The paragraph introduces the Q1 2025 earnings conference call for Revvity, coordinated by Sammy and hosted by Steve Willoughby. Key participants include Prahlad Singh, President and CEO, and Max Krakowiak, Senior VP and CFO. Steve mentions that forward-looking statements may be made, cautioning that actual results may vary due to various factors detailed in SEC filings, and emphasizes there's no obligation to update these statements in the future. He also notes the use of non-GAAP financial measures, with reconciliations available in the earnings press release. Prahlad Singh then comments on the dynamic macroeconomic conditions faced in the first quarter.

The paragraph highlights Revvity's strong organic growth and better-than-expected earnings despite global economic uncertainties over the past 90 days. The company attributes its success to its business resilience, adaptability, and innovative offerings, allowing it to thrive even amidst challenges like softer pharma customer spending. Revvity reported a 4% organic growth in the first quarter, meeting expectations due to strong performance in diagnostics and software, which offset pressures in other areas. The company is optimistic about maintaining its strong performance through adaptable strategies and innovations.

In the quarter, the company's organic growth was affected by unexpected fluctuations in demand from US academic customers, impacting life science instruments. Despite this, the company exceeded earnings expectations with an adjusted EPS of $1.01 and achieved 97% free cash flow conversion. They aggressively repurchased shares, reducing the total outstanding shares by 6% since becoming Revvity in mid-2023. Lab activities with pharma and biotech clients have stabilized due to plateaued restructurings, while there was year-over-year growth in reagents. The Diagnostics franchise also saw a 5% organic growth, driven by strong market growth drivers resilient to macroeconomic changes.

The paragraph discusses Revvity's advancements in diagnostic innovations, highlighting their expanded alliance with Genomics England to enhance Newborn Genomic Sequencing in England by providing DNA sequencing services for screening newborns for rare genetic conditions. This collaboration aims to screen up to 100,000 newborns for over 200 rare disorders, positioning Revvity as a leader in this field. Additionally, Revvity secured FDA approval for an automated platform that integrates with their T-SPOT latent TB test, enhancing laboratory productivity and clinical performance in TB detection. This marks a significant step in combating TB by providing faster and more reliable diagnostic solutions globally.

The paragraph discusses the significance of launching a new latent TB test in the US market, which is crucial given its size. It highlights the growth and potential of the Signals Software business, noting its 20% organic growth in the first quarter and expectation for further expansion. The launch of Signals One, a unified data platform with enhanced AI capabilities, is a significant development following last year's releases of Signals Clinical and Signals Synergy. The company plans more product launches, including logistics and biologic-related offerings. Additionally, a favorable court ruling ensures continued service for Spotfire customers, and a competitor's sale highlights the value of the company's offerings.

The paragraph highlights Signals' robust growth and strong presence in the life sciences industry, supported by Revvity's innovation and customer relationships. Despite broader market trends and geopolitical challenges, Revvity has shown resilience and expects continued strong performance. The company is actively managing the changing tariff situation through contingency planning and strategic actions like inventory management, geographical adjustments, and supplier engagement to minimize potential impacts.

The paragraph outlines a company's efforts to mitigate the impact of tariff-related pressures on their financial performance. They have implemented temporary cost actions expected to offset most of the tariff impact by the end of the second quarter. Without these measures, they would face a $135 million hit to adjusted operating income, but with aggressive actions, they expect to reduce this impact significantly. The net impact on adjusted operating margins is anticipated to be a 60 basis point reduction. Most of the pressure will be felt in the second quarter, but they expect to offset it with other favorable financial actions. Consequently, they are maintaining their full-year adjusted EPS outlook of $4.90 to $5.

The paragraph discusses the company's resilience and adaptability in the face of a challenging macroeconomic environment. Despite headwinds in the academic and instrumentation sectors, the company reaffirms its full-year organic growth outlook of 3% to 5%, supported by strong performance in its Software business and growth in reproductive health due to recent commercial partnerships. The company emphasizes its ability to execute well in all market conditions and anticipates further strengthening once the current uncertainty subsides. Despite new challenges and reduced academic funding affecting customer spending, the company has achieved solid first-quarter results through strong execution and strategic business adjustments.

