Revvity Q3 2026 Earnings Call: 7% Organic Growth and Raised Guidance

Key takeaways

• Revvity generated Q3 2026 revenue of $710 million and pro forma organic growth of 7%, led by 9% growth in Life Sciences and 5% growth in Diagnostics.
• Pro forma adjusted operating margin reached 29.4%. Pro forma adjusted EPS rose 21% year over year to $1.37, supported by revenue growth, favorable mix and operational efficiencies.
• Life Sciences benefited from high-single-digit reagent growth, strong mid-single-digit instrument growth and upper-teens growth in Signals software. Management said improving pharma and biotech demand and early AI-related spending are affecting a broader portion of the portfolio.
• Free cash flow was $152 million, representing 99% of adjusted net income. Year-to-date free cash flow exceeded $450 million, with 105% conversion.
• Management raised its 2026 pro forma organic growth outlook to approximately 5% and its adjusted EPS guidance to $5.40-$5.45. Full-year pro forma revenue is expected to be approximately $2.86 billion.
• The guidance and operating commentary are presented on a pro forma basis excluding the China immunodiagnostics business, which Revvity expects to divest in 2027.

Core financial data

Business and operating performance

Life Sciences produced the strongest growth. Reagents increased by a high-single-digit percentage, supported by improving demand from pharma, biotech, academic and government customers. Fulfillment of bulk screening orders contributed about 100 basis points to reagent growth, but management said the underlying run-rate business also improved.

Instruments grew at a strong mid-single-digit rate. High-content screening revenue accelerated despite difficult comparisons, while backlog continued to increase. Management said backlog also expanded across almost every instrument category, with improving demand in detection and high-throughput screening. Revvity has added high-content screening capacity and is building additional capacity for potential demand growth in 2027.

Signals software grew in the upper teens, supported by contract renewals and annual recurring revenue growth above 20%. Annualized portfolio value increased by a low-double-digit percentage. New 2026 launches included Signals Logistics, Xynthetica, BioDesign, Signals AI and an Anthropic connector, although management did not expect the new products to make a significant contribution to 2026 growth.

Diagnostics delivered 5% organic growth. Immunodiagnostics grew by a high-single-digit percentage, including more than 20% growth in the U.S. Reproductive health increased by a low-single-digit percentage, while newborn screening outside China grew at a mid-single-digit rate.

Diagnostics adjusted operating margin was 29.9%, including a 160-basis-point headwind from the China immunodiagnostics operation being divested. Excluding that business, segment margin exceeded 30% and improved by more than 600 basis points year over year.

Geographically, Europe posted double-digit growth for a fourth consecutive quarter, and the Americas also grew by double digits. Asia-Pacific declined by a low-single-digit percentage as reproductive health pressure offset double-digit Life Sciences growth in China.

Management guidance

Management’s updated guidance excludes the China immunodiagnostics business planned for divestiture.

For Q4 2026, management expects approximately 5% pro forma organic growth and revenue of about $755 million at the midpoint. Pro forma adjusted operating margin is expected to be slightly above 32%, with net interest expense of approximately $22 million, an adjusted tax rate approaching 20% and pro forma adjusted EPS of about $1.60 at the midpoint.

The Q4 outlook assumes high-single-digit instrument growth, mid-single-digit reagent growth and Signals software growth moderating from the upper teens to the mid-teens. Diagnostics is expected to grow at a mid-single-digit rate, including high-single-digit immunodiagnostics growth and low-single-digit reproductive health growth.

Risks and watch items

• Some bulk screening orders originally planned for Q4 shifted into Q3. Management does not expect this timing benefit to recur in the fourth quarter.
• Signals software growth is expected to moderate sequentially from the upper teens in Q3 to the mid-teens in Q4.
• Birth rates remain challenging in China, pressuring reproductive health. Management said China reproductive health represents approximately 1% of total company revenue.
• Asia-Pacific revenue declined by a low-single-digit percentage in Q3 because reproductive health weakness offset Life Sciences growth in China.
• AI-related demand remains at an early stage. Management sees broader potential across reagents, high-throughput screening, imaging, detection and in vivo research, but did not quantify the revenue exposure.
• The China immunodiagnostics divestiture remains pending and is expected to close in 2027.

Analyst Q&A highlights

Management said the Q3 reagent result did not reflect a backlog flush. Larger screening programs can be multi-year engagements with uneven timing, and underlying reagent demand improved across both pharma and biotech and academic and government customers.

Pharma and biotech sales excluding Signals software grew by a high-single-digit percentage. Management cited improved laboratory activity, customer support, global product delivery and product value as contributors to reagent performance.

Revvity did not quantify high-content screening revenue or backlog. However, management said high-content screening growth accelerated, backlog increased during Q3, and instrument backlog expanded broadly. Q4 instrument growth is now expected to be in the high single digits.

Management considers low-40% incremental adjusted operating margins sustainable based on the portfolio’s structure. It attributed the recent margin improvement mainly to structural efficiency measures implemented over the past 18 months, favorable mix and sales leverage.

For Genomics England, Revvity expects a full-year 2026 contribution of approximately $25 million. The company remains in negotiations to extend the existing partnership and potentially expand it into additional projects.

