HOLX - Earnings call transcript Q3 2022

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Operator

Good afternoon and welcome to the Hologic Third Quarter Fiscal 2022 Earnings Conference Call. My name is Cody and I am your operator for today's call. Today's conference is being recorded. All lines have been placed on mute. And I would now like to introduce Ryan Simon, Vice President, Investor Relations. ahead. go Please

Ryan Simon

Executive Good third Cody. today thank for and you Steve Chief Oberton, Thank Officer. Financial fiscal afternoon XXXX Hologic's Chief President Chairman, quarter the me and earnings joining Karleen MacMillan, our you, company's and Officer, call. are With

third release now is Our on of section investors quarter corporate along website, presentation. press our with available the an updated

will after be prepared we post through will our remarks of to this website replay also call them. deliver XXth. shortly available And August a We our

Before in to currency revenue non-GAAP which screening safe constant can as filings. reconciliation GAAP included organic we statements differ define and from measures. and to harbor the we our be divested earnings revenue may are, earnings one, business begin, statements measures blood excluding of be revenue, would these Two release. and release from non-GAAP we during found discuss Also our statement XX, revenue, include that you like expressed results known And those implied. discontinued owned that less the excludes businesses for excluding Such in in we Diagnostics. than which sales revenue product SEC assay forward-looking. materially COVID- to certain one or unknown call, organic financial involve will acquired uncertainties actual factors certain inform we risks COVID-XX and this make today related A Hologic to will revenue cause and year. by These in two, those referenced COVID-XX,

noted. in constant and be a otherwise basis, be growth we revenue rates will discuss Finally, unless will changes on any percentage currency year-over-year

Steve like to I'd turn Now, to call over MacMillan, CEO. Hologic's the

Stephen MacMillan

everyone. good And Ryan. you, afternoon, Thank

results to fiscal discuss third our are the of for pleased We financial quarter XXXX.

performances promise also midpoint billion in the showcase and to the non-GAAP Surgical of doing women's and – durability industry-leading live Both our every business for COVID be our world, durability and and while our just to financial around earnings $X both businesses. everywhere, the lines lives to over revenue put shareholders. the and our simply, dynamic core products In and guidance business business. In environment. our patients continue numbers continue for health. diversity and diversity enables global even share continue and exceeded to strong per enable Total macro passion so, champions our day of the more of of – enduring $X.XX. strong purpose, succeed delivers revenue to on performance value was was we it our the healthier results Hologic this and Our our result – this Diagnostics bottom top and challenging world, reach ever-changing in To strength,

confidence we our navigate a business high. our As headwinds, in remains multitude and steady remains of

also Looking message unchanged. longer our is term,

advocating now. voice reaffirms Health, And Annual Forum and World especially of in provide highlight X% growth world share that we financial turbulence, the organic provided current rate we'd current the Surgical. our like Diagnostics, normalizes women's results despite an revenue X% turning announced to Meeting each and over – confident, the updates of May, chip are on on detail, achievable to the Economic to experience for our our to target, XXXX Karleen Breast businesses through drivers growth experience our more We as from health, close, importance excited annual to the previously expect. to are our Ahead we remains that of discuss place in call our stage and headwind the an

low, testing demand way. poised high each revisit into is important jumping impact either COVID our or we reality on of division, the for that is is Before the The to it business. are to COVID succeed whether

natural hedge. a have COVID We

each affects have two years, past of base the we seen prevalence COVID over businesses. As our

screenings, exams, surgical well-woman declines, cases postponed. and our strengthens. are COVID as rise, often base procedures elective COVID business Conversely, As

COVID we strengthened speed molecular we highly for unprecedented future. reliable world's responded to dramatically with the our also answer company needs testing, As for the

for non-COVID We gauge often doctor April, through stronger the impact Diagnostic growth longer-term of geographies also the additional durability significant COVID last as Surgical wide impact varying of our others placements, quarters in variability we of X% have the well last visit the of of years and truth various core at and as Surgical. are over quarters cases surges while created know Diagnostics the our and the last Panther you as quarter. and trying the of in many acquisitions many COVID times businesses surge to in time. respectively, is, comps, and in slowdowns, that our reflect bounced couple amidst When The in around the various reported the some in related year-over-year rates back example, of hospital given X.X%, any posted world

from So, quarter. this lower for questioning rates, anyone these we highlight growth numbers to want two admittedly

in – quarter. was global molecular the growth was second – The – our in that and business our – Surgical business, first this XX.X% the growth number that number X.X% diagnostic the

from quarter and view time, we'd match growth; true going is of COVID, somewhere rate the businesses quarter's evolves results. Now quarter's, a and growth this linear between result the model. results in takeaways these the need to single given how two, no simple these One, is and over variability two encourage our underscoring last to that underlying have strength strong

to Now the businesses. shifting gears

in Diagnostics, to opportunity quarter assays validate non-COVID down our testing more COVID provided their for Panther third First with on customers systems. sequentially, an run and significantly

in result, an and, expanded B, customers and An COVID their to base, period. consolidate yet throughput, wellness high-automation menu as molecular clear the impressive, utilized, their demonstrates a XX% over as year-over-year of is, to procedures. our prevail business business that of excluding installed sign diagnostics impact truly Diagnostic grew As A, choice returning women and as instrument high- will global Even molecular platforms. testing being early, Panther grew result our earlier, more that exams XX% COVID mentioned excluding the our worldwide, a one phenomenal

growth M.gen, respiratory name our a diagnostics, driven assays, molecular color menu was by a new on within performance few. more the of and on BV/CV/TV drivers combination Fusion, legacy Panther to CT/NG both For vaginitis and the namely the panel,

