months ended July 31, 2026, we repurchased and retired 2.212 million shares for $295 million excluding excise taxes under this authorization. As of July 31, 2026, we had remaining authorization to repurchase up to approximately $1,654 million of our common stock under the 2024 repurchase program.

Excise Taxes on Share Repurchases. During the nine months ended July 31, 2026, we paid excise taxes of approximately $3 million related to the shares repurchased in fiscal year 2025. During the nine months ended July 31, 2025, we paid excise taxes of approximately $10 million related to the shares repurchased in fiscal year 2024.

Dividends. During the nine months ended July 31, 2026 and 2025, we paid cash dividends of $0.765 per common share or $216 million, and $0.744 per common share or $212 million, respectively, on the company's common stock.

Credit Facilities. On June 7, 2023, we entered into a credit agreement with a group of financial institutions which provides for a $1.5 billion five-year unsecured credit facility that will expire on June 7, 2028 and an incremental revolving credit facility in an aggregate amount of up to $750 million. During the nine months ended July 31, 2026 and 2025, we had no borrowings or repayments under these credit facilities. As of July 31, 2026, we had no borrowings outstanding under either the credit facility or the incremental revolving credit facility.

On June 2, 2023, we entered into an Uncommitted Money Market Line Credit Agreement with Societe Generale which provides for an aggregate borrowing capacity of $300 million. The credit facility is an uncommitted short-term cash advance facility where each request must be at least $1 million. The interest rate is set by the lender at the time of the borrowing and is fixed for the duration of the advance. During the nine months ended July 31, 2026 and 2025, we had no borrowings or repayments under this credit facility. As of July 31, 2026, we had no borrowings outstanding under the credit facility.

We were in compliance with the covenants for the credit facilities during the nine months ended July 31, 2026.

Commercial Paper. Under our U.S. commercial paper program, the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.5 billion with up to 397-day maturities. At any point in time, the company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the nine months ended July 31, 2026, we borrowed and repaid $1.06 billion under our commercial paper program compared to borrowings of $1.12 billion and repayments of $1.10 billion in the same period in 2025. As of July 31, 2026, we had no borrowings outstanding under our U.S. commercial paper program.

Other Loans. We have two interest-free loans from the Strategic Innovation Fund ("SIF"). The loans are repayable in quarterly and yearly installments through 2040 at a weighted average imputed interest rate of 4.7 percent. In addition, we have two interest-free loans with the Atlantic Canada Opportunities Agency ("ACOA"). The loans are repayable in monthly installments through 2029 at a weighted average imputed interest rate of 4.5 percent. During the nine months ended July 31, 2026, we repaid $4 million of these loans. As of July 31, 2026, the current portion of these loans of $4 million was recorded in short-term debt and the non-current portion of $17 million was recorded in long-term debt.

2032 Senior Notes. On June 25, 2026, we issued $600 million in aggregate principal amount senior notes ("2032 senior notes"). The 2032 senior notes were issued at 99.968 percent of their principal amount. The 2032 senior notes will mature on January 15, 2032, and bear interest at a fixed rate of 4.90 percent per annum. The interest is payable semi-annually in arrears on January 15 and July 15 of each year and payments will commence on January 15, 2027.

Other than the issuance of our 2032 senior notes, there have been no changes to the principal, maturity, interest rates and interest payment terms of our outstanding senior notes in the nine months ended July 31, 2026 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Other. Our purchase commitments for indirect material and services increased by $15 million from $146 million as reported in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. These commitments are related to a variety of suppliers including IT support service providers. Our commitments to contract manufacturers and suppliers increased by $274 million, primarily related to our recent acquisition, from $693 million as reported in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. These commitments are related to a variety of suppliers, and we use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates. These open purchase orders with our suppliers have not yet been received, and our agreements usually provide us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the firm orders being placed. There were no other substantial changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 to our contractual commitments in the first nine months of fiscal year 2026. We have no other material non-cancelable guarantees or commitments.

Other long-term liabilities as of July 31, 2026 and October 31, 2025 include $64 million and $28 million, respectively, related to long-term income tax liabilities. Of these amounts, $23 million and $28 million related to uncertain tax positions as of July 31, 2026 and October 31, 2025, respectively. We are unable to accurately predict when these amounts will be realized or released. However, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitations or a tax audit settlement. As of July 31, 2026, the remaining $41 million in other long-term liabilities relates to top-up taxes which are due within the next two years.

We are exposed to foreign currency exchange rate risks inherent in our sales commitments, anticipated sales, and assets and liabilities and equity denominated in currencies other than the functional currency of our subsidiaries. We hedge future cash flows denominated in currencies other than the functional currency using sales forecasts up to twelve months in advance. Our exposure to exchange rate risks is mainly managed on an enterprise-wide basis. This strategy utilizes derivative financial instruments, including option and forward contracts, to hedge certain foreign currency exposures with the intent of offsetting gains and losses that occur on the underlying exposures with gains and losses on the derivative contracts hedging them. We may also hedge equity balances denominated in foreign currency on a long-term basis. We do not currently and do not intend to utilize derivative financial instruments for speculative trading purposes. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the cost of the transaction.

Our operations generate non-functional currency cash flows such as revenue, third party vendor payments and inter-company payments. In anticipation of these foreign currency cash flows and in view of volatility of the currency market, we enter into such foreign exchange contracts as are described above to manage our currency risk. Approximately 48 percent and 47 percent of our revenue was generated in U.S. dollars during the nine months ended July 31, 2026 and 2025, respectively. The overall effect of changes in foreign currency exchange rates had a 2 percentage point favorable impact on revenue growth in the nine months ended July 31, 2026 principally because of the relative weakness of the U.S. dollar. We calculate the impact of movements in our foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods.

We performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of July 31, 2026, the analysis indicated that these hypothetical market movements would not have a material effect on our condensed consolidated financial position, results of operations, statement of comprehensive income or cash flows.

