Revvity, Inc. (NYSE:RVTY) 42nd Annual J.P. Morgan Healthcare Conference January 9, 2024 1:30 PM ET

Company Participants

Prahlad Singh - President and Chief Executive Officer

Conference Call Participants

Rachel Vatnsdal - JPMorgan Chase & Co.

Rachel Vatnsdal

Hi, good afternoon, everyone. This is Rachel Vatnsdal from the Life Science Tools and Diagnostics team here at JP Morgan. I am joined on stage by Revvity and Prahlad, the CEO. And so as is typical, this is going to be a 40 minute session, it will be roughly 20 minutes of a presentation followed by 20 minutes of Q&A. If any of you in the audience have questions, feel free to ping me.

With that, I'll pass it on to Prahlad.

Prahlad Singh

Good morning, everyone. And thank you, Rachel, for inviting us again, to share our exciting story. And I also want to sort of commend you and your colleagues for being able to pull this off flawlessly year-over-year. Before I begin, I wanted to invite your attention to our Safe Harbor statement, and encourage you to visit the investors section on our website revvity.com for any forward looking statements and additional disclosures that are made here today. For those of you who might not have been following us, or our story, might be wondering who Revvity is, well, it's a new company. It's eight months old. And it was born as a result of the divestiture of one third of our legacy, analytical instrumentation, and enterprise services business. Along with it, we divested our legacy PerkinElmer brand name, which essentially gave us an opportunity to create a new identity brand, and corporate culture, which was more akin to who we are as a company and what we are going to look like in the future.

And that has been our singular focus as we have transitioned into Revvity, which is how do we stand side by side as a scientific partner to our customers, and help revolutionize life by solving some of the most complex diseases and challenges that medicine faces today? Over the next 15-20 minutes, I'll try to give you a deeper dive into what Revvity is, if you may ask that. It is essentially nearly a $3 billion annual revenue company focused on the high growth end markets of Life Sciences and Diagnostics. In those markets, we focus around specialized areas, which I will delve deeper into today. 80% of our revenue is recurring in nature. And 20% of it is from high value, differentiated instrumentation platform, which not only acts as a bedrock of innovation for us, but also is a strong pull through -- acts as a strong pull through for the consumables side of our business. Breaking down the two businesses, starting with the end market of life sciences, if you look at this slide, for those of you who are following, analyzing or investing in life sciences companies, this is not very similar to what you might be used to seeing. This differentiation is intentional. Our focus is on preclinical research and development. We do not sell commodity products that are used in routine lab care. Our focus is around providing technology, capabilities and tools to our customers that helped accelerate and make it more efficient, the process of drug discovery and bringing it to the clinic.

Similarly, if you look at our diagnostics business, it's about $1.4 billion in annual revenue. Again, this is not similar to one of the large diagnostic companies that you might be used to seeing. Our focus is around differentiated, around solving and identifying complex diagnostics diseases, whether it's in newborn screening, prenatal, latent tuberculosis, autoimmune, allergy, and next- generation sequencing Sample Prep, where we are focused on solving some of the more complex issues and identifying diseases and providing insights very early in the phase. So as we look at the chiasm, between research and diagnostics, our focus is how do you reduce the chiasm gap as medicine gets more and more personalized. And so our journey begins early on with the researcher and our customer by providing them technology that they can use to develop their drug and bring it into the clinic.

And then we have an opportunity also to partner with our customers by leveraging our lab infrastructure around the world, to identify the patient population, who might be the right ones, for those drug candidates. And eventually, we also use our in house technology, then to develop diagnostics or companion diagnostics, not just for identification of diseases, but also for testing the efficacy and for follow up. So as you can see, we try and be a partner to our customers through the journey of drug development, and into the clinic. What you did not hear me say is that we are a partner for our customers in clinical trials, or as they manufacture drugs. That's not where we play. Like, our focus is more around the innovation and discovery phase of it. And maybe I'll take an example and walk you through as to how does this work in reality and in practice. Our BioLegend and scientists work side by side with researchers as an example, to use a develop an antibody, which becomes a building block for a drug candidate, then this drug candidate goes through the animal model testing phase for testing its efficacy using a recently refurbished preclinical In Vivo Imaging platform and associated consumables. The efficacy of this drug and the activity and reactivity of it to various targets, is then tested using a high content screening platform. And then right before it goes into humans in clinical trials, we use our cell counting and cell imaging platform to assess the efficacy of these drug candidates.

