Revvity Q2 2025 slides: Revenue growth continues amid margin pressure

Published 28/07/2025, 11:12
Revvity Q2 2025 slides: Revenue growth continues amid margin pressure

Introduction & Market Context

Revvity Inc (NYSE:RVTY) released its second quarter 2025 earnings presentation on July 28, showing continued revenue growth but facing margin pressures across its business segments. The scientific solutions company, which helps address global health challenges from discovery to diagnosis, reported mixed results that prompted a negative premarket reaction, with shares down 3.78% to $99.75 before the opening bell.

The results come after a strong first quarter where Revvity exceeded Wall Street expectations. However, the Q2 presentation reveals a more challenging environment with margin compression despite top-line growth, particularly highlighting geographic disparities with weakness in China offsetting strength in other regions.

Quarterly Performance Highlights

Revvity reported second quarter revenue of $720 million, representing a 4% year-over-year increase. Organic growth contributed 3% while favorable foreign exchange added 1%, with no impact from M&A activities.

As shown in the following comprehensive financial results chart:

Despite the revenue growth, Revvity’s profitability metrics showed pressure. Adjusted operating margin declined 210 basis points year-over-year to 26.6%, while adjusted gross margin fell 180 basis points to 59.6%. Adjusted earnings per share decreased 3% to $1.18, with an adjusted tax rate of 19.1%.

Free cash flow generation remained solid at $115 million for the quarter and $234 million year-to-date, representing 90% of adjusted net income conversion. The company’s adjusted net interest and other expenses totaled $20 million for the quarter.

The revenue breakdown across segments, geography, and product mix provides additional context for Revvity’s performance:

The Americas region represents the largest portion of Revvity’s revenue, followed by Europe and Asia-Pacific. The company’s business is divided between Life Sciences (the larger segment) and Diagnostics, with recurring revenue comprising the majority of the product mix – a positive indicator for business stability.

Segment Analysis

Revvity’s Life Sciences segment, which includes life science solutions and software, delivered $366 million in revenue with 4% organic growth (5% reported including FX):

The segment showed mid-single-digit growth from pharmaceutical and biotech customers, partially offset by a low-single-digit decline from academic and government clients. While life science solutions experienced a low-single-digit decline due to instrument weakness, reagent growth provided some offset. The software business was a particular bright spot, delivering double-digit growth driven by new orders, strong renewals, and SaaS performance.

However, adjusted operating margins for the Life Sciences segment fell 220 basis points year-over-year to 31.6%, with the company attributing the pressure to unfavorable product mix and ongoing investments.

The Diagnostics segment, comprising immunodiagnostics and reproductive health, generated $354 million in revenue with 2% organic growth (3% reported):

Immunodiagnostics showed low-single-digit growth globally, but this was hampered by double-digit declines in China. Reproductive Health delivered low-single-digit growth globally, driven primarily by strength in newborn testing. Similar to the Life Sciences segment, Diagnostics also experienced margin pressure, with adjusted operating margins declining 180 basis points to 25.2%, which the company attributed to tariff impacts, foreign exchange headwinds, and strategic investments.

Strategic Initiatives

Revvity highlighted several key innovations during the quarter that position the company for future growth. As outlined in their key takeaways:

The company launched the IDS i20 ChLIA diagnostic analyzer and unveiled the Signals One software platform, reinforcing its commitment to innovation across both business segments. Management noted stability across pharmaceutical, biotech, and academic markets, with strong diagnostic trends in the United States and Europe helping to offset weaker volumes in China.

These initiatives align with Revvity’s long-term strategy of expanding its diagnostic capabilities while continuing to enhance its software offerings, which showed particularly strong growth during the quarter.

Forward Guidance

Looking ahead, Revvity provided full-year 2025 financial guidance that maintains its previous trajectory:

The company expects full-year revenue between $2.84 billion and $2.88 billion, representing 3-5% reported growth and 2-4% organic growth, with a 1% contribution from foreign exchange and no impact from M&A. Adjusted operating margin is projected to be 27.1-27.3%, while adjusted EPS guidance ranges from $4.85 to $4.95.

Additional guidance includes approximately $80 million in adjusted net interest expense and other items, an adjusted tax rate of about 18%, and an average diluted share count of approximately 117 million.

Market Reaction and Analyst Perspectives

The negative premarket reaction suggests investors may be concerned about the margin compression and EPS decline despite revenue growth. This contrasts with Revvity’s Q1 2025 performance, where the company beat both revenue and EPS expectations, delivering $665 million in revenue and $1.01 in EPS versus forecasts of $661.92 million and $0.95, respectively.

The geographic disparities, particularly weakness in China’s diagnostics market, appear to be a continuing concern for investors. Additionally, the margin pressure across both business segments, attributed to tariff impacts, unfavorable product mix, and ongoing investments, may raise questions about the company’s ability to maintain profitability while pursuing growth.

Revvity’s full-year guidance, which appears largely unchanged from previous forecasts, suggests management remains confident in the company’s ability to navigate these challenges while continuing to execute on its strategic initiatives.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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