Get started here. I'm Puneet Souda. I cover life science tools and diagnostics here at Leerink, and it's my pleasure to be hosting Dr. Udit Batra from Waters, Caspar Tudor. Thank you, Puneet. Thank you for being here. Thanks for taking the time. I think the time won't do justice to it because there's so much information you provided at the Investor Day and really great perspective at the Investor Day. I think I have to say, you know, congrats to Amol too in putting all the details on the numbers and providing a very, very, very in-depth view of the business and how you think about and what you're calling as idiosyncratic drivers. Maybe I'll kick off with the first question around the high single-digit plus growth. I mean, as I said at the Investor Day, you know, it's not lost on anyone that this is a tough backdrop for market and you're delivering in that. Your peers are projecting somewhere around 1%-3% type of growth, and you're doing high single digits, again, very impressive. Just given that context, maybe just help us understand what could be potential, what is the potential for upside there, or what are some of the things that you're looking out for and that gives you that thought about keeping prudence at least for 2025? Lots in there to unpack, Puneet, as usual, but thank you for having us. And a big thanks to Caspar and the team for setting up the Investor Day. There was a sufficient level of detail, perhaps too much in some places, but excited to sort of continue to build on that story. Look, we guided 4.5%-7% on the top line. I think that's where your question is for the full year. And to sort of address your last question first, why do we, having exited the year at 8%, why have we range bound it to the high at 7%? I mean, recurring revenues are between 6% and 7% no matter what the economic environment. So it's all about instruments, right? And instruments have to do 4.5% for us to hit the midpoint of the guide, which seems okay. Your question is, hey, you know, given it was high single digits at the end of the year, why not higher? Number one, we want to get constructive as the year goes along. Q1 is the smallest quarter, and I think the point's not lost on anyone that it's a pretty volatile environment, and we want to take some time to sort of get the runs on the board, and then we'll claim the data point, and then we'll go to the next one, then we'll go to the next one. I would rather do it that way. Now, to your question on the midterm projections on high single digit or high single digit plus, I mean, the first driver is the replacement cycle, and anytime you start the replacement cycle, there's a 2%-3% outperformance versus the 5% average of instruments over the long term. That's 100 to 150 basis points on the overall company, and that's what we showed at the Investor Day. This time around, we feel the replacement cycle will be a bit prolonged, right? It might not peak as high, but it will be prolonged given there are several segments that are not yet starting to recover, right? Drug discovery, biotech, CROs, and if you look at China, which was our largest market for a long period of time, especially for a number of LCs, that's still going to be a low single digit to mid single digit grower. I think reason to believe that it's a prolonged cycle on the replacement side. I'll take one example, and then you can poke at others where, yes, there is a bit of prudence built in, right? For instance, in GLP-1 testing, we've assumed 30 basis points of accretion, and that's only accounting for our market share and our development with the two large GLP-1 producers. It does not include any contribution from orals where we have a very good share. It does not include any contribution from semaglutide genericization, and you can argue where that should be, but if it's outside of India, it could be in Canada and in Brazil, and that should be in the GLP-1 number. There is reason to believe that this could be better, and I think that's at the heart of your question. In each of the different drivers, what you'll find is we've taken the set of facts and given it a bit of haircut just to find the data point in the rearview and then claim victory. As far as the competition is concerned, and I said this at the Investor Day, I mean, our competitors are world-class. They're very, very strong, and we learn a lot from them just watching them, and they've implemented systems and processes that we're just starting to implement, right? There's a lot to learn. You'll never find me saying, well, this one's bad and this one's bad, and we're doing this better and we're doing this worse. We're in a very good environment where we can learn a lot from what they've done. No, that's a very helpful perspective. The question that I've been getting since the Investor Day is, well, it's great that the near to medium-term high single digit plus growth outlook, again, lifted by this upcycle in instrumentation, but there is a question a bit about longer term after that. In this new era of growth, is that sustainable afterwards, or is there a view that Waters would revert back to that sort of mid single digit plus type of growth profile? I think you just have to look at the individual drivers, right? Let's