We are also exposed to interest rate risk due to the mismatch between the interest expense we pay on our loans at fixed rates and the variable rates of interest we receive from cash, cash equivalents and other short-term investments. We have issued long-term debt in U.S. dollars or foreign currencies at fixed interest rates based on the market conditions at the time of financing.

We performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in interest rates relating to the underlying fair value of our fixed rate debt. As of July 31, 2026, the sensitivity analysis indicated that a hypothetical 10 percent adverse movement in interest rates would result in an immaterial impact to the fair value of our fixed interest rate debt.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by the Securities Exchange Act of 1934 (the "Exchange Act") Rule 13a-15(b). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding such required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended July 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Business and Strategic Risks

General economic conditions may adversely affect our operating results and financial condition.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the United States. Slower global economic growth, increasing interest rates, inflationary pressures, instability and uncertainty in the markets in which we operate may adversely impact our business resulting in:

• reduced demand and longer sales cycle for our products, delays in the shipment of orders, or increases in order cancellations;
• increased risk of excess and obsolete inventories;
• increased price pressure for our products and services; and
• greater risk of impairment to the value, and a detriment to the liquidity, of our investment portfolio.

Our operating results and financial condition could be harmed if the markets into which we sell our products decline or do not grow as anticipated.

Visibility into our markets is limited. Our quarterly sales and operating results are highly dependent on the volume and timing of orders received during the fiscal quarter, which are difficult to forecast and may be cancelled by our customers. In addition, our revenue and earnings forecasts for future fiscal quarters are often based on the expected seasonality of our markets. However, the markets we serve do not always experience the seasonality that we expect as customer spending policies and budget allocations, particularly for capital items, may change. Any decline in our customers' markets or in general economic conditions has in the past and may in the future result in a reduction in demand for our products and services. Also, if our customers' markets decline, we may not be able to collect on outstanding amounts due to us. Such declines could harm our consolidated financial position, results of operations, cash flows and stock price, and could limit our profitability. Also, in such an environment, pricing pressures could intensify. Since a significant portion of our operating expenses is relatively fixed in nature due to sales, research and development and manufacturing costs, if we were unable to respond quickly enough, these pricing pressures could further reduce our operating margins.

Economic, political, foreign currency and other risks associated with international sales and operations could adversely affect our results of operations.

Because we sell our products worldwide, our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue. International revenue and costs are subject to the risk that fluctuations in foreign currency exchange rates could adversely affect our financial results when translated into U.S. dollars for financial reporting purposes. The overall effect of changes in foreign currency exchange rates had a 2 percentage point favorable impact on revenue growth in the nine months ended July 31, 2026 when compared to the same period last year. Typically, when movements in foreign currency exchange rates have a positive impact on revenue, they will also have a negative impact on our profitability by increasing our costs and expenses, or vice versa. In addition, many of our employees, contract manufacturers, suppliers, job functions, outsourcing activities and manufacturing facilities are located outside the United States. Accordingly, our results of operations and financial condition could be negatively affected by a variety of factors, including:

• interruption to transportation flows for delivery of parts and other inputs to us and our products to our customers;
• ongoing instability or changes in a specific country's or region's political, economic or other conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts, including uncertainties and instability in economic and market conditions caused by pandemics like COVID-19, conflicts in Ukraine/Russia and the Middle East, and political and trade uncertainties in the greater China region;
• changes in diplomatic and trade relationships, as well as changes to tariffs, trade protection measures, import or export licensing requirements, new or different customs duties, trade embargoes and sanctions and other trade barriers;
• tariffs imposed by the United States on goods from other countries and tariffs imposed by other countries on U.S. goods, including tariffs and trade policies by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods;
• negative consequences from changes in or differing interpretations of laws and regulations, including those related to tax and import/export;
• difficulty in staffing and managing widespread operations;
• differing labor regulations; and
• differing protection of intellectual property.

We sell many of our products internationally. Furthermore, we source many components and materials for our products from and have manufacturing operations in several countries. Future tariffs and tariffs already implemented could have a negative impact on our business, results of operations and financial condition. It may be time-consuming and expensive for us to alter our business operations in order to adapt to any such change. Further, additional tariffs, the scope and duration of which, if implemented, remain uncertain, and the potential commencement and escalation of a trade war and retaliatory measures could have a material adverse effect on our business, results of operations and financial condition.

Most of our accounting and tax processes including general accounting, cost accounting, accounts payable, accounts receivable and tax functions are centralized at locations in India and Malaysia. If economic, political, health or other conditions change in those countries, it may adversely affect operations, including impairing our ability to pay our suppliers and collect our receivables. Our results of operations, as well as our liquidity, may be adversely affected and possible delays may occur in reporting financial results.

In addition, a significant amount of certain types of expenses, such as payroll, utilities, tax, and marketing expenses, are paid in local currencies. Our hedging programs reduce, but do not always entirely eliminate the impact of currency exchange rate movements within any given twelve-month period. Therefore fluctuations in exchange rates, including those caused by currency controls, could impact our business, operating results and financial condition by resulting in lower revenue or increased expenses. For expenses beyond any twelve-month period, our hedging strategy does not mitigate our exposure. In addition, our currency hedging programs involve third-party financial institutions as counterparties. The weakening or failure of financial institution counterparties may adversely affect our hedging programs and our financial condition through, among other things, a reduction in available counterparties, increasingly unfavorable terms, and the failure of the counterparties to perform under hedging contracts.

If we do not introduce successful new products and services in a timely manner to address increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards, our products and services may become obsolete, and our operating results may suffer.

