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    RVTY
    Earnings call· Mar 2026(Q1 FY26)

    REVVITY Q1 FY26 earnings call RVTY

    May 5, 2026 Source

    Executive summary

    Revvity Q1 FY26 — Strong Organic Growth and Strategic Divestiture

    Revvity delivered strong Q1 FY26 results, exceeding expectations for organic growth, operating margins, and EPS, driven by robust performance in reproductive health and early signs of improvement in pharma/biotech and academic end markets. The company announced a strategic divestiture of its China immunodiagnostics business, aiming to improve its financial profile and focus resources on higher-return opportunities, which is expected to enhance future organic growth and operating margins. Significant software innovations and internal AI adoption are also underway to drive long-term growth and efficiency.

    Highlights

    5

    • Achieved 3% total company organic growth, demonstrating business resilience.

    • Adjusted operating margins reached 23.6%, exceeding the 23% outlook.

    • Adjusted EPS was $1.06, above the $1.02 to $1.04 outlook.

    • Pro forma organic growth (excluding China immunodiagnostics) was 6% in Q1.

    • Reproductive health business grew low double digits organically, driven by newborn screening and Genomics England contract.

    Concerns

    5

    • Divestiture of China immunodiagnostics business due to persistent policy-induced headwinds and challenging market dynamics.

    • China immunodiagnostics business was a lower growth, lower margin segment, consuming disproportionate management focus and capital.

    • Software business expected to be down approximately 20% organically in Q2 FY26 due to tougher comps.

    • Pharma and biotech customers continue to exhibit somewhat measured behavior due to budget cycles.

    • Global birth rate trends remain challenging, impacting newborn screening despite strong performance.

    Guidance & targets

    19
    CategoryTargetConfidence
    Full-year 2026 Pro Forma Organic Growth
    3% to 4%
    high materiality
    High
    Full-year 2026 Pro Forma Adjusted Operating Margins
    approximately 28.4%
    high materiality
    High
    Full-year 2026 Pro Forma Adjusted EPS
    $5.20 to $5.30
    high materiality
    High
    Q2 2026 Pro Forma Organic Growth
    2% to 3%
    medium materiality
    High
    Q2 2026 Pro Forma Total Revenue
    $699 million to $707 million
    medium materiality
    High
    Q2 2026 Pro Forma Adjusted Operating Margins
    approximately 27%
    medium materiality
    High
    Full-year 2026 FX Contribution to Revenue Growth
    approximately 50 basis points
    medium materiality
    High
    Full-year 2026 ACD/Labs Acquisition Contribution to Revenue Growth
    approximately 75 basis points
    medium materiality
    High
    Full-year 2026 Pro Forma Total Revenue
    $2.81 billion to $2.84 billion
    high materiality
    High
    Full-year 2026 Net Interest Expense and Other
    approximately $90 million
    low materiality
    High
    Full-year 2026 Adjusted Tax Rate
    approximately 18%
    low materiality
    High
    Full-year 2026 Diluted Average Share Count
    approximately 112 million
    low materiality
    High
    Eurobond Payoff
    approximately $600 million
    medium materiality
    High
    Gross Leverage Ratio
    below 3x
    medium materiality
    High
    Software Business Organic Growth
    positive mid-single digits
    low materiality
    Medium
    Software Business Organic Growth
    down approximately 20%
    low materiality
    High
    Software Business Organic Growth
    high teens
    low materiality
    Medium
    Cost Efficiency Initiatives Completion
    fully completed around midyear
    medium materiality
    High
    Investor Day
    Friday, November 13
    low materiality
    High

    Segment performance

    14
    SegmentRevenueYoYQoQMargin
    Total Company
    Reported figures including China immunodiagnostics business.
    Organic Growth: 3%FX Tailwaind: 3%ACD/Labs Acquisition Contribution: 75 bps
    		$711 million———
    Total Company (Pro Forma)
    Excludes China immunodiagnostics business.
    Pro Forma Organic Growth: 6%
    		$687 million———
    Life Sciences
    Strong performance in pharma/biotech and academic/government customer segments.
    Organic Growth: 3%Pharma/Biotech Sales Growth: low single digitsAcademic/Government Sales Growth: mid-single digits
    		$362 million6% reported——
    Life Science Solutions
    Component of Life Sciences segment.
    Reagents Growth: low single digitsInstrumentation Growth: mid-single digits
    		—low single digits organically——
    Signals Software
    Software business performing in line with expectations, strong SaaS and APV growth.
    SaaS ARR Growth: 40% YoYAPV Growth: double digits
    		—mid-single digits organically——
    Diagnostics
    Overall segment performance including China immunodiagnostics.
    Organic Growth: 4%
    		$349 million8% reported——
    Diagnostics (Pro Forma)
    Excludes China immunodiagnostics business.
    		—9% organically——
    Immunodiagnostics
    Performance impacted by meaningful declines in China, offset by strong performance outside China.
    		—low single digits organically——
    Immunodiagnostics (Pro Forma)
    Performance excluding China immunodiagnostics business.
    		—mid-single digits——
    Reproductive Health
    Strong broad-based strength, benefited from Genomics England contract.
    Newborn Screening Growth: low double digits
    		—double digits organically——
    APAC
    Geographic performance, impacted by China.
    		—mid-single digits decline organically——
    China
    Due to diagnostic pressures.
    		—double digits decline overall——
    Americas
    Geographic performance.
    		—low single digits organically——
    Europe
    Geographic performance.
    		—double digits organically——

