1 unchanged sentence
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.
−Removed: This report contains forward-looking statements including, without limitation, statements regarding growth opportunities, including for revenue and our end markets, strength and drivers of the markets into which we sell, sales funnels, our strategic direction, new product and service introductions and the position of our current products and services, market demand for and adoption of our products, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on differentiating our product solutions, improving our customers’ experience and growing our earnings, future financial results, our operating margin, mix, 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 focus on balanced capital allocation, our contributions to our pension and other defined benefit plans, impairment of goodwill and other intangible assets, the impact of foreign currency movements, our hedging programs and other actions to offset the effects of tariffs and foreign currency movements, our future effective tax rate, tax valuation allowance and unrecognized tax benefits, the impact of local government regulations on our ability to pay vendors or conduct operations, our ability to satisfy our liquidity requirements, including through cash generated from operations, the potential impact of adopting new accounting pronouncements, indemnification, source and supply of materials used in our products, our sales, our purchase commitments, our capital expenditures, the integration and effects of our acquisitions and other transactions, our stock repurchase program and dividends and the potential or anticipated direct or indirect impact of COVID-19 on our business that involve risks and uncertainties.
+Added: This report contains forward-looking statements including, without limitation, statements regarding growth opportunities, including for revenue and our end markets, strength and drivers of the markets into which we sell, sales funnels, our strategic direction, new product and service introductions and the position of our current products and services, market demand for and adoption of our products, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on differentiating our product solutions, improving our customers’ experience and growing our earnings, future financial results, our operating margin, mix, 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 focus on balanced capital allocation, our contributions to our pension and other defined benefit plans, impairment and adjustments of goodwill and other intangible assets, the impact of foreign currency movements, our hedging programs and other actions to offset the effects of tariffs and foreign currency movements, our future effective tax rate, tax valuation allowance and unrecognized tax benefits, the impact of local government regulations on our ability to pay vendors or conduct operations, our ability to satisfy our liquidity requirements, including through cash generated from operations, the potential impact of adopting new accounting pronouncements, indemnification, source and supply of materials used in our products, our sales, our purchase commitments, our capital expenditures, the integration and effects of our acquisitions and other transactions, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, our stock repurchase program and dividends, macroeconomic environment and geopolitical uncertainties, interest rate and inflationary pressures, 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 I Item 1A and elsewhere in this Form 10-K.
2 unchanged sentences
("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, 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.
−Removed: In the first quarter of fiscal year 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers.
−Removed: Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment.
−Removed: We also moved BioTek's service revenue and related cost of sales from our life sciences and applied markets business segment to our Agilent CrossLab business segment.
−Removed: We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022.
−Removed: Historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes.
−Removed: There was no change to our diagnostics and genomics business segment.
−Removed: COVID-19 Pandemic
−Removed: Both our domestic and international operations have been and continue to be affected by the ongoing global pandemic of a novel strain of coronavirus (“COVID-19”) and the resulting volatility and uncertainty it has caused in the U.S.
−Removed: and international markets.
−Removed: In fiscal 2022, many businesses and countries, including the U.S., continued applying preventative and precautionary measures to mitigate the spread of the virus.
−Removed: In the latter part of our second quarter, we had to shut down our primary gas chromatography production facility and logistics center in Shanghai in compliance with lockdown measures related to COVID-19.
−Removed: We successfully managed the unplanned shutdown of our facility and fully recognized the revenue that was delayed from our second quarter within fiscal year 2022.
−Removed: While conditions related to the COVID-19 pandemic have improved in 2022 compared to 2021, the pandemic continues to be dynamic, and near-term challenges across the economy remain.
−Removed: The ongoing effects of COVID-19 remain difficult to predict due to numerous uncertainties, including the severity, duration and resurgence of the outbreak, new variants and the contagiousness of these new variants, the effectiveness of health and safety measures including vaccines and therapies, government and community responses including additional lockdowns, the pace and strength of the economic recovery, supply chain pressures, delivery and installation delays due to variable access to customer sites, among others.
−Removed: We will continue to actively monitor the effects of the pandemic and will continue to take appropriate steps to mitigate the impacts to our employees and on our business results.
−Removed: Russia-Ukraine Conflict
−Removed: In response to the ongoing conflict in Ukraine, at the beginning of March, we suspended sales prohibited by sanctions, halted the shipment of products to Russia with the exception of diagnostics and healthcare products and limited our in-country service to those diagnostics and healthcare customers.
−Removed: Subsequently, effective May 23, 2022, we ceased major operations within Russia, and as a result, we recorded an immaterial expense associated with the shutdown of operations for the three months ended April 30, 2022.
−Removed: For the year ended October 31, 2022 and 2021, sales derived from customers based in Russia represented an immaterial percentage of our total revenue.
−Removed: Term Loan Facility
−Removed: On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025.
−Removed: As of October 31, 2022, we had $600 million borrowings outstanding under the term loan facility and had a weighted average interest rate of 3.98 percent.
−Removed: Loans under the term loan agreement bear interest, at our option, either at:
−Removed: (i) the alternate base rate, as defined in the term loan agreement, plus the applicable margin for such loans or (ii) adjusted term SOFR, as defined in the term loan agreement, plus the applicable margin for such loans.
−Removed: The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants.
−Removed: We were in compliance with the covenants for the term loan during the year ended October 31, 2022.
−Removed: On May 4, 2022, we used the proceeds from the term loan facility and repaid the $600 million outstanding aggregate principal amount of our 2023 senior notes.
−Removed: The total redemption price of approximately $609 million was computed in accordance with the terms of the 2023 senior notes as the present value of the remaining scheduled payments of principal and unpaid interest on the notes being redeemed.
−Removed: In May 2022, we recorded a loss on extinguishment of debt of $9 million in other income (expense), net in the consolidated statement of operations.
−Removed: In addition, $7 million of accrued interest, up to but not including the applicable redemption date, was paid.
+Added: Announced Exit and Subsequent Divestiture of Resolution Bioscience Business
+Added: During the third quarter of fiscal year 2023, we made the decision to exit the Resolution Bioscience business within our diagnostics and genomics segment and recorded a long-lived asset impairment charge of $270 million.
+Added: In the fourth quarter of fiscal year 2023, we received an unsolicited offer and entered into an agreement to divest the Resolution Bioscience business for $50 million.
+Added: As a result, we recorded a gain on the divestiture of $43 million in other income and expense, net in the statement of operations, which included an adjustment to goodwill of $13 million.
Actual Results
−Removed: During 2022, we navigated through a challenging environment marked by supply chain and logistics pressures, high inflation, a COVID-related shutdown in China and were able to deliver strong results.
−Removed: Agilent's net revenue of $6,848 million in 2022 increased 8 percent when compared to 2021.
+Added: Agilent's net revenue of $6,833 million in 2023 was slightly down when compared to 2022.
Foreign currency movements for 2023 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to 2022.
−Removed: Net revenue increased in all business segments, geographic regions and most key end markets.
−Removed: Revenue in the life sciences and applied markets business increased 9 percent in 2022 when compared to 2021.
+Added: Net revenue declined in our life sciences and applied markets segment, in the pharmaceutical market and in the Asia Pacific region primarily related to weaker demand in China and an overall pressure on our customers' capital expenditures compared to the same period last year.
+Added: The net revenue decline was partially offset by revenue growth from our other segments primarily in Agilent CrossLab.
+Added: Revenue in the life sciences and applied markets business decreased 4 percent in 2023 when compared to 2022.
Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to 2022.
4 unchanged sentences
Agilent's net revenue of $6,848 million increased 8 percent in 2022 when compared to 2021.
−Removed: Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 3 percentage points when compared to 2020.
−Removed: Net revenue increased in all business segments, geographic regions and key end markets compared to 2020.
+Added: Foreign currency movements for 2022 had an overall unfavorable impact on revenue growth of 4 percentage points when compared to 2021.
+Added: Net revenue increased in all business segments, geographic regions and most key end markets compared to 2021.
Revenue in the life sciences and applied markets business increased 9 percent in 2022 when compared to 2021.
−Removed: In 2021, acquisitions from 2019 had an overall favorable impact of 7 percentage points when compared to 2020.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Revenue in the diagnostics and genomics business increased 7 percent in 2022 when compared to 2021.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Revenue in the Agilent CrossLab business increased 7 percent in 2022 when compared to 2021.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Net income was $1,240 million in 2023 compared to net income of $1,254 million and $1,210 million in 2022 and 2021, respectively.
+Added: Net income in 2023 was impacted by the asset impairment charges primarily related to the exit of our Resolution Bioscience business and lower tax expense.
Net income in 2022 was impacted by higher sales volume partially offset by supply chain, logistics and inflationary pressures increasing our costs.
Net income in 2021 was impacted by higher sales volume and net gains on fair value of equity securities partially offset by significant expense increases from our variable pay, share-based compensation expense and sales commissions.
−Removed: Net income in 2020 was impacted by revenue declines in certain of our businesses associated with the COVID-19 pandemic and increased costs and expenses which included an impairment charge of $98 million related to the closure of our sequencer development program.
As of October 31, 2023 and 2022, we had cash and cash equivalents balances of $1,590 million and $1,053 million, respectively.
2019 Repurchase Program.
−Removed: During the year ended October 31, 2020, we repurchased and retired 5.2 million shares for $469 million under the 2019 repurchase program authorization.
During the year ended October 31, 2021, we repurchased and retired 3.1 million shares for $365 million under this authorization.
2 unchanged sentences
2021 Repurchase Program.
−Removed: During the year ended October 31, 2021, we repurchased and retired 3.0 million shares for $423 million under the 2021 repurchase program authorization.
During the year ended October 31, 2021, we repurchased and retired 3.0 million shares for $423 million under this authorization.
+Added: During the year ended October 31, 2022, we repurchased and retired 8.4 million shares for $1,139 million under this authorization.
+Added: During the year ended October 31, 2023 we repurchased and retired 661,739 shares for $99 million, excluding excise taxes, under this authorization.
+Added: On March 1, 2023, the 2021 repurchase program was terminated and the remaining authorization of $339 million expired.
