Hello, everybody, and welcome to the Q2 2025 Revvity Earnings Conference Call. My name is Elliot, and I'll be your coordinator for today. If you would like to register a question during today's event, please press star one on your telephone keypad. I would like to hand over to Steve Willoughby, Senior Vice President of Investor Relations. Please go ahead. Thank you, Operator. Good morning, everyone, and welcome to Revvity's Second Quarter 2025 Earnings Conference call. On the call with me today are Prahlad Singh, our President and Chief Executive Officer, and Max Krakowiak, our Senior Vice President and Chief Financial Officer. I'd like to remind you of the safe harbor statements outlined in our press release issued earlier this morning and those in our SEC filings. Statements or comments made on this call may be forward-looking statements, which may include but may not be limited to financial projections or other statements of the company's plans, objectives, expectations, or intentions. The company's actual results may differ significantly from those projected or suggested due to a variety of factors which are discussed in detail in our SEC filings. Any forward-looking statements made today represent our views as of today. We disclaim any obligation to update these forward-looking statements in the future, even if our estimates change. You should not rely on any of today's statements as representing our views as of any date after today. During the call, we will be referring to certain non-GAAP financial measures. A reconciliation of the measures we plan to use during this call to the most directly comparable GAAP measures is available as an attachment to our earnings press release. I'll now turn it over to our President and Chief Executive Officer, Prahlad Singh. Prahlad. Thanks, Steve, and good morning, everyone. The dynamic macro and market environment we experienced during the first quarter of the year continued through the second quarter and at this point does not yet appear to be settling down as we enter the second half of the year. Despite these persistent and, in some cases, new challenges, Revvity continues to perform at a high level. The strong performance exemplifies our unique businesses, which provided us with the proper balance to continue to generate results that were in line to above our expectations. I'm very proud and extremely impressed with our employees' ability to stay focused on our key objectives, quickly adapt to evolving obstacles, and capitalize on new opportunities as they arise. This strong performance and flexibility was on display in many ways during the second quarter. Such as our ability to maneuver rapidly in the varying tariff environment. Our strong levels of innovation, and our ability to swiftly manage and adjust our cost structure to ensure we continue to deliver for our shareholders. All these efforts culminated in our robust cash flow generation, which we have actively redeployed to return cash to our shareholders. Despite the evolving market and regulatory environment, we were again able to achieve our objectives and deliver another solid quarter with 3% organic growth overall, which was right in line with our expectations. With a modestly stronger operating margin performance when excluding the impact from FX. We reported adjusted EPS in the quarter of $1.18, which was solidly above our expectations and guidance. Our performance in the quarter was led by our life sciences business, which grew 4% organically overall. Led by approximately 30% growth in our Signals software franchise. In addition to the strong performance in the quarter, our software business also set a new record for orders in a single quarter, which bodes well for its future performance. This strength in software helped drive mid-single-digit growth year over year with our pharma and biotech customers. An improvement from the low single-digit growth we experienced in the first quarter. This improved rate of growth from pharma and biotech was partially offset by continued weakness from academic and government customers, where our revenue again declined in the low single digits year over year globally. Similar to the performance we saw in the first quarter. Sales into academic and government customers in the Americas region also declined in the low single digits, similar to the first quarter performance. Our diagnostics segment grew 2% organically, in line with our expectations, as our immunodiagnostics franchise faced more difficult multi-year comparisons, limiting its growth to the low single digits this past quarter. Around midway through the quarter, we began to face a new challenge in this business in China relating to an expansion and acceleration of a hospital lab reimbursement change known as the diagnosis-related groups, or DRG. This expanded policy change is having an impact on the size of diagnostic panels ordered by physicians in the country, initially resulting in a reduction in overall volumes for some of our multiplex products. This is likely to drive an eventual increase in volume for more expensive singleplex tests, which we also offer. For the remainder of the year, we are now expecting a fairly meaningful pullback in our immunodiagnostics business in China, which is incorporated into our updated outlook for the total company for the year. While this policy change is a new headwind for us to contend with over at least the remainder of the year, with the strong performance in many other areas of our business, along with tight management of our expenses, it is only having a very modest impact on our outlook for the year. We now expect our full-year organic growth to be in the 2%-4% range, down 1% from our prior outlook, while our adjusted EPS for the year is now expected to be in the range of $4.85-$4.95, which is also down a modest 1% compared to our previous expectation. Overall, the second quarter ended up playing out largely as we had expected, both from a top and bottom-line perspective, despite the new unforeseen headwinds in our diagnostics business in China, which is a testament to our resilience and the differentiation our unique businesses provide. In addition to the solid P&L results, we also continued to perform well with our cash flow conversion and generation. In the quarter, we generated another $115 million of free cash flow. Despite strategically