We generally sell our products in industries that are characterized by increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards. Without the timely introduction of new products, services and enhancements, our products and services may become technologically obsolete over time, in which case our revenue and operating results could suffer. The success of our new products and services will depend on several factors, including our ability to:

• properly identify customer needs and predict future needs;
• innovate and develop new technologies, services and applications;
• appropriately allocate our research and development spending to products and services with higher growth prospects;
• successfully commercialize new technologies in a timely manner;
• manufacture and deliver new products in sufficient volumes and on time;
• differentiate our offerings from our competitors' offerings;
• price our products competitively;
• anticipate our competitors' development of new products, services or technological innovations; and
• control product quality in our manufacturing process.

In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest in research and development of products and services that do not lead to significant revenue, which would adversely affect our profitability. Even if we successfully innovate and develop new and enhanced products and services, we may incur substantial costs in doing so, and our operating results may suffer. In addition, promising new products may fail to reach the market or realize only limited commercial success because of real or perceived concerns of our customers. Furthermore, as we collaborate with pharmaceutical customers to develop drugs such as companion diagnostics assays or provide drug components like active pharmaceutical ingredients, we face risks that those drug programs may be cancelled upon clinical trial failures.

Demand for some of our products and services depends on the capital spending policies of our customers, research and development budgets and on government funding policies.

Our customers include pharmaceutical companies, laboratories, universities, healthcare providers, government agencies and public and private research institutions. Many factors, including public policy spending priorities, available resources, mergers and consolidations, institutional and governmental budgetary policies and spending priorities, and product and economic cycles, have a significant effect on the capital spending policies of these entities. Fluctuations in the research and development budgets at these organizations could have a significant effect on the demand for our products and services. Research and development budgets fluctuate due to changes in available resources, consolidation, spending priorities, general economic conditions, medical reimbursement policies and institutional and governmental budgetary policies. The timing and amount of revenue from customers that rely on government or research funding may vary significantly due to factors that can be difficult to forecast, including changes in spending authorizations and budgetary priorities for our products and services. If demand for our products and services is adversely affected, our revenue and operating results would suffer.

Recent and dynamic government rule making and policy changes, as well as ongoing geopolitical instability, could increase our costs, affect our markets and customers and impact our results of operations.

The rapid increase or change in government regulations, including tariffs and proposed tariffs in the geographies and markets in which we operate, could result in significant costs and require modifications in the way we and our customers conduct business. As we and our customers respond to newly enacted rules and legislation and judicial rulings on the legality of such rules and legislations, effects on purchasing behavior and global trade relationships could affect our revenue. Increases in our costs and expenses related to our compliance or mitigation activities and those of our customers and suppliers could have a negative effect on our operating margin. If we are unable to respond to changing regulations in a timely and effective manner, our results of operations could be adversely affected.

In addition, geopolitical instability, including conflicts in the Middle East, and evolving trade regulations, including tariffs, sanctions, and export controls, may restrict our ability to ship products globally or source critical components. These developments can increase costs, disrupt supply chains, and require operational adjustments. Failure to comply with these regulations could result in penalties, loss of export privileges, and reputational harm.

Additionally, our business operations related to our product sales to customers receiving funding from the U.S. federal government could be impacted by a lack of appropriations of additional funding to federal agencies. Inadequate funding for government agencies, including from government shutdowns, or other disruptions to these agencies’ operations, such as actions to greatly reduce the size of the federal workforce, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions on which the operation of the businesses of certain of our customers and our business may rely, which could negatively impact our business.

Failure to adjust our purchases due to changing market conditions or failure to accurately estimate our customers' demand could adversely affect our income.

Our income could be harmed if we are unable to adjust our purchases to reflect market fluctuations, including those caused by the seasonal nature of the markets in which we operate. The sales of our products and services are dependent, to a large degree, on customers whose industries are subject to seasonal trends in the demand for their products. During a market upturn, we may not be able to purchase sufficient supplies or components to meet increasing product demand, which could materially affect our results. In the past, we have experienced a shortage of parts for some of our products. In addition, some of the parts that require custom design are not readily available from alternate suppliers due to their unique design or the length of time necessary for design work. Should a supplier cease manufacturing such a component, we would be forced to reengineer our product. In addition to discontinuing parts, suppliers may also extend lead times, limit supplies or increase prices due to capacity constraints or other factors. In order to secure components for the production of products, we may enter into non-cancelable purchase commitments with vendors, or at times make advance payments to suppliers, which could impact our ability to adjust our inventory to declining market demands. If demand for our products is less than we expect, we may experience excess and obsolete inventories and be forced to incur additional expenses, which could adversely affect our income.

Our business will suffer if we are not able to retain and hire key personnel.

Our future success depends partly on the continued service of our key research, engineering, sales, marketing, manufacturing, executive and administrative personnel. If we fail to retain and hire a sufficient number of these personnel, we will not be able to maintain or expand our business. We believe our pay levels are competitive within the regions that we operate. However, there is intense competition for certain highly technical specialties in geographic areas where we continue to recruit, and it may become more difficult to hire and retain our key employees.

Our strategic initiatives to adjust our cost structure could have long-term adverse effects on our business, and we may not realize the operational or financial benefits from such actions.

We have implemented multiple strategic initiatives across our businesses to adjust our cost structure, and we may engage in similar activities in the future. These strategic initiatives and our regular ongoing cost reduction activities may distract management, could slow improvements in our products and services and limit our ability to increase production quickly if demand for our products increases. In addition, delays in implementing our strategic initiatives, unexpected costs or failure to meet targeted improvements may diminish the operational and financial benefits we realize from such actions. Any of the above circumstances could have an adverse effect on our business and operating results and financial condition.

Our acquisitions, strategic investments and alliances, joint ventures, exiting of businesses and divestitures may result in financial results that are different than expected.

