Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Revvity Inc (RVTY, Financial) achieved 6% organic growth in the fourth quarter, outperforming expectations.
• The company reported a strong adjusted operating margin of over 30% in the fourth quarter.
• Revvity Inc (RVTY) saw significant growth in its Life Science consumables, indicating a positive trend in pharma biotech customer behavior.
• The company successfully integrated recent acquisitions and capitalized on synergy opportunities, contributing to its growth.
• Revvity Inc (RVTY) expanded its strategic partnerships, including a notable collaboration with Genomics England for a large-scale genetic study.

Negative Points

• Revvity Inc (RVTY) continues to face challenges in its high-ticket life science instrumentation segment, with demand not yet fully normalized.
• The company anticipates a 1.5% foreign exchange headwind to overall revenue for 2025.
• Revvity Inc (RVTY) expects a higher adjusted tax rate of approximately 20% in 2025, up from 18.4% in 2024.
• The company's guidance assumes no significant improvement in end markets due to ongoing political and regulatory uncertainties.
• Revvity Inc (RVTY) plans to increase strategic internal investments in 2025, which may impact operating margin expansion.

Q & A Highlights

Q: Can you provide more detail on the normalization of your key end markets and product categories, and what areas are lagging in recovery? Also, how does China factor into your guidance? A: Prahlad Singh, CEO: We see a path to recovery, but the pace is uncertain. Diagnostics and software are performing well, with reagents getting closer to normal. Life Sciences instruments are still lagging. For China, we expect growth in Life Sciences instruments in 2025, with overall growth in line with company averages. We assume modest stimulus impact and mid-single-digit growth in immunodiagnostics, considering pricing headwinds.

Q: How does the segment outlook compare to the 3% to 5% guidance, and what drives the low versus high end? A: Maxwell Krakowiak, CFO: Diagnostics is expected to be at the upper end of mid-single digits, while Life Sciences is in the low single-digit range. The guidance is balanced, assuming no significant market changes, with prudency due to regulatory and geopolitical uncertainties.

Q: Can you discuss the first quarter guidance and visibility on margin build throughout the year? A: Maxwell Krakowiak, CFO: Organic growth should be consistent throughout the year. Operating margins will follow a similar cadence to 2024, with Q1 below the full-year average. Interest and tax rates will be consistent, with the tax rate heaviest in Q1. This should clarify the perceived softer EPS in Q1.

Q: What are your expectations for the ImmunoDx segment in 2025, and what are you seeing in China? A: Maxwell Krakowiak, CFO: We expect high single-digit growth for immunodiagnostics, with China performing as anticipated. Ex-US performance continues to grow in low to mid-teens, driven by innovation and geographic expansion.

Q: Can you elaborate on the strategic investments planned for 2025 and their impact on margins? A: Prahlad Singh, CEO: We plan to step up digital investments in e-commerce and AI, and expand sales channels in high-growth markets. Despite these investments, we expect margin expansion due to productivity initiatives and gross margin improvements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.