+Added: 2023 Repurchase Program.
+Added: On January 9, 2023, we announced that our board of directors had approved a share repurchase program (the "2023 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs.
+Added: The 2023 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date.
+Added: The 2023 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time.
+Added: The 2023 repurchase program commenced on March 1, 2023, and also terminated and replaced the 2021 repurchase program.
+Added: During the year ended October 31, 2023 we repurchased and retired 3.9 million shares for $476 million, excluding excise taxes, under this authorization.
As of October 31, 2023, we had remaining authorization to repurchase up to approximately $1,524 million of our common stock under the 2023 repurchase program.
+Added: The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.
+Added: As a result, we recorded the applicable excise tax of $3.2 million during the year ended October 31, 2023, as an incremental cost of the shares repurchased and a corresponding liability for the excise tax payable in other accrued liabilities on our consolidated balance sheet.
During the year ended October 31, 2023, cash dividends of $0.900 per share, or $265 million were declared and paid on the company's outstanding common stock.
3 unchanged sentences
The timing and amounts of any future dividends are subject to determination and approval by our board of directors.
−Removed: Looking forward, we remain focused on improving our customers’ experience, differentiating product solutions and productivity.
−Removed: We expect to face continued inflationary and logistical pressures (such as longer lead times and limited sources of supply in the near term) which we will continue to mitigate through targeted pricing and various sourcing strategies.
−Removed: While we anticipate an increasingly uncertain macroeconomic environment in fiscal year 2023, we remain optimistic about our growth opportunities in all of our key end markets in fiscal year 2023.
+Added: Looking forward, we continue to be focused on improving our customers’ experience, differentiating product solutions and productivity.
+Added: While we anticipate a challenging macroeconomic environment, particularly in China, and an overall pressure on our customers' capital expenditures in the near-term, we remain optimistic about our long-term growth opportunities in all of our key end markets.
+Added: We expect to continue to face inflationary pressures which we will continue to mitigate through targeted pricing and various other cost savings strategies.
Critical Accounting Policies and Estimates
5 unchanged sentences
Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management.
−Removed: Those policies are revenue recognition, inventory valuation, retirement and post-retirement plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes.
+Added: Those policies are revenue recognition, inventory valuation, retirement and post-retirement plan assumptions, valuation of goodwill and purchased intangible assets, restructuring and accounting for income taxes.
Revenue Recognition .
12 unchanged sentences
Where acceptance is not a formality, the customer must have documented their acceptance of the product or service.
−Removed: For products that include installation, if the installation meets the criteria to be considered a separate performance obligation, product revenue is recognized when control has passed to the customer, and recognition of installation revenue occurs once completed.
+Added: For products that include installation, if the installation meets the criteria to be considered a separate performance obligation,
+Added: product revenue is recognized when control has passed to the customer, and recognition of installation revenue occurs once completed.
Product revenue, including sales to resellers and distributors is reduced for provisions for warranties, returns, and other adjustments in the period the related sales are recorded.
16 unchanged sentences
For contracts with multiple performance obligations, we allocate the consideration to which we expect to be entitled to each performance obligation based on relative standalone selling prices and recognize the related revenue when or as control of each individual performance obligation is transferred to customers.
−Removed: We estimate the standalone selling price by calculating the average historical selling price of our products and services per country for each performance obligation.
+Added: We estimate the standalone selling price by calculating the average historical selling price of our products and services per geographic region for each performance obligation.
Stand-alone selling prices are determined for each distinct good or service in the contract, and then we allocate the transaction price in proportion to those standalone selling prices by performance obligations.
A portion of our revenue relates to lease arrangements.
−Removed: Standalone lease arrangements are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 842, Leases ("ASC 842") beginning in 2020 and ASC 840, Leases ("ASC 840") for prior periods.
+Added: Standalone lease arrangements are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 842, Leases ("ASC 842").
Each of these contracts is evaluated as a lease arrangement, either as an operating lease or a sales-type finance lease using the current lease classification guidance.
1 unchanged sentence
Inventory Valuation.
−Removed: We assess the valuation of our inventory on a periodic basis and make adjustments to the value for estimated excess and obsolete inventory based upon estimates about future demand and actual usage.
+Added: Inventory is valued at standard cost, which approximates actual cost computed on a first-in, first-out basis, not in excess of market value.
+Added: We assess the valuation of our inventory on a periodic basis and make adjustments to the value for estimated excess and obsolete inventory based upon estimates and assumptions about future demand, economic conditions and actual usage, which require management judgment.
Such estimates are difficult to make under most economic conditions.
The excess balance determined by this analysis becomes the basis for our excess inventory charge.
−Removed: Our excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with manufacturing to maximize recovery of excess inventory.
+Added: Our excess inventory review process includes analysis of inventory levels, sales trends and forecasts, managing product rollovers and working with manufacturing to maximize recovery of excess inventory and to estimate and record reserves for excess, slow-moving and obsolete inventory.
If actual market conditions are less favorable than those projected by management, additional write-downs may be required.
6 unchanged sentences
Two critical assumptions are the discount rate and the expected long-term return on plan assets.
−Removed: Other important assumptions include expected future salary increases, expected future increases to benefit payments, expected retirement dates, employee turnover, retiree mortality rates, and portfolio composition.
+Added: Other important assumptions include
+Added: expected future salary increases, expected future increases to benefit payments, expected retirement dates, employee turnover, retiree mortality rates, and portfolio composition.
We evaluate these assumptions at least annually.
5 unchanged sentences
For 2023 and 2022, the discount rates for non-U.S.
−Removed: plans were generally based on published rates for high quality corporate bonds and in 2022, increased compared to the previous year.
+Added: plans were generally based on published rates for high quality corporate bonds and in 2023, mostly increased compared to the previous year.
If we had changed our discount rate by 1 percent, the impact would have been approximately $1 million on U.S.
7 unchanged sentences
Plans and U.S.
−Removed: Post-Retirement Benefit Plans, gains and losses are amortized using a separate layer for each year's gains and losses.
+Added: Post-Retirement Benefit Plans, gains and losses are amortized over the average remaining future service period or remaining lifetime of participants depending upon the plan, using a separate layer for each year's gains and losses.
In the U.S., target asset allocations for our retirement and post-retirement benefit plans were approximately 50 percent to equities and approximately 50 percent to fixed income investments as of October 31, 2023.
−Removed: Our Deferred Profit-Sharing Plan
−Removed: target asset allocation is approximately 60 percent to equities and approximately 40 percent to fixed income investments.
+Added: Our Deferred Profit-Sharing Plan target asset allocation is approximately 60 percent to equities and approximately 40 percent to fixed income investments.
Approximately 1 percent of the retirement and post-retirement plans consists of limited partnerships.
−Removed: Outside the U.S., our target asset allocation ranges from 15 percent to 60 percent to equities, from 30 percent to 80 percent to fixed income investments, from zero to 25 percent to real estate and from zero to 55 percent to annuity contracts, depending on the plan.
+Added: Outside the U.S., our target asset allocation (excluding annuity contracts in the U.K.) ranges from zero percent to 60 percent to equities, from 38 percent to 100 percent to fixed income investments, and from zero to 25 percent to real estate, depending on the plan.
All plans' assets are broadly diversified.
10 unchanged sentences
If we had changed our estimated return on assets by 1 percent, the impact would have been $5 million on U.S.
−Removed: pension expense and $10 million on non-U.S.
+Added: pension and post-retirement benefit plan expense and $8 million on non-U.S.
pension expense for the year ended October 31, 2023.
−Removed: The total periodic pension and post-retirement benefit costs recorded were a $2 million benefit in 2022, $24 million expense in 2021 and $22 million expense in 2020.
+Added: The total periodic pension and post-retirement benefit costs recorded were a $6 million expense in 2023, $2 million benefit in 2022 and $24 million expense in 2021.
These costs included a loss on settlement of $4 million, $4 million and $1 million, for the years ended October 31, 2023, 2022 and 2021, respectively.
15 unchanged sentences
life sciences and applied markets, diagnostics and genomics and Agilent CrossLab.
−Removed: We performed a quantitative test for goodwill impairment of the three reporting units as of November 1, 2021, due to the change in our segment structure.
−Removed: As of November 1, 2021, there was no impairment of goodwill.
−Removed: We performed a qualitative test for goodwill impairment of the three reporting units, as of September 30, 2022, our annual impairment test date.
−Removed: Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of each reporting unit is greater than its respective carrying value.
+Added: We performed a quantitative test for goodwill impairment of the three reporting units, as of September 30, 2023, our annual impairment test date.
+Added: Based on the results of our quantitative testing, there was no impairment of goodwill as of September 30, 2023.
Each quarter we review the events and circumstances to determine if goodwill impairment is indicated.
2 unchanged sentences
Our determination of the fair value of the intangible assets acquired involves the use of significant estimates and assumptions.
−Removed: Specifically, our determination of the fair value of the developed product technology and in-process research and development ("IPR&D")
−Removed: acquired involves significant estimates and assumptions related to revenue growth rates and discount rates.
+Added: Specifically, our determination of the fair value of the developed product technology and in-process research and development ("IPR&D") acquired involves significant estimates and assumptions related to revenue growth rates and discount rates.
Our determination of the fair value of customer relationships acquired involves significant estimates and assumptions related to revenue growth rates, discount rates, and customer attrition rates.
15 unchanged sentences
During the year ended October 31, 2023, 2022 and 2021, there were no impairments of indefinite-lived intangible assets.
−Removed: During the year ended October 31, 2020, we recorded an impairment of in-process research and development of $90 million related to the shutdown of our sequencer development program in our diagnostics and genomics segment.
+Added: Restructuring.
+Added: The main components of our restructuring plan are related to workforce reductions, consolidation of excess leased facilities and site closures.
+Added: Workforce reduction charges are accrued when payment of benefits becomes probable that the employees are entitled to the severance and the amounts can be estimated.
+Added: Consolidation of facilities costs primarily consists of accelerated depreciation of right-of-use assets classified as held and used.
+Added: In accordance with the accounting guidance, it was determined that certain assets had been abandoned, and an assessment was made of the remaining useful lives and potential alternative uses.
