Q1 2025 Revvity Inc Earnings Call

Speaker Change: [music].

Unknown Executive: Welcome, everyone, to the Q1 2025 Revvity Earnings Conference. My name is Sammy and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad.

Welcome everyone to the Q1 2025 earnings conference call.

My name is semi Tom I'll be coordinating your call today.

During the presentation you can rest your question by pressing star, but about one when you kind of think keypad. If you change your mind. Please press star followed by 200 kind of thank you Pat.

Stephen Willoughby: I will now hand over to your host, Steve Willoughby, to begin. Please go ahead. Thank you, operator.

Steve: I will now hand over to your host Steve will it be to begin.

Please go ahead Steve.

Steve: Thank you.

Prahlad Singh: Good morning, everyone, and welcome to Revity's first quarter 2025 earnings conference. On the call with me today are Prahlad Singh, our President and Chief Executive Officer, and Max Krakowiak, our Senior Vice President and Chief Financial Officer.

Speaker Change: Operator, good morning, everyone and welcome to <unk> first quarter 2025 earnings Conference call.

Speaker Change: On the call with me today are prolonged Zhang our president and Chief Executive Officer, and Mexico, Kodiak, Our senior Vice President and Chief Financial Officer I'd.

Prahlad Singh: I'd like to remind you of our safe harbor statements outlined in our press release issued earlier this morning and those in our SEC filing. Statements or comments made on this call may be forward-looking. which may include, but may not be limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. The company's actual results may differ significantly from those projected or suggested due to a variety of factors which are discussed in detail in our SEC filing. Any forward-looking statements made today represent our views as of today. We disclaim any obligation to update these forward-looking statements in the future, even if our estimates change.

Speaker Change: I'd like to remind you of our safe Harbor statements outlined in our press release issued earlier this morning, and those in our SEC filings statements or comments made on this call may be forward looking statements, which may include but may not be limited to financial projections or other statements of the company's plans objectives expectations or intentions.

Speaker Change: The company's actual results may differ significantly from those projected or suggested due to a variety of factors, which are discussed in detail in our SEC filings.

Speaker Change: Any forward looking statements made today represent our views as of today, we disclaim any obligation to update these forward looking statements in the future even if our estimates change. So you should not rely on any of todays statements as representing our views as of any date after today.

Prahlad Singh: So you should not rely on any of today's statements as representing our views as of any date after today.

Prahlad Singh: During this call, we will be referring to certain non-GAAP financial measures. Reconciliation of the measures we plan to use during this call to the most directly comparable GAAP measures is available as an attachment to our earnings press release.

Speaker Change: During this call we will be referring to certain non-GAAP financial measures a reconciliation of the measures we plan to use during this call to the most directly comparable GAAP measures is available as an attachment to our earnings press release.

Prahlad Singh: I will now turn it over to our President and Chief Executive Officer, Prahlad Singh. Thank you, Steve, and good morning, everyone. The first quarter ended up being one of the more dynamic macroeconomic periods in recent history to navigate. which has clearly continued during. Our ability to continue to generate strong organic growth and better than expected earnings in this environment is a testament to the resilience of our business and the tremendous efforts of our While we expected uncertainties were likely to occur when we first provided our appropriately prudent guidance in January. The materiality and frequency of the changes that have transpired over the last 90 days in the Global Economy would have been difficult to fully contemplate in advance.

Singh: I will now turn it over to our President and Chief Executive Officer, <unk> Singh per lot.

Singh: Thank you, Steve and good morning, everyone.

Singh: The first quarter ended up being one of the more dynamic macroeconomic periods in recent history to navigate through.

Singh: This is clearly continued during April.

Singh: Our ability to continue to generate strong organic growth and better than expected earnings in this environment is a testament to the resilience of our business and the tremendous efforts of our people.

Singh: While we expected uncertainties, we are likely to occur when we first provided appropriately prudent guidance in January as difficult.

Singh: Reality and frequency of the changes that have transpired over the last 90 days.

Singh: The global economy would have been difficult to fully contemplate in advance.

Prahlad Singh: Despite these new challenges, we remain very optimistic about Revity's differentiated financial profile and our ability to continue to drive new innovations for our customers. to help further the advancement of science. The current environment is clearly challenging for most companies. but our unique offerings and ability to quickly adjust are allowing us to continue to deliver for both our customers and our shareholders. As we demonstrated both throughout the pandemic and over the last two years, when our industry has faced softer spending from pharma customers. is a nimble company, which is well positioned to quickly respond to both challenges and opportunities.

Singh: Despite these new challenges, we remain very optimistic about remedies differentiated financial profile.

Singh: Our ability to continue to drive new innovations for our customers to help further the advancement of science.

Singh: The current environment is clearly challenging for most companies.

Singh: But our unique offerings and ability to quickly adjust allow.

Singh: Allowing us to continue to deliver for both our customers and our shareholders.

Singh: As we demonstrated both throughout the pandemic and over the last two years.

Speaker Change: <unk> has faced softer spending from pharma customers.

Speaker Change: <unk> is a nimble company, which is well positioned to quickly respond to both challenges and opportunities.

Prahlad Singh: enabling us to continue to deliver strong relative performance. We have demonstrated that we are a team that thrives at taking on challenges while continuing to execute at a very high level. I'm confident this adaptability and agility will continue, enabling us to sustain a strong performance throughout varying macroeconomic environments, including the remainder of this year. Despite the volatility, we were able to generate solid 4% organic growth in the first quarter, which was right in line with our expectations. This performance shows the impressive balance of our company as areas of strength, such as diagnostics and software, were able to offset those areas facing unanticipated pressures from the dynamic environment.

Speaker Change: Enabling us to continue to deliver strong relative performance.

Speaker Change: We have demonstrated that we are a team.

Speaker Change: <unk> zip taking on challenges, while continuing to execute at a very high level.

Speaker Change: I am confident this adaptability and agility will continue enabling us to sustain our strong performance throughout varying macroeconomic environments, including the remainder of this year.

Speaker Change: Despite the volatility.

Speaker Change: Able to generate solid 4% organic growth in the first quarter.

Speaker Change: Which was right in line with our expectations.

Speaker Change: This performance shows the impressive balance of our company.

Speaker Change: Areas of strength, such as diagnostics and software.

Speaker Change: Able to offset those areas facing unanticipated pressures from the dynamic environment yet.

Prahlad Singh: We are experiencing in some of our in March. In particular, our organic growth in the quarter was negatively impacted by unforeseen sharpness in demand from U.S. academic customers. throughout much of the quarter, primarily impacting our life science and 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. This solid top-line performance was again combined with appropriate operational management. which led to adjusted EPS in the quarter of a dollar and one cent. solidly above a $0.93 to $0.95 expectation. In addition to strong income statement performance.

Speaker Change: We are experiencing in some of our end markets.

Speaker Change: In particular, our organic growth in the quarter was negatively impacted by unforeseen choppiness in demand from U S academies customers.

Speaker Change: Throughout much of the quarter, primarily impacting our life science instruments.

Speaker Change: If it wasn't for this change in demand.

Speaker Change: Organic growth this quarter would have likely been at or above the upper end of our expectations.

Speaker Change: This solid topline performance was again combined with appropriate operational management, which led to adjusted EPS in the quarter of $1.01.

Speaker Change: Solidly above our 93 to 95 expectations.

Speaker Change: In addition to strong income statement performance.

Prahlad Singh: We yet again had great results with our cash flow and balance sheet management. In the quarter, we delivered 97% free cash flow conversion of our adjusted net income and were again able to aggressively deploy this cash by repurchasing our shares. We bought back $154 million of our shares in the quarter, resulting in an outstanding share count exiting the quarter of $119.4 million. As we entered 2Q, we remained opportunistic and have been able to continue our repurchase effort. I would highlight that we have now repurchased more than 7 million shares over the last two years. which represents a 6% decline in our total shares outstanding.

Speaker Change: We yet again had great results with our cash flow and balance sheet management.

Speaker Change: In the quarter, we delivered 97% free cash flow conversion.

Adjusted net income and were again able to aggressively deploy this cash by repurchasing our shares.

We bought back $154 million of our shares in the quarter.

Speaker Change: Resulting in an outstanding share count exiting the quarter of $119 4 million.

Speaker Change: As we enter Q, we remained opportunistic and have been able to continue our repurchase efforts.

Speaker Change: I would highlight that we have now repurchased more than 7 million shares over the last two years.

Speaker Change: This represents a 6% decline in our total shares outstanding.

Prahlad Singh: Since we became Revity in mid-2020. From an end market perspective, we have continued to see stabilized lab activity from our pharma and biotech customers. as their headcount reductions and restructurings have plateaued over the past several quarters. While instrumentation continues to remain pressured. in part because of the recent academic uncertainty. We did see continued year-over-year growth in our reagents again this quarter. We also continue to see strong demand for our resilient diagnostics franchise. which grew 5% organically in the quarter. As highlighted in the past calls, our specialty diagnostic businesses are strong and durable underlying market growth drivers that are more immune to changes in the macroeconomic environment.

Speaker Change: Since we became <unk> in mid 2023.

Speaker Change: From an end market perspective, we have continued to see stabilized lab activity from our pharma and biotech customers.

Speaker Change: Is there a head count reductions and restructurings have plateaued over the past several quarters.

Speaker Change: While instrumentation continues to remain pressured.

Speaker Change: In part because of the recent academy uncertainties.

Speaker Change: We did see continued year over year growth and our reagents again this quarter.

Speaker Change: We also continued to see strong demand for our resilient diagnostics franchise.

Speaker Change: Which grew 5% organically in the quarter.

Speaker Change: As highlighted in the past calls our specialty diagnostics businesses are strong and beautiful underlying market growth drivers that are more immune to changes in the macroeconomic environment.

Prahlad Singh: Consequently, we continue to believe this segment of our company is already largely back to normal following the swings in demand during and following the pandemic. A great example of our unique diagnostic businesses being at the forefront of scientific innovation. is our recent announcement of our expanded alliance with Genomics England. to further drive research into newborn genomic sequencing in England. Under the new agreement, Revvity will now provide DNA sequencing services to screen newborns for Rare Genetic Conditions. building upon our existing collaboration for DNA extraction service. This integrated end-to-end solution supported by our localized lab facility will accelerate the screening process and advance newborn health as part of the generation study.

Speaker Change: Consequently, we continue to believe this segment of our company is already largely back to normal following the swings in demand during and following the pandemic.

Speaker Change: A great example of our unique diagnostic businesses being at the forefront of scientific innovation.

Speaker Change: Is our recent announcement of our expanded alliance with genomics, England.

Speaker Change: Further drive research into newborn genomic sequencing in England.

Speaker Change: Under the new agreement.

