REVVITY, INC. Q4 FY2024 earnings call

• In 2024, Revvity made significant progress in integrating recent acquisitions, capitalizing on synergy opportunities, rightsizing operations, and introducing new innovations. The fourth quarter saw 6% organic growth, 30.3% adjusted operating margins, and an adjusted EPS of $1.42.
• Key innovations included a unique sample processing offering for cell and gene therapy customers, adoption of Phenologic.AI software, and new offerings in Signals Software. Strategic partnerships were announced, such as with Genomics England and Element Biosciences.
• Starting in 2025, most of the applied genomics business will be re-segmented from the Diagnostics Reporting segment to the Life Sciences segment, with a new Life Science Solutions business unit established within the Life Sciences segment.

In the fourth quarter, the Life Sciences segment generated total adjusted revenue of $336 million, which was up 5% on both reported and organic bases. For the full year 2024, the Life Sciences business was down low single digits organically. The Diagnostics segment generated $393 million in the fourth quarter, up 4% on a reported basis and 6% on an organic basis. For the full year 2024, the Diagnostics business achieved 1% organic growth with 4% growth, while the Life Sciences business had a 3% decline. The applied genomics business, which was part of the Diagnostics segment, is transitioning to the Life Sciences segment starting in 2025, making the fourth quarter of 2024 the last quarter for specific quarterly performance reporting of this business unit.

• Total company organic growth for 2025 is expected to be in the 3% to 5% range.
• Adjusted operating margins are anticipated to expand by 20 to 40 basis points from the 28.3% recorded in 2024.
• Total revenue for 2025 is projected to be in the range of $2.8 billion to $2.85 billion.
• Adjusted earnings per share for 2025 are expected to be in the range of $4.90 to $5.
• Free cash flow is estimated to be approximately $500 million in 2025, excluding anticipated proceeds from the AES divesture.

• Uncertainties in political and regulatory environments that could impact demand.
• Persistent challenges in the instrumentation business.
• Greater-than-expected foreign exchange headwinds due to the stronger dollar.
• Continued impact of lower pharma biotech spending on the applied genomics business.

Q: Doug Schenkel from Wolfe Research asked about end markets, product categories, geographic exposure, and China growth.

A: Prahlad Singh and Max Krakowiak responded, discussing the stabilization in Life Sciences demand, growth in Diagnostics, expectations for China, and the impact of BBD.

Q: Vijay Kumar from Evercore ISI inquired about segment outlooks and reagents growth.

A: Prahlad Singh explained the segment breakdowns, market share gains in reagents, and 2025 growth expectations for different segments.

Q: Patrick Donnelly from Citi asked about the 1Q guide, margins, and ImmunoDX.

A: Max Krakowiak discussed the cadence of 1Q, margin build-up, and the high single-digit growth expectations for ImmunoDX.

Q: Michael Ryskin from Bank of America asked about applied genomics and operating margin expansion.

A: Prahlad Singh talked about the recovery of the applied genomics business and the investment areas driving operating margin expansion.

Q: Puneet Souda from Leerink Partners inquired about software growth and NIH exposure.

A: Prahlad Singh and Max Krakowiak discussed the NPV metric for software and the minimal impact of NIH on Revvity.

Q: Matt Sykes from Goldman Sachs asked about instrument expectations and recovery.

A: Prahlad Singh and Max Krakowiak mentioned the specifics of the instrument portfolio and the prudence in guidance due to market uncertainty.

Q: Luke Sergott from Barclays asked about the durability of pharma recovery and guidance prudence.

A: Max Krakowiak discussed the recovery in the reagent portfolio and the prudence based on market uncertainty.

Q: Andrew Cooper from Raymond James asked about customer feedback on regulatory changes and margin trends.

A: Prahlad Singh and Max Krakowiak addressed customer feedback and the opportunities for margin expansion.

Q: Catherine Schulte from Baird asked about guidance prudence and pharma/biotech expectations.

A: Prahlad Singh and Max Krakowiak discussed the steady nature of guidance and the consistent cadence of the Life Sciences business.

Q: Dan Brennan from TD Cowen asked about reproductive health and geopolitical impacts.

A: Max Krakowiak and Prahlad Singh talked about the growth in reproductive health and the prudence in guidance due to geopolitical uncertainty.