Agilent Technologies Inc (A) Q1 2023 Earnings Call Transcript

Agilent Technologies Inc (NYSE:A) Q1 2023 Earnings Call dated Feb. 28, 2023.

Corporate Participants:

Parmeet Ahuja — Investor Relations

Mike McMullen — President and Chief Executive Officer

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Padraig McDonnell — Senior Vice President, President and Chief Commercial Officer, Agilent CrossLab Group

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Analysts:

Matt Sykes — Goldman Sachs — Analyst

Brandon Couillard — Jefferies & Company, Inc. — Analyst

Vijay Kumar — Evercore ISI — Analyst

Puneet Souda — SVB Securities — Analyst

Rachel Vatnsdal — J.P. Morgan Chase & Co. — Analyst

Derik De Bruin — Bank of America Merrill Lynch — Analyst

Daniel Brennan — Cowen and Company, LLC — Analyst

Patrick Donnelly — Citi Research — Analyst

Jack Meehan — Nephron Research LLC — Analyst

Joshua Waldman — Cleveland Research Co. — Analyst

Liza Garcia — UBS — Analyst

Paul Knight — KeyBanc — Analyst

Presentation:

Operator

Please standby, we’re about to begin. Ladies and gentlemen, welcome to the Agilent Technologies Q1 2023 Earnings call. My name is Bo and I will be coordinating your call today. [Operator Instructions] I will now hand you over to your host Parmeet Ahuja, to begin the conference. Parmeet, please go ahead.

Parmeet Ahuja — Investor Relations

Thank you, Bo, and welcome everyone, to Agilent’s conference call for the first quarter of fiscal year 2023. 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 Science 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 first 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 will 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. Our guidance is based on forecasted currency exchange rates. During this call, we will also make forward-looking statements about the financial performance of the company. These statements are subject to risks 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 risks and other factors.

And now, I’d like to turn the call over to Mike.

Mike McMullen — President and Chief Executive Officer

Thanks, Parmeet, and thanks everyone for joining our call today. The Agilent team delivered an excellent start to 2023, exceeding both top and bottom-line expectations. Q1 revenue was of $1.76 billion or up 10% core. Agilent’s broad-based portfolio and resilient growth model were on a full display during the quarter with growth across all end-markets and geographic regions. Operating margin in the quarter at 27.1% up 80 basis-points. Earnings per share of $1.37, are up 13%.

Let’s now take a closer look at our first-quarter performance, starting with end-market highlights. Chemicals and Advanced Materials led the way for us with an outstanding quarter delivering 14% core growth with strength across all geographies. The strength to our Pharma business continues and is up 11% with both large and small-molecule growing nicely. This is on-top of 17% growth last year. Our environmental-friendly business grew 12% while the academia and government and the food markets, both grew 8%.

On a geographic basis, China once again led the way. Our China team continue their record of strong execution overcoming any disruptions such as COVID and delivered 13% growth during the quarter, exceeding our expectations. In Europe, we also delivered stronger-than-expected results growing 10%. The Americas posted a solid result with 8% growth.

Looking at our performance by business unit, The Life Sciences and Applied Markets Group delivered revenues of $1.03 billion, up 11% core. LSAG delivered growth across all end-markets and regions. Our LC and LC/MS platforms continue their strong performance during the quarter. Growing faster than the market at 16%. Demand in The Chemicals and Advanced Materials end-market continues to be strong, particularly for materials used in manufacturing semiconductors and batteries. Our Spectroscopy business grew more than 20% in the quarter and we continue to strengthen our position in Spectroscopy across multiple end-markets.

In Q1 we announced the deployment of the Insight200M. This system is used at checkpoints throughout the London Heathrow Airport to officially provide enhanced security and ensure passenger safety.

The Agilent CrossLab Group posted revenue of $381 billion in Q1. This is up 13% core. Agilent team continues to take advantage of record instrument placements over the past two years, along with the continued growth and attach rates. CrossLab’s team deep knowledge of customer lab operations continues to drive consistently high levels of customer satisfaction. The breadth and diversity of our product offerings is driving record renewals for support contracts. At the same time our enterprise services business continues its strong momentum, driving growth and converting competitive accounts.

The Diagnostics and Genomics Group delivered revenues of $342 million, up 5% core. Our pathology related business performed well with double-digit growth led by the Americas and Europe. NASD posted another strong quarter growing 22%. Our Train B manufacturing expansion remains on track to come online mid calendar year. In January, we announced an additional $725 million expansion of our NASD facility that will double our oligo manufacturing capacity. And two weeks ago, we are pleased to have the Governor of Colorado join us at our groundbreaking ceremony at the Frederick site.

In addition to organic investments, we continue to invest externally in new technologies and partnerships. In the quarter, we welcome the Avida Biomed team into Agilent further enhancing our genomics capabilities. Avida is an early-stage life sciences company, designed to assess clinical researchers using NGS approaches to study cancer. We also continue to be a part of a new technology platform companies to drive our solutions in the marketplace. This quarter, we announced a partnership with Akoya Biosciences to combine our companion diagnostic and IHC workflow expertise with our solution to drive multiplex tissue assay development for biopharma.

In addition to these business group highlights, Agilent was again recognized among the Top 100 Most JUST companies in US by JUST Capital and CNBC. As part of this announcement, we are very proud to be the leader in the medical equipment and services industry for our treatment of employees and focus on customer relations.

The Agilent team navigated challenging market uncertainties in Q1 and yet once again produced excellent results. It was a great start to the year. Q1 was another outstanding example the work we’ve done to build a resilient company with multiple growth drivers. Those growth drivers placed with targeted investments that aim to expand and enhance our business high-growth areas are the heart of our build and buy growth strategy. As we look ahead to Q2, we remain confident in the strength and resilience of our business. We have an unstoppable One Agilent team that continues to execute at extremely high level and is well prepared to deal with any challenges they face. Given the strong start of the year, we are raising our full-year core revenue and EPS guidance while also keeping a close eye on macroeconomic conditions. Bob will provide the detailed overall outlook. But overall, we remain convinced our strategic focus and unmatched execution capabilities will continue to drive strong results.