moving and increasing inventories in some areas ahead of the potential tariff changes, this resulted in free cash flow conversion to our adjusted net income to continue to be in line with our longer-term aspirations and at 90% year to date. While we continue to actively evaluate redeploying this cash into potential M&A targets that we believe could make a strong strategic addition to the company, our disciplined multi-criteria process has not yet identified targets compelling enough from a financial profile and expected return perspective to move further forward with. Given the strong and differentiated financial profile Revvity now has and our robust internal innovation pipelines, we will continue to remain active and aggressive in evaluating potential acquisition targets of all sizes. We will also remain disciplined as we believe Revvity has been built into something that is truly special on its own. With our longer-term expectations for the company remaining unchanged despite the challenges our industry has faced over the last few years, we continue to be opportunistic and use this period to become increasingly aggressive with our share repurchase activities. After repurchasing $150 million worth of stock in the first quarter, we repurchased another nearly $300 million worth of stock in the second quarter alone. This brings our repurchases of stock through the first half of the year to just shy of $450 million. This equates to a reduction of over 4 million shares or nearly 4% of our total shares outstanding. Since the end of the second quarter last year, we have repurchased over $750 million of our stock, which has reduced our total average diluted shares outstanding by 7 million, or an approximate 6% decline in our share count overall. Our solid operational performance is driven by our strong levels of innovation, which allow us to consistently introduce important new offerings to our customers. One example of this from the second quarter was the launch of our new IDS i20 analytical random access platform, introduced through our Euroimmun business, which is part of our immunodiagnostics portfolio. This CE marked and FDA-listed device represents a breakthrough in specialty testing automation, allowing laboratories to consolidate up to 20 different analytes across six diagnostic specialties on a single instrument, the IDS i20 platform. It processes up to 140 tests per hour and enables labs to transition from manual or semi-automated methods to fully automated chemiluminescence immunoassay processing while offering continuous loading capabilities and integrated reagent cooling, allowing for nonstop operation. We believe this solution addresses critical laboratory needs for efficiency, versatility, and reliability in specialty testing areas, including endocrinology, allergy, Alzheimer's disease, autoimmune, and infectious diseases, as well as therapeutic drug monitoring. The launch includes a strong initial lineup of assays, with many more expected to be added over the remainder of the year and into 2026. Since launching in May, initial customer feedback from installations in key labs across Europe is quite promising, and we continue to believe the i20 will be a significant part of our chemiluminescence growth strategy in the coming years. Our ongoing innovation and strong execution are not only robust but also rooted in sustainability and integrity. Our continuous improvement in areas impacting our sustainability, governance, and social priorities was recognized recently by MSCI, who increased their overall ESG rating for Revvity to AAA, which is their highest level. I see this progress in action every day at the company, but I'm proud that our achievements are being recognized externally as well. As we look ahead to the second half of the year, a number of our businesses are positioned to continue to perform at a very high level, such as our Signals software franchise and our reproductive health business, which is starting to benefit from the ramp-up in July of sequencing volumes as part of the contract we were recently awarded from Genomics England for its generation study. It's also encouraging to see our life science reagents and instruments businesses demonstrating continued stability so far this year, with our full-year outlook for them remaining unchanged. We expect these promising signs to be partially offset by the new and unexpected challenges in our China immunodiagnostics business, as previously mentioned. Overall, the current macroeconomic and regulatory environment continues to present challenges. It's in precisely this kind of environment that we've consistently risen to the occasion and thrived. Just as we have throughout the past five years of Revvity's remarkable transformation. Our continued focus on executing at a high level on those items which are in our control, while capitalizing on opportunities and managing through hurdles as they arise, has allowed Revvity to consistently outperform most of our peers over the last two and a half years, which is something I expect will continue in the years to come. This is all because of the dedication of our 11,000 colleagues around the world who are embracing the impossible to help improve lives everywhere. With that, I will now turn the call over to Max. Thanks, Prahlad, and good morning, everyone. As Prahlad mentioned, we continue to show good performance in the second quarter despite facing new and existing challenges which were unanticipated at the start of the year. From funding levels for academic research to country and industry-specific tariffs and now new challenges from regulations which are limiting diagnostics volumes in China, our industry has faced many obstacles so far this year. Considering these developments, we have shown a strong ability to navigate them and respond quickly, allowing us to still deliver strong performance overall, as was evident in our second quarter results. I'll start on tariffs. As we first mentioned last quarter, we have quickly taken significant operational actions to largely mitigate their impact, which were executed upon as expected and on time during the second quarter. While some tariffs were rolled back during the quarter, particularly with China, this relief did not meaningfully change their overall impact on us, given our mitigation efforts are operational in nature and still