Financial Data and Key Metrics Changes - The company reported 3% organic growth in Q2, with life sciences slightly above that in the mid-single-digit range and diagnostics in the low single-digit range [4][5] - The guidance for the full year has been adjusted down to 2% to 4% organic growth, primarily due to the impact of diagnostics in China [44][56] Business Line Data and Key Metrics Changes - Life sciences software grew over 30% in Q2, while the reagents business continued to show sequential growth [12][15] - Diagnostics in China faced a significant headwind, with a 15% decline in Q2 and a projected mid-20% decline for the second half of the year [7][9] - The pharma segment saw mid-single-digit growth, driven by the strength in the Signals business [12][13] Market Data and Key Metrics Changes - The China diagnostics business accounts for about 9% of total company revenue, with overall exposure to China being 15% to 16% [9] - The U.S. A&G market represents about 5% of the revenue base, with expectations of a similar market environment in the second half of the year [20][22] Company Strategy and Development Direction - The company is focusing on expanding its software offerings and enhancing automation in the U.S. market to improve competitiveness [36][62] - There is an emphasis on driving productivity through integration synergies from past acquisitions and supply chain activities to mitigate tariff impacts [57][58] Management's Comments on Operating Environment and Future Outlook - Management expressed cautiousness regarding the operating environment, particularly in the pharma sector, until there is clarity on policies [19][62] - The company anticipates a gradual ramp-up in diagnostics and expects to see growth in reagents and specialty areas of life sciences [25][62] Other Important Information - The company achieved a free cash flow conversion of 90% in the first half of the year, guiding for over $500 million in free cash flow for the year [64][66] - The management believes that the software business is underappreciated by investors and has significant growth potential [68] Q&A Session Summary Question: What is the outlook for organic growth? - The company is now calling for organic growth of 2% to 4%, down 100 basis points from previous guidance, primarily due to the impact of China diagnostics [44] Question: How is the company addressing tariff impacts? - The net impact of tariffs is about a $0.12 headwind, primarily affecting the diagnostics business in Europe, with operational mitigations already in place for China [10][11] Question: What is the growth outlook for the software business? - The software business is expected to grow significantly, with a net retention rate of 115% and strong annualized portfolio value growth [15][33] Question: How is the company performing in the reproductive health sector? - The reproductive health business is expected to grow mid-single digits, driven by geographic expansion and menu adoption despite falling birth rates [38][40] Question: What are the expectations for the fourth quarter? - The company expects a sequential increase in organic growth in Q4, driven by diagnostics and reproductive health, with a projected mid-single-digit growth rate [44][49]

Financial Data and Key Metrics Changes - The company reported 3% organic growth in Q2, with life sciences slightly above that in the mid-single-digit range and diagnostics in the low single-digit range [4][5] - The guidance for the full year has been adjusted down to 2% to 4% organic growth, primarily due to the impact of China diagnostics [44][56] - The net impact of tariffs is estimated to be a $0.12 headwind, equating to about a 50 basis points impact on operating margins [10][11] Business Line Data and Key Metrics Changes - The life sciences segment saw mid-single-digit growth, driven by a strong performance in the Signals business, which grew over 30% [12][15] - The diagnostics business in China faced a significant headwind, with a reported decline of about 15% in Q2 and guidance for a mid-20% decline in the second half [7][9] - The reagents business has shown sequential growth for six consecutive quarters, with demand particularly strong in pharma and China [26][27] Market Data and Key Metrics Changes - The company’s exposure to the China diagnostics market is about 9% of total revenue, with overall China contributing 15% to 16% of revenue [9] - The U.S. A&G market represents about 5% of the revenue base, with expectations of a similar market environment in the second half of the year [20][22] - The Americas market for ImmunoDX has grown from less than 5% to over 15% of revenue, with expectations