Agilent Technologies Financial Model
Laboratory Equipment Company Financials Example (Free Excel Download)
Agilent Technologies is a global leader in life sciences, diagnostics, and applied chemical markets, providing application-focused solutions that include instruments, software, services, and consumables for the entire laboratory workflow.
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About this model
This model provides a comprehensive three-statement forecast and discounted cash flow valuation to determine the intrinsic equity value of Agilent Technologies, enabling an equity research analyst to make a buy, hold, or sell recommendation based on the company's core revenue growth and margin expansion trajectory.
Agilent Technologies is a global leader in life sciences, diagnostics, and applied chemical markets, providing application-focused solutions that include instruments, software, services, and consumables for the entire laboratory workflow. The company operates a razor-and-blade business model where high-value analytical instrument sales drive a recurring stream of high-margin consumables and services revenue.
- Life Sciences and Diagnostics Markets Group (LDG): Represents approximately 40% of revenue.
- Agilent CrossLab Group (ACG): Represents approximately 40% of revenue.
- Applied Markets Group (AMG): Represents approximately 20% of revenue.
- Key Geographies: Americas (approx. 40%), Europe (approx. 30%), Asia-Pacific including China (approx. 30%).
- Business Model Type: Hybrid capital equipment and recurring revenue (consumables, software, and services).
- Competitive Position: Top-tier player in liquid and gas chromatography, mass spectrometry, and lab services, competing directly with Thermo Fisher Scientific, Waters Corporation, and Danaher.
- Recent Major Events: In November 2024, Agilent restructured its segments to align with a market-focused strategy, combining former divisions into the new LDG, ACG, and AMG segments. All historical models must recast data to reflect this new three-segment structure.
The downloadable Agilent Technologies financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsAgilent Technologies financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $6.32B | $6.85B | $6.83B | $6.51B | $6.95B |
| Gross profit | $3.41B | $3.72B | $3.46B | $3.54B | $3.64B |
| Operating income | $1.35B | $1.62B | $1.35B | $1.49B | $1.48B |
| Net income | $1.21B | $1.25B | $1.24B | $1.29B | $1.30B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Agilent Technologies
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Life Sciences and Diagnostics Markets Group (LDG)
- Segment Name: Life Sciences and Diagnostics Markets Group
- Revenue Driver Formula: Instrument Placements x Average Selling Price + Reagent/Consumable Volume x Price per Unit
- Historical Growth Rate: 5% to 11% core growth historically, subject to biopharma funding cycles.
- Key Growth Levers and Headwinds: Driven by pharmaceutical R&D spending, demand for oligo-based therapeutics, and cancer diagnostics. Headwinds include biotech funding constraints and capital expenditure deferrals by major pharma customers.
- Pricing Dynamics: High pricing power on proprietary reagents and pathology solutions; competitive pricing on standard instruments.
- Revenue Recognition Notes: Instrument revenue is recognised upon delivery and installation; service contracts are deferred and recognised over the contract term.
- Seasonality: Fiscal Q4 (ending October) is typically the strongest quarter due to year-end budget flushes by pharmaceutical and academic customers.
Agilent CrossLab Group (ACG)
- Segment Name: Agilent CrossLab Group
- Revenue Driver Formula: Installed Base of Instruments x Service Attachment Rate x Annual Contract Value
- Historical Growth Rate: 6% to 9% core growth, highly resilient.
- Key Growth Levers and Headwinds: Driven by the growing installed base of Agilent and third-party instruments, lab automation trends, and the shift towards vendor-agnostic service contracts.
- Pricing Dynamics: Contractual, recurring revenue with annual price escalators.
- Revenue Recognition Notes: Primarily recognised over time as services are rendered or ratably over the life of the service contract.
- Seasonality: Less seasonal than instrument sales, providing a stable baseline of revenue throughout the fiscal year.
Applied Markets Group (AMG)
- Segment Name: Applied Markets Group
- Revenue Driver Formula: Replacement Cycle Volume x Average Selling Price
- Historical Growth Rate: Flat to 4% core growth.
- Key Growth Levers and Headwinds: Driven by environmental testing, food safety regulations, and advanced materials testing. Headwinds include macroeconomic sensitivity and exposure to the chemical and energy sectors.