Thank you for joining us today. And now, Bob, over to you.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Thanks, Mike, and good afternoon, everyone. In my remarks today, I will provide some additional details on revenue in the quarter as well as take you through the income statement and other key financial metrics. I’ll then finish up with our updated full-year guidance and initial guidance for the second-quarter. Unless otherwise noted, my remarks will focus on non-GAAP results. We are extremely pleased with our Q1 performance with a very solid start to the year. Q1 revenue was $1.76 billion, exceeding our expectations. Revenues were up 10% core and 5% on a reported basis. Currency was a five point headwind, which was an improvement from the beginning of the quarter, while the M&A contribution was as we expected. Pricing for the quarter was higher than the full-year forecast. Also, as we expected.

Now I’d like to share some additional detail on our end-markets. Results in our largest market pharma were again very strong. Pharma grew 11% following 17% growth of last year. Performance was solid across both small and large molecule. Small molecule grew 12%, while large molecule grew 9%. And as Mike mentioned, Chemicals and Advanced Materials also continue to be very strong, growing 14% during the quarter, on-top of 15% growth last year. The Chemical and Energy sub-segments of the market are doing well while the Advanced Materials market continues to deliver outsized growth. Semiconductors and batteries are driving demand, helped by government investment in this area. The food market grew 8% during the quarter, driven by double-digit growth in China. The environmental and forensics business grew 12%, led by the Americas as increased testing for PFAS chemicals drives customer investment in this area, and recently approved US legislation leads to broad spending in the environmental market.

Our business in the diagnostics and clinical market grew 4% versus 11% growth last year. Pathology led the way for us here, partially offset by industry-wide challenges in the genomics market. And the academia and government market was up 8%, led by LCs and services. Regionally, Europe and Asia, showed strong results. On a geographic basis, the China team delivered 13% growth and Europe grew 10%, both exceeding expectations. The Americas had another solid quarter coming in at 8%, in line with our expectations.

Now let’s turn to the rest of the P&L. First quarter gross margin was 56.5%, up 40 basis points from a year ago. The gross margin performance coupled with good cost discipline and SG&A helped drive our operating margins to 27.1%, up 80 basis points from last year. Below the line, our tax rate was 13.75% for the quarter and we had 297 million diluted shares outstanding, both as expected. Putting it all together earnings per share were $1.37 up 13% from a year ago. In summary, Q1 ended with 10% core top line growth and 13% earnings per share growth. A very good start to the year.

Now some metrics on cash flow and our balance sheet. In Q1, we generated $296 million in operating cash flow, up 16% versus last year while investing $76 million in capex. Capex spending continues to be driven by our scale-up of our Train B manufacturing line and other capacity expansion projects. In the quarter we returned $142 million to shareholders through $67 million in dividends and by repurchasing shares worth $75 million. We also announced, we’re increasing our dividend by 7% along with a new $2 billion share repurchase authorization, continuing our successful balanced approach to capital deployment. Our balance sheet continues to remain healthy as we ended the quarter with a net leverage ratio of 0.8.

Now let’s move to our revised outlook for the year and the upcoming quarter. The macroeconomic environment remains dynamic and interest rates and currencies continue to be volatile. However, given the good start to the year, we are increasing our full-year revenue to a range of $7.03 billion to $7.10 billion. This increase update our full year core revenue guidance to a range of 5.5% to 6.5%, increasing the midpoint of our guidance to 6%. We’ve also seen the dollar weaken against major currencies in the first-quarter, although it has rebounded somewhat in February, and as a result, the full year guide reflects a $100 million of favorable currency movements since our initial guide in November. And for the full year we still expect currency to be an almost 300 basis point headwind to reported growth.

In addition, we’re also raising our full year EPS guidance to a new range of $5.65 to $5.70 per share. And lastly, given the recently announced NASD expansion to double our oligo manufacturing capacity, we are updating our forecasted capital spending for the year to $500 million up $200 million from our guidance at the beginning of the year.

Now turning to Q2, we expect revenue in the range of $1.655 billion to $1.680 billion. This represents core growth of 6% to 7.5% and reported growth of 3% to 4.5%. Currency is expected to be a headwind of 3.1 points while M&A will contribute 0.1 points of growth in Q2, which is consistent with Q1. Second quarter non-GAAP earnings per share are expected to be between $1.24 and $1.27, representing growth of 10% to 12% versus the prior year.

I’m pleased with how the team has delivered in the first quarter. We are focused on the things we can control. Our team is driving strong execution in the marketplace. And coupled with our broad portfolio of products and services, we expect to continue to grow faster than the market as we go through the year.

Thanks for being on the call. And now I will turn over things back to Parmeet as we take your questions. Parmeet?

Parmeet Ahuja — Investor Relations

Thanks Bob. Bo, if you could please provide instructions for the Q&A now.

Questions and Answers:

Operator

Certainly Mr. Ahuja. [Operator Instructions] We take our first question this afternoon from Matt Sykes, Goldman Sachs.

Matt Sykes — Goldman Sachs — Analyst

Hi, good afternoon, Mike and Bob. Thanks for taking my questions. Maybe we’ll start on ACG, just given the quarter that it had and the comp it was facing last year, you’ve talked in the past about areas of under penetration. I think China was the region you called out. Could you just maybe kind of give us some mark-to-market on where you feel from sort of an end-market and regional standpoint, there’s still a lot of room for that growth in ACG, if we see it continue throughout this year and into next.

Mike McMullen — President and Chief Executive Officer

Thanks, Matt. First of all, I appreciate the recognition of the number you have posted. And we think there’s still a lot more opportunity in front of us and I want to actually have Padraig provide a little bit color on where those opportunities may lie.

Padraig McDonnell — Senior Vice President, President and Chief Commercial Officer, Agilent CrossLab Group

Yes, so look. I think the broad product offering across the hardware platforms, where we’ve had value to–where we had a lot of value to customer operations that has been broad based. We certainly see a lot of our offerings, particularly around asset utilization and so on being able to be used outside pharma and different industries and we see that as an opportunity to grow. I think also, given our big installed-base and our ability to attach in different markets and sectors is going to continue as we go through the year.

