REVVITY, INC. Q1 FY2025 earnings call

• First quarter had 4% organic growth, adjusted EPS of $1.01 above expectations.
• Strong cash flow and balance sheet management, with 97% free cash flow conversion and share repurchases.
• Diagnostic businesses had achievements like expanded alliance with Genomics England and FDA approval for an automated platform integrated with the T-SPOT latent TB test.
• Signals Software business grew slightly more than 20% organically in Q1, with new offerings like Signals One launched, and strong new business wins, upsell, and retention.
• Took actions to mitigate tariff impact, including proactive inventory positioning, geographical manufacturing adjustments, engaging alternative suppliers, and selective pricing actions.

The 4% organic growth in the first quarter was composed of 2% growth in the Life Sciences segment and 5% growth in Diagnostics. The Life Sciences business generated revenue of $340 million in the quarter, up 1% on a reported basis and 2% organically. Sales to pharma biotech customers grew in the low-single-digits, while sales to academic and government customers declined. The Life Science Solutions business declined in the low-single-digits, with instrumentation declines offset by solid growth in reagents. The Signals Software business was up a little over 20% year-over-year organically, representing approximately 8% of total revenue. The Diagnostics segment generated $324 million of revenue in the quarter, up 3% on a reported basis and 5% organically. The immunodiagnostics business grew high-single-digits organically, and the reproductive health business grew low-single-digits organically, with newborn screening growing high-single-digits globally.

• Reaffirmed full-year adjusted EPS outlook of $4.90 to $5.
• Reaffirmed full-year organic growth outlook of 3% to 5%.
• Anticipates revenue this year to be in the range of $2.83 billion to $2.87 billion.
• Expected adjusted operating margins to be in the range of 27.9% to 28.1%, down 60 basis points from prior outlook due to tariff pressures.
• Anticipates organic growth in the second quarter to be in the positive 2% to 4% range, resulting in total expected revenue in the range of $700 million to $715 million, and adjusted EPS in the range of $1.13 to $1.15.

• Macro-economic uncertainties.
• Tariff-related pressures, including potential impact on gross margins.
• Uncertainty in US academic funding leading to cautious spending from US academic customers.

Q: Can you talk about the tariff impact on US into China products and how you're neutralizing it?

A: We started working on it right after the election, with ongoing efforts to move products, build supply chain redundancy. Most of the Life Science products sold into China are being addressed.

Q: What's the outlook for China in the rest of the year?

A: Expect positive low-single-digit growth in China for the full year, with Life Sciences expected to have a slight decline year-over-year and Diagnostics anticipating mid-single digit growth.

Q: Refresh on the competitive landscape for the Signals business and margin impact?

A: Signals business benefits from favorable market dynamics, strong new business wins, upsell, and retention. It's a crown jewel with strong synergies with the Life Sciences franchise, but margin impact depends on business scaling.

Q: How are you managing reagent exposure in China?

A: We have put in place supply chain redundancy to ensure availability of product into China, not from the US for reagents and instrumentations.