Revvity (RVTY -9.00%), a global provider of life sciences and diagnostics tools, released its results for Q2 2025 on July 28, 2025. The company reported GAAP revenue of $720 million, surpassing Wall Street's GAAP estimate of $710.37 million. Adjusted earnings per share (Non-GAAP) landed at $1.18, exceeding analyst projections of $1.14 (non-GAAP) but down from $1.22 in the prior year. These numbers reflect solid performance in a challenging environment, with better-than-expected GAAP top-line and adjusted (non-GAAP) bottom-line results. However, the year-over-year decline in adjusted EPS and compressed operating margins signal persistent cost and profitability pressures. Overall, the quarter showed operational execution and innovation, but raised questions about future margin trends.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.18 | $1.14 | $1.22 | (3.3%) |
| Revenue (GAAP) | $720 million | $710.37 million | $692 million | 4.0% |
| Operating Margin (GAAP) | 12.6% | 12.4% | 0.2 pp | |
| Adjusted Operating Margin | 26.6% | 28.8% | (2.2 pp) | |
| Life Sciences Segment Revenue | $366 million | $349 million | 4.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Revvity’s Business Overview and Strategic Focus
Revvity stands at the intersection of life sciences research and clinical diagnostics. It supplies hardware instruments for lab analysis, reagents that are key ingredients for experiments, and software platforms for scientific data management. The company serves pharmaceutical, biotechnology, academic, government, and clinical customers worldwide, enabling drug discovery, medical diagnostics, and genomic workflows.
Recent business initiatives prioritize innovation, operational efficiency, and strategic partnerships. New product development and R&D investment underpin its pipeline. The company’s focus on operational excellence, supply chain flexibility, and regulatory compliance supports its ability to manage cost pressures and shifting market dynamics. Key factors for ongoing success include delivering scientific innovation, maintaining robust partnerships, and investing in workforce capabilities.
Quarterly Developments: Financial and Operational Highlights
Revenue for the period was $720 million, beating consensus by $9.63 million and marking a 3.0% year-over-year organic increase. Life Sciences revenue (GAAP) reached $366 million, rising 5% from the year-ago period, while Diagnostics revenue (GAAP) increased 3% to $354 million. Growth in the software division, known as the Signals software business, stood out with organic growth above 20% in Q2 FY2025, and is expected to reach upper-teen percentage organic growth for all of FY2025. Together, the two operating segments now contribute roughly equal portions of total revenue.
Operating margin on a GAAP basis edged up to 12.6%, a gain of 0.2 percentage points over the prior year. However, adjusted operating margin narrowed to 26.6%, down 2.2 percentage points year over year. Margins contracted in both segments, primarily due to higher tariffs. GAAP operating income improved to $91 million, while adjusted operating income was $192 million as cost pressures weighed on profitability. Management said swift actions to realign manufacturing and mitigate tariff impacts limited the potential $135 million tariff headwind in FY2025.
On the product side, Signals One, a data management platform enhancing scientific workflows using artificial intelligence, was recently introduced. In diagnostics, the T-SPOT TB test automation—used to detect latent tuberculosis—received US regulatory approval and launched, with management highlighting potential uptake in a large addressable market. Partnerships also expanded, notably with Genomics England, to provide newborn genomic sequencing solutions as part of a national screening pilot.
While there were no large acquisitions during the quarter, management reaffirmed its stance that selective deal-making is not required for ongoing growth, citing confidence in current organic performance and innovation. R&D expense (GAAP) climbed 11% to $53.3 million versus Q2 FY2024. With voluntary turnover at about 9% and employee headcount steady at around 11,000.
Segment Trends and Key Financial Metrics
Life Sciences and Diagnostics segments each saw top-line improvement, though both experienced profitability declines. The Life Sciences segment includes reagents, instruments, and scientific software. Despite revenue growth, adjusted operating margin in Life Sciences dropped 2.1 percentage points to 31.6% amid inflationary and tariff-related pressures. Diagnostics, which features products for medical testing, recorded margin compression of 1.8 percentage points to a 25.2% adjusted operating profit margin. These changes were largely offset by successful supply chain adjustments and selective pricing, as management noted up to 80% of tariff impact was countered through operational realignment.
Net cash from operations (GAAP) was $134 million, down 26% versus Q2 2024. Share repurchases continued, with the diluted share count fell to 117.5 million, a 5% decrease versus Q2 2024. The company indicated that share repurchases provide some support to earnings per share. Cash and cash equivalents at the end of the period stood at $992 million (GAAP). Long-term debt held steady. Management stated that the mitigation actions for tariffs are in place and should minimize further negative impacts in the second half of the year.
Geographically, sales in China showed low-single-digit organic growth, with modest declines expected in Life Sciences but growth anticipated in Diagnostics for the full year (organic, non-GAAP). The company confirmed continuing softness in US academic and government spending, which represents about 5% of total revenue and poses a 1 percentage point headwind to organic growth. Management observed resilience in pharmaceutical and biotech customer demand, especially for software and reagents.
However, no significant changes to environmental or workforce liabilities were reported. No dividend increase was announced, and the balance sheet remains solid. The company maintains its dividend, with $8.3 million paid in the period, consistent with levels from the recent past.
Looking Ahead: Guidance and Investor Considerations
Revvity raised its revenue guidance for FY2025 to a range of $2.84 billion to $2.88 billion, up slightly from $2.83 billion to $2.87 billion. The organic growth outlook is now 2% to 4%, factoring in currency effects and ongoing demand trends. However, management trimmed the adjusted earnings per share guidance to $4.85 to $4.95, down slightly from the prior $4.90 to $5.00 range. This minor reduction reflects persistent margin and cost challenges, particularly those stemming from tariffs. Adjusted operating margin is expected to be about 60 basis points lower than previously forecast, although below-the-line gains in tax planning and foreign exchange are expected to offset the decline in adjusted EPS.
Investors should monitor the impact of further tariffs and cost management efforts. Special attention may be warranted for academic and government sales exposure, which continues to drag on segment growth. Software performance is a highlight, with robust recurring revenue metrics and a healthy pipeline of releases. Key watchpoints include new product ramp-ups.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
