dGood afternoon. Thank you for attending today's Agilent Technologies Q3 2022 earnings call. My name is Hannah, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Parmeet Ahuja, with Agilent. Please go ahead. Thank you, Hannah, and welcome everyone to Agilent's conference call for the third quarter of fiscal year 2022. With me are Mike McMullen, Agilent's President and CEO, and Bob McMahon, Agilent's Senior Vice President and CFO. Joining in the Q&A after Mike and Bob's comments will be Jacob Thaysen, President of the Agilent Life Sciences and Applied Markets Group, Sam Raha, President of the Agilent Diagnostics and Genomics Group, and Padraig McDonnell, President of the Agilent CrossLab Group. This presentation is being webcast live. The news release for our third quarter financial results, investor presentation, and information to supplement today's discussion, along with the recording of this webcast, are available on our website at www.investor.agilent.com. Today's comments by Mike and Bob will refer to non-GAAP financial measures. You'll find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year-over-year, and references to revenue growth are on a core basis. Core revenue growth excludes the impact of currency and any acquisitions and divestitures completed within the past 12 months. Guidance is based on exchange rates as of July 31. As previously announced, beginning in the first quarter of fiscal 2022, we implemented certain changes to our segment reporting structure. We have recast our historical segment information to reflect these changes. These changes have no impact on our company's consolidated financial statements. We will also make forward-looking statements about the financial performance of the company. These statements are subject to risk and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risk and other factors. Now I'd like to turn the call over to Mike. Thanks, Parmeet, and thanks everyone for joining our call today. In the third quarter, we once again demonstrated the strength of our diversified business and the unstoppable One Agilent team. We delivered an excellent quarter, significantly exceeding our revenue and earnings expectations. Revenues of $1.72 billion are up 13% core. This is on top of 21% core growth in Q3 of 2021. Third quarter operating margins are 27.5%. Operating margins continue to expand and are up 150 basis points from last year. Earnings per share of $1.34 are up 22%. Our strong results in Q3, coupled with orders continuing to outpace revenues, highlight the ongoing strength of our diversified business. The momentum in our business continues, and we are once again raising our outlook for the year. Let's take a closer look at our Q3 results. From an end-market perspective, our results were once again led by strength in our 2 largest markets, pharma and chemical and energy. Our largest market, pharma, grew 16% versus 27% a year ago. Within pharma, both the biopharma and small molecule segments grew double digits. The momentum in our C&E market segment continues, with Q3 growth of 22%. This is on top of 23% growth a year ago. The C&E market is being fueled by demand in chemicals, along with strong secular demand and ongoing investment within the advanced materials space. We're also very pleased to achieve double-digit growth in the food, environmental, and forensic markets, with both markets growing 11%. In our last call, I shared our belief that the business impacts of the Shanghai COVID-19 lockdown would be transitory. I also expressed that we remain confident about the ongoing strength of our business in China. In Q3, the China team delivered 29% growth. These stellar results were driven by continued strong end-market demand, coupled with the faster-than-expected recovery of production and shipment activity following the end of the Shanghai area lockdown. We are also very pleased with its results, which highlights the customer focus, drive, and outstanding execution of the Agilent China team. Strength in America has continued as we post another quarter of double-digit growth on top of 32% growth last year. Our European business grew 6% against a 23% last year, despite a 2 point headwind for the curtailment of our operations in Russia. In terms of business unit performance, the life sciences and applied revenues of $1.02 billion, up 18% on a core basis. Growth was broad-based, but continued strong demand for our LC and LCMS offerings, where we posted high 20s% growth. Our spectroscopy business grew to low 30s, driven by strength in the advanced materials market. Chemistries and consumables, cell analysis, and our GC business each delivered double-digit growth in the quarter. LSAG's end-market growth was broad-based, with particular strength in the pharma and chemical and energy markets. Our pharma results were driven by strength in the biopharma segment, which grew more than 20%. We had an excellent showing at the recent ASMS conference, introducing several important LCMS and GCMS instruments and biopharma workflow solutions. These innovative and intelligent LCMS and GCMS systems have been designed to make the lives of our customers easier. The building instrument intelligence and a higher level of instrument diagnostics help maximize system uptime and improve lab productivity by allowing operators to focus on their analysis rather than on their instruments. In addition, we introduced an industry-first Hydroinert source for GC single-quad and GC triple-quad instruments, enabling customers to seamlessly migrate from helium as a supplier of gas to lower-cost hydrogen. Rounding out the list of new products announced at ASMS, we introduced the MassHunter BioConfirm 12.0 software, an integrated compliant workflow targeted at the fast-growing oligo-based therapeutic development market. These new products have already been well received by customers and represent the latest addition to Agilent's history of leadership in mass spectrometry. Our LSAG business also won some important awards during the quarter, including the 6560C Ion Mobility LC/Q-TOF system, winning the Scientists' Choice Award for Best New Spectroscopy Product. Early this month, we also strengthened and broadened our advanced materials and biopharma portfolio with the acquisition of PSS, Polymer Standards Service, a leader in polymer characterization. We're extremely pleased to welcome the PSS team and their technology to the Agilent family. The Agilent CrossLab Group posted services revenue of $359 million. This is up 10% core. We grew 10% core even as lab activity continues to ramp in China. Growth in services was again