The paragraph discusses the impact of an executive order that reduced indirect funding, affecting spending behavior among US academic customers, who account for just over 5% of the company's revenue. Although funding currently remains intact, cautious spending is expected to continue. Revvity is also dealing with tariff-related challenges, with a focus on three areas: mitigating the $135 million tariff impact on products made in the US and sold to China, addressing tariffs on products made in Europe and sold in the US, and leveraging operational agility to capitalize on new opportunities. The company plans to neutralize the US-China tariff impact within two months and is implementing various strategies, such as adjusting manufacturing and selective pricing, to offset the US-European tariff effects.

The company anticipates a second-quarter impact from current tariffs but plans to mitigate this through tax strategies and favorable foreign exchange, maintaining their adjusted EPS outlook at $4.90 to $5. In the first quarter, the company achieved $665 million in revenue and 4% organic growth despite a 1% FX headwind and no acquisition contributions. They reported a 25.6% adjusted operating margin, benefiting from strong expense management. The adjusted net interest and other expense were $18 million, influenced by FX volatility, while the adjusted tax rate was lower than expected at 19.5% due to tax initiatives. The share repurchase program reduced average shares to 120.2 million, contributing to an adjusted EPS of $1.01, surpassing expectations by $0.07.

In the quarter, the company generated $118 million in free cash flow, achieving a 97% conversion of adjusted net income. They actively managed working capital and anticipate further divestiture-related inflows later in the year. The company repurchased $154 million in shares, maintaining confidence in their long-term potential. Their balance sheet ended with a 2.4x net debt to adjusted EBITDA leverage ratio, all fixed-rate debt at a 2.6% interest with seven-year maturity. They aim to optimize capital deployment for high returns while preserving their investment-grade credit rating. In terms of business performance, the company saw 4% organic revenue growth, with 2% growth in Life Sciences and 5% in Diagnostics. Regionally, the Americas and Europe grew mid-single-digits, and Asia, including China, grew low-single-digits. The Life Sciences segment reported $340 million in revenue, up 1% reported and 2% organic, with a low-single-digit increase in sales to pharma biotech customers and a decline in sales to academic and government customers.

In the quarter, the Life Science Solutions business saw a slight decline due to a drop in instrumentation, which was partially offset by growth in reagents. The Signals Software business excelled with over 20% organic year-over-year growth, performing well in ARR, ATV, and net retention rates. The Diagnostics segment reported $324 million in revenue, a 3% increase reported and 5% organically, led by high-single-digit organic growth in immunodiagnostics and neonatal screening, despite challenges like global birth rates. The reproductive health business grew in low-single-digits. In China, the overall organic growth was low-single-digit, with growth in Diagnostics balancing a decline in Life Sciences. Limited stimulus in the region affected instrumentation. Looking forward, the company reaffirmed its full-year organic growth outlook of 3% to 5%, with some composition changes.

The paragraph discusses the company's updated financial outlook, factoring in slower demand from academic customers in the U.S., which affects their Life Science Solutions unit and causes a 100 basis point headwind to organic growth. However, this is offset by strong growth in their Software business and reproductive health due to successful partnerships. Despite a weaker dollar impacting foreign exchange, revenue is expected to be $2.83 billion to $2.87 billion. Adjusted operating margins are forecasted to be 27.9% to 28.1%, down due to tariff pressures, which also impact full-year adjusted EPS by approximately $0.12. If tariffs decrease, the company might maintain their manufacturing flexibility while reverting some temporary cost-saving measures without changing overall financial guidance. Successful tax planning and less FX headwind are expected to offset earnings impacts.

The company has revised its financial forecasts, projecting an adjusted tax rate of 19% for the year, net interest and other expenses at approximately $75 million, and an average diluted share count of about 119 million. As a result, the adjusted earnings per share (EPS) for the year are expected to be between $4.90 and $5. In the second quarter, organic growth is anticipated to be between 2% and 4%, with total expected revenue ranging from $700 million to $715 million. Adjusted EPS for the second quarter is predicted to be between $1.13 and $1.15. Despite facing unforeseen challenges, the company started the year strong but notes the macroenvironment's volatility and uncertainty. They plan to focus on controllable aspects, capitalize on opportunities, and respond to new challenges. The company believes it is well-positioned for when market trends improve and opens the floor for questions, with Patrick Donnelly from Citi starting off with a question about US-China tariffs.