Tim will now provide DNA sequencing services to screen newborns.

Speaker Change: Genetic conditions.

Speaker Change: Building upon our existing collaboration for DNA extraction services.

Speaker Change: This integrated end to end solution supported by our localized lab facility.

Speaker Change: We accelerated the screening process and advanced newborn.

Speaker Change: As part of the generation study.

Prahlad Singh: Genomics England's landmark initiative which aims to screen up to 100,000 newborns for over 200 rare genetic disorders. This collaboration strengthens our position as a leader in newborn genomic sequencing and sets a standard for future programs. We are proud to contribute to this critical program by delivering timely and reliable sequencing data to support newborn health in England over the next several years. I'm also proud that earlier this month, we secured FDA approval for a more automated platform that is integrated with our T-Spot latent TB test. This combination, which was initially launched outside the U.S. late last year, allows laboratories to enhance productivity.

Speaker Change: Genomics, England Landmark initiative.

Speaker Change: Which aims to screen up to a 100000 newborns for over 200 rare genetic disorders.

Speaker Change: This collaboration strengthens our position as a leader in newborn genomic sequencing and sets a standard for future programs.

Speaker Change: We are proud to contribute to this critical program by delivering timely and reliable sequencing data to support newborn health in England over the next several years.

Speaker Change: I'm also proud that earlier this month.

Speaker Change: Your SBA approval for a more automated platform that is integrated with our T spot latent TB test.

Speaker Change: This combination which was initially launched outside the U S late last year.

Speaker Change: How's laboratory to enhance productivity, while maintaining superior clinical performance and latent tuberculosis detection.

Prahlad Singh: while maintaining superior clinical performance in latent tuberculosis detection. This milestone marks a significant advancement in the fight against TB. providing a faster high throughput solution that delivers accurate diagnostic results to support timely treatment and containment both in the U.S. and globally. By automating T-Spot TB testing, we equip laboratories with increased throughput and reliability, ultimately leading to better patient outcomes. Considering the US market represents slightly more than half of all latent TB tests performed globally. This is an important launch in the most important market in the world for latent TB tests. I'm excited to see this new offering in the U.S.

Speaker Change: This milestone marks a significant advancement in the fight against TB.

Speaker Change: Providing a faster high throughput solution.

Speaker Change: That delivers accurate diagnostic results to support timely treatment and containment.

Speaker Change: Both in the U S and globally.

Speaker Change: By automating T spot TB testing.

Speaker Change: Equipped laboratory.

Speaker Change: With increased throughput and reliability ultimately leading to better patient outcomes.

Speaker Change: Considering the U S market represents slightly more than half of all latent TB test is performed globally.

Speaker Change: This is an important launch in the most important market in the world for latent TB testing.

Speaker Change: I'm excited to see this new offering in the U S ramp up over the coming months and quarters.

Prahlad Singh: ramp up over the coming months and quarters.

Prahlad Singh: I now want to take a minute and shine a spotlight on our fantastic signals software business. which I think does not garner the appreciation from the investor community that it should. This business, which represents approximately 8% of our total revenue. grew slightly more than 20% organically in the first quarter. and we expect even stronger growth for it in the second quarter. This performance position signals to deliver another year of strong double-digit growth overall. In addition to the commercial execution, it was also exciting to see the launch of our new Signals 1 offering earlier this month.

Speaker Change: I now want to take a minute and shine a spotlight on a fantastic Cygnus software business.

Speaker Change: Which I think does not garner the appreciation from the investor community that it should.

Speaker Change: This business, which represents approximately 8% of our total revenue.

Speaker Change: Grew slightly more than 20% organically in the first quarter.

Speaker Change: And we expect even stronger growth for it in the second quarter.

Speaker Change: This performance position Cigna to deliver another year of strong double digit growth overall.

Speaker Change: In addition to the commercial execution. It was also exciting to see the launch of US new signals one offering earlier this month.

Prahlad Singh: Signals 1 is a newly reimagined version of the Core Signals data platform. an all-in-one solution designed to manage data across our customers scientific workflow. with new and expanded AI capabilities. This offering builds on our new product launches last year of Signals Clinical and Signals Synergy. which are off to strong starts in their first year on the market. Looking ahead, Signals continues to have a very promising new product pipeline with the upcoming launches of logistics and additional biologic related offerings, which we expect to bring to the market in the coming quarters. It was also great to secure a recent court ruling in our favor to ensure uninterrupted access and business as usual for our Spotfire customers for many years into the next decade.

Speaker Change: Cigna is one is a newly imagined version of the core signals data platform.

Speaker Change: And all in one solution designed to manage data across our customers' scientific workflows.

Speaker Change: The new and expanded AI capabilities.

Speaker Change: This offering builds on our new product launches last year of signals clinical and Sigma synergy.

Speaker Change: Which are off to strong starts in their first year on the market.

Speaker Change: Looking ahead signals continues to have a very promising new product pipeline with the upcoming launches of logistics and additional biologic related offerings, which we expect to bring to the market in the coming quarters.

Speaker Change: It was also great to secure a recent court ruling in our favor.

Speaker Change: To ensure uninterrupted access and business as usual for a spot fire customers for many years into the next decade.

Prahlad Singh: Finally, it was encouraging to see a recent sale transaction announced for one of our key competitors in this space. which reflects the tremendous value and capabilities our offerings provide to our customers. Signals has an even stronger growth rate and a more ingrained enterprise footprint than anyone else in the industry. and benefits from the entrenched customer relationships of our broader life sciences franchise. By leveraging our internal R&D capabilities to provide unique and responsive assistance for new product development. and capitalizing on our broader pharma and customer relationships, along with favorable market trends. Signals is in a great position to continue to generate very strong results for a very long time in the future.

Speaker Change: Finally, it was encouraging to see a decent sale transaction announced for one of our key competitors in this space.

Speaker Change: Which reflects the tremendous value and capabilities our offerings provide to our customers.

Speaker Change: Cigna has an even stronger growth rate any more engrained enterprise footprint than anyone else in our industry.

Speaker Change: And benefits from the entrenched customer relationships of our broader life Sciences franchise.

Speaker Change: By leveraging our internal R&D capabilities to provide unique and responsive assistance for new product development.

And capitalizing on a broader pharma and customer relationships, along with favorable market trends.

Speaker Change: Signals is in a great position to continue to generate very strong results for a very long time in the future.

Prahlad Singh: Overall, we had an eventful but successful start to the year. The power of Revvity's specialized offerings and importance of delivering significant innovation to our customers was clearly on display. As we have shown during periods of disruption over the last few years, We have a unique capability to navigate these unforeseen challenges and continue to execute Thank you. While no company is completely immune from broader end market trends and geopolitical developments, I'm confident that Revvity will continue to be able to show differentiated performance amongst our peers and with our customers.

Speaker Change: Overall, we had an eventful, but successful start to the year.

Speaker Change: The power of gravity specialized offerings and importance of delivering significant innovation to our customers was clearly on display.

Speaker Change: As we have shown during periods of disruption over the last few years.

Speaker Change: We have a unique capability to navigate these unforeseen challenges and continue to execute.

Speaker Change: While no company is completely immune from product and market trends and geopolitical developments.

Speaker Change: I'm confident that revenue will continue to be able to show differentiated performance amongst our peers and with our customers.

Prahlad Singh: I also want to provide you some thoughts and comments as it pertains to the current tariff situation and its potential impact on revenue. First, this is clearly a very dynamic situation. seems to be changing on a nearly daily basis.

Speaker Change: I also want to provide you some thoughts and comments as it pertains to the current tariff situation and its potential impact on revenue.

Speaker Change: First this is clearly a very dynamic situation.

Speaker Change: It seems to be changing on a nearly daily basis.

Prahlad Singh: So it is a bit of a constantly moving target. Second, we have had a cross-functional task force evaluating a variety of scenarios. Since shortly after the election. So we have been contingency planning for many different potential outcomes. well before the first week of April.

Speaker Change: So it is a bit of a constantly moving target.

Speaker Change: Second.

Speaker Change: <unk> had a cross functional task force evaluating a variety of scenarios.

Speaker Change: Shortly after the election.

Speaker Change: So we have been contingency planning for many different potential outcomes very before the first week of April.

Prahlad Singh: 3rd, as soon as the initial round of tariffs was announced. Our teams immediately started taking a number of actions in an effort to mitigate potential impact. These efforts include proactive inventory positioning, geographical manufacturing adjustments. Engaging Alternative Suppliers in Selective Pricing Acts. In addition to these efforts, we have also implemented some additional temporary cost actions to offset the impact from the remaining unmitigated tariff-relative pressures.

Speaker Change: It's hard.

Speaker Change: As soon as the initial round of tariffs was announced.

Speaker Change: Our teams immediately started taking a number of actions in an effort to mitigate potential impacts.

Speaker Change: These efforts include proactive inventory positioning.

Speaker Change: Geographically manufacturing adjustments and.

Speaker Change: Engaging alternative suppliers and selective pricing actions.

Speaker Change: In addition to these efforts we have also implemented some additional temporary cost actions to offset the impact from the remaining unmitigated tariff related pressures.

Prahlad Singh: In the second half of the year. Based on our actions today, 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. Consequently, while we foresee a headwind from the current tariffs here in the second quarter, We expect we will have largely offset their impact on our 2025 results. By the time we enter the second half of the year and will work to minimize any lingering effects in the future year.

Speaker Change: In the second half of the year.

Speaker Change: Based on our actions to date.

Speaker Change: It will largely be implemented by the end of this quarter.

Speaker Change: We expect to be able to mitigate most of the currently contemplated tariff impact by the end of June.

Speaker Change: Consequently, while we foresee a headwind from the current tariffs here in the second quarter.

Speaker Change: We expect we will have largely offset the impact on our 2025 results.

Speaker Change: By the time, we entered the second half of the year.

Speaker Change: And we'll work to minimize any lingering effects in the future years.

Prahlad Singh: While Max will provide more details in a bit. Based on the current tariff situation, If we would not have taken any action We would expect to see a gross impact of approximately $135 million this year to our adjusted operating environment. However, based on what we know today, with the aggressive actions we are taking, We expect to be able to mitigate the vast majority of this potential. currently expect the net impact from the current tariff situation. will negatively impact our adjusted operating margins by approximately 60 basis points this As mentioned, we anticipate the vast majority of the headwind to occur here in the second quarter as our tariff related initiatives fully ramp up by the time we enter the second.

Max: While Max will provide more details in a bit.

Max: Based on the current tariff situation.

Max: If we would not have taken any actions.

Max: We would expect to see a growth impact of approximately $135 million this year to our adjusted operating income.

Max: However, based on what we know today.

Max: The aggressive actions we are taking.

Max: We expect to be able to mitigate the vast majority of this potential impact.

