All right, great. Thank you, everybody, for joining us today. I'm Casey Woodring from the Life Science Tools and Diagnostics team here at JPMorgan. Welcome to our conference. Pleasure to be joined today by the management team of Revvity. Pass it off to CEO Prahlad Singh for some prepared remarks and go through the presentation. Then we'll do a Q&A afterwards. So, Prahlad, how about it?
Thank you, Casey. Good morning. Welcome. We are excited to share with you our story and the progress that we've made over the past 12 months since we were here at the conference last. Before I begin, I wanted to invite your attention to our safe harbor statement and encourage you to visit the investor section on our website, revvity.com, for additional financial disclosures and the latest SEC filings. All the figures and financials that you'll hear today are all estimated future results and growth rates presented, and what we'll talk about today are based from our Q3 earnings call guidance that was provided as of October 27, 2025.
For those of you who have been part of our portfolio transformation journey and have followed us, will recall when a few years ago we started primarily as an industrial company that was around one-third analytical, and a third of the business was in primarily small molecule preclinical life sciences, and a third of it in diagnostics, which was essentially a mother and child company at that point of time. Since then, and through COVID, we've gone on our portfolio transformation journey and acquired significant capabilities and competencies. On the life sciences side, that was focused on building out a large molecule capability with the acquisitions of BioLegend, Horizon, Nexcelom, SIRION Biotech , among others, and on the diagnostic side, we expanded our addressable market from reproductive health in autoimmune, allergy, and emerging infectious diseases with the acquisition of Euroimmun, Oxford Immunotec, IDS, among others.
At that point, if you recall, we were a company which was two-thirds in high-growth, high-margin businesses, and a third, primarily a legacy PerkinElmer company in analytical, food, and applied markets, was lower growth and lower margin. At that point, we made the decision to divest the legacy business in that arena along with the PerkinElmer brand name, which gave the birth of Revvity, which we feel strongly is a company with a category of one, more of a partner for our customers than a vendor, with significantly enhanced scientific expertise, a very high recurring revenue mix, and leading market position in the end markets that we participate in.
Revvity today is essentially a $2.8 billion company, roughly divided equally between life sciences and diagnostics market segments, with still nearly half the revenue coming in from the Americas, about a third of it in EMEA, and a quarter of the business is from the APAC region. From a product portfolio perspective, now nearly 85% of our revenue is on a recurring basis from consumables, assays, services, software, and services, and 15% of the business is CapEx-focused around non-routine specialized life sciences instrumentation. This is powered by 11,000 employees globally.
From a life sciences perspective, the business is essentially now a reagents, instrument, and software offering that enables all stages of R&D, with about 85% of it comprised of life sciences solutions, that is, highly innovative reagents and instruments, and 15% of the business is our Signals software business, which is essentially providing comprehensive SaaS solutions that support research informatics and clinical analytic workflow on the research, primarily still on the preclinical research side of the business. Historically, this has a five-year average organic growth rate of high single digits, with operating margins north of 30%. From an end market perspective, nearly 75% of our customers are in pharma biotech, and 25% comprise of academia and government. On the life sciences solution side, we continue to pursue adjacent opportunities for incremental growth through our technology and licensing portfolio.
Similarly, the diagnostics business comprises about $1.4 billion in revenue and provides comprehensive solutions in specialized clinical markets, where our focus really is how to be differentiated from an offering perspective, so we are not running into the routine clinical competitors or large clinical competitors. Towards that, 60% of the business is in immunodiagnostics, and 40% is comprised of reproductive health. This segment, too, has seen a five-year historical average organic growth rate of high single digits and has operating margins around 25%, with significant opportunities for incremental margin expansion. Our key customers here comprise of public health labs, primarily in the U.S. with the newborn screening business, large and small reference labs, and hospitals and clinics around the world.
