Revvity, Inc.

Ladies and gentlemen, thank you for joining us and welcome to the Q4 2025 Revity Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the conference over to Steve Willoughby, SVP, Investor Relations. Steve, please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Revity's fourth quarter 2025 earnings conference call. On the call with me today are Prahlad Singh, our President and Chief Executive Officer, and Max Grzykowiak, our Senior Vice President and Chief Financial Officer. I would like to remind you of the safe harbor statements 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. 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. 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 today's statements as representing our views as of any day after today. 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. I'll now turn it over to our President and Chief Executive Officer, Prahlad Singh. Prahlad?

Thank you, Steve, and good morning, everyone. I'm glad you are able to join us to discuss our fourth quarter results and our initial outlook for 2026. Overall, 2025 proved to be a dynamic year filled with both new challenges and significant opportunities for both our company and our customers. I'm pleased to share that in spite of the evolving circumstances we faced, we closed the year on a high note. with our fourth quarter revenue, organic growth, and adjusted EPS, all surpassing our expectations. This strong fourth quarter performance enabled us to exceed our adjusted EPS guidance for the entire year. It's especially impressive that even with the factors such as changes in NIH funding, evolving tariffs, pharma policy uncertainty, the extended US government shutdown, foreign exchange movements, and shifts in DRG-related volumes affecting our diagnostics business in China, we were still able to deliver $5.06 in adjusted EPS, surpassing the initial guidance we provided a year ago. Additionally, our 3% organic growth for the year was also within our original guidance range we outlined last January, despite all the unexpected challenges we encountered throughout the year. Our ability to achieve our initial organic growth guidance and exceed our EPS guidance in spite of these hurdles speaks to Revity's resilience our agility and our overall ability to execute in those areas that are more fully within our control. We were able to accomplish all of this while still delivering strong outcomes for our customers, our employees and our shareholders. In the fourth quarter, we saw positive momentum continue across our diagnostic businesses with both reproductive health and immunodiagnostics performing better than anticipated. This strength led to our diagnostic segment organic growth being up 7% in the quarter overall. In our life sciences segment, we also continued to see trends gradually move in the right direction across our end markets as our organic growth was flat year over year with positive low single digit growth from our pharma customers and a low single digit year-over-year decline in sales from our academic and government customers which included a modest headwind from the us government shutdown importantly Our sales of life sciences reagents and consumables were a bit better than we had expected and were flat year over year overall. We also saw continued improvements in demand for our life sciences instruments during the fourth quarter as they were also roughly flat on a year over year basis. This performance for our instruments represented a strong double-digit sequential increase in total revenue as compared to the third quarter and marked a meaningful organic growth improvement compared to the more significant declines we've seen with these products fairly consistently over the past three years. Given the strong finish to 2025 and the progress we've made over the past few years, we chose to reinvest a portion of this operating upside back into the company during the fourth quarter. With a particular focus on supporting our employees who have remained highly dedicated and productive throughout the year. This resulted in our adjusted operating margins in the quarter being 29.7%. When combined with some below the line favorability, this led to our adjusted earnings per share in the fourth quarter to be $1.70, which was 11 cents above the midpoint of our guidance and 6 cents above the high end. In addition to the meaningful progress we've made operationally in 2025, I'm very proud of what we've been able to opportunistically accomplish from a capital deployment perspective as well. In 2025 alone, we've repurchased over $800 million worth of our shares, reducing our share count by 8.5 million shares overall. This brings our repurchase activity since becoming Revity in the middle of 2023 to over $1.5 billion, representing nearly 15 million repurchased shares, or about 12% of our total share count at the time. This robust repurchase activity during a period of elevated in-market uncertainty demonstrates not only our continued confidence in our transformation, and our medium and longer term potential, but also our continued disciplined stewardship of shareholder capital. We will continue to be both opportunistic and disciplined as we evaluate all capital deployment opportunities