At the end of April. And I think the way I would look back is, you know, from a company performance perspective, you know, I think we did better than expected, both on the, you know, revenue and cost and margin. I think from an overall market perspective, as we had shared, you know, we continued to see stabilization in the market environment, but, by no means, you know, we saw any great uptick. So I would say that, you know, from where Q3 ended in 2023, you know, those were two quarters of continued stabilization that we observed. But I think that's where if you look at from a performance perspective, that's where our portfolio differentiation started showing up, and I think we'll see that subsequently towards the year.
Got it. Yeah, maybe that's a good segue. I wanna kind of stay high level. Now, it's been some time since the transition from PerkinElmer to Revvity. How is this transformation kind of away from, you know, a heavier instrument mix towards more recurring revenue? How has that made your business more defensible amid this sort of dynamic macro environment? And maybe reflect back on some of the changes that have taken place at the company. And, and I think that given the, given the tougher macro environment, I think we were expecting to see that higher level of recurring revenue and sort of defensiveness come through.
Yeah, it's a great question. I mean, if you look at it, you know, where we started on, on our portfolio transformation journey, over the past, you know, for three-five years, we've sort of totally transformed the portfolio. I mean, imagine what, you know, the impact of that, that we are seeing now is in terms of, you know, the numbers. If you look at our performance in 2023 or what we've guided to in 2024, I mean, imagine what that would have been if we had our old port- old portfolio today. And then I think you see that in terms of the organic growth in our performance versus our peers.
The fact of the matter is, what we focused is how we can evolve our portfolio to one, where it was much more focused around recurring revenue, much more focused around pharma biotech. And I think we've accomplished that with, you know, 80% of our revenue coming from, you know, a recurring basis. And I think the impact of that will continue to show not just in our top line differentiation, but more importantly in our margin profile, where, you know, already off the gate, we were, you know, in the top quartile in our industry. But as we continue to see the benefit and the leverage that we see from the collaborative internal synergies that we are continue to see the impact of once we cont...
As the integration continues, you know, having a profile of top-line growth, 200 basis points above market and, you know, and our margin in the mid-30s% will make us in a category of one.
Just given your experience in the industry, it'd be great to get your perspective on sort of the recent downturn that we've seen in the industry and what you see as potential structural changes versus purely cyclical in terms of end market demand and customer behavior.
Yeah, I mean, you know, we have talked about this, but really, if you just look at it from our perspective, what we see is not really a structural change, and we don't foresee a structural change coming in the market. What we do see is there was a lot of buying that happened during the pandemic, and I don't think that impact of that is not fully absorbed. You know, obviously, there were other factors that have played, you know, cost of capital, the economy, the market, interest rates, and those have impacted. More importantly for us from a company perspective, you know, we operate majority of our businesses at the top end of the funnel, you know, which is around innovation, preclinical research and development on the life sciences side. And that, you know, has to happen. Innovation has to continue.
So I think from our-- you know, we see it more cyclical in nature rather than a structural change. You know, and at the same time, you know, 50%, roughly 50% of our business is on the diagnostic side, on specialty diagnostic, and that acts as a very strong moat in market environments such as these.
Got it. Maybe kind of walk us through any of the trends that you're seeing so far in the second quarter, or are things kind of trending in line with your expectations and how are you seeing things now?
Yeah, and obviously, I'm not gonna give intra-quarter guidance-
You're right.
... but, you know, it's worth the try. I, I think the way I would, you know, go back to what we said at the end of April in our Q1 call, you know, what we do see is continued stabilization in the market, but by no means are we, you know, pointing out to any significant uptick, in our customer buying pattern or behavior.
Got it. Maybe pivoting towards an area that's not necessarily new, but sort of reinvestment in it, and you've talked more about it, is the Software Signals business.
Yeah.
Particularly around the SaaS-only model that was highlighted to kind of give the company more long-term certainty around revenue contributions. Maybe talk a little bit about what that business represents today, to contextualize it, and then how you see sort of growth and margins and how it contributes to the overall group going forward.