- Pricing Dynamics: Highly competitive, especially in basic gas chromatography and spectroscopy.
- Revenue Recognition Notes: Point-in-time recognition upon transfer of control for instruments and basic supplies.
- Seasonality: Moderate seasonality aligned with industrial capital expenditure budget cycles.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Direct materials (electronic components, raw chemicals), direct manufacturing labour, overhead allocation, freight and logistics, and tariffs.
- Gross margin range: 52.0% to 55.0% (FY25 reported at 52.4%).
- Key input costs and commodity exposures: Electronic components, specialised metals, and global shipping rates.
- How COGS scales with revenue: Step-function scaling for instrument manufacturing; highly scalable with strong operating leverage for software and CrossLab services.
Operating Expenses
- R&D: Typically runs at 6.0% to 6.5% of revenue (approx. $447 million in FY25). It covers next-generation mass spectrometry, software informatics, and clinical diagnostics development.
- SG&A: Typically runs at 24.0% to 26.0% of revenue. Driven by the global direct sales force, marketing campaigns, and corporate administrative functions.
- Depreciation & Amortisation: Approximately 3.0% to 4.0% of revenue, heavily weighted towards amortisation of acquired intangible assets from historical bolt-on acquisitions.
- Stock-Based Compensation: Approximately 1.5% to 2.0% of revenue, standard for a technology and life sciences hybrid company.
- Restructuring / one-time charges: Frequent but moderate. In FY25, Agilent announced a restructuring plan aiming to reduce annual costs by $75 million to $80 million.
Margin Profile
- Gross margin: 52.0% to 55.0%.
- EBITDA margin: 26.0% to 28.0%.
- Operating margin: 21.0% to 23.0% (FY25 reported at 21.3%).
- Net margin: 18.0% to 19.0%.
- Margin trend: Margins experienced slight compression in FY25 due to tariffs and shipping costs but are expected to expand as the higher-margin CrossLab segment outpaces instrument sales.
Balance Sheet Structure
- Total assets: Approximately $12.7 billion.
- Key asset categories: Cash and cash equivalents, accounts receivable, inventory, goodwill, and intangible assets.
- Goodwill & intangibles as % of total assets: High (typically 40% to 50%) due to a history of strategic acquisitions like BioTek and Resolution Bioscience.
- Working capital profile:
- Days Sales Outstanding (DSO): 55 to 65 days.
- Days Inventory Outstanding (DIO): 90 to 105 days (high inventory needed to support global service level agreements for spare parts).
- Days Payable Outstanding (DPO): 40 to 50 days.
- Net working capital as % of revenue: Typically 15% to 20%.
- Is working capital positive or negative? Positive. The company requires working capital investment to fund growth, particularly in inventory.
- PP&E: Approximately $1.2 billion to $1.5 billion, consisting of global manufacturing facilities, R&D labs, and demonstration centres.
- Right-of-use assets / operating leases: Material but manageable, typically representing $200 million to $300 million for leased office and lab space.
Capital Expenditure & Investment
- Capex as % of revenue: 5.0% to 6.5% (FY25 capex was approximately $450 million).
- Maintenance capex vs. growth capex: Roughly 40% maintenance (facility upkeep, IT infrastructure) and 60% growth (manufacturing capacity expansion, digital transformation).
- Major capex programmes underway or planned: Investment in digital lab platforms, automated manufacturing lines, and expansion of oligo-therapeutic manufacturing capacity.
- Capitalised software / development costs: Moderate, primarily related to internal-use software and customer-facing informatics platforms.
- M&A pattern: Serial bolt-on acquirer focusing on complementary technologies, software, and contract manufacturing capabilities.
- Typical acquisition multiple paid: 4.0x to 6.0x revenue for high-growth life sciences tools assets.
Debt & Capital Structure
- Total debt: Approximately $3.0 billion in long-term debt.
- Net debt: Approximately $1.2 billion (Total debt of $3.0 billion less cash of $1.8 billion).
- Debt/EBITDA ratio: 1.5x to 2.0x (highly conservative and well within investment-grade parameters).
- Credit rating: Investment grade (typically BBB+ or equivalent).
- Key debt instruments: Senior unsecured notes and a revolving credit facility.
- Maturity profile: Well-laddered with average maturities exceeding 5 years.
