You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: We have reported another quarter of strong broad-based momentum across our portfolio and geographies.
Our teams have remained focused on supporting our customers and developing and delivering exciting new products despite the continuing impact of the pandemic.
September 1 marked one year since I joined the company and what a year it has been.
I'm often asked what is different.
I would first like to talk about what is the same because that is what is giving us the ability to compete more effectively.
Our brand stands for deep scientific expertise, a clear understanding of our customers' challenges and courage to invest in game-changing innovation; this remains the same.
What we have injected with our new leadership team is a stronger focus on execution, a sense of urgency and accountability.
We are a work in progress but the trend is positive.
Now moving to Slide 3 which summarizes where we are on our journey.
Firstly, we're sustaining our commercial momentum with another strong quarter delivering flat sales growth of 6%, showing solid business performance with minimal COVID tailwinds.
Meanwhile, our commercial initiatives and strong traction of new products like premier columns and instruments and Arc HPLC were well-positioned to deliver market cost growth through 2022.
Finally, preparing on this momentum by taking decisive steps and solving key problems that are present in higher growth adjacencies like biologics manufacturing.
I will now provide a brief overview of our third quarter operating results, as well as commentary on our end markets, geographies and technologies.
Amol will then review our financial results in detail and provide comments on our updated financial outlook.
Moving now to Slide 4.
In the third quarter, our revenue grew 11% as reported and on a constant currency basis, reflecting continued strength in our pharma and industrial end markets, with balanced demand for our instruments and recurring revenue products.
This translates to a 6% stack CAGR for the quarter versus 2019 on a constant currency basis.
Year-to-date, revenue has increased 21% with a constant currency tax CAGR versus 2019 also above 6%.
Our top line growth resulted in Q3 non-GAAP adjusted earnings per share of $2.66, growing 23% year-over-year.
Year-to-date, non-GAAP adjusted earnings per share have grown 39% to $7.54.
Looking more closely at our top-line results for the quarter on Slide 5 in constant currency, first, by operating segment.
The Water division grew 9% while DA grew by 27%.
By end market, our largest market category, pharma, grew 16%, industrial grew 9%, while academic and government declined by 11%.
In Pharma, we saw a broad-based continued strength in sales across customer segments, geographies and applications.
Specced [Phonetic] was both in small molecule and large molecule applications which both grew in mid-teens for the quarter.
Industrial growth was regionally broad and led by our TA business which saw strong growth globally in thermal, microcalorimetry and theology.
Turning to academic and government which is about 10% of our business, continued strength in Europe was offset by softer performance in China and other regions.
Moving now to our sales performance by geography, on a constant currency basis, sales in the Americas grew 16%, with the U.S. growing 13%.
Sales in Europe grew 8%.
Sales in Asia grew 8%, with India over 40% and China sales were down 3%.
Now to a bit of clarification on China; demand remains very healthy as does the execution of our initiatives.
A shipment of approximately $12 million got delayed at an airport in the last few days of the quarter due to a third-party shipping issue and has been delivered in the first few days of the fourth quarter.
Looking therefore at China orders for the quarter, this was up mid-teens year-over-year.
So really no challenge from a demand perspective.
In the U.S., growth was led by a broad-based continued strength in our pharma and industrial end markets.
In pharma, we saw strength across our instrument and chemistry portfolios.
In Industrial, our Waters and TA businesses both saw strong growth.
Europe demand remains robust across all end markets with continued strength in pharma, industrial and academic and government.
For the quarter, India was our fastest-growing market, driven by very strong growth in instrument sales to our pharma customers.
As you know, India is primarily a small molecule and generic market for export and this is indicative of continued strength in global pharmaceutical demand for small molecule drugs.
At products and services, customer demand for our instruments remain strong after an impressive first half of the year, while recurring revenues also continued to see sustained growth.
Overall, instrument sales grew 10% for the quarter, driven by robust demand, our improved commercial execution, new product contribution and instrument replacement.
In LC, the newly released Arc HPLC continued to see strong growth and uptake of our premier instruments, both Arc and acuity, especially for applications in novel modalities like mRNA and Biologics remain solid.