Yeah, I mean, you know, it's one of our most underappreciated assets in the company. You know, we have a $200 million software business. We are in 48 or 49 of the top pharma biotechs in every one of those companies. I think the beauty of the portfolio is that it's not just whether it's a SaaS or on-prem. You know, it is ingrained, and you know, and the way to think of it, it is an ERP for scientists. You know, it's literally like an ERP system for scientists, where, you know, whether it's from molecular modeling, drawing, electronic lab notebooks, analytical capabilities, it is ingrained, and it is independent of any instrumentation. So it is not dependent on ours, on any one, on any other instruments. So it essentially becomes the fabric of a lab.
I think the beauty of that portfolio is that even now, you know, while we are limited to preclinical research and development, there are a lot of opportunities for us to grow that both horizontally and vertically as we move forward into clinical, you know, with the launch of Signals Clinical and Signals Synergy that we just announced a couple of months ago. You know, SaaS obviously is an important aspect to it, and I think one-third of our portfolio and revenue comes now from the SaaS side, and it will continue to grow. But on-prem is equally important, you know, in many labs. And then I think, you know, as SaaS continues to become a larger component of that portfolio, the reliability and the and the assurance of revenue stream continues.
But most of these tend to be multiyear contracts, even on the on-prem side. So yeah, it is, again, as I said earlier, one of our most underappreciated assets, in our portfolio, but one that we have a lot of promise and growth that will, it'll continue to generate.
Got it. Last quarter, you noted that pharma biotech budgets were finalized kind of slightly later than usual, which led to a slower start to the year. Now that we have more of a line of sight to the budget release, have you seen sort of a positive momentum in conversations aligned with your commentary around sort of March, April, showing improvement? Maybe just an update on that.
Yeah, I mean, I think the way I would look at it, as I said earlier, Matt, you know, there is stability, and I think for us, that's a sign of positivity that the market has stabilized. What you know, and this is what I pointed out during, you know, on the earnings call, is typically you see budgets getting approved in November, December timeframe, and this time it was more December, January, or late January timeframe. So it was more around those programs ongoing, you know, and on a continuum on the path of growth of functioning and operationalization. What we've not seen is a significant uptick nor a downtick. So I think what I would take it, as I said during the end of April, is continued stability in the market.
Got it. If we kind of look geographically, Americas represents about 44% of revenue, EMEA is 27%, APAC, 29%. In the medium to long term, from a region perspective, where do you see opportunities for future growth? There's clearly a lot of focus on China.
Yeah.
A lot of your focus in China is diagnostics. It's slightly different than some of the concerns that we have in the market. But maybe as you think about the business regionally and you think about sort of future capital allocation, how are you thinking about that?
Yeah, I mean, I think, look, all markets are growth areas for us. I mean, let's start on the U.S. side, right? I mean, outside of the pharma biotech, our autoimmune portfolio is still got a lot of traction in the marketplace and still a lot of growth opportunities for us in the U.S. I mean, it is. As I say, our penetration in the U.S. is still in its nascency with our autoimmune portfolio. You know, and outside of that, if you go in, even in China, that you used as an example, you know, while it is 17% of our revenue, you know, 10% of it comes from immunodiagnostics and newborn screening. So it's a very different profile compared to our peer group, and there is still opportunities for growth.
In terms of EMEA and outside of China and U.S., you know, newborn screening, it is very much underpenetrated as a market. So geographical expansion there, you know, will continue to gain traction, whether it's in Indonesia or India or some of the other markets. So I think the portfolio that we have, whether it's on the diagnostic side, more specifically, if you look at it, right, whether it's on autoimmune disease or newborn screening, we're still underpenetrated, not in terms of our share, but in terms of market growth. And there's still a lot of market growth opportunities for those before they reach, you know, any point of sort of maturity. So the portfolio that we have on the diagnostic side gives us that growth opportunity geographically, variably.