Mike McMullen — President and Chief Executive Officer

Yes. I think we see a lot of opportunity obviously in China, that’s when we flagged in the past. The other one we’re pointing to is, a lot of the growth has historically been centered in the pharma space. We’re seeing growing interest in the CAM space as well, so. I think from an end-market perspective, that’s an area we would expect to see some more growth and geographically the China story is still hasn’t fully played out yet. And then again, I would just remind you Matt, some of the points made in the call record renewals for sports contracts and also clearly taking share on the enterprise level, those attach rates, we keep talking about are going up as well. So a lot to like here.

Matt Sykes — Goldman Sachs — Analyst

Great, thanks. And then maybe just kind of refresh us on your outlook for instruments. I mean, you’ve kind of guided to mid single digit growth for the full year. Given that we’re a little way into this year, you probably have more visibility on that backlog. How are you thinking about sort of the back half for instruments overall.

Mike McMullen — President and Chief Executive Officer

Yes, so first of all, let me taking a bit on this, with Bob, but I’m talking about the backlog first of all. I think it’s very important to just remind the audience that the quality of our backlog remains extremely high, so. And you can see the great work of our team to work down the backlog, we’re not seeing any cancellations or anything pulling out of backlog. So that gives us a level of confidence around the revenues, we can forecast. I think it really isn’t anything new to talk about today, relative to the second half, we still remained–we still want to acknowledge the uncertainty about the back half of the year. So really no new news here, this is very consistent with what we talked about in November. I think you hear a lot of us talking about normalization of growth rates, normalization of deal cycle times. So the funnel has remained healthy, the deal cycle times are. I think we’re already more towards the historical levels. And Bob…

Robert W. McMahon — Senior Vice President, Chief Financial Officer

No. I think you’re right. I mean, I think obviously, we had a very strong start to the year with double-digit growth from LSAG. We will go up against very tough comps in the back-half of the year with the recovery of the business. But as Mike said, pleased with very, very good start but not anything material changed.

Matt Sykes — Goldman Sachs — Analyst

Got it thanks and congrats on the quarter.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Thank you very much.

Operator

Thank you. We’ll go next now to Brandon Couillard of Jefferies.

Brandon Couillard — Jefferies & Company, Inc. — Analyst

Hey, thanks. Good afternoon and thanks for taking my questions. Mike. I think you said China was up 13% in the quarter. That’s a lot better than we’ve heard from the other counterparts. Can you unpack that a little bit for us because it perhaps have been due to the fact you are one month later, maybe talk about linearity in China through the quarter and if your outlook for the full-year. So, I think it was high single’s that has changed at all.

Mike McMullen — President and Chief Executive Officer

Well, I’m glad you noticed Brandon and if you’re in the conference room here, you see there is lot of smiles in the room here, because really proud of what the team has done here. So, I don’t think it’s a timing issue, it’s about execution and it’s ability of this team to execute because our teams were hit with waves of COVID during the quarter, but we know how to execute. We’ve also enabled our ability to interact with customers digitally. So while people maybe couldn’t go to the office or couldn’t go to customer sites, they were with support to customers. So we were just delighted with the performance out of China. In Q3, but I think it was a broad-based story. We had growth–double-digit growth in pharma, CAM, food. So really pleased with the results. I know our narrative is different than others are saying, but I also think my team in China is capable and also different.

Brandon Couillard — Jefferies & Company, Inc. — Analyst

Got it and then on the NASD Train C I guess expansion. We just have a timeline for that build-out and I remember back to Train B. I think a good amount of that was already kind of earmarked for customer demand. Is that a case that summarizes the current expansion.

Mike McMullen — President and Chief Executive Officer

Yeah, I’m going to tag team a bit with this with Sam and myself and Bob. So we lovingly referred to Train B, that’s the latest expansion that’s coming online this year. In fact, we had a chance to see that first time when we went through the groundbreaking ceremony for what we called Project Endeavor or as you’re referring to Train C and D. It looks really good. We’re on-track for that mid calendar year go-live. And we have a full book of business for that just a matter of ramping again the project up and then I’m going to pass it over to Sam and maybe you want to remind Brandon what our plans are with the new expansion when we expect to see some of that first revenue coming into Agilent.

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Yes, yes, happy to do so. As you mentioned. Mike, first of all, we’re tracking right on plan for Train B rate midpoint midyear. Coming on, and it was great to see firsthand, Bob joined me. Really the progress that we’re making. The facility is looking really, really nice, lot of validation work happening, miles and miles of stainless steel piping. And other infrastructure that’s been put in place. As you also noted, we did on the end of February–the middle of February, pardon me, the groundbreaking for Trains C and D. And these projects will take some time, but we started the process and the first revenue from that will be coming online in 2025. And remember, there’s two trains, Train C and Train D. Both dedicated to siRNA antisense capabilities as well as expanding our ability to serve customers of single guide RNA or CRISPR, so excited about the progress in the NASD team under Brian Carother’s leadership is aspiring in all cylinders.

Mike McMullen — President and Chief Executive Officer

Hey, Sam, unless you’re going to commit to me for earlier go-live, I think you meant to say 26, right?

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Did I say 2025. Thank you Mike for catching, usually you are the one that I always catch instead its the other way. Indeed, it’s 2026, Thanks for catching that yeah.

Mike McMullen — President and Chief Executive Officer

And Brandon. To your point around. The question of purchase orders and so forth. We have good visibility into the pipeline but we haven’t started taking orders given the timeframe there. We have high confidence, we would be putting in $725 million into the expansion.

Brandon Couillard — Jefferies & Company, Inc. — Analyst

Very helpful, thanks.

Operator

Thank you. We will go next now to Vijay Kumar of Evercore ISI.

Vijay Kumar — Evercore ISI — Analyst

Hey guys, congrats. And a good screen share, Mike.

Mike McMullen — President and Chief Executive Officer

Thank you, Vijay.

Vijay Kumar — Evercore ISI — Analyst

My first question here on the second-quarter guidance 67.5 organic. That’s a sequential step-down of 250 basis points at the high-end. I guess, the comps get easier. Is there anything in the second-quarter. Was there any timing of revenues that got pulled forward to Q1 or any China impact, anything that can explain here the sequential guide for 2Q.

