RVTY · Q3 2025 Earnings

Cautious

Revvity

Reported October 27, 2025

30-second summary

Revvity beat its Q3 adjusted EPS guide ($1.18 vs. $1.12–$1.14) on cost discipline, but organic growth landed at just 1% — the low end of the 0–2% guide — and FY revenue was trimmed at the low end to $2.83B from $2.84B even as adjusted EPS was raised to $4.90–$5.00. The first 2026 framework — 2–3% organic with a 28% margin baseline — is narrower and lower than this year's 2–4%, and management's "increasingly optimistic" tone on industry overhangs is hedged by the admission that the October activity uptick is confined to pharma/biotech instruments. Diagnostics is holding the 2% organic line, software is still the offset (+20%), but the multi-year growth profile is being reset down.

Headline numbers

EPS

Q3 FY2025

$1.18

Revenue

Q3 FY2025

$0.70B

+2.0% YoY

Gross margin

Q3 FY2025

53.6%

Free cash flow

Q3 FY2025

$0.12B

Operating margin

Q3 FY2025

11.7%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$0.70B	+2.0%	$0.72B	-2.9%
EPS	$1.18	—	$1.18	+0.0%
Gross margin	53.6%	—	54.5%	-90bps
Operating margin	11.7%	—	12.6%	-90bps
Free cash flow	$0.12B	—	$0.12B	+4.3%

Guidance

Company raised FY2025 adjusted EPS guidance while narrowing revenue low-end; introduced forward FY2026 guidance signaling slower organic growth (2–3%) but higher margin expansion (28% baseline).

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q3 FY2025	$0.69–$0.705 billion	$0.699 billion	in-line	Met
Adjusted EPS	Q3 FY2025	$1.12–$1.14	$1.18	+$0.04 above the high end of guide	Beat
Organic Growth	Q3 FY2025	0% to 2%	1%	in-line (at bottom of range)	Missed
Adjusted Operating Margin	Q3 FY2025	approximately 26%	26.1%	+0.1pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
Organic Growth	FY 2026	2% to 3%	—
Adjusted Operating Margin	FY 2026	28%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2025	$2.84–$2.88 billion	$2.83–$2.88 billion	−$0.01B at the low end	Lowered
Adjusted EPS	FY 2025	$4.85–$4.95	$4.90–$5.00	+$0.05 at the low end; +$0.05 at the high end	Raised
Adjusted Tax Rate	FY 2025	approximately 18%	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Organic Growth (2% to 4%), Adjusted Operating Margin (27.1% to 27.3%)

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
Life Sciences	$0.343B	+1.0%
Diagnostics	$0.356B	+3.0%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025
Life Sciences Adjusted Operating Margin	29.5%
Diagnostics Adjusted Operating Margin	25.1%
Life Sciences Organic Revenue Growth	0%
Diagnostics Organic Revenue Growth	2%
Adjusted Operating Margin	26.1%
Organic Revenue Growth	1%

Management tone

Q4 2024 customer caution → Q1 2025 overhangs accumulating → Q2 2025 China DRG shock + multi-quarter restructuring → Q3 2025 "overhangs starting to gain clarity"

Management's framing of the demand environment has flipped from "increasingly larger headwinds" (Q2) to "I'm increasingly optimistic that some of the larger industry overhangs we and others have been impacted by so far this year appear to be starting to gain clarity." That's a real shift, but it's load-bearing on a single sentence — the same call introduces a 2026 organic growth range (2–3%) that is narrower and lower than 2025's, suggesting management's actual planning assumption hasn't moved as much as the rhetoric. The optimism is anticipatory, not embedded in the numbers.

The AI narrative escalated meaningfully. In Q2 software was discussed primarily as a growth and retention story (32% organic, 115% NRR). This quarter management is positioning Revvity as an AI operator: "we are bringing real-world AI-based solutions to market for our customers at a rapid pace. This is not just automated note-taking or digital image creation, but rather true productivity improvements...our sales reps are now seeing a three to four times improvement in their lead generation conversion rates." This is a deliberate repositioning toward a differentiated AI story, but it lands awkwardly against software growth decelerating from 32% to 20% in the same quarter.

The China DRG story shifted from "fairly meaningful pullback" (Q2) to a quantified, time-boxed framework: China diagnostics ~6% of revenue, down mid-20s through Q2 2026 anniversary, then low single-digit growth in 2H 2026. Management knows the bear case here and is trying to bound it — and the consistency between Q2 and Q3 commentary on this trajectory is itself a positive signal. The risk, as Schenkel of Wolfe pointed out, is that peers (Danaher, Abbott) have flagged incremental China headwinds and management didn't engage that comparison.