On the life sciences side, you know, again, China, you know, with 7% of our revenue, 50%, 50%+ percent of it is on the reagent side. But, you know, if there was any stimulus to come, none of that is assumed into our, into our guidance. So that gives us an opportunity for growth. And the reagent portfolio, you know, I think it will continue to have high sustained growth once the market normalizes.
Got it. If we just turn to financials for a minute, your operating margin in Q1 came in above expectations in the quarter. You maintain your full year operating margin guide of 28%. Can you kind of walk us through your expectations of phasing of margin? I think that there was some, you know, in the beginning, in Q4, there was some concern about that, that margin ramp, but given what you did in Q1, it kind of de-risked that a little bit. But maybe just talk about sort of margin uplift, just given the transformation you've done in the business, and you said it earlier, I think margins is where you really see some of this transformation. So maybe talk about that phasing for the year, some of the drivers of that operating margin expansion.
Yeah. I mean, you know, number one, obviously, is that we started seeing the impact of the cost cutting and the cost, you know, rationalization that we had done in 4Q and early Q1 to start showing its impact. You know, and, and, and again, you know, some of the variable expenses will come back in terms of merit and comp, et cetera, but overall, we will continue to see a sustained effort and the impact of all the cost rationalization that has been done. Plus, you know, with all the acquisitions that have gone, you know, gone through, there is still several synergistic opportunities that we've not fully leveraged and will be continued to do so, and we will see the impact of that.
So as, you know, as we've said, we expect our margins to be in the 28% range, and we, you know, we will continue to... I think we've set for Q2 and Q3 to be just under 28%, and Q4, obviously, with the volume leverage, we'll see in the 30.
Got it. And just staying on margins, life sciences and the instrument side were down mid-teens in the quarter, with applied genomics instruments down sort of mid-20s. Can you maybe talk us through the expected impact on margins as instruments start to come back, particularly in the second half of 2024, and maybe some of the incremental margin benefit that you could get from that?
I mean, again, it goes back to the point made earlier. You know, obviously, volume has a big impact-
Yeah, yeah
... right, on cost and leverage. And if we are able to deliver 28% margin with that, you know, with that pressure that we have on the top line, and then just an assumption, you know, as the volume comes back up, you know, that's why we have, you know, confidence in coming out and saying that we expect our margins to be in the mid-30s% over the next few years. And that's where the impact will start showing up. Once the volume leverage comes back, it'll have a big impact on our, on our margin.
Got it. Last quarter, you guys maintained the assumption of China to be roughly flat for the full year of 2024. Now that we have sort of more line of sight in the anticipated stimulus program in the region, maybe talk a little bit more about the expected impact of the business and whether this is sort of a late Q4 2024 dynamic or maybe 2025. I mean, the way we kind of think about it, it's, it's a lending program.
Mm-hmm.
The transmission mechanism might be a little bit more delayed than what these stimulus programs used to be. It's a three-year program, which doesn't necessarily create a massive sense of urgency to get that done. But maybe what are your expectations for stimulus impact from China?
Yeah, I think the number one thing is, in our guidance, we've not assumed any stimulus. So let's start there.
Got it.
If anything does come through, that'll be upside.
Okay.
And then I think the way we think. You know, as I've shared earlier, you know, we continue to have good conversations, and there is a lot—you know, there is quite a bit of discussions, but I would not say anything that has come through or, you know, you've started seeing, you know, a significant uptick in orders coming from the stimulus program. And I think the timing, you know, giving a sense of timing and when that would be happen, would be speculation at this point of time. You know, it could be Q3, Q4, Q1, you know, somewhere. But I think what is more important to, you know, just sort of appreciate, in, in our current guidance, which is, you know, quite differentiated from our peer group, we have not assumed any stimulus.