broad-based across services contracts, preventive maintenance, compliance, education, and informatics enterprise services. Strong instrument placements and increased connect rates continue to be a driver for our service business as customers continue to see value in our ACG offerings. Another critically important factor in our results is the scale and execution capability of Agilent's world-class global service delivery organization in serving our customers to meet their needs. Agilent is seen as the trusted company to work with among our global customers. The Diagnostics and Genomics Group delivered revenue of $340 million, up 3% core. This is the first comparable 37% growth last year. The solid results in our clinical cancer testing and NGS businesses were partially offset by COVID testing headwinds in our qPCR portfolio. In addition, the DGG business in China continues to ramp following the COVID-related shutdowns there. NASD revenues were up modestly in line with expectations. As we noted last quarter, Q3 included the impact of a planned shutdown of our oligo manufacturing line in Frederick, Colorado. The shutdown in Frederick was for both routine maintenance and development of key elements of our Train B, our new manufacturing line that would increase our capacity $150 million plus when fully ramped. While we continue to make good progress on the construction of Train B, we have seen some supply chain-related delays and are now targeting the mid-year 2023 go-live, a slight delay. We see continued strong demand for oligo-based therapeutics as the number of approved drugs continues to increase and the pipeline of drugs in development are targeting disease states with larger patient populations. We are more confident than ever in the long-term trajectory of the market and our business. In addition to these highlights, I'd like to also point out the recent release of Agilent's 2021 ESG report. While we've always published our progress in sustainability and addressing societal needs, this year we've taken our approach to the next level. We address these issues in a new format that, for the first time, looks specifically at our progress in the areas of environmental, social, and governance issues. We hope you have a chance to review our progress in ESG by checking out the report on the Agilent website and learning more about how we're executing our mission to advance the quality of life. Agilent's Q3 results, again, point to the strength of our diversified business and the outstanding execution ability of the Agilent team. We continue to bring innovative, differentiated new offerings to the marketplace. Acceleration in digital orders growth continues, as well as new customer acquisition. In addition, as we started 2022, we undertook a bold move to create a One Agilent commercial organization to further drive customer focus and growth. The strength of our portfolio and the continued strong execution by our One Agilent commercial organization make a powerful combination, and you see it in the results we're delivering. Customer satisfaction hit another all-time high this quarter. We continue to outgrow the market. As a result of our strong Q3 performance and continued momentum, we're once again raising our full-year revenue on EPS guidance. Bob will share more of the specifics. It's an exciting time in Agilent with the best yet to come. Thank you for being on the call today. Now I will hand the call off to Bob. Bob? Thanks, Mike, and good afternoon, everyone. In my remarks today, I'll provide some additional details on revenue in the quarter and take you through the income statement and other key financial metrics. I'll then finish up with our guidance for the fourth quarter and fiscal year. Unless otherwise noted, my remarks will focus on non-GAAP results. We are extremely pleased with our Q3 performance. Results were above expectations, and we expect that strength to continue in the fourth quarter. Q3 revenues were $1.72 billion, up 8.4% on a reported basis and up 13.2% core. FX was a 4.8-point headwind to growth, or $76 million. Pricing for the quarter contributed over 3 points of growth year-over-year and improved sequentially. The performance was broad-based as all end markets and regions grew during the quarter. As we mentioned last quarter, the COVID-related lockdowns in China deferred an estimated $50-$55 million in revenue from Q2, and we forecasted that revenue would be recovered during the rest of the calendar year. Our team in China did a fantastic job ramping production and shipments faster than expected following the shutdowns. We estimate over half of that deferred total was delivered in Q3, exceeding our expectations. Given this strong performance, we now expect the remainder will be delivered in Q4, which is an acceleration from our thinking from last quarter. The acceleration of the COVID-related shutdown recovery in China contributed to an already strong Q3 for the company. For perspective, we estimate the total business grew double digits, excluding the accelerated recovery. As Mike mentioned, earnings per share of $1.34 are up 22% from a year ago, representing strong incremental flow-through of the better-than-expected revenue growth. This performance is against our most difficult comparison of the year, as EPS grew 41% in Q3 of last year. Now, let me dive a little deeper into the end markets. Our largest market, pharma, was up 16%, exceeding our expectations. Biopharma grew 18%, and small molecule was up 14%. Biopharma is a focus area for us and now represents 38% of our overall pharma business. We expect that ratio to continue to climb over time. In addition, all 3 business groups grew double digits in the pharma segment, and our LC portfolio continues to perform very well, growing 25% in this important market for us. Chemicals and energy continue to show strength, growing 22% during the quarter, driven by the chemicals and advanced materials segments of this market. We saw strengths in plastics and packaging for chemicals and ongoing demand in advanced materials coming from the markets for semiconductors and batteries. In the food segment, we achieved growth of 11% on top of 12% growth a year ago. Strength in the food market was led by the Americas and China. Our environmental and forensics market also grew 11% during the quarter, driven by the Americas and China. In the Americas, we saw increased funding to support PFAS testing, while China experienced faster-than-expected recovery post the Shanghai shutdowns for GCs and GCMS. The academia and government market grew 5% on top of a 12% comparison last