take them in turn, right? We said biologics, bioprocessing, and bioanalytical characterization will be 40 basis points accretive. That is accounted for alone by Wyatt, and the fact that 50% of the pipeline is going to be biologics, I don't see that slowing down, right? Second, if you look at Indian generics, we've said 70 to 100 basis points of accretion. Let's just take the last five years. Last five years, roughly 15 blockbuster small molecules have gone off patent. Over the next five years, this number is going to be 21 with a higher total volume per molecule going off patent, right? In the last five years, India has grown in the high teens for us under the leadership of Anil, who you've met as well. Over the next five years, we've assumed for that 70-100 basis points to come true, that number just has to be low teens, right? So there is a bit of prudence built in, and there is at least line of sight for the next five years on even these two drivers. Take PFAS testing now as a third one. The last two years, we've grown roughly 45%, where the markets, according to many others, has grown 20%. We're assuming that it grows 20% over the next few years for 30 basis points of accretion, right? And PFAS testing, I think it's safe to assume people want clean water and safe food and want their consumer products not to have PFAS in them. We don't expect the regulations to be rolled back. Again, going back to the Investor Day, we showed that across the globe, the water testing regulations have been implemented, but food testing, potable water testing, consumer testing have not yet been implemented, right? It is not just a U.S. story, even if regulations change in the U.S. The rest of the world has also caught up, right? Packaged goods export in India require PFAS testing now. In Japan, two prefectures have now implemented PFAS testing. There is a lot more to go. In Europe, food testing regulations are much more stringent than the United States. For PFAS testing also, there is a long-term secular driver. For these particular drivers, and there is a reason why we highlighted them, we said replacement cycle is transient, whereas these four to five drivers are now consistent at least for the next five years. Got it. I want to come back to the PFAS question, but maybe just on the replacement cycle, which is more near term and, as you said, transient. Obviously, the numbers you laid out are replacing your own install base. How should we think about any share gains in that process itself? I think very difficult to think of share gains and replacement, not because the Alliance iS is by far not the best instrument. In the QC setting and late-stage development, customers are very reticent to change anything because it's a file drug or it is in the drug master file. The instrument is, the chemistry is, the software is, the methods are. You do not change that, right? I have personal experience with this. When I joined the company four and a half years ago, Waters had been trailing in growth to some of our competitors, and I said we lost market share. As I dug in deeper, I realized that none of the Waters instruments had been replaced by an Agilent or a Shimadzu or somebody else because customers are reticent to change a vendor unless you abuse them, unless you do something crazy. These instruments work fine, right? They might not be Alliance iS, but they work fine. People are not ready to replace instruments with another vendor and take undue risk. They're willing to do it if it's a new use, if it's a new manufacturing site, and you prove to them that they have a better value by using Alliance iS, by reducing errors by 40% versus any other LC in the market. They are then open to replacing their instruments with an Alliance iS, and there we've been winning more than we've been losing. Got it. Okay. I think different ways to think about it. Unfortunately, Puneet, the other challenge in the tools industry is you do not have a third party that reports market shares. When you compare one peer to the other, I mean, our nearest competitor is double the size of our company, and they have a much larger instrument portfolio. They have some other pieces of the business. By the time you sort of break it down, there are so many assumptions. The best way to look at it for us is we basically look at the overall growth rates, and there are choices embedded in that overall growth rate. A few years ago, we were told, hey, you are a small molecule company, and you shall grow only like this, and there is no innovation in small molecules. The Alliance iS shows you that there's a lot more innovation to be had in small molecules. There's a lot more innovation to be had with our informatics software Empower. A lot more innovation to be had with chemistry, even in small molecules and now in the large molecule space. I think the overall growth is a resultant of execution, commercial innovation, etc., but also portfolio choices, right? We suffered from that for a little while, and I think we're benefiting from that at least in this short period of time. Got it. No, that's a super helpful perspective. One, I wanted to touch on pricing, and as you laid out in the algorithm, it's 100 basis points incremental