Will Revvity Q4 Earnings Benefit From Early Signs of Demand Recovery?

Revvity, Inc. RVTY is slated to report fourth-quarter 2025 results on Feb. 2, before market open.

In the last reported quarter, the company delivered an earnings surprise of 3.51%. RVTY’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 4.16%.

Revvity appears to have entered the back half of 2025 with a steady but cautiously improving operating backdrop. While Life Sciences performance likely remained stable, supported by continued strength in software and early signs of improving customer activity, Diagnostics results are expected to have remained pressured, primarily due to ongoing reimbursement-related headwinds in China.

That said, solid execution across reproductive health and resilient ex-China demand should have helped offset regional softness, positioning the company to exit the year with improving momentum rather than deterioration.

Q4 Estimates

The Zacks Consensus Estimate for revenues is pegged at $767.2 million, indicating a gain of 5.2% from the prior-year quarter’s level. The consensus mark for earnings is pinned at $1.55 per share, indicating a deterioration of 9.2% year over year.

For the fourth quarter of 2025, Revvity anticipates performance largely in line with its prior expectations, with organic growth expected to remain in the low single digits. Management expects seasonal strength to support results, driven by higher software revenues, modest sequential improvement in instrument volumes and favorable year-end dynamics.

However, ongoing reimbursement-related pressure in China Diagnostics and a cautious demand environment, particularly among academic and government customers, are likely to persist.

Despite these headwinds, strong operating discipline and volume-driven leverage are expected to support a typical fourth-quarter margin step-up.

Life Sciences Segment

In the Life Sciences segment, performance in the fourth quarter is expected to have reflected a stable demand environment with early signs of improvement. The Signals software business, which delivered 20% organic growth in the third quarter, is likely to have remained a key growth driver, supported by strong SaaS adoption, high ARR growth and solid customer retention, even as growth potentially moderates sequentially. Reagents demand from pharmaceutical and biotech customers is expected to remain resilient, underpinned by steady underlying lab activity despite a seasonally softer third quarter.

Instrumentation trends are anticipated to have shown modest sequential improvement, driven primarily by increasing activity among pharma and biotech customers and typical year-end seasonality, although capital spending from academic and government customers is likely to remain constrained. Overall, Life Sciences results in the fourth quarter are expected to have benefited from software strength and incremental instrument momentum, partially offset by continued caution in public-sector funding.

Our estimate for the Life Sciences segment’s revenues is pegged at $376.2 million, up 11.9% year over year.

Diagnostic Segment

The Diagnostics segment is expected to have delivered a mixed performance in the fourth quarter, with strength outside China continuing to be offset by persistent reimbursement-related headwinds in the region. Excluding China, immunodiagnostics demand is anticipated to have remained healthy, supported by high single-digit growth trends, particularly in the Americas, where underlying customer activity has remained robust. Reproductive health is also expected to continue contributing positively, aided by solid execution in newborn screening and early benefits from strategic partnerships.

However, China Diagnostics is likely to remain a material drag on fourth-quarter results, as the impact of the DRG-driven de-bundling of multiplex testing continues to weigh on volumes. Management indicated that China immunodiagnostics declined more than 20% in the third quarter, a trend expected to persist through year-end before anniversary effects begin to ease in 2026. While these pressures are likely to have tempered segment-level growth and margins in the near term, strong performance across ex-China markets should help partially mitigate the overall impact in the reported quarter.

Our estimate for the Diagnostic segment’s revenues is pegged at $385.5 million, down 1.9% year over year.

Revvity Inc. Price and EPS Surprise

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

Other Factors to Consider

Beyond core segmental trends, several operational and strategic factors discussed in the third-quarter call are likely to have influenced Revvity’s fourth-quarter performance. Software and AI-driven offerings remain an important tailwind, with management highlighting continued commercial traction across multiple platforms, including Signals, Phenologic.AI and Living Image Synergy AI. While growth rates may moderate sequentially, higher absolute software revenues and strong customer retention are expected to support top-line stability and margins in the quarter.

Strategic partnerships are also expected to have contributed incrementally in the fourth quarter. In particular, the Genomics England collaboration, which began contributing in the third quarter, is expected to have witnessed a modest sequential pickup as sequencing activity scales, supporting Diagnostics revenues. Additionally, progress on new assay development through partnerships, including the recently announced Sanofi collaboration in type 1 diabetes screening, reinforces the longer-term growth outlook, even if near-term financial contributions remain limited.

From a financial standpoint, seasonal volume leverage is expected to support fourth-quarter profitability, as management reiterated that the final quarter is typically the company’s strongest margin period. Ongoing cost-containment initiatives, disciplined expense management and productivity gains from internal AI deployment are likely to further underpin margin performance. Meanwhile, continued share repurchase activity, supported by strong free cash flow generation, is expected to remain a favorable earnings lever.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Revvity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +2.09%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present.

Other Stocks Worth a Look

Here are some other medical product stocks worth considering, as these also have the right combination of elements to post earnings beat this reporting cycle.

Masimo MASI has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. The company is set to release fourth-quarter 2025 results on Feb. 26.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.39%. According to the Zacks Consensus Estimate, MASI’s fourth-quarter EPS is expected to decline 20.6% from the year-ago reported figure.

Hologic HOLX has an Earnings ESP of +1.97% and a Zacks Rank #3 at present. The company is set to release first-quarter fiscal 2026 results on Jan. 29.

HOLX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.89%. According to the Zacks Consensus Estimate, HOLX’s fiscal first-quarter EPS is expected to improve 5.8% from the year-ago reported figure.

DexCom DXCM has an Earnings ESP of +4.91% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter 2025 results on Feb. 12.

DXCM’s earnings surpassed estimates in two of the trailing four quarters and missed twice, the average surprise being 0.17%. Per the Zacks Consensus Estimate, DXCM’s fourth-quarter EPS is expected to gain 44.4% from the year-ago reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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