moving forward as previously planned. While the tariff situation continues to evolve, as evidenced by yesterday's announced preliminary pact between the U.S. and Europe, our updated outlook assumes the tariffs that are in place as of last Friday, the 25th of July. As it pertains to our updated outlook for the year, we are expecting continued stability from our pharma and biotech customers, and the headwinds our academic and government customers are facing to continue. Our assumptions for growth within our life sciences segment remain unchanged within our updated outlook and guidance. However, as Prahlad mentioned, since the start of May, we have begun experiencing increasingly larger volume-related headwinds in our immunodiagnostics business in China, which we now expect will continue over at least the remainder of the year. While we were able to mitigate and offset most of the impact from these I changes during the second quarter itself, as we move into the second half of the year, we are lowering our expectations for this business in China to account for the trends we are seeing in July, which we anticipate will continue over the coming months. As a result, our immunodiagnostics business in China, which represents approximately 6% of total company revenue, is expected to now be down high teens for the full year. Our updated outlook for this business in China is driving the entirety of the change in our overall outlook for the company. Incorporating the impact of these new pressures, we are now looking for organic growth this year for the total company to be in the range of 2%-4%, which is slightly below our previous expectations. While this is impacting most diagnostic players in the market, including domestic competitors, we have already begun to take additional near and longer-term cost actions to help offset the impact to our bottom line. Those actions that are quicker to implement, including right-sizing the business in China, along with other immediate discretionary expense reductions, are now factored into our updated outlook. In addition to these near-term actions, we are also taking additional structural actions that, given their scope, will take into next year to be fully implemented. While we are actively managing and offsetting a significant portion of the bottom line impact, we do expect the drop in volume and some margin rate headwinds from recent changes in FX to have a modest impact on our overall operating margins and adjusted EPS for the year. I will provide additional details on our updated outlook in a moment, but the net impact of this is we now expect our 2025 adjusted earnings per share to be in a range of $4.85-$4.95, down 1% from our prior outlook. Now, turning to the specifics of our second quarter performance. Overall, the company generated revenue of $720 million in the quarter, resulting in 3% organic growth. FX was a 1% tailwind to growth, and we again had no incremental contribution from acquisitions. While FX became more favorable to our top line as the quarter progressed, given the severity of the changes in rates and their geographical dispersion, the change in the top line impact from FX is having a minimal corresponding impact to our adjusted net income, both in the second quarter and in our current outlook for the remainder of the year. As I mentioned, this is generating some pressure on our gross and operating margin rate for the year, given the associated increase in revenue dollars is without a corresponding increase in gross and operating profit dollars. As it relates to our P&L, we generated 26.6% adjusted operating margins in the quarter, which were down 210 basis points year over year and in line with our expectations. Our underlying operating margin performance was better than we had anticipated, as FX movements were a headwind to our margin rate, and the impact from tariffs was in line with our expectations despite the changes that occurred midway through the quarter. Looking below the line, our adjusted net interest and other expenses were $20 million in the quarter, which was modestly impacted by the increased share repurchase activity year to date, resulting in lower interest earnings on our cash balances. Our adjusted tax rate was 19.1% in the quarter, which was slightly lower than expected due to the favorable impact of recent tax planning initiatives. We also continue to remain active with our share repurchase program and averaged 117.5 million diluted shares in the quarter, which was down over 2.5 million shares sequentially. This all resulted in our adjusted EPS in the second quarter being $1.18, which was 4 cents above our expectations. Moving beyond the P&L, we generated free cash flow of $115 million in the quarter, resulting in 83% conversion of our adjusted net income. On a year-to-date basis, our $234 million of free cash flow equates to a solid 90% conversion of our adjusted net income. As we move into the back half of the year, I expect our absolute cash flow and its conversion to continue to remain strong and solidly above our 85% long-term expectations. Regarding capital deployment, we have stayed active so far this year with our buyback program as we repurchased $293 million worth of shares in the second quarter. As it relates to our balance sheet, we finished the quarter with a net debt to adjusted EBITDA leverage ratio of 2.6 times, with 100% of our debt being fixed rate, with a weighted average interest rate of 2.6% and a weighted average maturity out another seven years. As we evaluate capital deployment, we will continue to remain flexible in order to capitalize on the highest return opportunities while maintaining our investment-grade credit rating. I will now provide some commentary on the second quarter business trends, which is also highlighted in the quarterly slide presentation on our investor relations website. The 3% growth in organic revenue in the quarter was comprised of 4% growth in our life sciences segment and 2% growth in diagnostics. Geographically, we grew in the mid-single digits in both the Americas and Europe, while Asia declined in the mid-single digits, with China also declining mid-single digits. From a segment perspective, our life sciences business generated revenue of $366 million in the quarter. This was up 5% on a reported basis and 4% on an organic basis. From a customer perspective, sales