contribution that you expect in that high single digit plus number. You know, if I recall Waters, even back in the day as a customer, Waters was and is a premium product in the marketplace, a strong brand recognition there that supports it. That's my question, you know, how does that premium product continue to push the pricing higher? Maybe help us understand that. I think the two answers to the question, first, just looking at the facts, right? There is Part A and Part B. In the last four years, we have passed on well above the 50 basis points we used to in the pre-pandemic era. Part B, it is all well and good to talk about price increases. It is more important to show it in your bottom line. In 2023 and 2024, with a slowing economy, we were able to take the margin and take the pricing and have it flow through the P&L, right? We were probably one of the only ones in the industry to be able to do that. I think to me, it is once in a while good to look at the facts, right? The facts suggest that it is possible to do. Now, going forward, what is the conceptual explanation? That's what you're after. Let's keep it very simple. Our chemistry portfolio is differentiated, right? We showed again at the Investor Day, as you look at 50% of the pharma pipeline, it's large molecules, and large molecules are not all created equal. They range from 150 angstroms or 15 nanometers in diameter, which is proteins and peptides, small proteins and peptides, to all the way to lipid nanoparticles, which are 8 times the size, eight to 10 times the size, which is about 2,000 angstroms or 200 nanometers. All of these require very specialized chemistry and material science, right? They require the morphology of the particle that you're using to separate these molecules to be matched to the size of the particle, and the chemistry on the surface has to be modified to be able to entrain that molecule in the column that you're using to separate it, right? That requires very significant skill, which our customers recognize. You say, why is he telling me all this story? It is complex. It is difficult. Not many people in the world can do it. You can pass on pricing to the customer, and they accept it, right? We pass on roughly 5%-10% increase in price every year on chemistry, and customers happily accept it, and they say, look, great, there's no other choice. This is the best product in the industry. You're the only ones who are able to help me separate this, and you're collaborating with me day in, day out, and there's a 100% stick rate on that 5% price increase, right? That's already 100 basis points. On service, we have the highest attachment rate in the industry. That's about 40% of our business, right? There too, we get about 100 basis points of pricing fall through. You're starting with 200 basis points, and that's a gift that the headquarters and the innovation team gives to the regions. We say, guys, you start with 200. You have to deliver at least 150 by the end of the year. Do not lose more than 50 basis points on instruments. There we have a lot of systems and processes, so there's not illogical behavior in reducing price for a premium product that is giving you sufficient levels of service, right? Just with service and chemistry alone, we get 200 basis points, and you just have to protect the instrument pricing. There with a differentiated portfolio over time, we don't expect that to be a challenge, right? That's the logic behind the 200 basis points. That's 150 basis points incremental that we think we have line of sight on, and we say, you know what, we'll commit to 100 basis points. Yeah. No, that's excellent. The point following up on that, it's a good segue into the chemistry question that I had, and part of it you addressed at the Investor Day was not all recurring revenue is truly recurring, you know? There is differentiation when you get into the QA QC stage. Maybe just briefly touching on something that was said at the Investor Day in terms of the chemistry itself. You have vertical integration across chemistry, and that, I believe, was an important point when you showed the chart of chromatogram showing a differentiation that helped you win that share, right? Maybe talk to me about that. Yeah, no, that was a very geeky slide, and I insisted with Caspar that I want it in my slides, and I want to show people why our chemistry is so differentiated. He said, you lose people. I said, I don't care. Somebody like Puneet will ask again. The chart basically simply said, if you have an impurity in a sample, you want to detect it and detect it differentially from the new molecular entity, right? A chromatogram is just two peaks or a set of peaks. One peak corresponds to the molecule of interest, and another peak corresponds to an impurity, right? You don't want impurities in your samples, right? The FDA says your impurity level should be less than 0.5% in a sample. What happens with many large molecules is these two peaks merge, right? They merge not because there is no differentiation between the species that you're trying to analyze and the impurity. It's because your separation method is not sensitive enough to separate those two things. This is exactly what was happening with Eli Lilly with