Revvity at Bank of America 2025 Healthcare Conference: Navigating Tariffs and Growth

On Tuesday, 13 May 2025, Revvity Inc (NYSE:RVTY) participated in the Bank of America 2025 Healthcare Conference, presenting a strategic overview marked by both achievements and challenges. Despite a shifting macroeconomic landscape, Revvity’s Q1 performance was strong, driven by diagnostics and software sectors. However, the company faces tariff headwinds, particularly impacting its China operations.

Key Takeaways

• Revvity reported solid Q1 results, with resilience in diagnostics and software.
• Tariff impacts are being actively mitigated, with a net EPS impact of $0.12 expected mainly in Q2.
• The company is focusing on share buybacks and selective M&A for capital allocation.
• China’s life sciences market remains challenging, but diagnostics are expected to grow modestly.
• Revvity aims for margin expansion once market conditions stabilize.

Financial Results

• Tariff Impact: Estimated at $135 million gross, with a net EPS impact of $0.12, mainly in Q2. Operational strategies are expected to offset these by the year’s second half.
• Operating Margin: Expansion of 75 basis points is anticipated if the market normalizes, with 50 basis points expected with mid-single-digit organic growth.
• Revenue by Geography: China contributes 16% of revenue, with diagnostics growing in high single digits, while life sciences saw a slight decline.

Operational Updates

• Tariffs: Revvity is implementing supply chain actions and cost management to mitigate US-to-China tariff impacts, considering these steps as "no regret" moves.
• Academic and Government Sector: Accounts for 12% of global revenue, facing cautious spending due to budget uncertainties.
• Pharma and Biotech Sector: Positive growth in Q1, although macroeconomic factors and tariffs pose challenges.
• BioLegend Synergies: Leveraging capabilities in diagnostics presents significant synergy opportunities.

Future Outlook

• Growth Cadence: Consistent organic growth is expected throughout the year without significant ramp-up in the second half.
• China Diagnostics: Anticipated mid-single-digit growth for the remainder of the year.
• Capital Deployment: Focus on opportunistic share repurchasing and selective M&A.

Q&A Highlights

• Tariff strategies and their impacts were a major discussion point.
• Revvity’s long-term strategy includes M&A, with a current emphasis on selectivity.
• Capital allocation will prioritize share buybacks.

In conclusion, Revvity’s participation at the Bank of America 2025 Healthcare Conference highlighted its strategic efforts to navigate current challenges while positioning for future growth. For more details, please refer to the full transcript below.

Full transcript - Bank of America 2025 Healthcare Conference:

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: It’s Mike Ryskin on the Bank of America Life Science Tools and Diagnostics teams. And I’m excited to host Revity for our next session. I’m joined by Max Grackowicke, Senior VP and CFO. Max, thank you for being here.

Max Grackowicke, Senior VP and CFO, Revity: Yeah, thanks for having us, Mike.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Kick things off, our opening question sort of, you reported 1Q recently, gave an update on the guidance. Could you talk us through how the quarter played out? Sort of what are the big changes? Obviously, there’s a lot to unpack there, but give us a high level overview and then we’ll attack each of the points separately.

Max Grackowicke, Senior VP and CFO, Revity: Yeah, sure. So I would say, overall, first, the first quarter was, I would say, solid performance, obviously, a little bit different macro environment than what we had assumed at the time of our initial 2025 guidance. But I think the sort of three main takeaways I would say from our first quarter earnings call is, one, the beauty of our portfolio. I think it’s been a big part of the transformation, and you can see the strength in our diagnostics business as well as our software business that continue to perform extremely well. I’d say the second piece is we had appropriately prudent guidance to start off 2025.