to pharma and biotech customers grew in the mid-single digits, whereas sales into academic and government customers declined in the low single digits in the quarter. Our life sciences solutions business declined in the low single digits in the quarter overall, with declines in instrumentation partially offset by continued growth in reagents. Our Signals software business was up a little over 30% year over year organically in the quarter, and as Prahlad mentioned, had its largest quarter of orders in its history. The business also continued to perform exceptionally well from an ARR, APV, and net retention rate perspective as well, with all metrics solidly above levels from last year. In our diagnostics segment, we generated $354 million of revenue in the quarter, which was up 3% on a reported basis and 2% on an organic basis. From a business perspective, our immunodiagnostics business grew low single digits organically during the quarter, which was in line with our expectations despite China declining more than we expected and being down in the low teens. Excluding China, the other 80% of our immunodiagnostics business continued to perform very well, especially in the Americas, which grew organically in the mid-teens, while immunodiagnostics in Europe grew in the solid mid-single digits. Our reproductive health business grew low single digits organically in the quarter. Newborn screening continued to perform well and grew high single digits globally, which was driven by outstanding operational and commercial execution, given continued headwinds from global birth rates, which have again intensified so far this year, particularly in China. As it pertains to China specifically, overall, we incurred a mid-single digit organic decline in the second quarter, driven by our diagnostics business being down in the low double digits as it began to face the impact of the DRG-related declines in volume. This was partially offset by strong mid-single digit growth in our life sciences business in China, as we saw improvements in year-over-year growth in both reagents and instruments in the region. Now, moving on to guidance. As mentioned, we are updating our organic growth outlook for the back half of the year to account for the new volume-related pressures we are seeing from DRG changes in China and our diagnostics business. This change is leading to our total company organic growth outlook for the year to now be in the range of 2%-4%. We continue to expect our life sciences segment to grow in the low single digits, unchanged from our prior outlook, but we now expect diagnostics to also grow in the low single digits, down from our previous mid-single digits outlook. With the continued weakening of the dollar so far this year, we now anticipate the impact from FX to be an approximately 1% tailwind to revenue for the full year, compared to our previous assumption of it being a 50 basis point headwind. As mentioned, given the makeup of the changes in FX, we do not expect it to have a material flow-through in our P&L for the year. We expect these changes to our outlook for organic growth and FX to result in our total revenue this year to now be in the range of $2.84 billion-$2.88 billion overall. Moving down the P&L, we now expect our adjusted operating margins to be in a range of 27.1%-27.3%, which is down from our prior outlook due to the changes in FX and the impact from lower volume of high-margin diagnostics tests, which is being partially offset by the additional cost actions we are currently implementing. We expect the more significant structural cost actions we are beginning to take to be fully implemented in 2026. We anticipate the impact from these actions will allow us to offset the incremental margin pressures we are now facing this year and to be able to enter next year with a 28% operating margin baseline, which we would then expect to further expand upon, commensurate with the level of organic growth we experience. Consequently, because of these initiatives, we anticipate our overall operating margin expansion next year to be greater than what we would typically be expected in a given year, enabling us to recoup the impact from the new headwinds we are facing this year. Below the operating line, we now expect our net interest and other expense to be around $80 million this year, driven by some incremental pressure from lower interest income. We are continuing to make good progress with our tax planning initiatives and now expect our adjusted tax rate this year to be approximately 18%, down from our prior 19% outlook and the 20% we had assumed at the beginning of the year. With our increased share buyback activity, we now also expect an average diluted share count of approximately 117 million for the year overall. This all results in our adjusted earnings per share for the year expected to be in a range of $4.85-$4.95. Regarding our outlook for the third quarter, we anticipate organic growth to be in the 0%-2% range, resulting in total expected revenue in the range of $690 million-$705 million. We anticipate our adjusted operating margins to be approximately 26% in the third quarter, and we are assuming a tax rate of approximately 18%, with roughly 116 million average diluted shares outstanding for the quarter. We expect this to result in our adjusted EPS in the third quarter to be in the range of $1.12-$1.14. Overall, we perform well in the second quarter despite facing new and existing challenges, which we are actively working to counter and offset. Our levels of innovation and investment remain strong, which, when combined with the additional cost actions we are taking, positions us well to execute at a high level through all market environments while always still delivering for our customers. With that, Operator, we would now like to open up the call for questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. First question comes from Vijay Kumar with Evercore ISI. Your line is open. Please go ahead. Hey, guys. Thanks for taking my question. And maybe, first one on, on, the guidance you share on organic. I know, you mentioned this was China, China, this change in DRG. Was that anything else beyond DRG? Anything on VBP? Because when we're doing the math, I think the exit rate is low singles. It should, should that be the ballpark here, for fiscal 2026? You know, given some of these