In the normal course of business, we frequently engage in discussions with third parties relating to possible acquisitions, strategic investments and alliances, joint ventures and divestitures, and generally expect to complete several transactions per year. In addition, we may decide to exit a particular business within our product portfolio. As a result of such transactions, our financial results may differ from our own or the investment community's expectations in a given fiscal quarter, fiscal year, or over the long term. We may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances the performance of our combined businesses or product lines. Acquired businesses may also expose us to new risks and new markets, and we may have difficulty addressing these risks in a cost effective and timely manner. Transactions such as acquisitions have resulted, and may in the future result, in unexpected significant costs and expenses. In the future, we may be required to record charges to earnings during the period if we determine there is an impairment of goodwill or intangible assets, up to the full amount of the value of the assets, or, in the case of strategic investments and alliances, consolidate results, including losses, of third parties or write down investment values or loans and convertible notes related to the strategic investment.

Integrating the operations of acquired businesses within Agilent could be a difficult, costly and time-consuming process that involves a number of risks. Acquisitions and strategic investments and alliances may require us to integrate and collaborate with a different company culture, management team, business model, business infrastructure and sales and distribution methodology and assimilate and retain geographically dispersed, decentralized operations and personnel. Depending on the size and complexity of an acquisition, our successful integration of the entity depends on a variety of factors, including introducing new products and meeting revenue targets as expected, the retention of key employees and key customers, increased exposure to certain governmental regulations and compliance requirements and increased costs and use of resources. Further, the integration of acquired businesses is likely to result in our systems and internal controls becoming increasingly complex and more difficult to manage. Any difficulties in the assimilation of acquired businesses into our control system could harm our operating results or cause us to fail to meet our financial reporting obligations.

Even if we are able to successfully integrate acquired businesses within Agilent, we may not be able to realize the revenue and other synergies and growth that we anticipated from the acquisition in the time frame that we expected, and the costs of achieving these benefits may be higher than what we expected. As a result, the acquisition and integration of acquired businesses may not contribute to our earnings as expected, we may not achieve our operating margin targets when expected, or at all, and we may not achieve the other anticipated strategic and financial benefits of such transactions.

A successful divestiture depends on various factors, including our ability to effectively transfer liabilities, contracts, facilities and employees to the purchaser, identify and separate the intellectual property to be divested from the intellectual property that we wish to keep and reduce fixed costs previously associated with the divested assets or business. In addition, if customers of the divested business do not receive the same level of service from the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other Agilent products. In exiting a business, we may still retain liabilities associated with the support and warranties for products of those businesses and other indemnification obligations. All of these efforts require varying levels of management resources, which may divert our attention from other business operations. If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

The impact of consolidation and acquisitions of competitors is difficult to predict and may harm our business.

The life sciences industry is intensely competitive and has been subject to increasing consolidation. Consolidation in our industries could result in existing competitors increasing their market share through business combinations and result in stronger competitors, which could adversely affect our business, financial condition and results of operations. We may not be able to compete successfully in increasingly consolidated industries and cannot predict with certainty how industry consolidation will affect our competitors or us.

Public health crises may adversely impact, and pose risks to, certain elements of our business, results of operations and financial condition, the nature and extent of which are highly uncertain and unpredictable.

Our global operations expose us to risks associated with public health crises, including epidemics and pandemics. Public health crises, and any related remediation measures such as quarantine, curfew and other travel and activity restrictions, may impact our operations and sales and delivery of products and services. Our supply chain has in the past and may in the future be impacted, and we could experience disruptions or delays in shipments of certain materials or components of our products. We may be unable to accurately predict the full extent and duration of the impact of a public health crisis on our business and operations due to numerous uncertainties, including the duration and severity of the crisis, the efficacy and distribution of vaccines, containment measures and additional waves of infection.

Regulatory, Legal and Compliance Risks

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results, which could lead to a loss of investor confidence in our financial statements and have an adverse effect on our stock price.

Effective internal controls are necessary for us to provide reliable and accurate financial statements and to effectively prevent fraud. We devote significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes Oxley Act of 2002 and continue to enhance our controls. However, we cannot be certain that we will be able to prevent future significant deficiencies or material weaknesses. Inadequate internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on investor confidence in our financial statements, the trading price of our stock and our access to capital.

Our customers and we are subject to various governmental regulations. Compliance with or changes in such regulations may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.

Our customers and we are subject to various significant international, federal, state and local regulations, including but not limited to regulations in the areas of health and safety, packaging, product content, employment, labor and immigration, import/export controls, trade restrictions and anti-competition. In addition, as a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal, sensitive and/or patient health data in the course of our business. Global privacy laws, including the EU's General Data Protection Regulation, China’s Personal Information Protection Law and Data Security Law, the California Consumer Privacy Act and Brazil’s Lei Geral de Protecao de Dados, apply to our activities involving the processing of personal data, both in relation to our product and service offerings and the management of our workforce. The global proliferation of privacy laws, with governmental authorities around the world passing or considering passing legislative and regulatory proposals concerning privacy and data protection, continues to result in new requirements regarding the handling of personal data and when personal data may be transferred outside the country where it was collected. Many such laws impose significant penalties for non-compliance (including possible fines of up to four percent of total company revenue under the General Data Protection Regulation or orders to stop processing personal data in a particular jurisdiction). Each of these privacy, security and data protection laws and regulations could impose significant limitations and increase our cost of providing our products and services where we process personal data and could harm our results of operations and expose us to significant fines, penalties and other damages.

We must also comply with complex foreign and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other local laws prohibiting corrupt payments to governmental officials, anti-competition regulations and sanctions imposed by the U.S. Office of Foreign Assets Control and other similar laws and regulations. Such laws demand that we implement, test, and monitor an effective compliance program in order to detect and prevent instances of non-compliance. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, suspension of government contracts or debarment, restrictions on our business conduct and on our ability to offer our products in one or more countries, and could also materially affect our brand, our ability to attract and retain employees, our international operations, our business and our operating results. Although we have implemented policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.