Mike McMullen — President and Chief Executive Officer

Now, I’ll pass it over to Bob for some additional detail, but I think the answer is no, nothing unusual about movements between the quarters and Bob, I think what we’ll do is we want to set-up another guide in Q2 that was above our full-year guide. So that was the thought process there.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

That’s exactly right. I mean I think as we look at this, we just came off a 10%, still 6% to 7.5% is still significantly above where we’re forecasting the full-year and. I think we feel good and. I think it’s consistent with how we have guided in the past.

Mike McMullen — President and Chief Executive Officer

I did not know we are prudent yet today, Bob.

Vijay Kumar — Evercore ISI — Analyst

I was waiting for that, Mike. The second-quarter is a prudent guide. Is that a fair comment?

Mike McMullen — President and Chief Executive Officer

That is correct, yes.

Vijay Kumar — Evercore ISI — Analyst

Fantastic. I just have one on this NASD, Mike. We don’t want to give us a Novartis. I think they’re pulling their API manufacturing in-house and I know you’re starting Train C maybe for what some context and how big is Novartis as a customer. What’s the pipeline looking NASD and you assessed it best.

Mike McMullen — President and Chief Executive Officer

Yeah I I’ll tag team on this lead and Sam, if you want to add some additional color. But first of all, the announcement from Novartis has no news that as always been part of the plan and we actually have contractual agreements relative to how much of the market demand we get. So that’s all well known. Relative to the Novartis is one of many customers we have in this business and we really have worked hard to build a diversified book of business. And we talked a lot about Novartis great customer. I talk a lot about in Ireland, because we had a talk about those programs, but we have a much broader base, our book of business and. I think that gives us a lot of competencies we move forward, because we have a number of programs that were supporting, we know not everyone is going to hit, but we know that there’s going to be a lot of success rates there as well about.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah, let me just add something that. I would say this means nothing to our expansion. [Speech Overlap] I want to be very clear about that. I mean I think we feel very good about. We’ve continued to be capacity-constrained. We’ve had more orders than we can satisfy and I think that continues to be the case and we feel extremely good about the overall technology and our position in the marketplace.

Vijay Kumar — Evercore ISI — Analyst

Thanks, Bob, appreciate that build.

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Hey Mike, if I can just add a couple of quick things, right. We’ve stated this before, we think the therapeutic oligo market for the suppliers that we are billion dollars today go into $2.4 billion by 2027, and what’s really encouraging about the market is the number of molecules that are advancing, but just to give you a little bit more color. We’re doing work with over 30 pharma partners today and dozens of programs at various stages. So, the pipeline programs are working on, some of which have the potential of being, molecules of broad populations is absolutely there and something that we’re excited about.

Vijay Kumar — Evercore ISI — Analyst

Great, thanks, helpful guys. Thank you.

Mike McMullen — President and Chief Executive Officer

You’re welcome, Vijay.

Operator

Thank you. We’ll go next now to Puneet Souda of SVB.

Puneet Souda — SVB Securities — Analyst

Yeah, Hi Mike, Bob, thanks for taking the questions. So first one. Bob, I don’t know if I’ve heard it on the call. Contribution from pricing in the quarter and for the full-year if I’m correct, you are still expecting 3% pricing contribution this year and that would imply a 3% volume contribution, which it appears below historical levels for what Agilent has grown. So maybe just what we’re trying to understand given the tailwinds you’re seeing in China, any of the other areas and obviously, congrats on the strong growth in the quarter. So is there anything you’re seeing beyond sort of tougher compares that are emerging in the sort of the second half.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

No, it’s a great question. So I did make a quick reference in the prepared remarks. Actually Q1 was higher than the overall 3% as expected. We are still planning and forecasting that 3% price contribution for the full-year of FY 23 and you’re right that would speak to roughly a three point volume. What I would say is, we’re taking it one quarter at a time. As we’ve said, we’re dealing with looking-forward, there are still some uncertainties around macro and that’s where I think our forecast and our guidance is. It’s prudent to use that word again but I wouldn’t say anything has materially changed since the beginning of the year from that standpoint. And I’ve have been very pleased with our ability to continue to maintain that pricing throughout the course of the last several quarters, and I would expect that to continue going forward.

Puneet Souda — SVB Securities — Analyst

Okay, that’s helpful. And then on the Lunar New Year, is that part of–is that baked-in into the guide as well. I just wanted to clarify on China. I mean obviously I’ve heard about the stimulus, absolutely Agilent is listed. One of the companies is listed, within the document that was put out. But for the loan stimulus for China this is sizable. How are you thinking about it. You obviously have the longest–one of the most legacy positions in China. So just trying to understand, what does that mean for China growth in 2023 and 24, thank you.

Mike McMullen — President and Chief Executive Officer

Good question sure. Yeah, but the impact of Lunar New Year was not only in Q1, but it’s also been reflected in our Q2. It was roughly 0.5 point headwind in Q1 and that come back to us in Q2. So it was kind of as planned. And in regards to the stimulus, we’re looking at this as system has got kicked-off in the calendar Q4. I mean, there is a section in there that’s focused on equivalent for universities, hospitals, but from our perspective, it’s still early. So we’re kind of wait right now to see how it plays out and Bob, I think at this point, we really haven’t put anything assumed in our guide or trying to growth relative to December or so if it does get deployed and comes to our way then that will be an upside to our current forecast.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

And I think Puneet, you said it well. I mean, our business to China continues to be very-very strong and couldn’t be prouder of the team, how they delivered in Q1. And that’s continuing strong momentum throughout the second half of last year and we will expect that to continue here in Q2 as well.

Puneet Souda — SVB Securities — Analyst

Got it. Congrats guys. Thank you.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Thanks.

Operator

Thank you. We’ll go next now to Rachel Vatnsdal at JPM.