Max: We currently expect the net impact from the current tariff situation.

Max: Will negatively impact our adjusted operating margins by approximately 60 basis points this year.

Max: As mentioned, we anticipate the vast majority of the headwind to occur here in the second quarter.

Max: As our data related initiatives fully ramp up by the time, we entered the second half.

Prahlad Singh: We are able to offset this near-term pressure with favorable below-the-operating-line execution. and a less severe headwind from effect. Consequently, we are reaffirming our full year adjusted EPS outlook of $4.90 to $5.

Max: We are able to offset this near term pressure with favorable below the operating line execution.

Max: And a less severe headwind from FX.

Max: Consequently, we are reaffirming our full year adjusted EPS outlook of $4 90.

Max: To $5.

Prahlad Singh: In a sign to the uniqueness and durability of our business. We are also reaffirming our full year organic growth outlook of 3 to 5%. As the academic and instrumentation headwinds we are now factoring in for the remainder of the year are offset by even stronger expected performance from a software business and increased growth in reproductive health due to recent commercial partnership success. Overall, we are keeping a close eye on the dynamic macro environment. and will continue to pivot as necessary to execute at a high level in all market conditions.

Max: In assigned to the uniqueness and durability of our business.

Max: Also reaffirming our full year organic growth outlook of 3% to 5%.

Max: As the Academy and instrumentation headwinds, we are now factoring in for the remainder of the year are offset by even stronger expected performance from our software business and increased growth in reproductive health due to recent commercial partnership successes.

Max: Yes.

Max: Overall.

Max: We are keeping a close eye on the dynamic macro environment.

Max: And we will continue to pivot as necessary to execute at a high level.

Max: All market conditions.

Prahlad Singh: Revvity was built to thrive during periods such as this. which will only make us even stronger once the current macro uncertainty subsides.

Max: <unk> was built to thrive during periods such as this.

Max: Which will only make us even stronger once the current macro uncertainty subsides.

Maxwell Krakowiak: With that, I will now turn the call over to Matt. Thanks, Prahlad, and good morning, everyone. As Prahlad mentioned, while we have been navigating and evolving in dynamic macro environments so far this year, we were still able to deliver very solid first quarter results because of our strong execution on those items which are more fully within our control and our unique mix of business.

Max: With that I will now turn the call over to Max.

Max: Thanks, Rod and good morning, everyone.

Max: As for Lard mentioned, while we have been navigating an evolving and dynamic macro environment. So far this year, we were still able to deliver very solid first quarter results because of our strong execution on those items, which are more fully within our control and our unique mix of businesses.

Maxwell Krakowiak: Our industry has faced a multitude of headwinds over the last two and a half years, which have continued so far in 2025. During this time, we have still been able to grow our top line organically, increase our margins through synergy realization and optimization. and drive below the line improvements which have helped support our earnings per share performance during this.

Max: Our industry has faced a multitude of headwinds over the last two and a half years, which have continued so far in 2025.

Max: During this time, we have still been able to grow our topline organically increase our margins through synergy realization and optimizations and drive below the line improvements, which have helped support our earnings per share performance. During this period.

Maxwell Krakowiak: As you are likely well aware, our industry has also faced new challenges over the last few months, which were unanticipated when we first provided our intentionally prudent guidance in late January. First, given the changing landscape as it pertains to academic funding in the U.S. We have seen customers pull back with their spending for both instrumentation and consumables, given the increased uncertainty over the future of their funding. While the executive order to reduce indirect funding levels is currently held up in the court. Funding currently remains intact. We have seen it have an impact on buying behavior of the last few For the time being, we expect this more cautious level of spending from our U.S.

Max: As you are likely well aware our industry has also faced new challenges over the last few months, which were unanticipated when we first provided our intentionally prudent guidance in late January.

Max: First given the changing landscape as it pertains to academic funding in the U S. We have seen customers pulled back with their spending for both instrumentation and consumables given the increased uncertainty over the future of their funding.

Max: While the executive order to reduce indirect funding levels is currently held up in the courts and funding currently remains intact. We have seen it have an impact on buying behavior over the last few months.

Max: For the time being we expect this more cautious level of spending from our U S academic customers to persist until there is more clarity and stability regarding their future funding levels as.

Maxwell Krakowiak: academic customers to persist until there is more clarity and stability regarding their future funding levels. As a reminder, revenue from our academic customers in the U.S. represents a little over 5% of our total company revenue overall. As it pertains to the ever-evolving tariff situation, Revvity is well positioned overall.

Max: As a reminder, revenue from our academic customers in the U S represents a little over 5% of our total company revenue overall.

Max: As it pertains to the ever evolving tariff situation remedy is well positioned overall.

Maxwell Krakowiak: Based on the situation as it currently exists today, I see three main focus areas that we are appropriately navigating. First, are those products which we historically have manufactured in the U.S. and sold into China. which represent the majority of the $135 million gross tariff impact estimated this year. And then secondly, those products which are manufactured in Europe and sold in the US.

Max: Based on the situation as it currently exists today I see three main focus areas that we are appropriately navigating.

Max: <unk> for those products, which we historically had manufactured in the U S and sold into China, which.

Max: Which represent the majority of the $135 million gross tariff impact estimated this year.

Max: And then secondly, those products, which are manufactured in Europe and sold in the U S.

Maxwell Krakowiak: Lastly, we are focused on how we leverage our operational agility to capitalize on potential opportunities that arise from the changing macro landscape. As it pertains to those products currently made in the U.S. and sold in China, through a number of initiatives, many of which were already underway before the new administration took office, we expect to almost fully neutralize this impact operationally within the next two months. So as Prahlad mentioned, we do expect to incur some impact from the current tariffs here in the 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.

Max: Lastly, we are focused on how we leverage our operational agility to capitalize on potential opportunities that arise from the changing macro landscape.

Max: As it pertains to those products currently made in the U S and sold in China through a number of initiatives many of which were already underway before the new administration took office, we expect almost fully neutralized this impact operationally within the next two months.

Max: For the impact stemming from those products made in Europe, and the U K, which are sold in the U S. We are aggressively taking a number of different actions to offset the impact, including adjusting our manufacturing working with suppliers implementing selective pricing actions and taking <unk>.

Max: Mental temporary cost actions across the entire business. So long as these headwinds remain this year.

Speaker Change: So as <unk> mentioned, we do expect to incur some impact from the current tariffs here in the 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.

Maxwell Krakowiak: We are also able to offset the associated approximate $0.12 adjusted EPS impact from the tariff through our continued successful tax planning initiatives and more favorable effects, allowing us to reiterate our adjusted EPS outlook for the year of $4.90 to $5.

Speaker Change: We are also able to offset the associated approximate 12% adjusted EPS impact from the tariffs through our continued successful tax planning initiatives and more favorable FX, allowing us to reiterate our adjusted EPS outlook for the year of $4 90 to five.

Maxwell Krakowiak: Now turning to the specifics of our first quarter performance. Overall, the company generated revenue of $665 million in the quarter, resulting in 4% organic growth. FX was a 1% headwind of growth, and we again had no incremental contribution from acquisition. As it relates to our P&L, we generated 25.6% adjusted operating margins in the quarter, which was up modestly year-over-year and above our expectations. This was driven by strong expense management and favorable mix. We will continue to closely monitor our expense structure given the current macro environment in an effort to maintain our strong profitability levels while still continue to invest internally in areas with high return potential.

Speaker Change: Now turning to the specifics of our first quarter performance.

Speaker Change: Overall, the company generated revenue of $665 million in the quarter, resulting in 4% organic growth.

Speaker Change: FX was a 1% headwind to growth and we again had no incremental contribution from acquisitions.

Speaker Change: As it relates to our P&L, we generated 25, 6% adjusted operating margins in the quarter, which was up modestly year over year and above our expectations.

Speaker Change: This was driven by strong expense management and favorable mix.

Speaker Change: We will continue to closely monitor our expense structure given the current macro environment in an effort to maintain our strong profitability levels, while still continuing to invest internally in areas with high return potential.

Maxwell Krakowiak: Looking below the line, our adjusted net interest and other expense was $18 million in the quarter, which was slightly impacted by higher than expected FX volatility. Our adjusted tax rate was 19.5% in the quarter, which was lower than our expectations due to the favorable impact of recent tax planning initiatives. We also continue to remain active with our share repurchase program, an average of 120.2 million diluted shares in the quarter, which was down nearly a million and a half shares sequentially.

Speaker Change: Looking below the line our adjusted net interest and other expense was $18 million in the quarter, which was slightly impacted by higher than expected FX volatility.

Speaker Change: Our adjusted tax rate was 19, 5% in the quarter, which was lower than our expectations due to the favorable impact of recent tax planning initiatives.

We also continue to remain active with our share repurchase program and averaged $120 2 million diluted shares in the quarter, which was down nearly 1 million and a half share sequentially.

Maxwell Krakowiak: This all resulted in our adjusted EPS in the first quarter being $1.01, which was $0.07 above our expectations.

Speaker Change: This all resulted in our adjusted EPS in the first quarter hitting a dollar in <unk>, which was <unk> <unk> above our expectations.

Maxwell Krakowiak: Moving beyond the P&L, we had another strong quarter from a cash perspective as we generated free cash flow of $118 million in the quarter, resulting in 97% conversion of our adjusted net income. Cash remains a bright spot as we continue to diligently manage our working capital, and we expect to receive additional divestiture-related inflows in the second half of the year. As I mentioned regarding capital deployment, we have stayed active so far this year with our buyback program as we repurchased $154 million worth of shares in the first quarter and have continued to remain opportunistic during these periods of increased uncertainty, given our confidence in our long-term potential.

Speaker Change: Moving beyond the P&L, we had another strong quarter from a cash perspective, we generated free cash flow of $118 million in the quarter, resulting in 97% conversion of our adjusted net income.

Speaker Change: Cash remains a bright spot as we continue to diligently manage our working capital and we expect to receive additional divestiture related inflows in the second half of the year.

Speaker Change: As I mentioned regarding capital deployment, we have stayed active so far this year with our buyback program as we repurchased $154 million worth of shares in the first quarter and have continued to remain opportunistic during these periods of increased uncertainty given our confidence in our long term potential.

Maxwell Krakowiak: As it relates to our balance sheet, we finished the quarter with a net debt-to-adjusted EBITDA leverage ratio of 2.4 times, with 100% of our debt being fixed rate, with a weighted average interest rate of 2.6%, and maturity out another seven years.

Speaker Change: As it relates to our balance sheet, we finished the quarter with a net debt to adjusted EBITDA leverage ratio of two four times with a 100% of our debt being fixed rate with a weighted average interest rate of two 6% and maturity out another seven years.