These regulations are complex, change frequently and have tended to become more stringent over time. We may be required to incur significant expenses to comply with these regulations or to remedy any violations of these regulations. Any failure by us to comply with applicable government regulations could also result in the cessation of our operations or portions of our operations, product recalls or impositions of fines, suspension of government contracts or debarment and restrictions on our ability to carry on or expand our operations. In addition, because many of our products are regulated or sold into regulated industries, we must comply with additional regulations in marketing our products. We develop, configure and market our products in conformance with these regulations to meet customer needs. Any significant change in these regulations could reduce demand for our products, force us to modify our products to comply with new regulations or increase our costs of producing these products. If demand for our products is adversely affected or our costs increase, our operating results and business would suffer.

Our products and operations are also often subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies such as the Food and Drug Administration. We also must comply with work safety rules. If we fail to adequately address any of these regulations, our businesses could be harmed.

We are subject to extensive regulation by the Food and Drug Administration and certain similar foreign regulatory agencies, and failure to comply with such regulations could harm our reputation, business, financial condition and results of operations.

A number of our products and services are subject to regulation by the Food and Drug Administration, the U.S. Department of Health and Human Services, the Centers for Medicare & Medicaid Services and certain similar foreign regulatory agencies. In addition, a number of our products and services may in the future be subject to regulation by the Food and Drug Administration and certain similar foreign regulatory agencies. These regulations govern a wide variety of product and service-related activities, from quality management, design and development to manufacturing, labeling, promotion, sales, distribution and post-market surveillance. In addition, we are subject to inspections by these and other regulatory authorities. If we or any of our suppliers, distributors or customers fail to comply with Food and Drug Administration regulations and other applicable regulatory requirements or are perceived to potentially have failed to comply, we may face, among other things, warning letters; adverse publicity affecting both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil or criminal penalties; import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of operating restrictions; suspension or revocation of our license to operate, increased difficulty in obtaining required Food and Drug Administration clearances or approvals or foreign equivalents; seizures or recalls of our products or those of our customers; corresponding customer and third party claims; or the inability to sell our products. Any such Food and Drug Administration or other regulatory agency actions could disrupt our business and operations, lead to significant remedial costs and have a material adverse impact on our financial position and results of operations. In addition, the global regulatory environment has become increasingly stringent for our products and services. For example, in May 2022, the EU began enforcing the EU In Vitro Diagnostic Regulation, which imposes stricter requirements for the marketing and sale of in vitro diagnostics in the EU. These new regulations are more stringent in a variety of areas, including clinical evidence requirements, quality management systems and post-market surveillance activities. Failure to meet these requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

Some of our products are subject to particularly complex regulations such as regulations of toxic substances, and failure to comply with such regulations could harm our business.

Some of our products and related consumables are used in conjunction with chemicals whose manufacture, processing, distribution and notification requirements are regulated by the U.S. Environmental Protection Agency under the Toxic Substances Control Act and by regulatory bodies in other countries under similar laws, to prevent unreasonable risks to human health or the environment. Under the Toxic Substances Control Act, the Environmental Protection Agency has authority to require reporting, record-keeping and testing, and to implement restrictions relating to chemical substances and/or mixtures. The Toxic Substances Control Act prohibits persons from manufacturing (domestic production or importation of) any chemical in the United States that has not been reviewed by the Environmental Protection Agency for its effect on health and safety or which is not listed on the Environmental Protection Agency Toxic Substances Control Act chemical substance inventory. We must ensure conformance of the manufacturing, storing, processing, distribution of and notification about these chemicals to these laws and adapt to regulatory requirements in all applicable countries as these requirements change. If we fail to comply with the notification, record-keeping and other requirements in the manufacture or distribution of our products, then we could be subject to civil penalties, criminal prosecution and, in some cases, prohibition from distributing or marketing our products until the products or component substances are brought into compliance.

Our business may suffer if we fail to comply with government contracting laws and regulations.

We derive a portion of our revenue from direct and indirect sales to U.S. federal, state, local, and foreign governments and their respective agencies. Such contracts are subject to various procurement laws and regulations and contract provisions relating to their formation, administration and performance. Failure to comply with these laws, regulations or provisions in our government contracts could result in the imposition of various civil and criminal penalties, suspension of government contracts or debarment, termination of contracts, forfeiture of profits, suspension of payments, increased pricing pressure or suspension from future government contracting. If our government contracts are terminated, if we are suspended from government work, or if our ability to compete for new contracts is adversely affected, our business could suffer.

Our reputation, ability to do business and financial statements may be harmed by improper conduct by any of our employees, agents or business partners.

Our internal controls and compliance systems may not always protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices and workplace behavior, export and import compliance, money laundering and data privacy. In particular, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree. Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions, and related shareholder lawsuits could lead to substantial civil and criminal, monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees. In addition, the government may seek to hold us liable as a successor for violations committed by companies in which we invest or that we acquire. We also rely on our suppliers to adhere to our supplier standards of conduct, and material violations of such standards of conduct could occur that could have a material effect on our business, reputation and financial statements.

The expectations and requirements of regulators and other key stakeholders, including on corporate governance and sustainability-related matters, continue to evolve and diverge, and our ability to meet these expectations and requirements could impact our risk exposure and financial conditions.

We are subject to rapidly changing and varied expectations and requirements, including on corporate governance and sustainability issues, from a wide range of stakeholders, such as governmental and self-regulatory organizations, including the Securities and Exchange Commission, U.S. federal and state governments, New York Stock Exchange, and the European Union, as well as our investors, customers and suppliers. In addition, many of our stakeholders have diverging demands, perspectives and preferences, including on topics such as climate change and diversity. We may not be able to meet the diverse expectations and demands of all of our stakeholders, which could result in an adverse impact on our business, financial results, stock price or reputation, and subject us to legal, reputational and operational risks.