Rachel Vatnsdal — J.P. Morgan Chase & Co. — Analyst

Hey, thanks for taking the questions and congrats on the quarter. And so first up on semiconductors. One of your peers stated that they were expecting the semiconductor market to be softer in 2023. Semi customers were facing a macroenvironment. So you mentioned strength in semicon are prepared. So can you just walk us through first-half which part of the market, you guys really play in semis and then are you seeing any of that softness that one of your peers stated in fact.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah, I’ll start and then we’ll turn it over to Jacob to give some additional color about where we play and so forth, but I would say the short answer is no. I mean, as our spectroscopy business grew over 20% in the quarter and we’re steadily seeing strong demand and Jacob, you want to provide a little more color.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Yeah, absolutely we have. I would say we have the strongest portfolio atomic spectroscopy for this market in Semi, but generally speaking, in material science, and we continue to see demand from the semicon industry, both in the fabs, but also in the upstream for all the fine chemicals that goes into the fabs, they require the same level of QC testing like they do in the labs, and hence, they are using the same instruments. So we see a lot of benefits. Those as new fabs built, but also for the continuous operation in the lab. So we expect this to continue. For a while we of course, see a lot of news around investments into this in other parts of the world. Also, particularly in the US, obviously, they will take some time before it. Continental will play, but we expect the whole semicon market to continue to be an upside for us. But as I mentioned also, we also see a lot of interest in the rest of the materials market, particularly in lithium batteries. But we see a lot of demand. Not only for Spectroscopy business, but really across our broad portfolio where Lithium battery needs both the LCs GCs to Spectroscopy and the LCMS, so we are very excited about that space and see a lot of continued growth…

Robert W. McMahon — Senior Vice President, Chief Financial Officer

And then Jacob, I think the point you made earlier to about some of the funding environment, but we’re seeing some government funding coming in from different parts of the world as part of the semiconductor industry this has benefited us.

Rachel Vatnsdal — J.P. Morgan Chase & Co. — Analyst

Great. And then maybe just shifting over weren’t which from a biotech and so small-molecule grew faster than large molecule this quarter, and talked in the past, but still not outpaced strength in small-molecule being driven from catch-up spending related instrument purchases that were delayed back-in 2018 and 2019 timeframe. If you walk us through, really what inning are we in, in terms of that catch-up spend and how long can you sustain outpaced growth in small-molecule before kind of back to that normalized level. And then and just update on large molecule as well. Thanks.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Sure, Rachel, would pass this question to the Danish member of the staff as the baseball analogy, but I think Jacob, got a great print on LC and LCMS 17% growth clearly outpacing the market and. I think we saw some really good strength in small-molecule. In particular this quarter.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Yeah, absolutely, I would start by saying, I don’t think this is a baseball game. I think there is a continuous opportunity in this market space. And we see both opportunities and we continue to believe that there is a big market in small molecules and I think the current performance is a reflection of the investment we have done into–we made into our portfolio over the past years, both for the LC and LCMS. And so it’s really focus very much on where we have gone strategically on a lot of investment into making robust, reliable and routine instruments and instrument solutions. We continue to spend significant time to truly understand our customers’ pain point that it’s not only about the overall performance, but also about how you can ease-of-use, a lot of smart we put into the instruments and of course also continues on focus on uptime of instruments and our commercial organization is brilliantly going out and connect both our consumables and also the service contracts to it. So this just continues to be a great business for Agilent.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah Rachel, this part maybe I can add a few points, because we talked at the beginning of the year. About this strong performance kind of normalizing this year. We also said, if it continues, we’re going to take it and I think what you’re seeing is some of that as well, but we still do think that this will normalize over time. And the portfolio that Jacob and team have. I think, speaks very well to us growing faster than the market and I think you talked about the biopharma. The beauty of our business is we’ve got that nice diversification across both small and large molecule, and certainly starting off the year very nicely.

Rachel Vatnsdal — J.P. Morgan Chase & Co. — Analyst

Great, thank you guys.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

You’re welcome.

Operator

We’ll go next now to Derik De Bruin of Bank of America.

Derik De Bruin — Bank of America Merrill Lynch — Analyst

Hi, good afternoon. This is Peter on for Derik. Thanks for taking the question. Could you just dive a bit more into the latest on what you’re seeing in Europe, you expressed embedding some caution, particularly in CAM on the last call, if you can touch on that as well, that would be great.

Mike McMullen — President and Chief Executive Officer

So hope it came through in the call remarks, and I’ll make a few comments here then invite Padraig in here as well, but we we’re delighted with the print in Europe in the first-quarter exceeded our expectations actually. The strength across the marketplace was pretty good. I think five of our six end-markets were high-single-digits or better. I think the standouts for us were actually the CAM markets along with Diagnostics, but I have to say we continue to watch closely investment plans, particularly for our large accounts in the chemical space as well as the pharma space, but we’re off to a really good start. But that remains a watch area for us, but again we’re delighted with broad-based growth we had.

Padraig McDonnell — Senior Vice President, President and Chief Commercial Officer, Agilent CrossLab Group

I think you said it all, Mike. I think it’s broad-based and five out of the six markets growing high-single-digits and I think what the team has been able to do has been able to really work together to take share in a lot of areas and all the markets and our focus of course on attach rates in both services and consumables has really been a benefit as well. I think. You don’t talk about weather, but I think the more favorable weather environment in Europe actually has put less pressure on customers relative to energy costs, energy demand. So that’s been a positive. But we’re still in. Thanks.

Derik De Bruin — Bank of America Merrill Lynch — Analyst

Okay, and then could you just discuss your margin outlook and then pacing across 23, and kind of what’s the level of expansion potential going-forward, how much gas is left in the tank there looking out in the years. Thank you.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

You want to take that, Mike.

Mike McMullen — President and Chief Executive Officer

Yeah, yeah. I think there is still gas in the tank. I mean I think obviously despite the inflationary environment that we’re in, we’re still able to manage growing our margins. So both nice balance here this quarter, with about half of it coming through gross margin as well as half of it coming through opex. I think as we think about it going-forward. I think that 50 to a 100 basis-points over the course of the next several years is still a reasonable way to think about it, that’s how we’re thinking about the rest of this year as well.

Derik De Bruin — Bank of America Merrill Lynch — Analyst

Great, thank you.

Mike McMullen — President and Chief Executive Officer

Welcome.

Operator

We’ll go next now to Dan Brennan of Cowen.