- Interest rate profile: Predominantly fixed-rate bonds with a weighted average cost of debt around 3.5% to 4.5%.
- Covenants: Standard investment-grade covenants (maximum leverage ratios, interest coverage).
- Share repurchase programme: Highly active. Completed a 2023 programme and initiated a new $2.0 billion authorisation in 2024.
- Dividend policy: Consistent dividend payer. FY25 dividend was $0.992 per share, with a payout ratio typically around 20% to 25%.
Cash Flow Characteristics
- Operating cash flow conversion: 1.1x to 1.2x (OCF routinely exceeds net income due to high non-cash amortisation and stock-based compensation).
- Free cash flow margin: 15.0% to 18.0% of revenue.
- Major non-cash items that bridge net income to OCF: Depreciation, amortisation of intangibles, stock-based compensation, and deferred taxes.
- Working capital cash flow impact: Generally a use of cash during periods of high growth due to inventory build and receivables expansion.
- Capex intensity: Moderate (approx. 6% of revenue), allowing for strong free cash flow generation.
- Cash tax rate vs. GAAP effective tax rate: Cash taxes are often lower than the GAAP effective tax rate (which runs around 9% to 15%) due to R&D tax credits and geographic mix.
Sheet Structure
- Assumptions: Hardcoded inputs for macroeconomic drivers, segment growth rates, margin profiles, working capital days, and capital structure targets.
- Revenue Build: Detailed forecast of revenue broken down by the three new reporting segments (LDG, ACG, AMG), including core growth and foreign exchange impact.
- Income Statement: Historical and forecasted GAAP and Non-GAAP P&L, mirroring the 10-K layout from Gross Profit down to Net Income and EPS.
- Working Capital Schedule: Calculation of accounts receivable, inventory, accounts payable, and deferred revenue based on DSO, DIO, and DPO assumptions.
- Depreciation & Amortisation Schedule: Waterfall schedule for existing PP&E, new capex, and acquired intangible assets.
- Debt & Interest Schedule: Tranche-by-tranche debt balances, mandatory repayments, interest expense calculations, and revolving credit facility sweeps.
- Shareholders Equity: Tracking of share capital, retained earnings, dividends paid, and the impact of the active share repurchase programme.
- Balance Sheet: Consolidated assets, liabilities, and equity, ensuring the fundamental accounting equation balances in all periods.
- Cash Flow Statement: Indirect method cash flow statement bridging Net Income to Cash from Operations, Investing, and Financing.
- DCF Valuation: Unlevered free cash flow calculation, WACC build, terminal value estimation, and implied share price output.
Key Financial Relationships
- LDG Revenue = Prior Year LDG Revenue x (1 + LDG Core Growth Rate + FX Impact)
- ACG Revenue = Prior Year ACG Revenue x (1 + ACG Core Growth Rate + FX Impact)
- AMG Revenue = Prior Year AMG Revenue x (1 + AMG Core Growth Rate + FX Impact)
- Total Net Revenue = LDG Revenue + ACG Revenue + AMG Revenue
- Cost of Products and Services = Total Net Revenue x (1 - Consolidated Gross Margin %)
- Research and Development Expense = Total Net Revenue x R&D % of Revenue
- Selling, General and Administrative Expense = Total Net Revenue x SG&A % of Revenue
- Accounts Receivable = (Total Net Revenue / 365) x DSO
- Inventory = (Cost of Products and Services / 365) x DIO
- Accounts Payable = (Cost of Products and Services / 365) x DPO
- Free Cash Flow = Cash Provided by Operating Activities - Capital Expenditures
- Basic Shares Outstanding = Prior Period Shares - (Share Repurchase Spend / Average Share Price)
- Dividends Paid = Basic Shares Outstanding x Annual Dividend per Share
- Interest Expense = Average Total Debt x Weighted Average Interest Rate
Cross-Sheet Dependencies
- The Assumptions sheet dictates the growth rates and margin profiles used in the Revenue Build and Income Statement.
- The Income Statement generates Net Income, which is the starting point for the Cash Flow Statement and feeds Retained Earnings on the Balance Sheet.
- The Working Capital Schedule uses Revenue and COGS from the Income Statement to calculate balance sheet items, and the period-over-period changes feed the Cash Flow Statement.