The strength we are seeing in our LC instrument portfolio remains a positive indicator for sustainable future growth in consumables and service.
In mass spec, demand strength from pharma customers continued with strong demand for our single quad led by users for oligo and biologics purification as well as strength in our tandem quad used in late-stage product development.
We're also encouraged by early interest in our Select Series MRT Time-of-Flight platform which delivered highest quality resolution at fast speeds.
Now for our recurring revenues, chemistry sales grew 13%, driven by an increase in utilization of our pharma customers, as well as strength in our industrial end markets.
Demand for our new premier columns remains strong, while our e-commerce initiative is progressing and making it easier for our customers to do business with us.
So far this year, our chemistry consumables have grown almost double digits when compared to our 2019 base.
We're pleased that our premier technology is continuing to provide important benefits in separation and purification of mRNA and oligonucleotide molecules, given it's unique ability to reduce selective binding of plasmids and mRNA to various services.
Service also grew double digits again this quarter even as last year's comps have become tougher.
On a two year stack basis, service grew 7% in constant currency for the quarter and 6% year-to-date.
By focusing on our value proposition and commercial execution, we have seen an increase in service plan attachment rates and plan renewals.
Finally, TA had a great quarter, with sales up almost 30% as demand has rebounded with strong growth across all regions.
TA instrument sales have grown at 8% on a two year stack basis so far this year driven by strong demand for our thermal instruments used in the analysis of advanced materials, as well as microcalorimetry instrument demand for our pharma and academic customers.
Moving now to Slide 6.
Let me now focus on why we believe that we will continue to deliver market class growth.
I think you're used to seeing these initiatives, so let me use the same trend starting from the left-hand side of the slide.
In 2021, we expect our instrument replacement initiative to deliver over $30 million in revenue.
In 2022, we expect this to become over $40 million which means an incremental $10 million over 2021.
Our focus on commercial execution is positively impacting our service business with planned coverage rates having increased by 2% so far this year compared to the first three quarters of 2019.
In 2022, we think a further 100 basis points of expansion in service plan adoption is attainable.
Growth in e-commerce adoption also remains strong with chemistry sales through our e-commerce channels approaching roughly 30% versus the 21% we saw in 2019.
We expect this to continue reaching over 35% by the end of next year.
So far, this year, revenue from contract organizations has grown over 40% versus the comparable period in 2019.
Next year, we expect the expect this to grow low double digits for the year versus 2021.
And new products continue to do well.
We are just taking the example of Arc HPLC and Premier to illustrate the point here.
Both Arc HPLC and Premier continue to be strong drivers with over $45 million revenue expected from these sources of this year in and separate to the replacement initiative.
In 2022, we are expecting this number to be over $60 million.
So in all, these initiatives alone should give us approximately 1% over our base business growth for 2022 which reaffirm our belief in market plus growth rates.
Moving now to Slide 7, we operate a strong core business in healthy and durable end markets.
This strong foundation provides us a platform for solving critical problems facing our industry, where we can bring our scientific expertise and product portfolio capabilities.
I would like to say, there are three areas of focus which also happen to be in high-growth end markets.
First, in the biologics arena on the reagent side and bioseparations.
We believe there are significant problems to solve in separating and purifying these newer modalities, having a deeper understanding of reagents coupled with our chemistry expertise will allow us to solve these problems.
Second, in bioprocessing, the largest challenge I felt as an engineer in bioprocessing versus small molecule processing was that once you define the process, you got stuck with it because it was in a drug master file.
We have to decouple the process from the product.
Separately, the process development time scales are longer versus small molecules, given the sheer complexity of attributes you need to measure.
A simple and robust tool that can measure multiple attributes as a potential solution.
We believe that the bio cohort is the right LCMS tool that can begin to address this challenge.
Third area is diagnostics, where we need a fast unbiased detection of multiple biomarkers to enable early disease detection.
We believe, again, mass spec has a significant role to play here.
Moving now on to Slide 8.