Our sequential continues vaginitis and a impressive growth deliver year-over-year basis. and outperform on to panel both

previously become top we panel As stated, to excluding business driven portfolio X in the International have a also molecular bright primarily spot assay the diagnostic our The positioned quarter. COVID, virology a was by well vaginitis portfolio. is grew XX.X% time. diagnostics over our in

to placed XX expected, As placed with XX% placements quarter, slowed of internationally. systems in the nearly new these Panther

two in run a per While decline the about to first our quarters, QX's placements lands XXX placements of from XXX systems XXX our placed historic year. annualizing and rate XXX within

placements XX% reminder, footprint as sales lower roughly quarter, forward the molecular assays As Panther the highlight XX%. diagnostic now again of in close by with to minimal primary have We a the of posting $XX.X consistent is impact far. our Diagnostics going sales, our have given Biotheranostics Further, Panthers growth growth, are expectations, the business out Panther nearly the we start representing increased worldwide. for levels was at rate, have driver pandemic. installed by X,XXX outstanding To of the million a since update, our growth

Moving Breast on Health. to

of – of chip to supply, in we prove from be will low we First our quarters the to chip reiterate and availability fiscal quarter and terms fourth as believe last XXXX statement water the third observed foremost, lead trends with our our positive trends closely channels, breadth gantries. our stabilizing of include These and procurement combination importantly, through we in suppliers, for and supply. QX. narrowing positive depth of times, most tight the Working a mark

our remainder trends optimistic these maintain positive we of fluid. remains the will Although fiscal throughout the situation remain year,

demand for As remains gantries, strong.

differentiate and competition. Our the best-in-class technology, to separate continues service, us satisfaction and customer from

addition, meaningful rate to sales cancelled chip change orders to has the in In of to orders. set headwind quotas no force the and with surfacing our been there place continues line prior

supply anticipate thus on we call, fiscal recovery, throughout On not are chain availability, chip into recovering and be XXXX providing fiscal that XXXX. the XXXX will do continue chip this we gantry and while guidance supply,

Bolder. the in the in Next, to of third Surgical, performance, growth posting Management was System, and quarter. the Fluent This strong primarily returned our driven revenue X.X% MyoSure, by Fluid combination business growth

are for historically cumbersome Fluent with workflow procedures. these procedures. management in our fibroid tissue is As the assisting and simplifies MyoSure devices hysteroscopic and fluid Fluent the and reminder, a physicians and used system system used complementary MyoSure, complicated to streamlines removal The

and share and growth MyoSure lion's our Surgical growth the the by portfolio. in excited Fluent franchise very we well. also sales growth Acessa that of performed represent from Bolder Both the to are devices the While diversify the add and quarter, laparoscopic we procedure acquired

by by excited this year-over-year, utilization incremental sales was in driven the Smaller numbers novel are the of two meaningful Specifically, nearly XX% revenue growth Acessa of growth increasing the primarily of step in but factors. progress Acessa's a procedure. we procedure.

compared often XX% table efforts from business of this covered years increase about critical we team to acquired when doors With to considered by to our the first more two lives, covered First, XX% lives which were physicians, is opened. many ago. patient mass stakes excellent

growth cases. Second, more innovative access to via specifically case virtual monitoring physician system in-person access was was to driven This monitored address also platform. our Access conduct challenges implemented by was and COVID. also both physician created virtual by

that physician COVID change May Forum, Meeting are as access held with pandemic many And further to makers we state the going contributor Forum our At in and endemic we women's participate and be confident Annual a the the moves to Switzerland. opportunity champion of at had to we Acessa As forward. growth health. World leaders Economic you an the improves, Davos, meaningful know, met and gradually mission world finally, will in

was health, at help data the long and policy women's was Our to of to putting with The forefront now. message is clear, making, health decisions time guide the elevate women's overdue. science-backed

committed move we is from economies a families, said we difference. to left way. Index, understand of around and in women's line, step are and to Project have Equality does We every straight and women Forum world. the decades Forum We health we change the of a not societies health, With had. make to Global Hologic Health of As came the insights communities, supporting the we in cornerstone the leadership Health women's our knowing Women's before,