+Added: If the amounts and timing of cash flows from restructuring activities are significantly different from what we have estimated, the actual amounts of restructuring and other related charges could be materially different, either higher or lower, than those we have recorded.
+Added: "Restructuring and Other Related Costs" for additional information.
Accounting for Income Taxes.
20 unchanged sentences
See Note 2, "New Accounting Pronouncements," to the consolidated financial statements for a description of new accounting pronouncements.
+Added: Restructuring and Other Related Costs
+Added: In the fourth quarter of fiscal year 2023, we initiated a new restructuring plan ("FY23 Plan") designed to reduce costs and expenses in response to the current macroeconomic conditions.
+Added: The plan includes a reduction of our total headcount by approximately 400 regular employees, representing approximately 2 percent of our global workforce, and the consolidation of our excess facilities, including some site closures.
+Added: In connection with this plan, we have recorded approximately $ 46 million in restructuring and other related costs in fiscal year 2023.
+Added: These costs include severance and other personnel costs associated with the workforce reduction.
+Added: The consolidation of excess facilities includes accelerated depreciation expenses of right-of-use ("ROU") and machinery and equipment assets and other facilities-related costs.
+Added: The timing and scope of the workforce reductions will vary based on local legal requirements.
+Added: These actions impact all three of our business segments.
+Added: The costs associated with this restructuring plan have not been allocated to our business segments' results;
+Added: however, each business segment will benefit from the future costs savings from these actions.
+Added: When completed, the restructuring program is expected to result in a reduction of $80 million in annual cost of sales and operating expenses over the three business segments.
+Added: While the majority of the workforce reduction will be completed in the first quarter of 2024, we expect to substantially complete the remaining restructuring activities by the end of fiscal year 2024.
+Added: A summary of total restructuring activity is shown in the table below:
+Added: Reduction Consolidation of Excess Facilities Total
+Added: (in millions)
+Added: Balance at October 31, 2022 $ — $ — $ —
+Added: Income statement expense 33 13 46
+Added: Accelerated share-based compensation expense ( 1 ) — ( 1 )
+Added: Accelerated depreciation expenses of ROU and machinery and equipment — ( 8 ) ( 8 )
+Added: Cash payments ( 1 ) — ( 1 )
+Added: Balance at October 31, 2023 $ 31 $ 5 $ 36
+Added: The restructuring and other related costs, which totaled $ 36 million at October 31, 2023, are recorded in other accrued liabilities on the consolidated balance sheet and reflect estimated future cash outlays.
+Added: A summary of the charges in the consolidated statement of operations resulting from the restructuring plan is shown below:
+Added: (in millions)
+Added: Cost of products and services $ 11
+Added: Research and Development 6
+Added: Selling, general and administrative 29
+Added: Total restructuring costs $ 46
Foreign Currency
1 unchanged sentence
Foreign currency movements for the year ended October 31, 2023, had an overall unfavorable impact on revenue of 2 percentage points when compared to the same period last year.
−Removed: Foreign currency movements for the year ended October 31, 2021, had an overall favorable impact on revenue of 3 percentage points when compared to 2020.
+Added: Foreign currency movements for the year ended October 31, 2022, had an overall unfavorable impact on revenue of 4 percentage points when compared to 2021.
When movements in foreign currency exchange rates have a negative impact on revenue, they will also have a positive impact by reducing our costs and expenses.
7 unchanged sentences
Results from Operations
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
3 unchanged sentences
Total net revenue $ 6,833 $ 6,848 $ 6,319 — 8%
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
% of total net revenue:
−Removed: Products 76 % 75 % 75 % 1 ppt.
−Removed: Services and other 24 % 25 % 25 % (1) ppt.
+Added: Products 74 % 76 % 75 % (2) ppts.
+Added: Services and other 26 % 24 % 25 % 2 ppts.
Total 100 % 100 % 100 %
−Removed: Agilent's net revenue of $6,848 million for the year ended October 31, 2022, increased 8 percent when compared to 2021.
+Added: Agilent's net revenue of $6,833 million for the year ended October 31, 2023, was slightly down when compared to 2022.
Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to 2022.
−Removed: For the year ended October 31, 2022, net revenue increased in all our segments, geographic regions and most of our key end markets.
+Added: For the year ended October 31, 2023, net revenue declined in our life sciences and applied markets segment in the pharmaceutical market and in the Asia Pacific region primarily related to weaker demand in China and an overall pressure on our customers' capital expenditures compared to the same period last year.
+Added: The net revenue decline was partially offset by revenue growth from our other segments primarily in Agilent CrossLab.
Agilent's net revenue of $6,848 million increased 8 percent in 2022 when compared to 2021.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Product revenue includes revenue generated from the sales of our analytical instrumentation, software and consumables.
−Removed: Revenue from products increased 9 percent for the year ended October 31, 2022, when compared to 2021.
−Removed: Product revenue growth in the year ended October 31, 2022, was primarily driven by increased sales within our liquid chromatography, spectroscopy, nucleic acid solutions and consumables businesses.
+Added: Revenue from products decreased 3 percent for the year ended October 31, 2023, when compared to 2022.
+Added: The decrease in product revenue in the year ended October 31, 2023, was primarily due to significant declines in our mass spectrometry, genomics, gas chromatography and cell analysis businesses partially offset by strong growth in our nucleic acid solutions and pathology businesses, and modest growth in our spectroscopy business.
+Added: Overall, product revenue declined due to our customers' capital expenditure pressures and mostly impacted the pharmaceutical market within our life sciences and applied market segment.
Revenue from products increased 9 percent for the year ended October 31, 2022, when compared to 2021.
−Removed: The growth in product revenue was driven by increased sales within our liquid chromatography and mass spectrometry businesses with continued strong growth in our nucleic acid solutions and cell analysis businesses.
+Added: The growth in product revenue was driven by increased sales within our liquid chromatography, spectroscopy, nucleic acid solutions and consumables businesses.
Services and other revenue consist of contract repair, preventative maintenance, compliance services, repair and maintenance, installation services, and consulting services related to the companion diagnostics and nucleic acid solutions businesses.
Services and other revenue increased 7 percent in 2023 as compared to 2022.
−Removed: Service revenue increases reflected strong growth from contract repair services, compliance services, installation services, consultative services and relocation services in all key end markets except the academia and government markets.
+Added: Services and other revenue increases reflected strong growth from contract repair services, consultative services, per incident repair and maintenance services, and relocation services in all key end markets.
Services and other revenue increased 6 percent in 2022 as compared to 2021.
−Removed: Service revenue was strong across all service regions and from contract services, on-demand repairs and nearly all other service types.
−Removed: Services sold with instrument sales grew more than twice as fast as the growth in after-market service revenue during that same period.
−Removed: Increase in services from our companion diagnostics, cell analysis and pathology businesses also contributed to the increase in service revenue in 2021.
+Added: Service revenue increases reflected strong growth from contract repair services, compliance services, installation services, consultative services and relocation services in all key end markets except the academia and government markets.
Net Revenue By Segment
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
5 unchanged sentences
Total net revenue $ 6,833 $ 6,848 $ 6,319 — 8%
+Added: Revenue in the life sciences and applied markets business decreased 4 percent in 2023 when compared to 2022.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to 2022.
+Added: For the year ended October 31, 2023, we saw a significant decline in revenue in the pharmaceutical market and a moderate decline in revenue in the diagnostics and genomics market partially offset by strong growth in the academia and government market and modest growth in the food market when compared to 2022.
Revenue in the life sciences and applied markets business increased 9 percent in 2022 when compared to 2021.
2 unchanged sentences
Revenue growth was strong within the pharmaceutical market driven by demand for our liquid chromatography, cell analysis and liquid chromatography mass spectrometry products.
−Removed: Revenue in the life sciences and applied markets business increased 18 percent in 2021 when compared to 2020.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
−Removed: For the year ended October 31, 2021, we saw revenue growth across all key end markets when compared to 2020.
−Removed: Revenue growth was led by strong demand for our products within the pharmaceutical and the chemicals and advanced materials markets when compared to 2020.
Revenue in the diagnostics and genomics business increased 1 percent in 2023 when compared to 2022.
Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to 2022.
−Removed: Revenue growth was strong within the pharmaceutical market led by performance from our nucleic acid solutions business.
+Added: Revenue growth in the pharmaceutical market was strong led by our nucleic acid solutions business which was partially offset by a decline in the academia and government markets when compared to 2022.
Revenue in the diagnostics and genomics business increased 7 percent in 2022 when compared to 2021.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
−Removed: For the year ended October 31, 2021, we saw revenue growth across all key end markets when compared to the same period last year.
−Removed: Revenue growth was strong within the pharmaceutical market led by performance from our nucleic acid solutions and biomolecular analysis businesses.
−Removed: Revenue growth was strong within the diagnostics and clinical markets led by performance from our pathology, companion diagnostics and genomics businesses.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
+Added: Revenue growth was strong within the pharmaceutical market led by performance from our nucleic acid solutions business.
Revenue in the Agilent CrossLab business increased 8 percent in 2023 when compared to 2022.
Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to 2022.
−Removed: For the year ended October 31, 2022, we saw revenue growth across most of our end markets led by strong revenue growth from the pharmaceutical and chemicals and advanced materials markets when compared to the same periods last year.
−Removed: generated by Agilent CrossLab increased 16 percent in 2021 when compared to 2020.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.
−Removed: For the year ended October 31, 2021, we saw revenue growth across all key end markets led by strong growth from the pharmaceutical and chemical and advanced materials and food markets when compared to 2020.
+Added: For the year ended October 31, 2023, we saw revenue growth across all of our end markets led by strong revenue growth in the pharmaceutical, academia and government, diagnostics and clinical and chemical and advanced materials markets when compared to 2022.
+Added: Revenue generated by Agilent CrossLab increased 7 percent in 2022 when compared to 2021.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
+Added: For the year ended October 31, 2022, we saw revenue growth across most of our end markets led by strong revenue growth from the pharmaceutical and chemicals and advanced materials markets when compared 2021.