Let me illustrate what I mean by sharing what we are doing to solve some of the key problems in bioprocessing.
Last week, we announced a partnership with Sartorius, a leader in bioprocessing.
We will combine our water Biocare system as a bioprocess analyzers with Sartorius amber bioreactors, giving scientists both faster and at line direct access to advanced quality characterization information.
Scientists across Sartorius, Waters and some of our customers have already shown that the combined offering will shorten product development timelines considerably, taking what currently takes six weeks to analyze down to only two days.
It also lays the foundation for using the BioCore as a bioprocess analyzer for process control and quality testing in the future.
BioAccord is both versatile and easy to use and we expect that process engineers will be able to master it's operation within one to two weeks.
In fact, one of our customers had summer interns use the BioAccord and gave raving reviews on how simple it is to use.
I'm also an engineer who have been out of the last for many years and I was able to learn quickly.
Resulting configuration will allow direct analysis of bulk substance not just cell culture media, while targeting over 250 cell culture media analytics.
Separately, we also announced a multiyear collaboration with the University of Delaware to develop technology for analytical characterization of manufacturing processes for biologics and normal modality.
Through these partnerships, researchers from both Waters and the University of Delaware will identify and develop solutions that can provide better aseptic sampling, make sensor and analytical instrument improvements and develop data analytics and process control.
This partnership will help us expand our capabilities to characterize biological manufacturing processes in order to drive improvements in quality, yield, efficiency and process control.
In summary, 2021 so far has been a very successful year for Waters.
We are laser focused on our commercial execution.
The markets we serve are in a healthy state and our geographic regions have rebounded solidly from pandemic lows.
Meanwhile, I'm convinced of the great opportunity that lies ahead of us higher growth adjacencies to impact and deliver value by extending our scientific expertise and product portfolio toward helping customers solve the most complex problems in our industry.
With that, I'd like to pass the call over to Amol for a deeper review of third quarter financials and our outlook for the remainder of 2021.
As Udit outlined, we recorded net sales of $659 million [Phonetic] in the third quarter, an increase of 11% in constant currency.
Reported sales growth was also 11%.
Looking at product line growth, our recurring revenue which represents the combination of chemistry and service revenue increased by 11% for the quarter, while instrument sales increased 10%.
Chemistry revenues were up 13% and service revenues were up 10%.
As we noted in our last earnings call, recurring revenues were not impacted by a difference in calendar days this quarter.
Looking ahead, there are six fewer days in fourth quarter of this year compared to 2020.
Now, I would like to comment on our third quarter non-GAAP financial performance versus the prior year.
Gross margin for the quarter was 58.9%, as compared to 55.8% in the third quarter of 2020.
Improvement was driven primarily by volume leverage and revenue mix.
The foreign exchange benefit in the quarter was about 1%.
Moving down the P&L, operating expenses increased by approximately 17% on a constant currency basis and on a reported basis.
The increase was primarily attributable to higher labor cost due to the normalization of prior year cost actions, as well as higher variable compensation on the higher sales volume.
In the quarter, our effective operating tax rate was 11.7%, a decrease from last year due to some favorable quarter specific discrete items.
Excluding the impact of these discrete items, our year-to-date tax rate is consistent with the prior year.
Our average share count came in at 61.9 million shares or about 400,000 less than the third quarter of last year as a result of our share repurchase program.
Our non-GAAP earnings per fully diluted share for the third quarter increased 23% to $2.66 in comparison to $2.16 last year.
On a GAAP basis, our earnings per fully diluted share increased to $2.60 compared to $2.03 last year.
Turning to free cash flow, capital deployment in our balance sheet.
We define free cash flow as cash from operations less capital expenditures and exclude special items.
In the third quarter of 2021, free cash flow was $140 million after funding $40 million of capital expenditures.
Excluded from the free cash flow was $12 million relating to investment in our Taunton precision chemistry.
Year-to-date free cash flow has increased to $488 million and at approximately $0.25 of each dollar of sales converted into free cash flow.