year, in line with expectations. Rounding out the review of our end markets, our business in the diagnostics and clinical market grew 2% against a very strong 28% compare versus last year. While not material at the Agilent level, this market did experience some headwinds associated with COVID-related revenues being lower than last year. Excluding this, the growth would have been mid-single digits in this quarter. On a geographic basis, China led the way with 29% growth, driven by underlying demand and a faster-than-expected recovery following the COVID-related lockdowns. Looking forward, demand in China continues to be very strong. The Americas grew 11%, another strong showing, and Europe grew 6%, which exceeded expectations. Now, turning to the rest of the P&L, our team continues to execute at a very high level. Third-quarter gross margin was 56.4%, up 50 basis points from a year ago, as pricing actions, volume, and productivity helped offset inflationary pressures tied to ongoing supply chain challenges and higher logistics costs. Operating expense leverage, driven by the strong top line and continued attention to cost management, helped deliver very healthy margin improvements. Our operating margin was 27.5%, up 150 basis points from last year. Below the line, our tax rate was 14% for the quarter, as expected, and we had 299 million diluted shares outstanding. Looking at cash flow in our balance sheet, we generated operating cash flow of $326 million in the quarter while investing $82 million in capital expenditures during Q3, driven by our NASD expansion. During the quarter, we also repurchased $323 million worth of shares. We paid out $62 million in dividends in Q3, returning a combined total of $385 million to shareholders in the quarter. Year to date, we have purchased over $1 billion of shares. Given the ongoing strength of the business, we believe this is a very good investment. Our balance sheet continues to remain healthy, with a net leverage ratio of 1. Now, let's move to our outlook for the full year and the fourth quarter. We now expect revenues for the full year to be in the range of $6.75-$6.775 billion. This takes into account our Q3 results and an improved outlook in Q4, partially offset by an additional $40 million headwind associated with the strengthening of the dollar. This represents core revenue growth of between 9.9%-10.3%. We are also raising our EPS guidance for the year to a range of $5.06-$5.08, representing 17% growth year-on-year. This translates to Q4 revenue in the range of $1.75-$1.775 billion. Core growth is expected to be in the range of 10.3%-11.8%, while exchange rates will be a 5-point headwind and M&A will contribute 0.1 points. Closing out our Q4 guidance, non-GAAP EPS is expected to be in the range of $1.38-$1.40, up 14%-16% versus the prior year. This is based on a 14% tax rate and 299 million diluted shares outstanding. The Agilent team once again performed extremely well in Q3, delivering strong results, driving excellent execution, and building a strong foundation for the future. Our diversified business and, most importantly, our team have put us in an excellent position to again deliver strong results in Q4. Now back to Parmeet as we take your questions. Parmeet? Thanks, Bob. Hannah, if you could please provide instructions for the Q&A now. All right. Lee, if you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first question is from the line of Matthew Sykes with Goldman Sachs. Please proceed. Hey, good afternoon, Mike and Bob. Congrats on the quarter. Thanks for the questions. Good afternoon, Matt. Sure. Maybe just starting on LSAG, we had a really good quarter. Just interested to know, 1, what drove the operating margin expansion in the quarter relative to your expectations in last year? Specifically, I know it was broad-based strength across instrument categories, but was there 1 or 2 areas that really surprised you to the upside where you feel is either underappreciated or could see continued momentum in the back half of the calendar year? Yeah. I'll take the first part of that, and we'll jump in and have Bob and Jacob add their thoughts here as well. I think relative to the strength and why the operating margin was so high, is one, I think we've benefited from the leverage impact of having those higher-than-expected revenues. More importantly, we've been working on the pricing side and really ensuring that we are receiving the value for our offerings. Bob, I think we were well over 3 points of price appreciation overall for the portfolio in LSAG, I believe. That's correct. That's correct. We are, as you may have picked up in my script, it was a across-the-board great quarter for LSAG and across all product categories. Jacob, I think a couple really stood out for you, didn't they? Yeah. I think, as we know, we continue to do really well in the LC/LC/MS space, but this quarter is really spectroscopy that was standing out. Especially in our atomic spectroscopy field, we have really seen a lot of momentum based, of course, on the dynamics in the markets, but also the innovations that have been created over the past years. I think we really see the impact of that these days. Yeah. I think it was a real race to see who had the highest growth rate. Spectroscopy, your LC and LCMS, they both did extremely well in the quarter. They were close. Great. Maybe just a follow-up. I know Europe. Sure. Yeah. I thought just say for a follow-up, can you hear me? Yes. Yes. Yes. Oh, yeah. Sorry. Just for a follow-up on Europe, 6% growth. I think getting a lot of questions on just the spend environment in that region. What are you seeing there, and are there any kind of concerns you might have in terms of demand either from the currency fluctuations or just overall demand in certain end markets within Europe? Yeah. Sure, Matt. We posted a 6% growth rate, core growth, in the third quarter, albeit there was actually 2 points of headwind from the containment of our rush operation. It really was high single digit, 8% on a restated basis. Europe clearly is a watch area for us, but we haven't seen any significant signals of movement to the downside. Yeah. I think, Matt, to build on what Mike is saying, I think in particular, we continue to see very strong growth in our pharma business, and that really is a global phenomenon. We also saw very nice growth in our chemical and energy businesses as well. As Mike mentioned, it is a watch area, but the demand from what we're seeing in the health of the order funnel continues to be there. Great. Thanks very much. Thank you. The next question is from the line of