- The Depreciation & Amortisation Schedule feeds operating expenses on the Income Statement and non-cash add-backs on the Cash Flow Statement.
- The Debt & Interest Schedule calculates interest expense for the Income Statement and ending debt balances for the Balance Sheet. The revolving credit facility acts as the plug to balance the model, creating a circular reference between interest expense, net income, cash flow, and debt balances.
- The DCF Valuation pulls NOPAT from the Income Statement, D&A from the Cash Flow Statement, Capex from the Cash Flow Statement, and changes in NWC from the Working Capital Schedule.
Sign Convention
- Revenue and Assets: Positive.
- Expenses and Capital Expenditures: Positive in their supporting schedules, but subtracted in aggregate formulas (e.g., Gross Profit = Revenue - COGS).
- Liabilities and Equity: Positive.
- Cash Flow Statement: Cash inflows are positive. Cash outflows (e.g., capital expenditures, dividends paid, share repurchases, debt principal repayments) are negative.
- Working Capital Changes: An increase in an asset (e.g., inventory) is a negative cash flow. An increase in a liability (e.g., accounts payable) is a positive cash flow.
Things Most Likely to Go Wrong
- Segment Restructuring: The company changed segment reporting in November 2024. Historical segment data before FY24 must be recast to the new LDG, ACG, and AMG structure; failure to do so will result in broken growth rate calculations.
- Non-GAAP vs GAAP Margins: Agilent heavily promotes Non-GAAP operating margins (which exclude amortisation of intangibles and restructuring costs). The model must explicitly forecast GAAP expenses and bridge to Non-GAAP to match management guidance.
- Foreign Exchange Sensitivity: Agilent generates over 60% of its revenue outside the US. The model must include a toggle for constant-currency (core) growth versus reported growth.
- Share Repurchase Impact: Agilent aggressively buys back stock. Failing to dynamically reduce the share count will artificially depress forecasted EPS.
- Tariff and Supply Chain Costs: Gross margins were impacted by tariffs in FY25. The model should not assume an immediate return to peak historical gross margins without explicit assumptions regarding supply chain normalisation.
- Deferred Revenue Dynamics: The CrossLab segment relies heavily on service contracts. The model must accurately capture the deferred revenue liability on the balance sheet to reflect cash collected ahead of service delivery.
- Tax Rate Volatility: The GAAP effective tax rate fluctuates due to discrete tax benefits. The model should use a normalised cash tax rate for DCF purposes.
- Circularity in Debt Schedule: Interest expense depends on the debt balance, which depends on cash flow, which depends on interest expense. The builder must implement a circuit breaker toggle to resolve Excel calculation errors.
Validation Checks
- "Gross margin should be in the 52.0% to 55.0% range based on the last 5 years; flag if outside this band."
- "Operating margin should remain between 21.0% and 24.0%; flag if the model assumes unrealistic margin expansion."
- "Capex as a % of revenue typically runs 5.0% to 6.5%; flag if it drops below 5.0% as this implies underinvestment."
- "OCF/Net Income conversion should be >1.1x; flag if the model shows poor cash conversion."
- "Debt/EBITDA should remain below 2.5x per investment-grade rating agency guidance; flag if leverage spikes."
- "Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period. Difference must equal exactly zero."
- "Effective tax rate should be 10.0% to 15.0%; flag if the model defaults to the statutory 21% US corporate rate."