Karleen, call demonstrated want quarter the and we conclude, our give strength to in results to ability turn our we and macroenvironment. of This the adapt this absorb even is the in to that of us Before third rooted pressures confidence repeat to our headwinds confidence over dynamic more business. to

time, turn in our continue Karleen. we subside to and the pressures growth years and are current that, over let strong call the quarters come. durable With to position trajectory to headwinds for over As me

Karleen Oberton

Thank everyone. And afternoon, you, Steve. good

share significantly guidance non-GAAP to and again pleased quarter very once revenue are results for We both EPS. that third exceeded our

remain our period. the And quarter Diagnostics target the and surpassed in businesses, strength growth of optimistic business, highlights of will which to our the semiconductor although Surgical Breast financial fiscal availability, in performance Health our third our both supply Steve revenue see Our we X% environment that long-term in to related improve XXXX. headwinds we to of core mentioned, to chip as X% start continue

COVID-XX our our non-COVID COVID diagnostics testing, demand. we meet we also global showcase on to In demand our responding we needs, variable terms for in agility highly continue to of robust delivered customers' And have to continue while molecular menu. testing

cash flow very again in Finally, quarter coming levels. strong, was third the in pre-pandemic generation above

remains exceptional our a As balance pillar an strength. result, of sheet

more just results. higher mid-point the non-GAAP $X.XX, than our revenue Moving was financial the EPS and line our of of on, $XXX $X.XX our than than the of billion, $X were well we higher will mid-point line and bottom performance top quarter, came prior Total now estimates. in profitability guidance, provide over guide. our previous third both million more ahead on color In

of Turning million year. results. business to the declined XX.X% revenue compared prior Diagnostics, to $XXX.X global In our

a products, excluding result a organic solid comp discontinued from of COVID great related a revenue However, amount prior in against and the XX%, year. assay worldwide increased Diagnostics ancillaries, small revenue revenue,

Biotheranostics in revenue, strong organic was our annualized. Within reminder, our third business a Diagnostics, XXXX transactions include fiscal As our and have quarter. fiscal QX as these results molecular for now Diagenode exceptionally

impact molecular was grew over excellent of in this molecular the period. Excluding XX% strong base the COVID-XX, result menu. revenue utilization Underlying organically our across

vaginitis our also from virology strong panel way, growth performance. the while portfolio Steve delivered As our led highlighted,

period, the in in In diagnostics. core in saw women's stability we position STI our leadership addition, affirming our menu health

a small from While of impact demand amount key the residual Diagnostics catalyst felt COVID a growth. adverse second of quarter, be of molecular future include in our franchise our to results these the continues

our testing declines. very as are menu systems see onto We additional customers to COVID encouraged demand transition Panther

shipped of it As million in to of $XXX approximately million quarter, COVID a tests generated global guidance we We our the our ASP $XX. million. revenue assay relates of customers, reflecting exceeding results, X.X COVID $XXX about to

reimbursement steady eventually Although this believe ASP quarter, held pricing still we that fall will declines. as

COVID as year. declined after periods geographic the during COVID demand by geography, assay In exams we while reflective six discussed the COVID down well- flip months. chip the of out Breast postponing compared revenue have variability prevalence. This high revenue expected, X.X% period, throughout assay XX% of result gantries, strong, underscoring terms cytology of $XXX.X the Diagnostics, better was COVID primarily performed represented businesses revenue patients slightly the COVID by supply prior prior global domestic XX%, women's anticipated. and is year, important approximately the total to to Rounding split past of shortages demand their a the our million testing increased Related visits of revenue quarter. demand was COVID international returning US The over In of these to we than driven versus perinatal in in revenue. approximately Health,

delivered quarter and base. our through chips in acquisition boards slight again printed our installed While recertifying favorability from circuit we met servicing our refurbishing expectations, reclaiming, gantry of the

Breast, segment $XXX.X constrained. over by increasingly our in million continue especially XX%. driven needles. Interventional third biopsy Surgical, grew and resources see efficient their Brevera's revenue as In X% quarter have This become in third quarter. to grew benefit performance of the workflow, to of differentiated Brevera's labor almost Moving Customers was disposable growth fiscal the

rebound positive June. continued from performance nice our exiting was in the the as We second through trends and related Fluid for Surgical plus Powering quarter's Fluent are fiscal very this strong quarter pleased System, with business Management MyoSure the the a during procedural lift Bolder. period,

to compared period. prior-year million Skeletal our business, decreased XX% Lastly, expected, of approximately the revenue $XX.X in as

The in move businesses let's in of volume testing our Total marketing the higher-than-expected for less driven partially results rest $XXX.X expense. period. prior margin was within operating quarter. in sales to expenses expense to of operating non-GAAP the driven third Gross XX.X% less spend the increase forecast, than quarter the and was X% year. the P&L ahead in of our on Now million compared and offset increased by by of third by and base COVID-XX the strong G&A R&D, the