for continued growth driven by FDA approvals and automation [35][36] Company Strategy and Development Direction - The company is focusing on expanding its software business, which is expected to continue growing, with a transition to SaaS and strong net retention rates [15][33] - There is an emphasis on increasing automation in the U.S. market to remain competitive, particularly in the ImmunoDX segment [36] - The company aims to leverage its competitive advantages in customer service and product quality to capture market share from competitors [29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautiousness regarding the operating environment, particularly in pharma, due to unclear policies affecting investment planning [19] - The company anticipates a challenging market heading into next year, with expectations of low single-digit growth and continued pressure on instrumentation until clarity on policies is achieved [56][63] - The management remains optimistic about the long-term margin potential, projecting mid-30% operating margins once market conditions normalize [68] Other Important Information - The company achieved a free cash flow conversion rate of 90% in the first half of the year, with guidance for over $500 million in free cash flow for the year [64][66] - The company is actively engaging in share repurchases, viewing current share prices as an attractive opportunity [66] Q&A Session Summary Question: What is the outlook for organic growth? - The company is now guiding for organic growth of 2% to 4%, down from previous expectations, primarily due to the impact of China diagnostics [44] Question: How is the company addressing tariff impacts? - The net impact of tariffs is about a $0.12 headwind, with most effects felt in Europe, and operational mitigations are in place for China [10][11] Question: What is the growth outlook for the software business? - The software business is expected to grow significantly, with a net retention rate of 115% and strong annualized portfolio value growth [15][33] Question: How is the company performing in the diagnostics market? - The diagnostics business in China is facing challenges, with a projected mid-20% decline in the second half, while growth outside of China remains stable [7][48] Question: What are the expectations for the fourth quarter? - The company anticipates a sequential increase in growth rates, driven by diagnostics and reproductive health, with a projected mid-single-digit growth in Q4 [44][49]

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Unaudited financial statements for Q2 and H1 2025 show revenue growth, mixed net income trends, and decreased operating cash flow to $262.5 million [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 operations show revenue growth to $720.3 million, operating income increase, but a slight net income decrease to $53.9 million Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $720,284 | $691,685 | $1,385,046 | $1,341,605 | | **Operating Income from Continuing Operations** | $90,760 | $85,724 | $162,990 | $129,840 | | **Net Income** | $53,948 | $55,360 | $96,185 | $81,373 | | **Diluted EPS (Net Income)** | $0.46 | $0.45 | $0.81 | $0.66 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, total assets were $12.36 billion, with cash decreasing to $991.8 million and total liabilities increasing Balance Sheet Summary (In thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $991,849 | $1,163,396 | | Goodwill | $6,614,989 | $6,463,619 | | Total Assets | $12,362,789 | $12,392,478 | | Long-term debt | $3,214,324 | $3,150,476 | | Total Liabilities | $4,806,621 | $4,725,604 | | Total Stockholders' Equity | $7,556,168 | $7,666,874 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow decreased to $262.5 million, while financing cash outflow significantly increased to $466.1 million due to share repurchases Cash Flow Summary (In thousands) | Cash Flow Activity | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $262,473 | $306,184 | | Net cash (used in) provided by investing activities | $(15,871) | $103,310 | | Net cash used in financing activities | $(466,139) | $(61,508) | | Effect of exchange rate changes on cash | $48,075 | $(12,931) | | **Net (decrease) increase in cash** | **$(171,462)** | **$335,055** | - Purchases of common stock amounted to **$447.5 million** in the first six months of 2025, a significant increase from **$30.3 million** in the same period of 2024[24](index=24&type=chunk)[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail segment realignment, a **$1.0 billion** stock repurchase program with **$414.5 million** remaining, and total debt of **$3.2 billion** - Effective