Costs and Expenses
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
(in millions, except margin data)
−Removed: Gross margin on products 56.8 % 56.3 % 55.0 % 1 ppt.
+Added: Gross margin on products 51.9 % 56.8 % 56.3 % (5) ppts.
Gross margin on services and other 47.3 % 46.8 % 46.7 % 1 ppt.
−Removed: Total gross margin 54.4 % 53.9 % 53.1 % 1 ppt.
+Added: Total gross margin 50.7 % 54.4 % 53.9 % (4) ppts.
Research and development $ 481 $ 467 $ 441 3% 6%
1 unchanged sentence
Operating margin 19.8 % 23.6 % 21.3 % (4) ppts.
+Added: Total gross margin for the year ended October 31, 2023 decreased 4 percentage points when compared to 2022.
+Added: Total gross margin as well as gross margin on products, for the year ended October 31, 2023 was significantly impacted by asset impairment charges of $253 million primarily related to the exit of our Resolution Bioscience business.
+Added: Excluding these asset impairment charges, total gross margin for the year ended October 31, 2023 was relatively flat when compared to 2022.
+Added: gross margin was also impacted by targeted price increases, lower shipping and logistics costs, variable pay expenses and intangible amortization expense offset by the unfavorable impact of currency movements, higher wages, restructuring and other related costs and inventory charges.
Total gross margin for the year ended October 31, 2022 increased 1 percentage point when compared to 2021.
Total gross margin was impacted by higher sales volume, targeted price increases and lower inventory charges which were offset by higher material costs, shipping and logistics costs, wages, transformational initiative costs and intangible amortization expense.
−Removed: Total gross margin for the year ended October 31, 2021 increased 1 percentage point when compared to 2020.
−Removed: Total gross margin increased due to higher sales volume and favorable product mix which was partially offset by higher wages and variable pay, higher shipping and logistics costs, higher intangible amortization expense and higher share-based compensation expense.
Gross inventory charges were $40 million in 2023, $24 million in 2022 and $29 million in 2021.
1 unchanged sentence
Research and development expenses for the year ended October 31, 2023 increased 3 percent when compared to 2022.
−Removed: Research and development expenses increased due to higher wages and program investments in our diagnostics and genomics segment and in our mass spectrometry business within our our life sciences and applied markets segment, and additional research and development expenses related to the Resolution Bioscience acquisition.
−Removed: Research and development expenses for the year ended October 31, 2021 decreased 11 percent when compared to 2020.
−Removed: Excluding the intangible and other assets impairments recorded in 2020, research and development expenses for the year ended October 31, 2021 increased 11 percent due to increased wages and variable pay, higher program investments in our life sciences and applied markets and diagnostics and genomics businesses, additional expenses related to an acquisition, and higher share-based compensation expense.
−Removed: Selling, general and administrative expenses increased 1 percent in 2022 when compared to 2021.
−Removed: The increase was due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, acquisition and integration costs, variable pay, transformational initiatives and a decrease related to the change in the fair value of contingent consideration.
+Added: Research and development expenses increased due to higher wages, program costs in our life sciences and applied markets and diagnostics and genomics businesses and restructuring and other related costs partially offset by the lower variable pay expenses and favorable impact of currency movements.
+Added: Research and development expenses for the year ended October 31, 2022 increased 6 percent when compared to 2021.
+Added: Research and development expenses increased due to higher wages and program investments in our diagnostics and genomics segment and in our mass spectrometry business within our life sciences and applied markets segment, and additional research and development expenses related to the Resolution Bioscience acquisition.
+Added: Selling, general and administrative expenses were flat in 2023 when compared to 2022.
+Added: Selling general and administrative expenses in 2022 included a decrease in expenses of $25 million related to the change in the fair value of contingent consideration.
+Added: Excluding this amount, selling, general and administrative expenses decreased 2 percent when compared to 2022.
+Added: The decrease was due to lower variable pay, intangible amortization expense, sales commissions and the favorable impact of currency movements partially offset by higher wages, restructuring and other related costs and asset impairment charges primarily related to the exit of our Resolution Bioscience business.
Selling, general and administrative expenses increased 1 percent in 2022 compared to 2021.
−Removed: The increase was due to higher wages and variable pay, higher commissions and higher share-based compensation expense partially offset by a decrease related to the change in the fair value of an acquisition-related contingent consideration, lower legal costs and lower transformational initiatives expenses.
−Removed: Total operating margin for the year ended October 31, 2022 increased 2 percentage points when compared to 2021.
+Added: The increase was due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, acquisition and integration costs, variable pay, transformational initiatives and a decrease related to the change in the fair value of contingent consideration.
+Added: Total operating margin for the year ended October 31, 2023 decreased 4 percentage points when compared to 2022.
+Added: Total operating margin for the year ended October 31, 2023 decreased mainly due to asset impairment charges primarily related to the exit of our Resolution Bioscience business and restructuring and other related costs.Total operating margin for the year ended October 31, 2022, increased 2 percentage points when compared to 2021.
Operating margin increased due to higher sales volume, increased gross margin, lower commissions and variable pay partially offset by increases in wages, share-based compensation expense and inflationary pressures.
−Removed: Total operating margin for the year ended October 31, 2021, increased 6 percentage points when compared to 2020.
−Removed: Operating margin increased due to higher sales volume and increased gross margin partially offset by increases in wages and variable pay, commissions, share-based compensation expense and amortization of intangible assets.
Interest income for the year ended October 31, 2023, 2022 and 2021 was $51 million, $9 million and $2 million, respectively.
−Removed: The increase in interest income in 2022 was primarily due to increases in interest rates for our cash and cash equivalents.
+Added: The increase in interest income in 2023 was primarily due to higher cash balances and increases in interest rates related to our cash and cash equivalents.
Interest expense for the years ended October 31, 2023, 2022 and 2021 was $95 million, $84 million and $81 million, respectively, and relates to the interest charged on our senior notes, term loan, credit facilities, commercial paper and the amortization of the deferred loss recorded upon termination of the forward starting interest rate swap contracts partially offset by the amortization of deferred gains recorded upon termination of interest rate swap contracts.
−Removed: At October 31, 2022, our headcount was approximately 18,100 compared to 17,000 in 2021.
+Added: The increase in interest expense is primarily related to higher interest rates on short-term commercial paper and the variable rate on the term loan facility.
+Added: Our headcount was approximately 18,100 at October 31, 2023 and 2022.
Other income (expense), net
−Removed: For the year ended October 31, 2022, other income (expense), net includes income of $11 million related to the provision of site service costs to, and lease income from, Keysight Technologies, Inc.
+Added: For the year ended October 31, 2023, other income (expense), net includes income of $43 million related to the net gain on the divestiture of our Resolution Bioscience business and $12 million income related to the provision of site service costs to, and lease income from, Keysight Technologies, Inc.
("Keysight").
The costs associated with these services are reported within income from operations.
−Removed: Other income (expense), net includes $25 million income related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and settlement loss) offset by the net loss on the fair value of equity securities of approximately $67 million and $9 million loss on extinguishment of debt.
+Added: Other income (expense), net also includes $10 million income related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss, prior service credits and settlement loss) partially offset by the net loss on the fair value of equity securities of approximately $41 million.
For the year ended October 31, 2022, other income (expense), net includes income of $11 million related to the provision of site service costs to, and lease income from, Keysight.
The costs associated with these services are reported within income from operations.
−Removed: Other income (expense), net includes a $17 million loss on extinguishment of debt and net gains on the fair value of equity securities of approximately $98 million.
+Added: Other income (expense), net includes $25 million income related to the defined benefit retirement and post-retirement benefit plans offset by the net loss on the fair value of equity securities of approximately $67 million and a $9 million loss on extinguishment of debt.
For the year ended October 31, 2021, other income (expense), net includes income of $7 million related to the provision of site service costs to, and lease income from, Keysight.
The costs associated with these services are reported within income from operations.
−Removed: Other income (expense), net also includes net gains on the fair value of equity securities of approximately $27 million and income of $22 million related to the settlement of our legal claim against Twist Bioscience Corporation.
+Added: Other income (expense), net includes a $17 million loss on extinguishment of debt and net gains on the fair value of equity securities of approximately $98 million.
Years Ended October 31,
3 unchanged sentences
For 2023, our income tax expense was $99 million with an effective tax rate of 7.4 percent.
+Added: For the year ended October 31, 2023, our effective tax rate and the resulting provision for income taxes were impacted by the federal tax benefit of $104 million related to the realized loss on the divestiture of a business.
+Added: The income taxes for the year ended October 31, 2023, also include the tax benefit of $41 million related to foreign-derived intangible income along with the tax benefit of $30 million related to the release of tax reserves in the U.S.
+Added: due to the settlement of the audit with the Internal Revenue Service ("IRS") for tax years 2018 and 2019.
+Added: For 2022, our income tax expense was $250 million with an effective tax rate of 16.6 percent.
For the year ended October 31, 2022, our effective tax rate and the resulting provision for income taxes were impacted by the tax benefit of $46 million related to foreign-derived intangible income.
2 unchanged sentences
The income taxes for the year ended October 31, 2021, also include the excess tax benefits from stock-based compensation of $29 million.
−Removed: For 2020, our income tax expense was $123 million with an effective tax rate of 14.6 percent.
−Removed: For the year ended October 31, 2020, our effective tax rate and the resulting provision for income taxes were impacted by foreign income taxed at lower rates.
We have negotiated a tax holiday in Singapore.
The tax holiday provides a lower rate of taxation on certain classes of income and requires various thresholds of investments and employment or specific types of income.
−Removed: In December 2018, the tax holiday in Singapore was renegotiated and extended through 2027.
+Added: The tax holiday in Singapore was renegotiated and extended through 2030.
As a result of the incentive, the impact of the tax holiday decreased income taxes by $54 million, $53 million, and $35 million in 2023, 2022, and 2021, respectively.
The benefit of the tax holiday on net income per share (diluted) was approximately $0.18, $0.18, and $0.11 in 2023, 2022 and 2021, respectively.
−Removed: With these jurisdictions and the U.S., 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 limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable.
−Removed: Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.
