Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $772 million, resulting in 4% organic growth, with a full year revenue of $2.86 billion, reflecting 3% organic growth [20][21] - Adjusted EPS for the fourth quarter was $1.70, exceeding guidance, while full year adjusted EPS was $5.06, representing a 3% year-over-year growth [9][23] - Adjusted operating margins for the fourth quarter were 29.7%, down 60 basis points year-over-year, while full year adjusted operating margins were 27.1%, down 120 basis points year-over-year [21][24] Business Line Data and Key Metrics Changes - The diagnostics segment achieved 7% organic growth in the fourth quarter, with full year organic growth of 4%, driven by strong performance in immunodiagnostics and reproductive health [6][27] - The life sciences segment remained flat year-over-year in organic growth for the fourth quarter, with full year organic growth also at 2%, impacted by low single-digit declines in academic and government sales [6][26] - Signals software business grew in the high teens organically for the full year, with a nearly 40% ARR growth compared to last year [26] Market Data and Key Metrics Changes - Geographically, the company experienced flat performance in both the Americas and APAC, while Europe saw double-digit growth [25] - For the full year, the Americas grew low single digits, Europe grew high single digits, and APAC declined in the low single digits [25] Company Strategy and Development Direction - The company plans to reinvest a portion of operational upside back into the business, focusing on employee support and capital deployment opportunities [10][19] - The acquisition of ACD/Labs is expected to contribute over $20 million in total revenue, adding approximately 75 basis points to overall revenue growth [12][30] - The introduction of the AI models-as-a-service platform, Signals Synthetica, is aimed at enhancing drug development processes [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery of end markets, reiterating a 2%-3% organic growth outlook for 2026 [11][29] - The company acknowledged recent positive trends in pharma and biotech funding, but remains prudent in its initial outlook due to ongoing market uncertainties [10][20] - Management highlighted the importance of maintaining a disciplined approach to capital deployment while navigating a fluid end market and policy environment [10][19] Other Important Information - The company repurchased over $800 million worth of shares in 2025, reducing the share count by 8.5 million shares [9][10] - Free cash flow for the fourth quarter was $162 million, resulting in 84% conversion of adjusted net income, with full year free cash flow at $515 million [24] Q&A Session Summary Question: Insights on the 2%-3% organic growth guidance - Management acknowledged positive signs in end markets since September but maintained the conservative guidance to allow for potential upside as the year unfolds [39][40] Question: Factors driving strength in life sciences instruments and reagents - Management indicated that improvements in preclinical spending and ongoing demand development are key drivers, with a focus on maintaining market share [45][46] Question: Timing and trajectory of new software product launches - Management confirmed that the Signals business is in a significant new product introduction phase, with expectations for growth rates to accelerate over the coming years [49][50] Question: Performance within pharma biotech and order trends - Management noted cautious optimism in order trends, with improvements attributed to greater clarity in the policy and regulatory environment [61][62] Question: Outlook for diagnostics business and potential upside - Management highlighted strong performance in newborn screening and immunodiagnostics, suggesting potential for upside in diagnostics for 2026 [65][66]

Revvity (NYSE:RVTY) FY Conference Summary Company Overview - Revvity is a $2.8 billion company, with revenue split roughly equally between life sciences and diagnostics segments [4] - The company has undergone a portfolio transformation, moving from a legacy industrial company to a focus on high-growth life sciences and diagnostics [2][3] Key Financial Metrics - Approximately 85% of revenue is recurring, derived from consumables, assets, services, and software [4] - Life sciences solutions have a five-year average organic growth rate of high single digits and operating margins above 30% [5] - Diagnostics revenue is about $1.4 billion, with a similar growth rate and operating margins around 25% [6] Strategic Initiatives - Revvity aims to be a key player in the drug development lifecycle, providing comprehensive solutions from early discovery to commercialization [9] - The company has launched AI initiatives, including Transcribe AI, which improves workflow speed by 40% for clinical lab customers [10][11] - A partnership with Eli Lilly aims to accelerate AI-enabled drug discovery through the Signals Synthetica platform [11][12] Market Dynamics - The life sciences segment is primarily focused on pharma and biotech, with 75% of customers in these sectors [5] - The diagnostics segment focuses on immunodiagnostics (60% of revenue) and reproductive health (40%) [6] - The company has seen a significant increase in immunodiagnostics revenue from the Americas, which has doubled from 10% to 20% [14] Growth Outlook - For 2026, Revvity expects 2%-3% organic growth, with high single-digit adjusted EPS growth [19][20] - The company anticipates double-digit growth in immunodiagnostics and Signals Software, with mid-single-digit growth in life sciences solutions and reproductive health [20] - The operational excellence initiatives aim for a 28% adjusted operating margin by 2026, with a focus on cost reductions and efficiency improvements [19] Partnerships and Collaborations - Revvity has formed strategic partnerships with Genomics England and Sanofi, focusing on large-scale genomic screening and pediatric disease screening [15][16][46] - The company is exploring opportunities for partnerships in AI and genomics, although specific details are not yet public [54] Challenges and Risks - The company faces headwinds in the Chinese market, particularly in immunodiagnostics, but expects growth to return in the second half of 2026 [50] - The overall market conditions and funding trends in biotech are seen as positive indicators for Revvity's growth [33][58] Conclusion - Revvity is positioned as an innovative life sciences and diagnostics company with a transformed portfolio and a focus on operational excellence, aiming for significant growth and margin expansion in the coming years [21][22]