Got it. Okay. Instruments came in slightly better than expected in the quarter, which was down sort of mid-teens versus expectations of down mid-twenties, which was a positive development, just given the environment. But maybe could you walk us through what you're hearing from customers in terms of willingness to purchase CapEx-intensive instruments and sort of your expectations for the rest of the year? I mean, I think, from a sub-segment standpoint, there still is a lot of debate as to the sort of slope of recovery and timing of recovery of instruments, and so kind of any color you can share on that would be helpful.
It's a good question. I mean, it did come, it did come in better than expected, but I think, you know, Matt, again, we have to go back and look at what is- what instruments do we sell-
Yeah
... right? And how, you know, does it make an impact? On the in vivo side, you know, we totally refurbished and revamped our NPI portfolio there and launched it, you know, towards the end of last year. You know, we are seeing quite a good lot of discussions around that from academia and folks that depend on research grants. You know, the big CapEx items on the life sciences instrument side, overall, you know, we see the same profile that we have seen in the first quarter and the fourth quarter. I.e., there's a lot of discussions happening. People are still, you know, on the big CapEx item. There's still discussions, but not, you know, big execution. And neither have we assumed any of that in our guidance.
So, I mean, our expectation, and that's why I think what we've done, you know, sort of better performance than what we anticipated, is just based on the fact that, you know, anything that comes through will be upside. That's our assumption. That's our grounding hypothesis and our guidance.
Got it. Kind of similar question, just more on the reagent-
Yeah
... consumable side. You know, they were down high single digit range for the first quarter. Expectations of sort of mid-single digit growth for full year 2025. But how much kind of, your expected growth is sort of comp driven versus an underlying improvement in lab activity? I know you guys have taken a conservative approach.
Yeah.
We've talked about stabilization-
Yeah, yeah
... not assuming stimulus and things like that, but for the reagent side, what are your sort of underlying year assumptions?
I mean, quite a bit of it is comp driven, as you-
Yeah
... pointed out. I mean, we've you know, we expect marginal absolute dollar increase in Q2 and Q3. But you know, again, we've not assumed any big uptick at this point.
Okay. Maybe shift to immunodiagnostics.
Yeah.
Particularly throughout the U.S., is kind of where you have grown your exposure, 15% of ImmunoDx revenue versus sort of 5%-
Yeah
... five years ago, with a goal to get to forty. Can you talk a little bit about Revvity's kind of go-to-market strategy, increasing U.S. immunodiagnostics-
Yeah
... and the revenue mix, and sort of what are some of the obstacles that you're trying to overcome? What's the competitive landscape look like? How are you positioned to gain share in that market?
Yeah. Let me talk about the obstacles first.
Yeah.
You know, it's just essentially time, resources, and regulatory timelines. You know, we just need to get stuff in front of the regulatory bodies fast enough to get approval. I think the opportunity where it comes on the autoimmune side of it, you know, what the business has done a really good job is using indirect immunofluorescence to screen autoantibodies. I mean, they have the best portfolio for that in the industry. Now, if you combine that with their, you know, fastest in the industry microscopic imaging capabilities, for which they use, you know, a proprietary AI patterns that they have for, you know, imaging patterns, they really are the best in class in the industry for that. Now, if you combine that with the middleware that they use, which is... they call ELO 3.0.
You know, essentially what it does, it is a very good middleware, sort of for the assay recognition, assay development, and linking it back to the lab information systems in large big labs. So whether it is for a small rheumatology practice where they have manual solutions or for the big reference laboratories, you know, that they have fully automated solution using, you know, immunofluorescence, Western blot and ELISA. You know, the total solution capabilities that EUROIMMUN brings to the portfolio is really what is been their success factor and the market position that they hold and command in autoimmune testing. And then I think it is still at its very early stages in the U.S.
Got it. Just staying on diagnostics, you guys have a pretty comprehensive suite of neurology-focused offerings that don't really get talked about very much. Now with the advent of sort of Alzheimer's disease-altering therapies and the opportunities there, how do you see your neurology offerings evolving, and what do you think about that market?