Daniel Brennan — Cowen and Company, LLC — Analyst

Great, thanks. Thanks for taking the question guys, congrats on the quarter. Hey Mike, maybe first one and there are a few questions asked on the Chemical Advanced Materials segment booked obviously great growth in the quarter, just wondering with your new hire guide for the year. Are you assuming something above the Mid-single-digit outlook that you previously guided to for the year and would love it if you can give us any color on kind of how the growth rate broke out this quarter between Advanced Material and then Chemical and Energy.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah, it’s a great question. Dan, I’ll take that. And so with our revised guide we have ticked up a bit, given the strong performance that we had in Q1 and we continue to be surprised to the upside. When we talked about it at the beginning of the year was a source of upside. This would have been one of the markets that we would have talked about. And what we’re seeing is actually good growth across all of the sub-markets in our CAM market. If I think about the chemical and energy markets were up high-single-digits. And the growth was really outsized in that Advanced Materials, that we’ve been talking about. So that semiconductor and batteries area grew in excess in the high 20s and so this is a continued strength. Really given not only the investment there, but really the power and strength of our portfolio to be able to supply critical tools and instrumentation into markets that are really continuing to expand. So we’re expecting that don’t book high-single-digits and the high 20s for the rest of the quarters, we will take it, but we’re expecting a slight uptick there given the strong performance that we had in Q1.

Daniel Brennan — Cowen and Company, LLC — Analyst

Great, thanks, Bob. And then maybe just one on the balance sheet, obviously it’s in great shape, leverages very low, just wondering what you’re seeing from the M&A environment. Obviously what has had a deal in the quarter. I’m wondering what you’re seeing in terms of–have you identified any interesting opportunities, like what’s the appetite like for sellers to kind of move forward. Just wondering, what we could expect from Agilent model. I’m just kind of wondering about your appetite to do something bigger since you have been looking for the right fit. Thanks.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah. I think happy to comment on their daily or closing comments. Exactly where our heads are, which is the right fit. So we think the environment is much more favorable than it was a year-ago. We think it’s much more of a buyer’s market, so to speak. Most people are willing to come off interview of the last round. Yeah, there’s still some dialog, we are there yet. So we have, obviously, nothing to announce, but we remain very interested in looking for opportunities to clear backlog about our core organic business, and this is at the heart of our build and buy growth strategy. As I’ve said a number of times, the buy-side is all optionality for us. We’ll do just fine with all the debts we have right now, but if we see the right thing we will move on it and we have also just wanted to make sure we stuck with our framework and we don’t ever want to have buyers remorse. So we’ve been very happy with all the deals we’ve done to date and we’ll continue to use that framework moving forward. I think that fit piece that you described it, really the key criteria for us.

Daniel Brennan — Cowen and Company, LLC — Analyst

Great, thank you.

Operator

Our next question comes from Patrick Donnelly of Citi.

Patrick Donnelly — Citi Research — Analyst

Hey guys, thanks for taking the questions. Maybe one on just the the order side. I know you guys talked a little bit about the backlog remaining pretty healthy. Can you just give a little bit of color in terms of what the order growth look like in the quarter. I know last quarter you guys started even into the backlog a little bit, which is natural. Just given the supply chains normalizing a little bit, can you just talk about I guess order growth versus revenue growth, which you saw in the quarter. And any color there would be helpful.

Mike McMullen — President and Chief Executive Officer

Let me make some summary comments and then Bob and Padraig jump-in here. But as you mentioned, we don’t specifically provide book-to-bill ratios but what I can tell you is that orders for the quarter were greater than revenue. And so we continue to grow orders with particular strength in our NASD and services business. On the instrument side, we continue to bring down this record backlog we had now as we really are focused on meeting those customers’ shipment requirements and really thanks to the great work of order fulfillment team, we have really been enable to get back to a normal flow of shipment times and delivery commitments. And again I would just say that the funnel remain healthy. The backlog is still a very-high quality. I think we had pretty much next to no cancellations. So quality is good, it gives Bob a level of predictability around revenue from that backlog.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

I would say. As Mike said I mean, the backlog continues to be healthy, and we haven’t seen anyone back-out of any cancellations or anything like that that would be beyond kind of the normal active notes, but I would emphasize one point I made earlier, the deal cycles are reverting towards the historic norms in this space. Again, this whole construct that we see of a normalization of particularly the analytical instrumentation marketplace evolving.

Patrick Donnelly — Citi Research — Analyst

Yeah, that’s helpful. I appreciate that. And then maybe just on kind of the environmental spend, PFAS testing, you called out last couple of quarters, Mike. I know you’re excited to see some actual infrastructure dollars kind of coming through in the US here, can you just talk about what you’re seeing there, kind of where we are. I mean it seems really early, but just your perspective on kind of how that’s tracking. What impact do you guys are seeing from that, obviously the durability as well.

Mike McMullen — President and Chief Executive Officer

Sure. I would be happy to talk about that and actually happy to have Jacob talk about it because I think you just spent some time in front of the Board recently and I’m talking about the PFAS opportunity not only to educate the Board on what it’s all about, but the durability of growth we’re seeing we see here.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Yeah, absolutely. And we continue to see a lot of opportunities in the PFAS, where the beginning was really all about looking for PFAS in the border supply and now it’s moving into food and other types of areas. I think you are right, we are still in the early phases of the growth opportunity. As you know, the US infrastructure bill that was a 4 billion set-aside to PFAS testing. And so we have one of the leading solutions here. I mean PFAS, it’s very difficult to measure. So you need high-end instrumentation, but also very specified the sample prep and consumables to make sure that you don’t contaminate while your measure. So we have spent a lot of energy of putting a high quality solutions out there and we continue to see a lot of opportunities and we will continue to invest in this space beyond PFAS. I think in Environmental it’s really a place that there would be a lot of investment going-in over the next decade. So we are excited about that area also besides the Advanced Materials.

Patrick Donnelly — Citi Research — Analyst

Great, thank you guys.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

You’re quite welcome.

Operator

And we’ll go next now to Jack Meehan of Nephron Research.

Jack Meehan — Nephron Research LLC — Analyst

Thank you. Good afternoon. Wanted to spend a little time on DGG. Let me start with the pathology business. So, double-digit growth. Was stronger than I guess what we’ve seen in the last few quarters. Was there anything in terms of the uptick in the quarter.

