Revvity’s third quarter results were met with a significant negative reaction from the market, as investors focused on sluggish organic revenue growth and margin compression despite headline results aligning with Wall Street expectations. Management pointed to a strong performance in its Signals software and reproductive health businesses, with CEO Prahlad R. Singh highlighting that “our signals software business continued to perform extremely well, growing 20% organically,” and that “newborn screening again grew in the high single digits in the quarter.” However, challenges persisted, particularly in China’s diagnostics segment, where volumes remained under pressure, and lower life sciences reagent sales contributed to margin declines. Singh acknowledged these headwinds, noting the company remains focused on cost containment and cash flow generation.
Is now the time to buy RVTY? Find out in our full research report (it’s free for active Edge members).
Revvity (RVTY) Q3 CY2025 Highlights:
- Revenue: $698.9 million vs analyst estimates of $700.7 million (2.2% year-on-year growth, in line)
- Adjusted EPS: $1.18 vs analyst estimates of $1.14 (3.6% beat)
- Adjusted EBITDA: $284.5 million vs analyst estimates of $198.9 million (40.7% margin, 43% beat)
- The company reconfirmed its revenue guidance for the full year of $2.86 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $4.95 at the midpoint, a 1% increase
- Operating Margin: 11.7%, down from 14.3% in the same quarter last year
- Organic Revenue rose 1% year on year vs analyst estimates of 1.1% growth (5.4 basis point miss)
- Market Capitalization: $10.86 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Revvity’s Q3 Earnings Call
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Patrick Bernard Donnelly (Citi) asked about the moving pieces behind the 2%–3% organic growth outlook, especially China diagnostics and software growth. CEO Prahlad R. Singh stressed prudence, citing early signs of instrument demand recovery, while CFO Maxwell Krakowiak tied margin targets to this growth range.
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Vijay Muniyappa Kumar (Evercore ISI) inquired about rising customer activity in October and the impact on pharma and biotech clients. Singh clarified the improvement was concentrated among large and mid-sized pharma/biotech, particularly in instrumentation.
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Michael Leonidovich Ryskin (Bank of America) pressed on the steeper Q3-to-Q4 margin and organic growth ramp. Krakowiak explained that seasonality, software ramp, and higher instrument volumes typically drive a stronger fourth quarter.
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Dan Leonard (UBS) asked for details on software growth assumptions for next year and the timeline for new product launches. Krakowiak forecast mid-single-digit organic software growth in 2026 due to tough comps, with incremental gains expected from recent launches as adoption ramps.
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Doug Schenkel (Cowen) sought clarity on China diagnostics exposure and the risk of further headwinds. Krakowiak estimated China diagnostics will be about 6% of sales by year-end and expects stabilization after the first half of next year.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the adoption pace and revenue contribution from new AI-enabled software launches, (2) the trajectory of China diagnostics as DRG headwinds potentially subside, and (3) execution of cost management initiatives and their impact on margin recovery. Progress in strategic partnerships and regulatory clearance for new assays will also be important signposts for future growth.
Revvity currently trades at $95, down from $98.91 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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