Once this moves into the clinic, we can then work with our customers in leveraging our lab infrastructure and every continent, on the Asian, European and American continents, to identify patients who might be best suited, and who are the best and ideal candidates for testing these drugs. Similarly, we might be using the same antibody from BioLegend, or a similar antibody, and develop a diagnostic that can then work as a companion diagnostic for that drug candidate to be used for testing the efficacy and for further follow up. So as you can see, what I've tried to lay out is how we partner our customer throughout the journey of drug development, as it goes from early discovery all the way into human clinical trials. So the question is, then, how does this differentiation that I've talked about actually result in a differentiated financial performance?

And that is focused for us around three pillars. One is the approach that we use working with our customers, which I talked briefly -- touched briefly upon. The second is around products, we have to have an innovative portfolio. And I'll talk a bit about it and some examples around that, that helps foster that. And the third really is the positioning, how do we position our portfolio and the transformation that we have gone through to help in a financially differentiated performance?

Starting with our customers, I talked about the fact that they are partner in the journey, but the beginning stage of it is the technology that they use, and we try to provide them cutting edge technology which they can license. And once they have brought that in house, they use the capabilities and tools that we provide for developing that drug candidate. In one example of that was what we announced publicly in the middle of last year with a very important customer of ours, wherein we licensed are Pin-point based editing technology for some disease areas where they are using for their internal drug development process. Similarly, we are now moving beyond providing preclinical research antibodies to developing GMP-grade antibodies, cytokines and other consumables that our customers might need. But essentially, our focus is on how do we provide streamlined workflows for our customers, so that it makes their jobs easier, i.e. more efficient, more productive at a lower cost. That is where we are working with our customers.

From a product perspective, for those of you who have been following us might obviously be aware of the portfolio transformation that we've gone through, we post divestment of one third of our business. We don't have any chromatography equipment. You don't hear us talking about LCs, GCs, mass specs, UV-Vis thermal, all of that is not part of our portfolio anymore. Our focus is around high value differentiated technology, which our customers must have. And our focus is how do we bring that innovative differentiation into our portfolio early in the phase. One example of this is the recently launched Quantum GX3 microCT platform, this imaging platform for Ex Vivo and In Vivo Imaging, provides the maximum sensitivity that helps our researchers get further insights into the disease profile much earlier. And then another example I'll give you is on the diagnostic side of the portfolio, obviously, our work around newborn screening is well known. We recently launched on Eonis Q platform, which is nothing like the automated random access large platforms that you would see in labs. But it is a fully integrated workflow that provides the consumables, instruments, software for complex dread diseases, like spinal muscular atrophy and SCID, which was recently launched in Europe, as I said, are the example around a Revvity Signals portfolio, which you will find in every pharma, preclinical discovery lab, it is used for analysis and research, and it is not related or integrated with any particular instrument. So it is ubiquitous in the lab. And this portfolio capabilities allow us to be differentiated with our customers.

So the question really comes that, how do you position this portfolio? We've obviously done a lot, we've acquired more than a dozen company over the past 24 plus months, which has given us an opportunity. And this has been a diligent effort on our part is how do we build a portfolio that allows for a differentiated financial performance and allows for a profitability profile, which is different and attractive? One way to think of it is if you just look at our immunodiagnostic reagent, life sciences reagents and software, this is the highest growth part of our business, which is growing to grow double digits, and provides an incremental profit margin. So the natural growth of this business is a natural margin expansion opportunity that it provides, even before we start picking on the low hanging fruits around costs and synergy opportunistic. This is again, built on a platform of an instrumentation portfolio, both on the life sciences and apply genomic side, which delivers strong cash flow, and more importantly, also has strong organic growth. And, as I mentioned earlier, it also continues to be a bedrock for pulling through more and more consumables, which is on the top side of the chart. And all of this is also, any opportunities that we have around us strategic partnerships, drives additional upside to the underlying market growth that we've mentioned.

Maybe one example from a regional perspective to illustrate this, right. China obviously had a tough year last year from a market environment, not just for us, but also for our peers. 17% of our revenue comes from China. But one fact that was overlooked is how differentiated our portfolio is in China. And maybe this example will give a deeper insight into that, 10% of that 17% is on the diagnostic side of the portfolio, where with autoimmune and allergy we continue to see growth. 7% of it is on the life sciences side, even in a tough, and because of the tough market environment as instrumentation saw pressure last year in China, now more than 50% of the life sciences side of our revenues coming from reagents. So it's not that we were not impacted or are totally immune to challenging market conditions. But in 2023, we grew mid-single digits in China. None of our peers or maybe one or two of our peers can talk about growth, and not declines or significant declines in China. So I think China for us is an example that shows that how our differentiated portfolio allows you to have a differentiated performance in a region.