I think we had baked in for some uncertainty, didn’t know the level of or extent of change, but I think that was a very appropriate prudency, and it’s part of the reason why we’re able to maintain our full year guidance despite a weaker macro backdrop. And then the third thing I would say is really our ability to execute. I’m sure we’ll talk about tariffs today, but our ability to sort of hold our full year EPS and operationally mitigate the majority of tariff headwinds sort of exiting the second quarter here, I think, is a testament, again, to our ability to execute.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. Let’s pick it up right there on the tariffs and the mitigation front. Can you expand a little bit on your mitigation strategy, how that’s being implemented, the timing of that phasing out over the course of the year?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, so maybe to just to reframe for everyone to how we sort of talked about tariffs on the earnings call. So for us, framed it at about $135,000,000 of gross tariff headwinds, and we said the net impact was roughly $0.12 of EPS after the operational mitigation. When you think about that, it’s majoritally in the second quarter. And so we’re really able to operationally mitigate the headwinds here in the second half with a lot of supply chain actions, but then also some additional belt tightening.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Why are you able to or how are you able to implement the mitigation steps so quickly? Because I know a lot of other peers have talked about taking most of 2025, in some cases into 2026. So by the end of 2Q, is this from an end market perspective, from a geo perspective? Just walk us through that.

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I’d say there’s really probably two main drivers in our ability to do so. One is the beauty of our portfolio. We are a global company, but I also say we are a nimble company as well with our streamlined portfolio that we now have, which has been a tailwind to our mitigation efforts. I’d say the second piece is something that we’ve been working on for really a long time in terms of our supply chain resiliency throughout the COVID period, but also some of our strategic actions we were taking just overall as a company perspective over the past twelve to eighteen months. So for example, we’ve talked about the importance of GMP for us over the next couple of years in our life sciences reagents business.

As part of that, your customers want you to have dual manufacturing capabilities. So we have the GMP facility in San Diego. We had already been in process of building a GMP facility outside of The US as sort of the backup or redundancy site. And so we’re just able to leverage that site and sort of reassure some of our reagent portfolios, which is helping us mitigate the tariff headwinds.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: And then in terms of the updates over the last couple of weeks since you announced results yesterday, obviously the big change was China tariff from 145, 1 hundred and 20 5 to 3010% in the two directions. What impact does that have on your footprint, on your tariff hit?

Max Grackowicke, Senior VP and CFO, Revity: Yeah. So yes, recent news. It feels like there’s new news every day here. But I would say, again, if you go back to how we framed up the tariff discussion, the impact for us, most of that impact was really in the second quarter from an operating margin headwind perspective. And so we’re already kind of midway through the period here.

We’ve already sort of been positioning inventory and selling through to our customers and making sure they get what they need. So if you think about that $0.12 impact, we’ve kind of framed it up as half is the impact from US to China and then half is sort of rest of the world into The US. And so as you look at that impact in the second quarter, could there be some potentially modest upside or impact to the second quarter? There could be here, but we are also halfway through the quarter. So I don’t want to somewhat temper the expectations in terms of the benefit of that China tariff reduction.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. And then from a policy going forward perspective, in terms of the mitigation actions, one the questions we ask is sort of how permanent are those? How much are you willing to dial them back or adjust them? Like you said, I mean, you already have them in place in second quarter, but let’s say hypothetical tariffs stay at current levels, thirty and ten between US and China, would you over time pull back on some of those efforts? Or is this sort of like a no regrets, we’re going all in and this is the plan no matter what?

Yeah, I think

Max Grackowicke, Senior VP and CFO, Revity: as you talk about The US to China piece in particular, I think that one is a full no regret activity, and we’re going to keep maintaining sort of the plans that we’ve laid out here. I would say when you then look at the rest of the tariff impact I mentioned, sort of half that impact is from rest of world into The US. And when you really look at that, that’s mostly our diagnostics business where we have manufacturing in Europe and The UK that’s being sold into The US. If tariffs are to stay around longer and depending upon the levels which they’re at, I think we might have to relook at whether we want to make more, I would say, dramatic operational changes to mitigate them. But I think that’s really where you’re seeing the belt tightening is to offset some of those headwinds here in the second half, and those are sort of temporary in nature.

