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RI

REVVITY, INC. (RVTY)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $699M, essentially in line with consensus ($699.6M*), while adjusted EPS of $1.18 beat by ~$0.04*; GAAP EPS was $0.40 . Revenue grew 2% reported/1% organic; adjusted operating margin was 26.1% .
  • Guidance: FY25 revenue outlook updated to $2.83–$2.88B (FX) with 2–4% organic growth reaffirmed, and adjusted EPS raised to $4.90–$5.00 .
  • Capital returns: Board approved a new $1B two‑year repurchase authorization; Q3 buybacks were $205M (~2.3M shares); quarterly dividend of $0.07 per share declared Oct 23 .
  • Call tone: Management highlighted 20% organic growth in Signals software, mid‑single digit growth in reproductive health, high‑single digit newborn screening growth, and early traction for AI initiatives; margin pressure tied to tariffs/FX and China DRG headwinds persists but 2026 adjusted operating margin “baseline” of 28% reiterated .

Estimates referenced with * are from S&P Global; see “Estimates Context.”

What Went Well and What Went Wrong

What Went Well

  • Signals software continued to outperform: +20% organic growth; commercial KPIs strong (ARR >40%, APV 12%, NRR >110%). “Our Signals software business continued to perform extremely well, growing 20% organically in the quarter…” .
  • Diagnostics momentum ex‑China: Reproductive health grew mid‑single digits; newborn screening grew high‑single digits, supported by Genomics England work; AI product launches (Living Image Synergy AI) and partnerships (e.g., Sanofi Type 1 diabetes assay) underpin future growth .
  • Strong cash generation and returns: Free cash flow of $120M (~88% conversion) and $205M in Q3 buybacks; new $1B authorization boosts capacity .

Select quotes

  • CEO: “We are bringing real‑world AI‑based solutions to market…not just automated note‑taking…but true productivity improvements…” .
  • CEO: “Our strong level of execution is positioning the Company for even greater success in 2026 and beyond.” .

What Went Wrong

  • Margin pressure YoY: Adjusted operating margin 26.1% (−220 bps YoY) driven by tariffs, FX, and lower volume leverage (notably China diagnostics) .
  • China diagnostics headwinds: China immunodiagnostics down mid‑20% organically; total China declined low‑teens, pressuring segment margins and growth .
  • Life Sciences reagents softness: Reagents “down very slightly” YoY as summer run‑rates were lighter; academic/government demand down mid‑single digits in the Americas .

Financial Results

Summary P&L and Margins (chronological: oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($M)$684.0 $664.8 $720.3 $699.0
GAAP EPS (Diluted, net)$0.77 $0.35 $0.46 $0.40
Adjusted EPS (cont. ops)$1.28 $1.01 $1.18 $1.18
GAAP Operating Margin %14.3% 10.9% 12.6% 11.7%
Adjusted Operating Margin %28.3% 25.6% 26.6% 26.1%

Actuals vs S&P Global Consensus (Q3 2025)

MetricConsensus*ActualSurprise
Revenue ($M)$699.6*$699.0 ~($0.6)M slight miss*
Adjusted EPS (cont. ops)$1.14*$1.18 $0.04 beat*

Values retrieved from S&P Global.

Segment Performance

MetricQ3 2024Q2 2025Q3 2025
Life Sciences Revenue ($M)$338.8 $365.9 $342.8
Life Sciences Adj. Op Inc ($M)$110.6 $115.5 $101.0
Life Sciences Adj. Op Margin %32.6% 31.6% 29.5%
Diagnostics Revenue ($M)$345.2 $354.4 $356.1
Diagnostics Adj. Op Inc ($M)$93.8 $89.4 $89.4
Diagnostics Adj. Op Margin %27.2% 25.2% 25.1%

KPIs (Q3 2025)