Mobidiag Bolder, However, and from the decreased year. operating prior when we normalize expenses spending for to compared X%

net margin XX%, pre-pandemic tax $X.XX. expected. was XX.X%, rate above our and these Finally, together, finished QX XX.X%, income pieces and margin in Non-GAAP QX at at levels. Putting for came as in non-GAAP was $XXX.X operating million net was both EPS

tremendous was million balance this strategic continue flows P&L, and the quarter. in from strong leverage operational third flow we robust financial was cash times. These cash billion and Moving on had flexibility. performance, sheet operations on the $XXX.X cash ratio from to of X.X Based provide $X.X our on our

have we As one M&A macro in continue of we challenging backdrop. said, comfortable building our this diligently we stated, each That opportunities businesses. pursue during previously are cash to balance our

an no repurchases of there share share were program part deployment capital our ongoing during while quarter, remains the framework. Finally, our repurchase

this outlay X.X a far for So have year, approximately sizeable fiscal $XXX million, repurchased of we million shares funds.

fiscal and XXXX. the full year on let's non-GAAP Now quarter move financial our for guidance to updated fourth

reminder, until Bolder from guidance deal As Therefore, revenue revenue annualizes. quarter our organic only a acquisition excludes each base. organic our fourth our guidance excludes

strong our we EPS once performance, are our quarter full-year guidance. and Given revenue increasing third again

guidance. range With see guidance midpoint For remaining on in year, EPS billion the revenue this only compared of revenue an line we given and fourth quarter our more on million for top quarter $X.XX to of in strength nearly previous increase total now full to of million of of $X.XX, FX incorporated of respect foreign of bottom-line our $XXX the the $X.XX of to fiscal and fiscal $X.XX to quarter. year, than in the million than to representing the we our implies the annual one US the the our prior $XX headwind unabated million XXXX, $XX million to slightly assuming $XXX an EPS higher the guidance quarter. $XXX of $X.XX dollar, for are fourth and With exchange, $X.XX $X.XX

fourth million full than and revenue, of terms for small quarter COVID the of of quarter product be COVID-related slightly expect of inclusive in the a be we are fourth discontinued XXXX $XX for in expected $XX assay items, sales, $XXX and amount less COVID at In the year. to full to million billion the million sales $X.XX year. least

Health had marginal for gantry to QX, the Breast relates expectations messaging. it in chip prior versus remains quarter revenue shortfall guidance As the the although our improvement we on unchanged shortage, fourth from

above P&L, shortfall. Breast the approximately the Health well percentage estimates are down gross from margin XX%. XXs high impact high forecast full supply Further, our pre-pandemic for Moving incorporates year our we levels. non-GAAP the XXs non-GAAP in the and the chain to our margin Both revenue QX guidance margin in our percentage operating

consolidated gross gantry position operating accretive maintained in move receive margins we reminder, be to a to and to quickly chips. have are once averages, spend As we

In costs QX and relates into elevated addition, plastics guidance we have as again electronics, our to logistics. incorporated it

expect operating we expenses, spending In fiscal around net, few million to quarter. sequentially. million a income, expenses, dollars terms we our be of down $XX other operating Below fourth in to be expect

outstanding Our tax based XX% effective and of rate million diluted year. of shares XXX full an is the for around on guidance

XXXX. we quarter To these into where business to rates Finally, our although strategically QX in efficiencies our next companies, out and headwinds during dollar, US I we quarter, into on remind headwinds you costs, we XXXX in continue the subside fiscal and the opportunity. that update stronger Like seek offset every higher near-term. to input quarter, would expect unlikely and we the help pressures, have as interest pricing related our the we are other our to many increasing fourth manage guidance these will everyone call fiscal the do

and let business. Surgical conclude, very by that challenges exceptional rebound Although diagnostics posted wrap underpinned me important Hologic for unique in saying strong these results, our in healthy growth are To by third to purposes. quarter modeling Hologic, are consider a they not molecular temporary to up

once We raising although an with And are future hedge increasingly cloudy, guidance future macro-outlook uncertainties, COVID well as a the year. financial for also again as remains natural the our to sheet call continue and for questions. best-in-class shareholders. for positioned to the cash With the our balance open operator strong ask we that, flow, are we to strong deliver well results to

Operator

Instructions]. We'll [Operator first our Meehan take Research. Nephron Jack with question from

Jack Meehan

I wanted COVID. ex into organic the the growth molecular and XX% results to go

well? that the what was revenue If vaginitis the it COVID, now out out And Panthers quarter? the last just running over much you break also as years COVID couple within at in beyond is look the for installed possible you call now to something are of how portion result, can you've

Karleen Oberton

So – our Panthers majority US, I think for COVID, sure. running from a the of than in certainly more the are

I number are absolute we're pleased with really to but think vaginitis think at I going we the growth, time. this the give don't

Jack Meehan

On customers fall you're government great the as and from hear we demand what would and side, COVID-XX the to just around hearing into be you head winter. from the the

Just you're heading into going to next guidance quarter. be

the for thoughts you Just early it for XXXX COVID? guidance approach any around time as first how relates setting to