The forward pipeline claim is the most striking departure from prior quarters. Management said "I believe some of the novel solutions we are currently working on, which are not all that far away from coming to market, have the potential to truly change scientific paradigms." That's an unusually bold claim from a CEO who in Q2 was defensive about NIH visibility ("anyone's response would be as good as mine"). Either there's a near-term product catalyst building, or this is rhetorical compensation for a soft top-line print. Worth pressing on next quarter.

FX flipped from tailwind to modest pressure. Q2 framing assumed ~1.5% FX tailwind to FY; this quarter management trimmed that to "slightly less than 1%." Small in absolute terms but it removes a cushion that was implicit in the FY revenue guide.

Recurring themes management leaned on this quarter:

AI commercialization and operational integration acceleratingMarket clarity emerging on structural industry overhangsStrategic partnerships yielding tangible resultsSignals software exceptional growth trajectoryChina diagnostics stabilizing with non-China immunodiagnostics performing stronglyCapital deployment discipline with continued buyback authorization

Risks management surfaced:

Tariff environment headwinds to marginsChina immunodiagnostics DRG-related volume declinesFX volatility reducing expected tailwind benefitCustomer spending normalization timeline uncertaintyDiagnostics business margin pressure from lower volume leverage

Q&A highlights

Patrick Donnelly · Citi

Discussion of 2026 guidance at 2-3% organic growth with 28% operating margins. Questioned moving pieces including China diagnostics (down teens to 20%), software growth deceleration from 20% comp, and confidence in margin maintenance at low single-digit growth.

Management expressed confidence in 2-3% organic growth assumption based on normalizing customer behavior, especially around instruments. China diagnostics down mid-20s in Q3 but ex-China performing in high single digits. Software expected to contribute but coming off strong comps. 28% baseline margin tied to 2-3% organic growth, with upside potential if growth exceeds guidance. Life sciences reagents modestly lower in Q3 due to lighter summer activity; fourth quarter assuming similar environment.

2026 organic growth guidance: 2-3%2026 operating margin target: 28%China diagnostics down mid-20s in Q3Ex-China diagnostics: high single digit growth

Michael Riskin · Bank of America

Drilled into Q4 2025 ramp confidence given softer reagents in Q3, ongoing China DRG headwinds, and steep organic growth and margin ramps quarter-over-quarter. Requested bridge on moving pieces and color on remaining China Immuno DX portfolio risk.

Management confirmed 30% Q4 operating margin unchanged from prior guidance, driven by seasonal volume strength and flat costs. Q3-Q4 organic growth ramp attributed to three factors: IDX comps performing consistently, software nominal dollar ramp despite lower organic growth rate, and seasonal instrument volume lift. For China DRG, management expects continued mid-20s decline through Q2 2026 anniversary, then return to muted single-digit growth in H2 2026. No anticipated change to previous DRG communication.

Q4 2025 operating margin target: 30%China DX down mid-20s in Q3 (as anticipated)China IDX expected down 20%+ in Q3China diagnostics represents ~6% of revenue exiting 2025

Vijay Kumar · Evercore ISI

Requested elaboration on October customer activity uptick signals—which customer segments (pharma/biotech vs. academic/government), which product types (reagents vs. instruments). Questioned whether tied to Pfizer announcements. Also asked about 2-3% organic growth plus 28% margin translating to EPS growth and assumptions on below-the-line items.

Management indicated increasing activity signals concentrated in pharma/biotech segment (not academic/government) specifically on instruments, not yet broad demand, more pockets of activity. Not tied to specific company announcements like Pfizer, but broader trend. On EPS: 2-3% organic growth with 28% operating margin baseline implies high single-digit EPS growth. Tax rate baseline reset to 18% (from prior 20%), interest and other relatively flat, and share count reduction from buybacks all point to high single-digit EPS growth.

October activity uptick: pharma/biotech instruments onlyNot broad demand, but pockets of increasing activity2026 EPS growth expected: high single digit2026 tax rate baseline: 18% (improved from 20%)

Tycho Peterson · Jefferies

Probed reagent performance: did reagents actually decline if software up 20%, instruments down mid-single? Requested clarity on go-forward incremental margins given tighter pricing environment. Also asked about budget flush assumptions in Q4 guidance.

Management confirmed reagents were down very slightly year-over-year in Q3 (not low single-digit decline as analyst inferred), attributed to lighter summer activity. No change to 60-70% incremental margins despite tighter pricing environment; management holding pricing and expects margin benefit as lab activity ramps. Q4 budget flush baked into guidance at modest seasonal levels (not historical peaks); management seeing uptick in instrumentation pipeline activity and opportunity in Q4.