Brandon Couillard with Jefferies. Please proceed. Hey, thanks. Good afternoon. Hey, Brandon. Mike, could you elaborate just on the core order growth that you saw in the third quarter? Given the strength of order momentum over the last several periods, how has that informed kind of your initial thoughts on 2023? I mean, should we still think about 5%-7% still being relevant? Then, Bob, should we expect normal 30%-40% incrementals next year? Any headwinds to consider, maybe the new NASD line? Hey, Brandon, we're probably not ready to talk about 2023, but I want to leave you with a couple of thoughts here, which is very clearly, the business has momentum. Even though we had the highest revenue quarter ever for Agilent in this recent third quarter, we still built backlog, both globally and also in China. Our orders exceeded our revenues in those. It sets us up nicely, I think, for 2023, but we'll get to 2023 guidance when we get there. Yeah. I think, Brandon, on your core incrementals, I mean, I think that if you look at historically, that's where we've been. Obviously, we do have some startup costs in 2023 for NASD, and we'll spell those out when we get to the numbers. I don't think that there's going to be anything fundamentally different on an incremental basis going forward. Okay. That's helpful. Then on the NASD Train B line, like you said, it's pushed out a little bit in terms of the launch timeline. Is that 1 or 2 months? I thought the plan was already mid-next year. Could you elaborate a little more specifically on kind of where the supply chain issues, exactly what those are that are kind of pushing the delay? Yeah. I I think you got the right time frame in there, which is a month or 2 It's really been sort of specialized steel that's required. I actually had a chance to see it myself where you go into a room where the steel pipe fitters are working and getting the area ready, and they can't close things off because they're missing 1 valve or something. We've had bits and pieces that have been missing that have actually caused us certain delays. I mean, the team's been all over. I think the global supply chains are pretty well publicized, but we thought we should, in the spirit of transparency, let you know we're still on track for revenue coming out of the facility in 2023, but maybe a month or 2 later than we had thought initially. Yeah. I think, Brandon, there is one more important piece. I think based on what we know today, we still expect to be at capacity at the exit of FY 2023 as well in terms of a ramp-up. Great. Thank you. Thank you. The next question is from the line of Vijay Kumar with Evercore ISI. Please proceed. Hey, guys. Congrats on a really strong quarter here. Hi, Mike. Thank you. Congrats on the print. 1, maybe on the guidance here, in Q4, at the midpoint is that 11% organic. You guys just did 13%. The comps do get easier for Q4. I'm curious, sequentially, when you think about it, is the change just because of the cadence of how the China deferred revenues were recognized more in 3 Qs than Q4? Maybe just talk about the sequential assumptions here for the 4Q guidance. Sure, Vijay. Again, we are very, very pleased with the print. Thanks for the feedback. Bob, we didn't use it in our script, but I think the word prudent may apply to our Q4 guide as well. That's right. Yeah. I think, Vijay, if you think about kind of the moving pieces within China, what we did was we pulled forward some of the revenue that was deferred into Q3, but we also pulled Q1 revenue into Q4. Q4, I would say, didn't have a material change one way or another. We actually feel very good that we're going to realize that full $50 million-$55 million here in the fiscal year versus having it bleed a little into Q1. As Mike said, I mean, we're not out of the woods, certainly, in supply chain challenges and in COVID situations. We thought at this point in time, a double-digit core growth is very good but also prudent, as Mike said. I love that word prudent. Maybe one on that. Some of the moving parts for 2023, Mike, and I'm not asking for a guidance, but if I look at pricing contribution, I think we started the year at 100 basis points. We're running at 300 basis points. I think that pricing should continue until it annualizes mid of next year. You did mention orders coming in about revenues. What is the backlog conversion? Is that a 3-month or a 6-month or a 12-month visibility that you have from backlog? Any impact from NASD, and sorry, on C&E? Very strong, but obviously, with the macro, should we perhaps be prudent for 2023? Yeah. Great question, Vijay. I think I'd like to the headline here was, as the way Bob closed off his prepared remarks, we're building a strong foundation for the future. We had record revenues in Q3, yet we still build backlog. Some of that backlog, obviously, will carry into 2023. It's probably a 3- to 6-month visibility for sure on the revenue coming from the backlog. Bob, I don't know if you do that. We agree with your thesis around pricing and the impact it'll have on our 2023 business as well. Bob, maybe you want to add a few comments? Yeah. The only thing I think you're spot on, Vijay. I would say there's not a material change right now in terms of how we're thinking about NASD. If I think about the various pieces there, they certainly set us up for a good momentum going into FY 2023. Now, there's still some unknowns in terms of kind of the macro environment, but we're expecting to have stronger-than-normal backlog. We certainly have that right now and are expecting to continue that into 2023. Then obviously, pricing is continuing to anniversary, and I would expect it to be a higher contributor to growth next year, all things being equal. Understood. Thank you, guys. Thanks, Vijay. Thank you. The next question is from the line of Puneet Souda with SVB Leerink. Please proceed. Hi, Mike. Bob, thanks for taking the questions. First one, just LSAG, obviously, a very strong quarter. I mean, obviously, congrats on the quarter here. When you look at the 25% growth that you're seeing in LC, overall, the order book being strong, can you maybe just characterize sort of from an end-to-market perspective? It seems like biopharma continues to do well, but geographically, can you just characterize this contribution from biopharma, China, in the quarter? How should we think about this sort of order book? Can you maybe characterize this order book more geographically? Do you expect this, again, in line with sort of some of the other questions, is sort of how should we think about this order book flowing through into 