headwinds should persist in, in 2026. Hey, good morning, Vijay. You know, essentially, a majority of what we are seeing is from DRG. You know, late April, this policy went into effect, which is called the debundle policy, that is specifically impacting the multiplex tests that we have. You know, in the mid to longer term, you know, the way to think of it is, you know, with autoimmune testing, you look for a needle in a haystack. And essentially, with the debundling policy, you know, it lowers the test volumes, which essentially means that they have to look for a needle in half the haystack is one way to think of it. But really, what it does is, in the longer run, we think that this potentially offsets because there will be more single plex tests that will be needed, which also tend to be more expensive on a per assay basis. So from a, you know, company perspective, we are working across with thought leaders, KOLs, doctors, and hospitals to see if this could potentially, you know, reverse some of the changes because of the impact that it has on patient care. But the majority of what you see is from DRG. Understood. And then, Max, maybe one for you on, on, the margin, change here. I think you made some comments about, about 2026 margins being above your typical range, right? Can you just remind us, what is your typical range? What volumes do they assume? And, and, you know, when you think about margins for next year being slightly better on cost actions, is that assuming, what kind of volumes or revenue growth is that assuming? Thank you. Yeah. Hey, Vijay. So look, I think you kind of mentioned it yourself, right? I think the, the intent of the comments was to establish that next year, our baseline will be a 28% operating margin. And then from there, depending upon the level of organic growth, we would have the corresponding margin expansion. As a reminder, our LRP, right, assumes a couple hundred basis points above market growth, which, if you call it mid-single digits, you know, would be a high single digit organic growth. And with that growth level, we would expect to expand margin 75 basis points in a normal year. If growth is, you know, mid-single digits for us next year, that would probably be closer to a 50 basis points margin expansion. And so I think that's been the framework we have provided. And I think, you know, again, the intention on this call was just to establish that our baseline OM for next year will be starting at, you know, 28% with these structural cost actions. Understood. Thank you, guys. We now turn to Doug Schenkel with Wolfe Research. Your line is open. Please go ahead. Good morning. I just want to ask, questions on two topics. First is just guidance assumptions for this year from a revenue pacing standpoint, and then a follow-up on China. On guidance, it looks like you're assuming similar revenue pacing to last year. I just want to make sure that's right. And if so, what is embedded into guidance for things like a year-end budget flush and NIH funding? That, that's on guidance. And then on China, the incremental reimbursement pricing headwinds is just getting going. When would you expect this to annualize? Do you have visibility on whether or not this is the last cut? When would a move to single marker panels start to help your business? Thank you. Yeah. Hey, Doug, I'll take the first question there on the revenue pacing. You know, I think as you look at the, you know, sort of Q3 versus Q4 dynamic in the back half here, I would say it is sort of normal seasonality. It's a high single digit ramp in both our life sciences solution and our diagnostics business. The other two, I would say, sort of unique differences for us as a company is one, you do have the ramp up of gel in the fourth quarter. Two, although the signals organic growth will be lower in the fourth quarter, it is always a larger quarter from a volume perspective for there. That is adding additional ramp between Q3 and Q4. Doug, to your second question, as I said, we started seeing the impact of this in late April, early May. We would likely see an impact continue till the anniversary this, or as you said, potentially the regulation is either rolled back or altered. Just to put it in perspective, IDX in China is now less than 6% of our total revenue and will likely be less than 5% in 2026. Thank you. Our next question comes from Dan Brennan with TD Cohen. Your line is open. Please go ahead. Great. Thank you. Maybe just on the lifetime side, since that did well in the quarter, you kind of beat your expectation. Made some positive comments. I'm wondering, could you give any color underneath the hood about reagents and instruments? I know you said grew and were weak. Was there a contemplation to raise the guidance there at all? Just kind of wondering if you could speak to, you know, kind of overall the trends that you were seeing, particularly on biopharma. Maybe I'll start with the trends that we are seeing, and then Max, you can jump in. I think, you know, Ben, if you just think of it, as we've said, pharma biotech continues to show stability, you know, as mid-single digit growth in the second quarter. Just to put it in perspective, our life sciences reagents business has now grown five consecutive quarters. I think that bodes well as we look forward. Obviously, there continues to be impact on the capital equipment spend as we are seeing. Overall, we continue to be optimistic with five consecutive quarters of reagents growth that we have seen in the business. Terrific. Maybe just on the reproductive health business. Sounds like the newborn screening business continues to do really well. Just kind of remind us how you are thinking about that business in the back half of the year. Max, I know you alluded to the gel impact. Can you frame exactly what we are thinking about by the fourth quarter and what is the visibility on that? Thank you. Yeah. I think when you look at the reproductive health business, in the first half here, it grew low single digits. Again, we mentioned on the call, the newborn screening business continues to perform incredibly well despite continued global birth rate pressures. As you look at the back half, the third quarter will probably be similar levels of what you saw in the first half as gel is still ramping up. In the fourth quarter, we do expect reproductive health to grow in the