KPIQ3 2025
Organic Revenue Growth+1% total; LS 0%; DX +2%
Free Cash Flow ($M)$120
FCF Conversion (%)~88% of adjusted net income
Adjusted Tax Rate (%)15%
Avg Diluted Shares (M)115.5
Share Repurchases ($M)$205 in Q3
China PerformanceOverall: low‑teens decline; Immunodiagnostics: mid‑20s decline
Signals Software+20% organic growth; ARR >40%; APV 12%; NRR >110%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$2.84–$2.88B (Q2 guide) $2.83–$2.88B Lowered low end (FX)
Organic GrowthFY 20252%–4% 2%–4% Maintained
Adjusted EPSFY 2025$4.85–$4.95 $4.90–$5.00 Raised
Adjusted Op MarginFY 202527.1%–27.3% (unchanged per CFO) 27.1%–27.3% Maintained
Net interest & otherFY 2025Prior lower (undisclosed) ~$83M Raised slightly
Adjusted Tax RateFY 2025~18% prior assumption ~17% Lowered 100 bps
Avg Diluted SharesFY 2025N/A“A little under 117M” N/A
Segment growthFY 2025N/ALS: low‑single digits; DX: low‑single digits Maintained
Share RepurchaseThrough 2027Prior program (remaining) New $1B/2‑yr authorization Increased capacity
DividendQuarterly$0.07/share (ongoing)$0.07/share; payable Feb 6, 2026 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesPress releases emphasized pipeline and innovation, but limited AI detail Multiple launches (SignalsOne, Transcribe AI, Phenologic.AI); Living Image Synergy AI unveiled; AI agents deployed internally across 30+ use cases Accelerating deployment and commercialization
Supply chain/tariffs/macro“Dynamic/evolving market environment” noted Margin pressure from tariffs and FX; prudence on macro and instrument demand Macro headwinds persist
Product performanceSegment growth steady; LS up low‑single digits; DX up low‑single digits Signals +20% org; reproductive health mid‑single; newborn screening high‑single Mix shifting to software and select DX franchises
Regional trendsLimited disclosure in releases Americas low‑single digit, Europe mid‑single digit growth; Asia mid‑single digit decline with China down low‑teens China remains a drag; ex‑China healthy
Regulatory/clinicalNot highlighted in releasesIVDR approval for NeoLSD 7 Plex; Sanofi T1D 4‑plex assay pathway; Italy screening policy cited Building Dx pipeline and partnerships
Capital allocationOngoing buybacks and dividend $205M Q3 buybacks; new $1B repurchase authorization Increasing focus on buybacks

Management Commentary

  • Strategic focus and AI: “At Revvity, we are bringing real‑world AI‑based solutions to market…true productivity improvements for our customers…our development pipeline…has the potential to truly change scientific paradigms…” — Prahlad Singh, CEO .
  • Execution and outlook: “We generated 26.1% adjusted operating margins…adjusted EPS of $1.18…we are reiterating our 2%–4% organic growth expectation for this year while raising our adjusted EPS guidance to $4.90–$5.00.” — CEO .
  • Margin framework: “A 28% operating margin baseline for 2026…we’re feeling very good about that target…tied to 2%–3% organic growth” — CFO .
  • Internal AI leverage: “Deployed Revvity AI for all 11,000 employees…over 30 custom AI agents…sales lead conversion 3–4x improvement…5%–10% reduction in software development timelines” — CFO .

Q&A Highlights

  • China diagnostics/DRG: China immunodiagnostics −mid‑20%; total China −low‑teens; management expects headwinds until anniversary in Q2’26, then muted growth resumption in 2H’26 .
  • 2026 framework: 2%–3% organic growth with 28% adjusted operating margin baseline implies high‑single‑digit EPS growth; tax baseline ~18% for 2026; continued lower share count benefits .
  • Instruments and reagents: Instrument pipeline activity improving (pharma/biotech); reagents down very slightly YoY in Q3; Americas academic/government down mid‑single digits; modest government shutdown impact assumed for Q4 .
  • Software comps and outlook: Signals expected mid‑single digit organic growth in 2026 given tough comps; new MPIs should contribute gradually; ARR/APV/NRR remain strong .
  • Capital deployment: Best near‑term ROC seen in buybacks; active but disciplined M&A pipeline maintained .

Estimates Context

  • Q3 2025 Actuals vs Consensus (S&P Global): Adjusted EPS $1.18 vs $1.14* (beat ~$0.04); Revenue $699.0M vs $699.6M* (essentially in line/slight miss) .
  • Analyst coverage breadth: 16 EPS and 15 revenue estimates contributed to Q3 2025 consensus*.
  • Target price consensus mean: ~$113.67*.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Modest topline with mix quality: Revenue steady and in line, but high‑quality growth in software (+20% org) and reproductive health/newborn screening supports medium‑term mix improvement .
  • Profitability framework intact: Despite YoY margin pressure from tariffs/FX/China, FY25 adjusted margin guide intact and 2026 baseline of 28% reiterated—cost actions underway .
  • Guidance credibility: Raised FY25 adjusted EPS and reaffirmed organic growth; Q4 expected to deliver seasonal margin lift (~30%) per historical pattern noted by CFO .
  • China headwinds contained: DRG pressure is known and compartmentalized; exit run‑rate expected to stabilize post Q2’26 anniversary; ex‑China immunodiagnostics growing high single digits .
  • Capital return as catalyst: $1B repurchase authorization and ongoing dividend ($0.07) provide support into 2026 alongside improving tax rate and lower share count .
  • AI as differentiation: Concrete internal productivity gains and customer‑facing AI launches may sustain software momentum and drive operating leverage over time .
  • Watch Q4 execution: Software dollar growth, instrument “budget flush,” and China Dx trajectory are key near‑term drivers for hitting the higher EPS range .