Good morning. Welcome to Waters Corporation Fourth Quarter 2023 Financial Results Conference Call. All participants will be in a listen-only mode until the question-and-answer session of today's call. This conference call is being recorded. If anyone has any objections, please disconnect at this time. It is now my pleasure to turn the call over to Mr. Caspar Tudor, Head of Investor Relations. Please go ahead, sir.

Thank you, Cedric. Good morning, everyone, and welcome to the Waters Corporation fourth quarter earnings call. Today, I'm joined by Dr. Udit Batra, Water's President and Chief Executive Officer, and Amol Chaubal, Water's Senior Vice President and Chief Financial Officer. Before we begin, I will cover the cautionary language. I would first like to point out that our earnings release and the slide presentation supplementing today's call are available on the Investor Relations section of our website at ir.waters.com. In this conference call, we will make various forward-looking statements regarding future events or future financial performance of the company. In particular, we will provide guidance regarding possible future results and commentary on potential market and business conditions that may impact Waters Corporation over the first quarter of 2024 and full year 2024. These statements are only our present expectations and actual events or results may differ materially. For more details, please see the risk factors included in our most recent Annual Report on Form 10-K, our Form 10-Qs, and the cautionary language included in this morning's earnings release. During today's call, we will refer to certain non-GAAP financial measures including in our discussions of the results of operations. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures are attached to our earnings release issued this morning and in the appendix of our presentation, which are available on the company's website. Unless stated otherwise, references to quarterly results increasing or decreasing are in comparison to the fourth quarter of fiscal year 2022 in organic constant currency terms. In addition, unless stated otherwise, all year-over-year revenue growth rates and ranges given on today's call are given on a comparable organic constant currency basis. Finally, we do not intend to update our guidance, predictions or projections, except as part of a regularly scheduled quarterly earnings release or as otherwise required by law. Now, I'd like to turn the call over to Udit to deliver our key remarks. Then Amol will provide a more detailed look at our financial results. After, we will open up the phone lines to take questions. Udit?

Thank you, Caspar. And good morning, everyone. I would like to begin today's call by expressing my gratitude to all my colleagues. 2023 was another transformative year for Waters. Throughout the year, our teams kept an unwavering focus on customers, launched innovative new products, and delivered strong business performance, all during highly eventful times with dynamic market conditions. As 2022 ended, the results of our transformation clearly showed on the top line, having delivered several years of very strong, above-average sales growth. Since then, in 2023, we've demonstrated our ability to manage exceptionally well through a downturn while continuing to make investments for growth. In 2023, we also initiated the next phase of our transformation with the acquisition of Wyatt. This brings with it a new vector for value creation to our shareholders through M&A and we're off to a great start. As an added benefit, it has accelerated our journey into high growth adjacent markets, where we made continued progress with our organic investments over the course of the year. We launched new and innovative products in 2023, including our Alliance iS next generation LC platform. We expanded our Xevo tQ mass spec into clinical applications and developed size exclusion columns for viral vectors that pair with Wyatt MALS instruments. We even had our first light scattering launch as a combined company with ZetaStar. Finally, we were recognized as one of the world's most sustainable companies, achieving a variety of ESG awards. This includes our top five ranking on Barron's Most Sustainable Companies list which scores over 1,000 publicly traded companies based on 230 ESG performance indicators. We're very proud of what we've achieved at Waters in 2023. Today, as I share our fourth quarter and full-year results, I have three key messages. First, we've continued to execute well.…

Thank you, Udit. And good morning, everyone. We delivered a solid close to a tough year in the fourth quarter with sales that were in line with our expectations despite continued market challenges. In the quarter, sales declined 4.5% as reported, which aligned with our expectations for 15% increase in reported revenues versus Q3. Organic constant currency sales declined 8% against the high-single-digit growth comparison last year. We did observe a budget flush in the fourth quarter as sales grew across all geographies in Q4 versus Q3. However, this year's budget flush was more muted than typical, consistent with our expectations. Our Wyatt acquisition delivered excellent results again, adding over 3% growth to the reported sales. In organic constant currency by end market, pharma declined 11%, industrial declined 4% and academic and government declined 9%. In pharma, our results were impacted by a further weakening in China, which declined 45% for the quarter. Outside of China, pharma sales declined 4% as instruments sales were impacted by a muted budget flush, in line with our expectations. In industrial, growth was flat outside of China against a tough high-teens prior-year comparison. China declined approximately 20% as weakness has broadened into non-pharma segments due to weak economic conditions. Overall, we observed continued strong growth in PFAS and battery-related applications, which have continued to partially offset weakness in more cyclical areas. In academic and government, our ex-China Business continued to perform well with mid-single-digit growth. However, this was more than offset by a decline of almost 40% in China, where demand has deteriorated after the benefits of stimulus ended in the second quarter. By geography, sales in Asia fell 16% as China weakness more than offset mid-single-digit growth in the rest of Asia. The Americas declined 2% and Europe declined 6%, driven by this…