+Added: With these jurisdictions and the U.S., it is reasonably possible that some tax audits may be completed over the next twelve months.
+Added: However, management is not able to provide a reasonably reliable estimate of the timing of any other future tax payments or change in unrecognized tax benefits, if any.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax law and regulations in a multitude of jurisdictions.
7 unchanged sentences
Segment Overview
−Removed: In the first quarter of fiscal year 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers.
−Removed: Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment.
−Removed: We also moved BioTek's service revenue and related cost of sales from our life sciences and applied markets business segment to our Agilent CrossLab business segment.
−Removed: Following this reorganization, we continue to have three business segments (life sciences and applied markets, diagnostics and genomics and Agilent CrossLab), each of which continues to comprise a reportable segment.
−Removed: We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022.
−Removed: Historical financial segment information have been recast to conform to this new presentation in our financial statements and accompanying notes.
−Removed: There was no change to our diagnostics and genomics business segment.
Through October 31, 2023, we have three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business.
Life Sciences and Applied Markets
−Removed: Our life sciences and applied markets business 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, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level.
+Added: Our life sciences and applied markets business provides application-focused solutions that include instruments, consumables and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level.
Key product categories include:
22 unchanged sentences
Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
1 unchanged sentence
Net revenue $ 3,856 $ 4,007 $ 3,663 (4)% 9%
−Removed: Life science and applied markets business revenue in 2022 increased 9 percent compared to 2021.
+Added: Life science and applied markets business revenue in 2023 decreased 4 percent compared to 2022.
Foreign currency movements had an overall unfavorable impact on revenue growth of 2 percentage points in 2023 when compared to the same period last year.
−Removed: Geographically, revenue increased 11 percent in the Americas with no currency impact, increased 2 percent in Europe with a 7 percentage point unfavorable currency impact and increased 13 percent in Asia Pacific with a 3 percentage point unfavorable currency impact.
+Added: Geographically, revenue decreased 4 percent in the Americas with a 1 percentage point unfavorable currency impact, increased 1 percent in Europe with a 2 percentage point unfavorable currency impact and decreased 7 percent in Asia Pacific with a 4 percentage point unfavorable currency impact.
+Added: The revenue decline in Asia Pacific was driven by China with declines in liquid chromatography and gas chromatography mass spectrometry when compared to 2022.
+Added: End market revenue performance in 2023 was mixed as the pharmaceutical market declined significantly, chemicals and advance materials market and environmental and forensics markets remained relatively flat, food market delivered modest growth while academia and government market delivered strong growth when compared to 2022.
+Added: Revenue decline in the pharmaceutical market was driven by weakness in our liquid chromatography, cell analysis and liquid chromatography mass spectrometry businesses when compared to 2022.
+Added: Revenue growth in the chemicals and advanced materials market was relatively flat with strength in our spectroscopy, cell analysis and consumables businesses offset by declines in gas chromatography and liquid chromatography mass spectrometry when compared to 2022.
+Added: Revenue growth in the environmental and forensics market was relatively flat with strength in our cell analysis, liquid chromatography and liquid chromatography mass spectrometry businesses offset by declines in spectroscopy, gas chromatography and gas chromatography mass spectrometry businesses when compared to 2022.
+Added: Revenue growth in the food market was primarily driven by strength in our spectroscopy, cell analysis and liquid chromatography businesses compared to 2022.
+Added: Revenue growth in the academia and government end market was mainly driven by strength in the liquid chromatography, spectroscopy, gas chromatography and the liquid chromatography mass spectrometry businesses when compared to 2022.
+Added: Life science and applied markets business revenue in 2022 increased 9 percent compared to 2021.
+Added: Foreign currency movements for 2022 had an overall unfavorable impact on revenue growth of 4 percentage points when compared to 2021.
+Added: Geographically, revenue increased 11 percent in the Americas with no currency impact, increased 2 percent in Europe with a 7
+Added: percentage point unfavorable currency impact and increased 13 percent in Asia Pacific with a 3 percentage point unfavorable currency impact.
The increase in Asia Pacific was led by strong demand in liquid chromatography systems in China.
−Removed: In 2022, revenue growth was driven by strong growth in liquid chromatography, spectroscopy products and consumables portfolio when compared to the same period last year.
−Removed: End market revenue performance in 2022 was mixed with pharmaceutical, chemicals and advanced materials markets and diagnostics and clinical market delivering strong revenue growth, food and environmental and forensics delivering modest revenue growth while academia and government remained relatively flat when compared to the same period last year.
+Added: In 2022, revenue growth was driven by strong growth in liquid chromatography, spectroscopy products and consumables portfolio when compared to 2021.
+Added: End market revenue performance in 2022 was mixed with pharmaceutical, chemicals and advanced materials markets and diagnostics and clinical market delivering strong revenue growth, food and environmental and forensics delivering modest revenue growth while academia and government remained relatively flat when compared to 2021.
Revenue growth in the pharmaceutical market was primarily driven by our liquid chromatography, cell analysis and consumables businesses.
−Removed: Revenue growth in the chemicals and advanced materials market was mainly driven by strength in our gas chromatography and spectroscopy portfolio as compared to the same period last year.
−Removed: The academia and government market revenue growth was relatively flat with strength in our liquid chromatography and gas chromatography mass spectrometry businesses offset by other product categories when compared to the same period last year.
−Removed: Life science and applied markets business revenue in 2021 increased 18 percent compared to 2020.
−Removed: Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 3 percentage points when compared to 2020.
−Removed: Acquisitions had an overall favorable impact on revenue growth of 8 percentage points when compared to 2020.
−Removed: Geographically, revenue increased 20 percent in the Americas with a 1 percentage point favorable currency impact, increased 20 percent in Europe with a 5 percentage point favorable currency impact and increased 15 percent in Asia Pacific with a 3 percentage point favorable currency impact.
−Removed: In 2021, revenue increases were broad based across our portfolio driven primarily by liquid chromatography, liquid chromatography mass spectrometry, cell analysis, spectroscopy products and our consumables portfolio when compared to 2020.
−Removed: End market revenue performance in 2021 was strong with all end markets (pharmaceutical, chemicals and advanced materials, diagnostics and clinical, food, academia and government and environmental and forensic market) delivering strong results when compared to the same period last year.
−Removed: The revenue growth in the pharmaceutical end market was driven by liquid chromatography, liquid chromatography mass spectrometry, cell analysis products and our consumables portfolio led by broad based strength across all regions.
−Removed: Revenue growth in the chemicals and advanced materials market was mainly driven by strength in spectroscopy, vacuum, consumables, gas chromatography, and gas chromatography mass spectrometry products with broad based strength across regions.
−Removed: Revenue growth in the food and diagnostics and clinical markets was across all products and regions.
−Removed: Revenue growth in the academia and government end market was driven by strong growth in cell analysis and consumables portfolio.
−Removed: Revenue growth in the environmental and forensics market was driven by strong growth in vacuum products and consumables portfolio as compared to the same period last year.
−Removed: Looking forward, despite supply chain and inflationary pressures and COVID-19 uncertainties, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs.
−Removed: While we anticipate volatility in our markets, we expect continued growth across most end markets in the long term from our new product introductions and acquisitions in the last couple of years as we continue to invest in expanding and improving our applications and solutions portfolio.
+Added: Revenue growth in the chemicals and advanced materials market was mainly driven by strength in our gas chromatography and spectroscopy portfolio as compared to 2021.
+Added: The academia and government market revenue growth was relatively flat with strength in our liquid chromatography and gas chromatography mass spectrometry businesses offset by other product categories when compared to 2021.
+Added: Looking forward, despite the challenging macroeconomic environment, our customers' capital expenditure pressures and geopolitical uncertainties, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs.
+Added: While we anticipate continued volatility in our markets, we expect long term growth across most end markets as we continue to invest in expanding and improving our applications and solutions portfolio.
Gross Margin and Operating Margin
The following table shows the life sciences and applied markets business' margins, expenses and income from operations for 2023 versus 2022, and 2022 versus 2021.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
(in millions, except margin data)
−Removed: Total gross margin 60.2 % 60.2 % 59.6 % — 1 ppt.
+Added: Total gross margin 60.2 % 60.2 % 60.2 % — —
Research and development $ 297 $ 293 $ 272 1% 8%
Selling, general and administrative $ 910 $ 933 $ 915 (2)% 2%
−Removed: Operating margin 29.6 % 27.8 % 25.4 % 2 ppts.
+Added: Operating margin 28.9 % 29.6 % 27.8 % (1) ppt.
Income from operations $ 1,116 $ 1,186 $ 1,017 (6)% 17%
Gross margin was flat in 2023 compared to 2022.
+Added: Gross margin was impacted by lower revenue, the unfavorable impact of currency movements, higher wages and warranty costs which were fully offset by targeted price increases, lower variable pay, logistics and materials cost.
+Added: Gross margin was flat in 2022 compared to 2021.
Gross margin was impacted by higher materials and logistics costs which were fully offset by price increases, higher sales volume and favorable cash flow hedging gains.
−Removed: Gross margin increased 1 percentage point in 2021 compared to 2020.
−Removed: Gross margin was favorably impacted by higher sales volume which was partially offset by higher wage and variable pay, higher material costs and unfavorable currency impact and cash flow hedging losses.
Research and development expenses increased 1 percent in 2023 when compared to 2022.
−Removed: Research and development expenses increased due to higher wages and program investments in our mass spectrometry and cell analysis businesses.
+Added: Research and development expenses increased due to higher wages and program investments in our software and informatics business partially offset by lower variable pay.
Research and development expenses increased 8 percent in 2022 when compared to 2021.
−Removed: Research and development expenses increased due to higher wage and variable pay, higher program investments in informatics and cell analysis, unfavorable currency impact and higher share-based compensation expense.
−Removed: Selling, general and administrative expenses increased 2 percent in 2022 compared to 2021.
−Removed: Selling, general and administrative expenses increased due to higher wages and marketing expenses partially offset by lower commissions, variable pay and favorable currency movements when compared to same period last year.
+Added: Research and development expenses increased due to higher wages and program investments in our mass spectrometry and cell analysis businesses.