For example, U.S. federal, state and local governmental authorities, as well as governmental authorities in various jurisdictions, have proposed or implemented and are likely to continue to propose or implement, legislative and regulatory initiatives around corporate governance and environmental and social practices and disclosures. Compliance with such evolving expectations, rules and regulations, including any that may emerge in the future as well as those incorporated in our contractual obligations from our customers, could increase the cost and complexity of operating our business, and could adversely impact us. In addition, various jurisdictions have adopted or proposed laws, regulations and policies that diverge from, or potentially conflict with, those adopted or proposed in other jurisdictions, making compliance more difficult and uncertain. Failure to comply with any law, regulation or policy, including as a result of making good faith interpretations that may differ from those taken by authorities in relevant jurisdictions, could potentially result in legal, reputational and operational risks.

Furthermore, any actual or perceived failure to achieve our current and future sustainability goals, including those which result from contractual obligations from our customers, or to act responsibly with respect to such matters or to effectively respond to new or additional sustainability-related legal or regulatory requirements, could result in adverse publicity and adversely affect our business and reputation. There is no assurance that we will be able to successfully achieve any sustainability-related goal or execute on any sustainability-related strategy, or adequately meet stakeholder expectations with respect to such matters. Our ability to deliver on any sustainability-related goal or strategy is subject to numerous risks, many of which are outside of our control. These factors include rapidly shifting regulatory requirements and stakeholder expectations, our ability to recruit and retain a robust workforce, the activities and availability of suppliers and other business partners, cost considerations and the development and availability of cost-effective technologies or resources.

Environmental contamination from past and ongoing operations could subject us to substantial liabilities.

Certain properties we have previously owned or leased are undergoing remediation for subsurface contamination. Although we are indemnified for liability relating to the required remediation at some of those properties, we may be subject to liability if these indemnification obligations are not fulfilled. In other cases, we have agreed to indemnify the current owners of certain properties for liabilities related to contamination, including companies with which we have previously been affiliated such as HP, Inc., Hewlett-Packard Enterprise (formerly Hewlett-Packard Company) and Siemens Healthineers (formerly Varian

Medical Systems, Inc.). Further, other properties we have previously owned or leased at which we have operated in the past, or for which we have otherwise contractually assumed or provided indemnities, certain actual or contingent environmental liabilities, may or do require remediation. While we are not aware of any material liabilities associated with any potential environmental contamination at any of those properties or facilities, we may be exposed to material liability if environmental contamination at material levels is found to exist. In addition, in connection with the acquisition of certain companies, we have assumed other costs and potential or contingent liabilities for environmental matters. Any significant costs or liabilities could have an adverse effect on results of operations.

We are subject to environmental laws and regulations that expose us to a number of risks and could result in significant liabilities and costs.

Our current and historical manufacturing and research and development processes and facilities are subject to various foreign, federal, state and local environment protection and health and safety laws and regulations. As a result, we may become subject to liabilities for environmental contamination, and these liabilities may be substantial. Although our policy is to apply strict standards for environmental protection and health and safety at our sites inside and outside the United States, we may not be aware of all conditions that could subject us to liability. Further, in the event that any future climate change legislation would require that stricter standards be imposed by domestic or international environmental regulatory authorities, we may be required to make certain changes and adaptations to our manufacturing processes and facilities. We cannot predict how changes will affect our business operations or the cost of compliance to us, our customers or our suppliers. Failure to comply with these environmental protection and health and safety laws and regulations could result in civil, criminal, regulatory, administrative or contractual sanctions, including fines, penalties or suspensions, restrictions on our operations and reputational damage. If we have any violations of, or incur liabilities pursuant to these laws or regulations, our financial condition and operating results could be adversely affected.

Issues in the development, deployment, and use of artificial intelligence technologies in our business operations, services and products may result in reputational harm, regulatory action, or legal liability, and any failure to adapt to such technological developments or industry trends could adversely affect the competitiveness of our business.

We are integrating artificial intelligence and machine learning technologies ("AI") into our business operations, products and services, while continuing to explore the opportunities that AI could bring to the company. The use of AI, particularly generative AI, presents opportunities as well as risks that could negatively impact the business. The development, deployment, and use of AI, including within the life sciences industry, is still in its early stages, where the use of insufficiently developed AI technologies and premature deployment practices could result in unintended outcomes that harm the business. AI technologies may be developed using inaccurate, incomplete, flawed or biased algorithms, training methodologies or data, which could result in competitive harm, regulatory penalties, legal liability, or brand or reputational harm. Further, a failure to timely and effectively use or deploy AI and integrate it into new product offerings and services could negatively impact our competitiveness, particularly ahead of evolving industry trends and evolving consumer demands. We may be unable to devote adequate financial resources to develop or acquire new AI technologies and systems in the future.

Use of AI to improve internal business operations, or in the development or provision of products or services, poses risks and challenges. AI can pose risks from an intellectual property, confidential data leakage, data protection and privacy perspective, as well as raise ethical concerns, compliance issues, and security risks. The input of confidential information or trade secrets into AI systems may result in the loss of intellectual property, proprietary rights, or attorney-client privilege in such information or trade secrets. The use of AI technologies for developing products or services may adversely affect or preclude the company’s intellectual property rights in such products or services, or may expose the company to liability related to the infringement, misappropriation or other violation of third-party intellectual property. The use of AI technologies with personally identifiable information may also result in legal liability. Further, particularly given the nascent stage of the technology, the use of AI can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading, or that result in unintended biases and discriminatory outcomes, or are otherwise flawed, which could harm our reputation and business and expose us to risks related to such inaccuracies or errors in these outputs.

Moreover, AI is subject to a dynamic and rapidly evolving legal and regulatory environment, which, without appropriate review, governance and risk management, could expose the company to unforeseen legal or regulatory scrutiny and liabilities. As such, it remains uncertain how AI laws and regulations will impact our business or the associated cost or risks related to compliance therewith or with respect to embedding compliance mechanisms appropriately and effectively into our operations. The use of AI may be subject to new legal or regulatory requirements, the impact of which may be prohibitive or pose further risks from a legal or regulatory action perspective.

