Earnings call transcript Q3 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the Hologic's Third Quarter Fiscal 2023 Earnings Conference Call. My name is Cynthia, and I am your operator for today's call. Today's conference is being recorded. All lines have been placed on mute.

I would now like to introduce Ryan Simon, Vice President, Investor Relations, to begin the call. ahead. go Please

Ryan Simon

Executive Good third Cynthia. 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 website. press our available the

call an website will XX replay deliver them, we We post will after a our on our also available days. And well be prepared updated as website shortly of next presentation. remarks this to our the corporate as for

to Before statement materially you involve we begin, and from included implied. Such those that harbor may those we would will release SEC uncertainties filings. These and certain like today we expressed in statements or be cause risks forward-looking. the include safe inform make in factors actual differ statements to referenced earnings unknown and our known that results

COVID-XX, year; acquired two, screening than products discontinued can reconciliation define and non-GAAP in less by one, organic call, revenue, one related COVID-XX excluding of excludes non-GAAP blood Hologic and business revenue, for these owned revenue GAAP businesses measures certain sales this we divested from the earnings revenue assay Two our we which to discuss during from organic Also will release. revenue measures. excluding revenue be which as COVID-XX and to are financial in A found Diagnostics.

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

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

Stephen MacMillan

third our XXXX. to financial afternoon, good and quarter everyone. you, Thank pleased We're discuss results fiscal the of for Ryan,

were broadest, foundation our and is earnings exceeded was and had. These with non-GAAP business the $X.XX. the prior of results built and end the we've at the demonstrate solid. strongest $XXX Total guidance our range. that revenue of transformed for per Our finished long-term results EPS Revenue showcase power were ever high our million, share Hologic

top to this again, transformation, our strong discipline strength, with we and in the continue from cash Once operate position forge operational is of proof of flow numbers. sheet, the ahead. we strong On a as outstanding balance with

organic company growth By we at these Surgical. organic growth Standing diagnostics division, and XX.X% posted rather was ex-COVID XX.X%. COVID remarkable growth growth, in impressive. rates Total excluding XX.X% alone, are

context, delivered high in Given top Surgical these we these of and a exceptionally growth Diagnostics because wider a both XXXX, in we as bars results of ago. strong, on view growth XX% very X.X% year from performances in QX

as gantry of Health, chip another XX.X% to expectations. supply quarter track improve to as expected, delivered And we strong our in growth and Breast availability continue and

this pace excluding fiscal targets, achieve we XXXX COVID. low or organic year, to on double-digit remain growth our exceed For

X% In our than to fact, our growth for more X% now growth fiscal double target. is expected 'XX rate long-term

outlook. Put strong a is given in X% face, growth now, performance consideration solid Based we've recently simply, But quarters uncertain ahead, we our target. much for to number why. long-term of our a are X% serious very reasons our on long-term combined with raising environment still to our continued macro two the there confidence given

well First, single-digit know, double-digit growing challenging X% to growing more as to X% all is X% growth you on clearly top comps. of than X% against

which bigger we'll did first the will growth we Net, in exist And lap we XXXX set persist when stronger guide. today, For year. when XXXX in the entering periods macro are and our be geopolitical example, and fiscal XXXX, challenges second, we double-digit not goal. back there much prior first of throughout that than business several set already

today's in on expand will call. We later this aspect

focus note, growth challenges, when while that year to let's ways we first it. to goal X% Taken is our maintaining some X% established together, than last On today. overcoming in an for move of this on combination even

will highlight business strengths our the QX we underpin our strong First, that results. of

customers, long-term. And you'll for diverse advantages strengths with of discussion a Hologic our we is provide the unique Our built second, share and the our hope we are durable. confidence that

our growth drivers. to Moving QX forward

As organic our quarter. the double-digit result growth COVID, for our year-over-year consistency business execution a is impressive the drivers, each division growth excluding mentioned, against of posted of direct strategy. Equally

division's organic the performance Diagnostics, In was growth overall molecular. rate, by COVID, excluding driven in strong XX.X% again

combination the Molecular our ago. top health on growth XX% double-digits Growth Diagnostics women's and year For in ex-COVID, Amgen by the newer quarter, strong longstanding molecular like a well as contributions driven from BV, assays as HSV, growing from growing growth CV/TV well posted a over into XX% of of both was and approximately each menu.

this Biotheranostics Diagnostics, both Perinatal and continues this in large shine, trajectory contributed the last and growing before also holiday. nearly Cytology's bottom view our shift XX%. led placed orders by for a cytology, by lines. to Rounding timing of out a top Cytology growth QX the as the growth to to elevated accretive opposed lift being one-time Molecular the in was X a strong the few as We business. acquisition our driven week quarter, extended July the of of quarter

continues of know co-testing co-testing, the who who said, have medical and on lines front the same screening to positive science for the That firsthand. Pap the the These practitioners. which cervical the are cancer method impact practitioners seen who overwhelmingly includes be preferred are the Pap+HPV and

cervical was most by test women than has successful XX%. in among fallen the estimates, States Pap The Why? cause rate The leading of in which was been Since cancer reason death is the performed screening of United cancer the or today more combination nearly cervical our By introduced years XX co-testing. test history. screening the has Pap over of the clear. of the Pap using ago, XX% alone is a cancer,

cervical of As women's Pap+HPV. standard care is screening, to with continue an the years, we ThinPrep, for advocate over cancer for co-testing health for best-in-class XX women, and support gold the