at the beginning of fiscal year 2025, the company integrated its Applied Genomics business from the Diagnostics segment into the Life Sciences segment. Prior period financials have been reclassified for comparability[43](index=43&type=chunk)[44](index=44&type=chunk) - The company's Board authorized a **$1.0 billion** stock repurchase program expiring in October 2026. As of June 29, 2025, **$414.5 million** remained available for repurchases[50](index=50&type=chunk) - The company declared a quarterly cash dividend of **$0.07 per share** for the first two quarters of 2025 and announced the same for the third quarter[53](index=53&type=chunk) - Total debt as of June 29, 2025, had a net carrying amount of **$3.215 billion**, primarily consisting of various senior unsecured notes[39](index=39&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue growth to $720.3 million, gross margin decline from tariffs, and strong liquidity with $991.8 million cash [Overview](index=24&type=section&id=Overview) Q2 2025 revenue grew **4%** to **$720.3 million**, driven by Life Sciences and Diagnostics, despite a **123 basis point** gross margin decline Q2 2025 Performance vs. Q2 2024 | Metric | Change | Driver(s) | | :--- | :--- | :--- | | Total Revenue | +4% | Growth in both Life Sciences (+5%) and Diagnostics (+3%) segments | | Gross Margin | -123 bps | Increased tariffs and product mix shift, partially offset by pricing | | Operating Margin | +20 bps | Sales volume leverage and productivity gains | - Effective at the beginning of fiscal year 2025, the company moved its Applied Genomics business from the Diagnostics segment to the Life Sciences segment[84](index=84&type=chunk) [Consolidated Results of Continuing Operations](index=25&type=section&id=Consolidated%20Results%20of%20Continuing%20Operations) Q2 2025 revenue increased **4%** to **$720.3 million**, but gross margin declined **123 basis points** due to tariffs and product mix - The company estimates that recently enacted tariffs could increase its cost of revenue for the current fiscal year by approximately **$25 million**, with mitigation actions expected to limit the gross margin impact to about **$20 million**[95](index=95&type=chunk) Q2 2025 vs Q2 2024 Expense Analysis | Expense Line | Q2 2025 ($M) | Q2 2024 ($M) | Change (%) | Key Drivers | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | $327.7 | $306.2 | +7% | Increased tariffs, unfavorable FX, product mix | | SG&A | $248.5 | $251.7 | -1% | Lower amortization and litigation costs | | R&D | $53.3 | $48.1 | +11% | Investments in new product development, unfavorable FX | - The effective tax rate is expected to be approximately **20%** for fiscal year 2025, before discrete items[103](index=103&type=chunk) [Reporting Segment Results of Continuing Operations](index=27&type=section&id=Reporting%20Segment%20Results%20of%20Continuing%20Operations) Q2 2025 Life Sciences revenue grew **5%** to **$365.9 million** and Diagnostics revenue grew **3%** to **$354.4 million**, both with operating margin declines Q2 2025 Segment Performance vs. Q2 2024 | Segment | Revenue ($M) | Revenue Growth (%) | Operating Income ($M) | Operating Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Life Sciences | $365.9 | 5% | $115.5 | -218 bps | | Diagnostics | $354.4 | 3% | $89.4 | -179 bps | - Life Sciences revenue growth was driven by a **$17.1 million** increase in Software revenue[106](index=106&type=chunk) - Diagnostics revenue growth was driven by increases in both Immunodiagnostics (**$5.6 million**) and Reproductive Health (**$5.7 million**)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$991.8 million** cash and **$1.5 billion** credit, using **$447.5 million** for H1 2025 share repurchases - As of June 29, 2025, the company had **$991.8 million** in cash and cash equivalents and **$1.5 billion** of available borrowing capacity[118](index=118&type=chunk) - The company expects to use proceeds from the sale of its former business for debt retirement, share repurchases, and strategic acquisitions[117](index=117&type=chunk) - Net cash used in financing activities increased to **$466.1 million** in H1 2025 from **$61.5 million** in H1 2024, largely due to a significant increase in share repurchases (**$447.5 million** vs. **$30.3 million**)[126](index=126&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency and interest rates using derivatives, with no material changes from its 2024 Form 10-K disclosures - The company's primary market risks are foreign currency exchange rates and interest rate changes[130](index=130&type=chunk) - The company uses derivative transactions to hedge against known or forecasted