Third parties may claim that we are infringing their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products or services.

From time to time, third parties may claim that one or more of our products or services infringe their intellectual property rights. We analyze and take action in response to such claims on a case-by-case basis. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming due to the complexity of our technology and the uncertainty of intellectual property litigation and could divert our management and key personnel from our business operations. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which could not be available under acceptable terms or at all, could require us to redesign our products, which would be costly and time-consuming, and/or could subject us to significant damages or to an injunction against the development and sale of certain of our products or services. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of intellectual property infringement. In certain of our businesses, we rely on third-party intellectual property licenses, and we cannot ensure that these licenses will continue to be available to us in the future or can be expanded to cover new products on favorable terms or at all.

Third parties may infringe our intellectual property, and we may suffer competitive injury or expend significant resources enforcing our rights.

Our success depends in large part on our proprietary technology, including technology we obtained through acquisitions. We rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish, maintain and enforce our proprietary rights. If we do not enforce our intellectual property rights successfully, our competitive position may suffer, which could harm our operating results.

Our pending patent, copyright and trademark registration applications may not be allowed, or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us with a significant competitive advantage.

We may need to spend significant resources monitoring and enforcing our intellectual property rights, and we may not be aware of or able to detect or prove infringement by third parties. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights quickly or at all. In some circumstances, we may choose to not pursue enforcement because an infringer has a dominant intellectual property position or for other business reasons. In addition, competitors could avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries, which could make it easier for competitors to capture market share and could result in lost revenue. Furthermore, some of our intellectual property is licensed to others which may allow them to compete with us using that intellectual property.

Operational Risks

Our operating results may suffer if our manufacturing capacity does not match the demand for our products.

Because we cannot immediately adapt our production capacity and related cost structures to rapidly changing market conditions, when demand does not meet our expectations, our manufacturing capacity may exceed our production requirements. If during a market downturn we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our gross margins and operating results. If, during a general market upturn or an upturn in one of our segments, we cannot increase our manufacturing capacity to meet product demand, we may not be able to fulfill orders in a timely manner which could lead to order cancellations, contract breaches or indemnification obligations. This inability could materially and adversely limit our ability to improve our gross margins and operating results.

If we are unable to successfully manage the consolidation and streamlining of our manufacturing operations, we may not achieve desired efficiencies, and our ability to deliver products to our customers could be disrupted.

Although we utilize manufacturing facilities throughout the world, we have consolidated, and may further consolidate, our manufacturing operations to certain of our facilities to achieve efficiencies and gross margin improvements. Additionally, we typically consolidate the production of products from our acquisitions into our supply chain and manufacturing processes, which are technically complex and require expertise to operate. If we are unable to establish processes to efficiently and effectively produce high-quality products in the consolidated locations, we may not achieve the anticipated synergies and production may be disrupted, which could adversely affect our business and operating results.

Dependence on contract manufacturing and outsourcing other portions of our supply chain, including logistics and third-party package delivery services, may adversely affect our ability to bring products to market and damage our reputation. Dependence on outsourced information technology and other administrative functions may impair our ability to operate effectively.

As part of our efforts to streamline operations and to manage costs, we outsource aspects of our manufacturing processes and other functions and continue to evaluate additional outsourcing. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers' orders on a timely basis. The ability of these manufacturers to perform is largely outside of our control. If one or more of the third-party package delivery or other logistics providers we use experiences a significant disruption in services or institutes a significant price increase, we may have to seek alternative providers, which could result in increased costs, and/or delay the delivery of our products. Additionally, changing or replacing our contract manufacturers, logistics providers or other outsourcers could cause disruptions or delays. In addition, we outsource significant portions of our information technology and other administrative functions. Since information technology is critical to our operations, any failure to perform on the part of our information technology providers could impair our ability to operate effectively. In addition to the risks outlined above, problems with manufacturing or information technology outsourcing could result in lower revenue and unexecuted efficiencies and impact our results of operations and our stock price.

If we suffer a loss to our factories, facilities or distribution system due to catastrophe, our operations could be seriously harmed.

Our factories, facilities and distribution system are subject to the risk of catastrophic loss due to fire, flood, terrorism, public health crises, increasing severity or frequency of extreme weather events, or other climate-change related risks, including resource scarcity, rationing or unexpected costs from increases in fuel and raw material prices that may be caused by extreme weather conditions. In addition, several of our facilities could be subject to a catastrophic loss caused by earthquake due to their locations. Our production facilities, headquarters and laboratories in California, and our production facilities in Japan, are all located in areas with above-average seismic activity. In addition, our facilities in California are susceptible to extreme weather conditions such as drought, flooding and wildfires. If any of our facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. If such a disruption were to occur, we could breach agreements, our reputation could be harmed, and our business and operating results could be adversely affected. In addition, because we have consolidated our manufacturing facilities and we may not have redundant manufacturing capability readily available, we are more likely to experience an interruption to our operations in the event of a catastrophe in any one location. Although we carry insurance for property damage and business interruption, these coverages are subject to deductibles as well as caps and may not be sufficient to cover the entirety of potential losses in certain catastrophic events. We do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism. Also, our third-party insurance coverage will vary from time to time in both type and amount depending on availability, cost and our decisions with respect to risk retention. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which we are able to obtain third-party insurance. If our third-party insurance coverage is adversely affected or to the extent we have elected to self-insure, we may be at a greater risk that our financial condition will be harmed by a catastrophic loss.

If we experience a significant disruption in, or breach in security of, our information technology systems, or if we fail to implement new systems and software successfully, our business could be adversely affected.