Full earnings call transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Ladies and gentlemen, thank you for joining us, and welcome to the Q3 2026 Revvity Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Steve Willoughby, SVP, Investor Relations. Steve, please go ahead.

Stephen Willoughby

Thank you, operator. Good morning, everyone, and welcome to Revvity's Third Quarter 2026 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.

Before we begin, I'd like to remind you that today's call may include forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from our expectations. Please refer to the safe harbor statements in our earnings release and to our SEC filings for a detailed discussion of these risk factors. We assume no obligation to update these forward-looking statements in the future. Additionally, we will refer to certain non-GAAP financial measures during this call. Reconciliations to the most directly comparable GAAP measures are available in our earnings release.

I'll now turn it over to our President and Chief Executive Officer, Prahlad Singh. Prahlad?

Prahlad Singh

Thank you, Steve, and good morning, everyone. I'm pleased to report that Revvity delivered exceptionally strong performance in the third quarter with pro forma organic growth of 7%, exceeding our mid-single-digit expectation. With healthy gross margins, combined with sales leverage from the revenue upside we experienced, our strong incremental margins shined through leading to pro forma adjusted operating margins in the quarter of 29.4%. This resulted in pro forma adjusted earnings per share of $1.37 for the quarter which was $0.08 above the midpoint of our expectations.

Our stronger-than-expected performance in the quarter was driven by our Life Sciences segment, which grew 9% organically with reagents up high single digits, instruments up strong mid-single digits and our Signals software business growing in the upper teens. This fantastic performance was complemented by solid performance in our Diagnostics segment, which grew in the mid-single digits, in line with our expectations. As we have been sharing with you for the last several quarters, underlying market demand trends from our pharma and biotech customers continued to improve in the third quarter, following the policy-related headwinds our industry faced throughout much of last year.

On top of this market recovery, we also continued to see incremental AI-related demand build and begin to expand beyond just a high-content screening business where it has initially been concentrated. While our high-content screening revenue growth continued to accelerate in the quarter, despite strong year-ago comps, our backlog for these instruments also continued to increase. We have taken additional actions to further expand our capacity in this area to support this elevated demand while also building some additional capacity should it accelerate even more as we head into next year. I think the most important dynamic we saw in the third quarter was that the end market improvements and AI-related incremental demand we've experienced over the past few quarters began to positively impact other parts of our portfolio beyond just our cellular analysis franchise.

For example, as I have mentioned, our Life Sciences reagents grew in the high single digits in the quarter, which was its strongest performance in several years across both pharma/biotech and academy and government. Our agent performance in the quarter also benefited from execution of our bulk orders backlog getting fulfilled along with an improvement in our run rate business as well. We also saw other pieces of our instruments portfolio improved, such as our detection franchise primarily consisting of our high throughput screening instruments, which incurred solid growth in the quarter with improving momentum as we head into year end. So overall, the market continues to remain dynamic, but is moving in the right direction. AI-related demand is beginning to be seen across a wider cross-section of our offerings. But it is still in its very early days. I feel our customers are only beginning to scratch the surface in how AI is reshaping their workflows and how preclinical science is conducted.

One thing I find particularly interesting is the amount of scientific data that can now actually be used. Our reagents and instruments have been generating large amounts of biological data for years. What has changed is the ability to now combine that information with other data sets and extract additional insights from it much faster than what's previously possible. As customers look to build larger biological data sets to train and refine their AI models. They are going to need exponentially more data from the wet lab. Our Life Sciences portfolio is well positioned to help them generate analyze and validate that data. I'm looking forward to our Investor Day taking place next Friday, November 13, where we will spend more time discussing how we see science and R&D changing because of and why Revvity is well positioned to support our customers through these changes. I hope many of you will be able to join us either in person or virtually.

Another aspect of how the scientific world is changing because of AI that we plan to spend time on at our Investor Day is within our Signals software business. As expected, this business delivered strong performance in the third quarter. And as we've highlighted throughout this year, 2026 will be the most significant year of new product launches in its history. Just 2 weeks ago, we announced the launch of Signals Logistics, a novel AI native offering that helps connect and coordinate scientific workflows across different people, systems and stages of development. Today, a lot of that work can still be fragmented, particularly as a drug moves from discovery into development and ultimately into manufacturing. Logistics is designed to bring those different pieces together, which we believe can help our customers work more efficiently and ultimately, move promising therapies forward faster.

The launch of Logistics caps an exciting year for signals, where we have also introduced Xynthetica, BioDesign, Signals AI and our Anthropic connector. Some of these offerings were not even on the drawing board 12 to 18 months ago, which says a lot about the team's ability to respond as technology and our customers' needs change. I'm excited about how the business is positioned for what comes next and look forward to further showcasing our signals franchise next week. During the quarter, we also demonstrated our continued innovation in our Diagnostics segment by recently launching in Europe, our new CE-IVDR-certified GSP T1D 3plex kit for the early detection of type 1 diabetes. This is an important innovation for us because it capitalizes on the capabilities and infrastructure we've built over many years in newborn screening and extends our expertise into early childhood screening, which is a new market for us. using a simple dry blood spot sample on our existing GSP platform.