This business is essentially a high-growth specialty diagnostic portfolio that offers end-to-end solutions from sample collection to the software that provides the reports back to our customers and patients for screening and diagnostics. But more importantly, it is also supported and surrounded with our omics capabilities around the globe that provides not just screening, but also companion diagnostics and partnerships with our customers with our pharma and biotech customers as they continue their drug development journey.
From a strategic perspective, when you look at our portfolio, our goal really is to be a key player in the high-value areas of the drug development life cycle, starting from early drug discovery, where we provide not just reagents and instrumentation, but also licensed technology to our customers and be part of the journey of that therapeutic candidate from early discovery as it moves on to development, clinical, and eventually commercialization by wrapping it around with our reagents, instrumentation, Signals software, and services capabilities, and as it enters into the clinic, our focus is to reduce the chasm between discovery to cure by providing companion diagnostics capability, identification of patients, monitoring of patients as they go through the therapeutic journey, leveraging our omics capabilities around the world, essentially focusing on specialized areas that require innovation and leverage our capabilities throughout the portfolio, helping customers for whatever they need.
Today, what I want to do is focus and provide you an update on our key strategic priorities and give you examples as to what we are doing on each one of them. Talking about AI, which is now pervasive in all our professional and personal lives as to how we are capitalizing on the potential of that, give you some examples of our expansion and how we are reaching into the market through our scientific capabilities and an update on the operational excellence initiatives that we have ongoing. Starting with AI, to give you an example of how we are unlocking new frontiers with AI, we recently launched Transcribe AI for our clinical lab customers that significantly reduces the amount of time that it requires for workflow.
So instead of manual data entry when the samples come in, putting in this portfolio has improved the workflow speed by 40% for our customers that have adopted this. Internally, we have deployed AI for all our 11,000 employees and already started seeing improvement, efficiency, productivity, and new commercial opportunities coming out through that. To give you an example, the deployment has resulted in nearly a 10% reduction in software development timelines for our product portfolio. We recently announced our partnership to deliver AI enabling drug discovery with Lilly, but more importantly for us is the Signals Synthetica platform, which essentially is a framework that is going to accelerate AI-enabled drug discovery. And we strongly feel about the capabilities that it'll bring to our research customers. The partnership with Lilly essentially creates a scalable federated framework that will accelerate AI-enabled drug discovery.
If you look at it today, traditionally, the Signals One platform, which is present in pretty much every pharma and biotech customer, provides the ability and the capability to our research scientists to design, develop, test, and make decisions around which drug candidates move forward. But as we look at the Synthetica platform, it provides a framework for AI-enabled drug discovery to be able to not only have a platform where you are going to have the AI tools like Lilly's Tune Lab and their models or access to them, but more importantly, the ability to curate, QA, QC these models and provide these to all our biotech customers and partners as a models-as-a-service framework. Both Eli Lilly and Revvity are going to initially co-fund access to Signals One and Synthetica for biotech customers.
This is something we are really excited about what it could do in terms of how drug discovery happens into the future. From a scientific and a market reach perspective, to give you a few tidbits, on the GMP reagents expansion, which we have talked about for a bit now, we continue to build manufacturing and regulatory capabilities. In the last 12 months, this has really driven downstream expansion with our customers and seen nearly two-and-a-half-time increase in how many products and projects are moving into the GMP bioprocessing effort. Now, as you know, this takes time before it moves into this journey from discovery into development and commercialization and clinical. This is an exciting data point, which I think is going to pay off in the long run.
From an immunodiagnostics perspective, when we made the acquisition of Euroimmun, only 10% of the revenue that was coming in was comprised of the Americas. This has now nearly doubled to 20%, but we see that the rightful share of revenue coming in from the U.S. for the autoimmune portfolio is around 40%, so there is still a lot of room for expansion of our immunodiagnostics portfolio in the Americas. Recently, we've announced the strategic partnership with Genomics England and Sanofi. These are, again, examples of how our focus is moving from being more of a vendor to a partner to our customers. The Genomics England partnership is really breakthrough in the sense that it is the first large-scale deployment for sequencing and screening newborns for rare genetic conditions, and we are really proud of being part of this innovative decision made by the United Kingdom.