Q3 reagents: down very slightly YoYReagent incremental margins: 60-70% (unchanged)Pricing environment: tighter but still holdingQ4 budget flush: modest seasonal increase, not historical peak levels

Doug Schenkel · Wolfe Research

Three-part China question: (1) Confirm China diagnostics ~5% of revenue; (2) Model 20-25% decline through Q2 2026 due to multiplex reimbursement changes; (3) Can we confidently model recovery thereafter or should we be cautious given prior China head fakes and peers' incremental headwind guidance?

Management corrected China diagnostics exposure to ~6% of revenue (not 5%), confirmed continued headwinds matching Q3 through Q2 2026 anniversary, and reiterated LRP assumption of low single-digit growth for China IDX in H2 2026. Emphasized strong performance of immuno-diagnostics ex-China (Americas up mid-teens, IDXX China up high single digits) to provide business context. Acknowledged peer guidance on incremental headwinds but maintained confidence in recovery assumptions.

China diagnostics exposure: ~6% of revenue (exit Q3)China IDX expected 20-25% decline through Q2 2026DRG headwinds through Q2 2026 anniversary2026 H2 China IDX growth assumption: low single digit

Answers to last quarter's watch list

China immunodiagnostics trajectory — Management held the line. China IDX expected down 20–25% through Q2 2026 anniversary; China diagnostics exposure confirmed at ~6% of revenue exiting 2025. Trajectory matches the Q2 high-teens FY framing — neither materially worse nor better, and the "anniversary" framing remains intact. Status: Continue monitoring.

Diagnostics organic growth ≥2% in Q3 — Met the threshold exactly. Diagnostics delivered 2% organic in Q3, keeping the low-single-digit FY framing intact. Below 1% would have implied a further cut; this clears the bar without margin of safety. Status: Resolved positively.

Signals software net retention >110%, SaaS mix >35% — Software organic growth decelerated from 32% in Q2 to 20% in Q3. Management didn't disclose NRR or SaaS mix on the print, which is itself notable given how heavily these metrics were leaned on last quarter. The offset narrative is weakening. Status: Resolved negatively.

2026 margin recovery quantification — Quantified: 28% adjusted operating margin baseline for FY2026, paired with 2–3% organic growth. That implies ~80bps expansion vs. FY2025 midpoint of 27.2% — meaningful but materially less than the "greater than typically expected" language from Q2 implied. Status: Resolved negatively.

Manufacturing footprint actions / restructuring charge quantification — Not addressed on the print. No restructuring charge or capex disclosure quantified the scope of the EU-tariff-driven footprint review. Status: Continue monitoring.

Capital equipment inflection — Partial signal: management cited improved instrumentation pipeline activity and Q4 upside opportunity, with October activity specifically concentrated in pharma/biotech instruments. Not a broad-based capex unlock — narrow and early. Status: Continue monitoring.

What to watch into next quarter

Q4 organic growth bridge to FY: management is implying a 3–4% Q4 organic print to hit the FY 2–4% range with Q1/Q2/Q3 at ~2%/3%/1%. Watch whether Q4 organic clears 3% or whether FY closes at the low end (implying 2025 was effectively a 2% organic year).

2026 organic growth re-rating risk: the 2–3% framework is the planning assumption; watch whether Q4 management commentary widens this back to 2–4% (signaling demand recovery is real) or holds the narrower band (signaling rhetoric, not numbers).

Software organic growth trajectory: Q2 32% → Q3 20%. Sustained <20% in Q4 would mark a clear deceleration in the segment that has carried the offset narrative for four quarters. The absence of NRR and SaaS mix disclosure this quarter is itself a watch item.

China IDX Q4 print: management has held the down-mid-20s framing through Q2 2026 anniversary. Any deterioration to down 30%+ would force a further FY 2026 cut and reopen the "incremental China headwinds" peer comparison.

Pipeline catalysts: management flagged "paradigm-shifting" pipeline solutions "not all that far away." Watch for product launch disclosures, KOL events, or specific timing commentary that substantiates the claim — or for the language to disappear, which would signal it was rhetorical.

Adjusted tax rate baseline: the FY2025 ~18% guide was withdrawn and the 2026 baseline reset to 18% (from prior 20% implied). Watch for clarification on whether this is a structural one-time benefit or a sustainable lower rate.

Sources

Revvity Q3 2025 press release — https://www.sec.gov/Archives/edgar/data/31791/000003179125000032/q32025pressrelease.htm
Revvity Q3 2025 earnings call (management commentary and Q&A)

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