Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hologic Inc (HOLX, Financial) reported total revenue of $987.9 million for the fourth quarter, exceeding the high end of their guidance range.
- The company's molecular diagnostics business grew 9% excluding COVID, demonstrating strong growth and resilience.
- Hologic Inc (HOLX) maintained a 30% operating margin, placing it in the top tier of its peer group.
- The company successfully executed its M&A strategy with acquisitions like Endo Matics and Gyno SOIC, enhancing its global portfolio.
- Hologic Inc (HOLX) announced a new $250 million accelerated share repurchase program, reflecting strong capital allocation and shareholder value focus.
Negative Points
- The company faced a 54.9% decrease in revenue from its Skeletal business due to a temporary stop ship, impacting overall performance.
- Hologic Inc (HOLX) anticipates headwinds in the first half of fiscal 2025 due to IV fluid shortages affecting surgical and breast procedures.
- The breast health segment is expected to experience slower growth due to the anticipation of a new gantry launch.
- The company is planning conservatively around the respiratory season, which could impact revenue from respiratory assays.
- NovaSure, a part of the surgical business, is experiencing a decline in the U.S. market due to alternative treatments becoming more prevalent.
Q & A Highlights
Q: Can you discuss the margin outlook for fiscal 2025 and the factors influencing it?
A: Karleen Oberton, CFO, explained that there are transitory headwinds in the first half of the year, such as the IV fluid shortage impacting surgical operations. These are expected to be resolved over the year. Network optimization opportunities will also contribute to margin benefits as the year progresses. Revenue growth is expected to accelerate in the latter half of the year, aiding margin expansion.
Q: What is the outlook for the breast health business, particularly with new product launches?
A: Stephen Macmillan, CEO, noted that the new gantry launch will impact revenue more significantly in 2026-2028. There might be a slight slowdown in gantry sales before the launch, but the service and interventional businesses, along with new additions like Endo Ma, will continue to drive growth.
Q: Could you provide an update on the growth drivers, specifically Biotheranostics and BV CV TV assays?
A: Karleen Oberton, CFO, stated that BV CV TV is the second largest assay, generating several hundred million dollars in revenue, and is expected to continue double-digit growth. Biotheranostics is around $100 million and also expected to maintain solid double-digit growth.
Q: How is the transition to the respiratory panel affecting sales, and what are the expectations for 2025?
A: Karleen Oberton, CFO, mentioned that the transition from COVID revenue to the respiratory panel contributed several tens of millions of dollars in 2024. They do not expect another transition year, which presents a headwind for the first half of 2025.
Q: Can you elaborate on the impact of the IV fluid shortage and its expected duration?
A: Stephen Macmillan, CEO, and Karleen Oberton, CFO, explained that the IV fluid shortage, resulting from recent hurricanes, is impacting elective procedures in surgical and breast businesses. This is expected to be a short-term issue, potentially affecting the first two quarters of 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