Thank you, Amol. So, in summary, another transformative year for Waters. We will continue to navigate the current market environment well and deliver earnings growth for our shareholders in 2024. Before I close, I would like to share a few updates on our ESG efforts. We've made strong progress towards our environmental goals with 77% of our electricity now sourced from renewable or low carbon sources. In 2023, we started working with the Science Based Targets initiative to build on this progress and develop further emissions reduction targets. We've also enhanced our climate related disclosure with our TCFD related reporting. Waters was recognized as one of the best companies to work for but by the US News and World Report, and we achieved a perfect score of 100 on the Human Rights Campaign Foundation's Corporate Equality Index. We're also proud that our governance has been recognized. Waters Board of Directors was named the 2024 Public Company Board of the Year by National Association of Corporate Directors, New England chapter. So with that, I'll turn the call back over to Caspar.

Thanks, Udit. That concludes our formal comments. We're now ready to open the phone lines for questions.

Our first question comes from Vijay Kumar with Evercore ISI.

Udit, just on the annual guidance here, at the midpoint, I think it's about 50 basis points growth. What is the guide you're assuming zooming for price? And can you talk about end markets, pharma, government and academia, and industrial sort of assumptions? I know you gave the China assumption. China is expected to be down. But could you just parse out between China versus non-China for those end markets?

Look, a couple of high level comments, and then I'll go to the end markets and let Amol comment on the pricing question. The 2024 guidance in general assumes that the trends that we saw in 2023 continue in large part. So, you start off just looking at what happened in 2023. outside of China, all end markets and geographies grew low-single-digits or thereabouts. So all geographies were low-single-digits, and we assumed the same trend for the balance of the year. And all end markets are in the similar sort of zip code. And in China, we assume roughly sort of mid-teens to high-teens decline for 2024. Now when you do the arithmetic, you basically look at the comps. The first half of the year will be slower than the second half, right? The first half of the year has significantly higher comps. When you look at the academic and government stimulus, especially in China, and then the second half of the year, that alleviates, so you'll start to see a bit of a growth. So now to your question on the full year and the assumption for different end markets. For the full year, pharma, we are expecting to grow low-single-digits. And this is again on the back of what we saw in 2023. Industrial was flat in 2023 for the full year, expect to be there or thereabouts, low-single-digit growth. And A&G with a very strong year, roughly 10%, 12% for 2023. We expect it to be a low double-digit decline, basically in China declining quite significantly because of high comps, and the rest of the world, you sort of go back to the long term trends of low single-digit growth. So really, overall, expecting the same execution that we saw in 2023, basically really nice performance in markets outside of China with low single-digit growth in China, mid-teens decline. And by end market, sort of similar trends. Strength continuing in pharma due to our QA/QC focus. Amol, on the pricing.

On pricing, when we started 2023, we started with an assumption of 200 basis points, 250 basis points. But as the year panned out, our team gathered strength quarter after quarter, and you see full year, we finished about 300 basis points on price side. Now, long term, we've said we'll do about 100 basis points better than what we've historically done. And historically, we had done 50 to 75 basis points. So that's where our current assumption is starting, roughly around 200 basis points of pricing gains in 2024. But, again, the underlying trend is we're doing better than that. And where better to see it, right? It reflects loud and clear in our gross margin expansion, which is where it should show up.

I think just to sort of emphasize that point even more, what gives me sort of a lot of confidence is what we saw on our gross margin and our operating margin. In such an environment, we took proactive cost actions. Operating margin for the full year expanded by 70 basis points and gross margin by 160 basis points. You can talk a good game on pricing, but at the end, it has to show up in the P&L, and that's what we're really proud off.

Amol, one for you. Operating margin expansion, that's really pretty impressive considering revenues are almost flat this year organically. Is that all being driven by gross margins. I think in the past, you noted FX could have an impact on gross margins. Maybe just talk about what's driving [indiscernible] and FX assumptions on margins.