I think the other point we get asked is, what about pricing and the ability to pass it on through the customers? Again, given that it’s mostly diagnostics related, it’s a little bit longer of a cycle in terms of the contracts being renewed and when you can pass through those price increases. And a lot of our contracts are with state government labs on the newborn screening side. So it’s just not necessarily the easiest or fastest place to push through pricing changes. So again, think the punchline being we’ll continue to execute the plan for US to China, and then for the rest of the world into The US, we’ll have to see how things sort of unfold here from a tariff perspective.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. Talking about some of those moving pieces in the guide update and the impact of tariffs, you trim your adjusted operating margin guide a little bit to account for that. The offset was some non op items. But if we think about that OpEx or op M number going into 2026, once the mitigation is slowly in place, should that bounce back? Or is there going to be continue to be margin pressure from this into next year?

You kind of talked about that with The UK, US

Max Grackowicke, Senior VP and CFO, Revity: Yeah. Certainly not giving 2026 guidance here today. There’s a lot of moving pieces. Again, new news happens every day. So I would say as you think about it, maybe the better way to frame it is I would think 2026 is more of a normal margin year in the context of our LRP.

If the market does return to a more normalized state, for us that’s 75 bps of operating margin expansion. If it’s more of a mid single digit organic growth, that’s roughly 50 bps. And you can kind of scale down there, low single digits, more modest op margin expansion. So I think that would probably be a different way to frame it based on what we know and where we sit here today is I wouldn’t expect some sort of huge margin catch up next year.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. Okay. That’s helpful. Let’s break into a couple of the specific end markets and customer groups. So not the biggest exposure for you, but the other policy areas, academic and government.

Can you talk about, you know, specifically where you see exposure, what parts of the portfolio, how that played out in the first quarter? Then especially if you could give any order commentary or forward guidance, because there’s, you know, it is expected to continue?

Max Grackowicke, Senior VP and CFO, Revity: Yeah. I think maybe just hitting the last point first too. From our sense, we don’t guide necessarily by end markets between pharma, biotech versus academic and governmental life sciences side. But as we looked and updated our guidance for 2025, we have factored in sort of the lower or tempered expectations on the academic and government side, but we’re able to offset that with our software and diagnostic strength. And so that allowed us to hold the full year organic growth guidance, which we’re very proud of.

I would say when you look at specifically academic and government for us, as a reminder, exposure level, it’s 12% of revenue globally, slightly more than 5% of that being in The US. And then even when you look at what we sell to the academic government customers, the vast majority of it is our reagents. And so when you look at kind of what’s happening, I would say there is consistent cautiousness on both the instrumentation and even on the reagent side as they sort of wait to see what happens with around indirect expense reimbursements and with the funding levels for NIH. And so there is just general cautiousness. And in the first quarter, both instrumentation and reagents were down through academic and government customers in The US.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: You mentioned the budget, a lot of anticipation of the fiscal year budget once Congress sort of gets their hands on it. Is that the next major catalyst? Or just when you talk about cautions from your customers, what do you think we could look to see some relief of that?

Max Grackowicke, Senior VP and CFO, Revity: Yeah. Well, every year they go through the budget thing, right? I mean, that’s not a nuanced dynamic. I would say the indirect expenses is definitely causing some significant cautiousness. I think more clarity around there would be helpful.

Obviously, more budget certainty helps as well. But I think right now, until we get a little bit more information, you’ll kind of continue to see that level of cautiousness, which is what we factored into our updated guidance.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: And when you say the majority of your US A and G’s reagents, is that BioLegend?

Max Grackowicke, Senior VP and CFO, Revity: Yeah. The vast majority of that is even within BioLegend.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Yep, okay.

Max Grackowicke, Senior VP and CFO, Revity: All

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: right. And then talking about switching to pharma and biotech grew positively in the first quarter. How have those conversations continued?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I think when we came into the year from a pharmabiotech perspective, I think we were cautiously optimistic that we were going to continue to see that improved underlying end market trends. I think now with the more uncertainty on the macro backdrop and the pharma tariffs and the preferred pricing, it’s going to be a little bit more of a wait and see, which is what we’re sort of seeing from our pharma biotech customers. I think when you look at what we sell to pharma biotech, though, you do have a little bit of differences based on the portfolio group. So when you look at it from a software perspective, our software business continues to perform extremely well in an area we remain incredibly excited about long term. I think when you look at reagents, even despite the cautiousness, we continue to see modest sequential quarter over quarter growth, but also year over year growth.