Yeah. And again, it is probably one of our most under-talked about portfolio offerings, you know, like the software solution. You know, the especially on the autoimmune neurological, you know, diseases, they can be very debilitating, if not fatal. And this is where our, you know, EUROIMMUN business has done a really good job working with KOLs and clinicians for the last decade, where they have such a good IP profile around autoimmune neurological disease testing, and then building it out again, you know, ring-fencing it with a software solution that they bring to the portfolio. And I think it is still in its very early stages in terms of what you will see us coming out with offerings on the neurology side.
Got it. On TB testing-
Yeah.
With the acquisition of Oxford Immunotec , you were able to participate in that market. You recently added some pretty significant automation.
Yeah
... to that test. Maybe talk a little bit about sort of how you're looking to attack that market. It's still about 60% skin test versus blood. There's another competitor that's been in the market for a while. But just maybe talk about sort of what do you think that increased automation will allow for in terms of the competitive positioning for your test, and how do you see that market evolving?
Yeah, I think, you know, while we've had good presence in China and Japan, as an example, in the Asian marketplace, we are still quite under-penetrated in the U.S. And one of the challenges for it was automation. You know, ours was a much more manual based test. I think with the recent advent of what you talked about, of the launches that we have brought to fore in the U.S., it'll, you know, despite the skin testing, even in the latent TB testing, there's a good opportunity for us to, you know, start gaining share. And I think with the launch of the AP2400, it will give us, you know, similar, if not better, you know, time frame for the testing and automation that would be required. And it already is a much more sensitive test compared to the competition.
So we feel very good about being able to gain share, even in the latent TB testing. I think outside of that, you know, overall, if you look at it, the next three to five years down the road, you know, having a direct blood test for active TB is going to... which is much more sensitive and specific than a skin test, is in, I would say, the Holy Grail.
Got it. I want to go back to something we were talking about earlier. And just given your involvement in sort of the R&D side of things, particularly in the life sciences-
Mm-hmm
... segment, there's a lot of debate as to large pharma R&D spend, not just sort of the second half, but just sort of going forward. They've got a patent cliff that they're facing. There's been a lot of cost-cutting programs that have been announced. We talked earlier about structural versus cyclical. You're certainly in the cyclical camp as, as we are as well. But I'd just love to kind of, given your view into those budgets over the long term, how are you thinking about large pharma over the next couple of years in terms of spending? Innovation will continue. IRA has caused a bit of a-
Mm-hmm
... sort of rationalization shift in that. How are you thinking about R&D budgets, and how are you thinking about the positioning of Revvity to gain exposure to whatever change that might be in those R&D budgets?
I mean, Matt, the answer was, a lot of the elements of the response was in your question.
Sorry.
You know, if you think about it, right? I think, you know, what we are saying is a consolidation cycle that is happening, and it'll happen temporarily till things get back to, quote-unquote, "what normal is." But the benefit of our portfolio is, as I keep saying, is we are at the wide end of the mouth of the funnel. You know, whether it is the impact of cost or consolidation or other aspects, you know, as AI is one that is mentioned. At the end of the day, you have to continue to identify target candidates, and for that, you will need reagents. You will need software to be able to do the analysis of candidates that you bring to the table, and that is why our focus has been laser... You know, we have been laser-focused around the top end of the funnel.
You know, while whether that results in optimization of two targets going to clinical versus three in the past, that might have an impact. But I strongly believe that at the top end of the funnel, innovation, you know, cannot stop because that is the basis of existence for pharma biotech, and I think that will continue.
It's interesting, too, because you're also targeting products like the software piece that creates a stickiness-
Yeah
... once you get them into the funnel, and so you're capturing the customer throughout that R&D journey.
Correct.
Are there any gaps in the portfolio that you see where a customer might have to step out and use another service provider that you feel like could be additive to the business?