We expanded our full year margins by 70 basis points. And on a constant currency basis, that's 120 basis points of expansion because we had a good 50 basis points of FX headwind during the year. The negative leverage from volume was partially offset by mix and AIP. So net-net, it was negative 40 basis points. Pricing added 110 basis points, freight and material savings another 60 basis points, cost actions added another 60 basis points. And then we invested about 70 basis points in nurturing higher growth adjacencies. So that's roughly the breakdown.

All hands on deck basically.

My next question comes from Matt Sykes with Goldman Sachs.

Maybe just the first one, a higher level question. Udit, just on the replacement cycle impact, just given the outsized growth we saw in instruments during this sort of COVID period, what kind of impact do you think this has had on replacement cycles, particularly in biopharma, given a lot of the spend was concentrated there? Do you think the replacement cycle has been pushed out? Or do you think that you'll see that impact of that coming back in this year? Or is it more of a 2025 impact?

Let me start by first just talking about what we have seen in Q4. You would have seen that, Q4, our sales ramped from Q3 to Q4 by about 15%. And this is typical in a QA/QC driven business. It's muted versus historical trends, which are roughly 24% for Waters. But in a QA/QC driven business, you do see a ramp in replacement towards the end of the year. That trend is very much intact, especially outside of China. I think it's naive to think that replacement cycles have suddenly stopped. This Q4 ramp tells us that replacement cycles are still ongoing. Now the underlying question is, what are driving these replacement cycles and how do you trigger them? In a muted CapEx environment, the conversations we've had with customers on replacements have largely centered around new products, Arc HPLC and Alliance iS, which have both gained a lot of nice receptivity. So, new products allow you to continue to have that conversation. And you see that reflected in our sort of pharma results outside of China and as you compare it to our peer group. Now, to your question on did we see an outsize replacement during the post COVID years? It's very difficult to tell. We think it was more a push back from the depression that you saw during COVID and outsized execution that we saw due to the replacement cycle that we had not had from 2018 to 2020. So pent up demand sort of helped us get really outsized growth. Now, to corroborate that point, if you just look at LC, LC is 70% replacement business. And if you look at how we ended the full year 2023, so LC – and again, one should look at long term trends, on a long term basis, is roughly 1% growth on a four-year CAGR. So LC is growing roughly 1% on a four year CAGR basis, which is well below the long term average of about 4% to 5%. And you add pricing, so it's actually 4-ish-percent sort of below in volume versus the long term trend of 4% to 5% LC growth. So we do expect LC replacement to start imminently. Now don't ask me exactly when that inflection point is. Short term, we have a ton of visibility with a lot of data and a lot of conversations with customers. Long term, we think the trends are going to revert back to the mean or even better, given what we've talked about in our prepared remarks. The inflection point you don't get any extra marks to call it. So in 2024, we've assumed the same trends as 2023 to persist. But, definitely, we believe LC is due to come up in growth rates. So, long answer, but I hope that gives you a lot of context on how we're thinking about it.

A quick one on PFAS. You mentioned that slide deck that the market is starting to expand into foods probably earlier than we had expected. Just given the potential size of the market, food relative to water, one, how big do you assume the food market to be over the long term? And two, how much of that 30 basis points annual contribution from PFAS actually comes from food relative to water in your assumptions?

Early days, Matt. We've assumed roughly $50 million to $75 million for now in the food market. And over time, we expect it to expand. As you well pointed out, that could be a pretty significant market. We want to be a bit cautious here. So the 30 basis points is largely on the back of water testing, and not much from food testing at this point. But that said, the PFAS market is super dynamic. So we've gone from water testing to expansion into food testing, into tissue samples, into soil samples, into sewage, and into industrial companies sort of purchasing mass specs to analyze their effluent stream. So, it's a market that's going to significantly expand. But we're a bit cautious in trying to guess exactly what that size is. What we're focused on is sort of going after each and every opportunity in these segments, and you see that with roughly 40% growth. So stay tuned. As we find out more, you'll progressively see the increased market sizes or better information emerge.

And our next question comes from Rachel Vatnsdal with JPMorgan.

I just wanted to dig into this 1Q guide a little bit. This was weaker than most of us had anticipated. Appreciate the market is pretty dynamic and you had some really difficult comps in China during 1Q. But are there any other one-timers in terms of why you'd have that level of sequential step down? And was there any pull-forward that may have helped 4Q that led to that softer 1Q guide as well?