Stephen MacMillan

August thing up. gone and things a in conversely, started And dries and Omicron point, I been get – conservative we'll whatever up. it it on hit been or coaster like a everything roller hard and and September then to when spike such continue was this or quarter year, We've that quarter. for like to XX, that we quarter, think in in last probably it's start the the to It's months looked almost hit XX within be COVID Jack, – last strong side. Delta a to July then almost watched predict

always opportunity ups months said some for lot you top say play very to a here beginning ago, what and sit our running downs had as who And or that other was the we'll Japan four three along, said the think and was to to a was would mutating be all of as of a create become us to bunch in, we around still that immunity of probably and continues world And at herd we Having countries, so very the not to with for ongoing going one to was the forecast going said continue US, probably So that out. is time have leave a we be of this and it. achieved assays. we've thought business know, today dead vaccines might I we be whole the goal in going when thought XX rampant, think those cautious an and be this that high came thing fairly virus, many as business. that, in more quite and I residual we be more a to endemic going business XX, for we've

next not I think winter. would see as from we into and world. the burned expectations full away thing This and we fall is go that

lower will truly the we base forecast go some model is, we certainly just it's – So put be businesses. as on opportunistic can't count or business. – But This think there on a it's side on it, it. I in because subject we we'll one call linear it can our

Operator

from Savant We'll Morgan take Stanley. Tejas with our question next

Tejas Savant

on one pretty Steve, I the know you mentioned CapEx strong. environment is gantries for demand here.

book cancellation sight from an of sort don't the rate, messaging line some We've into here? see et What's medtech of your peers. order some of You elevated sort cetera. your had of

Some CapEx kind not here. impact, like a of environment softened any them seeing to of pointing others

get as just So to take. your curious

Stephen MacMillan

Yeah, on what think large we're it's offering. I dependent probably customers. you're it our really hearing degree, to products or from a not seeing And

scheme hospital the not in grand a systems. procedure We're line revenue Ours and top both the patient generating also for hospitals. – generating for capital the are a outlay huge

So they it. think I will certainly find

I always, think a benefits hearing is, there's a even demand. But So, we're as cautiously expect I got actually I into power there bit I through and likelihood to over going help does flip environment. all we've next think of that we a got not if of years – we're somewhere little couple more some would working if that is contraction slowdown, will say, macro or that. And recessionary The we've micro we would us go think little a pent-up side right the in there here it. plan believe

Tejas Savant

any slope I the figure gantry commentary your the with here to the sort talked you've of around the you having your in construction on timelines past, on out of of started know and chips. about Have timelines here sort wait follow-up FY we shared until more on you a here, installation look cautious fiscal Just recovery XXXX what comments customers. around your earlier? had little recovery perhaps as to bit of the work full margin you having XXXX? the than to that on are to And a

Stephen MacMillan

wouldn't I more any it's say cautious.

for been speak anybody the months of the into listened think saying, last throughout XXXX. all industry recovery allocation plus, And is I that's to operating to happen of look, XXXX, they've leaders go semiconductor and six the over a not we're going going on largely to right even kind it's now. quarter-to-quarter

So do to on back than I it's a miraculously fiscal a was, year. day flip least us for this calendar to at come the where it that bouncing is indicate new at important but you we're doesn't better think a cadence

Karleen Oberton

also that install. do I'd the ones want and just that our installed add field are service to the base who the engineers the gantries maintain

of hospital the resources So our there as to as own recovery balancing schedules. well is that

Operator

take next from question now We'll our with Citi. Patrick Donnelly

Patrick Donnelly

costs, like give the think slowly higher to seems I the flipping thinking one margin end, it input the chips, the to on of about But terms way back? dollar, whether right it Steve, supply Again, Karleen there obviously, XXXX to what's terms XXXX cadence, of the one maybe on way it's guidance. at expectation going I XXXX. of in bit setup. going in guys it's the aren't that a work most about Just you models normal of the lingers little kind its of of know throughout chain day almost touched know pretty the costs, is would the it those, some and have and most on

our right pressure that wrap year the just think that pretty to obviously that XXXX on to some starts cadence trying way about Again, to way here. cost around of get think just XXXX. the trying and surprising not right handle soon to But piece. about into that a I'm So, heads lingering

Karleen Oberton

Patrick, it's Karleen.

some there. give try Let me insight to you

headwind Health QX, probably to our margins. points at headwind XXX revenue is look you when basis roughly on the of Breast operating XXX a So

think over course XXXX, come Now as the back will that I recovers – business XXXX. that of over that

headwind are far higher XXX QX. costs, points costs as basis XXX on As probably to about

that little Now continue. we might inflationary longer think pressures persist as a

So where improvement of we got end we sight we line how good from to we've think get QX.