So looking ahead, while we'll talk about the 2024 numbers during our earnings call on February 1, I do want to sort of take a step back and talk about facts that we want to focus on our attention on in terms of strategic areas. Look, we've done a lot as a company, some say too much. But we've gone through a portfolio transformation, which I would bet you will be hard pressed to find a company that has gone through the level of transformation that we've had from a portfolio perspective in that short period of time. But really, we are just scratching the surface in terms of the opportunity all of this provides. We've done a dozen plus acquisitions in less than 21 months. And our number one driver for growth is going to be the cross company innovation, we are still just plucking on early fruits, as we bring these acquisitions together, and the technological synergies that this provides, as we put the portfolio together. I talked about the number of acquisitions. But we know we cannot lose sight of the fact that off the bat, post divestiture Revvity was delivering 28% margins in the high 20s and close to 30%.

And again, this is without us having delve very deep into the cost synergy opportunities that are there in front of us, both from a top line revenue synergy, and from a cost perspective. And the third pillar where we will continue to keep our focus on is an investment, both organic and inorganic, we'll continue to deploy capital diligently, we've got $700 million of debt during the second half of the year, which we expect to pay. On the organic side, I talked about the GMP capability that we are building, e-commerce is another platform, we just launched our MVP of our e-commerce platform in December of this year. Now imagine, with all the acquisitions that we have done, some of them are delivering 50% of the revenue from an e-commerce platform. And some of them are at 3% to 5%. Putting all of this on an integrated e-commerce platform, which we will fully launch at the end of the first quarter or early second quarter, will give us a tremendous opportunity to bring our full product portfolio on a singular e-commerce platform. And not only does it give the obvious OpEx synergies that would come with it over a period of time, but also, near term, the revenue synergies that it brings with giving you clear insight to our customers of our full capability, and tools that we are able to bring. And the last aspect that I'll touch upon on the investment side is we'll continue to be opportunistic and diligent around our share buyback, like we were in 2023.

So what does all this mean? As we look at our longer term profile, at the end of the 3Q when we did our call on first or second of November, we had talked about the fact that we will take the next few weeks to analyze our longer-term profile. In hindsight, when we gave out our medium term outlook, post divestiture, life sciences were growing double digits from 2020 to 2022. And this was during the COVID phase and market spending was in an exuberance phase. And that now, in hindsight, we realize it was not normal, but neither was 2023. The steep decline that we saw in 2023 was not normal either. I'm very confident that the market is going to turn around and get back to what is a more normal phase of growth, which we expect to be in the 4% to 6%. And given the differentiated portfolio that I have laid out to you, hopefully, we feel very confident of being at least 200 bps above that market in terms of growth, which we also expect to give at least 75 bps of operating margin expansion, as I laid out to you, which should result in double digit EPS growth.

So hopefully that gives you a sense of who we are as a company and what Revvity is all about. Yes, we are in clinical diagnostics. Yes, we are in life sciences and research. But in the markets that we play, we remain differentiated. And that is why we feel strongly confident that we will deliver differentiated financial performance in the years to come. Thank you for your time, and I look forward to the Q&A session. Thank you, Rachel.

Question-and-Answer Session

[Operator Instructions]

Operator

Prahlad Singh

Do you want me to stand or sit or stand?

Rachel Vatnsdal

You can sit or stand. It's up to you.

Prahlad Singh

I’ll stand.

Rachel Vatnsdal

Perfect. So first step just on the 4Q numbers. And that came in a little better than expected, really at the high end of the outlook. So can you talk about what specifically drove that outperformance? You were anticipating low double digit declines in life sciences and low single digit declines in diagnostics. So by segment, can you talk about some of the 4Q trends that you saw in 4Q there?

Prahlad Singh

Yes, I would say that, on the 4Q numbers, that we released this morning, I think we were slight, I wouldn't say that there was anything that was spectacular. But I think in all the end markets that you talked about, we were slightly better than what we expected it to be, and the way we expected it to play out. I think particularly the only thing I will say that America showed a bit more resiliency, we did not see any yearend budget flush, or anything to that effect, which I would point out to saying that was the causative factor. But I would say we probably were slightly better in putting up with what we saw and showing execution in what we needed to do.