    Operational metrics

    15
    Adjusted Operating Margins
    23.6%above 23% outlook
    Q1 FY26

    Reported operating margins, including China immunodiagnostics.

    Adjusted Operating Margins (Pro Forma)
    24%
    Q1 FY26

    Operating margins excluding China immunodiagnostics.

    Adjusted EPS
    $1.06above $1.02-$1.04 outlook
    Q1 FY26

    Reported EPS, including China immunodiagnostics.

    Adjusted EPS (Pro Forma)
    $1.04
    Q1 FY26

    EPS excluding China immunodiagnostics.

    Adjusted Net Interest and Other Expenses
    $23 millionin line with expectations
    Q1 FY26

    Reported net interest and other expenses.

    Adjusted Tax Rate
    18.3%in line with expectations
    Q1 FY26

    Reported adjusted tax rate.

    Free Cash Flow Conversion of Adjusted Net Income
    97%
    Q1 FY26

    Robust conversion rate.

    Free Cash Flow Conversion of Adjusted Net Income (Pro Forma)
    300 bps highervs 87% reported
    FY25

    Expected improvement in FCF conversion if China immunodiagnostics business was excluded in FY25.

    Net Debt to Adjusted EBITDA Leverage Ratio
    2.8x
    Q1 FY26

    Balance sheet remains strong.

    Share Repurchases
    $86 million
    Q1 FY26

    Amount of shares repurchased in the quarter.

    Diluted Shares
    111.9 million
    Q1 FY26

    Average diluted shares in the quarter.

    China Revenue Exposure (Pro Forma)
    8% to 9%
    FY25

    Pro forma revenue mix for China after divestiture.

    Genomics England Contribution
    $20 million
    FY26

    Expected contribution from Genomics England partnership for the first year.

    AI Employee Adoption Rates
    well above corporate averages
    current

    Internal AI deployment showing strong employee engagement and efficiency.

    Cost Efficiency Initiatives Impact
    greater impact
    H2 FY26

    Initiatives completing midyear, expected to drive financial benefits in the second half of the year and annualize into H1 2027.

    Industry KPIs

    7
    MetricValueDetails
    FCF conversion ROIC97%%
    Revenue EPS guidanceFY26 Organic Growth: 3% to 4%; FY26 Adjusted EPS: $5.20 to $5.30% / USD
    China revenue exposure6%%
    Diagnostics testing demandlow double digits organically%
    M a contribution synergies75 basis pointsbps
    Segment organic revenue growthLife Sciences: 3%; Diagnostics: 4%%
    Organic core revenue growth by end marketlow single-digit%

    Product announcements

    4
    ProductTypeDetails
    Xyntheticalaunch
    BioDesignlaunch
    LabGisticslaunch
    Opera Phenix OptIQ systemlaunch

    Deals & partnerships

    1
    local management-led buyer groupSale of immunodiagnostics business in China

    Revvity will retain a minority interest in the new company. Definitive agreement expected within the next 2 months. Closing by end of 2027 to allow for local manufacturing and regulatory approvals. Represented approximately 6% of total company revenue last year.

    Risks & headwinds

    5
    Policy-induced headwinds in China diagnostics marketmedium term

    Dramatically impacted customer demand and pricing dynamics; challenges expected to continue over the medium term.

    Mitigation: Strategic divestiture of immunodiagnostics business in China to focus resources on higher-return opportunities.

    Challenging global birth rate trendsongoing

    Continued challenging global birth rate trends.

    Mitigation: Strong execution in newborn screening business, new instrument placements, and new assay development to outpace market trends.

    Measured customer behavior in pharma and biotechnear term

    Customer behavior continues to remain somewhat measured as customers work through budget cycles.