From a Sanofi partnership perspective, which we've talked about earlier, it gives us an opportunity to move from screening for rare diseases to leveraging the same capability and competency for more common diseases like juvenile or pediatric Type 1 diabetes. To give you a bit more detail on that, Sanofi is the first company that has had FDA approval for a therapeutic that delays the onset of juvenile and pediatric diabetes. We leveraged our capabilities internally from antibodies, being able to do risk screening for newborns, and developed a DBS, a dry blood spot card assay for four biomarkers. This not only advances the early detection for Type 1 globally, but also in progressive countries, for example, in Italy, where there are now mandates to identify asymptomatic early pediatric Type 1 diabetes cases, we are working with the government to be able to deploy this from a screening perspective.
So to put it, if you think about it, as this gets adopted by more and more countries, it leverages our newborn screening infrastructure to use it for pediatric diseases screening, too. So it's a really good example of how we are able to use our infrastructure from newborn screening to other more common diseases. From an operational excellence perspective, we are laser-focused on driving operational and financial improvements in the company. We've already talked about from a free cash flow conversion, we've gone from being a company that used to have free cash flow conversion of 70% to now greater than 85% of adjusted net income. From a capital allocation perspective, in the market, when the market had its downturn, we were opportunistic in deploying our capital, which has resulted now in nearly $1.4 billion in share repurchases and a 10% reduction in our share count.
I'll now give you a few examples as to what we have been focused on in terms of headcount rationalization, supply chain optimization, and footprint consolidation to stay on track to achieve the stated 28% adjusted operating margin target that we have for ourselves for 2026. There are three primary areas. Around headcount rationalization, we are increasing productivity by bringing in and integrating all the acquisitions that we have made and leveraging that for management delayering and commercial synergy, which will result in nearly a 10% headcount reduction. Similarly, as we integrate these businesses, we look at supply chain optimization opportunities for insourcing, reengineering, vendor optimization, and consolidation.
And from a footprint perspective, we are looking at impacting by downsizing, co-location, and site closure activities, nearly 30-plus rooftops over the next 12-24 months, which will result in nearly a 20% annual cost reduction and 10% footprint reduction by 2027. So these are just some examples, concrete examples of what we have already started and deployed to get to our 28% operating margin target by the end in 2026. As we've talked about in the fourth quarter, I wanted to highlight some of the 2026 considerations of 2%-3% organic growth that we expect to result in high single-digit adjusted EPS growth. Of course, we will provide a lot more detail on this during our fourth quarter earnings call in early February. But our assumption on this is that the current market assumption, which we've started to see improving, will continue to exist.
That trend will continue to exist in 2026. We are on track to achieve 28% in operating margin, and from a below-the-line consideration perspective, the increased net interest expense will be offset by the lower share count. Our assumption for this is our tax rate is 18%. From a long-range perspective, we are laser-focused on driving sustained and superior growth and expect the Immunodiagnostics and Signals Software business to grow in the double digits and the life sciences solutions and reproductive health in the mid-single digits. We feel confident that we will deliver 200 basis points of above-market growth in normal market conditions, resulting in 6%-8% of an LRP. In addition, we have not assumed anything in the plan from upside that would come from our technology and licensing initiatives and the omics partnerships that we are in discussions with.
All of this while focusing on achieving top-tier margins from 27% in 2025 to the mid-30s in the near future, with 25 basis points of that coming from gross margin expansion and 50 basis points of it coming from operating leverage and cost efficiencies. All of this while delivering double-digit EPS growth over the long term with capital deployment opportunities providing additional upside. I'm hopeful and confident that what you've heard together, that Revvity is an innovative life sciences and diagnostic company with a unique portfolio that is well-positioned with nearly 85% high recurring revenue and provides compelling growth opportunities by being a strategic partner to our customers that now has a transformed portfolio as we are focused on our operational excellence that will result eventually in a differentiated financial profile with attractive margin expansion opportunities for our shareholders.