And I think you’ll continue to see, I would say, stable growth from a reagents perspective. And then when you look at it really where the pressure point is right now, as I would say, on the instrumentation side. And so it continued to be down year over year in the first quarter. We expect it to continue to face pressures over the remainder of the year and aren’t really factoring in sort of any improvement from an instrumentation standpoint.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Have parsed out any difference between the large pharma, SMID biotech, small biotech, sort of like where the various pockets of weakness in instrumentation are coming from?

Max Grackowicke, Senior VP and CFO, Revity: Well, if you look at our portfolio, majority of what we sell into is mid and large sized pharma. And so from that perspective, that is where most of the, I would say, the weakness or cautiousness that we’re seeing is mostly within that customer group.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. And the other question we got was, as it relates to pharma as a customer group, maybe a little bit to A and G as well is timing changes, pull forward. I hate to use the word stockpiling, but just sort of were any of your customers trying to get ahead of tariffs, get ahead of budget cuts? Did you notice any unusual ordering patterns or dynamics there?

Max Grackowicke, Senior VP and CFO, Revity: No, I would say for our portfolio, the sort of stocking of inventory, it really doesn’t have an impact. It have an impact in COVID. Would say it’s not really having an impact now. Again, most of our reagents are shipped and delivered within twenty four to forty eight hours across the globe. So from that perspective and with the expiration date risk, it’s just not something where they can stockpile months and months of inventory.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. And on the weakness you’re seeing in instrumentation or maybe some of the cautions you’re seeing there, What do you think is driving that, especially if it is large, mid sized pharma, they’re not necessarily budget constrained? Is it uncertainty on pharma tariffs? Is it drug pricing, mostly origination, just sort of like, what’s the source of the cautiousness?

Max Grackowicke, Senior VP and CFO, Revity: I think it’s a combination of all the factors that you’ve mentioned. And again, if you remember what we sell from an instrumentation perspective, most of it is relatively large ticket customized instrumentation on preclinical research. And so from that perspective, in terms of new areas of research they’re looking into or new projects they might be looking to start, that’s something I think if I was in their shoes as well, there would just be a certain level of cautiousness given uncertainty on some of the policies. I think until you start to see that settle out and they can more clearly forecast and plan from their perspective, I would assume they’re going to be continuously cautious on large ticket purchases. Okay.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Maybe pivoting a little bit to geographies, maybe we could touch on China a little bit, obviously a sizable part of the business. How did the first quarter play out relative to expectations? Maybe you can parse out again different sub segments or business lines.

Max Grackowicke, Senior VP and CFO, Revity: Yeah, so I think when you look at China for us, just overall context too, it’s 16% of total company revenue, roughly 9% in diagnostics, seven percent on the life sciences side. I think when you look at the first quarter performance, I would say it was roughly in line with expectations. We had a slight decline year over year on the life sciences side, and then we had high single digit growth on the diagnostics side. And I think as you look over the course of the rest of the year, I think our expectation is that you’ll continue to see choppiness in the China Life Sciences end market. And I think you’ll continue to see modest growth in our diagnostics business probably ending the year roughly around mid single digit growth year over year.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Good. When you talk about that choppiness, obviously there’s been a lot of reasons for choppiness in China over the last couple of years. If you think in terms of tariffs and forgetting sort of like the cost impact and the tariff impact, do you think that a de escalation of the trade war could improve underlying market conditions in China, maybe improve some of the growth factors there? Or what’s your view on underlying demand?

Max Grackowicke, Senior VP and CFO, Revity: I don’t think it can hurt to have more stability from a trade perspective. I think there’s a lot of other variables that are going on right now just broadly with the China economy. And so I think until you see a little bit more clarity and certainty there and how that’s going to progress, I think the market will continue to be choppy. I think the one benefit we do have with our life sciences portfolio, though, is again, the majority of it is the reagents in terms of our revenue exposure there. And so from that perspective, we do continue to see levels of lab activity.