We rely on several centralized information technology systems throughout our company to provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. Our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. For example, in December 2020, it was widely reported that SolarWinds, an information technology company, was the subject of a cyberattack that created security vulnerabilities for thousands of its clients. We identified an impacted SolarWinds server and promptly took steps to contain and remediate the incidents. While we believe that there were no disruptions to our operations as a result of this attack, other similar attacks could have a significant negative impact on our systems and operations. Our information technology systems also may experience interruptions, delays or cessations of service or produce errors in connection with system integration, software upgrades or system migration work that takes place from time to time. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our information technology systems or products could result in the misappropriation or unauthorized disclosure of confidential information belonging to us or to our employees, partners, customers or suppliers, which could result in our suffering significant financial or reputational damage. Concern over increasingly prevalent cyberattacks or other forms of security breaches of information technology systems can result in additional legal and regulatory requirements in the markets we operate our business and may lead to increased compliance burdens and costs to meet the regulatory obligations. For example, as a U.S. publicly traded company, we are subject to the U.S. Securities and Exchange Commission Final Rule on Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure which requires enhanced disclosure requirements for cybersecurity, with similar applicable requirements under the EU’s NIS2 Directive and China’s Data Security Law.

Financial and Tax Risks

Our retirement and postretirement pension plans are subject to financial market risks that could adversely affect our future results of operations and cash flows.

We have significant retirement and postretirement pension plan assets and obligations. The performance of the financial markets and interest rates impact our plan expenses and funding obligations. Significant decreases in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets will increase our funding obligations and adversely impact our results of operations and cash flows.

Changes in tax laws, unfavorable resolution of tax examinations, or exposure to additional tax liabilities could have a material adverse effect on our results of operations, financial condition and liquidity.

We are subject to taxes in the U.S., Singapore and various foreign jurisdictions. Governments in the jurisdictions in which we operate implement changes to tax laws and regulations periodically. Any implementation of tax laws that fundamentally change the taxation of corporations in the U.S. or Singapore could materially impact our effective tax rate and could have a significant adverse impact on our financial results.

We are also subject to examinations of our tax returns by tax authorities in various jurisdictions around the world. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of our provision for taxes. These assessments can require a high degree of judgment and estimation. Intercompany transactions associated with the sale of inventory, services, intellectual property and cost share arrangements are complex and affect our tax liabilities. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in multiple jurisdictions. There can be no assurance that the outcomes from ongoing tax examinations will not have an adverse effect on our operating results and financial condition. A difference in the ultimate resolution of tax uncertainties from what is currently estimated could have an adverse effect on our financial results and condition.

If tax incentives change or cease to be in effect, our income taxes could increase significantly.

We benefit from tax incentives extended to our foreign subsidiaries to encourage investment or employment. Singapore has granted us tax incentives which require renewal at various times in the future. The incentives are conditioned on achieving various thresholds of investments and employment or specific types of income. Our taxes could increase if the incentives are not renewed upon expiration. If we cannot or do not wish to satisfy all or parts of the tax incentive conditions, we may lose the related tax incentive and could be required to refund tax incentives previously realized. As a result, our effective tax rate could be higher than it would have been had we maintained the benefits of the tax incentives.

We have outstanding debt and may incur other debt in the future, which could adversely affect our financial condition, liquidity and results of operations.

We are party to a $1.5 billion five-year unsecured credit facility that will expire on June 7, 2028, pursuant to which we are permitted to establish an incremental revolving credit facility of up to $750 million. We also entered into an Uncommitted Money Market Line Credit Agreement which provides for an aggregate borrowing capacity of $300 million. Under our U.S. commercial paper program, the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.5 billion with up to 397-day maturities. As of July 31, 2026, we had approximately $3.9 billion in outstanding indebtedness which included an aggregate outstanding principal amount of $3.9 billion in unsecured senior notes. We may borrow additional amounts in the future and use the proceeds from any future borrowing for general corporate purposes, future acquisitions, expansion of our business or repurchases of our outstanding shares of common stock.

Our incurrence of this debt, and increases in our aggregate levels of debt, may adversely affect our operating results and financial condition by, among other things:

• increasing our vulnerability to downturns in our business, to competitive pressures and to adverse economic and industry conditions;
• requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flows available for other purposes, including capital expenditures, acquisitions, stock repurchases and dividends; and
• limiting our flexibility in planning for or reacting to changes in our business and our industry.

Our credit facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and engage in certain types of sale and leaseback transactions and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control. In addition, the indentures governing our senior notes contain covenants that may adversely affect our ability to incur certain liens or engage in certain types of sale and leaseback transactions. If we breach any of the covenants and do not obtain a waiver from the lenders or noteholders, then, subject to applicable cure periods, our outstanding indebtedness could be declared immediately due and payable.

We cannot assure that we will continue to pay dividends on our common stock.

Since the first quarter of fiscal year 2012, we have paid a quarterly dividend on our common stock. The timing, declaration, amount and payment of any future dividends fall within the discretion of our Board of Directors and will depend on many factors, including our available cash, estimated cash needs, earnings, financial condition, operating results, capital requirements, as well as limitations in our contractual agreements, applicable law, regulatory constraints, industry practice and other business considerations that our Board of Directors considers relevant. A change in our dividend program could have an adverse effect on the market price of our common stock.

Adverse conditions in the global banking industry and credit markets may adversely impact the value of our cash investments or impair our liquidity.

As of July 31, 2026, we had cash and cash equivalents of approximately $1.8 billion invested or held in a mix of money market funds, time deposit accounts and bank demand deposit accounts. Disruptions and volatility in the financial markets may, in some cases, result in an inability to access assets such as money market funds that traditionally have been viewed as highly liquid or hinder our ability to borrow money in the amounts, at interest rates or upon the more favorable terms and conditions that could be available under different economic circumstances. Any failure of our counterparty financial institutions or funds in which we have invested may adversely impact our cash and cash equivalent positions and, in turn, our operating results and financial condition.