Thank you for your time today, and I look forward to the Q&A session.
All right. Great. Thank you.
Yeah, look , Max here, too. All right. Maybe just to start on the pre-announcement from last night, 4Q organic growth was at 4%, beat the street. Can you just walk through how the quarter played out relative to your expectations between life science and diagnostics and how some of the underlying growth drivers in each segment performed, like Signals and immunodiagnostics?
Sure. I mean, I'll start with the life sciences solutions. The reagents did slightly better than what we had expected. On the instrument side, while it improved from the third quarter to the fourth quarter, probably was not as great as we would have wanted it to be, but it did improve. But overall, life sciences solutions did better than what we had. And the diagnostics, both immunodiagnostics and reproductive health, did better than what we had wanted it to be.
Yeah. Maybe just elaborate on the instrument piece. So in 3Q, you noted you were seeing an uptick in activity in the instrument pipeline. You just said that instruments may be a little weaker than you would have expected. We've heard from some companies that are presented here about a budget flush that occurred maybe towards the last few weeks of the quarter. So just any sort of further color on the instrument piece in 4Q and between pharma and academic and government, how all that played out.
Pharma biotech did better than academia and government. So I'm talking about the whole instruments portfolio. Pharma biotech did better than academia and research. I would say that we did not see a lot of budget flush. Our instruments are not as routine. They tend to be more high-ticket items. But they did better. I would say that there was a continued improving trend towards it, but reagents did a whole lot better.
Okay. And from a margin perspective, you guys were guiding to a low 59% gross margin, expected OpEx to step down about $5 or $6 million sequentially from some of the cost outs. Any sense of how you executed against those expectations?
Yeah. I would say from a margin perspective, we were roughly in line with our expectations. Obviously, we had the stronger revenue beat that led to some additional flow through from an incremental standpoint. But we did take some opportunity as well to reinvest some of that back into the business. So I would say from a margin standpoint, it was in line with our expectations overall.
Okay. Maybe shifting over to 2026 expectations, you guys earlier in the year, in 2025 at least, than you normally do, gave top-line color 2%-3% organic. You noted at the time you gave it, it was a prudent approach to the year based on your current view of the end market. A few months later here, from an end market perspective, does that still feel like a prudent number to you guys? Certainly feels like pharma. There seems to be some optimism there with biotech funding and so forth. So maybe just walk through your current view of the 2%-3%. How prudent really is that?
Yeah, Casey, it hasn't changed. I mean, pharma biotech trends continue to improve, and we feel good about it. We'll provide a whole lot more detail when we provide our fourth quarter earnings call in early February. That gives another four weeks of data point for us to continue to assess how the market's doing. But we feel very optimistic about what we are seeing from the trend coming out of pharma biotech.
Yeah. Maybe to elaborate on that, biotech funding is getting better. Revvity is more kind of levered towards early-stage R&D versus some of the other tools players. So how should you think about the puts and takes about the pharma and biotech expectations for next year? And then maybe on the instrument growth outlook for life sciences, you're calling for kind of flattish growth in 2026. Would a better-than-expected year in pharma really drive that number higher?
Yeah. I mean, we are already seeing that in our reagents portfolio. And as I talked about it, even in the fourth quarter, we saw reagents did better than what we had expected. And that's a precursor for us, and it's a clear indicator that pharma biotech has started to come back. We are seeing encouraging trends, I would say, on the instrument side. We just need that to continue.
Okay.
No, look, I think there's a lot of positive signals in the market right now from a pharma biotech perspective, whether it's around clarity with some of the MFN deals, whether it's around increased levels of biotech funding, pickup in M&A activity. All that is positive indicators. I think for us and our stances, as Prahlad mentioned, we want to just see a consistent trend of multiple quarters here of sort of the benefit of those positive indicators before we start to move numbers. But obviously, there are some positive indicators that are encouraging to see.