I think instrumentation, again, sort of with the stimulus flow through remains a little bit more volatile.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. All right. And then you talked about the strength in diagnostics in the first quarter. Any specific areas of strength there? And I want to tie that into a VBP question, just sort of what you’ve seen there and give us an update on why you think your portfolio may be less exposed there.

Max Grackowicke, Senior VP and CFO, Revity: Yeah, mean, I think it’s important for our diagnostics business, trying to remember we do different things than I think the other competitors who say they have diagnostics in China. We don’t play in the generalist diagnostics markets of respiratory and infectious disease. We play in more specialized end markets of immunodiagnostics in terms of autoimmune, allergy, TB testing, and then we’ve got the reproductive health business. But the majority of what we do in China Diagnostics is really our autoimmune portfolio, and that remains something that is highly specialized, requires a high degree of science. And so as weaving that into the VBP question, it’s, one, not the biggest piece of hospital budget, so not necessarily a focus from that perspective.

And two, there’s not a ton of local competition with the breadth and depth of our menu, which is really preventing it from being a priority from a VBP perspective. I think as we look at our long term growth algorithm for diagnostics in China, we expect immunodiagnostics to grow mid single digits. And that includes facing a mid single digit pricing headwind every year. So it might not be VBP, but we’re also not immune from the pricing headwinds that do exist in the China Diagnostics market.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. But on a VBP specific basis, you haven’t seen any hits so far in the fourth quarter or first quarter? No. Okay. All right.

Maybe we’ll dive into life sciences a little bit. You talked about the different pushes and pulls you’re getting between consumables and instrumentation. Just where do you think you’re best positioned for the rest of the year in consumables? How sustainable is that performance?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I think we remain, again, encouraged by the performance of our reagents business. Again, I think coming into this year, I think we’re maybe a little bit more optimistic that the recovery was really going to continue to ramp and get closer to more normalized, I would say, behavior of our reagents business and underlying lab activity. But I think that’s been tampered down a little bit, but we still expect our reagents business to grow year over year for the full year ’twenty five with relatively consistent volume levels for which we saw in the first quarter. And so I think that continues to be a bright spot for us. I think if you go back over the past couple of quarters, our reagents business has outperformed the peers reagents group, particularly around what we sell in RUO and preclinical reagents.

So I think we remain incredibly excited about that business. I think when you look out on the instrumentation side, again, I think until you get more certainty both on academic and government funding levels, but also the impact of policy on pharma budgets, until you get more certainty around those two areas, think you’re going to continue to see pressure on instrumentation.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. We touched on BioLegend previously, but just following up on that, how has that performed relative to your deal model? It’s been a couple of years. Can you give us an update on sort of integration plans, synergy, cost outs and just next steps with BioLegend?

Max Grackowicke, Senior VP and CFO, Revity: I think we remain incredibly excited about acquisition. Obviously, it’s a little bit different market environment than when we underwrote the deal or acquired them a couple of years ago. And so yes, it is a little bit off of the deal model, but that doesn’t change, I think, our long term excitement level about the BioLegend portfolio. And again, if you look back over the past couple of years and the performance of our reagents business outperforming peers, as I mentioned, BioLegend is the biggest piece of our reagents portfolio and a key part of that. And so I think we remain incredibly excited.

