Episode summary
Agilent: Back To The Lab - [Business Breakdowns, EP.223]
Business Breakdowns
· · Hosts: Matt Reustle · Guests: Mark de Vos
![Agilent: Back To The Lab - [Business Breakdowns, EP.223] – Business Breakdowns](https://i.ytimg.com/vi/m8p5hGQljOQ/hqdefault.jpg)
Summary
Agilent is presented as a $30 billion laboratory tools company built around instruments, services, software, and consumables used to identify what molecules are in a sample. The business serves pharma, diagnostics, chemicals, food, environmental testing, academia, and government, with pharma as the largest end market. Mark de Vos argues that the appeal is not just the instruments but the recurring revenue from consumables and service contracts, which create a durable razor-and-blade model in regulated settings.
The episode traces Agilent’s lineage from Hewlett-Packard’s 1938 origins through the 1999 spinout and later portfolio reshaping. De Vos says the company is now far more focused than the old HP collection of assets, with its remaining business centered on analytical equipment for life sciences, diagnostics, and chemicals. He highlights chromatography as the core technology, especially gas chromatography, where Agilent is the clear leader and holds roughly two-thirds of the global market.
A major theme is how stable the franchise has been despite cycles in pharma and China. De Vos says revenue has grown about 5% organically since 2015, EPS has compounded much faster, and the service attach rate has been steadily rising. He also points to newer growth in nucleic acid solutions and oligos, plus emerging testing demand around PFAS, as potential upside drivers.
Key takeaways
- Mark de Vos says Agilent’s business is roughly one-third instruments and two-thirds recurring consumables, service, and software.
- De Vos says Agilent leads gas chromatography and probably has about two-thirds of the global market.
- Since 2015, De Vos says sales have averaged about 5% organic growth and EPS about 13% CAGR over nine years.
- De Vos says Agilent’s service attach rate has risen from the high-20s to the low-30s, with room to keep climbing.
- De Vos says PFAS testing is now a $400 million market growing about 20% per year, where Agilent is the clear leader.
Notable quotes
“Agyant is a leading provider of instruments, services, and consumables for labs”
“its core use case is to tell you what molecules are in a sample that you're testing”
“about a third of it is selling instruments. The largest category of which is chromatography instruments”
“it's gone over the last five years from a sort of high 20s number to a low30s percent and we expect it to continue to grow about a percentage point a year”
“Gas chromatography is the golden business within agilant. That's obviously where it came from”
How the episode opens
This is business breakdowns. Business breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick.
We believe every business has lessons and secrets that investors and operators can learn from and we are here to bring them to you. To find more episodes of breakdowns, check out join colossus.com. All opinions expressed by hosts and podcast guests are solely their own opinions.
Hosts, podcast guests, their employers or affiliates may maintain positions in the securities discussed in this podcast. This podcast is forformational purposes only and should not be relied upon as a basis for investment decisions. This is Matt Russell and today we are breaking down Agyant.
If you aren't familiar with Agyant, it is a $30 billion market cap company at the time of this recording and they focus on one of the more interesting niches, equipment and instruments sold into laboratories. So you can think of this equipment being sold to the life sciences sector, diagnostics, applied chemical markets, some very unique R&D work. My guest is Mark Dvas, fund manager at Troy Asset Management.
And Mark brings us through the story of Agelant. This is something that was born within Huelet Packard, spun off a little more than 25 years ago. And Mark helps break down what can be a very complicated concept around things like cromatography and some of the other things that Agyant's involved in.
But this is a deeply ingrained industry player with a unique razor and razor blade model and a business that has evolved over time. These episodes tend to be my favorite and this one lives up to the others. Please enjoy this breakdown of Agyant.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- agilent business breakdown
- laboratory instrumentation
- chromatography
- life sciences and diagnostics markets
- investment thesis and valuation
Companies and tickers mentioned
- A
- HPQ
- HPE
- Agilent
- Hewlett-Packard
- Troy Asset Management
Watch the episode
Watch “Agilent: Back To The Lab - [Business Breakdowns, EP.223]” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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