The one-timers are largely in China. You had the stimulus last year in A&G. And the level of weakness we are seeing now in China, last year's Q1 baseline doesn't reflect that at all. In the rest of the world, we are assuming customers will be slow out of the gate versus what we typically see. And that's based on the trend that we saw in Q4, where the budget flush was muted. And that will somehow, we think, reflect in how quickly budgets are released to customers. And that's sort of playing out in the guide.

Rachel, just to sort of build on what Amol has said, we're really no different than what we saw in Q4 overall, right? Q4 was almost 7.5%, 8% down versus previous year. And we're assuming, at the midpoint of the guide, Q1 is roughly 10% down. We expect, as Amol said, the trends from Q4 to persist into Q1. Low-single-digit-ish growth or flat growth in ex China. And in China, roughly 40% decline due to the heavy comps, especially from A&G last year where we had the benefit of the stimulus was coming through. So no real challenge. I'll just sort of say one more thing. In pharma in China, in particular, we're starting to see a bit of stabilization. We're starting to see biotech spending start to reemerge. We're starting to see CDMO spending on recurring revenues. And we're also, in the branded generics segment, which is roughly 50% of our pharma market, where more and more cities and more and more hospitals are starting to open up. So we see that trend, but we are cautious in calling that at this point in Q1. So Q1, basically similar tends to Q4.

Just keep in mind, Q1 is our smallest quarter, right? So small changes have a meaningful impact on the pattern.

Just my follow-up on this assumed gradual improvement that you guys are embedding throughout the year, can you just dig a little bit more into those assumptions? Which markets and which geographies are you assuming more of an improvement than others? You talked about some of the China in the comping. So, how much do comps really have to do with that improvement that you're expecting throughout the year as well?

We've sort of looked at it from various different vantage points. If you look at sort of how we've performed ex China, we've grown sort of low single-digits and we expect that to be the case for the full year, with some slow out of the gate with how the budgets are released in Q1. And then, you sort of face a muted budget flush baseline towards the later part of the year. China, you will see decline, as we talked about, in Q1 because the baseline is pretty strong. But as we get into the second half of China, we think things will normalize because a lot of the demand slowness is reflected. So if you sort of look at it from that vantage point, for the first half, we sort of declined mid-single-digits. For the second half, we sort of grow mid-single-digits. When you look at it on a five year stack versus 2019, roughly, it's mid-single-digits growth both for the first half as well as the second half.

Similar trends in the first half and second half. Just the arithmetic is that the comps in the first half are higher than the second half.

And our next question comes from Doug Schenkel with Wolfe Research.

Actually, I want to look at China a different way. And I'm just doing some quick math on the fly, which is always dangerous. But one thing as I look back the last few years I've noticed is I think Q1 revenue in China is typically about 70% of Q4 revenue in China, just kind of thinking about the historical sequential pattern, to the extent you can do that, over the last few years, given how different that has been. But if we use that as precedent, it seems like you're essentially embedding that pattern into your guidance this year again. So when I keep that in mind and I look at Q3 and Q4 revenue in China, which were about $100 million each, well, the comps are really tough and the growth is not going to look great in the first half of the year. Are you at some level kind of assuming a normalization of sequential growth over the course of 2024 relative to Q4 on a sequential basis?

It's a great question. You nailed it. When we gave our Q4 guidance also last year, there was a lot of questions on how did you come up with the guidance, and we use similar sort of math. You basically look at 15 years of data, which is what we have. And you look at sequential changes mathematically. Then you look at the funnel itself and then look at what the funnel is saying in terms of the orders. And third, you have conversations with customers. And during a difficult time, the visibility – ironically, people say visibility is pretty low. Well, visibility in the short term is incredibly high. We just didn't like what we're seeing. And so, people think visibility is low. Visibility is pretty high. Analytically, we're looking at things very carefully. We're talking to a ton of customers. We're just executing really, really well. Just getting every opportunity that's in front of us. So to answer your question, yes, we are using that math of sequential growth quarter-on-quarter, and that's embedded in the full-year guidance. Now, if that improves – I mean, I'm sort of anticipating the next question. If that improves, of course, you'll see upside right? And we're starting to see trends from Q4, especially in China, look a bit better in Q1, especially in the largest end market, which is pharma. In the ex-China geographies, in Q1, we've assumed that the same trends continue from Q4 and customers are cautious, like they were cautious in Q1, which is what we are sort of hearing from many of our customers. They want to see how Q1 lands before they start releasing CapEx. But you've got one of the elements of our guide philosophy nailed, yes.