market exposures, but no interest rate hedge instruments were outstanding at June 29, 2025[130](index=130&type=chunk)[133](index=133&type=chunk) - The company's market risks are not materially different from those disclosed in its 2024 Form 10-K[131](index=131&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 29, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 29, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[135](index=135&type=chunk) - No changes were identified during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[136](index=136&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, with management not expecting a material adverse effect on financial statements - The company is subject to various legal proceedings arising from its ordinary business activities[139](index=139&type=chunk) - Management believes the total cost of resolving current contingencies will not have a material adverse effect on its consolidated financial statements[139](index=139&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Key risks include market dependence, global instability, innovation, supply chain, cybersecurity, intangible asset impairment, and regulatory compliance - **Business & Economic Risks:** The business is sensitive to declines in customer markets, government funding cuts, and global economic conditions, including tariffs and trade barriers[140](index=140&type=chunk)[141](index=141&type=chunk) - **Innovation & Competition Risk:** Failure to introduce new products in a timely manner in a technologically competitive landscape could lead to loss of market share[144](index=144&type=chunk) - **Supply Chain Risk:** The company relies on limited or single-source suppliers for certain critical components, and disruptions could adversely affect operations[154](index=154&type=chunk) - **IT & Cybersecurity Risk:** A significant disruption or security breach of information technology systems could result in financial loss, reputational damage, and misappropriation of assets[158](index=158&type=chunk)[159](index=159&type=chunk) - **Financial Risk:** The company has substantial debt, which could impact future financing and flexibility. It also faces risk of intangible asset impairment, with goodwill and other intangibles totaling **$9.1 billion**[160](index=160&type=chunk)[175](index=175&type=chunk) - **Regulatory & Legal Risk:** The company is subject to extensive regulation (FDA, environmental, data privacy) and faces risks of product liability claims and non-compliance penalties[166](index=166&type=chunk)[167](index=167&type=chunk)[171](index=171&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Q2 2025 saw the company repurchase **3,103,930 shares** at **$94.34** average, leaving **$414.5 million** available in the repurchase program Issuer Repurchases of Equity Securities for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | Mar 31 - Apr 27, 2025 | 1,562,485 | $96.04 | 1,561,807 | $557,209,881 | | Apr 28 - May 25, 2025 | 1,091,354 | $91.71 | 1,090,425 | $457,209,962 | | May 26 - Jun 29, 2025 | 450,091 | $94.81 | 450,000 | $414,544,747 | | **Total for Quarter** | **3,103,930** | **$94.34** | **3,102,232** | **$414,544,747** | - The Board authorized a **$1.0 billion** stock repurchase program on October 24, 2024, which will expire on October 23, 2026[190](index=190&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the three months ended June 29, 2025[188](index=188&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL data files

Group 1 - Revvity, Inc. (NYSE: RVTY) operates in the life sciences and diagnostics markets, providing instruments, reagents, and assays [1] - Approximately 80% of Revvity's total revenues come from recurring business, indicating a stable revenue model [1] - The company is strategically focused on key growth markets, particularly in cell and gene therapy [1]

Core Viewpoint - Revvity, Inc. (RVTY) reported strong second-quarter 2025 results with adjusted earnings per share (EPS) of $1.18, exceeding estimates, while revenue growth was noted despite margin contraction [1][8][10] Financial Performance - Adjusted EPS of $1.18 beat the Zacks Consensus Estimate of $1.14 by 3.5%, but declined 3.3% year-over-year [1] - Revenue reached $720.3 million, reflecting a 4.1% year-over-year increase and surpassing estimates by 1.2% [2][8] - GAAP EPS from continuing operations was 46 cents, slightly up from 45 cents in the prior-year period [1] Segment Analysis - Life Sciences segment generated revenues of $365.9 million, up 4% organically year-over-year, with adjusted operating income of $115 million, down 2.5% [3] - Diagnostics segment reported revenues of $354.4 million, a 