The paragraph discusses a company's strategy to offset a $135 million gross impact by quickly adjusting their supply chain and product distribution, particularly between the US and China. Prahlad Singh and Max Krakowiak highlight that preparations began right after the election, allowing them to efficiently navigate a dynamic macroenvironment. Most of their Diagnostics business is focused on the Chinese market, and they emphasize their agility as a company. The conversation also touches on the Life Science Solutions segment, noting some changes in product performance: instrument sales have declined slightly while software sales have increased, and there's an acknowledgment of some impact on reagents, particularly in the academic sector.

The paragraph discusses a company's growth expectations in its Life Sciences segment. Max Krakowiak explains that the overall growth guidance for the year remains mostly unchanged from 90 days ago, though slightly lower. The Life Science Solutions business, which includes both instrumentation and reagents, is experiencing pressure, with instrumentation being under more pressure than assumed previously. Despite pressures, the reagent side is still expected to show solid growth, albeit slower due to pressure from academic and government sources. The Software business is anticipated to grow stronger than the low-double-digit growth initially expected. Patrick Donnelly appreciates the response, and the conversation shifts to Dan Brennan from TD Cowen who asks about the company's performance in China and potential impacts of political tensions on Western vendors like Revvity due to the Trump administration.

In the paragraph, Prahlad Singh discusses their business operations in China, highlighting that the diagnostics business is well-established there, with reproductive health products produced locally and immunodiagnostics products imported from Europe. To ensure smooth operations in Life Sciences, they've been working on supply chain redundancy. Max Krakowiak adds that they expect low-single-digit growth in China for the rest of the year, with Life Sciences experiencing a slight decline and Diagnostics showing mid-single-digit growth. Dan Brennan asks for clarification on expected revenues from US academic and government sectors, and Singh responds that they are adjusting expectations due to slower growth in these areas, particularly in the US.

The paragraph discusses the financial outlook and performance of the company, focusing on the impact of different business segments. The company has accounted for a 100 basis point headwind from academic and government customers, which is being offset by its software and reproductive health businesses. There is an ongoing partnership with Genomics England for reproductive health, and global newborn screening is performing well. Matt Sykes from Goldman Sachs inquires about the software business, which, despite being only 8% of total revenues, is crucial in offsetting macroeconomic challenges. Prahlad Singh explains that the software segment benefits from favorable market dynamics, strong business wins, high retention rates, and successful new product launches. There are also opportunities for expansion into material science markets.

The paragraph discusses a company's strong position in the market due to synergies between its Signals business and Life Sciences Solutions franchise, leading to a competitive edge amid market disruptions. The focus then shifts to ImmunoDx's performance, which showed growth globally and especially in the US for the quarter. There's a clarification that there was no tariff-related pull forward or unique market effects impacting these results, and the growth trend is expected to continue. The conversation also highlights that diagnostic activities are primarily focused on or linked to China.

Vijay Kumar raises a question about the $135 million tariff impact, recognizing it as a significant headwind to gross margins. Prahlad Singh clarifies that the figure assumes no action was taken and emphasizes that measures have been implemented to mitigate the impact, including increasing supply chain redundancy. Max Krakowiak notes that while the tariffs will pressure gross margins, reducing them to about 60% in the second quarter from their usual 61.5% to 62.5%, the company is undertaking proactive steps to counteract the impact and plans further cost-saving measures in the second half of the year.

The paragraph involves a discussion between Vijay Kumar, Prahlad Singh, Max Krakowiak, and Catherine Schulte regarding the impact of tariffs and the company's approach to handling disruptions. Prahlad Singh highlights that most of their sales are directed at the preclinical side, with stable trends in the reagent segment. It's noted that pharma biotech accounts for roughly 35% of the company's total revenue. Catherine Schulte inquires about the company's mitigation strategies for dealing with a $135 million tariff headwind, such as changes in manufacturing, cost actions, or pricing adjustments, and Max Krakowiak responds regarding the broad mitigation strategy.