high single digits, which is really a combination of one, the ramp up of gel, and two, there is a little bit of a comp dynamic in the fourth quarter. That essentially sums up our expectations for the second half. In terms of visibility on gel, I would say the launch is going incredibly well so far. We are almost now, almost a full month into it, and we have got pretty good levels of visibility into the expected volume ramps here for the rest of the year. Great. Thank you. We now turn to Puneet Soudha with Leerink Partners. Your line is open. Please go ahead. Yeah. Hi, Prahlad and Max, thanks for taking my question. Just briefly on the software side, can you talk a little bit about how much of that was installed to new contracts versus continuing licensing and service? What is the expectation of growth for software in the second half? Remarkably strong here, but wondering how sustainable that is and why is that not a tailwind to gross margins? Yeah. Hey, Puneet, as I mentioned in, as we mentioned in our prepared remark, our Signals software business continues to do extremely well. We had record quarters for the orders. This is, I think, the longest, highest we had in the history with the, also from a growth perspective, 32% organic growth. You know, but I think it's not really as much as what we look at organic growth, but more around net retention, our ARR and APV. You know, we've had a 21% uplift with 115% net retention in the business. Our APV has grown by 13%. That is driven by a strong SaaS booking. You know, we had nearly more than one third of our business is now SaaS. Overall, you know, when we look at the business, the benefits of the investments that we have made in the business, and as the new product launches come up, that gives us the confidence that this business is continuing to grow very well. Got it. Can you repeat the second question? Do you mind repeating that? Yeah, please. Can you repeat that second question for us? Margin side, you know, why shouldn't we expect improved margins from the software side, just given the, you know, generally those are better margins on the gross margin side? I think we're, look, we're factoring in, obviously, the mix of our businesses as we look at our operating margin for the year. Really, what you're having an impact of on the operating margin side is the magnitude of the volume drop on what were extremely high margin diagnostic assays for a China immune diagnostics business. Okay. Then, Prahlad, you know, a high level, an important question for you. You know, I didn't hear as much on the portfolio resiliency that, as you have talked about in prior calls since the transformation. I mean, diagnostics was supposed to be the support or the ballast in these challenging times and tools, but, you know, it's turning out to be no different than what peers are seeing in terms of the DRG impact in China. Can you talk a little bit about, you know, where the portfolio is and how do you see the position of your position in China, IDX, overall, and your presence in China and how that fits into the portfolio mix that, you know, you want to have in terms of the resiliency? Thank you. Yeah, Puneet, I think, you know, we are very confident and very optimistic with our total portfolio. I mean, we talked about the strength that we have seen in our life sciences business with five consecutive quarters of growth on reagent from pharma biotech in a tough market environment. We have a Signals software business that has grown 30% plus organic growth in the quarter. Our reproductive health business continues to do very well in a tough birth rate market environment. Even our IDX business outside of China grew very well. I think the fact is that, you know, the DRG came up and we saw this unexpected debundling policy that was implemented in the middle of the quarter. Our focus really is that how do we address this with KOLs and with the, you know, and with hospitals to, A, figure out how to reverse these changes because it is going to have an impact on patient care. You know, there are many things that have gone and taken place in China around VBP, Sunshine Act, but really the one that has impacted us is DRG. Our focus really is to ensure that we address that because in the longer term, we are confident this is going to impact patient care. Okay. Thank you. Our next question comes from Dan Leonard with UBS. Your line is open. Please go ahead. Thank you. I want to make sure I understood the comment on the difficult multi-year comps and immunodiagnostics. Could you elaborate there? Sure. I mean, I think when we look at our guidance here for the second half, Dan, if you look at the multi-year stacks between Q3 and Q4 for our IDX business outside of China, they're basically the same at low double digits. That is what we mean by when we say there's a little bit of a comp dynamic, but on the multi-year basis, they're at the same level between Q3 and Q4. Okay. And, clarification on foreign currency, Max, the foreign currency movements haven't been that dramatic since late April when you last reported. So, what's the, I'd just like to better understand the driver of foreign currency on the EBIT margin percentage, if possible. Yeah. I'd say a couple of things on that. One is that, you know, it was as of March 31st as the FX rates we moved, and I don't know, maybe your definition of materiality, but I think it's been a quite significant weakening of the U.S. dollar from the end of March. I think it's been pretty material. I'd say second, when you look at the operating margin drop, the biggest pieces I've mentioned though is really the volume drop of incredibly high margin assays in our diagnostics business for IDX China. Got it. Thank you. We now turn to Michael Riskin with Revvity team. Your line is open. Please go ahead. Yeah, Mike, Michael Riskin with Bank of America, but close enough. Thanks, guys. I want to go back on the DRG changes that you talked about. You made a comment a couple of times that you think that this could actually lift, lead to a change in how diagnostics is done, you know, with moving away from some of these more multiplex panels going to individual testing. I'm just wondering sort of what makes you think that's the direction it's going to. I mean, could not you interpret this as just another step to reduce costs and reduce spending? So while people