2023? Boy, Puneet, you packed in a lot in that 1 question. We'll try to address it. Sorry, Mike. I was going to say maybe you want to handle that, Bob. I think the answer was really across the board. I mean, both clearly, biopharma and pharma, our portfolio is doing really, really well there. As I mentioned to the team the other day, we just got the most recent Aalto report, which shows market share movements. As my Danish colleagues like to say, it was green as a Danish forest. Did I get that right, Jacob? That's right, Mike. It was across the board, but I think it's the same story holds geographically as well. It really is a nice global story. I think it's more than just pharma. I know you're getting some good C&E growth, right, in the advanced materials with LC, LCMS. We posted some really good numbers in food and the environmental market, which also are big users of LC and LCMS. I think it was really a broad-based story there, if I remember correctly, Jacob. Yeah. Correct, Mike. I think we are really seeing good performance across the board, as you were saying, Mike. And we are also seeing that the customers are really, really interested in our full solutions. I think PFAS is a good example of where we see a lot of interest right now, both right now but also where we see some of the big bills that are coming through in the U.S. where PFAS have a prominent exposure. We expect to continue to see momentum in that space. I think, Puneet, just to build on what Mike and Jacob were saying, I think one of the things you're really seeing come out in Q3 is just the strength and breadth of our portfolio and why we haven't talked about spectroscopy a lot in the past. It continues to be a very important part of our portfolio and solution set, and I think it fits nicely across multiple end markets. The LC and LCMS get a lot of headlines, but we're more than just an LC and LCMS business. Got it. Thanks for that. Just I'll keep it simple from a follow-up. Polymer Standards acquisition, can you characterize sort of what's the contribution this year, and how does that enhance your offering for columns and sort of biomolecules? How should we think about that overall acquisition, overall fitting into the LSAG group? You want to take the first piece of that? Yeah. It's not a material business. We estimate that it's less than $10 million annualized today. That's the 0.1% that we built into our guide for Q4. More importantly, I think strategically, I'll let Jacob talk about the merits of the portfolio and how we think it's going to continue to drive growth for us. Yeah. Thanks for that. We have a long-standing relationship with PSS, so we knew exactly their strengths. We've been very impressed with what they've done in the polymer business for a long period of time. Particularly, our interest was intrigued when we also see polymer science going from advanced material into biopharma, where we see a lot of opportunities. PSS have done a wonderful job using our instrumentation together with their columns and also an informatics pack they have built to really go after a segment of the market and also the expertise in the field. They have more than 500 application notes within this field. We can really leverage that with the strong presence we have across the globe to really accelerate that business opportunity that they have built up over the past decades, really. Got it. Okay. Great. Thanks, guys. Congrats again. Thank you. Appreciate it. Thank you. The next question is from the line of Rachel Vatnsdal with JP Morgan. Please proceed. Hi. Thanks for taking the questions, and congrats on a nice quarter. Hi, Rachel. First up, on China, great to hear that some of that catch-up in China was pulled forward there. Then you also pointed to double-digit growth in the region for that extra acceleration recovery. First off, can you just walk us through specifically what drove that pull forward on the catch-up from lockdowns? Are you seeing an acceleration of demand extra catch-up in China? Then second, how are you thinking about that longer-term growth within China? Could that be a source of upside for the year? Great. I'll start, Bob, here. I'd have to say it was an extraordinary effort of our team in China. I mean, people sacrificed and worked tremendously hard. We had people coming into our factories and living at the factories. They slept and worked at the factories for an entire period of when, before, you couldn't really get out back to your local community. They did that for several weeks, both in our logistics operations as well as our factories. That allowed us to get our global GC production going as well as the import-export of our products as well. I have to say, really, it was an extraordinary effort of the team that made that happen. We're very optimistic about our ability to continue to grow well in China. In Q2, I think we talked about a greater than 20% order rate. We posted a number of 29% growth in Q3, yet we still built backlog in the third quarter in China. I think we're well-positioned for the fourth quarter. Bob, I'd say that probably does represent a level of upside, potentially, if things continue to develop as we hope. The wildcards, from my perspective, are how much money could come into this segment from government stimulus. I know they're talking about some of the things. We haven't seen any specifics. That would be something that would be there on a positive. Again, our demand really is coming from the core private sector, commercial sector around pharma and C&E. We think those things are sustainable. Yeah. Exactly, Mike. I think you mentioned Q2 kind of order growth rate, and Q3 was in that same range. We're seeing very strong demand and been able to do a fantastic job of ramping up that capacity. We expect that to continue into Q4. Great to hear. Last one from me just on the C&E segment. 