The new test can screen children at risk for type 1 diabetes, months or even years before symptoms appear, creating the opportunity for earlier intervention, given the increasing incidence of type 1 diabetes, and the growing interest in population level screening, we think this is a great example of how we can leverage our existing instrument installed base, scientific expertise workflows and customer relationships to expand into important new areas of diagnostics, which have significant unmet needs. I'm optimistic about the potential of this new 3plex assay as adoption expands initially across European countries. At the same time, we are advancing the development in our pipeline of an even broader T1D assay in collaboration with Sanofi.

Over the last few months, I've spent time at a number of our sites around the world, including our operations in Lubeck and Hamburg, Germany as well as our newly modernized campus in Hopkinton, Massachusetts. These visits give me a valuable opportunity to see firsthand the progress our teams are making. Every one of these sites is running better than it was 2 years ago, and the teams are motivated and engaged to do even more. Hopkinton is a good example. We've consolidated key life sciences and diagnostics activities onto one campus there, including R&D and manufacturing. That's part of the increased efficiency we've talked about over the past several quarters. It simplifies our footprint and increases our team's opportunities to collaborate. I look forward to having you visit this updated campus outside of Boston in the future.

We are seeing similar progress with the efficiency of our Diagnostics work in Europe as we've mentioned over the last year, these actions are now starting to show up in our numbers as adjusted operating margins for our Diagnostics segment in 3Q were 29.9%, which included 160 basis points of headwind from our immunodiagnostics business in China that we are working to divest. Excluding this business in China, our diagnostics margins were up over 600 basis points year-over-year and over 30% overall in the quarter. These efforts, which I was able to view firsthand over the last few months are helping to allow Revvity's full potential to shine through. Our 40% plus incremental margins were on full display in the quarter, which I expect will continue going forward. We are in a good position to deliver a strong finish to 2026 with solid momentum heading into next year. While Max will provide more details in a moment, given the improving performance we've seen over the first 9 months of the year and our expectation for current underlying market trends to continue during the fourth quarter, we now expect our full year pro forma organic growth to be approximately 5%.

Considering we started the year with a 2% to 3% organic growth outlook, it is clear that our performance this year has been progressively moving in the right direction. Given our earnings outperformance in the third quarter, we now expect our pro forma adjusted EPS for the full year to be in the range of $5.40 to $5.45, which equates to approximately 12% growth year-over-year.

So in closing, we have driven strong levels of operational, commercial and financial execution over the last several years since becoming levity while overcoming what has been fairly challenging end market environments that we have been able to consistently outperform by several hundred basis points. I believe our third quarter performance fully demonstrated for the first time since the start of our recent transformation, what our true potential is as a company, our specialty offerings across Life Sciences and Diagnostics are seeing stronger and differentiated levels of demand due to their robust innovation and our ability to deliver the solutions that our customers need.

Our significant operational efforts are having a meaningful impact, which should continue to benefit us as we move forward. With AI-related demand tailwinds beginning to come into view, Revvity is well positioned to capitalize on these emerging opportunities and help power scientific innovation alongside our customers. Finally, I look forward to seeing many of you next week at our Investor Day in New York.

With that, I will turn the call over to Max.

Maxwell Krakowiak

Thanks, Prahlad, and good morning, everyone. The improved momentum we have been seeing across the business as we have gone through this year further accelerated in the third quarter as evidenced by our exceptional performance in the quarter and improved outlook for both the fourth quarter and the full year.

Most encouragingly, the strength we saw was broad-based. Our Life Sciences segment delivered a meaningful sequential improvement with strong growth across reagents, instruments and Signals software, while our Diagnostics segment continued to perform well, and demonstrate solid durable growth. As Prahlad discussed, we are encouraged by the continued recovery in demand from our pharma and biotech customers and incremental AI-related demand is beginning to extend beyond just high content screening and impact a broader portion of our portfolio. We also continued to execute very well operationally. The combination of stronger revenue growth, favorable business mix and the operational efficiency actions we have taken over the last 18 months drove meaningful margin expansion and demonstrated our strong incremental margin potential.

Our third quarter results reinforce our confidence in Revvity's ability to continue to deliver differentiated and above-market growth across all end market conditions with the potential for even greater separation as AI-related demand impact certain areas of our industry more than others.

Now turning to the specifics of our third quarter performance. As a reminder, given the pending divestiture of our China immunodiagnostics business, the following commentary and our updated guidance is provided on a pro forma basis which excludes the impact of that business, which we expect to divest next year. Overall, we generated total revenue of $710 million in the quarter, resulting in strong 7% organic growth, which was well above our guidance. FX was an approximate 1% headwind to growth, while our recent acquisition of ACD/Labs contributed another approximately 1% to growth. As it relates to our P&L, we delivered strong operational performance in the quarter with better gross margin performance as a result of our operational efficiency actions beginning to take hold and in an improved product mix. Our pro forma adjusted operating margins were 29.4%, approximately 40 basis points ahead of our expectations.

Looking below the line, our adjusted net interest and other expenses were $21 million in the quarter, and our adjusted tax rate was 18%. We averaged 111.8 million diluted shares in the quarter as we continue to benefit from our repurchase activity over the last few years. Our pro forma adjusted operating earnings per share in the quarter was $1.37, which was well above our guidance and represented 21% growth year-over-year. The earnings upside was driven primarily by our stronger top line performance and the margin favorability from our efficiency actions and sales leverage.