might, you know, while you might try to replace them with single plex panels, it does not seem like it is going to be a durable change if, again, the end goal was to cut costs. So I do not know if you have seen any evidence for that or any early anecdotes. Just talk about the long-term shift there. Sure. Hey, Mike, welcome to the team. Good morning. You know, I would just say that you are right. You know, the debundle policy or the minimum sufficiency principle, as they say, you know, the primary driver for this is cost. And that is what we are assuming, that this is going to have an impact, and we have assumed in our guidance that this impact will continue until we anniversary this. The fact of the matter is that as you think from a patient care perspective, you do need to find out what is the cause for the autoimmune disease that a patient might have. So from that perspective, they will eventually have to get a single plex test to confirm. And again, I use the needle in a haystack example to sort of illustrate as to how this plays a role. But you are right. From our perspective, we have assumed that this impact is going to continue and we will anniversary this. Okay. All right. Fair enough. And then on the life sciences side of things, you know, the declines in instruments, not super surprising given what we know about the end market. Just curious if you could give us anything on order trends, book to bill. I know you do not like to give specifics, but just any forward demand trends that you saw during the quarter to give you any sense for how, when instruments might return to growth, if they will return to growth by the end of the year, or if we should really look for that in 2026. Thanks. Yeah. Hey, Mike. Look, I think as you look at our platform assumptions for the remainder of the year, we are really not anticipating a different market environment than what we have experienced so far in the first half of the year, which will continue to be a cautious environment, but one that is relatively stably cautious. And so that is kind of our assumption here for the second half. You know, I think we will have to continue to see how, you know, things play out here over the back half of the year and what that also means for 2026. But at least our assumption for the remainder of this year is that it is going to remain, you know, relatively cautious here. Got it. Thank you. We now turn to Patrick Donnelly with Citi. Your line is open. Please go ahead. Thank you for taking the questions. Maybe just a follow-up on the reagent side. Can you just talk about not only what you saw in the quarter, but expectations going forward? I know you serve, you know, some different end markets there. Just curious what you're seeing in each vertical and, again, expectations for the remainder of the year on the reagent side and what you're seeing there. Yeah. From a reagent perspective, I think it's, you know, Prahlad mentioned it's been five straight quarters now of sequential growth, which is obviously a positive sign. I think as you look at what our expectation is for the back half of the year past year, it's very similar to what we saw from the first half. Again, similar to what I just mentioned on platforms. We're not really assuming a change in the underlying market environment, and things continue to be stable and modestly improving, although we're definitely not back at what we consider normal levels. I think when you look at the different splits between pharma biotech and academic and government on the reagent side, pharma biotech is doing slightly better from a reagent standpoint. Obviously, the academic and government headwinds, we're not immune to, but although we are selling reagents, we are, I would say, a little bit more insulated there from an academic and government standpoint. Things are, I would say, relatively stable even there as we've kind of progressed through the second quarter. Okay. That's helpful. Then maybe on the cap deployment side, you guys talked a little bit about a little more aggressive on the share repo. Can you just talk about the appetite on the deal side? It's been topical. We've seen a few larger deals kind of come through in a group. Can you just talk about your appetite, what you've seen, and what the funnel looks like at the moment? Thank you, guys. Yeah, Patrick. I mean, we continue to actively evaluate redeploying our cash into potential M&A targets as I've talked about earlier. Really, we are focused on making strong strategic additions to the company. This is sort of where our disciplined multi-criteria process plays a role. We've not really identified targets yet that are compelling enough from both a financial profile and expected return perspective to move forward with. Given the strong and differentiated financial profile that we have now put in place for Revvity and our strong internal innovation pipeline, we'll continue to remain active and aggressive in looking at opportunities and targets of all shapes and sizes. We'll also remain disciplined, as we believe that what we've built at Revvity is now something that is truly special on its own. We continue to look. We have an active pipeline, but really, we haven't found anything that has been compelling enough for us to make the jump. Understood. Thank you, guys. Our next question comes from Rache l Vatnsdal with JP Morgan. Your line is open. Please go ahead. Hi. Good morning, you guys. Thanks so much for taking the questions. I wanted to kind of pivot here and talk a little bit about your tariff assumptions. You mentioned that your guide was really assuming the tariffs as of Friday, but you also acknowledged the tariff deal that was announced over the weekend with the EU, given EU tariffs are now going to be 15% instead of 10%. Can you help unpack for us a little bit what is currently assumed in terms of dollar amounts for what's going to be pressuring the EU, and then talk about some of the incremental offsets that we can see there, given just that's an important geography for you guys? Yeah. Hey, Rachel. Thanks for the question. Look, I think as you look at the tariff situation here, obviously, it's, you know, rapidly evolving as we saw the news come across the desk yesterday. I'd say, look, there's still some details that have to get finalized here in terms of the exact scope of what is agreed upon in this