Patrick Donnelly

on page just through, Can into acquisitions rates, the question rolling obviously, flipped into what they another a goes I Just the bit. talk that? the – guess, Again, the Steve, number growth molecular little obviously, jumps it, off organic. it. you It's number. kind different Mobidiag. of the focus where Obviously, of be out coming Maybe of a again, through drivers just will real because, talk that were components think strength I a the big obviously

Stephen MacMillan

of Yes. are Clearly, able nice a core start our kind to the take Panthers the health But BV/CV/TV, the during board. to especially now sold our start. pandemic new also across assays. product that on to more more is as panel, we've to we it's talked vaginitis launches and It's off to women's very still customers that

what's think growth, across think product is which I I dispersed remarkable both geographically So, and lines. it's fairly

what future. gives it. completely for the confidence that dominates of one us that's no And a there's lot So, I think

Karleen Oberton

probably most the the as quarter, be… significant in of expect Biotheranostics is would Yes. the we growth component that of I would to acquisitions, say, one

Stephen MacMillan

called we Which out.

Operator

question next from Derik De with our America. take Bruin we'll Bank And of

Nisarg Shah

on is This Nisarg for Derik.

I So XX% about range think XX% off on fiscal want the you Do think to the to start still way XXXX year the right guys is margins. to margins?

Karleen Oberton

Yes.

that chip point our how normalized to occur the we in still would a We're I'd was planning margin. believe of way course a low to I which is on is think over XX.X% the the when. again, have We about in say operating XXs. baseline, and recovery that is if when you to going will. that what chip of normalized QX XXXX. XXXX, exactly stages is them that supply, So the of But,

of it gate won't of So likely. the out kind QX be

Nisarg Shah

on more. issues seen order Like chip think as in. gradually away One catch-up the there go any have shortage book how Health, changes much for the you Breast see you could do we

Karleen Oberton

prior set in the as our remarks, I the hitting were are teams that to think said sales we prepared chip shortage. quota

rate. So no haven't cancellation deviation again, Steve increase in as booking seen mentioned, rate. the in the any we And

losing scheduling the recovery. just the of solid. in it then think the is business manage of we So the will not We're and through installs to chips be, still be again, any on working we'll availability share, that

Operator

our Vijay with We'll take from Kumar question Evercore. next

Vijay Kumar

Karleen, on the breast guidance. imaging. I on two One have

I million headwind of guidance the XXXX. for $XXX fiscal think prior had

XQ QX on Shouldn't like headwind think that breast QX? better. what And I be changed. trends? the based number that implied updated What improving is imaging Looks number? in is came for XQ

Karleen Oberton

in million. in So you're $XXX QX. you right, QX. better, QX $XXX did to million million about $XX and was QX, guide in in $XX better million It $XXX like slightly we here did said, We million

I favorability, of holding we'll blood, yields circuit Vijay, QX, the sweat and to again, that kind $XXX reclaiming of was boards continue in this and if think and in quarter. done know by don't just those million recertifying we're tears to because have

we for best just million QX. be – So it's $XXX and conservative that's the to

Vijay Kumar

math line chip next for OpEx commentary eventually? – correct on, dollar think did we revenues, OpEx Is implies the at I annualize resolve think, OpEx number, have I of assumption the billion. you'd as $X.XX question. the If the guide just an on that north I high somewhere think $XXX at sequentially EPS, OpEx the basis I we that on QX the QX the end, your of based hold a $X.X year, look will If that guidance on million shortage implied flattish.

Karleen Oberton

we're XXXX, budgeting in for process. planning Vijay, still the process, Again,

would into is with I to give that you only that, insight with of But partnership – calendar the the would just our the XXXX. going I expense not WTA, loaded is that is So, comment.

a – expenses we amount our XXXX, then will and tailwind that of as disproportionate into be XXXX. most which get of in XXXX fiscal expenses So

Operator

Needham. on move our Mike with to from next We'll Matson question

Joseph Conway

This is on Mike. Joseph for

the there seem if seem the could in maybe still So, barriers some guess talk rates you screening have start and, then record Maybe currently maybe just I in similar spiked in to removed that are off, pandemic, near the that currently, STI place And can about rates? highs. or be increase question. to of they at to industry

testing? STI potential Hologic's staying this see a that introduce, and And will to As at saw at-home for competitive what looking there if testing we at-home were options? guess, COVID if for with solution includes then, to I do moving the testing, the as that testing you market

Stephen MacMillan

shut first from that, it, their clinics on to COVID. and did we lot during and that see either call the community of folks just their in focusing barriers everything or of down redeployed terms really On intercity serving resources COVID STIs, STIs time got of, part a serving

seen So I come pockets get hopefully certainly, in as probably more during of to about say, good as to back increase, we there's you feel some screening. we've time. ability the many an been this of STIs think those And back,

hopefully, ability pick to So, up. the those

terms testing, home lot in everything shipping of a in and testing and home else. there's to idea it the administering the test On at of more complications a terms container of women themselves proper in

approached COVID is were by quickly of market that as not were to – testing we're don't savior testing candidly, home when sure next home STIs time for companies think as move lots pragmatic as actually home were So, nearly about testing it. well great to we in they the be of as of the realities convinced you that for going going that who all to COVID

continue so, And we very think good. I to feel

to expect own able I way, try be market as broaden might quickly where companies the partnerships hoping. By puts continue it portfolios, it's that to I'd as to not position. move us to be a our them. out if cash say, balance in really also some would We our were, capture But nearly to good our

