Revvity(RVTY) - 2026 Q3 - Quarterly Report

Revenue Performance - Total revenue for Q3 FY2025 was $698.9 million, an increase of $14.9 million or 2% compared to Q3 FY2024, driven by a 3% increase in Diagnostics segment revenue and a 1% increase in Life Sciences segment revenue [89]. - Life Sciences segment revenue for Q3 FY2025 was $342.8 million, up $4.0 million or 1%, primarily due to an $8.9 million increase in Software revenue [95]. - Diagnostics segment revenue for Q3 FY2025 was $356.1 million, an increase of $10.9 million or 3%, attributed to a $9.7 million increase in Reproductive Health revenue [95]. - Total revenue for the nine months ended September 28, 2025, was $2,084.0 million, a 3% increase from $2,025.7 million for the same period in FY2024 [96]. - Life Sciences segment revenue for the nine months ended September 28, 2025, was $1,049.1 million, a 2% increase driven by a $35.1 million increase in Software revenue [96]. Expenses and Margins - Consolidated gross margins decreased by 266 basis points to 53.6% in Q3 FY2025, primarily due to increased tariffs and unfavorable foreign exchange rates [90]. - Selling, general and administrative expenses for Q3 FY2025 were $241.9 million, a 2% increase from $237.5 million in Q3 FY2024, with expenses as a percentage of revenue decreasing to 34.6% [101]. - Research and development expenses for Q3 FY2025 were $50.8 million, an increase of $1.7 million or 3%, representing 7.3% of revenue [103]. - Cost of revenue for Q3 FY2025 was $324.3 million, an 8% increase from $299.2 million in Q3 FY2024, resulting in a gross margin decrease to 53.6% [97]. - The company anticipates a $25 million increase in cost of revenue due to tariffs, with an expected $20 million decrease in gross margin for the current fiscal year [99]. Income and Taxation - Segment operating income for the Life Sciences segment decreased by $9.5 million, or 9%, to $101.0 million for Q3 2025, with a segment operating margin decrease of 316 basis points [112]. - The effective tax rate for continuing operations increased to 15.2% for Q3 2025 from 6.9% in Q3 2024, primarily due to prior year true-ups recorded in fiscal year 2024 [108]. Cash Flow and Investments - Net cash provided by operating activities decreased to $407.0 million for the nine months ended September 28, 2025, from $489.5 million for the same period in 2024, a decrease of $82.5 million [128]. - Net cash used in investing activities increased by $699.1 million, totaling $(53.2) million for the nine months ended September 28, 2025, compared to net cash provided of $646.0 million in the prior year [129]. - Cash and cash equivalents stood at $931.4 million as of September 28, 2025, with $540.0 million held by non-U.S. subsidiaries [122]. Financing Activities - The company repurchased 515,232 shares of common stock at an aggregate cost of $47.5 million under the stock repurchase program prior to its termination [123]. - Net cash used in financing activities decreased by $254.0 million to $681.2 million for the nine months ended September 28, 2025, compared to $935.2 million for the same period in 2024 [130]. - Share repurchases totaled $652.5 million during the nine months ended September 28, 2025, up from $184.4 million in the prior year period [130]. - Dividends paid decreased slightly to $24.8 million for the nine months ended September 28, 2025, compared to $25.9 million for the same period in 2024 [130]. - Net payments on debts were $2.6 million for the nine months ended September 28, 2025, significantly lower than $722.3 million in the prior year [130]. Credit Facilities and Market Risks - A new senior unsecured revolving credit facility with a borrowing capacity of $1.5 billion was established, available through January 7, 2030 [133]. - A quarterly cash dividend of $0.07 per share was declared for the first three quarters of fiscal year 2025, with future dividends potentially reduced or eliminated to fund growth investments [134]. - The company is exposed to market risks including interest rate and currency exchange rate fluctuations, managed through derivative transactions [136]. - The outstanding €500,000 Principal 1.875% Senior Unsecured Notes due in 2026 are expected to be repaid with existing cash or credit facility draws [132]. Accounting and Compliance - The company has recorded contingent consideration obligations of $19.2 million related to acquisitions, with a maximum earnout period of 6.2 years [124]. - The company has not adopted any new accounting pronouncements during the nine months ended September 28, 2025 [135].