Life sciences company Avantor (NYSE: AVTR) beat Wall Street’s revenue expectations in Q2 CY2026, but sales were flat year on year at $1.69 billion. Its non-GAAP profit of $0.21 per share was 11% above analysts’ consensus estimates.

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Emmanuel Ligner, President and Chief Executive Officer, says: "Our Revival program is strengthening how we serve our customers, leading to improved business performance.

Company Overview

With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE: AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Avantor’s demand was weak and its revenue declined by 1.4% per year. This was below our standards and is a sign of poor business quality.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Avantor’s annualized revenue declines of 2% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Avantor’s organic revenue averaged 1.9% year-on-year declines. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Avantor’s $1.69 billion of revenue was flat year on year but beat Wall Street’s estimates by 4.9%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

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Adjusted Operating Margin

Avantor has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average adjusted operating margin of 16.8%.

Looking at the trend in its profitability, Avantor’s adjusted operating margin decreased by 5.9 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 2.8 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

In Q2, Avantor generated an adjusted operating margin profit margin of 13.3%, down 1.7 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Avantor, its EPS declined by 7.8% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

We can take a deeper look into Avantor’s earnings to better understand the drivers of its performance. As we mentioned earlier, Avantor’s adjusted operating margin declined by 5.9 percentage points over the last five years. Its share count also grew by 14.6%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q2, Avantor reported adjusted EPS of $0.21, down from $0.24 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Avantor’s full-year EPS to grow 1.6% from $0.82 to $0.83.

Key Takeaways from Avantor’s Q2 Results

We were impressed by how significantly Avantor blew past analysts’ organic revenue expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 7% to $13.28 immediately after reporting.

Avantor had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).