# Revvity (RVTY) Financial Model Free Excel 3-statement financial model and company analysis for Revvity. - Canonical: https://finamodel.com/companies/revvity - Industry: Laboratory Equipment - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/RVTY.xlsx ## Model Purpose This model provides a comprehensive equity valuation and scenario planning tool for an equity research analyst to forecast Revvity's recurring revenue streams, assess margin expansion following its recent portfolio transformation, and determine a fair value per share. ## Company Overview Revvity, Inc. provides health science solutions, technologies, and services that deliver workflows from discovery to development and diagnosis. The company focuses heavily on translational multi-omics technologies, biomarker identification, imaging, and informatics. Business segments include: * **Life Sciences** (approx. 50% of revenue): Provides instruments, reagents, and informatics software (such as the Signals platform) for pharmaceutical and academic research. * **Diagnostics** (approx. 50% of revenue): Provides immunodiagnostics and reproductive health testing, including global newborn screening platforms. Key geographies include North America, Europe, and Asia-Pacific, with China historically representing a material but volatile market for diagnostics. The business model is increasingly asset-light and recurring, driven by high-margin consumables, reagents, and software subscriptions that follow initial instrument placements. Revvity holds a strong competitive position in newborn screening and life science informatics, competing with peers like Thermo Fisher Scientific, Danaher, and Bio-Techne. In early 2023, the company completed a transformational divestiture of its Applied, Food and Enterprise Services businesses to New Mountain Capital, subsequently rebranding the remaining high-growth Life Sciences and Diagnostics company from PerkinElmer to Revvity. ## Revenue Deep Dive ### Life Sciences * **Segment name:** Life Sciences * **Revenue driver formula:** (Installed Instrument Base x Consumables Pull-Through Rate) + (Software Subscribers x Annual Contract Value) * **Historical growth rate:** 2% to 4% organic CAGR. * **Key growth levers and headwinds:** Growth is driven by biopharma R&D spending, adoption of AI-driven informatics (Signals Xynthetica), and demand for multi-omics tools. Headwinds include constrained capital expenditure environments in the biotech sector and high interest rates delaying instrument purchases. * **Pricing dynamics:** Software and consumables have strong pricing power due to high switching costs; instruments face competitive discounting. * **Revenue recognition notes:** Instrument sales are recognised upfront upon delivery. Software and service contracts are recognised over time, creating a deferred revenue balance. * **Seasonality:** The fourth quarter is typically the strongest due to year-end budget flush in academic and biopharma end markets. ### Diagnostics * **Segment name:** Diagnostics * **Revenue driver formula:** Testing Volume x Average Selling Price per Test * **Historical growth rate:** 4% to 7% organic CAGR (excluding pandemic-related volatility). * **Key growth levers and headwinds:** Driven by global birth rates (for reproductive health/newborn screening) and expanding immunodiagnostics menus outside of China. Headwinds include shifting diagnostic testing policies in China and changing birth demographics. * **Pricing dynamics:** Heavily regulated and contractual. Public health tenders and government contracts dictate pricing for newborn screening. * **Revenue recognition notes:** Consumables and test kits are recognised upon shipment. * **Seasonality:** Relatively stable throughout the year, though public health procurement cycles can cause slight lumpiness. ## Cost Structure ### Variable Costs / COGS * COGS includes direct manufacturing labour, raw materials (biological reagents, plastics, electronic components for instruments), freight, logistics, and tariffs. * Gross margin range: 54% to 57% over the last 3 years. * Key input costs include specialized biological materials and global shipping rates. * COGS scales with operating leverage. As the mix shifts toward software and consumables, gross margins naturally expand due to the low marginal cost of software delivery. ### Operating Expenses * **R&D:** Typically 7% to 8% of revenue. Covers development of new assays, instrument engineering, and software platform enhancements. * **SG&A:** Includes global sales force commissions, marketing, and corporate overhead. * **Depreciation & Amortisation:** Extremely high as a percentage of revenue due to the amortisation of acquired