Mike McMullen — President and Chief Executive Officer

Yeah, Jack, I’m going to actually pass that over to Sam because Sam actually is calling in from Denmark, he is actually with the pathology team right now, so you can get it right latest and greatest on-the-ground from from Glostrup. Go ahead, Sam.

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Yes, yes. Thanks, Mike. Jack, thanks for the question. I offer you a couple of things that we’ve observed in the quarter and I think are also promising going-forward. First of all we continue to see the trend of hospitals and healthcare systems being able to work through COVID and start to re-prioritize cancer diagnostics. So overall. I think that’s been something that’s positive. We’ve continued to see strength in our IHC solutions, be it our companion diagnostic solutions that are in the market, but more broadly speaking, including for the antibodies that we have that we sell as ready-to-use reagents. We’re also continuing to see good traction for our advanced steering system that dock along. All of that, you look at geographically. We’ve had some good success, particularly in Europe, but the Americas as well.

Jack Meehan — Nephron Research LLC — Analyst

Great. And then sticking with DGG either for you Sam or Mike, just on the genomic side. I was backing into sort of like a high-teens decline in the quarter. That sounds right. I was just curious, different companies have called out different issues in this end-market. If you could talk about just maybe what exactly you’re seeing, that would be great.

Mike McMullen — President and Chief Executive Officer

Hey, Bob. I don’t remember the exact number, but it was down, but not to that extent.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah, it was down close to double-digits.

Mike McMullen — President and Chief Executive Officer

Okay. [Speech Overlap] And I’m going to have Sam talk about this, but we’re seeing some, what do think. Is a transitory disruption in the diagnostics side of Genomics. So there’s a lot going on with a lot of the diagnostics firms where we provide our solutions into their assays. So Sam, your perspective on I think would be really good.

Sam Raha — Senior Vice President, President, Diagnostics and Genomics Group

Yes, happy to provide that. Building on what you said, Mike, right, there’s a lot of public information now that I’m sure Jack you’re aware of it, restructuring or other sort of operational challenges at a number of customers from research into technology-driven Genomics companies and diagnostic testing companies are going through. Based on that we’ve definitely seen conservatism from customers that they pulled back on purchasing levels, they are working down excess safety stock that they perhaps have built-up and we’ve just seen a little bit of hesitation in purchase patterns. Now that being said, just recently earlier in February I had a chance to attend AGBT, which is one of the most important technology and science conferences and there we definitely saw good interest for our early access that we’ve been doing for SureSelect cancer CGP just a comprehensive cancer panel of 679 genes. We continue to see really good interest in our Magnus automation system, which is the walk away for our SureSelect platform. And our broad-based market leadership and Genomics and NGS QC remains intact. So, I think this is some market headwinds that we’re seeing, but it’s just I think a transitory thing as Mike mentioned.

Jack Meehan — Nephron Research LLC — Analyst

Thank you. All right.

Operator

Thank you. We will take the next question now from Joshua Waldman of Cleveland Research.

Joshua Waldman — Cleveland Research Co. — Analyst

Hey guys, thanks for taking my questions. Two for you, if I may, first on the core growth guide. I wondered if you could provide a bit more color on the considerations that went into reiterating the top-end of the core growth outlook for the year. I guess, maybe a bit surprised we didn’t see more of the Q1 upside flow-through to the full-year. I’m wondering if maybe this is backlog work down benefit here in the quarter that starts to abate as we get into the second-half or I guess something else.

Mike McMullen — President and Chief Executive Officer

Yeah, well, I’ll let him, but I think the headline was more just the recognition of the continued uncertainty about the back-half, but yeah. I think the way to think about that, Josh, is we raised the midpoint of the guidance. Delivered 10% in Q1, we’re saying that Q2 is going to be higher than the full-year. And we’re going to take this one-quarter at a time, given some of the uncertainty that we’re seeing. Obviously, we did talk about having great visibility into Q1 with some of the backlog activities and so forth, but I wouldn’t say it was just that. I mean. I think what I would characterize it as a prudent guide given kind of what we’re seeing. And taking it one quarter at a time.

Joshua Waldman — Cleveland Research Co. — Analyst

Got it, okay. And then, Mike. Following-up on pharma, I think these accounts typically start to get better clarity on their full-year budgets, this time of year. Wondered if you could update us on what you’re hearing from key pharma accounts with respect to instrument budgets and purchasing plans here in 2023.

Mike McMullen — President and Chief Executive Officer

Yeah, sure, Josh. And in fact, I think you’ve just done recently around with some of the large pharma accounts and.

Joshua Waldman — Cleveland Research Co. — Analyst

Yes, so. I think what we’re saying is, our fund those are very-very stable on that. And of course, you’re correct, pharma budgets are set around this time of the year end and I think we’re watching closely a hold-up moves to the second half, but for now, no change.

Mike McMullen — President and Chief Executive Officer

I think we probably haven’t seen any surprises on those themselves, but they’re not aggressively released yet either. That’s why made a few times those call comments around normalization of the deal cycle times.

Joshua Waldman — Cleveland Research Co. — Analyst

Got it, okay. I appreciate it guys.

Mike McMullen — President and Chief Executive Officer

You’re welcome.

Operator

We’ll take our next question now from Liza Garcia.

Liza Garcia — UBS — Analyst

Thank You guys. Thanks so much for taking the question and congrats on the quarter. I wanted to talk about cell analysis if we could. Obviously we think of $100 million business over four years. At this point being about performance and then I think in a recent presentation kind of indicated that in pharma that’s like maybe the largest customer followed by research. So we’ve agreed to get a sense of kind of the different customer groups and what you’re seeing there.

Mike McMullen — President and Chief Executive Officer

It’s hard to get a lot of all the good news in, but I think we had a good start to the year in Cell Analysis, Jacob, as I recall.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Yeah, we had another good quarter in cell analysis, actually we very proud of what we have build-up of our business over the past, yes here in-cell analysis, including the M&A and the acquisitions we have done and you’re absolutely right that the main opportunities are within the biopharma and academia and we’ve actually done a really good job in diversifying where we had some of the business we acquired was very exposed to academia, we have been able to really penetrate into the biopharma over the past years. So we continue to see opportunities and especially, actually in the high-end of the business that there is still a lot of opportunities in the biopharma space and especially in understanding the immune system, immune-oncology, CAR-T and all those areas that we have put a lot of investments into and we see that pays off. So I believe there is still a lot of opportunities in front of us here. There is a strong correlation there in the biopharma academia space, there are a lot of collaborations where especially if you look into the CAR-T where you see a lot of the big University hospitals that is investing into this. So it’s kind of a crossover between the academia and biopharma right now. So we see opportunities in both those arenas right now.