going forward, both organically and inorganically. while we began to see some encouraging signs during the fourth quarter and take note of a few different promising market tailwinds of late, such as stronger biopharma funding and M&A activity, and greater clarity on future NIH funding. We also want to remain cognizant in our initial outlook for 2026 that the signs of modest improvement we have seen to date have been only recent and we continue to operate in what is a fluid end market and policy environment. Consequently, while Max will provide more details in a bit, we are reiterating for our organic growth this year to be in the 2-3% range as we are assuming recent end market trends continue over the course of the year. If these potentially favorable market conditions do result in customer demand recovering more than we currently anticipate in this outlook, we will look to appropriately update you on future quarterly earnings calls. I'm happy to report that in mid-January, we closed on our previously announced acquisition of the software company ACD Labs. We are already in the process of integrating ACD into our signals business and initial steps are underway to integrate its core product offerings into our main signals one platform as well. We expect ACD to contribute a little over $20 million in total revenue this year, which adds another roughly 75 basis points to our overall revenue growth for the year. So taking into account our 2% to 3% organic growth outlook and the expected tailwinds from FX and the ACD acquisition, it brings our total expected revenue this year to be in a range of $2.96 to $2.99 billion. As we've highlighted in the past, we are making good progress with our various cost efficiency initiatives and remain on pace for them to be fully completed by the end of the second quarter. These programs include significant footprint consolidations, deeper commercial and operational integrations, and greater supply chain and logistical synergies. while their impact will increase as the year goes on, especially in the second half of the year. We continue to expect these initiatives to result in our adjusted operating margins this year being 28% overall. We expect this all to result in our 2026 adjusted earnings per share to be in the range of $5.35 to $5.45, representing high single-digit adjusted EPS growth for the year. So overall, we are positioned well as we enter 2026, and I'm optimistic that our end markets should begin to recover as we go through the year, which would provide even greater opportunities for us and our shareholders. Another item we are extremely excited about as we move into 2026 is our recent introduction and upcoming launch of our AI models as a service platform, Signals Synthetica. Our signals software business is perfectly positioned to capitalize on the potential of AI as it is the central repository and workflow engine for nearly all major pharma preclinical R&D activity across the globe, and increasingly for many biotechs and small to midsize pharma companies as well. Preclinical scientists work within SignalsOne every day to create new data, analyze results, and seamlessly share it with colleagues. With the introduction of Zynthetica, we are providing a platform where bench scientists will be able to seamlessly leverage industry-leading AI and ML models that are both publicly and privately available, directly within their existing workflows. The insights gained by leveraging these AI models will be used by scientists to more quickly iterate and improve their drug candidates and development, both in the wet lab and virtually, enabling a lab-in-the-loop approach to drug development. We expect this repeating loop of faster and more frequent refinement and advancements of drugs and development will ultimately accelerate drug development timelines versus previous methods. As part of our Zynthetica launch, we also announced our important collaboration with Lilly and its TuneLab initiative. Lilly TuneLab's AI models are built on knowledge and insight from over a billion dollars of R&D investment by the company over the last decade. Lilly is not only making these models available to smaller biotechs in exchange for them sharing data back into the platform, but they are also co-funding with us access to our signals platform and providing Synthetica modeling credits to biotech users. exemplifying our shared commitment to driving adoption and engagement of both platforms. Signals is embedded in nearly all major pharma companies around the world already. And now with Synthetica and our collaboration with Lily Tune Lab, we can uniquely deliver functional AI capabilities directly to scientists in a completely transformative way. So in closing, I'm excited that the power, differentiation and momentum that we have built at Revity over the last several years is increasingly garnering more and more appreciation. amongst our customers, our investors, and even our competitors. Driven by leading innovation, coupled with strong and consistent operational and commercial execution, Revity is on a strong path with a bright future, especially as key end markets likely continue to recover over the coming months and quarters. With that, I will now turn the call over to Max.