The majority of the supply chain changes and manufacturing adjustments account for about 75-80% of an offset, with the remaining being achieved by changing suppliers, selective pricing actions, and some expense tightening in the latter half of the year. Catherine Schulte inquires about the impact of immigration on latent TB business, particularly due to actions by the current administration. Max Krakowiak explains that their TB market is more focused outside the US and recent developments are expected to increase their US presence, suggesting immigration issues wouldn't significantly impact them overall. Then, Daniel Arias from Stifel asks about expectations for the Signals business, noting its strong performance in the first half of the year.

In the article paragraph, Max Krakowiak expresses optimism about the company's Signals business, indicating strong performance and double-digit growth for the second half of the year and upper-teens growth for the full year. Despite potential fluctuations during the year, he remains confident in the long-term performance, citing metrics like ARR, net retention rate, and APV growth as indicators of success. Daniel Arias inquires about the company's strategic approach to mergers and acquisitions (M&A). Prahlad Singh responds that while the company does not comment on specific deals, it continues to evaluate investment opportunities both organically and inorganically.

In the given paragraph, a discussion takes place about the company BioLegend's post-acquisition strategy. Despite initially relying on organic growth and investment, the company now maintains a robust pipeline and a strong organic profile, making mergers and acquisitions less critical for financial success. The conversation shifts to the company's strategies in China, where they have countered tariff challenges by creating a redundant and agile supply chain, allowing for local product availability without reliance on US sources. Additionally, questions are raised about the transition of the Signals business to a SaaS model, with an indication that the high growth reported may have influenced the timeline of this transition.

The paragraph discusses the progress and future outlook of a company's transition to a Software as a Service (SaaS) model. As of now, about a third of their portfolio has been converted to SaaS, with some parts still on-premises affecting revenue in 2025. Key performance metrics like ARR growth, net retention rate, and portfolio value growth demonstrate strong underlying business performance, indicating consistent customer behavior and exceeding expectations. Additionally, Dan Leonard and Luke Sergott have a discussion about the impact of current investments and manufacturing shifts on long-term operating margins, with Max Krakowiak confirming that the long-range plan and margin expectations remain largely unchanged.

The paragraph discusses the company's long-term operating margin expansion, detailing that 75 basis points of expansion are expected, with 25 basis points from gross margin and 50 basis points from operating margin, primarily through SG&A volume leverage without significant investment needs. Tariff situations are not anticipated to impact this plan. The company remains confident in its operating margin as a differentiator. Luke Sergott inquires about reproductive health, and Max Krakowiak highlights two key factors for growth: the expansion of commercial partnerships, notably with Genomics England, and the strong performance of the Newborn Screening business, which has consistently outpaced global birth rates over the past ten quarters.

The paragraph discusses the impact of potential changes in pharma research and development (R&D) on a business related to life sciences. Despite concerns about R&D budget cuts and FDA plans to phase out animal testing, the company remains optimistic due to its diverse portfolio. Its in vivo imaging, which constitutes 25% of the Life Science business, is primarily used in early research stages and may not be significantly affected by the changes. The company is well-positioned long-term due to its strengths in high throughput cell-based screening, refined in vivo methods, micro-dosing capabilities, and use of ex vivo human tissues. The focus on small rodents instead of larger animals aligns with reducing larger animal experiments.

The discussion focused on the cell analysis portfolio and its alignment with the FDA 3.0 agenda, which is seen as a positive factor rather than a challenge. Prahlad Singh mentioned that any potential cuts in pharmaceutical R&D funding would primarily affect capital expenditures, but their reagents business continues to show strong performance. Tycho Peterson inquired about the success in consumables, to which Max Krakowiak responded that it is challenging to pinpoint whether the success is due to market share gains or other factors. The company remains focused on product differentiation and customer engagement, which they believe contributes to their positive results. The call concluded with an operator announcement.

This summary was generated with AI and may contain some inaccuracies.