Mike McMullen — President and Chief Executive Officer

[Speech Overlap] You had asked about kind of growth rates, what I would say is it grew faster than the overall company and faster than LSAG.

Liza Garcia — UBS — Analyst

Awsome. Thank you. Super helpful. I guess, if I could just squeeze in one last on the attachment rates. You just crossed over the 30% line. I think, I’m more thinking about kind of how do we think about kind of the incremental particularly I’m thinking about services ACG did pretty well this quarter, the revenue progression as we’re looking at a larger installed-base that’s been put out over the past couple of years.

Mike McMullen — President and Chief Executive Officer

Yeah, I hope you make some comments, Padraig, but I think we’re expecting to continue to step-up on that attach rate.

Padraig McDonnell — Senior Vice President, President and Chief Commercial Officer, Agilent CrossLab Group

Yeah. I think there’s significant opportunity to drive growth for our business and components. One point of a tight trade is about $30 million annually and we know our customers have adopters, workflow solutions that with tight integration on the instruments and that allows us of course, with the one commercial organization to demonstrate the value and, of course. I’ll touch more services and consumables. I will say if you think about what Jacob said about PFAS and biopharma. Our focus on solution-selling has really paid-off. That’s really driven attach rates and I think our overall attach rates in both service and consumables are now in the low 30s and that represents a 2% increase and we expect that to grow as we move forward.

Mike McMullen — President and Chief Executive Officer

And largely, a cleaner question focused on the attach rate on services but I’d be a miss not to have Jacob talk about what’s going on attach rate to consumer that ties in this workflow solutions because we did make some changes organizationally, but the ACG strategy of driving connect rates and services and consumables remains intact.

Jacob Thaysen — Senior Vice President, President, Life Sciences and Applied Markets Group

Yeah, exactly. And I think along worldwide product automation is that there’s been a lot of investment from both businesses and in commercial about driving connect rate also with consumables and it’s more about selling the full solution, and hence, going out not only 40% in the instrument, the consumables Informatics to go after as Padraig was mentioning PFAS, other workflows into BioPharma’s and really starting to addressing the high-end parts of the market and we’ve seen significant uptake in our attach rates in our consumables and I would say we will continue to see growth. We still have a lot of opportunities, but I’ve been really impressed with the team to take it from the 20s up way beyond the 30th now.

Liza Garcia — UBS — Analyst

Thanks so much guys. I appreciate the time.

Mike McMullen — President and Chief Executive Officer

You’re welcome.

Operator

Thank you. We will go next now to Paul Knight of KeyBanc.

Paul Knight — KeyBanc — Analyst

Hey Mike, thanks for being patient and getting me in. I’ll call later. On the RNA, on the oligo production business, it looks like we’ve had I guess four or five here in the last four years or so dominated by Alnylam and Novartis. I’m assuming that this customer account you talk to and project count is expanding well beyond that group of that customers. So my question really is, what’s your position in the market? Do you think you’re the dominant vendor and 2. Does this number of partners suggests you’re going way beyond Novartis and Alnylam.

Mike McMullen — President and Chief Executive Officer

Paul, I’m really glad you hung on and got your question, because very enthusiastic to answer that question. We have a much broader base of business via two very good customers, but the programs go much, much, much broader than that.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

And we are the market-leader.

Mike McMullen — President and Chief Executive Officer

Yeah, we crossed over on the siRNA piece. We are the clear market-leader. We are going to be going after more aggressively the CRISPR space where we can yet claim leadership. But overall, we’ve really with the capacity expansion, continued great work of our team, we continue to gain market-share. From the math we’re doing, we’ve now crossed over the leader in this space.

Paul Knight — KeyBanc — Analyst

So. I think what you’re really building out is the kind of market are the technological I guess the threshold you’ve now achieved, is that fair to say.

Mike McMullen — President and Chief Executive Officer

I’m not sure I understand completely the question. But I think what we’re doing is. I think I got it. We actually spend on our portfolio, which is we’re the leader in siRNA, we’ve got a broad-based business with broad-based set of number of pharma customers and over-time you’ll hear more about those when they’re therapeutics come to market, but also we’re expanding into the CRISPR area, we’ve got a small business there right now, we do really well. We just don’t have all the capacity we needed and that’s part of the story board of what we’re doing what we called Project Endeavor.

Robert W. McMahon — Senior Vice President, Chief Financial Officer

Yeah, and Paul, to build-on what Mike was saying, is not only are we expanding, but I think just as importantly, the market is expanding and so the Alnylam’s of the world were the pioneers of this technology are one of the pioneers, but if you look at the number of products that are in in the clinical compounds that are in the clinic, it goes well beyond the two customers that you just talked about.

Mike McMullen — President and Chief Executive Officer

Bob, maybe just add a touch of color to that the actual number of programs that are in various stages have literally doubled over the last four years. And then in terms of pharma partners, we’re not in a position today to share anything publicly, but already said, we’re working with more than 30 pharma partners and I think what’s encouraging for us is even within pharma the caliber of the companies that have now entered and advancing molecules at various stages. This is a market that is maturing, the number of FDA approvals that have happened, European approvals that have happened, so there is momentum in the market. And we’ve worked hard to be leaders in siRNA but there’s momentum that’s there for us to ride as well.

Paul Knight — KeyBanc — Analyst

Thank you, Great.

Operator

Thank you. And gentlemen, it appears we have no further questions today. Parmeet, I’ll hand things back to you for any closing comments.

Parmeet Ahuja — Investor Relations

Thanks, Bo and thanks everyone for joining. With that, we would like to end the call for today. Have a great rest of the day, everyone.

Operator

Thank you, Parmeet. [Operator Closing Remarks]