Maxwell Krakowiak: As we evaluate capital deployment, we will continue to remain flexible in order to capitalize on the highest return opportunities while maintaining our investment grade credit rating.

Speaker Change: As we evaluate capital deployment, we will continue to remain flexible in order to capitalize on the highest return opportunities while maintaining our investment grade credit rating.

Maxwell Krakowiak: I will now provide some commentary on our first quarter business trends, which is also included in the quarterly slide presentation on our investor relations website. The 4% growth in Organic Revenue in the quarter was comprised of 2% growth in our Life Sciences segment and 5% growth in Diagnostics. Geographically, we grew in the mid-single digits in both the Americas and Europe, while Asia grew in the low single digits, with China also growing low single digits. From a segment perspective, our life sciences business generated revenue of $340 million in the quarter. This was up 1% on a reported basis and 2% on an organic From a customer perspective, sales to pharma biotech customers grew in the low single digits, whereas sales into academic and government customers declined in the low single digits in the quarter.

Speaker Change: I will now provide some commentary on our first quarter business trends, which is also included in the quarterly slide presentation on our Investor Relations website.

Speaker Change: The 4% growth in organic revenue in the quarter was comprised of 2% growth in our life Sciences segment and 5% growth in diagnostics.

Speaker Change: Geographically, we grew in the mid single digits in both the Americas and Europe, While Asia grew in the low single digits with China also growing low single digits.

Speaker Change: From a segment perspective, our life Sciences business generated revenue of $340 million in the quarter.

Speaker Change: This was up 1% on a reported basis and 2% on an organic basis.

Speaker Change: From a customer perspective sales to pharma biotech customers grew in the low single digits, where sales into academic and government customers declined in the low single digits in the quarter.

Maxwell Krakowiak: Our life science solutions business declined in the low single digits in the quarter, with continued declines in instrumentation offset by solid growth and reagent. Our Signal software business was again a highlight in the quarter as it was up a little over 20% year-over-year organically. The business continued to perform well from an ARR, APV, and net retention rate perspective as well, with all metrics at or slightly above full-year levels from last year. And our diagnostics segment, we generated $324 million of revenue in the quarter, which was up 3% on a reported basis and 5% on an organic basis.

Speaker Change: Our life Science solutions business declined in the low single digits in the quarter with continued declines in instrumentation offset by solid growth in reagents.

Our signals software business was again, a highlight in the quarter as it was up a little over 20% year over year organically the business continued to perform well from an <unk>.

Speaker Change: <unk> ATV and net retention rate perspective, as well with all metrics at or slightly above full year levels from last year.

Speaker Change: In our diagnostics segment, we generated $324 million of revenue in the quarter, which was up 3% on a reported basis and 5% on an organic basis.

Maxwell Krakowiak: From a business perspective, our immunodiagnostics business grew high single digits organically during the quarter, which was in line with expectations. The business continues to perform well as its strong growth this quarter was driven by continued strength in the Americas and solid uptake of recent menu expansion. Our reproductive health business grew low single digits organically in the quarter. Newborn screening continued to perform well and grew high single digits globally, which was driven by outstanding operational and commercial execution, giving continued headwinds from global birth rates. In regards to China specifically, we had low single-digit organic growth overall in the first quarter, which consisted of a decline in life sciences offset by high single-digit growth in diagnosis.

Speaker Change: From a business perspective, our immuno diagnostics business grew high single digits organically during the quarter, which was in line with expectations.

Speaker Change: The business continues to perform well as its strong growth. This quarter was driven by continued strength in the Americas and solid uptake of recent menu expansions.

Speaker Change: Our reproductive health business grew low single digits organically in the quarter <unk>.

Speaker Change: <unk> screening continue to perform well and grew high single digits globally, which was driven by outstanding operational and commercial execution given continued headwinds from global birth rates.

Speaker Change: In regards to China, specifically, we had low single digit organic growth overall in the first quarter, which consisted of a decline in life sciences offset by high single digit growth in diagnostics.

Maxwell Krakowiak: Stimulus was not a significant factor on our business to start the year as instrumentation in the region remained pressure. Looking ahead, we are only assuming a modest amount of stimulus over the rest of the year coming from programs which have already been announced and are currently being disbursed.

Speaker Change: Stimulus was not a significant factor on our business to start the year at instrumentation in the region remain pressured.

Speaker Change: Looking ahead, we are only assuming a modest amount of stimulus over the rest of the year coming from programs, which have already been announced and are currently being dispersed.

Maxwell Krakowiak: I now want to provide some additional color as it pertains to our updated outlook for the full year. As mentioned, we are reaffirming our organic growth outlook for the year of three to 5% growth, but with a slightly different composition than we have previously assumed. First, we are now factoring in slower demand from our academic customers, particularly in the U.S., which is largely impacting our instrumentation, but is also having some impact on a demand for our reagents as well. This slightly slower assumed growth for the full year in our life science solutions unit is resulting in a 100 basis point headwind to total company organic growth for the year.

Speaker Change: I now want to provide some additional color as it pertains to our updated outlook for the full year.

Speaker Change: As mentioned, we are reaffirming our organic growth outlook for the year of 3% to 5% growth, but with a slightly different composition than we had previously assumed.

Speaker Change: We are now factoring in slower demand from our academic customers, particularly in the U S, which is largely impacting our instrumentation, but is also having some impact on the demand for our reagents as well.

Speaker Change: This slightly slower assumed growth for the full year and our life Science solutions unit is resulting in a 100 basis point headwind to total company organic growth for the year.

Maxwell Krakowiak: However, this headwind is being fully offset by even more robust expected growth in our software business and stronger performance in reproductive health given the recent success of a number of commercial partnerships coming to fruition. This resiliency speaks to the uniqueness of our company and our ability to continue to generate differentiated financial results throughout varying macro environments, as well as our appropriately prudent initial outlook to start the year. With the weaker dollar impacting effects, we now anticipate our revenue this year to be in the range of $2.83 to $2.87 billion. Moving down the P&L, we now expect our adjusted operating margins to be in the range of 27.9% to 28.1%, which is down 60 basis points from our prior outlook due to the tariff-related pressures we expect to incur predominantly in the second quarter.

Speaker Change: However, this headwind is being fully offset by even more robust expected growth in our software business and stronger performance in reproductive health given the recent success of a number of commercial partnerships coming to fruition.

Speaker Change: This resiliency speaks to the uniqueness of our company and our ability to continue to generate differentiated financial results throughout varying macro environment as well as our appropriately prudent initial outlook to start the year.

Speaker Change: With the weaker dollar impacting FX, we now anticipate our revenue this year to be in the range of $2 83 to $2 $87 billion.

Speaker Change: Moving down the P&L, we now expect our adjusted operating margins to be in the range of $27 nine to 28, 1%, which is down 60 basis points from our prior outlook due to the tariff related pressures, we expect to incur predominantly in the second quarter.

Speaker Change: <unk>.

Maxwell Krakowiak: This impact equates to an approximate 12 cent headwind to our full year adjusted EPS. If the tariffs were to subside in the coming months, we would likely look to maintain most of our new manufacturing footprint flexibility, while rolling back the majority of the temporary belt tightening actions we are currently taking. Consequently, we would not expect to meaningfully change the operating margin or full year earnings outlook that we have provided here today. As mentioned, due to our continued successful tax planning initiatives, along with less of a headwind from FX, we expect to be able to fully offset this impact to our earners.

Speaker Change: This impact equates to an approximate <unk> <unk> headwind to our full year adjusted EPS.

Speaker Change: If the tariffs were to subside in the coming months, we would likely look to maintain most of our new manufacturing footprint flexibility, while rolling back the majority of the temporary belt tightening actions. We are currently taking.

Consequently, we would not expect to meaningfully change the operating margin our full year earnings outlook that we've provided here today.

Speaker Change: As mentioned due to our continued successful tax planning initiatives, along with less of a headwind from FX, we expect to be able to fully offset this impact to our earnings.

Maxwell Krakowiak: We now forecast our adjusted tax rate this year to be 19 percent, our net interest and other to be approximately $75 million, and an average diluted share count of approximately $119 million. This all results in our adjusted earnings per share for the year expected to continue to be in the range of $4.90 to $5.00. Regarding our outlook for the second quarter, we anticipate organic growth to be in the positive 2 to 4% range, resulting in total expected revenue in the range of $700 to $715 million. We anticipate our below-the-line items in the second quarter to be fairly similar to those we just reported for the first quarter with an approximate 119 million average diluted share count.

Speaker Change: We now forecast our adjusted tax rate this year to be 19%, our net interest and other to be approximately $75 million.

Speaker Change: In an average diluted share count of approximately $119 million.

Speaker Change: This all results in our adjusted earnings per share for the year expected to continue to be in the range of $4 90 to $5.

Speaker Change: Regarding our outlook for the second quarter, we anticipate organic growth to be in a positive 2% to 4% range, resulting in total expected revenue in the range of $700 million to $715 million.

We anticipate our below the line items in the second quarter to be fairly similar to those we just reported for the first quarter with an approximate 119 million average diluted share count.

Maxwell Krakowiak: We expect this to result in our adjusted EPS in the second quarter to be in the range of $1.13 to $1.15.

Speaker Change: We expect this to result in our adjusted EPS in the second quarter to be in the range of $1 13 to $1 15.

Maxwell Krakowiak: Overall, we had a strong start to the year as we were able to overcome a number of unforeseen challenges. The macro environment is currently in a period of elevated volatility and uncertainty. which is limiting what would have likely been an even stronger year than we had contemplated 90 days ago. As we look ahead, we will remain diligent and execute on those items which are more fully within our control by quickly pivoting to capitalize on commercial opportunities that present themselves, while also responding operationally to mitigate new challenges that arise. Revvity has a strong team and a differentiated business, which allows us to continue to perform at a high level through evolving macro environments, while remaining well positioned to benefit when market trends become more favorable.

Speaker Change: Overall, we had a strong start to the year as we were able to overcome a number of unforeseen challenges.

Speaker Change: The macro environment is currently in a period of elevated volatility and uncertainty.

Speaker Change: Which is limiting what would have likely been an even stronger year than we had contemplated 90 days ago.

Speaker Change: As we look ahead, we will remain diligent and execute on those items, which are more fully within our control by quickly pivoting to capitalize on commercial opportunities that present themselves. While also responding operationally to mitigate new challenges that arise.

Speaker Change: <unk> has a strong team and a differentiated business, which allows us to continue to perform at a high level through evolving macro environment, while remaining well positioned to benefit when market trends become more favorable.

Unknown Executive: With that, operator, we would now like to open up the call for questions. Thank you very much. To ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally.

Speaker Change: With that operator, we would now like to open up the call for questions.