+Added: Selling, general and administrative expenses decreased 2 percent in 2023 compared to 2022.
+Added: Selling, general and administrative expenses decreased due to lower variable pay, sales commissions, and marketing expenses, and the favorable impact of currency movements partially offset by higher wages when compared to 2022.
Selling, general and administrative expenses increased 2 percent in 2022 compared to 2021.
−Removed: Selling, general and administrative expenses increased due to higher wages and variable pay, higher commissions, higher share-based compensation expense and unfavorable currency movements.
+Added: Selling, general and administrative expenses increased due to higher wages and marketing expenses partially offset by lower sales commissions, variable pay and the favorable impact of currency movements when compared to 2021.
+Added: Operating margin decreased 1 percentage point in 2023 compared to 2022.
+Added: Operating margin was impacted by lower sales volume and the unfavorable impact of currency movements partially offset by lower variable pay and logistics costs.
Operating margin increased 2 percentage points in 2022 compared to 2021.
Operating margin was impacted by higher sales volume and favorable currency movements on expenses partially offset by higher wages, material and logistics costs.
−Removed: Operating margin increased 2 percentage points in 2021 compared to 2020.
−Removed: Operating margin increased due to higher sales volume and favorable impact of currency on revenue which was partially offset by higher wages and variable pay, unfavorable impact of currency on expenses and higher share-based compensation.
Income from Operations
−Removed: Income from operations in 2022 increased by $169 million or 17 percent when compared to 2021 on a revenue increase of $344 million.
−Removed: The increase in income from operations was primarily due to higher sales volume.
+Added: Income from operations in 2023 decreased by $70 million or 6 percent when compared to 2022 on a revenue decrease of $151 million.
+Added: The decrease in income from operations was primarily due to lower sales volume and unfavorable currency impact when compared to 2022.
Income from operations in 2022 increased by $169 million or 17 percent when compared to 2021 on a revenue increase of $344 million.
4 unchanged sentences
First, our genomics business includes arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling, gene expression profiling, as well as next generation sequencing ("NGS") target enrichment and genetic data management and interpretation support software.
−Removed: This business also
−Removed: includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy.
+Added: This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy.
Second, our nucleic acid solutions business is a contract and development manufacturing organization that provides services related to and the production of synthesized oligonucleotides under pharmaceutical good manufacturing practices ("GMP") conditions for use as API in a class of drugs that utilize nucleic acid molecules for disease therapy.
1 unchanged sentence
The broad portfolio of offerings includes immunohistochemistry ("IHC"), in situ hybridization ("ISH"), hematoxylin and eosin ("H&E") staining and special staining.
−Removed: Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue and liquid-based pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy.
+Added: Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy.
Fifth, the reagent partnership business provides clinical flow cytometry reagents for routine cancer diagnostics.
2 unchanged sentences
Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques including NGS, utilized in clinical and life science research applications.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
3 unchanged sentences
Foreign currency movements for 2023 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to the same period last year.
+Added: Geographically, revenue increased 4 percent in the Americas with no currency impact, increased 2 percent in Europe with a 1 percentage point unfavorable currency impact and decreased 9 percent in Asia Pacific with a 6 percentage point unfavorable currency impact.
+Added: The increase in the Americas was driven by strong growth in our nucleic acid solutions and reagent partnership businesses and growth in our pathology business, which was partially offset by a decline in our biomolecular analysis and genomics businesses.
+Added: The increase in Europe was driven by growth in our pathology and reagent partnership businesses and was somewhat offset by a decline in our biomolecular analysis business.
+Added: The revenue decline in Asia Pacific was driven by our biomolecular analysis and genomics businesses and an overall weakness in China.
+Added: In 2023, revenue performance in the pharmaceutical market was led by strong revenue growth in our nucleic acid solutions business.
+Added: We also saw moderate revenue growth in diagnostics and clinical markets led by our pathology and reagent partnership businesses when compared to 2022.
+Added: Revenue in the academia and government markets declined due to softness in our biomolecular analysis and genomics businesses.
+Added: Diagnostics and genomics business revenue in 2022 increased 7 percent compared to 2021.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Geographically, revenue increased 13 percent in the Americas with no currency impact, decreased 1 percent in Europe with a 7 percentage point unfavorable currency impact and increased 6 percent in Asia Pacific with a 7 percentage point unfavorable currency impact.
2 unchanged sentences
Revenue growth in Asia Pacific was primarily driven by an increase in China as well as a strong performance across our entire portfolio.
−Removed: In 2022, revenue performance in the pharmaceutical market was led by double-digit revenue growth in our nucleic acid solutions and single digit growth in biomolecular analysis and genomics businesses.
−Removed: We also saw moderate revenue growth in diagnostics and clinical and academia and government markets led by our biomolecular analysis, pathology, genomics and reagent partnership businesses when compared to the same period last year.
−Removed: Diagnostics and genomics business revenue in 2021 increased 24 percent compared to 2020.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.
−Removed: Geographically, revenue increased 35 percent in the Americas with a 1 percentage point favorable currency impact, increased 12 percent in Europe with a 5 percentage point favorable currency impact and increased 16 percent in Asia Pacific with a 2 percentage point favorable currency impact.
−Removed: The increase in the Americas was driven by strong performance in our nucleic acid solutions and genomics portfolios.
−Removed: In Europe, we saw strong demand for our genomics solutions as well as an increase in our companion diagnostics and pathology businesses.
−Removed: In Asia Pacific, revenue growth was driven by our pathology and genomics product portfolios.
−Removed: In 2021, revenue performance in the diagnostics and genomics business was led by double-digit revenue growth in our nucleic acid solutions, pathology and genomics businesses.
−Removed: The broad-based growth in the genomics product portfolio was driven by our next generation sequencing quality control product portfolio.
−Removed: Pathology testing volume returning to pre-pandemic levels drove strong growth throughout all pathology product families.
−Removed: All key end markets had revenue increases when compared to 2020.
−Removed: Looking forward, we are optimistic about our long-term growth opportunities in our end markets and continue to invest in expanding and improving our applications and solutions portfolio.
−Removed: We remain positive about our growth in our end markets as our product portfolio around OMNIS and PD-L1 assays continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing target enrichment solutions continue to be adopted.
−Removed: Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, and with the planned extension of our nucleic
−Removed: acid solutions production facility in Frederick, Colorado, we are well positioned to serve more of the market demand.
−Removed: We are expanding our capabilities in NGS-based cancer diagnostics and will provide innovative technology to further serve the needs of the fast-growing precision medicine market.
+Added: In 2022, revenue performance in the pharmaceutical market was led by strong revenue growth in our nucleic acid solutions and moderate revenue growth in our biomolecular analysis and genomics businesses.
+Added: We also saw moderate revenue growth in diagnostics and clinical and academia and government markets led by our biomolecular analysis, pathology, genomics and reagent partnership businesses when compared to 2021.
+Added: Looking forward, despite the challenging macroeconomic environment, geopolitical uncertainties and the short-term unfavorable market conditions affecting our genomics business, we are optimistic about our long-term growth opportunities in our end markets and continue to invest in expanding and improving our applications and solutions portfolio.
+Added: We remain positive about our growth in our end markets as our product portfolio around OMNIS and PD-L1 assays continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing related solutions continue to be adopted.
+Added: Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, and with the expansion of our nucleic acid solutions production facility in Frederick, Colorado, we are well positioned to serve more of the market demand.
We will continue to invest in research and development and seek to expand our position in developing countries and emerging markets.
1 unchanged sentence
The following table shows the diagnostics and genomics business' margins, expenses and income from operations for 2023 versus 2022, and 2022 versus 2021.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
(in millions, except margin data)
−Removed: Total gross margin 53.5 % 52.8 % 51.9 % 1 ppt.
+Added: Total gross margin 51.8 % 53.5 % 52.8 % (2) ppts.
Research and development $ 142 $ 138 $ 128 3% 8%
2 unchanged sentences
Income from operations $ 296 $ 301 $ 273 (2)% 10%
+Added: Gross margin decreased 2 percentage points in 2023 when compared to 2022.
+Added: Gross margin decreased due to volume decline in our genomics business resulting in unfavorable business mix.
+Added: Gross margin was also impacted by the unfavorable impact of currency movements, higher wages and infrastructure costs partially offset by lower variable pay.
Gross margin increased 1 percentage point in 2022 when compared to 2021.
Gross margin increased due to higher sales volume offsetting the higher wages and logistics costs.
−Removed: Gross margin increased 1 percentage point in 2021 when compared to 2020.
−Removed: Gross margin increased due to higher sales volume more than offsetting higher wages, variable pay, inventory charges and logistics expenses.
Research and development expenses increased 3 percent in 2023 when compared to 2022.
−Removed: Research and development expenses increased primarily due to higher wages and additional expenses related to the Resolution Bioscience acquisition and higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines.
+Added: Research and development expenses increased due to higher wages, additional expenses related to a recent acquisition and higher infrastructure costs.
Research and development expenses increased 8 percent in 2022 when compared to 2021.
−Removed: Research and development expenses included higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines, wages and variable pay, and additional expenses related to our acquisition which were partially offset by the shutdown of the sequencer development program in 2020.
+Added: Research and development expenses increased primarily due to higher wages and additional expenses related to the Resolution Bioscience acquisition and higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines.
+Added: Selling, general and administrative expenses decreased 4 percent in 2023 when compared to 2022.
+Added: Selling, general and administrative expenses decreased due to lower variable pay, the favorable impact of currency movements and lower infrastructure costs.
Selling, general and administrative expenses increased 7 percent in 2022 when compared to 2021.
Selling general and administrative expenses increased due to higher wages and additional expenses related to the Resolution Bioscience acquisition and inflationary pressures partially offset by lower commissions and favorable currency movements.
−Removed: Selling, general and administrative expenses increased 19 percent in 2021 when compared to 2020.
−Removed: Selling, general and administrative expenses increased due to higher commissions, share based compensation expenses, higher wages and variable pay.
+Added: Operating margin decreased 1 percentage point in 2023 when compared to 2022.
