Life sciences company Avantor (NYSE: AVTR) beat Wall Street’s revenue expectations in Q3 2026, with revenue up 4.6% year on year to $1.70 billion. Its non-GAAP profit of $0.22 per share was 5.6% above analysts’ consensus estimates.

For more on Avantor, read our free full research report.

"VWR Distribution & Services delivered another quarter of improving revenue performance, with organic growth accelerating to 5.8%, and Bioscience & Medtech Products returned to organic growth as expected. We believe that improving execution and stronger end markets provide a foundation for sustained revenue growth, and we remain focused on execution to build on our positive momentum," Ligner concludes.

Revenue growth

A company’s long-term performance is an indicator of its overall quality. Any business can deliver a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Avantor’s demand was weak and its revenue declined by 1.8% per year. That underwhelming result suggests poor business quality.

Long-term growth matters most, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Avantor’s annualized revenue declines of 1.4% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk.

Organic revenue sheds more light on the company’s revenue dynamics by stripping 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 1.1% year-on-year declines. This was in line with its two-year revenue growth, indicating that the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Avantor reported modest year-on-year revenue growth of 4.6% but beat Wall Street’s consensus estimates by 3.4%.

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

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 16.5%.

Avantor’s adjusted operating margin decreased by 6.5 percentage points over the last five years. The company’s two-year trajectory also shows it failed to return profitability to its peak, as its margin fell by 2.8 percentage points. This was a poor performance, indicating its expenses were rising and it couldn’t pass those costs on to its customers.

In Q3, Avantor generated an adjusted operating margin of 13.4%, down 1.2 percentage points year on year. This small reduction indicates the company’s overall cost structure has been relatively stable.

Earnings per share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Avantor’s EPS declined by 9.4% annually over the last five years, more than its revenue. The company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

A closer look at Avantor’s earnings helps explain its performance. As mentioned earlier, Avantor’s adjusted operating margin declined by 6.5 percentage points over the last five years. Its share count also grew by 13.8%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q3, Avantor reported adjusted EPS of $0.22, in line with the same quarter last year. This result beat analysts’ consensus estimates by 5.6%. Over the next 12 months, Wall Street expects Avantor’s full-year EPS to grow 5.9% from $0.82 to $0.87, according to S&P.

Key takeaways from Avantor’s Q3 results

Avantor turned in a decent quarter, with organic revenue and total revenue both topping Wall Street’s consensus estimates. Investors were likely hoping for more, however, as shares fell 2.5% to $16.71 immediately after the release.

Considering Avantor at the current price? The latest quarter matters, but not as much as longer-term business quality and valuation when deciding whether to invest in the stock. For more on Avantor, read the full research report here (it’s free).