Speaker Change: Thank you very much to ask a question. Please press star followed by one on your telephone keypad, if you change your mind.

Speaker Change: Please press star followed by two.

Marshall: Alright, It's Marshall question. Please ensure your devices on mute locally.

Patrick Donnelly: Our first question comes from Patrick Donnelly from City. Your line is open, please go ahead. Hey guys, thanks for taking the questions. Maybe one not surprisingly start off on the tariff side. Can you guys talk about that piece, the US into China, it sounds like 135 million gross impact. You're going to neutralize that, I think you said within two months. Can you talk about first what those products are, what you guys are doing to shift around and offset that? And just how you're able to do it so quickly. I mean, other companies are talking about a far longer timeline to shift around to manufacturing footprint or get around some of that US to China.

Patrick Donnelly: Our first question comes from Patrick Donnelly from Citi.

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Hey, guys. Thanks for taking the questions.

Speaker Change: Maybe one not surprisingly start off on the tariff side.

Speaker Change: Can you guys talk about that piece when you ask them to China. It sounds like a 135 million gross impact.

Speaker Change: Neutralize that at least two months can you talk about first what those products are what you guys are doing to shift around and offset that and just how youre able to do it so quickly and other companies are talking about our longer timeline to it could shift around some manufacturing footprint get around some of that U S to China. So.

Prahlad Singh: So we'd love to just talk through what you're doing, what those products are and the confidence level you can contain that at the two key Hey, Patrick, good morning. Let me start and then Max will chime in. You know, as we mentioned in our prepared remarks, you know, we didn't start this in April, right? We started this just right after the election.

Speaker Change: Would love to just talk to what Youre doing what those products are and the confidence level you can take that at the compute.

Speaker Change: Hey, Patrick Good morning, Let me start and then Max will chime in.

Speaker Change: Okay.

Speaker Change: As we mentioned in our prepared remarks, we didn't start this in April we started this just right after the election and the process of moving products building redundancy in our supply chain and then ensuring product availability into <unk> into China, specifically has been an ongoing.

Maxwell Krakowiak: And the process of moving products, building redundancy in our supply chain, and ensuring product availability into China specifically, has been an ongoing exercise for us over the last Allen, Wang, Danielle Nishler, Michelle McCarthy, Ram Lasty, Faith Smith, Katie Maresh, Yeah, I think there's the other piece I'd add to is, I think we, you know, continue to prove that we are a agile and nimble company, and that we are able to sort of quickly navigate what is a very dynamic macro environment. I think the other piece, just to answer your question in terms of what products Patrick, if you remember, most of our diagnostics business is in China for China.

Speaker Change: Exercise for us over the last.

Speaker Change: Few months and then that's why sort of build that resiliency in our supply chain. Thanks.

Speaker Change: Yes, I think it is your other piece I'd add too I think.

Speaker Change: Continue to prove that we are agile and nimble company and that we are able to quickly navigate what is a very dynamic macro environment I think the other piece just to answer your question in terms of what products. Patrick If you remember most of our diagnostics business is in China for China, and so you really you are talking about the life science products that are being sold in.

Patrick Donnelly: And so you really you're talking about the life science products that are being sold into China. Okay, got it. That's helpful.

Speaker Change: To China.

Speaker Change: Okay got it that's helpful.

Maxwell Krakowiak: And then maybe the Life Science Solutions Guide, Max, I know you talked a little bit about the moving pieces there. I think overall, that segment was low single previously. Sounds like instruments move lower, software, maybe a little higher. I think software was low double before. Can you just talk through the moving pieces there? And then the reagents, you mentioned the academic pieces may be a little bit affected. I believe that was kind of three or 4% growth gap before. Can you talk about that piece, what you're seeing, academic versus biopharma? I would love to just break down that segment a little bit.

Speaker Change: And then maybe the life Science solution Guide Max I know you talked a little bit about the moving pieces. There I think overall that segment is low single previously sounds like instruments with lower software, maybe a little higher I think software low double before can you just talk through the moving pieces. There and then the reagents you mentioned the academic pieces, maybe a little bit affected.

Speaker Change: I believe that was kind of a three or 4% growth guide before can you talk about that piece. What you are seeing academic versus Biopharma would love to just break down by taking a little bit. Thank you guys.

Maxwell Krakowiak: Thank you. Yeah, sure. So I think when you look at the life sciences guide overall, for the full year, it does remain unchanged, mostly from what we had said 90 days ago, maybe a little bit slightly lower. Remember, in life science solutions, now we have two components, you have the life sciences solutions business, and then you have our software business. I think as we mentioned our prepared remarks on the life science solution side, instrumentation is more pressured versus our assumption 90 days ago, I would say on the reagent side, we still are expecting solid growth for the year.

Speaker Change: Yes, sure. So I think when you look at the life Sciences Guide overall for the full year. It does remain unchanged, we mostly from what we had said 90 days days ago, maybe a little bit slightly lower remember in life Science solutions now we have two components you have the life Sciences solutions business and then you have our software business I think so.

Speaker Change: We mentioned in our prepared remarks on the life Science solutions side instrumentation is more pressured versus our assumption 90 days ago I would say on the reagent side, we still are expecting solid growth for the year, albeit maybe a little bit slower.

Maxwell Krakowiak: I'll be at maybe a little bit slower on, you know, the pressure from academic and government, but still solid growth for the year. And then I think on the software side, that's where you're really seeing the majority of the offset, where we are now expecting, you know, stronger growth versus the low double digits we had assumed 90 days ago. Appreciate it, guys.

Speaker Change: The pressure from academic and government, but still solid growth for the year and then I think on the software side, that's where you're really seeing the majority of the offset where we are now expecting stronger growth versus the low double digits. We had assumed 90 days ago.

Speaker Change: Appreciate it guys.

Patrick Donnelly: Our next question comes from Patrick Donnelly from City.

Patrick Donnelly: Our next question comes from Patrick Donnelly from Citi.

Unknown Executive: Sammy, Patrick just asked this question, if we can move on to the next question. Thank you. Apologies.

Speaker Change: Sami Patrick just ask this question to <unk> question.

Patrick Donnelly: Thank you.

Dan Brennan: Our next question comes from Dan Brennan and T.D. Caron. Thank you. Thanks for the question. Great, thanks for the questions.

Patrick Donnelly: Yes.

Dan Brennan: Our next question comes from Dan Brennan from TD Cowen.

Dan Brennan: Okay. Thank you thanks for taking the questions.

Speaker Change: Great. Thanks, Thanks for thanks for the questions maybe the first one just on China, you said low single digits in the quarter just kind of wondering if you can unpack how you expect <unk> rest of year to plan for China and are you seeing any impact from the government towards revenue and our other western vendors just given the heightened.

Dan Brennan: Maybe the first one just on China. I think you said low single digits in the quarter. Just kind of wondering if you can unpack how you expect, you know, 2Q rest of the year to play out for China. And are you seeing any impact from the government towards Revity and or other Western vendors just given the heightened, you know, political tensions that have been introduced here under the Trump administration? Yeah, Dan, I mean, I wouldn't, I wouldn't classify it as any heightened pressure or attention specific to Revity. Overall, you know, there is obviously a sense of awareness as to what's happening in the marketplace.

Speaker Change: Political pension that have been introduced here under the Trump administration.

Dan Brennan: Yeah, Dan I mean, I wouldn't I wouldn't classify it as any heightened pressure or attention.

Speaker Change: Specific to <unk>.

Speaker Change: Overall, there is obviously a sense of on readiness as to what's happening in the marketplace. If you recall for our diagnostics business all of our reproductive health in China is in China for China, we've done that over the past decade and on the immuno diagnostic side most of all of our products goes.

Prahlad Singh: You know, if you recall, for our diagnostics business, all our reproductive health in China is in China for China. We've done that over the past decade. And on the immunodiagnostic side, most of our, all of our products goes from Europe into China. So we've pretty much have had that in place for a period of time. And on the life sciences side, you know, to Patrick's question, as Max mentioned earlier, that's the one where we have been working over the last few months to ensure that there is supply chain redundancy in market to ensure that we have a smooth supply of products into China on the life sciences side of the.

Speaker Change: From Europe into China, So we've pretty much have had that in place for a period of time and on the life Sciences side to Patrick's question as Max mentioned earlier, that's the one where we have been working over the last few months to ensure that their supply chain redundancy in market to <unk>.

Speaker Change: Sure that we have a smooth supply of products into China on the life Sciences side of the business.

Maxwell Krakowiak: Yeah, and just to add from a numbers perspective, Dan, I think as we look at China for the rest of the year, our expectation for the full year is positive low single digits growth in China. Life Sciences, we expect to have a slight decline year over year. And then on the diagnostic side, we are anticipating roughly mid single digit growth. So not too much change from our previous assumption.

Dan Brennan: Yeah, and just to add from a numbers perspective, Dan I think as we look at China for the rest of the year our expectation for the full year is positive low single digit growth in China life Sciences, we expect to have a slight decline year over year and then on the diagnostics side, we are anticipating roughly mid single digit growth.

Speaker Change: So not too much change from our previous assumptions.

Dan Brennan: Yes.

Dan Brennan: Got it.

Maxwell Krakowiak: And then maybe just to follow up to the first question, just maybe unpacking a little bit more of the changes. So just kind of doing the math. So for U.S. academic and government, you guys said 5% of revenues. What's kind of baked in now for the year from that front? And on the flip side, you talked about a positive offset being reproductive health and these new partnerships. Just wondering if you can unpack that a little bit and kind of what's changed on the outlook on that front. Thanks. Yeah, so I guess first on the academic and government expectations, you know, we don't guide by end market.

Dan Brennan: Got it and then maybe just a follow up to the first question, just maybe unpacking a little bit more of the changes.

Dan Brennan: Doing the math so for U S academic and government you guys said, 5% of revenues, what's kind of baked in now for the year from that front.

Dan Brennan: And on the flip side, you talked about a positive offset being reproductive health and these new partnership just wondering if you can unpack that a little bit and kind of what's changed on the outlook on that front. Thanks.

Speaker Change: Yes, so I guess first on the academic and government expectations. We don't guide by end market and where we are factoring in now the slower expectations from academic and government, particularly in the U S. I think is again as you look at the full year overall right. We baked in about 100 basis point headwind from the academic and.

Maxwell Krakowiak: And we are factoring in now the slower expectations from academic and governments, particularly in the US. I think it's again, as you look at the full year overall, right, we've baked in about 100 basis point headwind from the academic and government customers, and that's being offset half by our software business, and then half by our reproductive health business. I think on reproductive health, in particular, you know, we've mentioned the extension or expansion of the contract in partnership with Genomics England. And then as you saw from the first quarter results, newborn screening continues to perform well globally.