Moving beyond the P&L. We generated robust free cash flow of $152 million in the quarter, resulting in a 99% conversion of our adjusted net income. On a year-to-date basis, we've now generated over $450 million in free cash flow with a conversion rate of 105% of our adjusted net income. Our cash performance continues to be something we are very proud of, and I expect should continue as we move forward. Our balance sheet also continues to improve as we finish the quarter with a net debt to adjusted EBITDA leverage ratio of 2.3x. As a reminder, we retired our EUR 500 million note earlier in the quarter, resulting in a meaningful drop in our gross leverage overall. We are still targeting a gross leverage ratio of below 3x as we exit the year with our net leverage approaching 2x. Following this recent repayment, our outstanding debt stack remains very well positioned as 100% of our long-term debt remains fixed rate with a weighted average interest rate of 2.8% and a weighted average maturity out another 7 years.

I will now provide some commentary on our third quarter business trends which are also highlighted in the quarterly slide presentation on our Investor Relations website. Again, these results are on a pro forma basis to exclude our China Immunodiagnostics business, and are comparable to the guidance we provided 90 days ago. The 7% growth in our total company organic revenue in the quarter was comprised of 9% organic growth in our Life Sciences segment and 5% organic growth in our Diagnostics segment. Geographically, Europe continued its double-digit growth for the fourth quarter in a row. The Americas also grew double digits in the quarter, while APAC experienced a low single-digit decline due to continued reproductive health pressures offsetting double-digit Life Sciences growth in China. From a segment perspective, Life Sciences generated $380 million of revenue in the quarter. This was up 11% on a reported basis and 9% on an organic basis.

From a business perspective, both our Life Sciences Solutions and Signals software business performed exceptionally well in the quarter and saw significant improvements in growth sequentially. Our Signals software business grew in the high teens organically, which was in line with our expectations, driven by strong contract renewals in the quarter and continued 20% plus ARR growth. Annualized portfolio value or APV, also continued to show good growth and once again grew in the low double digits. Life Sciences Solutions grew in the high single digits in the quarter with both reagents and instrumentation delivering growth ahead of our expectations. While our instrumentation performance improved with strong mid-single-digit growth, our high single-digit growth in reagents was the clear standout. We saw strong trends across geographies for reagents and also benefited from the delivery of the bulk orders we meant in last quarter.

Even absent the bulk orders, our reagent performance improved meaningfully as compared to the trends we were seeing in the first half of the year. By customer type, sales to pharma/biotech grew in the low double digits, while academic and government sales increased in the mid-single digits year-over-year, supported by improved instrumentation and reagent growth. In our Diagnostics segment, we generated $330 million of revenue in the quarter. This was up 4% on a reported basis and 5% on an organic basis. From a business perspective, Immunodiagnostics grew in line with our expectations with high single-digit organic growth overall, driven by more than 20% growth in the U.S. Reproductive health grew in the low single digits organically in the quarter, which was also in line with our expectations as newborn screening outside of China grew in the mid-single digits year-over-year. On a year-to-date basis, our reproductive health business is still up low double digits, which is well above our longer-term expectations for this franchise.

Now moving to our updated guidance for the year. Again, our updated guidance is on a pro forma basis. Excluding the China immunodiagnostics business, we are planning to divest as this is the most appropriate way to view the company and its performance going forward. Our strong third quarter results demonstrated a continuation of the improved demand we have been seeing since the start of the year and benefited modestly from some timing items that we do not expect to repeat here in the fourth quarter. Overall, our performance continues to be differentiated, which I expect to continue even as end market conditions improve. As a result, we are raising our expectations for pro forma organic growth for the fourth quarter and for the full year as compared to our previous outlook. We now expect our pro forma organic growth in both the fourth quarter and for the full year to be approximately 5%. This is up from our prior outlook of 4% for the fourth quarter and 4% to 5% for the year.

FX is still expected to contribute approximately 50 basis points for the full year, while the acquisition of ACD/Labs is still expected to add another approximately 75 basis points to our revenue growth this year. We expect this to now result in our 2026 pro forma revenue being approximately $2.86 billion. With our strong operating margin performance in the third quarter, we are again raising our pro forma adjusted operating margin outlook for the full year. This is now the third quarter in a row we have raised our margin outlook this year. We now expect our full year operating margins to be 28.8%, which is up 10 basis points from our prior outlook and is 80 basis points higher than our outlook at the start of the year.

Our operational efficiency actions are clearly having an impact and the improved growth in areas such as our Life Sciences reagents and Signals software business are favorably impacting our mix. The exciting piece is that the majority of our margin performance is driven by structural actions we've taken over the last 18 months and consequently, we'll continue to provide benefits to us as we enter next year. We now expect our net interest expense to be approximately $88 million, down slightly from our previous outlook and our full year adjusted tax rate assumption of 18% remains unchanged. Our outlook for our shares outstanding also remains unchanged at 112 million. This all results in our pro forma adjusted earnings per share now expected to be in the range of $5.40 to $5.45. This increase reflects our 3Q outperformance, an increased growth outlook for the fourth quarter, offset by some incremental investments we made in the business to reflect our performance so far this year and support our growth in the future.