3% increase year-over-year, with organic growth of 2% [3] Margin and Expense Analysis - Selling, general and administrative expenses totaled $248.5 million, down 1.2% year-over-year [5] - Research and development expenses increased by 10.7% to $53.3 million [5] - Adjusted operating income declined 3.6% to $191.8 million, with an adjusted operating margin of 26.6%, down 220 basis points [5] Cash Flow and Financial Position - Cash and cash equivalents at the end of Q2 2025 were $991.8 million, down from $1.14 billion in the previous quarter [6] - Net cash provided by operating activities was $134.3 million, compared to $158.6 million in the year-ago quarter [6] Guidance and Outlook - The company raised its revenue guidance for 2025 to a range of $2.84-$2.88 billion, while lowering its EPS outlook to $4.85-$4.95 [7][9] - The adjusted EPS guidance was revised down from $4.90-$5.00 [9] Strategic Developments - Recent product launches, including the IDS i20 analytical platform and Mimix reference standards, are expected to drive additional sales [13] - A favorable ruling in litigation with Cloud Software Group ensures continued access to essential software, supporting operational continuity [14] Market Reaction - RVTY shares fell 5.9% in pre-market trading, attributed to the lowered EPS outlook, with a year-to-date decline of 7.1% compared to the industry’s 5.2% drop [11]

Core Insights - Revvity (RVTY) reported revenue of $720.28 million for the quarter ended June 2025, reflecting a year-over-year increase of 4.1% [1] - The company's EPS was $1.18, down from $1.22 in the same quarter last year, but exceeded the consensus estimate of $1.14, resulting in an EPS surprise of +3.51% [1] - The revenue surpassed the Zacks Consensus Estimate of $711.27 million, indicating a surprise of +1.27% [1] Revenue and Earnings Performance - Organic revenue growth for the total company was 3%, slightly below the four-analyst average estimate of 3.1% [4] - Organic revenue growth in Life Sciences was 4%, outperforming the 2.2% average estimate from three analysts [4] - Organic revenue growth in Diagnostics was 2%, which fell short of the 3.8% average estimate from three analysts [4] Sales Metrics - Net Sales in Life Sciences reached $365.9 million, exceeding the three-analyst average estimate of $342.32 million, with a year-over-year increase of +16.6% [4] - Net Sales in Diagnostics were reported at $354.39 million, below the three-analyst average estimate of $365.99 million, reflecting a year-over-year decline of -6.3% [4] Stock Performance - Revvity's shares have returned +6% over the past month, outperforming the Zacks S&P 500 composite's +4.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $1.18 for the quarter, which was solidly above expectations and guidance [7][24] - Organic growth for the quarter was 3%, with a modestly stronger operating margin performance when excluding FX impacts [7][10] - Full year organic growth is now expected to be in the range of 2% to 4%, down 1% from prior outlook, while adjusted EPS is expected to be in the range of $4.85 to $4.95, also down 1% from previous expectations [10][22] Business Line Data and Key Metrics Changes - Life Sciences business grew 4% organically, driven by approximately 30% growth in the signals software franchise [7][26] - Diagnostics segment grew 2% organically, with immunodiagnostics facing challenges due to difficult multiyear comparisons and new reimbursement policies in China [8][9] - The software business set a new record for orders in a single quarter, indicating strong future performance [8] Market Data and Key Metrics Changes - Sales to pharma and biotech customers grew in the mid single digits, while academic and government customers saw low single-digit declines [8][27] - The Americas and Europe experienced mid single-digit growth, while Asia, particularly China, declined in the mid single digits [26] Company Strategy and Development Direction - The company continues to evaluate potential M&A targets but has not yet identified compelling opportunities [11][88] - There is a focus on share repurchase activities, with nearly $300 million repurchased in the second quarter alone, totaling approximately $450 million for the first half of the year [11][12] - The company aims to maintain a strong financial profile while being opportunistic in share repurchases and potential acquisitions [11][89] Management's Comments on Operating Environment and Future Outlook - Management acknowledged persistent macroeconomic challenges but emphasized the company's ability to adapt and perform well [5][6] - The impact of new reimbursement policies in China is expected to