22% growth is quite impressive, and that growth has really continued to accelerate in recent quarters on that end market. How should we be thinking about that longer-term outlook for C&E, especially given some of the macro dependence on that portfolio? Well, we think that the structure of this market reflects a change over the last few years. Yes, there's still a segment that's tied directly to what happens to the global GDP situation. We highlighted it in my comments. There's secular demand happening here, particularly in advanced materials when there's investments being made in battery technology, more sustainable materials, semiconductors, onshoring of production. We think those trends are here for us for a number of years. I think our view is the sector's probably got a higher growth rate than we viewed it having a couple of years ago because of the secular aspect of growth and C&E. Bob, what else might you add there? Yeah. As you said, I think one of the things that I think is really important. Don't take 2022 and take that and build it into your model because we don't think that growth rate is going to continue. We certainly are pleased with it. But I think the other more important piece is we have a very strong right to win in the C&E business. We're a leader in this space and feel good about our portfolio. As Mike said, this is an area that we are seeing kind of a renewed sense in some of these areas that we do think that has many years to come in terms of investment. I'm going to use the word undisputed leader in this space. I won't disagree. Thanks for the question, Rachel. Great. Thank you. Thank you. The next question is from the line of Derik de Bruin with Bank of America. Please proceed. Great. Thanks for taking the question. This is Michael Ryskin on for Derik de Bruin. I want to follow up on your comments on price. Hey, guys. You sort of indicated that price continues to sort of grow as you go through the year. Is that a factor of the timing of when orders are converted to revenues and when you're recognizing those revenues? Is this just more of a dynamic of that, or is this an incremental price increase that you're building in as you go through the year? Just alongside that, any comments you could take in terms of reception to price, any pushback in any particular areas where you were able to take more versus less? Just sort of give us an update on the pricing dynamic as you go through the year. Yeah. Hey, Mike. This is Bob. I'll take that one. It's the former. When we take price, it takes some time to get through the backlog. We're seeing the price realization from the orders, the price increase that we took back in the beginning of the calendar year. Really, what we're trying to do is cover our costs. We're seeing increased logistics costs and increased material costs. We've taken it across the board, but also recognizing where the costs are higher, we've taken those prices up higher. We haven't really heard any pushback, I think, as evidenced by our strong order growth. We look very closely at cancellations within our order book, and that continues to be very low. I think our customers understand why we're having to raise prices because of the inflationary environment. I think to date, we've been able to actually generate more price than I think we anticipated at the beginning of the year. Okay. Great. For the follow-up, you commented on the balance sheet and sort of getting the leverage lower and lower. I've done a couple of deals here and there in the past couple of years, but they definitely tended to be on the much smaller side. Could you talk about your willingness to lever up a little bit and put a little bit more of that capital at work? If so, what are the types of assets you're looking for? Sort of, are sellers willing to engage in this market, or how are things proceeding on that front, on the BD front? Thanks. Yeah. I think we've been public about being willing to take on bigger deals than what we have had historically. I think we have the benefit of having a very strong balance sheet. We're going to first invest in our business. We think that that's the greatest opportunity, but we're always out on the lookout for M&A. As you said, I would say the pipeline continues to be healthy. The dynamic has certainly changed in the last 9 months, particularly on the public market side. I think there's some good assets out there. It's probably taken a little longer on the private market side, which is where we tend to focus our efforts. I can tell you that we have the beauty of our model is that we have organic growth first, and M&A is kind of an adder on top of that. It is something that we're continuing to look at, and it would be not uncomfortable levering up a little higher than where we are today for the right deal and if the economics work. Absolutely, Bob. Is that a 3-4 times leverage, or? I'm not. That's pretty rich. I think it all depends on what the right asset and what it looks like. Got it. Thanks. Thank you. The next question is from the line of Josh Waldman with Cleveland Research. Please proceed. Hey, Josh. Hey. Thanks for taking my questions. Just 2 for you guys. First, Mike, wondered if you could provide more context on the supply chain situation, how supply and costs have tracked versus your expectations over the last 90 days. Have you seen any relief on supply? It sounds like you built backlog in Q3. Curious whether your fourth-quarter guide assumes any workdown in the backlog given recent order rates. Yeah. I'll let Bob handle the second question, and I'll start with the first one. Supply chain challenges are still out there, but our team continues to do an excellent job navigating them, getting the material that we need for our customers. We continue to have very, very low order cancellation rates. It's something we watch like a hawk. I think we're managing the price changes. I think in the early days of things, we were kind of surprised at what things would cost on the market for chips and others. I think we've now found ways to work that and then offset that with some of the pricing actions that we mentioned earlier. I think, if anything, it's probably trending in a more positive direction, albeit it is still challenging out there. Yeah. I would say on the second question, Josh, I would say first and foremost, demand continues to be very strong in our marketplace. We're expecting order growth to continue into our fourth quarter. As you know, that typically is one of the larger quarters that we have for our sales organization and certainly for our customers as well. That being said, I would expect maybe some slight degradation in backlog just given, again, the deferral that we're talking about within China. Don't interpret that as us seeing anything slowing in the marketplace. Got it. Kind of along those lines, wondered if the group has any initial thoughts on pharma budget flushing this year given the strength in orders from these accounts. Curious at this point if you're getting any indication that maybe the strength in the order book is reflecting pull forward or just not seeing that yet. Yeah. Yeah, Josh. I'm going to pass this call over to Padraig McDonnell. He's the closest to what's going on. As you know, he heads up our One Agilent commercialization in addition to running our ACG services business. Padraig McDonnell, what's your