Udit, either for you, or for Amol, I was wondering if you'd be willing to delineate between large and small molecule growth on the chemistry side? I'm just curious how that's been trending. And what's incorporated into guidance that may be cutting things in an unfair way? But if you're willing to indulge us, I think that would be really interesting just to hear how that's been trending and how you're thinking about it for 2024.

I think let's look at clean results ex-China, which is where things are not sort of affected by shutdowns and the like. I can give you the overall statistic. Back in 2020, the revenues from biologics, out of our total pharma revenues, were less than 20%. Now that number is in excess of 35%. 400 basis points of that is Wyatt. But the rest of it is the base organic acceleration in large molecule applications. Now, I can't tell you off the top of my head, how much of that comes from chemistry and how much of that comes from instruments. It's a mix, I would argue. At this point, it's basically a mix of the two, BioAccord sort of picking up, Xevo G3 picking up. But in chemistry, what I can tell you is roughly 70% to 80% of R&D spend is now on large molecule and biologics application MaxPeak Premier Columns, in its third year, is growing in excess of 30%. We've introduced a new gene therapy column. So, really pleased with what we're doing on large molecule applications, with 35% of our pharma revenues now coming from biologics.

Our next question comes from Dan Brennan with TD Cowen.

This is Tom Stevens on for Dan Brennan today. I guess my first one is just on the industrials guide. And given the strength of the category with PFAS testing and battery testing and the like, what kind of gives you confidence that momentum kind of continues in the back half and why we shouldn't see maybe a rest of world cyclical slowdown? That's my first one and I've got a couple of others to follow up.

Industrial finished 2023 roughly flat. And flat in a year where there was significant macro challenges. And this was largely due to PFAS and battery testing offsetting the other macro sensitive segments in our industrial business. And TA, we've not talked about that business in a while, but the TA business for the full year grew 3% in a year where growth was very difficult to get and that included – that number includes China. Now, as you look into 2024, we assume that the full year will be there or thereabouts, low single-digit growth. Ex-China growing low single-digits really on the back of PFAS, battery and a bit of recovery on food and environmental. And China, really now, given this large comps in 2023 in the negative territory in the low to mid-single-digits. So expecting 2024 to look similar to 2023 overall, especially ex-China. A little bit of – the stronger sort of comps in China make maybe a bit of muted growth. So you should assume that industrial will be sort of flat to low single-digit growth in 2024.

Just to pivot to LCs and that kind of long term trajectory, could you remind us what the net contribution of China was in the prior four years on a trend basis and then maybe how you think that long term market trajectory is different, with a potentially muted China going forward and/or you're kind of mixed into kind of larger molecule applications?

China, if you look at 2019 or 2022, was roughly 17% to 19% of our revenue. Now, where we finished in 2023, it's about 15% of our revenue. When you look at sort of the different issues compounding the current situation in China, but we generally feel, barring maybe one or two smaller issues, most of these issues are cyclical rather than structural. So, for example, CDMOs struggling with overcapacity, as well as geopolitical challenges or branded generics pulling back spend because of anti-corruption campaigns or industrial business, especially food and environmental, slowing down because of government pulling back reimbursement. We think these issues are largely cyclical. They will all come back. It's just a question when, and it's very hard to predict when that will happen. On the other hand, the biotech funding and the resultant volume they've placed on tier two, tier three CDMOs, that we think is structural. And in the near term, they're not going to be at the levels of 2021, 2022 spending. But at least on that issue, which is structural, the good news is we think we found the bottom on that issue because newer molecules are starting to see funding. But there is going to be sort of $30 million to $40 million correction to our 2022 baseline. The remaining issues we think eventually will come back. And that's the business that is today. And then, as we've said before, what we are super excited about is this whole push for innovative medicines. And there's a whole new vector opening up in China and we think that will create significant value. And we absolutely want to be part of that equation. And we are taking steps, so that we have local presence and participate in that journey more closely.