lead to a significant pullback in the immunodiagnostics business, but overall performance remains resilient [9][20] - The company remains optimistic about its long-term growth despite current challenges, with a focus on innovation and operational excellence [15][16] Other Important Information - The company generated $115 million in free cash flow during the quarter, resulting in a 90% conversion of adjusted net income [10][24] - The launch of the new IDS I 20 analytical platform is expected to significantly contribute to growth in the immunodiagnostics segment [13][14] - The company received an upgraded ESG rating from MSCI, reflecting its commitment to sustainability and governance [14] Q&A Session Summary Question: Impact of DRG changes on guidance - Management indicated that the majority of the guidance change is due to the DRG policy, which affects multiplex tests, but expects a potential increase in demand for more expensive single plex tests in the long run [35][36] Question: Margin expectations and volume assumptions - Management clarified that the baseline operating margin for next year is expected to be 28%, with potential expansion depending on organic growth levels [37][38] Question: Revenue pacing and guidance assumptions - Management confirmed that revenue pacing is expected to follow normal seasonality, with a high single-digit ramp in both Life Sciences and Diagnostics businesses [44][45] Question: Visibility on China’s reimbursement pricing headwinds - Management noted that the impact of the DRG changes is expected to continue until the policy anniversaries, with IDX in China projected to represent less than 5% of total revenue by 2026 [47][48] Question: Trends in Life Sciences reagents and instruments - Management reported five consecutive quarters of growth in life sciences reagents, while capital equipment spending remains impacted [51][52] Question: Software growth sustainability - Management highlighted strong performance in the signals software business, with a significant portion of revenue now coming from SaaS, indicating continued growth potential [59][60] Question: Portfolio resiliency and diagnostics performance - Management expressed confidence in the overall portfolio, noting strong growth in life sciences and reproductive health, despite challenges in the diagnostics segment due to DRG [64][66]

Financial Data and Key Metrics Changes - The company reported revenue of $720 million for Q2 2025, achieving 3% organic growth, with a 1% tailwind from foreign exchange (FX) [20][24] - Adjusted EPS for the quarter was $1.18, exceeding expectations by $0.04, with adjusted operating margins at 26.6%, down two basis points year over year [22][20] - Full year organic growth is now expected to be in the range of 2% to 4%, down 1% from prior expectations, with adjusted EPS projected between $4.85 and $4.95, also down 1% [9][30] Business Line Data and Key Metrics Changes - Life Sciences business grew 4% organically, driven by a 30% increase in the signals software franchise, while Diagnostics segment grew 2% organically [5][24] - Sales to pharma and biotech customers showed mid single-digit growth, while academic and government customer sales declined in the low single digits [6][24] - The immunodiagnostics business in China is expected to decline in the high teens for the full year due to new reimbursement policies impacting test volumes [17][18] Market Data and Key Metrics Changes - The Americas and Europe experienced mid single-digit growth, while Asia, including China, saw mid single-digit declines [24][27] - The company faced challenges in China due to the implementation of a new diagnosis-related groups (DRG) policy, affecting diagnostic panel sizes ordered by physicians [8][17] - The overall impact of FX is anticipated to be a 1% tailwind to revenue for the full year, compared to a previous assumption of a 50 basis point headwind [28] Company Strategy and Development Direction - The company continues to focus on cash flow generation, with $115 million in free cash flow for the quarter, and has been active in share repurchase activities, totaling nearly $450 million in the first half of the year [10][11] - The management remains disciplined in evaluating potential M&A targets, emphasizing the importance of financial profiles and expected returns [10][90] - The company is committed to innovation, with the launch of the IDS I 20 analytical platform expected to enhance growth in specialty testing automation [12][11] Management's Comments on Operating Environment and Future Outlook - The management acknowledged ongoing macroeconomic and regulatory challenges but expressed confidence