+Added: The decrease in operating margin resulted from lower gross margins, the unfavorable impact of currency movements and additional costs related to a recent acquisition partially offset by lower variable pay.
Operating margin increased 1 percentage point in 2022 when compared to 2021.
The increase in operating margin resulted from higher revenue growth and gross margins, which offset the increase in wages, inflationary pressures, logistics costs and program investments.
−Removed: Operating margin increased 3 percentage points in 2021 when compared to 2020.
−Removed: Operating margin improved as revenue growth more than offset the increase in commissions, wages and variable pay.
Income from Operations
+Added: Income from operations in 2023 decreased by $5 million or 2 percent when compared to 2022 on a revenue increase of $20 million.
Income from operations in 2022 increased by $28 million or 10 percent when compared to 2021 on a revenue increase of $93 million.
Income from operations increased due to higher revenue and gross margin improvement partially offset by higher wages, logistics costs and program investments.
−Removed: Income from operations in 2021 increased by $81 million or 42 percent when compared to 2020 on a revenue increase of $249 million.
−Removed: Income from operations increased due to strong sales performance.
Agilent CrossLab
1 unchanged sentence
The majority of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices.
−Removed: The services portfolio includes repairs, parts, maintenance, installations, training, compliance
−Removed: support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations.
+Added: The 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.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
3 unchanged sentences
Foreign currency movements for 2023 had an overall unfavorable impact on revenue growth of 2 percentage points when compared to 2022.
+Added: Geographically, revenue increased 12 percent in the Americas with a 1 percentage point favorable currency impact, increased 10 percent in Europe with no currency impact and increased 3 percent in Asia Pacific with a 5 percentage point unfavorable currency impact.
+Added: During the year ended October 31, 2023, revenue growth in all three regions was driven by contract repair services, per-incident repair services and consultative services, with installation related service in China partially offsetting the overall growth in Asia Pacific.
+Added: Agilent CrossLab business revenue increased 7 percent in 2022 when compared to 2021.
+Added: Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.
Geographically, revenue increased 11 percent in the Americas with no currency impact, increased 1 percent in Europe with a 9 percentage point unfavorable currency impact and increased 7 percent in Asia Pacific with a 5 percentage point unfavorable currency impact.
During the year ended October 31, 2022, revenue growth in all three regions was driven by contract repair services, compliance services, installation services and consultative services.
−Removed: Agilent CrossLab business revenue increased 16 percent in 2021 when compared to 2020.
−Removed: Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.
−Removed: Geographically, revenue increased 14 percent in the Americas with no currency impact, increased 16 percent in Europe with a 6 percentage point favorable currency impact and increased 17 percent in Asia Pacific with a 4 percentage point favorable currency impact.
−Removed: The strong growth across the regions reflected consistently high demand for services across the entire product portfolio and end markets.
−Removed: Revenue growth also reflected weakened sales in 2020 when many of our customers closed their sites or reduced their operating capacity in response to the COVID-19 pandemic.
Looking forward, Agilent CrossLab services are well positioned to continue their success in our key end markets by supporting a growing installed base of instruments.
−Removed: Digital and remote capabilities will continue to be a key factor in improving the service quality and the experience to customers.
+Added: 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.
1 unchanged sentence
The following table shows the Agilent CrossLab business' margins, expenses and income from operations for 2023 versus 2022 and 2022 versus 2021.
−Removed: Years Ended October 31, 2022 over 2021
−Removed: Change 2021 over 2020 Change
+Added: Years Ended October 31, 2023 over 2022 Change 2022 over 2021 Change
2023 2022 2021
(in millions, except margin data)
−Removed: Total gross margin 47.6 % 46.8 % 46.9 % 1 ppt.
+Added: Total gross margin 49.3 % 47.6 % 46.8 % 2 ppts.
Research and development $ 33 $ 32 $ 34 2% (5)%
2 unchanged sentences
Income from operations $ 463 $ 370 $ 323 25% 15%
+Added: Gross margin increased 2 percentage points in 2023 when compared to 2022.
+Added: Gross margin was impacted by higher sales volume, targeted price increases and lower variable pay that improved margins, which were partially offset by higher wages, service delivery costs for logistics and parts and the unfavorable impact of currency movements.
Gross margin increased 1 percentage point in 2022 when compared to 2021.
Gross margin was impacted by higher sales volume and targeted price increases that improved margins, which were partially offset by higher wages and service delivery costs for logistics and parts.
−Removed: Gross margin was relatively flat in 2021 when compared to 2020.
−Removed: Higher volumes and targeted price increases did help elevate margins, but those benefits were offset by higher service delivery costs, higher variable pay and higher cash flow hedging losses.
+Added: Research and development expenses increased 2 percent in 2023 when compared to 2022.
+Added: Research and development expenses increased due to higher wages, partially offset by lower variable pay and the favorable impact of currency movements.
Research and development expenses decreased 5 percent in 2022 when compared to 2021.
Research and development expenses decreased mainly due to cost efficiencies in certain research and development projects which led to lower expenditures.
−Removed: Research and development expenses increased 4 percent in 2021 when compared to 2020.
−Removed: development investment within the Agilent CrossLab business increased due to higher wages and a continued focus on digital service offerings.
−Removed: Selling, general and administrative expenses increased 3 percent in 2022 when compared to 2021.The increase was due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, variable pay, and favorable currency movements.
+Added: Selling, general and administrative expenses decreased 4 percent in 2023 when compared to 2022.
+Added: The decrease was primarily due to lower variable pay and a favorable impact of currency movements partially offset by higher wages.
Selling, general and administrative expenses increased 3 percent in 2022 when compared to 2021.
−Removed: Selling, general and administrative expenses increased due to higher wages and variable pay, sales commissions and share-based compensation expense.
+Added: Selling, general and administrative expenses increased due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, variable pay, and favorable impact of currency movements.
Operating margin increased 4 percentage points in 2023 when compared to 2022.
+Added: Operating margin increased mostly due to higher sales volume, targeted price increases and lower variable pay that improved margins in addition to a reduction in expenses.
+Added: Operating margin increased 2 percentage points in 2022 when compared to 2021.
Operating margin increased mostly driven by higher sales volume with improved gross margins and higher cash flow hedging gains.
−Removed: Operating margin increased 1 percentage point in 2021 when compared to 2020.
−Removed: Operating margin grew slightly in 2021 due to higher sales volume offset by higher wages and variable pay, higher service delivery costs and cash flow hedging losses.
Income from Operations
Income from operations in 2023 increased by $93 million or 25 percent when compared to 2022 on a revenue increase of $116 million.
−Removed: Income from operations increased primarily due to higher sales volume.
+Added: Income from operations increased primarily due to higher sales volume and targeted price increases.
Income from operations in 2022 increased by $47 million or 15 percent when compared to 2021 on a revenue increase of $92 million.
−Removed: Income from operations increased primarily due to higher sales offset by higher spending.
+Added: Income from operations increased primarily due to higher sales volume.
Financial Condition
7 unchanged sentences
Net cash provided by operating activities was $1,772 million in 2023 as compared to $1,312 million provided in 2022 and $1,485 million provided in 2021.
−Removed: Net cash paid for income taxes was approximately $279 million in 2022 compared to income taxes paid of $211 million in 2021 and $361 million, which included a one-time payment of $231 million related to the transfer of intellectual property, in 2020.
−Removed: For the years ended October 31, 2022, 2021 and 2020, other assets and liabilities used cash of $8 million, $14 million and $182 million, respectively.
−Removed: The cash outflow in the year ended October 31, 2020 was largely the result of increased income tax payments, interest payments on senior notes and changes in deferred revenue.
−Removed: In 2022, accounts receivable used cash of $321 million, compared to $128 million in 2021, and $107 million in 2020.
+Added: Net cash paid for income taxes was approximately $199 million in 2023 compared to income taxes paid of $279 million in 2022 and $211 million, in 2021.
+Added: For the years ended October 31, 2023, 2022 and 2021, other assets and liabilities provided cash of $47 million, used cash of $8 million and $14 million, respectively.
+Added: In 2023, accounts receivable provided cash of $132 million, compared to cash used of $321 million in 2022, and $128 million in 2021.
Days' sales outstanding as of October 31, were 69 days in 2023, 68 days in 2022 and 64 days in 2021.
−Removed: The increase in accounts receivable related to the transitory impacts of shutdowns in China.
+Added: In 2023, cash provided in accounts receivable was driven by stronger collections compared to 2022.
+Added: The increase in cash used in accounts receivable in 2022 compared to 2021 related to the transitory impacts of shutdowns in China.
In addition, we had a change in the mix of unbilled receivables primarily due to our nucleic acid solutions business, which has a longer cash conversion cycle.
−Removed: The change in accounts payable provided cash of $121 million in 2022, $64 million in 2021 and $2 million in 2020.
+Added: The change in accounts payable used cash of $171 million in 2023, provided cash of $121 million in 2022 and $64 million in 2021.
+Added: The change in accounts payable in 2023 compared to 2022 was due to less expenditures for direct materials as we optimized our inventory level in 2023.
Cash used in inventory was $33 million in 2023, $248 million in 2022 and $136 million in 2021.
Inventory days on-hand increased to 120 days in 2023 compared to 112 days in 2022 and increased compared to 98 days in 2021.
−Removed: In the years ended October 31, 2022 and 2021, we increased our inventory levels to meet our customer needs and to compensate for long lead time in ordering from our suppliers.
−Removed: The employee compensation and benefits liability used cash of $22 million for the year ended October 31, 2022, compared to cash provided of $112 million in 2021 and $29 million in 2020.
+Added: The employee compensation and benefits liability used cash of $91 million for the year ended October 31, 2023, compared to cash used of $22 million in 2022 and cash provided of $112 million in 2021.
+Added: In 2023, the change was largely due to a lower accrual for variable pay compared to 2022.
In 2022, the change was primarily due to higher variable and incentive payments and a reduction in the employee vacation liability compared to 2021.
−Removed: In 2021, the change was
−Removed: largely due to an increase in the vacation liability and variable and incentive pay liability compared to 2020.
