Revvity (RVTY) Q1 FY26 earnings call: guidance and Q&A

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

Inquired about improvements in the reagents business, particularly in academic and government sectors, and whether recent biotech funding is translating into demand.

Prahlad characterized the reagents business as 'positively stable,' noting better performance from academic customers with positive mid-single-digit growth in Q1. He mentioned seeing signs of improvement in both instrument and reagent sales, expressing optimism for continued uptake, though emphasizing the need for more consistent performance.

“I would say that I would characterize it as positively stable. We expect -- we experienced better performance from this customer segment in the first quarter as our revenue was up positive mid-single digit.”

asked by Patrick Donnelly · answered by Prahlad Singh

Asked if the China Dx divestiture changes the company's appetite for M&A and capital deployment, especially given current tools multiples.

Prahlad stated the divestiture fortifies their long-range plan and removes an overhang from being over-indexed in a challenging market. He affirmed Revvity will remain an acquisitive company, filling portfolio gaps, but also highlighted share buybacks as a significant avenue for capital deployment, noting their aggressive and opportunistic approach to stock buybacks.

“In terms of capital deployment, we'll continue to be an acquisitive company. But when we look at our share buyback performance, if you see what we've done over the last year, we'll continue to be aggressive and opportunistic on the stock buyback too. So we have enough avenues to deploy capital in both ways.”

asked by Puneet Souda · answered by Prahlad Singh

Sought details on the strength in reproductive health, particularly the Genomics England (GEL) contract, and its full-year incorporation, as well as underlying ex-GEL performance.

Max explained that reproductive health had a very strong quarter, growing double digits, driven by stronger underlying reagents performance, additional instrument placements, and a slightly stronger-than-anticipated GEL partnership. He reiterated the full-year assumption for GEL's contribution at about $20 million and emphasized the business's strong performance despite challenging birth rates, attributing it to commercial execution and new assay development.

“Reproductive health, it continues to be a really strong business for us. And I think when you look at even with the challenging birth rate environments, the performance, not only in the first quarter, but over the past several years has well outpaced that and has been growing above its LRP.”

asked by Daniel Brennan · answered by Maxwell Krakowiak

Questioned why the 6% pro forma organic growth in Q1 slows down to 3-4% for the full year, implying a step down for the remainder of the year despite comps not getting harder.

Max clarified that the 3-4% full-year guidance implies an average of 4% in H1 (6% in Q1, 2-3% in Q2) and 3-4% in H2. He noted that assumptions for Life Science Solutions and Diagnostics include conservatism in H2 compared to H1 trends. He also reiterated the software cadence (down 20% in Q2, high teens in H2). He suggested potential for upside if markets maintain or improve.

“I would say for 2 of our business units for Life Science Solutions and Diagnostics, we do have [ conservatism ] assumed in the back half of the year versus the trends we're seeing for the first half. I already talked about the software cadence as a result of Patrick's question. But I do look -- expect us to have, I would say, a strong performance here in the first half of the year and continued trends on that in the second half.”

asked by Vijay Kumar · answered by Maxwell Krakowiak

Asked about the drivers of Q1 operating margins, including cost inflation and spending, and how the company plans to bridge to the 28.4% full-year target.

Max attributed Q1 margin beat to strong incrementals on higher volume, flowing through at ~45%. He outlined the margin cadence: Q1 (24%) to Q2 (27%) driven by extra week absence, FX benefit, and seasonal revenue. Q2 to Q3 (29%) driven by cost productivity initiatives completing by Q2 end (headcount, centers of excellence, delayering, non-labor initiatives). Q3 to Q4 step-up is due to seasonal volume leverage.

“That step-up between Q1 and Q2 is really driven by half from not having the extra week and a little bit of FX benefit. And the other half is just from the incremental revenue as you do get a seasonal pickup from Q1 to Q2. I think then when you look between the jump of 2Q to 3Q, we do expect our margins to go up about from 27% in the second quarter to 29% in the third quarter. That step-up is really driven by the cost productivity initiatives that we've put into place.”

asked by Tycho Peterson · answered by Maxwell Krakowiak