in the company's ability to adapt and thrive [4][14] - The outlook for the second half of the year remains cautious, with expectations for continued stability in pharma and biotech customers, while anticipating ongoing headwinds in the academic and government sectors [17][18] - The company plans to implement structural cost actions to offset margin pressures and expects to enter next year with a baseline operating margin of 28% [30] Other Important Information - The company received an upgraded ESG rating from MSCI to AAA, reflecting its commitment to sustainability and governance [12] - The management highlighted the importance of addressing the DRG changes in China to mitigate impacts on patient care and business performance [66] Q&A Session Summary Question: Guidance change related to DRG and VBP - The majority of the guidance change is attributed to the DRG policy, which has impacted multiplex test volumes, with expectations for a shift towards more expensive single plex tests in the long run [34][35] Question: Margin change and typical range - The typical operating margin range is around 28%, with expectations for slight margin expansion based on organic growth levels [36][38] Question: Revenue pacing and guidance assumptions - The company expects normal seasonality in revenue pacing, with a high single-digit ramp in both Life Sciences and Diagnostics businesses [41][44] Question: Incremental reimbursement pricing headwinds in China - The impact of the DRG changes is expected to continue until the company anniversaries the policy, with IDX in China projected to represent less than 5% of total revenue by 2026 [46][46] Question: Trends in Life Sciences reagents and instruments - The Life Sciences reagents business has shown five consecutive quarters of growth, while capital equipment spending remains cautious [50][85] Question: Software growth and margin expectations - The signals software business achieved record orders and 32% organic growth, but overall margins are impacted by the volume drop in high-margin diagnostics [58][63] Question: Portfolio resiliency and diagnostics performance - The management remains confident in the overall portfolio, highlighting strong performance in Life Sciences and software, despite challenges in the diagnostics segment due to DRG [66][66]

Core Insights - Revvity (RVTY) reported quarterly earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.14 per share, but down from $1.22 per share a year ago, resulting in an earnings surprise of +3.51% [1] - The company achieved revenues of $720.28 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.27% and up from $691.68 million year-over-year [2] - Revvity has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Financial Performance - The earnings surprise for the previous quarter was +5.21%, with actual earnings of $1.01 per share compared to an expected $0.96 [1] - The current consensus EPS estimate for the upcoming quarter is $1.27, with projected revenues of $711.17 million, and for the current fiscal year, the EPS estimate is $4.82 on revenues of $2.85 billion [7] Market Position - Revvity shares have underperformed the market, losing about 7.1% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The Zacks Industry Rank places Medical Services in the top 37% of over 250 Zacks industries, indicating a favorable position compared to the bottom 50% [8] Future Outlook - The sustainability of Revvity's stock price movement will depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The estimate revisions trend for Revvity was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market [6]

Financial Performance - Revvity's Q2 2025 revenue reached $720 million, a 4% year-over-year increase[11] - Organic revenue growth was 3%, with a 1% positive impact from foreign exchange[11] - Adjusted operating margin was 266%, a decrease of 210 basis points year-over-year[11] - Adjusted EPS was $118, a 3% decrease year-over-year[11] - Free cash flow was $115 million for the quarter, with a year-to-date total of $234 million[11] Segment Performance - Life Sciences revenue was $366 million, with a 5% reported increase, including 4% organic growth and 1% from FX[13, 14] - Diagnostics revenue was $354 million, with a 3% reported increase, including 2% organic growth and 1% from FX[16, 17] - Life Sciences adjusted operating margin was 316%, a decrease of 220 basis points year-over-year[14] - Diagnostics adjusted operating margin was 252%, a decrease of 180 basis points year-over-year[17] 2025 Financial Guidance - Revvity projects full-year revenue between $284 billion and $288 billion, representing a 3% to 5% reported increase[18]