We’re seeing good commercial synergies with sort of our legacy revenue reagent portfolio. We’re continuing to see internal innovation and collaboration between BioLedget and our diagnostics business. And so it’s just, I think, a little bit of unfortunate timing with the market, but it’s still an acquisition we remain very excited about.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: You talked about some of those synergies and I remember we talked about this when you first acquired the business. Can you give us a couple examples where you’re able to leverage BioLegend’s capabilities in diagnostics and other parts of the portfolio?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, so I think for instance, anytime we’re coming out with a new diagnostic assay and it needs an antibody for that assay, Biolegend is the first call and the ability to make that in house. We’ve also seen opportunities where we’ve had the ability to move some of our reproductive health suppliers from outsourcing of our antibody development to moving that in house with BioLegend, which has been a big success for us. And then I’d say even commercially, the ability to leverage the pharma biotech channel of our legacy ReVEDY reagents, and then conversely, leveraging the academic and government channel from BioLegend for our legacy reagents have provided some nice wins for us. Again, I think those two pieces are adding up to our ability to, I think, outperform the peer group from a reagent perspective over the past couple of years.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Is there more upside for many of those areas? Just sort of like how many of those opportunities have you already tackled and incorporated? Are there other areas where you can continue to synergies between the two businesses?

Max Grackowicke, Senior VP and CFO, Revity: No, I think it’s a part of our long term growth algorithm. And I think when you look at what we expect reagents to do over the long term, those channel synergies are a key component of that execution.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. I want to touch on software. You called it out a couple of times as a pretty major area of strength. Just what’s driving that performance? What makes your software business so differentiated?

Why has it been so good for so long?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I think one big difference is really our portfolio. We do have two main direct competitors of Benchling and Diabmatics. But I would say when you look at really our product and how we partner with the large pharma customers, I would say it’s really differentiated and helps us drive that customer stickiness. I would say the second piece is we are really excited about the long term growth capabilities we have in that business as you look at the different pillars of our strategy. And those pillars being one, moving a little bit further downstream in the software world.

We’ve already launched two new products there, Signal Synergy and Signal Clinical, which are continuing to have strong commercial success. The second piece of the strategy is our product portfolio was mostly focused on small molecule in the past. We’re working very closely with our pharma partners to develop the same capabilities from a large molecule perspective in terms of their notebook and workflow capabilities. And then the third one is expanding into new customer groups, whether that’s moving further downstream into some of the smaller pharma biotech companies or entering into new markets such as material science, where it is a very similar workflow and software need perspective. And we’ve seen really good traction on both those fronts over the past couple of quarters.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: I want to ask little bit about cost structure and margins. You already talked about 2026 and sort of the puts and takes on how to think about that. But when I think about various levers for the rest of the year, ability to achieve upside versus downside versus from your targets, where do you see the opportunity across the portfolio, across the cost base?

Max Grackowicke, Senior VP and CFO, Revity: I would say right now our margin expectations for the year are balanced. I would say, again, in order to mitigate the tariff headwinds, we are doing some belt tightening here in the second half. Those are temporary in nature. We don’t have any sort of plans right now to take out additional structural costs here in the second half based on our commercial pipelines. Obviously, we’ll keep monitoring that to see if there’s any adjustments or course corrections are needed.

But I think over the past couple of years, we’ve shown our ability to execute from a margin standpoint and our ability to appropriately manage our cost profile. I think you’ll see the same thing play out here for 2025.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. And like you said earlier, those belt tightening moves, that’s not something you’re going to necessarily roll back based on the macro. That’s things you already committed to.

Max Grackowicke, Senior VP and CFO, Revity: Correct. Okay.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: From a pacing perspective, as we go through the year, anything we should keep in mind relative to normal seasonality, just given some of the macro besides the margin component?

Max Grackowicke, Senior VP and CFO, Revity: No, I think as you look at pacing, would say from a commercial perspective, it’s in line with what we had initially communicated at the start of the year. We had said it would be a relatively consistent organic growth cadence throughout the year, which is still sort of what’s factored in. We don’t have some meaningful ramp here in the second half. We’re assuming the underlying market conditions kind of persist as they were at the time of the earnings call. And so I wouldn’t really call it anything too specific from cadence perspective.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. I want to touch on capital allocation a little bit. We talked about BioLedging a little bit. Can you characterize your plans or the opportunity for further M and A and sort of how do you balance that versus other capital deployment or internal investment needs?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I think when you look at the capital deployment for us, and we spoke about this a little bit at the Investor Day, I think we have taken a much more balanced approach to capital deployment than we historically have as Revity or as when we were at PerkinElmer. I think for us, the balance is really around share buybacks. And for us, if you go back now over the past couple of years, we’ve done close to a billion dollars worth of share repurchases. I think you’ll see us continuously remain opportunistic in our share repurchasing, And I think for us, as we think about M and A, yes, it’s still a part of our long term strategy. I think for us to be successful, we no longer have to do M and A.