For the fourth quarter, as mentioned, we expect our pro forma organic growth to be approximately 5% with FX rates as of the end of September and the contribution of our recent acquisition, this puts the midpoint of our expected revenue for the fourth quarter to be approximately $755 million. We expect our pro forma adjusted operating margins to be slightly above 32% in the fourth quarter, and we expect our net interest expense will be approximately $22 million. We are looking for an adjusted tax rate this quarter that is approaching 20%, and we do not assume any buybacks in our guidance. So our share count should be around 112 million. Overall, this puts the midpoint of our pro forma adjusted EPS guidance at $1.60 for the fourth quarter.

In closing, our strong third quarter results marked a continuation of the improving conditions we've seen since mid-February of this year. Our pharma/biotech customers are continuing to move back to more normalized spending behavior while incremental AI-related demand appears to still be early days, but picking up momentum. Our Diagnostics business continues to perform well, and our strong execution and operational efficiency actions are beginning to more meaningfully show up in our reported results. This is all leading to our ability to demonstrate the true potential of what Revvity has become, and I look forward to sharing much more with you next week at our Investor Day in New York.

With that, operator, we would now like to open up the call for questions.

Operator

[Operator Instructions] Your first question comes from the line of Dan Brennan with TD Cowen.

Question-and-Answer Session

Daniel Brennan

Maybe just starting on reagents. So I know you kind of called out the bulk order. Could you quantify that? That would really help, I think, just how much did that contribute in the quarter, so ex that, what did reagents and the total organic do? And then what are you assuming for reagents in the fourth quarter sounds like you're pretty optimistic about what you're seeing? Is that -- is it more pharma? Is it more early biotech? Any more color on what's driving the reagent shrink?

Maxwell Krakowiak

Yes, sure. Dan. Look, I think as you look at the third quarter results, I think we were encouraged by the performance we saw across our reagents business, I think we saw a combination of, again, just stronger momentum on both customer groups from pharma, biotech and academic and government within the third quarter.

I think in your question in terms of the bulk order or some of the larger screening programs, it was a little bit of a contribution to the stronger performance. Maybe if you look at the reagent performance was maybe 100 basis points contribution to the reagents business within the quarter. I think as you then think about that as we head into the fourth quarter, I think us removing sort of that contribution from the screening orders is why you're seeing the reagents drop from what were high single digits in the third quarter to sort of a mid-single-digit outlook for the fourth quarter.

But again, I think we're very encouraged by what we saw from a, I would say, underlying market demand perspective and our team's ability to execute across the reagents business.

Daniel Brennan

That's great. And then maybe just switching over to instruments. It sounds like that was around 6% in the quarter. There's obviously been a lot of focus here, particularly on high-content screening, given the commentary you guys have had on customer ordering and demand trends there. So I would love to know if you could tell us on what did high-content screening actually do in the quarter? Kind of how are you thinking about that business in the fourth quarter? And then I know you talked about backlog. Could you give any color like on what the backlog looks like and how much capacity you guys have to meet the demand?

Prahlad Singh

Yes. Dan, obviously, as you heard us in the prepared remarks, high content screening. And overall, our instrument business does really well. I mean we had strong mid-single-digit growth in the third quarter, and we expect to have high single-digit growth in the fourth quarter. So obviously, the 10 continues to do well. We continue to have a strong backlog and execute. Obviously, high content screening did well.

But what I would say is the fundamental recovery that we are seeing in the pharma/biotech market is obviously helping the full instruments portfolio. So obviously, AI is a catalyst, but overall, there is a strong fundamental recovery in the base case market, which is obviously helping the instruments business.

Operator

Your next question comes from the line of Vijay Kumar with Evercore ISI.

Vijay Kumar

I guess maybe my first one, Max, perhaps to you on the Q4 implied, I think Q4 implied is maybe around 4.5% organic. Why does Q4 step down, just given you had a phenomenal in Q3, you sound bullish on end markets and AI demand? So curious, do you have any days headwinds? What's the assumptions underpinning the Q4 guide?

Maxwell Krakowiak

Yes. VJ, look, I think as you mentioned, I think, again, we're very encouraged by what we're seeing from an end market perspective. I think as we look at the fourth quarter, really, the drop quarter-over-quarter is mostly driven by 2 factors within Life Sciences. One, I did talk about the reagents dynamic. And then two, we are seeing a little bit slower of software growth between the third and the fourth quarter. And the third quarter, our software business was up high teens and we expect that to moderate a little bit in the fourth quarter to closer to a mid-teens number. I'd say those are really the 2 big, I would say, pieces that's really causing for a little bit of the drop between the third and the fourth quarter.

But again, I think we're very encouraged overall by what we're seeing across both customer groups of pharma/biotech and academic and government.

Vijay Kumar

Understood. Then Prahlad, maybe one for you, a big picture question on -- you noted AI a few times on the call, high-level, what are the key segments or products that are exposed to AI and high-content screening comes up. But I think I also heard you saying it's expanding beyond high-content screening. So what are the other product categories that are exposed to AI? And what percentage of revenues are exposed to AI? What's the right framework to think about AI demand?