We paid approximately $185 million in 2023 under our variable and incentive pay programs compared to $201 million in 2022 and $119 million in 2021.
5 unchanged sentences
defined benefit plans are generally funded ratably throughout the year.
−Removed: The higher contribution in 2020 mainly related to $12 million additional contribution in the Netherlands.
Our annual contributions are highly dependent on the relative performance of our assets versus our projected liabilities, among other factors.
7 unchanged sentences
Investments in property, plant and equipment were $298 million in 2023, $291 million in 2022 and $188 million in 2021.
−Removed: The increase in our investments in property plant and equipment is primarily due to the planned extension of our nucleic acid solutions production facility in Frederick, Colorado.
Our anticipated capital expenditures for fiscal year 2024 will be approximately $400 million.
−Removed: In 2022, we invested $52 million in a business and intangible assets, net of cash acquired for our acquisition of Polymer Standards Service and advanced artificial intelligence technology compared to $547 million primarily related to the acquisition of Resolution Bioscience in 2021 and zero in 2020.
−Removed: In 2022 cash used to purchase fair value investments was $13 million compared to $22 million outlay in 2021 and $20 million in 2020.
+Added: These continued investments in property plant and equipment are primarily due to the planned expansion of our nucleic acid solutions production facility in Frederick, Colorado.
+Added: In January 2023, we announced that we will be investing approximately $725 million to further expand our manufacturing capacity for production of nucleic acid based therapeutics in Frederick, Colorado.
+Added: Some of our investment may qualify for reimbursement incentives, which will not fully be known until the expansion is substantially complete.
+Added: In 2023, proceeds from the divestiture of our Resolution Bioscience business were $50 million.
+Added: In 2023, we invested $51 million for two acquisitions compared to $52 million for our acquisition of Polymer Standards Service and advanced artificial intelligence technology in 2022 and $547 million primarily related to the acquisition of Resolution Bioscience in 2021.
Net Cash Used in Financing Activities
2 unchanged sentences
2019 Repurchase Program.
−Removed: During the year ended October 31, 2020, we repurchased and retired 5.2 million shares for $469 million under the 2019 repurchase program authorization.
During the year ended October 31, 2021, we repurchased and retired 3.1 million shares for $365 million under this authorization.
2 unchanged sentences
2021 Repurchase Program.
−Removed: During the year ended October 31, 2021, we repurchased and retired 3.0 million shares for $423 million under the 2021 repurchase program authorization.
During the year ended October 31, 2021, we repurchased and retired 3.0 million shares for $423 million under this authorization.
+Added: During the year ended October 31, 2022, we repurchased and retired 8.4 million shares for $1,139 million under this authorization.
+Added: During the year ended October 31, 2023 we repurchased and retired 661,739 shares for $99 million, excluding excise taxes, under this authorization.
+Added: On March 1, 2023, the 2021 repurchase program was terminated and the remaining authorization of $339 million expired.
+Added: 2023 Repurchase Program.
+Added: On January 9, 2023, we announced that our board of directors had approved a share repurchase program (the "2023 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs.
+Added: The 2023 repurchase program authorizes the purchase of up to $2.0 billion, excluding excise taxes, of our common stock at the company's discretion and has no fixed termination date.
+Added: The 2023 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time.
+Added: The 2023 repurchase program commenced on March 1, 2023, and also terminated and replaced the 2021 repurchase program.
+Added: During the year ended October 31, 2023 we repurchased and retired 3.9 million shares for $476 million, excluding excise taxes, under this authorization.
As of October 31, 2023, we had remaining authorization to repurchase up to approximately $1,524 million of our common stock under the 2023 repurchase program.
+Added: The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.
+Added: As a result, we recorded the applicable excise tax of $3.2 million during the year ended October 31, 2023, as an incremental cost of the shares repurchased and a corresponding liability for the excise tax payable in other accrued liabilities on our consolidated balance sheet.
For the years ended October 31, 2023, 2022 and 2021, cash dividends of $265 million, $250 million and $236 million were paid on the company's outstanding common stock, respectively.
1 unchanged sentence
The timing and amounts of any future dividends are subject to determination and approval by our board of directors.
+Added: Contingent Consideration Payment
+Added: During the year ended October 31, 2023, we paid a total of $72 million in contingent consideration payments, of which $4 million is included as an outflow in cash from operations.
+Added: We paid $65 million related to the achievement of a certain technical milestone associated with our acquisition of Resolution Bioscience and $7 million related to other acquisitions.
+Added: Short-term Debt
Credit Facilities.
−Removed: On March 13, 2019, we entered into a credit agreement with a group of financial institutions which, as amended, provides for a $1 billion five-year unsecured credit facility that will expire on March 13, 2024 and incremental term loan facilities in an aggregate amount of up to $500 million.
−Removed: On April 21, 2021, we entered into an incremental assumption agreement, pursuant to which the aggregate amount available for borrowing under the revolving credit facility was increased to $1.35 billion, and the aggregate amount available for incremental facilities was refreshed to remain at $500 million.
−Removed: As of both October 31, 2022 and 2021, we had no borrowings outstanding under the credit facility and we had no borrowings outstanding under the incremental facilities.
+Added: On June 7, 2023, we entered into a new 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.
+Added: The credit facility replaced the existing credit facility which was terminated on the closing date of the new facility.
+Added: During the year ended October 31, 2023, we borrowed and repaid $360 million under the credit facility.
+Added: As of both October 31, 2023 and 2022, we had no borrowings outstanding under both the credit facility and the incremental revolving credit facility.
We were in compliance with the covenants for the credit facility during the year ended October 31, 2023.
+Added: 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.
+Added: The credit facility is an uncommitted short-term cash advance
+Added: facility where each request must be at least $1 million.
+Added: The interest rate is set by the lender at the time of the borrowing and is fixed for the duration of the advance.
+Added: During the year ended October 31, 2023, we borrowed and repaid $61 million.
+Added: As of October 31, 2023, we had no borrowings outstanding under the credit facility.
Commercial Paper.
4 unchanged sentences
The proceeds from issuances under the program may be used for general corporate purposes.
−Removed: As of October 31, 2022 , we had borrowings of $35 million outstanding under our U.S.
−Removed: commercial paper program and had a weighted average annual interest rate of 3.54 percent.
−Removed: As of October 31, 2021, w e had no borrowings outstanding under the U.S.
+Added: During the year ended October 31, 2023, we borrowed $1.67 billion and repaid $1.70 billion.
+Added: As of October 31, 2023 , we had no borrowings outstanding under our U.S.
commercial paper program.
+Added: As of October 31, 2022, w e had borrowings of $35 million outstanding under the U.S.
+Added: commercial paper program and had a weighted average annual interest rate of 3.54 percent .
Long-term Debt
1 unchanged sentence
On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025.
−Removed: As of October 31, 2022, we had $600 million borrowings outstanding under the term loan facility and had a weighted average interest rate of 3.98 percent.
+Added: As of October 31, 2023 and 2022, we had $600 million borrowings outstanding under the term loan facility and had weighted average interest rates of 6.22 percent and 3.98 percent, respectively.
Loans under the term loan agreement bear interest, at our option, either at:
2 unchanged sentences
We were in compliance with the covenants for the term loan during the year ended October 31, 2023.
−Removed: 2023 Senior Notes
−Removed: On June 21, 2013, the company issued aggregate principal amount of $600 million in senior notes ("2023 senior notes").
−Removed: The 2023 senior notes were issued at 99.544% of their principal amount.
−Removed: The notes would have matured on July 15, 2023 with a fixed interest rate of 3.875% per annum.
−Removed: We paid interest semi-annually on January 15th and July 15th of each year and payments commenced January 15, 2014.
On May 4, 2022, we used the proceeds from the term loan facility and repaid the $600 million outstanding aggregate principal amount of our 3.875% 2023 senior notes.
2 unchanged sentences
In addition, $7 million of accrued interest, up to but not including the applicable redemption date, was paid.
+Added: O n December 14, 2023, we prepaid $120 million of our outstanding $600 million term loan.
2026 Senior Notes.
18 unchanged sentences
The 2030 senior notes were issued at 99.812% of their principal amount.
−Removed: The 2030 senior notes will mature on June 4, 2030, and bear interest at a fixed rate of 2.10% per annum.
+Added: The 2030 senior notes will mature on
+Added: June 4, 2030, and bear interest at a fixed rate of 2.10% per annum.
The interest is payable semi-annually on June 4th and December 4th of each year and payments commenced on December 4, 2020.
17 unchanged sentences
Other purchase commitments 123 — — —
−Removed: Retirement plans 16 — — —
Total $ 817 $ 13 $ — $ —
3 unchanged sentences
The above amounts represent the commitments under the open purchase orders with our suppliers that have not yet been received.
−Removed: However, our agreements with these suppliers usually provide us the option to cancel, reschedule, and adjust our requirements based on our
−Removed: business needs prior to firm orders being placed.
+Added: However, our agreements with these suppliers usually provide us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being placed.
We expect to fulfill most of our purchase commitments for inventory within one year.
4 unchanged sentences
Our contractual obligations with these suppliers under "other purchase commitments" were approximately $123 million.
−Removed: Retirement Plans.
−Removed: Commitments under the retirement plans relate to expected contributions to be made to our U.S.
−Removed: defined benefit plans and to our post-retirement medical plans for the next year only.
−Removed: Contributions after next year are impractical to estimate.
−Removed: Effective May 1, 2016 through April 30, 2022, we provided an additional transitional company contribution for certain eligible employees equal to 3 percent, 4 percent or 5 percent of an employee's annual eligible compensation due to the U.S.
−Removed: Retirement Plan benefits being frozen.
We had no material off-balance sheet arrangements as of October 31, 2023, or October 31, 2022.
5 unchanged sentences
Term Loan — 600 — —
−Removed: Commercial paper 35 — — —
Interest expense 93 124 88 84
7 unchanged sentences
As of October 31, 2023, the remaining $94 million included in other long-term liabilities relates to the U.S.
−Removed: transition tax payment which is due in installments over the next four years.
+Added: transition tax payment which is due in installments over the next three years.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.