Note: This story has been updated with comments from a conference call discussing the firm's financial results.
NEW YORK – Revvity said Monday that it is making changes across its manufacturing, suppliers, and pricing as well as making temporary cuts in spending across the company to mitigate the effects of President Donald Trump's tariffs.
Revvity CFO Max Krakowiak said on a conference call to discuss the firm's first quarter earnings results that the tariffs implemented by the administration were likely to impact the firm during its fiscal second quarter, "but we will have our initiatives fully in place over the next two months to counter their impact as we enter the second half of the year."
The company's comments came amid Revvity reporting its first diagnostics quarter revenues rose 4 percent year over year on growth in its immunodiagnostics business with contributions from its reproductive health business.
For the quarter ended March 30, the Waltham, Massachusetts-based firm recorded total revenues of $664.8 million, up 2 percent from $649.9 million a year ago and beating analysts’ consensus estimate of $661.7 million. On an organic basis, the firm reported its revenues rose 4 percent year over year.
Revvity CEO Prahlad Singh cautioned that no company is immune to end market trends and geopolitical developments, but he said that Revvity is optimistic that it can endure the current challenges just as it navigated the COVID-19 pandemic and the past two years of softer spending from pharma customers.
"Our organic growth in the quarter was negatively impacted by unforeseen choppiness in demand from US academic customers throughout much of the quarter, primarily impacting our life science instruments," Singh said. "If it wasn't for this change in demand, our organic growth this quarter would have likely been at or above the upper end of our expectations."
However, he noted that tariff conditions seem to change almost daily. Shortly after the US elections in November, though, Revvity developed a task force to evaluate various scenarios, and the company has been planning for myriad outcomes.
Since the election, Revvity began moving product inventories, building redundancy into its supply chain, and, overall, working to ensure its products remained available, especially in China, Singh said. He noted that those interventions will have greater impact on the company's life sciences business, whereas the company is supplying China with diagnostics products that are made within the country or Europe.
The tariffs will still be a headwind in Q2, though the firm is working to offset their impact on the full-year 2025 results, Singh said.
"We have also implemented some additional temporary cost actions to offset the impact from the remaining unmitigated tariff-related pressures in the second half of the year," he said. "Based on our actions to date, which will largely be implemented by the end of this quarter, we expect to be able to mitigate most of the currently contemplated tariff impact by the end of June."
Singh said that the tariffs are still projected to reduce the firm's adjusted operating margins by about 60 basis points during the full year. However, he noted that the company's actions were expected to mitigate the vast majority of what would have been an approximately $135 million reduction in adjusted operating income if the firm had continued as normal.
"Revvity was built to thrive during periods such as this," Singh said.
Revvity officials said in January that the firm expected improving revenues in 2025 with rising spending by pharma and biotech companies, although Singh said at the time that the slope of recovery was uncertain over the full year and the company was assuming the current market conditions would prevail. He said Monday that lab activity among those customers continues to stabilize as those firms appear to have reached a plateau of head-count reductions and restructuring initiatives.
However, Krakowiak said that academic customers have been reducing spending on instrumentation and consumables in response to uncertainty over the future of their funding, and he noted that the executive order on reductions in federal payments for indirect funding levels remained held up in court. US academic customers provide about 5 percent of the company's total revenues.
"We expect this more cautious level of spending from our US academic customers to persist until there is more clarity and stability regarding their future funding levels," he said.
The firm's Q1 diagnostics revenues rose to $324.4 million from $313.4 million in the year-ago quarter. Revenues were up 5 percent on an organic basis. Revvity's immunodiagnostics revenues rose in the high single digits globally while newborn screening revenues rose in the low single digits, it said.
Krakowiak said that the growth in the company's immunodiagnostics business was driven by strong performance in the Americas, with solid uptake of products recently added to its menu.
Singh also noted that the company had announced in March that it was expanding a collaboration with Genomics England on the Generation Study that involves the screening of up to 100,000 newborns for more than 200 rare genetic disorders. Revvity said last month that it had inked an agreement to provide DNA sequencing services in addition to the previous agreement that it would provide DNA extraction services.
He also noted that Revvity announced earlier this month that it had gained US Food and Drug Administration approval for an automated latent tuberculosis test and said that the company expects sales to ramp up in coming quarters. He said that the test provides a faster, high-throughput solution to support treatment and containment of the disease. He also noted that the US market accounts for just more than half of latent TB tests performed globally.
Meanwhile, the company's life sciences revenues rose 1 percent to $340.4 million from $336.5 million a year earlier. The firm reported low single-digit growth in pharma and biotech spending but a low single-digit decline in academic and government spending. Its life sciences solutions business declined in the low single digits with declines in instrument sales but growth in reagent sales, while software revenues rose in the double digits.
The firm's R&D spending rose 6 percent to $53.6 million from $50.4 million a year earlier, while its SG&A spending fell 4 percent to $249.7 million from $260.6 million.
Revvity reported net income for the quarter of $42.2 million, or $.35 per share, compared to $26.0 million, or $21 per share, one year ago. The firm reported adjusted EPS of $1.01, compared to Wall Street's estimate of $.95 per share.
At the end of the quarter, the company had $1.14 billion in cash and cash equivalents.
Revvity raised its guidance for full fiscal-year 2025 revenues and now expects it to be in the range of $2.83 billion to $2.87 billion, up from previous guidance of revenues in the range of $2.80 billion to $2.85 billion. The company expects organic revenue growth of 3 percent to 5 percent for the full year. The firm reaffirmed its previous adjusted EPS guidance to be in the range of $4.90 to $5.00.
In afternoon trading on the New York Stock Exchange, Revvity's shares were down less than 1 percent to $93.92.