Speaker Change: <unk> customers and that's being offset passed by our software business and then half by our reproductive health business I think on reproductive health in particular, we've mentioned extension or expansion of the contract in partnership with genomics, England and then as you saw from the first quarter results newborn screening continues to perform well globally.

Unknown Executive: Operator, next question.

Speaker Change: Operator next question.

Matt Sykes: Our next question comes from Matt Sykes from Goldman Sachs. Your line is open, please go ahead. Thank you, and good morning. Thanks for taking my questions.

Mac Sykes: Our next question comes from Mac Sykes from Goldman Sachs.

Speaker Change: Your line is open. Please go ahead.

Mac Sykes: Thank you and good morning, Thanks for taking my questions maybe just.

Matt Sykes: Maybe just for my first question to focus on the signals business, software business, just given it's now becoming, even though it's 8% of total revenues, it's now becoming a pretty important offset this year, just given all the macro headwinds. Could you maybe kind of give us a refresh on the competitive landscape, how you're winning business, and what is sort of the margin impact as that business scales to the group, and how you can drive margin expansion just from that business? Or is it too small currently to be able to be a big driver this year?

Mac Sykes: My first question to focus on the signals business software business, just given it's now becoming even though it's 8% of total revenues is now becoming a pretty important offset this year just given all the macro headwinds could you maybe kind of give us a refresh on the competitive landscape, how youre winning business from what is sort of a margin impact as that business.

Mac Sykes: Scales to the group and how you can drive margin expansion just from that business or is it too.

Mac Sykes: Small currently to be able to be a big driver this year.

Prahlad Singh: Hey, Matt, good morning. You know, our software business continues to benefit from favorable market dynamics, given the growing adoption. But more importantly, if you look at the drivers across the board, you know, we continue to have strong new business wins, opportunity to upsell and expand, you know, with a very strong retention rate. The new NPIs, Signals Synergy and Signals Clinical that we've talked about, have had good initial success. And we also are looking at the opportunity to expand into the material science market. You know, but if you look at the portfolio, this is really a crown jewel in our portfolio that I, you know, hope it gets the attention that it deserves.

Speaker Change: Hey, Matt Good morning, and our software business continues to benefit from favorable market dynamics, given the growing adoption, but more importantly, if you look at the drivers across the board.

Mac Sykes: You need to have strong new business wins opportunity to upsell and expand with us.

Mac Sykes: Very strong retention rate, the new npi's signals synergy and signals clinical that we've talked about have had good initial success and we also are looking at the opportunity to expand into the material science markets.

Mac Sykes: But if you look at the Port this is really a crown jewel in our portfolio debt.

Mac Sykes: Hope it gets the attention that it deserves.

Prahlad Singh: Because what it also provides for us as a company is strong synergies and benefit that we have by having Signals as part of our portfolio, along with Life Sciences Solution Franchise, because both from a new product development perspective, the Signals business leverages the capability of what our Life Sciences portfolio brings to fore. So overall, you know, I think we benefit in the marketplace, we have a strong competitive position, and we look for, you know, the disruption that is, you know, right now going through in that marketplace. I think from an immunodiagnostic standpoint, I mean, the business continues to perform well globally.

Mac Sykes: Because what it also provides for us as a company strong synergies and benefit that we have by having signals as part of our portfolio along with life Sciences solutions franchise, because both from a new product development perspective, the signals business Leverages the capability of what on life Sciences.

Mac Sykes: Portfolio brings to four so overall I think the benefit in the marketplace. We have a strong competitive position and we look for the disruption that is.

Mac Sykes: Right now going through in the marketplace.

Mac Sykes: Got it. Thank you very much and then just maybe just drilling down on <unk> Dx.

Speaker Change: Pretty decent result in the quarter could you just kind of maybe get some regional color wondering if the U S. At any kind of tariff pull forward just can acceleration high single digits.

Speaker Change: Or was it a comp effect or just sort of the market getting back to normal and and given your comments of sort of return to normalization overall for diagnostics is sort of that mid single digit growth kind of what we should assume is what you would classify as normal given market conditions.

Speaker Change: I think from an immuno diagnostic standpoint, I mean, the business continues to perform well globally I think when you look at the U S continued to be strong quarter of growth and I think once that youll continue to see that.

Maxwell Krakowiak: I think when you look in the US, it continues to be a strong quarter of growth. And I think once that you'll continue to see that trend persist as we go throughout the year here, I wouldn't say that there's anything you need to call out in terms of a pull forward or anything of that nature in regards to our first quarter results. Yeah, and specifically, Matt, as I pointed out earlier, more on the diagnostic side, everything is either in China or China, going from Europe into China. So there was no pull forward from a tariffs perspective.

Speaker Change: <unk> persist as we go throughout the year here I wouldn't say, there's anything unique to call out in terms of a pull forward or anything of that nature in regards to our first quarter results.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: The plant as I pointed out on the more on the diagnostics side everything is either in China for China going from Europe into China. So there was no pull forward from a tariffs perspective.

Unknown Executive: Thank you.

Speaker Change: Alright, thank you.

Speaker Change: Yeah.

Vijay Kumar: Our next question comes from Vijay Kumar from Evercore. Your line is open, please go ahead. Hey, guys, thanks for taking my question.

Speaker Change: Our next question comes from Vijay Kumar from Evercore.

Speaker Change: Your line is open. Please go ahead.

Vijay Kumar: Hey, guys. Thanks for taking my question good morning, and congrats on a nice execution here.

Vijay Kumar: Good morning, Prahlad, and congrats on a nice execution here. The, I guess, my first question going back to tariffs, the $135 million, that's a 400, north of 450 basis points of gross headwinds to gross margins. That seems slightly higher versus, you know, what we've heard from some of your peers so far. So maybe just talk about what is the updated gross margin assumption? And how are we offsetting, you know, north of 450 basis points of GDP headwinds? Is there some new cost actions that's being planned?

Speaker Change: I guess my first question going back to the tariffs the $135 million.

Speaker Change: That's 400, north of 450 basis points of gross headwinds to gross margins.

Speaker Change: That seems slightly higher versus what we've heard from some of your peers so far.

Speaker Change: So maybe just talk about what is the updated gross margin assumption in how we offsetting.

Speaker Change: In the north of 450 basis points of GP headwinds is there some new cost actions that's been planned.

Prahlad Singh: Let me just, you know, start and then Max will join in. You know, Vijay, the 135 million number was assuming we would have not done anything. So just to provide a level of clarity, it would assume that we would just be on an as-is basis, beginning of the year, and we would continue to do business as usual and not make any changes. So I just want to make sure you guys don't get hung up on a number, the idea was to give what a frame of reference would have been had we not done anything. Obviously, as we said, over the past four months, we've taken a significant number of to ensure that there's a redundancy in our supply chain, and we have mitigated a vast majority of that.

Speaker Change: Let me just.

Speaker Change: And then.

Speaker Change: <unk>, who joined the revision of the $135 million number was assuming we would have not done anything.

Speaker Change: So just to provide a level of clarity it would assume that we would just be on an as is basis beginning of the year and we will continue to do business as usual and not make any changes. So I just want to make sure you guys don't get hung up on a number of the idea was to do what's the name of <unk> would have been.

Speaker Change: Had we not done any.

Speaker Change: We see as we said over the past four months, we've taken a significant number of actions to ensure that there is redundancy in our supply chain and we have mitigated a vast majority of that.

Speaker Change: Okay.

Maxwell Krakowiak: Yeah, and then I think in terms of the financials, Vijay, obviously, this will provide a headwind from a gross margin perspective. I would expect our 2Q gross margin to be closer to 60% versus what it's been historically, you know, running out over the past couple quarters of 61.5% to 62.5%. So I think from that perspective, you would see that sort of pop up here in the second quarter. But as Prahlad mentioned, we've been taking sort of quick, proactive measurements to counteract the tariff impact. We are taking some additional belt tightening here in the second half for any unmitigated tariff impact that there might be exiting the second quarter.

Vijay Kumar: Yes, and then I think in terms of the financials. Vijay obviously this will provide a headwind from a gross margin perspective, I would expect our <unk> gross margin to be closer to 60% versus what it's been historically running at over the past couple of quarters of 61, 5% to 62, 5%. So I think from that perspective, you would see that sort of.

Vijay Kumar: Pop up here in the second quarter, but as <unk> mentioned, we've been taking.

Vijay Kumar: Quick proactive measurements to counteract the tariff impact we are taking some additional belt tightening here in the second half for any on mitigated tariff impact that there might be exiting in the second quarter and I think we're really proud of the way we as a team here have really reacted and put ourselves in an extremely competitive.

Maxwell Krakowiak: And I think we're really, you know, sort of proud of the way we as a team here have really reacted and put ourselves in an extremely competitive position to take advantage of the potential disruption here with tariffs.

Vijay Kumar: <unk> positioned to take advantage of the many.

Vijay Kumar: Potential disruption here with tariffs.

Vijay Kumar: That's helpful, Max.

Vijay Kumar: That's helpful. Max maybe one on.

Prahlad Singh: Maybe, Prahlad, one on pharma. I know you don't guide by the end markets, but we've been getting some questions on the potential, perhaps, R&D to slow down here. Can you just remind us, what is pharma as a percentage of total company revenues? And where is this exposure? Is this R&D versus clinical? And what trends you're seeing from your customers? What are customers telling you right now? Yeah, Vijay, you know, just let me give you a sense of the broad trends. Again, most of what we sell, and our captive audience continues to be on the preclinical side still, right.

Speaker Change: Pharma I know you don't guide by the end markets.

Speaker Change: We've been getting some questions on potential perhaps R&D to slow down here.

Speaker Change: What is it.

Speaker Change: Can you just remind us what is the pharma as a percentage of total company revenues.

Speaker Change: And where does this exposure instance, R&D versus clinical and what trends you're seeing from our customers who are the customers telling you right now.

Speaker Change: Yes.

Speaker Change: Let me give you a sense of the broad trends again, most of what we sell and that captive audience continues to be on the preclinical side still right.

Prahlad Singh: And as we pointed out in our preferred remarks, we continue to see stabilization, I would say on the reagents side of the business and the impact of what we've seen quarter over quarter has continued to be sustained.

Speaker Change: And as we pointed out in our prepared remarks, we continued to see stabilization I would say on the reagent side of the business and the impact of what we've seen quarter over quarter has continued to be sustained the question Max.

Maxwell Krakowiak: The question, Max, highlight on the numbers. Yes, in terms of the overall exposure for Pharma Biotech, you know, it's roughly 35% of total company revenue, Vijay.

Speaker Change: Alright on the on the numbers yes.

Speaker Change: Yes.

Terms of the overall exposure for pharma biotech is roughly 35% of total company revenue Vijay.