In the third quarter, accounts receivable DSO came in at 71 days, down five days compared to the third quarter of last year and down two days compared to the last quarter.
Inventory DIO decreased by 13 days compared to the third quarter of last year.
Given the higher sales volume and our proactive measures to secure supply, inventory increased by 62 million in comparison to the prior year.
We maintain a strong balance sheet, access to liquidity and well-structured debt maturity profile.
In terms of returning capital to shareholders, we repurchased approximately 369,000 shares of our common stock for $151 million in Q3.
At the end of the quarter, our net debt position was $958 million, with net debt-to-EBITDA ratio about one.
Our capital deployment priorities are to invest in growth, maintain balance sheet strength and flexibility, return capital to shareholders and to deploy capital to well thought out, attractive and adjacent growth opportunities.
As we look forward to the remainder of the year, I would like to provide you with some update on our thoughts for 2021 on Slide 11.
Throughout this year, we've seen good momentum driven by robust end market demand and strong commercial execution.
We believe that this momentum will continue and expect our near-term growth initiatives to continue to contribute meaningfully to our performance.
Looking at the fourth quarter, the comparison is more challenging as it was the first quarter in our transformation journey and was further favorably impacted by post lockdown elevated year-end budget plus spending.
In addition, we have six fewer calendar days in the fourth quarter of this year.
This dynamic supports raising full year 2021 guidance to 15% to 16% constant currency sales growth.
At current exchange rates, the positive currency translation is expected to add approximately one percentage point, resulting in full year reported sales growth guidance of 16% to 17%.
Gross margin for the full year is expected to be approximately 58% to 59% and operating margin is expected to be approximately 29% to 30%.
We expect our full year net interest expense to be $34 million and full year tax rate to be 14% to 15%.
Average diluted 2021 share count is expected to be approximately $62 million.
Our share repurchase program will also continue into Q4 and we'll provide quarterly updates as appropriate.
Rolling all this together on a non-GAAP basis, full year 2021 earnings per fully diluted share are now projected in the range of $10.94 to $11.04.
This includes a positive currency impact of approximately two percentage points at today's rate and assumes no material adverse supply impact from COVID.
Looking at the fourth quarter of 2021, we expect constant currency sales growth to be 5% to 7%.
At today's rates, currency translation is expected to subtract approximately two percentage points resulting in fourth quarter reported sales growth guidance of 3% to 5%.
Fourth quarter non-GAAP earnings per fully diluted share are estimated to be in the range $3.40 to $3.50.
This includes a negative currency impact of approximately three percentage points at today's rates and assumes no material adverse supply impact from COVID.
Before I wrap things up, I would like to make a few comments on our ESG efforts and our core principles to fuel innovation and make a positive impact.
This includes doing our part to reduce our environmental footprint and leave the world better than we found it, being representative of the diverse society we live in and providing effective governance that enhances long-term shareholder value.
You will see more of our progress in each of these areas in our 2021 sustainability report coming out later this month.
Turning to Slide 10, I was particularly moved recently by the new internship program we developed with Team New England designed to increase access to STEM education for students of all backgrounds.
Over the course of six weeks, we gave high school students a hands-on learning experience with a mix of science, business and soft skills.
Over 70 Waters employees were involved, who gave practical exposure and mentorship.
We look forward to continuing these efforts in the future.
In summary, we continue to be pleased with our performance this year, we're sustaining our commercial momentum with our initiatives which continue to perform well and should provide a multiyear benefit as we continue to strengthen our core.
We are continuing to track 6% on a two year CAGR [Phonetic] 6% on a two year CAGR for our revenue in constant currency, showing that our core is strong.
We are focused on accelerating innovation to our portfolio and reaching these higher growth rate areas in adjacent markets.

user
q3 non-gaap earnings per share $2.66.
q3 sales rose 11 percent to $659 million.
sees q4 non-gaap earnings per share $3.40 to $3.50.
sees fy non-gaap earnings per share $10.94 to $11.04.
q3 gaap earnings per share $2.60.
sees fy21 constant currency sales growth in range of 15-16%.

assistant