intangible assets from historical M&A. * **Stock-Based Compensation:** Material expense used to retain top scientific and engineering talent. * **Restructuring / one-time charges:** Frequent in recent years due to the 2023 portfolio transformation, rebranding, and facility consolidations. ### Margin Profile * Gross margin: 54% to 57%. * Adjusted EBITDA margin: 28% to 30%. * Adjusted operating margin: 27% to 28% (Life Sciences typically runs higher at ~32%, while Diagnostics runs at ~24%). * Net margin (GAAP): Depressed (8% to 12%) due to heavy non-cash amortisation charges. * Margin trend is stable to expanding, driven by product mix shifting away from lower-margin instruments toward high-margin software and reagents. ## Balance Sheet Structure * Total assets are approximately $12.2 billion. * Key asset categories are heavily weighted toward Goodwill and Net Intangible Assets (approximately $9.1 billion combined), reflecting the company's history of serial acquisitions. * Working capital profile: * Days Sales Outstanding (DSO): 55 to 65 days. * Days Inventory Outstanding (DIO): 70 to 85 days (high inventory needed for biological reagents and instrument parts). * Days Payable Outstanding (DPO): 45 to 55 days. * Net working capital is typically positive, requiring cash absorption to fund organic growth. * PP&E is relatively light (asset-light model), consisting of specialised manufacturing facilities and laboratory space. * Right-of-use assets are material but standard for global facility leases. ## Capital Expenditure & Investment * Capex as a % of revenue: 2.5% to 3.5% (approximately $75 million to $90 million annually). * Maintenance capex represents the majority, with growth capex directed toward software development and automated manufacturing lines. * Capitalised software costs are material given the growth of the informatics business. * M&A pattern: Historically a highly acquisitive company (bolt-on and transformational), though currently focused on integrating past acquisitions and executing share repurchases. ## Debt & Capital Structure * Total debt is approximately $3.2 billion. * Net debt to Adjusted EBITDA ratio is currently around 2.7x. * Key debt instruments include senior unsecured notes and a revolving credit facility. * Maturity profile: Average maturity is approximately 6 years. * Interest rate profile: Debt is entirely fixed rate with a weighted average interest rate of approximately 2.6%. * Share repurchase programme: Highly active. The company repurchased over $800 million in shares in 2025, reducing the share count by 8.5 million shares. * Dividend policy: The company pays a modest quarterly dividend (yield typically below 0.5%), prioritising buybacks and M&A over dividend growth. ## Cash Flow Characteristics * Operating cash flow conversion is excellent, typically exceeding 100% of GAAP net income due to massive non-cash amortisation add-backs. * Free cash flow margin is strong, generating over $500 million annually (approx. 18% FCF margin). * Major non-cash items bridging net income to OCF include amortisation of acquired intangibles, depreciation, and stock-based compensation. * Working capital is a moderate use of cash during periods of high revenue growth. * Capex intensity is very low, allowing for high free cash flow conversion (FCF is typically 85% to 90% of adjusted net income). * Cash tax rate is generally lower than the statutory rate due to R&D tax credits and geographic mix. ## Sheet Structure 1. **Summary**: Dashboard of key metrics, target price, implied valuation multiples, and a 5-year financial summary. 2. **Assumptions**: Hardcoded inputs for macroeconomic drivers, segment growth rates, margin targets, and capital allocation plans. 3. **Revenue Build**: Segment-level forecast for Life Sciences and Diagnostics, broken down by volume and pricing assumptions where applicable. 4. **Income Statement**: GAAP income statement mirroring the 10-K, with a clear bridge to Non-GAAP (Adjusted) Operating Income and Adjusted EPS. 5. **Balance Sheet**: Standard asset, liability, and equity line items, highlighting the massive $9.1 billion intangible asset base. 6. **Cash Flow Statement**: Indirect method starting from GAAP net income, adding back D&A and stock-based compensation, and tracking working capital changes. 7. **Working Capital**: Schedules for Accounts Receivable, Inventory, and Accounts Payable driven by DSO, DIO, and DPO. 8. **Debt & Interest**: Tranche-by-tranche debt schedule, tracking fixed-rate notes, interest expense, and maturities. 9. **PP&E & Intangibles**: Waterfall schedules for capital expenditures, depreciation, and the heavy amortisation of acquired intangibles. 