Prahlad Singh

Yes, Vijay, obviously, if you look at on the Life Sciences side of our portfolio, starting from reagents, as we go from high content screening to a high throughput screening both on the instruments and the reagent side, you will expect to start seeing a pickup. I would say we are in the early days. And as both Max and I have pointed out, we are just starting to see the beginning of the impact that AI could have on the portfolio.

But the way I would sort of look at it as you walk through on the reagent side, from high-content screening, to high throughput screening and eventually, as these drug candidates move down the pipe to [indiscernible] filing, you will start seeing the impact of it on imaging and detection through in vivo. So we expect, as we move forward into 2027, it having a broader impact across the portfolio that we've set up for preclinical.

Operator

Your next question comes from the line of Doug Schenkel with UBS.

Douglas Schenkel

One follow-up on instruments, and then I want to talk about margins. On instruments, you grew Life Science Solutions instruments mid-single digits in the quarter. Based on your commentary, it seems like you beat what you embedded in guidance by maybe $1 million to $2 million. What drove instrument growth above your expectations, underlying demand order conversion or shipping timing? And really more to the point, given you're talking about high content screening continuing to grow double digits, how did the rest of the instrument portfolio perform based on the math, it seems like there are areas that are lagging. Where is there an opportunity for things to pick up?

So that's really instruments on the margin side. As revenue growth normalizes is about 40% incremental adjusted operating margin, a reasonable framework for the next several quarters. Or just the strength that we're seeing in the second half of the year, it includes some benefit that won't recur, especially as you move into an environment where maybe you could invest more in long-term growth.

Maxwell Krakowiak

Doug, thanks for the questions. I'm actually going to work backwards to the questions there and start with the margin one. I think as you take a step back and look at our portfolio, even when we set up our LRP a few years ago, we had mentioned that we expect our portfolio to deliver low 40s plus incremental margins. And I think you're continuing to see that come through over the course of the year. And so yes, we do believe that this is sustainable. We believe that it is one of the more exciting pieces of the revenue portfolio that we really haven't gotten a tremendous chance to show folks just given the market headwinds over the past couple of years.

But as you can see now, with some I would say, stronger improvements in the underlying markets, we are able to showcase the true, I would say, margin potential in revenue and is one of the things that we're most excited about. I think if I then move to your first question on instrumentation, I would say, from an instruments portfolio perspective, I'm not sure if $1 million or $2 million was really the right beat number in the third quarter, I think it was probably a little bit more than that. But it was broad-based. It wasn't just driven from the HCS portfolio, while was strong growth in the quarter. I think if you had heard Prahlad response to the previous question in terms of how we see this continuing to broaden out across our portfolio as we saw in the third quarter, our backlog grew across almost every instrument group that we have in the portfolio and continues to accelerate.

I think as you look at some of the additional, I would say, pieces of the instrument portfolio that we'll see demand pick up, we talked about starting to see it in the detection and high throughput business. We've talked about how subsequently, it will also start to impact our imaging and in vivo portfolios. And so I think this is something that isn't just an HCS phenomenon, and this is something that over the course of the next couple of quarters, you're going to see a continuing broadening out of the demand across our instrument portfolio.

Operator

Your next question comes from the line of Puneet Souda with Leerink.

Puneet Souda

First one, a more specific one on HCS. And then a broader follow-up after. And Prahlad, maybe -- or Max, on the HCS Opera Phenix, obviously, very strong. Wondering what metrics can you provide here in terms of sort of like the order book backlog conversion. Obviously, this is a high ticket item. I think investors also want to know the pull-throughs of these platforms, how sticky that is. And ultimately, if there is a way to conceptualize the AI demand that you're seeing not just HCS, not just across HCS, but just broadly across the portfolio that you have and which is obviously a transformed portfolio that is now delivering.

Prahlad Singh

Puneet, thanks for the question. As I'll point out, and we said I think in mind on Max's remarks, we are starting to see backlog build up across all our instrument groups. So I would say that HCS is obviously an important aspect of it and it gets attention. So specifically, I think what we can tell you guys is HCS backlog continued to increase in 3Q, and the revenue growth continued to accelerate despite we having strong comps. So that is an added element that we have to keep in mind.

We've added capacity and are building more just in case as demand continues to accelerate into next year. I don't think we are going to start quantifying subsegments of the instruments business. But I would -- we continue to be very excited about the trend that we are seeing and not just AI, I'll reiterate, we are seeing a fundamental recovery across the pharma/biotech sector.

Puneet Souda

Got it. On that point of fundamental recovery, I mean, you said outlook has steadily improved throughout the year. We've seen numbers go up. Prahlad, there are being fault of starts in the past and across the sector. Just wondering what gives you confidence that this is more sustainable this time and sustainable as the momentum can actually continue into 2027.

Prahlad Singh

I mean, I think the CapEx spend is a key indicator. The order trend, the backlog. I mean, I think what we've seen in the past, as you pointed out, they tempted to happen in sports. And then -- but now 2, 3 quarters in a row, we are continuing to start to see a trend where customers, researchers and pharma/biotech are really looking at mid- to longer term as to how can they build capacity and capability to be able to build out what they need to do both for their current pipeline and as they look at AI as a driver for research.

Operator

Your next question comes from the line of Subbu Nambi with Guggenheim.

