Revvity(RVTY) - 2026 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Unaudited Financial Statements 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 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 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 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][25] Notes to Condensed Consolidated Financial Statements 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][44] - 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] - 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] - Total debt as of June 29, 2025, had a net carrying amount of $3.215 billion, primarily consisting of various senior unsecured notes[39] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 revenue growth to $720.3 million, gross margin decline from tariffs, and strong liquidity with $991.8 million cash 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] Consolidated Results of Continuing Operations 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 $20 million[95] Q2 2025 vs Q2 2024 Expense Analysis | Expense Line | Q2 2025 ($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] Reporting Segment Results of Continuing Operations 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] - Diagnostics revenue growth was driven by increases in both Immunodiagnostics ($5.6 million) and Reproductive Health ($5.7 million)[110] Liquidity and Capital Resources 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] - The company expects to use proceeds from the sale of its former business for debt retirement, share repurchases, and strategic acquisitions[117] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] - 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][133] - The company's market risks are not materially different from those disclosed in its 2024 Form 10-K[131] Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Legal Proceedings 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] - Management believes the total cost of resolving current contingencies will not have a material adverse effect on its consolidated financial statements[139] Risk Factors 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][141] - 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] - Supply Chain Risk: The company relies on limited or single-source suppliers for certain critical components, and disruptions could adversely affect operations[154] - 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][159] - 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][175] - 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][167][171] Unregistered Sales of Equity Securities and Use of Proceeds 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] Other Information 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] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL data files