10. **Shareholders Equity**: Retained earnings roll-forward, dividend payouts, and the active share repurchase programme. 11. **DCF Valuation**: Unlevered free cash flow build, WACC calculation, terminal value, and implied share price. ## Key Financial Relationships 1. Life Sciences Revenue = Prior Year Life Sciences Revenue x (1 + Life Sciences Organic Growth Rate + FX Impact) 2. Diagnostics Revenue = Prior Year Diagnostics Revenue x (1 + Diagnostics Organic Growth Rate + FX Impact) 3. Total Revenue = Life Sciences Revenue + Diagnostics Revenue 4. Adjusted Gross Profit = Total Revenue - Cost of Revenue + Amortisation of Acquired Intangibles in COGS 5. Adjusted Operating Income = Adjusted Gross Profit - Adjusted SG&A - R&D 6. Life Sciences Segment Margin = Life Sciences Adjusted Operating Income / Life Sciences Revenue 7. Diagnostics Segment Margin = Diagnostics Adjusted Operating Income / Diagnostics Revenue 8. GAAP Net Income = Adjusted Operating Income - Amortisation of Intangibles - Restructuring Costs - Net Interest Expense - Taxes 9. Free Cash Flow = Cash from Operations - Capital Expenditures 10. Ending Share Count = Beginning Share Count - (Share Repurchase Amount / Average Share Price) 11. Adjusted EPS = (Adjusted Operating Income - Net Interest Expense - Adjusted Taxes) / Ending Share Count 12. Net Debt = Total Short-Term Debt + Total Long-Term Debt - Cash and Cash Equivalents ## Cross-Sheet Dependencies * The **Assumptions** sheet dictates the growth and margin profiles on the **Revenue Build** and **Income Statement**. * The **Income Statement** generates GAAP Net Income, which is the starting point for the **Cash Flow Statement**. * The **Working Capital** sheet calculates changes in operating assets and liabilities, feeding directly into the operating section of the **Cash Flow Statement**. * The **PP&E & Intangibles** sheet calculates depreciation and amortisation, feeding both the **Income Statement** (as expenses) and the **Cash Flow Statement** (as non-cash add-backs). * The **Debt & Interest** sheet calculates interest expense for the **Income Statement** and ending debt balances for the **Balance Sheet**. * The **Cash Flow Statement** determines the ending cash balance, which flows to the **Balance Sheet** and prevents circularity by using prior-period cash balances for interest income calculations. ## Sign Convention * Revenue and income items are positive. * Expenses (COGS, SG&A, R&D, Interest Expense) are positive inputs in their specific schedules but subtracted in total profit formulas. * On the Cash Flow Statement, sources of cash (e.g., net income, depreciation, increases in payables) are positive. Uses of cash (e.g., capex, increases in receivables, debt repayments, share repurchases) are negative. * Assets, Liabilities, and Equity balances are positive. ## Things Most Likely to Go Wrong * Failing to bridge GAAP to Non-GAAP earnings. Revvity has $9.1 billion in intangibles; amortisation crushes GAAP EPS. The model must explicitly forecast and add back amortisation to calculate the Adjusted EPS that the market actually trades on. * Ignoring the 2023 divestiture. Historical data prior to 2023 includes the Applied, Food and Enterprise Services businesses. The model must use 2024 and 2025 as the clean baseline for the "New Revvity" portfolio. * Mismodelling the share count. Revvity is aggressively buying back stock (over $800 million in 2025). The model must dynamically reduce the share count to accurately forecast EPS growth. * Underestimating the impact of foreign exchange. With global operations, FX can swing reported revenue by 1% to 2% annually. * Misunderstanding the Diagnostics margin profile. Tariffs and China policy changes have compressed Diagnostics margins to ~24%, while Life Sciences operates at ~32%. Segment mix shifts will materially impact consolidated margins. * Overestimating capital expenditures. This is an asset-light business; capex should not exceed 3% to 4% of revenue. * Miscalculating the tax rate. The GAAP tax rate is highly volatile due to one-time items; the model must use the management-guided Adjusted Tax Rate of approximately 18%. ## Validation Checks * Total Assets must equal Total Liabilities plus Shareholders Equity in every forecasted period. * Adjusted Gross Margin should remain in the 54% to 57% range based on historical performance. * Capex as a percentage of revenue should not exceed 3.5%. * Free Cash Flow conversion (FCF / Adjusted Net Income) should consistently track between 80% and 90%. * Net Debt to Adjusted EBITDA should remain below 3.0x, aligning with the company's current 2.7x leverage and fixed-rate debt profile. * Adjusted Operating Margin should consolidate to approximately 27% to 28%, reflecting the weighted average of the two segments. * The effective adjusted tax rate should be hardcoded near 18% per 2026 management guidance. