Revvity (RVTY) FY 2025 Conference September 03, 2025 08:00 AM ET Company ParticipantsBrandon Couillard - Managing DirectorMax Krakowiak - SVP & CFOBrandon CouillardAll right. Good morning. Thanks, everybody, for joining us. Welcome to the Wells Fargo Health Care Conference. I'm Brandon Couillard, covering the life science tools and diagnostics space here at the firm. Thrilled to have Revvity back with us at the opening presentation this year and joining us from the company, CFO Maxwell Krakowiak.Max Krakowi ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA margins for Q2 at 21.1%, slightly declining relative to Q1 [9] - Adjusted free cash flow was $79 million in Q2, with a free cash flow conversion rate of 31.1%, up from 26.1% in Q1 [20] - The company has paid four quarterly dividends of $0.25 per share and repurchased approximately $186 million worth of shares over the past four quarters [10] Business Line Data and Key Metrics Changes - North America and Latin America revenues were down sequentially, with North America affected by seasonal spring breakup in Canada and Latin America impacted by Argentina divestitures [7] - The ESSR region saw growth due to project startups in Europe, further amplified by foreign exchange [8] - The company expects a decline in international revenues by low double to mid double digits for 2025, adjusting for Mexico activity declines and Argentina divestitures [17] Market Data and Key Metrics Changes - The overall international market has softened over the past year, with expectations of continued pressure into 2026 [13] - The Kingdom of Saudi Arabia market has softened, with a decline in rig count affecting performance [36] - The company anticipates sluggish activity levels in 2025 and 2026 due to global trade reductions and increased supply [15] Company Strategy and Development Direction - The company is focused on defending margins and maximizing cash generation while adapting to evolving market conditions [29] - A multiyear cost optimization program is in place to achieve sustainable productivity gains through technology and lean processes [31] - The company is exploring M&A opportunities, particularly in well construction and production segments, with a focus on value creation [73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market disruptions, citing a strong balance sheet and liquidity of $1.3 billion [30] - The company expects continued market headwinds for at least another twelve months, with a potential recovery in the second half of 2026 [15] - Management remains hopeful for a slight uptick in Q4 but acknowledges the broader slowdown [25] Other Important Information - The company has reduced its headcount by over 1,500 and lowered annualized personnel expenses by more than $125 million since 2024 [16] - Capital expenditures (CapEx) were $54 million in Q2, down from $77 million in Q1, with expectations for further declines [23] - The company has a net leverage ratio of less than 0.5 times and approximately $1 billion in cash and restricted cash [24] Q&A Session Summary Question: Insights on Saudi Arabia's market transition - Management noted a steady decline in rig count and emphasized the importance of technology introduction and strong execution to drive performance [36][38] Question: Clarification on Q4 guidance - Management explained that the Q4 guidance includes expected seasonal sales and project startups, although year-end sales may be muted due to uncertainty [46][47] Question: U.S. Land market challenges - Management acknowledged a steady decline in U.S. Land, primarily driven by tariff impacts, and emphasized a focus on defending margins [52][54] Question: Stability in Mexico's market - Management expressed cautious optimism about stability in Mexico, with expectations for a ramp in activity levels in the second half of the year [63][66] Question: M&A opportunities and balance sheet strategy - Management highlighted a robust pipeline for M&A opportunities, focusing on strategic fits that create value through cash flow accretion [73][75]