Think before this portfolio transformation was really something we had to do. I think now we can be much more selective in terms of what we go after, and it’s going to need to be something that makes a ton of sense, both strategically and financially, as we really do like the new financial profile we’ve created as a company.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. Talking about on the topic of M and A, there’s been obviously a lot of pullback in valuations in the space. How does that factor into your decision making criteria? Are there more opportunities? Are sellers becoming a little bit more desperate?

Max Grackowicke, Senior VP and CFO, Revity: Yeah, I mean, think it’s a mixed bag, maybe a better way to answer it. I think too, when you look at where we’ve historically M and A, it’s been more in the private sector. For us, the private companies, yes, their valuations might be condensed right now or compressed, but long term, if their business is performing well, which it would have to be to sort of fit our financial framework that we would target, they’re not in a rush to sell. So evaluations are low today. Either they’re to pay them the valuation they want or they have no problem sitting on the sidelines and waiting for you to meet their valuation expectations.

So I think on the private sector, we haven’t really seen a change in expectations. I think on the public side, maybe you start to see some things shake loose at some of these lower valuations. But again, for some of the valuations and what we’re looking for to meet our strategic need, I don’t think we’re seeing a ton of drop from price expectations.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. All right. That’s fair. We got a left, a couple of minutes left. I’m going to sort of go to our standard closing comment of, you know, what’s what do you feel is most underappreciated or misunderstood about Revity?

Max Grackowicke, Senior VP and CFO, Revity: Yeah. I would say maybe three things. One is that when you look at our portfolio, it is a different portfolio, different from what we’ve had in the past as PerkinElmer, but also very different from the peer group that we compete against. I’m not sure that’s completely fully recognized yet. We’re still having conversations.

Feel like educating folks on what our software business is, which we really think is a crown jewel for us. We’re still going through education on how our newborn screening business and reproductive health continues to perform so well despite declining birth rates and why we’re excited about that business long term. And so I still think there’s pieces of the portfolio that aren’t maybe perfectly well understood externally. I think the second piece is we continued, I think, to get pressured and maybe concerns over our ability to execute. I think when you look at the past couple of years, we’ve shown an ability to execute in challenging times and an ability to put up numbers that are in line, if not better than the peer group.

You look at things across margins, organic growth, cash flow performance, which has been a huge tailwind for us, I still don’t think we get the execution credit. I think maybe the last piece is educating folks on our margin expansion opportunity, which is really, I think, the area I’m most excited about in the company and one we really haven’t been able to show yet externally because of the end market pressures. But I think once the market returns to that more normalized state and we’re able to really show the power of our margin profile, I think that’s going be a real differentiator for us versus the peer group and an ability to have industry leading margins at the end of it.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Okay. Maybe on those last two points, the ability to execute and the margin expansion opportunity, So what do you think needs to happen to be able to demonstrate that? Is it just about the underlying macro and the policy noise dying down? Is there anything you can do to sort of bring that to the forefront more? Or is it kind of out of your hands here?

Max Grackowicke, Senior VP and CFO, Revity: I think some’s in the control, some’s out of the control, but I think, again, if you look back over the past couple of years, I think we have demonstrated, I just don’t think we get the credit for it. I think we’ve shown the ability to manage our margin profile. Last year we expanded 30 basis points of margin growing 2%. I would say that’s normal than what you should be expanding margins in a 2% growth scenario. So I think that’s really probably something I would I just don’t think we’re getting the, I would say, credit for the execution we’ve shown.

Okay. Alright.

Mike Ryskin, Host, Bank of America Life Science Tools and Diagnostics teams: Well, thanks. On that point, Max, we’re out of time. Thanks so much for joining us. Thanks, everyone.

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