Just to sort of embellish on that, Amol has covered it extremely well, Tom. LC, as I mentioned earlier – two or three factors to keep in mind – on a long term basis, is traversing well below our long-term averages. So, in general, on a four or five-year stack basis, you should expect LC to be mid-single-digits. It's actually flat to 1%. You look at that number for 2023, LC overall declined almost 10%, 11%. And bulk of that decline came from China. So, China declined roughly 30%, 40% – maybe actually close to 40%, 45% in LC. Outside of China, we were sort of low single-digit decliners in LC. So to your question on how will the recovery will be impacted with coming back to growth in China, we expect that, in the first half of the year, we'll see similar trends that we saw in the second half of the year in LC. And the second half of the year, we will start to see a bit of a relief and growth. And as we talk to our customers, to our largest customer segment, which is pharma, we're starting to see biotechs start to spend again, we're starting to see CDMOs, especially recurring revenue, come back. And in branded generics, more and more hospitals are opening up. So it's going to be a mix of replacement cycles beginning again in ex-China markets and in China recovery in pharma. So put those two together, and you should start to see LC come back. We're not assuming that in our guide at this point, but definitely there are trends in that direction.

And our next question comes from Catherine Schulte with Baird.

Maybe first, just touching on some of your commercial initiatives. Any comments on what you're targeting for service attachment rates or ecommerce improvements in 2024?

Really continuing the trend. So we went from, what, 20 – so, ecommerce from about 20% to 35% already, 35-plus-percent already in ecommerce, and we expect that to grow closer to 40% by the end of 2024. And in service attachment, having already seen roughly 500 basis points of service attach increase from the time we started the initiative three years ago, we're planning for another 100 basis points of service attachment increase in 2024. So continuing on with our commercial initiatives.

And our next question comes from Derik De Bruin with Bank of America.

I've got a couple. Could you comment on order trends in Q4? If I missed it, I apologize. Did you see orders pick up sequentially? And how should we think about the tax rate sort of in 2025 as we work through the Pillar Two stuff. And I have one more follow-up?

I'll start with the order and then I'll let Amol talk about the tax piece. Orders are in line with sales again, direct. So, no real difference between the two for Q4. And the trend from Q3 to Q4, it's almost a 15% ramp from Q3 to Q4. Same thing we saw with orders really, as expected. So, Q4 really landed as we had talked about. Amol, on tax.

Derik, great question on tax. So, if you traced last few years with us, the tax rate has gone up roughly about 150 basis points to 200 basis points. And bulk of that is really coming from the US R&D capitalization. And as a company, we've sort of taken a position that Section 174 changes have an ongoing effect on our P&L. And absent of future legislation, we are not excluding those charges from our non-GAAP P&L, which is different from some of us in the sector. But we think those expenses are part of our non-GAAP P&L, and that's the bulk of the change. The other things that are creeping in there is Singapore going from 0% to 5%. and Ireland adopting Pillar Two, going to 15%. I think 2025, the. big one is, will Singapore adopt and in what form and in what offsets they provide when they do adopt that. So that remains to be seen. We are closely watching that. And as that plays out, we will provide more commentary when that happens.

One final one, if I may. Wyatt was a great deal. Nice fit in. Your leverage is down. I would expect you to potentially restart the buyback program. Could you just sort of talk about what other technologies you could potentially be thinking about in terms of how to augment. I'm just sort of curious in terms of what your capital appointment outlay is.

Derik, fantastic question. our goal in bioanalytical characterization is to make it as simple as it is in small molecules. The QA/QC environment for large molecules in cell and gene therapy should become just as simple. And to do that, you need to take some high end technologies, simplify them, move them into downstream applications, so they're simple to use. LC is already there. Mass spec, the BioAccord has made great strides. Light scattering is ahead of mass spec. So it's going to enter QA/QC sooner. And there are a couple of other technologies, like Raman, like cellular analysis, that also belong in the QA/QC and the process analytical testing domain. But all of this hinges on having a simple software that the regulators trust, like in power. So, our single largest initiative with Wyatt after delivering our commercial results is to get Wyatt light scattering software onto Empower. And we will have a beta version of that by the end of the year. And I think that's the primary requirement for QA/QC in large molecules to become like small. So stay tuned, really exciting area. And we're investing in the future while we are navigating the present really, really carefully.

Thank you very much. That concludes our Q&A session. I'd now like to turn the call back over to Udit to deliver our closing remarks.

Thank you, Caspar. Thank you, Amol. Thank you, everyone, for listening. 2023 has been an unprecedented and challenging year. We've navigated extremely well. As you look at our results outside of China, every end market, every geography grew, which is unusual in this environment amongst our peer group as well. And what is even more pleasing is our focus on cost management. So, really, 70 basis points of margin expansion in the year where the top line went down dramatically is quite an achievement. And we've done that while setting ourselves up very well for the future. We expect the long term growth of our business to be very much intact and accelerate based on what Amol and I described to you. So thank you, again, for your interest and your attention.

Thank you. That concludes today's conference. You may all disconnect at this time.