Vijay Kumar: Fantastic. Thank you guys.

Speaker Change: Fantastic. Thank you guys.

Catherine Schulte: Our next question comes from Catherine Schulte from Baird.

Speaker Change: Our next question comes from Catherine Schulte from Baird.

Catherine Schulte: Your line is open, please go ahead. Hey, guys, thanks for the questions. And thank you for the very clear messaging around tariffs. It's been very helpful.

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Okay. Thanks for the question and thank you for the very clear messaging around cash and very helpful.

Catherine Schulte: Maybe just on that topic, as we think about the mitigation actions you guys are taking any way to kind of quantify what's coming from changing manufacturing versus cost actions versus pricing, or just kind of a general thought around those pieces. Thank Yeah, I would say as you look at the sort of the mitigation of again, the gross $135 million tariff headwind, you know, that majority of the offset there, I would say is actually on the supply chain side and changing a little bit how we do our manufacturing, Catherine, I would say that takes care of, you know, roughly 75-80% of the number, I would say the remaining portion of it is a combination of, you know, either changing out suppliers or, you know, passing on selective pricing actions.

Speaker Change: Maybe just on that topic as we think about mitigation actions you guys are taking any way to kind of quantify what is coming from.

Speaker Change: Changing manufacturing versus cost actions or pricing or just kind of a general thought around that thank.

Speaker Change: Thank you.

Speaker Change: Yes, I would say as you look at the sort of the mitigation of again, the gross $135 million tariff headwinds that majority of the offset there I would say is actually on the supply chain side and changing a little bit how we do our manufacturing Catherine I would say that takes care of roughly <unk> <unk>.

Speaker Change: 75% to 80% of the the number I would say the remaining portion of it is a combination of.

Speaker Change: Either changing out suppliers are passing on selective pricing actions and then as we've mentioned there is a little bit of additional belt tightening here on overall expenses in the second half of the year, but again the vast majority is really around the supply chain manufacturing.

Catherine Schulte: And then as we've mentioned, there is a little bit of additional belt tightening here on overall expenses in the second half of the year. But again, the vast majority is really around the supply chain manufacturing.

Speaker Change: Okay.

Catherine Schulte: All right, great. Thank you.

Speaker Change: Okay, great. Thank you and then you mentioned latent TB in your prepared remarks, how much of that business.

Catherine Schulte: And then you mentioned latent TB and your prepared remarks. How much of that business is tied to migrants and immigrants and any concerns just given some of the actions taken by this administration? Yeah, great question, Catherine. I think as you look at the latent TB market, again, if you remember where we play from a TB perspective, we are more heavily indexed to outside the US. It is a strategic initiative for us to become more focused in the US, which with the, you know, recent announcement around the automated workflow, we expect to start to gain more traction in the US.

Speaker Change: Migraine and then they can any concern just given kind of action taken benefit administration.

Speaker Change: Yeah, Great question, Catherine I think as you look at the latent TB market again, if you remember where we play from a TV perspective, we are more heavily indexed to outside the U S. It is a strategic initiative for us to become more focused in the U S, which with the recent announcement around that.

Speaker Change: Workflow, we expect to start to gain more traction in the U S. So from that standpoint.

Catherine Schulte: So from that standpoint, you know, if there is any noise around the immigration in the US in particular, it's not something that would have a material impact on us as a company overall. Great, thank you.

Speaker Change: There is any noise around the immigration in the U S. In particular, it's not something that would have a material impact on us as a company overall.

Speaker Change: Great. Thank you.

Dan Arias: Our next question comes from Dan Arias from Stiefel. Your line is open, please go ahead. Good morning, guys. Thank you. Prahlad or Max on the signals business, which sounds like it's doing pretty well right now. What kind of step down should we assume in the back half of the year?

Speaker Change: Our next question comes from Diana Ross from Stifel.

Speaker Change: Open. Please go ahead.

Diana Ross: Hi, Good morning, guys. Thank you prolonged or Max on the signals business. It sounds like its doing pretty well right now what kind of step down should we assume in the back half of the year.

Dan Arias: It seems like you're north of 20% for the first half of the year, so you could move down to a mid-single-digit level, and you'd still be in the mid-teens range by just some rough math, so how should we think about the full year for signals?

Diana Ross: It seems like Youre north of 20% for the first half of the year and so you could move down to mid.

Diana Ross: Mid single digit level and you'd still be in the mid teens range by just some rough math. So how should we think about the full year for signals and I guess longer term just given the trajectory of the business and how confident you sound in it.

Maxwell Krakowiak: And I guess longer term, just given the trajectory of the business and how confident you sound in it, Is there a potential upside to, I think, the 9% to 11% that you laid out at the analyst day for the LRP there? Yeah, hey, Dan. So I think as we mentioned, in the prepared market, we are incredibly excited about the performance of our signals business. It's an incredibly strong first quarter, we expect the rest of the year to be strong, when you look at it from a financial perspective. You know, I would say the second half is still going to be strong, you know, sort of double digit growth here, I think for the full year, it's probably closer to, you know, upper teens level from an organic growth standpoint.

Diana Ross: Is there a potential upside to I think the 911% do you laid out at the analyst day for the LR P. There. Thanks.

Speaker Change: Yeah, Hey, Dan.

Speaker Change: So I think as we mentioned in the prepared remarks, we are incredibly excited about the performance of our signals business.

Speaker Change: Incredibly strong first quarter, we expect the rest of the year to be strong when you look at it from a financial perspective, I would say the second half is still going to be a strong sort of double digit growth year I think for the full year, it's probably closer to upper teens level from an organic growth standpoint in terms of your question on the <unk> I think we've.

Prahlad Singh: In terms of your question on the LRP, you know, I think we've been, you know, appropriate in our expectation over the long term of how we expect this business to perform. I think, as we've mentioned, there can be some ebbs and flows within a given year. But again, in the metrics that we really look at from a software perspective around, you know, our ARR, the network retention rate, what the APV growth is, the business continues to perform extremely well. And we believe that this portfolio is a real differentiator for us as a company.

Speaker Change: Been appropriate and our expectation over the long term of how we expect this business to perform I think as we've mentioned there can be some ebbs and flows within a given year.

Speaker Change: But again in the metrics that we really look at from a software perspective around.

Speaker Change: The network and generate what the ATV growth is the business that continues to perform extremely well and we believe that this portfolio is a real differentiator for us as a company.

Prahlad Singh: Okay, helpful.

Speaker Change: Okay helpful. Prolonged maybe just strategically on M&A can you just touch on where where you see your appetite for deals we've gotten questions I'm sure much like others on just some of the assets that are in the market. Some on the larger side do you see yourself as being.

Prahlad Singh: Prahlad, maybe just strategically on M&A, can you just touch on where you see your appetite for deals? We've gotten questions, I'm sure, much like others on. some of the assets that are in the market, some on the larger side, do you see yourself as being potentially acquisitive and particularly on something larger than maybe a bolt-on over the next 12 Yeah, then, you know, as a practice, we don't comment on any particular deal, whether we have an interest on it or not. But as a company, you know, as we've, as you've seen, and observed, we continue to evaluate, you know, areas of investment, both organically and inorganically.

Speaker Change: Potentially acquisitive and particularly on something larger than maybe a bolt on over the next 12 to 18 months.

Dan Brennan: Yeah Dan.

Speaker Change: As a practice, we don't comment on any particular deal whether we have an interest on it or not but as a company.

Speaker Change: <unk> seen and observed the continues to evaluate areas of investment both organically and Inorganically.

Prahlad Singh: I mean, over the past three and a half years, since the BioLegend acquisition in 2021, we've been mostly organic in nature in terms of our investment, but we have a very, you know, in a fertile pipeline. But I think the more important part is post the portfolio transformation, you know, we really don't need M&A to be financially successful. We have a strong organic profile now, you know, which may not have been the case pre-transformation. So we feel really good with what we have today.

Speaker Change: Past, three and a half year since the biologic <unk> acquisition in 2021.

Speaker Change: We've been mostly organic in nature in terms of the investment, but we have a very active and a fertile pipeline.

Speaker Change: But I think the more important part is most advanced portfolio transformation, we really don't need M&A to be financially successful.

Speaker Change: Strong organic profile now rich.

Speaker Change: Which may not have been the case pre transformation. So we feel really good with what we have today.

Dan Leonard: Okay, thank you.

Speaker Change: Okay. Thank you.

Dan Leonard: Our next question comes from Dan Leonard, UBS.

Dan Leonard: Our next question comes from Dan Leonard.

Speaker Change: Yes.

Dan Leonard: Your line is open, please go ahead. Thank you very much. First question on China, you know, I appreciate that you've been planning countermeasures since the election on the tariff front, but can you help me better understand how you're managing the reagent exposure specifically?

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Thank you very much.

Speaker Change: First question on China, I appreciate that you've been planning counter measures since the election on the tariff front, but can you help me better understand how you are managing the reagent exposure specifically you know, having just toured biology and it doesn't seem like that that's something you could spin up locally in any short period of time.

Prahlad Singh: You know, having just toured BioLegend, it doesn't seem like that that's something you could spin up locally in a short period of time.

Prahlad Singh: Well, Dan, I'm glad you asked that question. But that demonstrates the agility of our company. I can tell you with a high degree of confidence that we have been able to do that and we have mitigated that by having availability of product into China, not from the US, for all our reagents and instrumentations. That speaks volumes to the redundancy in our supply chain that we have put in place and the agility that this company has been able to do, and hopefully the execution around that that you guys have observed since the portfolio transformation. Understood.

Speaker Change: Well then.

Speaker Change: I'm glad you asked that question, but.

Speaker Change: Demonstrates the agility of our company.

Speaker Change: I can tell you with a high degree of confidence that we have been able to do that and we have mitigated that by having availability of product into China not from the U S for all our reagents and instrumentation that speaks well.

Speaker Change: <unk> to the redundancy in our supply chain that we have put in place and the agility that this company has been able to do and hopefully the execution around that that you guys have observed.

Speaker Change: Since the portfolio transformation.

Maxwell Krakowiak: Thank you.

Speaker Change: Understood. Thank you and then a quick follow up on the signals business can you give us an update on your conversion to SaaS model and is it safe to assume that the progression towards SaaS has reverted a bit given the magnitude of the growth you just reported and expect for the full year.

Dan Leonard: And then a quick follow up on the signals business.

Maxwell Krakowiak: Can you give us an update on your conversion to a SAS model? And is it safe to assume that the progression towards SAS has reverted a bit given the magnitude of the growth you just reported and expect for the full year?