Okay. Wanted to focus on Signals here for a little bit, the new product launch, Synthetica. Did I pronounce that right?
Yeah.
How's pre-registration going there? What's the current level of interest? What does the rollout look like for 2026? How do you expect customers to integrate this offering into their own workflows?
Yeah. I mean, we just launched the product. As we said, in 2026, we expect some customers to start looking at this and adopting this. But just, Casey, if you have to go back and look at the product launches that we've had on the Signals side, that's in Signals Synergy, Signals Clinical that was launched. It takes a few quarters for it to get used to, our customers get adopted, get familiarized before you start seeing it. So we'll start seeing any material impact from this from 2027 is the best way to look at it.
Okay. And lastly, you announced the collaboration with Eli Lilly to make Lilly's Tune Lab available through Revvity's Signals Synthetica platform. Could you just elaborate on the partnership? Will that help accelerate drug development timelines? Anything specific in terms of efficiencies that are expected to create for biotech companies? And then what do you see as the longer-term value of that collaboration?
Yeah. I mean, look, I would say of all our product launches, this is the one that excites me the most. If you think about it from a research scientist perspective, not all of them are computer scientists, right? They tend to be bench chemists and bench scientists. They are all familiar with using Signals today. So it is at their fingertip, at their mouse today. And really, Synthetica is a module that you would look on a Signals suite. So now if you provide that framework to a research scientist, and then they essentially have the ability to drag and drop AI models, whether it's from Tune Lab, from Lilly, or any other AI models.
What Signals Synthetica does is it curates those models, does a QA and QC check for authenticity, and be able to provide it with the same framework and infrastructure that a research scientist is able to use it. The hurdle of entry to do AI-enabled drug discovery with Signals Synthetica is significantly reduced for a bench chemist. That is the true power and potential of what Signals Synthetica will bring for AI-enabled drug discovery.
Okay. And then maybe sticking with Signals with BioDesign for large molecule workflows launching in the first quarter of 2026, how much of Signals is expected? How much of Signals growth, I'm sorry, going forward will come from penetration in the large molecule market where Revvity has really had a limited presence to date?
Yeah. I mean, I think if you look at our LRP for the Signals business of low double-digit growth, obviously the NPIs are a big piece of that, right? So whether it's around the large molecule which we're launching here or Lab Logistics which we're launching later in 2026, you've got the Synthetica platform that Prahlad just referenced, too. I mean, the NPIs are a significant part of that double-digit growth going forward. And then I also think from a Signals perspective, we continue to remain extremely excited also about our ability to expand our customer base, whether that's moving further downstream into the tier two and tier three pharma customers, which haven't been a big penetration for us today.
And then, secondly, also expanding outside of pharma, even into the applied markets where we have a lot of synergy opportunities with our existing workflows with pharmas and what is a fragmented market today in the applied space to start to drive some meaningful penetration. So I'd say it's really a combination of both the innovation with the NPIs, but also the new customer base that's really going to continue to fuel the Signals growth engine.
Okay. Maybe shifting over to diagnostics here. So newborn screening has performed well in 2025, outpacing declining global birth rates. Genomics England is kicking into gear, right? So can you just walk us through the latest updates on some more large-scale genomic screening initiatives globally and the interest Revvity is seeing now that Genomics England is in motion? And could any of those discussions really materialize in 2026?
Yeah. I mean, look, I would say that Genomics England and the U.K. was a flagship in that they are the torchbearers. On the scale that they have announced and what they are doing is really pathbreaking. And I think there are other countries where we've got discussions ongoing that hopefully will materialize. Some of them will materialize in 2026, but they are not obviously we can't talk about it till they are signed and publicly announced. But we see a lot of potential and promise and a lot of interest on similar populations and genomic screening program by many other countries.
Just to clarify, too, we have no assumption of future contracts in that 2%-3% framework. The only thing that's embedded in there is the annualization of the GEL contract.