Rachel Vatnsdal

Okay, that's helpful. And then just on the new LRP, and that 6% to 8% growth rate. First, can you kind of talk about how did you arrive at 4% to 6% being the underlying market growth rate? And then what is your 6% to 8% really assume for Life Sciences versus Diagnostics? And kind of compare and contrast that to the prior LRP?

Prahlad Singh

Yes, sure. I think what you got to go back and look and learn from what you've seen in the market play out, right. As I said, what we saw on the 2020 to 2022, was not normal, and neither was last year. So when you look at the historical performance over a period of years, you see in the markets that we play, historically, that market has grown 4% to 6%. So that is sort of what we lay out as the platform for what that looks like. In terms of, what was the second part of your question, Rachel? Rather two parts to it.

Rachel Vatnsdal

Just around the life sciences versus diagnostics assumptions in there? And then how does that kind of compare to the prior guide?

Prahlad Singh

Yes. So initially, when we had I think, life sciences we had growing in low double, and diagnostics we had growing in high single. And right now, just as we calibrate this, we expect life sciences to grow high single, and diagnostics to grow mid to high single. So sort of, that's the framework to think of.

Rachel Vatnsdal

Okay, that's helpful. And then just in terms of the margin and EPS assumptions within the new long term guide. So the 75 basis points of margin expansion, double digit EPS growth, your prior long term assumptions, really called for 75 to 100 bps and then 13% to 15% adjusted EPS growth. So obviously, lower revenue growth impacts some of these. But can you walk us through how should we be thinking about the operating leverage in the business over the long term? And does that margin expansion number really benefit from some of the cost options that you've talked about implementing in the next year or so?

Prahlad Singh

Yes, so some of that, obviously, we've sort of accounted for that, as we've laid out the numbers. Look, I mean, obviously, if the market growth is going to be higher, and the organic growth is going to be higher, the margin expansion is going to be more accretive and incremental. And if it's in, consequently, if it's going to be lower, it's going to be lower. But I think, given the way we've thought through, the only difference between what we had laid out to now is the lower market growth number.

Rachel Vatnsdal

Okay, that's helpful. And then just on China, given surprise asking a China question here. Given how pressured that market is really been, can you just talk about your confidence in the long term in China, given we've seen VBP, local competition, anticorruption, and just many of these lingering questions as we head into 2024. So what's your conviction and underlying demand in China? And then what growth rate are you assuming in China in updated LRP?

Prahlad Singh

Yes, and Rachel, this is I think one thing that I've been trying to shout from the rooftops, our portfolio is different. Our portfolio is different in China and other markets. And I think the results should speak for itself. We grew mid-single digits in China, as I said, and I think that is a concerted effort. We expect China to grow for us in line with the long range plan that we have laid out. And that is just based on the fact that whether you look at immunodiagnostics in that market, our life sciences reagent portfolio, software, all of that sort of account for the growth rate. If you take one example of VBP that you mentioned, right? I mean, we, it's not that we've not been feeling seeing pricing pressure, we've seen mid-single digit price declines year-over-year. But our focus really is how do we bring the differentiated tests into that market, where we don't have that much competition, and there is a necessity to have that product in the marketplace. That is strategically how we had tried to manage China. And this is gone for the last decade, since I've joined the company, and we did that on the diagnostic side earlier on, and now we are doing it for the company.

Rachel Vatnsdal

Great, that's helpful. Then I wanted to ask about some of these pharma and biotech trends that you've seen in 3Q, you noted that the weakness in pharma, biotech continued to really worsen throughout the quarter. So now that you've kind of gotten through the end of 4Q, can you talk about how it played out relative to your expectations? Did you see any type of budget flush type dynamics? Were there more site consolidations? And again, is there anything structurally that's really shifted within this pharma and biotech customers for Revvity?

Prahlad Singh

Yes, I mean, as I mentioned, at the end of the 3Q call, when the customers came back post the summer vacation, there was this, as we saw a sudden drop, not just us, and the whole industry saw it. But I think, if it comes back to what was the cause for it, I don't think there is one point or one pinpoint or one silver bullet, you can point that that was what caused it. I think it was a range of issues. One of them is obviously, the impact, the Federal impact around interest rates, cost of capital, and I think that did play in. And that does play a role. But I think the number one factor also goes back to the fact that customers, pharma, biotech, clinical labs, had done a significant amount of purchase over the past two, three years, during the COVID period, the purchases that were done, needed to get calibrated. And I think that was one of the bigger driving factors, which is what we saw in 2023, and likely will play out in 2024.