I think there were two, you know, two, two elements that we've pointed out around what we needed to, accomplish. One was on the GMP capabilities.
Yep.
You know, we've made quite a good amount of investment on that, and, you know, hopefully you guys will be able to see that in San Diego in November.
Mm.
And that'll continue the stickiness of that as it moves down to the clinical. And the second one is even on the software side, right? Primarily, our focus was on the preclinical side of it. And now, you know, with the launch of, you know, a couple of products and modules that, you know, we've announced earlier and more to come, we want to continue to have that stickiness as the journey of the compound goes from, you know, discovery to IND and beyond, and be part of that portfolio. 'Cause customers, anyone, researchers are continuing to want to look for that analytical capability, even as it moves down into the clinical side of the domain.
Got it. Just going back to margins for a second. You said in the past year, you guys were targeting mid-thirties operation, which you've spoken about. Can we talk through the split between gross margins and OpEx leverage, and how you kind of plan on driving expansion in the medium to long term?
Yeah, I think, you know, as we've said, you know, we expect 75 basis points of margin expansion. And, you know, and 25 basis points or one third of it should come from gross margin. But I would say 50% of that, you should expect to come from the SG&A side of it. There is still a lot of leverage that we have to be able to pull. So sort of that would be the split that you would see between gross margin and SG&A.
Okay. M&A, it feels funny to talk about M&A, just given all the activity that you guys have been doing over the past couple of years. But as sort of the delevering continues, and as you start thinking about areas that you want to focus on, maybe just give us a sense of how you're thinking about M&A as part of the longer term strategy. Given all that you've already done to transform the company, what areas do you feel like you still need to maybe, you know, invest in inorganically?
Yeah, I mean, you know, the funny thing is that it's been 20 months since we've last done an M&A.
Yeah.
But, you know, look, we feel very good with the portfolio that we have right now. You know, this has taken a lot of effort, and it's been a pretty, you know, active journey for us to transform the portfolio by, you know, the 10, 12 acquisitions we've done. We've divested a third of the company and the brand name along with it. So there's a lot that has gone through, and I think the portfolio that we have put together has taken a lot of thought process and, you know, building that out so that it has the differentiated profile it does. We don't foresee us seeing, you know...
You know, we continue to be looking, and we continue to be active, but I don't think that, you know, whether it's from a valuation perspective or, or relative valuation perspective, we feel compelled to do any M&A in the short term. I mean, if we were to look at, you know, from an M&A perspective, it would be more technology acquisitions-
Mm
... that would help to enhance what we have, but nothing significant. We, it's something you would expect from us.
And just on one of the larger acquisitions, BioLegend, clearly your Investor Day in November will have-
Yeah
some focus on that, so don't want to say front run that. But, at the same time, the competitive landscape has changed a little bit with one of your peers acquiring Abcam. Maybe just talk about how you see BioLegend today, given that sort of changes in the competitive landscape, and where the differentiation is, and, and do you continue to see that sort of high single or double-digit growth that you kind of talked about earlier on when you acquired it?
Yeah. You know, Matt, BioLegend has a very different profile than what, you know, the other company was. And then, I think, you know, if you recall, when we announced the BioLegend acquisition, we talked about the fact that, you know, what its growth rate was, what its EBITDA margin was compared to the other company. But I think more importantly is the product portfolio of BioLegend. You know, 90% plus of products are homegrown or homemade. You know, it is not a sort of store, you know, of third-party products. Secondly, you know, now portfolios flow. The fastest growing place where it now in the genomics and single cell cytokines, which is growing much faster. So there's a lot of growth trajectory. GMP capability was one that they were lacking, which I talked about earlier.
That provides another tool in its box for it to continue to have the growth profile it has shown. So I think, you know, there are a lot of elements in BioLegend, which have still not fully been capitalized and provide opportunities for sustained growth over a period of time.