Okay. Revvity's 2026 framework embeds mid-single-digit growth in diagnostics, including similar performance for reproductive health and immunodiagnostics. Can you just walk us through the puts and takes around the moving parts in these businesses? Immunodiagnostics growth ex China has been particularly a nice growth driver for you guys, particularly in the U.S., and then newborn screening really across different geographies outside of even Genomics England. So maybe just walk us through how you're thinking about that?
Yeah. I would say as you look at the 2026 framework, let's start with the immunodiagnostics side. Obviously, we've talked about some of the headwinds we have in China that we have to overlap in the first half of 2026. But I think when you look at, again, the majority of our IDX business is outside of China. And I think even if you looked at how they finished the year, I think in the fourth quarter, they grew mid-teens year- over- year, which is a really strong finish for them. And I think for the full year, that put them right around the high single, low double digits for the full year for IDX growth outside of China. And that's a trend that we expect to continue. A big piece of that is obviously the contributions from the accelerated U.S. growth.
We're excited about the roadmap we have there and being able to sustain that growth rate over the next couple of years. I think when you look on the reproductive health side, again, also I'll point out that it was a really encouraging year for newborn screening business. I think it was the fifth straight year of mid or high single-digit growth for that business despite what's been a declining birth rate environment. So that business continues to well exceed the sort of global birth rates. And that's a dynamic that we would expect to continue. I would say that at least in the 2%-3% framework, we're probably more assuming the LRP growth for the newborn screening business of 3%-5% versus what we've seen over the past couple of years.
I think that just points again to some of the prudence we have in the initial framework for 2026.
Okay. That's helpful. Revvity has highlighted some of its partnerships with pharma around Newborn Screening, including the recently announced Type 1 Diabetes partnership with Sanofi. Can you just walk us through the timing of some of these partnerships and the potential tailwinds to the Newborn Screening business over the longer term we could maybe see from them?
Yeah. I mean, the partnership really is an example of how we are able to leverage our capabilities from newborn screening to other pediatric disease screening. This has just kicked off in some markets, the Middle East, in the U.S., Canada, but there are still now opportunities as to how we leverage our omics capabilities around the globe to be able to start screening patients, so I would say this will start seeing material impact from 2027 onwards as we start deploying these programs, but also as countries are adopting this. As I gave you the example of Italy, where now there is a mandate for pediatric screening for Type 1 diabetes, so this is, again, one example of how you could take something till now mostly the focus were around newborn screening disorders, inborn errors of metabolism or genetic disorders at birth.
This is now expanding beyond newborn to pediatric and juvenile diseases, so this is an example of how we could expand and be an addressable market that it brings forth to us.
Okay. Sticking with diagnostics, it would be remiss to not talk about China, DRG, right? So I think you said on the 3Q call that you expect China immunodiagnostics to grow low singles in the back half of 2026 after lapping the tough comps in 2025. What sort of visibility do you have on that second-half growth rate in China diagnostics? And maybe just walk us through the latest and greatest from on the ground there.
Yeah, sure. So look, I think as you think about China immunodiagnostics, again, you mentioned DRG, which was the policy change that impacted us really in June of 2025. At that point in time, we had said it was going to take us a year to sort of reset at the new volume levels for that business. But then coming out of that, we did expect it to return to growth in the second half of 2026. I'd say nothing's really changed from that thesis. Again, it's been mostly playing out as we had anticipated. We continue to actively stay close with our commercial team, key opinion leaders to try and influence policy change. And we continue to remain confident, at least in that outlook that we set back five, six months ago.
Okay. Just maybe a couple on the model, I guess. What's your line of sight into the baseline 28% operating margin that you're expecting in 2026? How sensitive is that to top-line growth? And just where are you seeing the most leverage in the business?