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Life Sciences Organic Revenue Growth | 2.5 | % | Midpoint of 2026 management guidance and recent historical trends. | | Diagnostics Organic Revenue Growth | 4.5 | % | Reflects steady newborn screening demand and immunodiagnostics growth outside China. | | FX Revenue Impact | 1.0 | % | Assumed modest tailwind based on recent 2025 reporting. | | Adjusted Gross Margin | 55.5 | % | Aligns with 2024/2025 actuals, balancing software growth against tariff headwinds. | | R&D as % of Revenue | 7.5 | % | Historical average required to maintain innovation in informatics and assays. | | Life Sciences Adjusted Op Margin | 32.0 | % | Matches full-year 2025 actual segment performance. | | Diagnostics Adjusted Op Margin | 24.2 | % | Matches full-year 2025 actual segment performance. | | Capex as % of Revenue | 3.0 | % | Reflects the asset-light nature of the post-divestiture business model. | | Adjusted Effective Tax Rate | 18.0 | % | Explicit management guidance for 2026. | | Net Interest Expense | 95.0 | $ Millions | Explicit management guidance for 2026 based on 2.6% fixed-rate debt. | | Annual Share Repurchases | 500.0 | $ Millions | Conservative assumption following the $800M repurchased in 2025. | | Diluted Share Count (Base) | 112.0 | Millions | Explicit management guidance for 2026 average diluted shares. | | WACC | 8.5 | % | Standard discount rate for a large-cap, stable healthcare equipment provider. | | Terminal Growth Rate | 2.5 | % | Aligns with long-term global healthcare spending and GDP growth. | ## Data Sources & Benchmarks * **SEC Filings:** Revvity Investor Relations page and SEC EDGAR (10-K, 10-Q, 8-K earnings releases). * **Key Peers:** Thermo Fisher Scientific (TMO), Danaher (DHR), Bio-Techne (TECH), and Agilent Technologies (A). * **Industry Data:** IQVIA for biopharma R&D spending trends; global birth rate statistics for the reproductive health segment. * **Consensus Estimates:** Bloomberg or FactSet for forward-looking analyst estimates on Adjusted EPS and segment revenues. ## Sources * Revvity Q4 and Full Year 2025 Earnings Release (February 2, 2026) * Revvity 2025 Annual Report (Form 10-K) * Revvity Investor Relations Presentations (2025/2026) * Macrotrends: Revvity Gross Margin History (https://www.macrotrends.net) * Simply Wall St: Revvity Balance Sheet and Financial Health Metrics * Fiscal.ai: Revvity Capital Expenditure and Asset Data --- ## Frequently asked questions ### What does Revvity, Inc. do and what are its main business segments? Revvity, Inc. provides health science solutions, technologies, and services, focusing on workflows from discovery to diagnosis. The company operates through two main segments: Life Sciences and Diagnostics, each contributing approximately 50% of its revenue. ### How does Revvity generate revenue, and what is its core business model? Revvity generates revenue through an increasingly asset-light and recurring business model, driven by high-margin consumables, reagents, and software subscriptions. These recurring streams follow initial instrument placements in both its Life Sciences and Diagnostics segments. ### What is a key revenue growth assumption used in the Revvity financial model? A key revenue growth assumption in the financial model is approximately -1.17% for the forecast horizon. This reflects the company's recent portfolio transformation and strategic adjustments. ### What is Revvity's capital expenditure strategy, and how is it reflected in the financial model? Revvity's capital expenditure strategy is asset-light, with Capex as a percentage of revenue typically ranging from 2.5% to 3.5%. The financial model reflects this with a Capex_Pct_Revenue assumption of approximately 2.57%, primarily covering maintenance and growth in software development. ### What is the primary purpose of the Revvity financial model for analysts? The primary purpose of the Revvity financial model is to serve as a comprehensive equity valuation and scenario planning tool for equity research analysts. It helps forecast recurring revenue streams, assess margin expansion post-transformation, and determine a fair value per share. ### Can I download an Excel financial model for Revvity, and what forecast period does it cover? Yes, an Excel financial model for Revvity is available for download, providing a comprehensive tool for analysis. This model covers a forecast horizon from FY2026 through FY2030, allowing for long-term projections. 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