    Mitigation: Seeing early indicators for future improvement; remaining prudent with forward-looking assumptions until consistent performance is observed.

    Policy and regulation changes in academic and government sectorsongoing

    How quickly policies and regulations can change.

    Mitigation: Remaining mindful of the dynamic environment; maintaining prudent forward-looking assumptions despite recent positive trends.

    Tougher comps for software businessQ2 FY26

    Software business expected to be down approximately 20% organically in Q2 FY26.

    Mitigation: Comps are expected to ease in the second half of the year, leading to high teens growth in H2 FY26.

    What to watch in Q2 FY26

    5

    China Immunodiagnostics Divestiture Definitive Agreement

    within the next 2 months (by July 2026)
    CurrentLetter of intent signed
    TargetDefinitive agreement reached

    Why it matters

    Securing the definitive agreement is a critical step towards completing the strategic divestiture, which is expected to significantly improve Revvity's financial profile and focus.

    We have signed a letter of intent with a local management-led buyer group for the purchase of this business and expect to reach a definitive agreement within the next 2 months, which would include our retaining a minority interest in the new company.

    Q&A highlights

    6

    Asked about recent customer conversations regarding software and SaaS, and the expected cadence of the software business for the year, given comp dynamics.

    Prahlad highlighted continued high customer excitement for new software launches like Xynthetica, BioDesign, and LabGistics, leveraging AI. Max clarified that organic growth isn't always the best measure for software, noting strong double-digit APV growth and over 30% SaaS ARR growth. He detailed the cadence: positive mid-single digits in Q1, expected down ~20% in Q2 due to tough comps, then high teens growth in H2 as comps ease, targeting positive mid-single digits for the full year.

    “for the full year for this business, we are calling for positive mid-single digits organic growth. If you look at the cadence over the course of the year, it was positive mid-single here in the first quarter. In the second quarter, we do have tougher comps. And so we expect that business to be down approximately 20% in the second quarter. However, those comps eased in the second half of the year. And for the second half of the year for this business, we expect it to grow in the high teens.”

    asked by Patrick Donnelly · answered by Maxwell Krakowiak

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Divestiture of China Immunodiagnostics Business

    Revvity announced a transformative strategic decision to divest its immunodiagnostics business in China, which represented approximately 6% of total company revenue last year. This move is driven by persistent policy-induced headwinds in the Chinese healthcare market, particularly diagnostics, impacting customer demand and pricing. The divestiture aims to reallocate capital and management focus to higher-return opportunities, improving the company's financial profile. The transaction is expected to close by the end of next year, with Revvity retaining a minority interest in the new company.

    02

    Impact of Divestiture on Financial Outlook

    On a pro forma basis, excluding the divested business, Revvity's Q1 organic growth would have been 6%, and adjusted operating margins 24%. The divestiture is expected to improve 2026 total company organic growth by approximately 100 basis points and enhance operating margins by about 30 basis points. For FY26, pro forma organic growth is guided to 3-4%, adjusted operating margins to 28.4%, and adjusted EPS to $5.20-$5.30. This change also significantly improves cash flow conversion, with FY25 pro forma FCF conversion being 300 bps higher than the reported 87%.

    03

    End Market Performance and Trends

    The company observed a modestly improved pharma and biotech spending environment, leading to positive low single-digit organic growth from these customers in Q1, the strongest since H1 2023. Academic and government customers also showed positive mid-single-digit growth, with the U.S. seeing positive growth for the first time since Q2 2023. Reproductive health delivered strong low double-digit organic growth, benefiting from newborn screening and the Genomics England contract. Immunodiagnostics outside China performed as expected, offsetting declines within China.

    04

    Software Innovation and AI Strategy

    Revvity is driving significant software innovation, launching Xynthetica (AI models as a service platform) in December and BioDesign (cloud-native molecular design platform) in April. LabGistics, an AI-first drug discovery workflow offering, is planned for late 2026. The company emphasizes the transformational impact of AI on life sciences research, positioning its consumables, instruments, and software to meet the increasing demand for physical validation of AI-generated discoveries. Internally, Revvity is adopting AI across operations, with high employee adoption rates and cost-efficient implementation, as highlighted by Gartner.

    05

    Operational Efficiency Initiatives and Margin Expansion

    Operational efficiency initiatives are well underway and expected to be fully completed around midyear 2026, driving significant financial impact in the second half of the year. These initiatives are a key driver of the communicated operating margin expansion, with benefits expected to annualize into the first half of 2027. The efforts include headcount optimization, new centers of excellence, delayering management, and non-labor initiatives like footprint consolidation and sourcing optimization.

    AI-generated summary of the company’s earnings call. Not investment advice.