thoughts on that? Yeah. No, I think it's pretty steady. Mike, we're not seeing any pull forward at this point. Of course, the team are very focused on key end markets and workflows where we have the best chance to meet the customer needs. We're seeing a very steady-stage order rate with not much pull forwards. Got it. Appreciate it. You're very welcome. Thank you. The next question is from the line of Jack Meehan with Nephron Research. Please proceed. Thank you. Good afternoon. Good afternoon, Jack. I wanted to ask about the chemical and energy. Good afternoon. The chemical and energy acceleration. My first question is on the chemicals customers. Your commentary sounds pretty bullish. There's certainly been some headlines from some of the big European chemical players that have been a little bit more mixed, though. It would just be great to get your perspective on how you feel about the durability of that customer class and kind of squaring your view versus what we might be hearing from others in the market. Yeah. That may be more regionally specific to Europe, where we did see a level of growth that's a little bit slower than we've seen in the Americas and China. I'd say that's probably more regionally specific. As we mentioned earlier on our call, Europe remains sort of a watch area for us because of, obviously, obvious challenges in that region right now. I think we think it's pretty durable right now. I mean, I think if we remember the chemical pieces going into some of these supply chains as fabs go up and other things, so it's fueling some of the efforts in the advanced materials area. Bob, I know that you and Jacob looked at this a little more closely. I don't know if there's anything else you'd add to that. No, I think you're spot on, Mike. I mean, if we looked across all regions grew in C&E, as Mike, you were saying, but Europe was below the average. I think over time, that investment in some of these areas, we think, is ongoing demand. Great. Then it was only a week ago, the CHIPS and Science Act got signed into law. Not sure if you have any early perspectives as to what this might mean for Agilent, if you could call out kind of the businesses that you think could benefit from some of the funding that's going in. Can you just maybe call out what did the advanced materials business grow this quarter? Thanks. Yeah. I'll let Bob handle the second question. He's got more numbers on the pages than I do in front of him. Relative to the recent enactment by Congress, we see some real upside for us. We actually were just talking about that before this call. I think the big debate is when is it actually going to release? Jacob mentioned earlier PFAS. Well, we can see there's some funding in there for PFAS, which will help our LCMS and GCMS business. Then tied to the chips, both the upstream and downstream side of semiconductor fabs play right into that spectroscopy strength that we mentioned as well. Jacob, perhaps you want to add a few other thoughts? Yeah. I I think, I mean, actually, even though spectroscopy and GC are the big winners related to the CHIPS Act, we actually see across the board. It's both the mass spec business, also the LC and LCMS that Mike was mentioning, and then, of course, a lot of our consumables also. We see a lot of opportunities here. I think both the CHIPS Act, but also the other bill, what's it called? The. Inflation bill. Inflation bill and the inflation bill here. All of them are driving some of our technologies. We see a lot of opportunities in that. Now, it all comes down to timing here. Yeah, the answer to your last question, it was above 30%. Nice. Okay. Super. Thank you, guys. You're welcome, Jack. Thank you. The next question is from the line of Elizabeth Garcia with UBS. Please proceed. Hey, guys. Thanks so much for taking the question. Congrats on the plan. Sure, Elizabeth. No problem. Thank you very much. Yeah. Great. Maybe I just didn't catch it, but I know there was the planned shutdown this quarter for NASD, but just thinking about kind of how we should think about kind of, quote, "this quarter," and then maybe sequentially as we head into the next quarter for the 4 Q? Bob, you and Sam on the tech team on this one? Yeah, we had a planned shutdown this quarter. Expect return to strong growth in Q4 for NASD. Sam, I don't know if you want to add some comments about what you're seeing on the market as well. Yeah. Yeah. Thanks, Mike. Thanks for the question. I mean, listen, it was a good quarter. We had the planned shutdown you already heard about. I want to note that we are very pleased with the trend that we're seeing, that increasingly these very therapeutic oligos that we're working on, that the treatment modalities beyond the more rare indications are expanding into diseases for larger populations. For example, you might have seen just recent news from Alnylam that reported favorable results on their phase III study for patisiran. This is for patients with ATTR for cardiomyopathy. As Alnylam's supplier for the API and patisiran, we're, of course, excited. We also think this is indicative of just generally the trend that we're starting to see in the promise of therapeutic oligos. Our book of business remains strong as we go into the quarter and as we will go into next year. Yeah. Hey, thanks, Sam. Perhaps you should have elaborated a little bit more, Elizabeth, on the routine. I think it's also important to understand why we were shutting down, right, is both for routine maintenance, but also as a critical milestone in the construction of Train B. We tied the infrastructure together. That's why we were speaking with confidence about our ability to get revenue in 2023. Great. Great news. I guess just one more for me staying on the theme of kind of biopharma. You've announced the collaboration with APC for real-time process monitoring. You also had an announcement, Merck's, around downstream PAT. It would be great to kind of get your thoughts around this space and kind of the work you're doing here. Yeah. Yeah. I'll make some high-level comments, and then maybe JV, you want to provide some specifics as well. We love this space. We've been putting in a lot of our investments over the last several years targeted at the biopharma space. You see it reflected now in the growth rates and actually how we're shifting the mix of our pharma business, both in the lab but also plays outside the lab. Jacob, I know you got a lot of interesting things happening there. Yeah. Thanks for that, Mike. We are very interested in the bioprocessing space, especially from the analytical instruments perspective, where