Maxwell Krakowiak: Yeah, hey, Dan. In terms of the overall SaaS journey, I think it continues to be going as planned. And we continue to make good traction in the conversion. You know, roughly, you know, we're probably at about a third of the portfolio now has been converted to SaaS. You know, in terms of the dynamics within specifically 2025, there is still a piece of the portfolio that is still on prem. And so that is some part of the revenue performance here in 2025. But again, as I mentioned, you know, organic growth is just one of the metrics that we really look at in terms of the overall signals business.

Speaker Change: Yeah, Hey, Dan.

Speaker Change: In terms of the overall SaaS journey I think it continues to be going as planned and we continue to make good traction in the conversion roughly probably at about a third of the portfolio now has been converted to SaaS in <unk>.

Speaker Change: The dynamics within specifically 2025, there is still a piece of the portfolio that is still on Prem and so that is some part of the.

Speaker Change: The revenue performance here in 2025, but again as I mentioned organic growth is just one of the metrics that we really look at in terms of the overall signals business I think the metrics again around the AOR growth the net retention rate.

Maxwell Krakowiak: I think the metrics again, around the ARR growth, the net retention rate, and the annual portfolio value growth are really the metrics that focus on the underlying performance of the business, and those continue to perform well. And so from that regard, I wouldn't say in terms of a change in our customer behavior, it's really been as planned for the signals business and continues to outperform.

Speaker Change: Annual portfolio value growth are really the metrics that focus on the underlying performance of the business and those continue to perform well.

Speaker Change: So from that regard I wouldn't say anything in terms of a change in our customer behavior. It has really been as planned for this signals business and continues to outperform.

Speaker Change: Yeah.

Unknown Executive: Appreciate that. Thank you.

Speaker Change: I appreciate that thank you.

Luke Sergott: Our next question comes from Luke Sergott from Barkley. Your line is open, please go ahead. Great, thanks, guys. Actually want to ask a little bit longer term question here. So, you know, I appreciate the moving manufacturing around for the tariffs here and 2Q and avoiding that. But, you know, as you think about your operating margin potential here longer term, you know, this is one of the better selling points of the story. So, you know, are the investments that you're taking now, does that kind of in the shifting the manufacturing, does that potential, you know, put any pressure or inability to hit those longer term margin targets?

Speaker Change: Our next question comes from Luke.

Luke: Barclays Your.

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Alright, Thanks, guys I actually wanted to ask a little bit of longer term question here.

Speaker Change: So I appreciate the the moving manufacturing around for the tariffs here in <unk> and avoiding that but as you are.

Speaker Change: You think about your operating margin potential here longer term.

Speaker Change: This is one of the better selling points of.

Speaker Change: The story so.

Speaker Change: Are the investments that you are taking now does that kind of in the shifting of the manufacturing is that potential.

Speaker Change: Put any pressure or an ability to hit those longer term margin targets.

Maxwell Krakowiak: Or, you know, maybe even kind of accelerate that, make it better, just kind of walk through it. You know, the puts and takes on that.

Speaker Change: Or maybe even kind of accelerate that make it better just kind of walk through.

The puts and takes on that.

Maxwell Krakowiak: Yeah, hey, Luke. In terms of the LRP and our operating margin expectations, I would say those are largely remain unchanged. I think when you go and look at, you know, the 75 bps of operating margin expansion that we're calling out as a company long term, the breakdown of it is 25 bps from the gross margin line and 50 bps from the operating margin line. You'll have 50 bps from the operating margin line is really around the SG&A volume leverage as our growth does not really need a significant amount of investments from an SG&A perspective. And so nothing about the tariff situation really changes that algorithm.

Luke: Yeah, Hey, Luke.

Luke: In terms of the MRP and our operating margin expectations I would say those are largely remained unchanged I think when you go and look at the 75 bps of operating margin expansion that we're calling out as a company long term the breakdown of it is 25 bps from the gross margin line and 50 bps from the operating margin line fit.

Luke: 50 bps from the operating margin line is really around the SG&A volume leverage as our growth is not really need a significant amount of investments from an SG&A perspective, and so nothing about the tariff situation really changes that algorithm.

Maxwell Krakowiak: I think in terms of the, you know, additional redundancy costs, I don't think it's meaningful enough for us long term where that's going to create a headwind to our operating margin target. As you mentioned in your sort of opening comments there, we think our operating margins over the long term will continue to be a bright spot and differentiator for us as a company.

Luke: I think in terms of the <unk>.

Luke: Additional redundancy costs I don't think it's meaningful enough for us long term, where that's going to create a headwind to our operating margin target as you mentioned in your in your sort of opening commentary, we think our operating margins over the long term will continue to be a bright spot a differentiator for us as a company.

Luke: Yeah.

Maxwell Krakowiak: Awesome.

Maxwell Krakowiak: And then last on the on the repro side, you know, is upload singles off of a high single, you know, second half growth, and then you have, you know, the Year of the Dragon, you had strong prenatal in that second half, you think a little bit more coming into the, you know, the neonatal, just talk about the various dynamics that you're seeing there and kind of the outlook for repro for the year. I think as you look at reproductive health for the full year, I would say there's really two things. One is that we do have the expansion of the commercial partnerships, particularly with Genomics England that we've mentioned in our prepared remarks.

Luke: Awesome and then lastly on the repo side.

Luke:

Luke: It's up low singles off of a high single.

Luke: Second half growth and then you have the.

Luke: The year of the Dragon you had strong prenatal in that second half you think a little bit more coming into the.

Luke: Neonatal just talk about the various dynamics that you're seeing there and kind of the outlook for repo for the year.

Luke: Yeah, I think as you look at our reproductive health for the full year look I would say, there's really two things. One is that we do have the expansion of the commercial partnerships, particularly with genomics, England that we've mentioned in our prepared remarks, the second dynamic and the largest piece of our reproductive health business is our newborn screening business.

Maxwell Krakowiak: The second, you know, dynamic and the largest piece of our reproductive health business is our newborn screening business. And I think it's been a consistent, strong performer over the past, really, 10 quarters or so, in terms of really being able to outpace the global birth rates. And that's a testament to one, you know, the geographic expansion and to the menu expansion, whether that's us coming out with new MPIs or getting additional states or government to expand their additional testing capabilities or additional menu that they're testing for. So, in that regard, that business just continues to perform incredibly well.

Luke: And I think it's been a consistent strong performer over the past really headquarters or so in terms of really being able to outpace the global birth rates and that's a testament to one the geographic expansion and to the menu expansion why are that to us coming out with new MTI is or getting additional states our government to expand their addition.

Luke: Testing capabilities.

Additional menu that they're testing for so in that regard that business just continues to perform incredibly well and so I wouldn't say anything has really sort of fundamentally changed there. It's just continued strong performance on newborn screening and then you've got.

Maxwell Krakowiak: And so I wouldn't say anything has really sort of fundamentally changed there. It's just continued strong performance on newborn screening. And then you've got the expansion of the commercial partnerships. Great, thanks.

Luke: The expansion of the commercial partnerships.

Luke: Great. Thanks.

Tycho Peterson: Our next question comes from Tycho Peterson from Jeff. Your line is open, please go ahead. Okay, thanks.

Luke: Our next question comes from Tycho Peterson from Jefferies.

Speaker Change: Your line is open. Please go ahead.

Tycho Peterson: I want to go back and visit the pharma instrument question. Just curious what you're assuming for the full year. Obviously, there's some concerns around pharma R&D cuts in response to tariffs. And then, you know, there's obviously FDA plans to phase out animal testing, that's a long phase in period, but you do have in vivo imaging, I think that's 25% of the life science business. You also have organoid offering cell imaging. So how much, you know, how do you think your portfolio is positioned longer term for that trend as well?

Tycho Peterson: Hey, Thanks, I want to go back and visit a pharma instruments question, just curious what you're assuming for the full year, obviously, there's some concerns around pharma art.

Tycho Peterson: R&D cuts in response to tariffs and then Theres, obviously FDA plan to phase out animal testing Thats, a long phase in period, but you do have in vivo imaging I think that's 25% of the life Science business. You also have organoid offerings cell imaging so how much.

Tycho Peterson: How do you think your portfolio is positioned longer term for that trend as well.

Tycho Peterson: Yes.

Tycho Peterson: Good morning, Tycho I think from our perspective, the way we look at specifically as you called out the in vivo offerings. It's usually I mean as you know it's used in its early research stage not late stage safety safety studies, which this policy may eventually impact from our perspective, the roadmap calls out actually a number of areas which plays.

Tycho Peterson: To us if you look at high throughput cell based screening and looking at refine in vivo <unk> transitioned micro dosing capabilities are looking at ex vivo human tissues. So actually if you think of it our focus which is more around small rodents and not.

Tycho Peterson: <unk> business.

Tycho Peterson: It's really helpful to refine and reduce the larger animal experiments that takes place.

Tycho Peterson: The cell analysis portfolio is also well positioned to drive the <unk> agenda.

Tycho Peterson: So to come up with the way we look at this as actually.

Tycho Peterson: More of a tailwind to us than a headwind.

Prahlad Singh: Okay, and then concerns around already cuts for pharma and the outlook for the year. Again, if it will impact, it will continue to be on the CAPEX side of the funding. Our reagents business, especially on the pipeline that we have had, has done well over the last several quarters and it continues to show improvement quarter over quarter.

Tycho Peterson: Okay, and then concerns about R&D cuts for pharma and the outlook for the year.

Tycho Peterson: Again, if it didn't impact to continue to be on the capex side of the funding our reagents business, especially on the pipeline that we have had has done well over the last several quarters and it continues to show improvement quarter over quarter.

Prahlad Singh: Okay, and then a follow up on consumables, you know, you were up a lot of your peers were down, I guess, can you say whether that was price capture? Is it share gains? If so, you know, where do you think you're pulling share on the consumable side? Yeah, I think it's always tough to speculate in terms of whether it's, you know, share gain and others results. And I think as we look at our portfolio, the things that are more within our control, we continue to focus on our product differentiation from a reagents perspective, we continue to focus on how we engage with our customers.

Tycho Peterson: Okay, and then a follow up on consumables you were up a lot of your peers were down I guess can you say whether that was price capture is it share gains. If so what do you think youre pulling share on the consumable side.

Tycho Peterson: Yes, I think it's always tough to speculate in terms of whether it's share gain and others results and I think as we look at our portfolio of the things that are more within our control. We continue to focus on our product differentiation from a.

Tycho Peterson: <unk> perspective, we continue to focus on how we engage with our customers and I think we continue to be pleased the results of that business and our commercial execution.

Prahlad Singh: And I think we continue to be pleased the results of that business and our commercial execution.

Tycho Peterson: Yeah.

Tycho Peterson: Okay.

Unknown Executive: This concludes today's call. Thank you very much for joining. You may now disconnect your line.

Speaker Change: This concludes today's call. Thank you very much for joining you may now disconnect your lines.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.