Joseph Conway

you know don't I for and – but guidelines got diagnosis. see look screening that a posted to new already NCCN cancer happen seems it, at to breast did guys chance it I if

more about update? pathways on been How then Just diagnosis maybe been changed, the maybe Hologic you just mobile similar has can quick mammogram put really based some anything that that during your like out? screening look risk. like less And question recently? it. or But solidifying didn't It anything talk seen just at was a seem on that maybe and in that. of of that pandemic received reception the the What's a has

Stephen MacMillan

proper as for it continue guidelines. to push think relates guidelines, I the to we

pretty folks there's lot pent-up off But put and in of behind. their And are adhering too candidly, think to think and gone I demand. folks, some still are that of sometimes There's I USPSTF have women a of a the running general, during I screenings time sensible other think, guidelines. still far. lot most COVID

still catch up. we'll think I So

mobile, there. business. the of terms terms on available those we the of made here in impact It's and minimis In real de any

Karleen Oberton

doing mobile We've been to there. reach intent underserved Right. really mammograms well the really before pandemic communities, is the

Operator

from take Securities. SVB Souda with We'll question now our Puneet next

Puneet Souda

these are an new First And you prior that happen expect of and maybe from in repurposing chips? versus will boards of how do of offset one, XXXX getting chips? you Karleen. FY How much today for much

Karleen Oberton

if $XXX by minimis. of we did QX, pretty original forecasted It's And look the better roughly $XX de at million. than I million headwind

dollars. of most the to wouldn't It's of going to the going solution allocations. the be significant supply. think be So that getting again, it's higher challenges I in to And it's millions

Puneet Souda

corrections view. but Steve, create that on valuations right Hologic settled at the the in you at opportunities said hadn't first back fiscal do time, your for quarter call, time

improved, obviously, but So, valuations backdrop meaningfully. hasn't macro have here down come

the updated on growing viewing valuations vantage if flow. wondering how position still the your cash views and have So and you're point of you cash sort and strong now market and thoughts given

Stephen MacMillan

Yes. and long fascinating the that, seeing always becomes looking in. it's are settle still XX-week premiums – months – truly history. XX valuations at of The We some like start even past people always wanting to off high the past though part of since

at great also this place act, smaller the earlier sellers snap a or that the of We really better puts we position. feel going position – right believe, a being that's So and lot patient these, especially puts time potential like And and goes companies now in don't a more stage back. we see to feel we're by, realistic looking more in something much things urgent but just legitimate both no our grips true think we're early stage, I And like also that while base EBITDA in looking these to which our come us realities. with their bring business, puts the really some companies position. in to better of a in we're time, and need, strength given us

Operator

our from question We'll next now with J.P. Casey Woodring Morgan. take

Casey Woodring

wondering on last one, the the first of much how two. guess or quarter rate I from demand pent-up was that growth so Diagnostics the here,

you comment business that COVID made have given guys impact. women's the quarter, last wellness So softened

beginning in a if the some So there's pent-up XQ catch-up quarter this demand in visits and there's to of and hear maybe more curious even XXXX? to fiscal your left if

Stephen MacMillan

Yes. within different on and different global It's and in It's hard COVID Both for certainly things us move so a little US, bit. keep probably ebbing countries. the by basis, to a you flowing that time, see to paces say these regions just that geography.

a of I say like little but feels big it wouldn't bit pent-up, bolus. a created So that

just the to allowed before. I think visits that it through more of happening a come lot weren't

customers information time. but was it's it's keep it pop, And exactly over that necessarily like So, We again, saying, a know. our anything where keep think don't it's I let's But else. hard to not I restrained. from think these have we watching trends or just

Casey Woodring

Just on ex the called driven piece, by international XX.X% COVID diagnostics virology. out was growth you

did there. women's health mention You

side given placed? on of molecular So I material greenfield opportunity outside guess all with health, have us business the if is you diagnostics there's Panthers can much you just you've the of and remind sort how that US the especially women's

Stephen MacMillan

Yes.

the pandemic that opportunity, Panthers very in place been able molecular has the pieces business, one we're the really that's of health underdeveloped. about of so women's US to the has been core Our think magical many outside being been I which the underdeveloped. during – business the excited And also

as both molecular into think in our from the certainly used time that's for core some growth of And core Panthers I double-digit business. combination expect those be to health of start So something the and we some that we to business. quite COVID a internationally transition virals it's we for that women's internationally generating

Operator

with take Company. our next question from We'll Max Masucci and Cowen

Max Masucci

headquarters, San is the The done there. finished. integrating not Biotheranostics I nearly First think growth nicely you're if one, tracking lab operations Diego into

Biotheranostics the motivated pursue the for, deals serve lab team how once San say, be to will fully lab Biotheranostics, and settled in would into has M&A with operations that you Diego new specialty a that's you breast-focused to place? commercial headquarters, able So, additional be the

