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Revvity Sees Possible Path to Higher Growth Rates in 2025 While Firm's Q4 Dx Revenues Rise 4 Percent

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NEW YORK – Revvity said Friday that it is on the path back to higher growth rates following two years of slower growth, although company officials said that they are tempering expectations for 2025.

Revvity CEO Prahlad Singh said on a conference call that Revvity expects improving results in 2025 as pharma and biotech spending "normalizes." He said that pharma and biotech companies increased spending in Q4 on life sciences consumables both sequentially and year over year, and noted that the trend could be a signal that those customers had moved on from restructuring and other recent cost-cutting measures.

However, Singh said Revvity continues to see soft demand for its life sciences instruments.

"Overall, it appears we are now solidly on an upward trajectory heading into 2025 compared to what we and our industry have experienced over the past two years," he said. "However, we still have some uncertainty as to what the slope of this recovery will look like over the full year, so for the time being, we are assuming that the current demand environment continues for the entirety of the year."

Revvity CFO Max Krakowiak said that the company expects organic growth in the range of 3 percent to 5 percent for 2025, which is short of the company's expectation of 6 percent to 8 percent growth under normal market conditions. He said that the firm expects mid-single-digit growth in the diagnostics business in 2025 and low-single-digit growth in life sciences.

Revvity is tempering expectations considering uncertainty in the market, including geopolitical and regulatory uncertainties, and Krakowiak noted that currency exchange rates have been a headwind for the company.

While the Trump administration this week rescinded its freeze on federal loans and grants after a federal judge blocked that order, the move threatened to at least temporarily cut off National Institutes of Health funding for research. Singh said that Revvity doesn't expect a material impact from further moves that could reduce NIH research funding. The firm has about 1 percent direct exposure to NIH funding and about 5 percent indirect exposure, but most of that exposure comes through sales of reagents and other "small ticket" items, he added.

Revvity on Friday reported that its Q4 diagnostics revenues rose 4 percent and its overall revenues jumped 5 percent with strong contributions from the firm's reproductive health business and better-than-expected performance by its life sciences reagents and software businesses.

For the three months ended Dec. 29, 2024, the Waltham, Massachusetts-based firm reported $729.4 million in total revenues compared to $695.9 million a year ago. The results were short of Wall Street's consensus estimate of $730.1 million. Revvity had announced earlier this month preliminary Q4 2024 revenues of $730 million.

The company's diagnostics revenues rose 4 percent to $393.2 million from $376.4 million in Q4 2023, and the firm reported organic revenue growth of 6 percent year over year. The firm's immunodiagnostics business was up in the mid-single digits while the reproductive health business grew in the high single digits and the applied genomics business beat expectations with an increase in the low single digits, Krakowiak said.

The firm's life sciences revenues, meanwhile, rose 5 percent year over year to $336.3 million from $319.7 million in Q4 2023.

Krakowiak said that Revvity's Q4 revenues grew in the mid-single digits in the Americas and Asia and low single digits in Europe. Revenues in China grew in the high single digits on the strength of the firm's immunodiagnostics, reproductive health, life sciences reagents and consumables, and life sciences instrument businesses, although those gains were partly offset by declines in applied genomics, he said.

Singh had said during this month's JP Morgan Healthcare Conference that the firm had diversified its diagnostics offerings to become a provider of specialized autoimmune, allergy, and emerging infectious disease tests compared to its role seven years ago as mostly a provider of reproductive health tests. Its diagnostics business today is split about 60/40 between immunodiagnostics and reproductive health offerings.

He said at the time that the company continues to focus on diversifying its diagnostics menu through the development of specialty products such as novel antibodies and reagents, the Signals data management software platform, and its automated newborn screening workflow.

Revvity also inked new deals in the newborn screening space during Q4. The firm and Element Biosciences announced this month that they were partnering on the development of a newborn screening workflow for clinical and research settings. The companies said that the agreement would build on Revvity's automated next-generation sequencing workflow for newborn sequencing research and help Element to gain regulatory approval for its Aviti benchtop sequencing system.

Singh also noted on Friday that Revvity's Omics lab in Manchester, UK, inked a deal late last year to extract DNA from cord blood samples collected across England as part of a study that is meant to screen newborns for rare genetic conditions.

"This is an exciting project which is aimed to advance genetic understanding in a broad population, with the ultimate goal of eventually providing earlier diagnosis and interventions for rare genetic conditions in newborns," he said.

The firm also launched in October its Transcribe AI cloud-based service to analyze handwritten text for data entry including notes on dried blood spot test cards that are used in newborn screening.

Beyond Revvity's newborn testing offerings, the company also said this month that its Euroimmun subsidiary had received FDA 510(k) clearance for a free testosterone assay. Earlier in the quarter, the company also received a $9.2 million contract from the US Administration for Strategic Response and Preparedness' Biomedical Advanced Research and Development Authority for the development of a home-use molecular diagnostics platform for the detection of SARS-CoV-2 and flu A/B.

Revvity posted net income of $94.6 million, or $.78 per share, in Q4 2024 compared to net income of $78.6 million, or $.64 per share, in the year-ago quarter. Adjusted EPS was $1.42, compared to analysts' consensus estimate of $1.38 per share.

The firm reduced its R&D costs a fraction of 1 percent year over year to $49.2 million from $49.6 million and lowered its SG&A spending by 5 percent year over year to $244.3 million from $256.7 million.

For full-year 2024, Revvity's revenues rose less than 1 percent to $2.76 billion from $2.75 billion during the previous year. Krakowiak said that full-year revenues from the Americas and Asia grew in the low single digits and declined in the low single digits in Europe. The firm's revenues from China declined in the low single digits organically for the year.

Diagnostics revenues rose about 3 percent in 2024 to $1.50 billion from $1.46 billion in FY 2023. Life sciences revenues, though, declined about 3 percent for the year to $1.25 billion from $1.29 billion.

Krakowiak said that the firm's immunodiagnostics business provided 51 percent of its full-year diagnostics revenues while the reproductive health business provided 35 percent and the applied genomics business provided about 14 percent.

Singh noted that Revvity is establishing a life sciences solutions business unit from its applied genomics business and its life sciences instruments, consumables, and technology and licensing businesses. That unit will account for about 85 percent of the company's life sciences segment, and the remainder will come from its Signals software business.

As part of that shift, the former applied genomics business results will be reported as part of the company's life sciences business segment rather than the diagnostics segment. The company's profit for 2024 was $270.4 million, or $2.20 per share, compared to a profit of $693.1 million, or $5.55 per share, in 2023. The adjusted EPS of $4.90 beat analysts' estimate of $4.85.

Revvity cut its full-year R&D spending by 9 percent to $196.8 million from $216.6 million in FY 2023. The firm also reduced its SG&A expenses by 3 percent to $994.1 million from $1.02 billion a year earlier.

Krakowiak said that Revvity plans to step up its strategic investments into company operations during 2025 in pursuit of goals to expand its electronic commerce and artificial intelligence capabilities. He said that the firm also is investing in the expansion of its sales channels.

Revvity finished 2024 with $1.16 billion in cash and cash equivalents.

The company initiated full-year 2025 guidance and said that it expects revenues in the range of $2.80 billion to $2.85 billion. Adjusted EPS is expected to be between $4.90 and $5.00.

Revvity's shares were down less than 1 percent at $126.57 in morning trading on the Nasdaq.