- "Dividend payout ratio should remain within 20% to 30% based on stated policy; flag if dividends exceed free cash flow."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| LDG Core Revenue Growth | 6.0 | % | Blended average of recent performance and management long-term guidance. |
| ACG Core Revenue Growth | 7.0 | % | Highly resilient recurring revenue stream driving overall company growth. |
| AMG Core Revenue Growth | 3.0 | % | Slower growth end-markets with cyclical industrial exposure. |
| Consolidated Gross Margin | 53.0 | % | Slight improvement from FY25 (52.4%) as supply chain and tariff pressures ease. |
| R&D as % of Revenue | 6.4 | % | Consistent with FY25 actuals ($447M on $6.95B revenue). |
| SG&A as % of Revenue | 25.0 | % | Historical average required to support global direct sales and marketing. |
| Days Sales Outstanding (DSO) | 60 | Days | Standard collection period for life sciences tools sector. |
| Days Inventory Outstanding (DIO) | 95 | Days | High inventory required to meet global service level agreements. |
| Days Payable Outstanding (DPO) | 45 | Days | Standard vendor payment terms. |
| Capex as % of Revenue | 6.0 | % | Aligns with FY25 actuals and management guidance for capacity expansion. |
| Effective Tax Rate | 12.0 | % | Normalised rate reflecting geographic mix and R&D tax credits. |
| Weighted Average Interest Rate | 4.0 | % | Blended cost of existing fixed-rate senior notes. |
| Annual Share Repurchases | 500 | $ Millions | Run-rate based on the active $2.0 billion authorisation programme. |
| Annual Dividend per Share | 1.02 | $ | Slight increase from FY25 actual of $0.992 per share. |
| WACC | 8.5 | % | Standard discount rate for large-cap life sciences tools companies. |
| Terminal Growth Rate | 3.0 | % | Aligns with long-term global GDP and healthcare spending growth. |
Data Sources & Benchmarks
- SEC EDGAR: Source for Agilent's 10-K, 10-Q, and 8-K filings.
- Agilent Investor Relations: Source for earnings call transcripts, investor day presentations, and recast historical segment data.
- Key Peers for Benchmarking: Thermo Fisher Scientific (TMO), Waters Corporation (WAT), Danaher Corporation (DHR), Mettler-Toledo (MTD).
- Industry Data Sources: IQVIA for pharmaceutical R&D spending trends; Frost & Sullivan for analytical instrumentation market sizing.
- Consensus Estimates: FactSet or Bloomberg for validating near-term revenue and EPS model outputs.
Sources
- Agilent Technologies, Inc. Form 10-K for the Fiscal Year Ended October 31, 2025.
- Agilent Technologies Q1 2026 Earnings Release (February 25, 2026).
- Agilent Technologies Q4 2025 Earnings Release and Presentation (November 2025).
- Agilent Technologies Form 8-K detailing the November 2024 segment restructuring.
- SEC EDGAR Database (https://www.sec.gov/edgar).
- Agilent Investor Relations Website (https://investor.agilent.com).
Do more with the Agilent Technologies model
Frequently asked
What is Agilent Technologies' core business model?+
Agilent Technologies operates a "razor-and-blade" business model, where sales of high-value analytical instruments drive a recurring stream of high-margin consumables and services revenue. The company provides application-focused solutions, including instruments, software, services, and consumables, for the entire laboratory workflow in life sciences, diagnostics, and applied chemical markets.
How does Agilent Technologies generate its revenue across its segments?+
Agilent Technologies generates revenue primarily through its Life Sciences and Diagnostics Markets Group (LDG) and Agilent CrossLab Group (ACG), each contributing approximately 40% of total revenue. The remaining 20% comes from the Applied Markets Group (AMG), with significant contributions from the Americas, Europe, and Asia-Pacific regions.
What are the key assumptions for revenue growth and margins in the Agilent Technologies financial model?+
The financial model for Agilent Technologies assumes a revenue growth rate of approximately 7.26% for the forecast horizon. Key margin assumptions include COGS as a percentage of revenue at about 46.71%, R&D as a percentage of revenue at 7.59%, and SGA as a percentage of revenue at 25.95%.
What is Agilent Technologies' typical capital expenditure as a percentage of revenue?+
Agilent Technologies' capital expenditure typically ranges from 5.0% to 6.5% of revenue, with FY25 capex being approximately $450 million. This investment is roughly 40% for maintenance and 60% for growth, supporting initiatives like digital lab platforms and manufacturing capacity expansion.
What is Agilent Technologies' working capital profile?+
Agilent Technologies maintains a positive working capital profile, requiring investment to fund growth, particularly in inventory. The company typically has Days Sales Outstanding (DSO) of 55-65 days, Days Inventory Outstanding (DIO) of 90-105 days, and Days Payable Outstanding (DPO) of 40-50 days.
Is an Excel financial model for Agilent Technologies available for download?+
Yes, an Excel financial model for Agilent Technologies is available for download, providing a comprehensive three-statement forecast and discounted cash flow valuation. This model helps equity research analysts determine the intrinsic equity value based on the company's core revenue growth and margin expansion trajectory.
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