their GLP-1s. They had a sample where they had the peak of interest, and then they had the impurity that was merging into the peak. People were not sure how much impurity was present in the sample, right? They basically were running batch to batch, and they were getting different results from the same manufactured batch, but using different columns, right? The variability was in the columns of the manufacturer. They told us, they called us, and they said, can you guys do better, right? We came in, there was a three-month head-to-head race between us and another manufacturer, and we were able to show that we can increase the resolution and separate the impurity from the molecule of choice. That showcased what having vertical integration and deep capabilities allows you to do. We have complete control on the value chain of columns we produce, and columns basically have little particles that you have to synthesize. You have to modify them. You have to change the chemistry on the surface. You have to pack them, and the steel tube that they're packed in requires a certain type of functionalization. Most companies do not do this whole process internally. They sometimes outsource the particle manufacturing. Sometimes they outsource the functionalization. Sometimes they outsource the packing. We do all of it in-house. We have exquisite control on the separation that the columns that we produce and hence the separation that our customers demand. Long answer to your question, but it highlights what the chemistry capabilities and again goes back to pricing, right? Why our customers are willing to pay a premium for such capability and such collaboration. Customers, Lilly visited the plant. They went to Ireland. They went to Taunton, Massachusetts, where part of the value chain is. They talked to our experts, and they said, do you guarantee? And we said, yeah, within reason. We guarantee that you'll be able to see variations in your sample that are sample-led and not column-led. Yeah. No, that's excellent. Thanks for walking us through that. Maybe just switching gears to maybe a bit of a high-level question that we continue to get from investors on China. In the model, I believe you had, that's where there was some offset for China. Talk to us about, you know, when we recently had the news of 30% more stimulus beyond the CNY 1 trillion in China. Is it because of the portfolio you have in China? Is that the caution? I mean, it seems like tools companies should benefit from that stimulus. I think again, worthwhile just looking at the facts, right? China for us in Q4, unlike many of the companies in the sector, China grew, right, instead of declining, right? China grew for us in Q4. We've assumed that 2025 will be similar to Q4, basically low single-digit growth, low to mid-single-digit growth, including a modest impact of the stimulus. Now, why modest? There is line of sight on pretty significant number of orders, but orders' conversion to sales has its own timing. We would rather look at it in the rearview mirror and say, yes, it was higher than what we told you or what we assumed than committing to something and then it disappointing all of us, right? There is line of sight on orders. It was very good at the end of the year. We were winning more than our fair share. I'll remind you that our business was mostly pharma in the past, right? Now there's a bit more industrial. We've expanded our distribution. We've localized our production. We're competing very well for our fair share. I would rather look in the rearview mirror and say, hey, this is what the impact of the stimulus was. To your point on $1 trillion or $1.3 trillion, $1 trillion is a huge number in itself. $1.3 trillion is even better. It's very difficult to reconcile that $1.3 billion with what is being doled out to the individual segments that impact us. We know there is an impact. We know provinces are having procurement processes. Government institutions are. Now, food companies are. We're participating in those. If you ask me to reconcile the $1.3 trillion to how it's being doled out in the economy, I don't think it's straightforward to do. Yes, it's interesting headlines, but the reality on the ground is that there is stimulus, but the reconciliation is virtually impossible. Coming back to PFAS, obviously an important driver in the space. Some of the companies are putting up strong numbers as well. What I would love to understand is when you look at Waters' sort of premium products in the marketplace, environmental labs are sometimes more cost-conscious. They are looking at their margins as well. Maybe just help us understand where you continue to see, in what part of that PFAS testing and what type of labs, where you continue to see traction. I think taking a step back on PFAS testing, for the last two years, we've grown roughly 45%, right? Market reports suggest the market is growing 20%. Others are claiming they're growing at a similar rate. I cannot tell, but we've grown 45%. We have to grow roughly 20% for it to be accretive by 30 basis points for us this year, next year, the year after. The reason we win is because of the full portfolio that we offer, but most importantly, the fact that the Xevo TQ Absolute