Revvity Raises Outlook After Strong Q2, Launches New Drug Discovery Platforms

Revvity (NYSE: RVTY) reported second-quarter results above its expectations and raised its full-year outlook, citing continued strength in diagnostics, improving demand from pharmaceutical and biotechnology customers, and growing orders tied to artificial intelligence-enabled drug discovery workflows. The company also introduced several new discovery platforms at SLAS2026, aimed at speeding up high-throughput drug discovery workflows.

Pro forma organic revenue rose 3% in the quarter, while adjusted earnings per share reached $1.41. Second-quarter revenue totaled $711 million, including 3% pro forma organic growth. Foreign exchange had an immaterial effect on reported growth, while the recently acquired ACD/Labs software business contributed about 75 basis points to growth. Pro forma adjusted operating margin was 29.3%, above the company's 27% outlook. Free cash flow totaled $184 million, representing 117% conversion of adjusted net income, and year-to-date free cash flow approached $300 million.

The company received $16 million in tariff-related refunds during the quarter, which accounted for about half of the adjusted EPS upside. About one-third of the upside came from a lower-than-expected 16% adjusted tax rate, driven by the timing of discrete items that had previously been expected in the fourth quarter. The company maintained its full-year adjusted tax-rate assumption of about 18%. Revvity also retired a €500 million note in July, ending the quarter with net debt-to-adjusted EBITDA leverage of 2.5 times. The company expects gross leverage to be below three times by year-end, and all of its long-term debt is fixed rate with a weighted average interest rate of 2.3% and a weighted average maturity of about six years.

The company's non-GAAP results and outlook exclude its China Immunodiagnostics business, which Revvity has agreed to sell. The company has signed a definitive agreement with the buyer and continues to expect the transaction to close by the end of 2027.

The Diagnostics segment generated $352 million in second-quarter revenue, rising 12% on a reported basis and 11% organically. Immunodiagnostics grew at a high-single-digit organic rate, supported by broad-based performance outside China despite continued pressures in latent tuberculosis testing. Reproductive Health grew in the double digits, benefiting from Newborn Screening demand and the contribution from Revvity's work with Genomics England. The chief executive officer said Reproductive Health grew in the mid-teens during the quarter, while Immunodiagnostics outside China accelerated to high-single-digit growth. For the second half, the company expects Reproductive Health growth to moderate to low- to mid-single digits, reflecting more difficult comparisons related to Genomics England and a heavier instrument-placement cycle in the first half.

Life Sciences revenue was $359 million, down 2% on a reported basis and down 3% organically. The decline was driven primarily by an approximately 20% year-over-year decrease in the Signals software business, which Revvity attributed to contract timing and difficult comparisons from the prior year. Outside of software comparisons, Life Sciences Solutions grew in the low single digits, with both reagents and instruments posting growth. Instrument shipment timing restrained second-quarter revenue but contributed to a higher-than-normal backlog entering the second half. Order activity accelerated as the quarter progressed, leaving Revvity in what the chief executive officer described as its strongest backlog position in three to four years. He highlighted sustained double-digit growth in demand for high-content screening instruments, including the recently introduced Opera Phenix OptIQ platform, with order velocity in that category exceeding near-term production capacity.

Management linked part of the demand to customers building AI-driven drug-discovery capabilities. The chief executive officer said AI can accelerate the creation of scientific hypotheses and potential drug candidates, but those candidates still require lab-based testing, biological data generation and validation. He described the emerging customer workflow as "lab-in-the-loop."

At SLAS2026, Revvity launched several new platforms, including an advanced high-content screening system, a multimode plate reader, and a compact liquid handler for integrated lab setups. The Opera Phenix OptIQ system targets higher quality imaging in complex models like organoids, while the EnVision Nexus One and AssayMate workstation speak to laboratories that want higher throughput with simpler automation. These products expand Revvity's portfolio in life sciences tools and are designed to support more efficient discovery programs. The combination positions Revvity against other large tools providers such as Danaher, Thermo Fisher Scientific and Agilent that also focus on integrated systems.

The company reported full-year 2025 sales of US$2.86 billion and net income of US$241.2 million, with earnings per share moving from US$2.2 to US$2.07. For 2026, the company guided revenue of US$2.96 billion to US$2.99 billion and forecast organic growth of 2% to 3%. Revvity shares traded at $96.03, with a 7-day return of a 5.5% decline and a 30-day return of a 14.6% decline. Over one year, the stock has seen a 14.2% decline, and over three and five years it has recorded declines of 27.5% and 29.0% respectively.