Stephen MacMillan

to at continuing look all We're options.

about, We're of acquisitions integrated which a to where we're to casting digest Biotheranostics, between say, state do time. those. integrated, the probably getting moving of integrations, think behind I we say existing all been Diagenode existing synopsis bunch then relatively three integrated it the you of Acessa, your as fairly not the fully can I good a and integrating our what in CLIA Matt, into Diego little San we're those Boulder, of same a compressed I did we point to had lab in where think exactly broadly And and slightly to nicely. certainly we're and that, of rosy have handle but and bit but really is whole the period here. facility would be The have the net business, we work still we more businesses. getting with Mobidiag done. within and being all feel

Max Masucci

or whether the and your you Hologic's companies when benefited it's marketed to products. there, services, past which recently ownership Just look acquired following alongside being integrated up and XX have products of started that the the of breast some most cornerstone the Acessa they the have or sort products which if of some of all over of marquee at XX you under the expanded of or them interventional months, offerings,

Stephen MacMillan

very nicely. all benefiting think I they're

to sales what that about get been standpoint Acessa, stages think live supply well. able a brought was from and you the hugely Europe, do Hologic the The us little to whole a hands I while get excited behind you excited, that what team them that IVDR now think, to back business Biotheranostics, just on which really breadth to in is If been covered for to when the also process, through that to we've future. early team, their everything leader having issue the and teams, It's very dying very to commercial even Diagenode, it. as and business have a marketing have Boulder, force surgical of team, we holding by Mobidiag more and ramp capabilities focus talk been labor-intensive gone particularly a bit within that up. we've our

a the to and what, was company part of that company you to think of bought, we members for. at a to exactly I involved close part looking I been the he all 'you what bought, they're who Hologic.' So is being another be of talking still always CEO a know nice strive us. of part was And the he actually and loves in of us recently know we at said, ones they're what, team saying, proud we that's to one team want and

I of are really feel good them each pretty fitting bill. So that that

Operator

from Zimmerman with question will Ryan take We the BTIG. now next

Ryan Zimmerman

op margins And I lot It's already year. ask next asked for a been one, there. wanted about the just to appreciate Karleen. I color And

the had quarter, said over will normalized XXXX a on in maybe op look that basis number back margins at you XXX, kind think But if at of quarter environment. next margins I and fourth headwind come point XXX I op are sitting XX%.

basis Are so, a dynamic. that And if hairs XXX have we and, – off in maybe And normalized of – a as points splitting I it XXX, to we that I'm again, versus XX.X%. And it XXXX? follow-up. right the closer margin then puts XX-ish kind normalized basis And thinking point here, way XXX know I'm enter environment, and of back percent, still about kind you want it of maybe XX%. add to but I closer just

Karleen Oberton

Yes.

And which So beyond, margin probably eventually, basis from piece to perspective, resolving, that talked will over line some points, this, basis think XXX to the is but will op points higher the as planning was I the other expenses, XXX is basis abate points marketing to that we of cost points have about of don't roughly XXX basis higher I about I that think XXX a sight also XXX XXXX. which resolve. another headwind to

those have clear to back margin sight normalized we line of levels. So

Ryan Zimmerman

think understand If acquisition contribution I quarter maybe tracking from XXs. for million. and relative of think The that's want $X organic. today time go back was laps next how Mobidiag terms previous I'm Boulder disclosure of disclosures. the in to about I to I misunderstanding. Mobidiag, both kind something in becomes revenue of its was the I to the it just Maybe Mobidiag

Karleen Oberton

kind those. Novodiag beginning ramping inventory was has And X we're their been little And that revenue COVID That two revenue as bit there's that, of XXXX. COVID We've platform, in legacy had as commercially below and platform. there's the there handle some chain have well supply of the worked a go that up tracking not One, through come on at reasons. to would It's hard challenges. down. Amplidiag

here what So, the choppiness going to in about of but a still feel that's good couple do. year, really

Operator

We'll take next James. question the Andrew from Raymond Cooper with

Andrew Cooper

lot been asked. already A has

just on. I'll and one everybody go give So quick let one maybe

So, thinking on the on Novodiag we looking the sort of Mobidiag, maybe for US just and should greatest for that what's an and latest be product? update pathway on and coming potentially to the what there

Karleen Oberton

earlier approval teams clinical what our And have have comments in benefits is I time for required Finland understanding much in spent Steve's I R&D in to of the understanding our through expertise work has teams lot on really come time think these map about that for based US, think I the a a pushed position is approval out hand, of line in the what US. of Hologic's acquisitions road of a little. to Diego and Mobidiag's better think in San that in we're to the

feel acquisition. We what's EU good So that in to But we going feel early approvals XXXX. still happen we looking the more really now like good about here with about XXXX. that have already

Operator

conference quarter good call. earnings this Thank you. a And XXXX concludes third fiscal now Have Hologic's evening.

Hologic (HOLX) 28 Jul 222022 Q3 Earnings call transcript