that we launched as a mass spec is the most sensitive instrument in the industry. Currently, the EPA requires testing of water, and I think you were at the Investor Day where one of our experts talked about this. The EPA requires one to 100 parts per trillion of impurity to be detected. Our instrument can detect 1 part per quadrillion. If you sort of want to look at that math, that's six orders of magnitude more sensitivity. The sensitivity requirement is continuing to increase. By that, I mean it's going to go 1 part per trillion and then 1 part per 0.1 part per trillion, then 0.01 part per trillion. The sensitivity requirement continues to rise, and many of our customers don't want to have to purchase new instruments each time the sensitivity requirement increases. They are leaning towards the most sensitive instrument in the industry, right? That's the number one reason. That is, of course, armed with a very wide range of sample prep and automation and a software just like Empower that has the ability to submit data with a complete audit trail, right? That full solution is now embedded with our customers with a great service team, right? It is the same model. It just happens to be in the PFAS testing arena as opposed to QA/QC, and we have the most sensitive instrument in the industry, which is making a difference, right? We win more than we lose. I think two out of every three head-to-head tenders that we are in, we win with the instrument. That's great. That's a great segue. Given the time, let me ask the question on Empower. Sometimes I say to investors, Empower is the power, and it has delivered quite a dividend for you over the years. Maybe just talk about how you see Empower positioning in the new biologics world as you emerge. What are the capabilities that Empower needs to have to serve that market? Maybe a broader question there is in terms of molecules. These molecules are getting complex. They're larger. Maybe mass spec or LC maybe is not the most perfect solution when we start to get into cell therapy and gene therapies. Yeah. Empower has been the razor in the razor razor blade model, right? It has not nearly been monetized to the level that we would like to monetize it. The first step is in taking the existing infrastructure, the existing commercial relationships, and changing the charging model from an on-prem to a subscription model. For those of you who want to learn about that, go to any IT company, go to Adobe, go to PTC, go to Veeva. You'll see that they've made this transition, and that increases and makes the cash flows much more predictable. Now, to your question on the technical side, Empower is relevant to large molecules even today. It's basically compatible with a certain set of instruments that are more prevalent in their use for smaller molecules, right? Today, you can take UV data. You can take mass detection data. You can take capillary electrophoresis data that a competitor of ours supplies. That data is compatible with Empower. As complexity of molecules rises, other instruments are required, like flow cytometers, like mass spec, like light scattering. All of these now have to become compatible with Empower, and we are spending a lot of time and energy doing it. Multi-angle light scattering with the acquisition of Wyatt will now be compatible with Empower in the middle of the year. Customers have already signed up, and that's a barrier for it to get into QC, right? Light scattering can get into QC much more simply now. I'm not saying it will as a consequence, but the barrier's gone. The same thing is true with mass spec by the middle of next year. There are several other instruments in the lineup that we will bring in. We want to make the current version of Empower compatible, and then we want to raise the technical content in Empower, basically taking it from an on-prem software to a subscription software and then to a SaaS model, right? There is a bit of technical work to be done first to make instruments compatible and second to increase the or modify the tech stack to make it a SaaS-compatible software. Okay. Just given the time we have, let me just ask you quickly on BioAccord. What's been the traction there, and when do we see that getting specked in? BioAccord's been doing reasonably well. I think the challenge again is lack of compatibility with Empower for it to enter into QC, right? That's expected sometime in the middle of next year. I would not expect a massive inflection point, Puneet. This is a highly conservative customer base. Things have to start in early stage in development and then stay with the molecule downstream. That's where we've had a lot of success with BioAccord. BioAccord is now used for raw material characterization. It's used for cell line development, which we had not anticipated when we launched it. It is now in late stage development and in a couple of companies' drug master file. As those companies move it into the launch phase, you'll start to see more come in. I would expect it to be a slower build as opposed to an inflection point. More gradual. Okay. All right. This is great. Thank you again. Thanks for the time here and really insightful discussion as always. Thank you, Puneet. Thanks for having us.