Subhalaxmi Nambi

Acknowledging that we are still focused on 2026. Can you give us some color on how you're thinking about diagnostics for next year? There are some questions surrounding comps of reproductive health, if you can grow at LRP considering a potential general headwind? And what should immunodiagnostics ex China look like given the growth you have seen?

Prahlad Singh

Subbu, the way I would say is that if you're looking at 2027, our end markets, both on diagnostics and pharma continue to do well. I think you guys have looked at how the reproductive health business has done in the first half of the year, both on instruments and reagents. And in the second half, the reagents continue to do well. I think you might want to come to the Investor Day, and we may provide some considerations to think about 2027 there.

Subhalaxmi Nambi

Fair enough. And my second question is, it's great to see all this increase in demand because of AI. But are there areas that are seen as being negatively impacted by AI at any of the portfolio, whether it's instrumentation, reagents, software?

Prahlad Singh

Not on the preclinical research side, Subbu. I don't think we've seen anything where it has been a detractor or a deaccelerator on the portfolio. I mean the whole idea of when we set up privity and we build the preclinical side of the portfolio, was to ensure that we provide the capabilities, tools and elements that our researchers need in order to be able to accelerate drug discovery. So we are in a position to now leverage the full capability of the portfolio. And I would say that there is nothing that we've seen that as being a detractor.

Operator

Your next question comes from the line of Dan Leonard with RBC.

Dan Leonard

I just wanted to visit -- revisit that reagents growth number, again, high single digits in total mid-single digits ex the bulk. You talked a bunch about end market improvement, but it doesn't seem like the end markets for reagents businesses are growing that fast, if you look at comps that have already reported. So can you speak to some of the execution elements behind your reagents performance?

Maxwell Krakowiak

Yes, sure. And I think, look, I think from a reagents growth perspective, I think we would maybe argue that it does continue to improve sequentially from the trends we've seen over the past several quarters. I mean if you look discretely within both academic and government and pharma biotech, even if you remove some of the benefit from the screening orders. These were the strongest performance we've seen in both customer groups in over 1.5 years.

And so I think we are continuing to see improved levels of lab activity, again, across both customer groups. And I think also when you step back and look at it in terms of just our sort of overall reagent playbook and why we believe we're able to execute so well commercially, it's a multitude of factors, whether it's around, one, our ability to deliver our products within 24 hours around the globe or two, our level of customer support and engagement and being true partners with them on the research side. And three, really being able to, I would say, deliver the best value based product in the market. And so I think it's a multitude of factors. It's not just one factor. But we do believe, I would say, on 2 fronts. One, we're executing well and two, the markets are improving.

Dan Leonard

I appreciate that. And then my follow-up question, maybe this is better served for next week. But wondering if you could offer any insight into the uptake of your new software products. Any KPIs you could share?

Prahlad Singh

Yes. Dan, I think we have a big section on both the software side and the AI and life sciences component. So I'm sure you will really love to come to the Investor Day and hear the story there. I don't want to burst their bubble and talk about it here.

Operator

Your next question comes from the line of Dan Arias with Stifel.

Daniel Arias

Max, what was pharma/biotech up this quarter if you exclude software? Last quarter, you made the point that ex software, you were up low singles. Software is clearly accretive now this quarter. So just curious what the apples-to-apples would be if we're comparing growth rates for biopharma reagents and equipment.

Maxwell Krakowiak

Yes. So if you were to exclude the benefit from the Signals business, obviously, had a very strong quarter here in the third quarter. Pharma/biotech excluding Signals was still up high single digits. And so that is going to be an acceleration from what we had previously seen. So again, we talked about some of the reasons why we're seeing the improved demand from pharma/biotech, not just related to [indiscernible], but I would say more natural improvement in the market conditions and you're seeing that come through the results.

Daniel Arias

Okay. Okay. And then just maybe on Genomics England, I don't think I heard you say this, but to just finish the year, what are you thinking about as a contribution? And then the idea of an expansion of the relationship with a new contract into next year?

Maxwell Krakowiak

Yes. So for Genomics England, we are now embedding about, I would say, $25 million-ish in terms of a full year contribution from that project. And then as we previously discussed, we're still in active negotiations with them in terms of extending the existing partnership, but also looking to expand it into other areas that we can continue to work with them on. Again, I think both of us are incredibly excited about how the project is going and look forward to working together on additional projects as well.

Operator

Your next question comes from the line of Luke Sergott with Barclays.

Luke Sergott

Great. I know stuff on the AI and the high content screen, but can you just give us a sense of like the reagent strength in that bulk order, was that associated with your high-content screening, the Opera backlog build that you guys have been doing? It seems like that there was a little bit of a backlog flush here to get your instruments above what you guys were looking for. And I'm just wondering if how much of that bulk order on the reagent followed through. But more broadly on the demand, like where is this coming from an AI from these customers? Is this just like traditional or like legacy biotechs and pharma that are now transitioning into AI drug discovery? Or is this from just new biotech or pharma new AI drug discovery like startups?

Maxwell Krakowiak

Yes. Luke, I appreciate the question. There was a lot of questions embedded in that one. And so I think, look, maybe to just, I think, summarize what you were trying to get after.