framework. If we take the assumption that it's a 15% tariff here between Europe and the US, that's probably a gross impact for us in the second half of $0.03-$0.05. However, I would say we're already actively putting in place offsetting mitigation actions to sort of abate these potential headwinds. Longer term, as we're looking at our overall cost structure, this is going to be a major factor as we sort of look at, as we evaluate our global manufacturing footprint and what sort of permanent changes we may need to make there. Great. That's helpful. And then just on NIH, you talked about some of the pressure that you were seeing in academic and government, and that's kind of playing out in line with your expectations here. Could you just walk us through what's the house view from Revvity's end on how you see the budgets playing out? Do you think we'll have a continuing resolution here? You know, what are your expectations for NIH in regards to funding next year? Yeah. I think anyone's response would be as good as mine in trying to speculate what 2026 NIH budget would look like, Rachel. From our expectation right now for the rest of the year, we are assuming that academic and government performance will continue to stay weak, and stay stabilized at the lower level for the rest of this year. You know, we just have to see how things pan out in the second half to be able to comment on 2026. Next question, operator. We now turn to Luke Surgot with Barclays. Your line is open. Please go ahead. Great. Thanks. I just wanted to touch a little bit on the, the life-side margin side. You had a little bit of the, on the, on the GM, you talked about, like, the, the weakness there, but you have really strong software, reagents were up, you know, like we said, instruments. We talked a little bit about that. Just kind of the puts and takes with what's going on. I assume that there's probably a little bit of volume there, but like I said, you had strong reagents and software and kind of how this is going to trend throughout the year. Yeah. I think as you look at our life sciences operating margin, I'd say a couple of dynamics are at play. One, you've got the, the tariff headwinds, obviously, that we've talked about. There's more of an impact in DX, but LS isn't completely immune. I'd say the second thing is we did talk a little bit of the FX pressure that's impacting both of our businesses. And then the third one, I would say, is there was a little bit of specific product mix within the reagents business here in the second quarter that led to a little bit of some margin pressure for that business. But I think as we look over the long term, I mean, there's nothing really that's sort of structurally changed how we view, you know, the operating margin, performance or entitlement of our life sciences business. Okay, a nd then on the additional cost actions you guys are taking out, is this essentially you guys looking at it and saying, "All right, well, this is a, you know, tougher environment. We can kind of pull forward some of those cost actions we were looking to implement on the out years," or is this going to be incremental to those? I think it's a combination of things. One, I think there is a little bit of what you talked about of maybe pulling in some additional structural actions that were already planned in future years. I think two, as I've mentioned, we are reevaluating our global manufacturing footprint, you know, which just given that we have some regulated sites can take a little bit of time. But one now with some of these tariff rates, it probably makes a little bit more financial sense to pull the trigger on. And then I'd say third, we are looking at some specific sales and marketing channels, given the, you know, specific drops in IDX China, and making some very, I would say targeted, actions in that, in that location. Got you. Thank you. Our final question today comes from Dan Arias with Stifel. Your line is open. Please go ahead. Morning, guys. Thank you. Prahlad, you mentioned BBP in your China comments. Can you just sort of explicitly update us on the confidence that you have in that business not getting caught up there? I mean, the message I think has been pretty consistently that that shouldn't be an issue just given the nature of the business, and some of the competitive dynamics. Obviously, there are surprises afoot here. Just checking to make sure that that's still the view that you have. Yes, Dan. What we have seen, again, as I said, has been more around the DRG policy rather than on BBP. I mean, we haven't seen any impact from it going forward. At the end of the day, one way or the other, you know, the whole focus of the government really is how do you debundle, whether you use the Sunshine Act or BBP or DRG to bring costs down. The question really comes from our perspective. The guidance that we have assumed is that impact will continue till we anniversary this. Longer, mid to longer term, our focus is around patient care because from an autoimmune perspective, as I said, at the end of the day, you have to find what the specific autoimmune disease is. Without multiplex and going to singleplex, this is going to, in the mid to longer term, add to the cost, or rather, at the most, be neutral to the cost structure that they are trying to put in place right now and not really significantly bring it down. Okay. All right. That's helpful. And then maybe, on Genomics England and the expanded program there, can you just help us with what the ramp-up period should look like for volumes and maybe what kind of contributions you've assumed for the back half? I think we had circled like $10 million or so. Just checking to make sure that, Max, that's an okay number. Thanks. Yeah. Hey, Dan. I think that's an okay number. Again, as I mentioned, we've got pretty good visibility on what the ramp is. We've already a month into the program. It's going extremely well. I think the splits that you mentioned are appropriate in terms of $10 million overall for the back half. Most of that will be in the fourth quarter though. Okay. Thank you. This concludes our Q&A. I'll now hand back to Steve Willoughby for any final remarks. Thank you, Elliott. We look forward to speaking with everyone over the remainder of today and over the coming weeks. Have a good day. Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.