Padraig McDonnell
President and Chief Executive Officer at Agilent Technologies
Thank you Parmese and thanks to all of you for joining today's call. As you saw in our press release, we had a very solid start to the year, exceeding our expectations for core revenue growth and EPS before diving into the details, I want to first follow up on conversations I had with many of you starting at our Analyst Investor Day in December at the New York Stock Exchange and provide an update on progress of our Ignite transformation. We've stated that Ignite is for our customers, employees and shareholders.
For customers, we want to create a seamless experience across Agilent products, software and services. For employees we want to become nimbler and reduce complexity to enhance our ability to serve our customers and for shareholders we want to deliver industry leading shareholder value through differentiated growth. We have set targets to grow core revenues between 5% and 7% annually, expand our operating margin by 50 to 100 plus basis points per year and deliver double digit EPS growth.
Right now I want to share three notable accomplishments from the Ignite transformation that focus on setting new pricing mechanisms, elevating our digital ecosystem and identifying procurement opportunities. First, the creation of an enterprise strategic pricing organization that will focus on setting our standard approach for pricing across the entire solution set with the customer and not just at a tactical bottoms up product level. Second, our digital ecosystem, a critical enabler in our evolved strategy we unveiled at Investor Day, continues to be a key area of investment for us.
Already we have made meaningful improvements to our website, upgrading the user experience on our E Commerce platform by making it easier to find and purchase the products our customers need, helping driving top line growth in Q1, our progress continued with digital orders growing high single digits and third, our procurement teams have challenged our historical approach and are identifying significant cost saving opportunities in many of Agilent's functions. Also related to our Ignite transformation, we are assessing our organizational health. On my first day as CEO, I promised our employees we would become a nimbler organization to make decisions faster and accelerate innovation in service of our customers.
As a result, we are removing some management layers and increasing spans of control. This is a continuation of our new organizational structure we announced in late November. Through that reorganization, we're seeing our business leaders in lockstep on our strategy and transformation.
This alignment enables us to make better decisions faster on priorities and trade offs. As my leadership team and I look forward, we are focused on growing Agilent. A foundational element of growth is innovation.
Innovation that our customers want. Every time I visit a customer in any part of the world, they say the same thing. They want to partner with Agilent for better outcomes.
That's what differentiates Agilent the deep scientific knowledge of our customer facing team members that our competitors simply can't duplicate. Customers want everything from the ability to parse massive amounts of data in seconds to automating more tasks so they can focus on complex scientific challenges. In essence, they want to increase their productivity.
That's why driving lab productivity is among our key priorities. You can see evidence of this in our collaborative agreement with Zurich based ABB Robotics to produce automated laboratory solutions, ones that will help our customers find new ways of improved workflows and make operations more efficient and flexible. These are customers across multiple markets including pharma, biotech, energy and food.
Together with abb, Agilent can transform the customer lab operations by making workflow processes for research, development and quality control faster and more efficient. The goal is for all instruments, robots and software to be interoperable with which is crucial to significantly boosting productivity for our customers. Our customers want to buy whole product solutions, not just a single instrument.
To illustrate that our Infinity Tree series that we introduced in October has seen great adoption from all our customers. As a reminder, the Infinity Tree has an advanced automation that simplifies our customers daily routines and is compatible with previous generations, which allows for seamless upgrades and technology refreshes. And that has become a differentiator.
Customers are saying that the backward compatibility combined with the modularity of the Agilent systems allows them to decide how to upgrade and refresh their instruments. Plus they're telling us that they're choosing Agilent because of our long standing quality and technology leadership that's been further enforced with the Infinity Tree. The Agilent Infinity Lab LC solutions are certified by Migree Lab.
These instruments optimize lab space and they reduce water, solvent and energy consumption while also minimizing waste. We continue to see strong momentum and growth in our sales funnel for the Infinity Tree because of its advanced automation that empowers our customers to be more productive and because of Infinity Lab Assist, our automation software that provides onboard intelligence so our customers are not simply buying a platform, but a whole product solution. Just as exciting is that the great success of our Infinity Tree provides Agilent an incredible opportunity for us to upgrade our customers instruments and it's already happening across our legacy LT platforms, representing an opportunity in the hundreds of millions of dollars over the coming years.
Now I'd like to highlight some key aspects of our Q1 results. As you can see from our press release, we drove top line year over year growth while macro market Trends such as CapEx spending continue to improve. Our revenue of $1.681
Billion increased 1% over the same quarter in FY24. This result exceeded our expectations and was led by excellent growth in PFAS and capturing an outside share of the China stimulus awards. Our instrument book to bill was greater than 1 in Q1 a quarter when it's typically less than 1.
This is another sign of market recovery, but more importantly it's a testament to our intense customer focus with products such as a highly successful Infinity Tree and our success driving our market leading position in China. Additionally, we exceeded expectation in all regions and end markets except for academia and government. In our end markets, revenue was led by food which grew 9% driven by our success in capturing stimulus orders in China.
In China, our accelerating share gains were apparent in recording a win rate of more than 50% on stimulus related tenders. With our long history in the region elevated by our local manufacturing capabilities, we are well positioned to expand our market leadership in China. Now let me talk about our businesses and some growth factors in each.
Our Life Science and Diagnostics markets group grew 1% in the quarter reporting $647 million. Performance was driven by a nice result in our LC and LC Ms. Instruments which grew high single digits during the quarter on the heels of our Infinity Tree launch.
Within ldg, we remain focused on the integration of Bio Vectra and we are delighted by the response we're hearing from our existing and potential customers who are interested in leveraging Bio Vectra's unique capabilities and Agilent's expertise. It's clear that BioVectra's capabilities are in the sweet spot of tremendous markets with a terrific growth potential. The Agilent Cross Lab Group grew 3% reporting $696 million which was in line with our expectations, led by services.
We are especially excited about the new ACG that now includes services, automation, consumables and software and informatics. Software and informatics are among our key priorities and we've had an overwhelmingly positive response to both our Infinity Lab Assist automation software and our Open Lab cds. The Infinity Lab automation software offers remote notifications, troubleshootings, diagnostics and maintenance that paves the way for a fully automated digital lab.
And our Open Lab CDS provides time saving steps in analysis, interpretation and reporting workflows while technical controls ensure work quality, effective records management and enhanced data security. Inshore software is an incredible area of opportunity for us that we are poised to capitalize upon. Already customers are telling us that the Infinity Lab Assist and the Open Lab offer differentiated functionality and solutions in high throughput environments.
Our Applied markets Group reported $338 million in the quarter, a 2% decline better than expected related to a strong China stimulus orders. We are very pleased with our team's ability to compete and win in these tenders. We continue to invest in the applied markets for next generation technology innovation and as I said, support our customers with lab productivity.
Every customer we meet has expressed a desire to partner with Agilent to make better use of their instrument fleets to integrate with front end solutions and we're happy to help them find ways to to create customized solutions so they can deliver products faster. Before I hand over to Bob, I want to address topics that have been in the news of late. Regarding the recent news around tariffs, we have a diversified supply chain with a manufacturing presence in all major regions of the world.
Our teams are already taking action to mitigate the impacts on our business in terms of potential reductions to NIH funding. As we've shared with you before, our exposure to NIH related programs is limited to around 1% of our revenue. We currently believe the forecasted impact is manageable and within our current guidance.
Bob will now delve deeper on our Q1 results as well as our outlook for Q2. After Bob delivers his comments, I will be back for some closing remarks. Bob?
