• Total Revenue: $1.022 billion, an increase of 1% on a constant currency basis.
• Non-GAAP Earnings Per Share: $1.03, an increase of 5%.
• Non-GAAP Operating Margin: Improved by 90 basis points.
• Diagnostics Revenue: $470.6 million, grew 5.2% and 9.1% organically excluding COVID.
• Breast Health Revenue: $369.1 million, declined 2.1% or 5.8% organically.
• Surgical Revenue: $166.3 million, increased 2.5%.
• Skeletal Revenue: $15.8 million, decreased 37.4%.
• Non-GAAP Gross Margin: 61.6%, increased 80 basis points.
• Operating Expenses: $329 million, increased approximately 0.5%.
• Operating Margin: 29.4%, increased 90 basis points.
• Share Repurchases: 6.8 million shares for $517 million.
• Operating Cash Flow: $189 million.
• Cash and Investments: $2 billion at the end of the quarter.

• Warning! GuruFocus has detected 2 Warning Sign with HOLX.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hologic Inc (NASDAQ:HOLX) reported total revenue of $1.022 billion for the first quarter, in line with guidance and reflecting a 1% increase on a constant currency basis.
• Non-GAAP earnings per share were $1.03, at the high end of the guidance range, showing a 5% increase.
• The diagnostics division performed strongly, with revenue growing 5.2% and 9.1% organically, excluding COVID-related sales.
• The company has a robust pipeline with more than 20 assays on the Panther and Panther Fusion platforms, supporting future growth.
• Hologic Inc (NASDAQ:HOLX) continues to leverage its strong cash flow from market-leading brands to drive innovation and acquisitions, such as the recent Gynesonics acquisition.

Negative Points

• Breast health revenue declined by 2.1% or 5.8% organically, primarily due to lower sales of capital equipment.
• The company lowered its full-year revenue guidance by $100 million due to factors including a stronger US dollar and softer breast health capital equipment sales.
• Hologic Inc (NASDAQ:HOLX) faces potential policy-related revenue disruptions, such as the freeze on foreign aid affecting HIV testing partnerships.
• The skeletal business saw a significant revenue decrease of 37.4% due to delayed shipping of Horizon DXA units.
• The company anticipates tariffs on products manufactured in Mexico, which could impact gross margins.

Q & A Highlights

Q: Steve, can you discuss the current trends in the gantry market and how they are affecting Hologic's performance? A: Stephen Macmillan, CEO: The gantry market is experiencing a cyclical downturn, partly due to a bolus of demand we saw in 2023 and early 2024. This was driven by pent-up demand post-chip shortage. We expect a softer market this year but anticipate a reacceleration in 2026 with the launch of our new gantry.

Q: How is Hologic's diagnostics business performing, and what are the growth prospects? A: Stephen Macmillan, CEO: Our diagnostics business is strong, particularly in molecular diagnostics. We are excited about the growth potential of our Panther platform and new assays like BV/CV. We are still in the mid-innings of realizing the full opportunity for these tests, and international expansion remains a key growth driver.

Q: Can you provide more details on the impact of market conditions versus the upcoming gantry launch on breast health revenue? A: Essex Mitchell, COO: The market conditions, particularly post-chip shortage, have a larger impact on the current slowdown than the anticipation of the new gantry. However, we expect the new gantry launch to drive future growth.

Q: What is Hologic's approach to M&A, and how does it fit into the company's growth strategy? A: Karleen Oberton, CFO: M&A is a key part of our growth strategy. We focus on acquiring assets that are accretive to our growth rate and have strong gross margins. Recent acquisitions like Endomagnetics and Gynesonics align with this strategy, and we aim for a double-digit ROIC over time.

Q: How is the Panther Fusion platform contributing to Hologic's growth, and what are the future prospects? A: Stephen Macmillan, CEO: The Panther Fusion platform is crucial for expanding our assay menu, particularly PCR assays. We see significant growth potential as more customers adopt Fusion, and we continue to develop new assays to drive utilization.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.