Got it. Just going back to China for one minute. On the diagnostics side, you've talked publicly about sort of the impact of the VBP and where it may or may not impact you. There was obviously some friction around anti-corruption at the end of last year that seems to have kind of passed. Can you maybe talk about the diagnostic environment in China today, given VBP and how Revvity is positioned in that area?
Yeah. I mean, look, and then we talked about this, but the way to think of it is, right, you know, our diagnostics business in China is essentially immunodiagnostics-
Yep
- and reproductive health. Newborn screening has been there for, you know, 2+ decades, and it has continued to do well. I think the impact for us in China is more from birth rate -
Yeah, I know.
... than from VBP or anti-corruption. And even on the autoimmune side of it, you know, it's such a small piece from country perspective, right? Autoimmune is a specialized niche market and, you know, and we've assumed low single-digit price declines in that portfolio, and we've seen that. So, you know, VBP doesn't need to come as a major surgery. It can come-
Yeah
... continue to come as minor cuts, and, you know, we've assumed that into our growth profile.... It has pretty much played out the way we've seen so far.
Got it. Got it. Just on the reproductive health, on the birthrate-
Yeah.
You and I have talked about that in the past, and it's sort of a demographic shift that's very hard to combat. But also the newborn screening also gives you potentially entree into rare disease-
Yeah
and other areas. So maybe talk about the importance of having that newborn screening, despite the birth rate, that's very difficult to change or impact. Maybe talk about how that could then translate into the rare disease market as well.
I mean, think about the fact that despite the birth rate pressure, I think newborn screening grew 10% for us. I'm looking at Steve, if I said the number right. You know, so newborn screening for us grew 10%, and that shows the power of our portfolio there. You know, I mean, there are key rare disease therapies that are coming out. Impact and the power of the newborn screening portfolio plays a role. You know, to be able to screen, you know, newborns for these rare diseases at birth, and with the ability of having FDA-approved assays, and the same, you know, whether it's CE-IVD or NMPA-approved assays, marketplace, gives us a significant edge in that. Despite the fact that there is pressure on rates, there are still a 100 million newborns perspective.
You know, I think, you know, we feel very good about the fact that we screen nearly 40 million newborns, but we still feel very, you know, pressured by the fact that there are 100 million newborns not being screened. I mean, in fact, as I just mentioned to you, I mean, after the conference, I'm headed to Turku in Finland, where we hold a World Newborn Screening Conference every other year, where we bring in some of the top KOLs from around the world who talk about what is the next phase, what's the next pipeline of newborns, of rare diseases that we focus on? And that sort of, working with KOLs from around the world helps us build not only a continued new portfolio around rare disease testing, presence in markets where, you know, newborns are not tested, whether it's...
You know, you take India, there are still 20+ million babies who are not tested. Indonesia, Africa, there are still a lot of frontiers where we don't have any presence.
Got it. Just to wrap up, what do you feel is the most misunderstood part of the Revvity story, and what would you want to get across to investors just about Revvity and what you've accomplished over the past year or two and look forward to?
Yeah. I think the differentiation in our portfolio is still to be understood. And obviously, as we've gone through the portfolio transformation, you know, it would have been great to have a good market environment-
Yeah
—to be able to show the value of what we've done. But I would just, you know, sort of if you just take a step back and look at our performance in 2023 versus our peer group, and look at what we have guided in 2024 versus our peer group, it is clearly differentiated. And as I have said, more importantly, on the margin side, we are just getting started. You know, we've still have a lot of work to do and a lot of plans that we need to continue to execute to build a company. You know, and one market does come back to what is normal. You know, we expect to be 200 basis points above market and with a margin profile in the mid-30s. And as I said, that puts us in a category of one.
But really, what we, you know, look at, I think we need to continue to do a better job of explaining and educating the investor community about the differentiated portfolio profile that we have now.
Great, and I look forward to the Investor Day in November. Prahlad, thank you very much.
Thank you, Matt.
Thank you.