RVTY Q2 Earnings Beat Estimates on Diagnostics Strength, '26 View Up

Revvity, Inc. RVTY reported second-quarter 2026 adjusted earnings per share (EPS) of $1.41, up 19.5% year over year. The bottom line surpassed the Zacks Consensus Estimate of $1.23 by 14.6%.

GAAP EPS from continuing operations was 48 cents compared with 47 cents in the prior-year period.

RVTY’s Sales Growth Tops Expectations

Quarterly revenues rose 1.3% to $729.7 million and beat the consensus mark of $704.5 million by 3.6%.

Along with the earnings release, RVTY announced that it has recently entered into a definitive agreement to divest its Immunodiagnostics business in China (“China IDX”). The company posted second-quarter 2026 financial results on a reported and pro forma basis (excluding the China IDX business).

Pro forma revenues totaled $711.1 million, up 4% from $680.5 million in the year-ago quarter. Organic growth contributed 3 percentage points, while acquisitions added 1 point. Foreign currency movements had no impact.

The results benefited from broad-based Diagnostics strength, improved operating efficiency and tariff-related refunds. Pro forma organic revenues increased 3%, with Diagnostics organic growth partially offset by an organic decline in Life Sciences.

Recurring products generated low-single-digit growth, while non-recurring products advanced in the high-single digits. Geographically, Asia-Pacific recorded low-single-digit growth, Europe posted double-digit gains and the Americas declined in the low-single digits.

Revvity Inc. Price, Consensus and EPS Surprise

Revvity Inc. price-consensus-eps-surprise-chart | Revvity Inc. Quote

Segmental Revenue Discussion

Revvity’s Diagnostics Segment Drives the Upside

Diagnostics revenues increased 4.7% year over year to $371 million. On a pro forma basis, revenues rose 12%, while organic revenues climbed 11%, supported by strength across both Immunodiagnostics and Reproductive Health.

Immunodiagnostics delivered high-single-digit growth on broad-based demand. Reproductive Health posted double-digit growth, reflecting strength in newborn screening and partnerships. Management also highlighted favorable diagnostic trends outside China.

RVTY’s Life Sciences Results Reflect Software Timing

Life Sciences revenues declined 2% to $358.7 million. Pro forma revenues decreased 2%, while organic revenues fell 3% as weakness in software more than offset the growth in Life Sciences Solutions.

Life Sciences Solutions recorded low-single-digit growth, with gains in both reagents and instruments. Software revenues declined at a double-digit rate due to contract-renewal timing and difficult comparisons. Pharma and biotech demand fell in the mid-single digits, while academic and government demand declined in the low-single digits.

Revvity’s Margins Expand on Refunds and Efficiency

Pro forma adjusted gross margin rose 200 basis points to 62.3%.

Selling, general and administrative expenses totaled $278.6 million, up 12.1% year over year. Research and development expenses amounted to $49.0 million, down 8.1% from the year-ago quarter’s reported figure.

Adjusted operating income increased 10% year over year to $211 million. The adjusted operating margin expanded 230 basis points to 28.9%, while the pro forma adjusted operating margin improved 280 basis points to 29.3%. Results included $16 million of tariff-related refunds, which added approximately 11 cents to adjusted earnings.

Diagnostics margin expanded 520 basis points to 30.4% on volume leverage, operational efficiencies and the refunds. Life Sciences margin contracted 50 basis points to 31.1% due to lower software volume and strategic investments.

RVTY’s Cash Flow Strengthens the Balance Sheet

The company ended the quarter with $1.02 billion in cash and cash equivalents, up from $860.3 million at the end of the first quarter. Gross debt totaled $3.21 billion, producing a net debt-to-adjusted EBITDA ratio of 2.5 times. Revvity further strengthened its balance sheet by retiring a €500 million note in July.

Cumulative net cash provided by operating activities of continuing operations totaled $317.8 million compared with $268.4 million in the year-ago quarter. Free cash flow during the second quarter totaled $183.8 million, representing 117% of adjusted net income. Year-to-date free cash flow reached $299 million, or 108% of adjusted net income.

Revvity Raises Its 2026 Pro Forma Outlook

Revvity raised its outlook for full-year 2026 pro forma revenues and pro forma adjusted EPS. The company now expects pro forma revenues of $2.83-$2.86 billion compared with the previous guidance of $2.81-$2.84 billion. The forecast implies total growth of 5-6% and organic growth of 4-5%, with foreign currency expected to add 0.5% and acquisitions contributing 0.75%.

Pro forma adjusted EPS is now expected to be between $5.30 and $5.40, up from the previous guidance of $5.20-$5.30. The company expects an adjusted operating margin of 28.7%. The outlook assumes adjusted net interest expense and other items of roughly $90 million, an adjusted tax rate near 18% and approximately 112 million diluted shares. The guidance excludes the China Immunodiagnostics business, which Revvity has agreed to divest in a transaction expected to be closed by the end of 2027.

Wrapping Up

Revvity exited the second quarter of 2026 on a strong note, wherein both earnings and sales beat estimates. Both the top and bottom lines improved year over year.

RVTY shares fell 3.5% in pre-market trading despite the earnings and revenue beats and the raised 2026 outlook. The decline may reflect investor concerns that tariff-related refunds contributed approximately 11 cents to adjusted quarterly earnings, while a drop in organic Life Sciences revenues has raised questions about the pace of underlying customer demand. The company’s share price improvement of 12.5% so far this year has outperformed the industry’s 0.2% decline and S&P 500 Index’s 11.4% gain.

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The quarter reflected solid execution, led by double-digit Diagnostics growth, margin expansion and strong cash generation. The higher full-year revenue and earnings ranges also point to management’s confidence in improving end-market demand during the second half.

Revvity expects to complete the divesture of its China IDX business by the end of 2027. The business represented about 6% of 2025 revenues. The divestiture will remove a persistently weak business burdened by reimbursement reforms, pricing and volume pressure, localization demands and cash flow constraints. Exiting China IDX could improve Revvity’s margin profile and capital efficiency, though the long closing timeline means some execution and regulatory risk remains for investors.

RVTY’s Zacks Rank & Key Picks

Revvity currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank(Strong Buy) stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.4%.

McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%.

McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.

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