From an instrumentation perspective, let's start there. I would say there was no backlog flush within the period. Our backlog continued to grow and accelerate as we exited the third quarter, and again, that was broad-based improvement. I think even when you look at the reagent side of things, there was no, I would say, real backlog flush either. These screening programs are ones that usually -- you have a very strong engagement with a pharma/biotech customer, it's usually a multiyear project. The timing of these can be a little bit sporadic as it does take validation on their side as well when you come out with the larger screening panels. And so it was just a little bit of a timing and execution dynamic of why that shifts into the third quarter, but it wasn't a flush as I would call it, as you mentioned.

I think with the one thing on the reagent side to keep in mind is we did have some of the screening programs planned for the fourth quarter that moved into the third quarter, but we're still holding the same mid-single-digits reagent outlook in the fourth quarter that we had previously, which is a testament to the improved underlying market demand environments that we've been talking about that we're seeing from both pharma/biotech and academic and government customers.

Luke Sergott

Okay. Great. And then, I guess, lastly here from the Signals side. I know you just launched a lot of the new, I guess, software suites. Can you talk about the funnel and how that's been building? You guys talked about that ticking down a little bit in the mid-teens, and I know it's a little bit of a longer sales cycle there. So just give us a sense of the building demand for all the new Signals products.

Maxwell Krakowiak

Yes. Look, I mean, I think one of your colleagues here try to answer -- ask a similar question before. Look, I don't think we're going to run too much or give too much of a spoiler in terms of what we're going to go through at Investor Day. But I would say, overall, if you look at the Signals business, it continues to perform well. APV growth is double digits again in the third quarter. It should be on track to deliver again double digits for the full year from an APV perspective, which, again, that annualized portfolio value is really the best way to look at the performance of that business.

From an [ MBI ] perspective, we continue to get really good, I would say, traction and feedback from the customers. As we had previously mentioned, we didn't anticipate a huge contribution from them in 2026 just given that they were new product launches and that takes time to convert into the results and organic growth. But from an actual attraction perspective and feedback from customers, everything has been very positive on the NPIs.

Operator

Your next question comes from the line of Jack Meehan with Operon Research.

Jack Meehan

I want to focus on the Diagnostics business. Is it possible to just elaborate on the newborn screening performance in the quarter. So it was mid-singles ex-China? What was it altogether in China? It's just -- curious if there are any comp dynamics going on there?

Maxwell Krakowiak

So what was that -- Jack, repeat that second piece of the question?

Jack Meehan

I was just curious what -- so with mid-singles ex China, what was it altogether? And just talk about what's going on in the China business.

Maxwell Krakowiak

Yes. Look, I mean, reproductive health at a global level was low single digits in the quarter. I think when we had come into the quarter, we had talked about a couple of reasons for why you were going to see a step down from the first half to what we were expecting for the second half, which was a low single-digit outlook. And those 2 factors is, one, you have less of a contribution from Genomics England year-over-year. And then the second dynamic is we were not expecting as much contribution from instruments, which also had a tougher comp in the second half of this year. So I would say that's how you would -- I would think about it at the global level.

When you look at things from a China reproductive health perspective, obviously, birth rates continue to be very challenging within China. However, reproductive health in China for us is now like approximately 1% of our total company revenue. So it is a very -- it's a smaller piece of the overall portfolio. It can still move out, I guess, the reproductive health. But at least at a total company level, it's a very small balance for us.

Jack Meehan

Great. And then I appreciate all the 4Q commentary on the Life Science business. I was wondering if you could just share that on the diagnostics side, too, just what the expectations are for reproductive health and immunodiagnostics.

Maxwell Krakowiak

Sure. So for the fourth quarter on the Diagnostics side, we're expecting very similar performance to what we saw in the third quarter. So the outlook is about mid-single digits overall for Diagnostics, and that has immunodiagnostics, up high single digits like it was in the third quarter. And reproductive health at low single digits like it was in the third quarter.

Operator

Your next question comes from the line of Casey Woodring with JPMorgan.

Unknown Analyst

This is Paul on for Casey. Congrats in the quarter. So it looks like your 4Q guide, aside from pulling out the 100 bps that you talked about for the screening reagents all quarters is essentially the same on the top and bottom lines. Could you just confirm, are there any changes to the 4Q implied guide aside from the screening bulk orders that were moved to 3Q?

Maxwell Krakowiak

I would say maybe the one other nuance is we do have also an uptick in the instruments outlook for the fourth quarter as we're now calling high single digits versus the previous outlook. But other than that, no, in terms of nominal revenue dollars and the margins that we have in the fourth quarter, it's the same as we had in the previous guidance assumption.

Rachel Vatnsdal Olson

Okay. I appreciate that. And then just as we're thinking about exit rates, could you just touch on in terms of any assumptions for budget flush? How are you thinking about that? Any other timing factors or seasonality flags that you'd call out just as we're thinking about kind of exiting the year into 2027 as a jumping off point?

Maxwell Krakowiak

Yes. Look, I don't think there's anything specific I would call out from a fourth quarter perspective. If you look at the seasonality ramp, which we generally have about 6% or 7% between the third and the fourth quarter. I think if you look at it for what we've implied, it's a very similar level of seasonality ramp. So I wouldn't say there's anything specific I would call it, that would be a nuance for us in the fourth quarter.

Operator

We have reached the end of the question-and-answer session, and this concludes today's call. Thank you for attending. You may now disconnect.