Rachel Vatnsdal

Perfect. That's helpful. Speaking of 2024, I wanted to talk about that initial framework that you had provided during your last earnings call, and really pointing towards revenue growth in line with 2023 around let's call it 2%. So can you kind of walk us through the core drivers behind this potential growth assumption of, the framework of where we could land on 2024. And then what could be some of the swing factors that will get you to the high end or the low end of that theoretical range of outcomes?

Prahlad Singh

Sure, I would love to do provide more specifics around the four -- during our 4Q call at the end of the month, but I will address a couple of things. I think, as you pointed out, one of the likely scenarios is 2% scenario. And essentially, in that scenario, we expect it to largely play out and taper out into the second half of the year, when we start seeing recovery. I think in terms of the swing factor, the one that could really move the needle, Rachel, would be the pharma, biotech spending. And I think that's the one I would sort of keep an eye out on.

Rachel Vatnsdal

Okay. That's helpful. I appreciate well get full guidance in a few weeks here, but maybe just on pacing quickly. We've heard from many of your peers in the sector, that it's obviously going to going to be more back halfway to year. But can you spend a minute just talking about how you could see that reflection and kind of the pace of recovery playing out in 2024.

Prahlad Singh

I would wait till the end of the month, just four weeks, Rachel.

Rachel Vatnsdal

Fair enough. I had to try. Maybe just shifting over to Life Sciences segment, on Life Science instrumentation that decline high single digits during 3Q and you noted that you expected double digit declines in 4Q with really no sequential volume improvements. So can you talk about how did 4Q play out relative to your expectations? Did you see any of those budget flush dynamics? And then how does that set you up for ‘24?

Prahlad Singh

Yes, as I mentioned, during my prepared remarks, we didn't see any budget flush. But as I also said, we did see it do slightly better than what we expected to do as it was reflected in the performance overall.

Rachel Vatnsdal

Perfect, that's helpful. And then specifically on China within life sciences, in 3Q that life sciences segment in the region saw pressure due to the weakness in CROs. We also recently heard from some major CROs and CDMOs flag business pressure in the first half of 2024, before expecting a turnaround into the back half of this year. So can you talk about some of the trends you're seeing? How much do you really expect that weakness within some of these larger CRO customers could last before we could potentially see a rebound?

Rachel Vatnsdal

Yes, I mean, it's pretty well documented and scripted and they have come out publicly and talked about the impact that they are seeing. And I think the expectation from us and the others is that eventually it will taper off and come back in the second half of the year. I mean, I don't think anything has changed since what we've seen in the end of 3Q versus now, nothing materially has changed, that would tell us that, oh, now this is going to just switch around and turn around in February or March.

Prahlad Singh

Got it. That's helpful. And then on life sciences or licensing and software, excuse me, that's really been a drag on the life sciences segment as well, in 2023. So you noted that, the signal software business, especially had been expected to be download double digits in 4Q. So can you talk about, how did that trend? And then what visibility do you have in 2024, especially from a contract renewal perspective? And then moreover, how much of the licensing and software headwinds are really just timing related versus some type of market headwind?

Rachel Vatnsdal

Sure, I mean, the software business's performance in 2023 was well spoken about by us at the beginning of the year, because we knew what licenses and what contracts are coming up for renewal. And it played out as we expected it to including in the fourth quarter when it was down in the 20s. But similarly, we feel very good about the fact that we expect it to grow double digits in 2024, depending on what we already know, what the contract pipeline that is up for renewal. So it is the beauty of the software business is that once you have a multiyear contract with customers, you sort of have a very good predictive cadence to it. So we were able to see that.

Prahlad Singh

Okay, that's helpful. Maybe shifting over to the diagnostics portfolio, looking back at 2023, Revvity had seen mixed performance across its different diagnostics businesses, applied genomics had been pressured while the rest of the portfolio really is held up well. So looking to 2024, can you talk about, within these different sub segments within diagnostics, which ones are expected to perform above versus below? And then what are some of the key swing factors to growth for those segments as well?

Prahlad Singh

So I think for those of you who have been hearing me talk, I've talked about the immunodiagnostics business for what, seven years now, when I said that, expect it to grow double digit, I would just pencil that down again, that business has done exactly as we have said, and it performs as expected. We've seen pressure from baud rates. But, despite the pressure, which are seen now baud rates are declining by minus 4% globally, we still, continue to do, hold up the reproductive health business pretty well. The applied genomics lab, there are two factors to it, the applied genomics business, I'm sorry, there are two factors to it. One, obviously, we had the clinical labs, which were a big customer segment for that market. And again, with the COVID flush or budget flush, there was a reduction in spending or buying by labs. The second half of the customer base for the applied genomics business, again, happens to be pharma, biotech, and the same budget crunch that we saw in the life sciences’ instruments side of the portfolio impacted the applied genomics. So that's where you would see the impact. So I would put it in that order, Rachel.