we truly believe that instruments will start to move into the manufacturing. Historically, we have had in the small molecule space the QA/QC sitting in a different lab. Now we see the opportunity to bring at-line/online LC and LCMS technologies into the bioprocessing space itself or manufacturing space itself. Hence, we have decided and we have made collaborations with leaders in that space, Merck being one of them, where we're developing, of course, based on our individual strengths, new solutions to address that. We're looking at multiple partnerships in this space here, and we are really bullish around that. Great. Thanks so much. You're quite welcome. Thank you. The next question is from the line of Patrick Donnelly with Citi. Please proceed. Hey, guys. Thanks for taking the questions. Hey, Patrick. Sure. Mike, maybe one for you. Hey, how are you? Sure. Maybe one for you just on China specifically in terms of the linearity of the quarter. Can you just talk about, I mean, it sounds like things clearly picked up as we went, obviously, on the supply side. You guys kind of got back online. Can you talk about the demand environment as well? Obviously, you guys are the only ones who have kind of a full July in the quarter. So just curious what kind of ramp you saw throughout the quarter. Then again, as we work our way through August here, I mean, it certainly seems like the order growth has been encouraging. Maybe just talk about how things trended there throughout the quarter and kind of going into this quarter. Yeah. Great. Great Great. Great Great. Great question. Yeah, sure. Happy to do so. I think it's a great question. I'll parse my response into 2 areas, orders and revenue. I think I would say the order intake throughout the quarter was there. It was linear, smooth, no big lumpiness. In fact, that's what we saw in the second quarter as well. Now, as you know, the revenue side has been a different story because the ability to get product in and out of China as well as produced in China was affected by the COVID-19 shutdowns. That's where we saw maybe a slower start, the first few weeks of Q3. Then the team's efforts really started paying off when we were able to get back into our facility. I think the ramp rate of the revenue looked a little different profile throughout the quarter. Bob, I don't know if you had anything to add? Yeah. No, that's exactly right. I mean, if you think about the months in our quarters, May was very light. As we talked about, we were ramping up. I think we exited May at like 25% capacity. The teams really started kicking it in gear as the COVID restrictions started to ease. July was very strong as they not only got the production up to full capacity, but then were able to not only satisfy existing demand, but also some of that deferral and bring it in. They were really focused on meeting the expectations of our customers who wanted the product. As I mentioned earlier in my early comments, we had teams working a lot of overtime, working in the factories over the weekends. It was really some heroics that got us back on track. Yep. It's encouraging to hear. Bob, maybe one for you just on the margin side. You talked about pricing a few times on the call. Can you just talk about, I guess, the flow-through to the margin side? You basically said it's offsetting some of the increasing costs. Maybe just talk about the give and take on that front in terms of the pricing increases, the cost increases, and how we should think about kind of that algorithm going forward on the margin piece? Yeah. I think if you looked at our 150 basis points year-on-year, it was roughly 50 basis points in gross margin and then 100 basis points in leverage on the SG&A OPEX side. I think if you looked at that, if there was some productivity, as I mentioned, price probably would have kept things flat. Then the other 50 basis points were a benefit of some productivity that the OFS team did and then the volume. That's the thing that, I think, really helped drive a benefit in gross margin is just the amount of product that was able to be produced through the factories. I think about pricing as covering our costs. Then if those incrementals around better-than-expected revenues drove the margin improvement on the gross margin side. What I would say is we continue to leverage the OPEX side to drive our productivity as a company overall. Helpful. Thank you, guys. You're welcome. Thank you. The last question is from the line of Timothy Daley with Wells Fargo. Please proceed. Hey, everyone. Thanks for the time. Sure, Tim. Just quickly, I wanted to touch back on NASD here. If we're just thinking about when we're past the Train B buildouts, things have kind of normalized a bit. You're starting to leverage those investments and upfront costs here. What's a clean run-rate margin profile to think about in that business, I guess, initially when we get past that capacity buildout period? Hey, Tim, that question brought a smile to Bob's face. I'll let him answer that. I would say very good. Leave it at that. Well, the company average, right? Yes. Yeah. All right. I can work with that. Then I guess just a quick one here on capital allocation. Another strong quarter of buybacks. Just thinking about the go-forward outlook, how should we be sizing this in our heads? The $1 billion you've already hit in 2022 with a quarter left to go. Is that a good base for the out years? Just kind of general thoughts on the capital allocation hierarchy as some assets are probably getting a bit cheaper and more attractive here. Yeah. I mean, I think our methodology really hasn't changed. I think what we do is invest for growth first internally, and then we look for value accruing M&A. If there isn't anything imminent, we're also not going to keep cash on the books. If I looked at historically, we've generated roughly 2% of earnings per share growth kind of below the line through share repurchase. I think that that's probably a fair way to look at it going forward. In terms of to be very clear, our priorities are investing for growth internally and then M&A before we would do share repurchases. We're also committed to continuing to grow our dividend as well. All right. Great. That's it from my end. Thank you. You're quite welcome. There are no additional questions waiting at this time. I will turn the call back over to Parmeet for closing remarks. Thanks, Hannah. Thanks, everyone, for joining. With that, we would like to wrap up the call for today. Have a great rest of the day. That concludes today's call. Thank you for your participation. You may now disconnect.