Yeah. Look, obviously, your margin's going to be sensitive to top-line growth in any environment. But I think, again, at least for us in the 28% baseline, the 2%-3% organic growth is what's sort of required to hit that 28%. We have said that if we see a little bit stronger organic growth north of 2%-3%, we would expect to see incremental margin expansion off the 28% baseline. And then just in terms of the visibility, I would say we have a pretty high level of visibility into that 28%. We've already identified the necessary cost restructurings. You heard from Prahlad today, all the activities going on from a sourcing standpoint, headcount, rooftops, etc. So we've got the pipeline action. And I think we've also mentioned that you'll kind of see a flurry of that activity completed in the first half.
It won't all necessarily be on one.
And then on capital allocation, given some of the share repurchase activity, how do you plan on balancing near-term capital returns with M&A opportunities? And then on that second piece, are there areas in the portfolio you would look to be interested in filling through M&A? What's the criteria that makes M&A compelling versus buybacks?
Yeah, Casey, I mean, we continue to be acquisitive and continue to have a very active pipeline. We are just being diligent on ensuring that we do acquisitions which are strategically aligned and make the right financial sense. I mean, ACD/Labs was a good example as to the areas of interest that we have primarily around software or reagents. I mean, I think those are the areas where you would look us to be active in. But again, we are going to be diligent and we are going to be sensible on any acquisition that we make.
Okay. Helpful. And then we've seen recent reports that OpenAI, Anthropic, Google, these companies are actively seeking specialized data for AI model training and have approached companies like Revvity about potential data licensing or partnership opportunities, particularly in genomics and related fields. Can you provide any additional context on some of these discussions? Can you touch on your longer-term strategy regarding AI? Any kind of details you can share on that would be interesting.
Yeah. I mean, we talk to a lot of companies like all our peers and everyone else talks to. I mean, if there is anything that is specific and worth publishing, we will announce those partnerships. But this is part of the business. You have discussions and you explore opportunities for partnerships and collaborations with a lot of companies. I think what is important to know that on the Signals side, we have the portfolio already. We started talking about AI when we were ready to launch Synthetica rather than a year or two years ago and when we were ready to announce partnerships that will bear fruit and will accelerate AI-enabled drug discovery.
So sort of from an approach perspective, we are going to come out and talk about it when they are either materialized or will start paying dividends, which is what you saw over the last few weeks.
Okay. That's helpful. Bouncing around a little bit, but going back to life science and sort of the underlying pharma biotech and market growth, recently we've seen an uptick in M&A appetite for biotech over the last few months. How does or doesn't an increase in biotech M&A benefit early-stage R&D? Could M&A signal that pharma is filling pipelines inorganically rather than bringing targets up organically and using Revvity products in preclinical? Or are we reading too much into that?
No. I mean, I think and look, I mentioned a little bit too, but at least for us, a positive indicator is when there is M&A activity and really any continued flows of money into both pharma and the biotech industry. So for us, we're kind of agnostic whether pharma fills their preclinical budgets with M&A activity or whether they fund it organically. For us, it's just a positive indicator that more money and more funds are being flowed into the preclinical R&D space. And so for us, again, it's an important indicator for us. And hopefully, we start to see the benefit of that in the end markets here over the coming months as that activity has really started to pick up at the tail end of 2025.
Yeah. And to some extent, Casey, it enhances the probability of technical success of a drug candidate or a compound. Because the reason primarily early biotech companies get acquired is for their pipeline compounds. And now, once big pharma biotech make those acquisitions, they are going to fund those programs. So to some extent, it further enhances the probability of technical success. And for us, it actually is a positive tailwind.
Okay. Looks like we have about a minute left here. Would like to pose this question to each of you. We're early on in the year. What are you most excited about for 2026 for Revvity?
Yeah. I mean, our Signals portfolio continues to do well. We are optimistic and happy to see the trend that pharma biotech is taking, especially in early drug discovery. It's about time. It's been a couple of years where we've seen that downturn. And I think just seeing that coming back up is really a positive sign.
Okay. Well, it looks like we'll leave it there. Thank you, everybody, for joining us today. Thank you for Revvity for coming here and joining me on stage. Enjoy the rest of the conference, everybody.
Thank you.