Rachel Vatnsdal

Okay. That's helpful. Then just on applied genomic specifically, that segment declined low double digits in 3Q, as it was pressured by some of the pharma, biotech spend that we already touched on. So can you walk through first off, how did it perform in 4Q? And then secondly, walk us through how does revenue really compete in that applied genomics market? And what ultimately is really driving that weakness there? And then timing of rebound?

Prahlad Singh

Yes, I mean, I think what's really, how we compete is nothing, not dissimilar to what we've talked about on the other factor, how do we continue to innovate? How do we bring new NPIs to the marketplace? We talked about the [biocule] launch earlier in the year, and similar products that would help make our customers drug development process, if it's on the life sciences side, more efficient and more productive. In terms of performance in 4Q, I would say, it would be the same remark and slightly better than what we had expected. But, again, we didn't see a big budget flush or anything to that effect coming out from it.

Rachel Vatnsdal

Okay, that's helpful. And then just regarding China VBP. It's a question we still frequently get from investors. So on your 3Q call, you mentioned that roughly 10% of the diagnostics portfolio, you expect already really had an impact by VBP a number of years ago and that you don't expect that the remaining 90% of the full portfolio will be impacted. So can you walk us through what gives you confidence that the rest of the portfolio is going to be insulated from some of these dynamics?

Prahlad Singh

Yes, and I think it is the differentiated portfolio that we have. There is not much competition to what we sell in the marketplace. Plus those that are there they have seen mid-single digit declines in pricing, which we have accounted for. And in the long range, as I said earlier, we expect China to grow in line with our long range growth profile.

Rachel Vatnsdal

Helpful. And then maybe stepping back when we look across the diagnostics portfolio, where would you say that there's a greatest source of upside between ImmunoDx reproductive health, applied genomics, within those areas of diagnostics, both in the near term and in the longer term?

Rachel Vatnsdal

Yes, I mean I think, look, on immunodiagnostics, we continue to add more and more assays and the differentiation there is the innovation of the Euro immune team, which has paid very rich dividends and will continue to do so. On the newborn screening side, there are a whole host of new assays that have come up for recommendation by the RAS panel that we have, in line for regulatory approval, both in the US and Europe and other markets. And I think that will continue to be a growth driver, despite the challenges that we see to birth rates, I would sort of put it in that rank and order.

Rachel Vatnsdal

Perfect. That’s helpful. Maybe shifting over to capital allocation, as you mentioned, during the presentation, Revvity has done a myriad of deals over the past few years. So can you talk about from a synergy standpoint, between those different assets that you've acquired? Is there more to be done on integration? And then maybe just stepping back on M&A. How are you thinking about inorganic opportunities going forward?

Prahlad Singh

Sure. I mean, as I've said, we'll continue to be diligent on acquisition opportunities and look for technologies or product portfolios that will either enhance our current offering or help fill any potential gaps. So we will continue to be diligent in looking for that. I think from an integration perspective, as I said earlier, Rachel, I think we are probably I would say, in our second or third innings, there's still a lot to be done. And that's the exciting part of it. And it's not as necessarily as much on the cost side, but it's around the cross technology innovation, bringing Horizon and [inaudible] and BioLegend and Nexcelom, Peter is here in the audience, we didn't fathom the opportunity that bringing all of these technologies together would provide us and I think that is sustainable for the next several years.

Rachel Vatnsdal

Got it. That's helpful. And then maybe in the last minute or two here, Prahlad, I just wanted to ask you, what do you think is most misunderstood about the Revvity story? And then, where do you think we go from here in terms of the best opportunities?

Prahlad Singh

I think we need to do a better job around continuing to explain our portfolio and our story to our investors. And I think, hopefully, we've done that, with what we released this morning, and it's been a continuous journey. Look, again, it's a totally different company than what it was three years ago, two years ago, and a year ago. And I think we just need to continue to explain the differentiation in our portfolio and our story.

Rachel Vatnsdal

Perfect. And with that, we are out of time. So, Prahlad, thank you so much for joining us today and thank you everyone in the room as well.

Prahlad Singh

Thank you, Rachel.