Revvity (NYSE:RVTY) 2025 Conference Transcript

Financial Data and Key Metrics Changes - The second quarter performance was slightly ahead of expectations for both top and bottom lines, with low single-digit growth in consumables indicating stability in lab activity [4][5] - Instrument sales declined mid to high single digits, consistent with previous quarters and outlook for the second half of the year [5][6] - The software business, accounting for about 9% of total revenue, has shown consistent strong growth, expected to grow in the high teens this year [5][20] Business Line Data and Key Metrics Changes - Life sciences solutions fell low single digits in the second quarter, with expectations for a slight decline for the year [7][8] - The diagnostics segment, which constitutes about half of the company, has shown good growth in the Americas and reproductive health, but faced unexpected pressures in China [6][32] - Reagents performed well, particularly in China, where the life sciences business grew mid-single digits [19] Market Data and Key Metrics Changes - Academic and government sectors saw low single-digit declines, attributed to NIH funding concerns and policy changes [8][10] - The pharma and biotech sectors remained under pressure, with performance around flat when excluding software [13][15] - The diagnostics business in China is expected to decline by 25% in the second half of the year due to new government policies affecting multiplex tests [29][30] Company Strategy and Development Direction - The company is focused on preclinical R&D and aims to stabilize its consumables business while navigating uncertainties in the market [9][10] - There is a strong emphasis on software growth, with new product launches expected to enhance market positioning [20][23] - The company is interested in both organic growth and M&A opportunities to complement its portfolio, particularly in consumables and software [48] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market environment is challenging but believes in the long-term growth potential of the diagnostics and life sciences sectors [49][50] - There is optimism about the software business driving efficiencies and better data analytics, which are key areas of investment for customers [50] - The company anticipates stability in financial performance, with expectations of achieving a 28% operating margin baseline for 2026 [40][42] Other Important Information - The company has been active in share repurchase programs, buying back nearly 9% of its shares in the last 12 months [48] - The Genomics England partnership is expected to provide incremental revenue through DNA sequencing for newborns, starting in the second half of the year [35] Q&A Session Summary Question: What is the outlook for the diagnostics business in China? - Management indicated that the diagnostics business in China is expected to face a 25% decline in the second half of the year due to new government policies affecting multiplex tests [29][30] Question: How is the software business performing? - The software business is expected to grow in the high teens this year, outperforming long-term growth assumptions [20][21] Question: What are the biggest opportunities for the company in the next 12 to 18 months? - The software business and the diagnostics segment, particularly in the U.S., are seen as key opportunities for growth [50][51]