Breast to Health. Shifting

In as Demand return for differentiated guided we the we slightly business in our in expected, by well As posted than gantries revenue QX. was another Mammography, QX in XX.X%. service. Mammography high. delivered growing our as ongoing we of May, clinically exceptional QX and as performance less driven from contributions more remains quarter, strong gantries primarily than This solid

addition, our at backlog levels. In elevated still historically is

are backlog throughout shape to great work possibly levels and this more beyond. normal fiscal our We in down to XXXX

to is our In continues even becoming business grow larger an the breast and service, part mix. of division's

represents Our and strong contracted demonstrates recurring service customers. relationships revenue our performance stable with deepening

Fluent fully growth our business for again and Surgical, NovaSure moving pillars Now business. longer, on continues from In not driven in for contributions growing the Revenue the International portfolio. Management was System. With MyoSure by to appreciated. newer VX laparoscopic grow Surgical to QX. that XX.X% The and newer our growth company be may of Fluid our stronger and

with GYN Specifically, in we adjacent customers smaller dollars, explore while Bolder its and our still channels. surgical early continues as our days relationships leverage growth strong

through transformation plus our both additions The product the of new it line both value formula In internal has recent transformed a business Surgical company. the growth of across business for years of and meaningful into strategies been over innovation sum into Surgical, Hologic. life the winning underscores has It M&A, injected driver phenomenal. the a

quarter, growing to XX.X% business also COVID. excluding the continues Our impress, in international

process, leadership global spending part of our as to May, leadership In planning our team office strategic pride sense annual of our a Brussels our team. within reinforced a Brussels week in traveled

set world. a and even are important, more base the footprint with apart. culture of have workforce We we've made purpose-driven culture believe firmly and truly around we energy of us the highly built years. strides we our of past expanding the are we've Coupled talent proud developed the few our and over strong proud engaged global We

rate. As we've said for before, international accretive the revenue overall is business our growth rate growth our to

have trend continue X% Related, context to announced horizon. in this tailwinds the long-term we like expecting X% throughout long-term become. headwinds macro referenced expect When our we guide. and earlier in guide, the we our persistent than China rather places in today's to Russia, call, our We first challenges were of they

efforts world. our these to performance the of targets challenges, committed to commitment, our drive we around operate, and remains the that grit, with support employees growth we strong a on Despite is This geographies where and testament all and our other track. international determination in our remain

to going, customer there, on where Now on our bright will unwavering we light must which From shifting we customers discuss for how for To sets the long-term future. advantage success. our we focus, to we are poised and patient we've been. shed fully reflect we're where our the gears provide and appreciate stage

in years been pandemic. has even before as we making. transformation It and COVID during accelerated the Our started the know,

growth rearview durable top this early molecular and diagnostic ongoing today that the the Without story. days led highly high further pandemic company great sheet, a and world discipline. strength well in exercise drivers the we and COVID, the COVID globe, performance shows are than for around positioned a in to flow and continue bigger, pivotal feet. testing With of playing tests uncertainty get back and role more shutdowns, operational with COVID doubt, more from In our to on the a cash diverse delivered we stronger On with of haul. a we its now position balance operate much are and strong surges exceptional closures mirror, a our helping we of accurate and transformation, when long volumes our fear

we customers. needs magic never and our ahead, sight business. laser This our our our lose the are we As patients is on the look promise and passion focused and of of within purpose,

as They who the possible. as new can face seek efficiently environment. them customers our Today, this challenge help operate navigating of operating vendors

labs and shortages and labor from inflation For despite remain improvement. hospitals, pressures recent

and to think a they Breast products opportunity. Health improve our solutions to see portfolio The dramatically Surgical in efficiency their of opportunity our With when offer operational that innovative of efficiency. priority, around Hologic, customers Diagnostics, consolidate

of days to turn labor the year. savings can throughout Seconds course time of minutes and and a

efficiency speed, and with not businesses, need. industry-leading that that of process finally, biopsy scan in in sophisticated only Fluent digital with in is management automation with but and Panther streamlined Diagnostics fluid approach and to And advances Workflow our portfolio. our we products the our DNA our Health. cytology customers workflows gantry our Surgical. and create with real of efficient each streamline advantages Breast entire in Brevera AI our love, feature From In

focus service we our to In addition, needs adds customers have the teams our that unique to fact of advantage. the on competitive specialized

We lines. our to both customers offer that the into improve for of patients. world-class needs, our And meet attractive of sets products creates world-class today service. and service customers. This when choose we they and Hologic's importantly, very us up they create an receive Hologic, care know pathway our industry-leading for the improve for that Our combination more robust opportunity not future. bottom and but efficiencies success. their standard measurable real products customers' Between portfolio only and well incredible capabilities, a specialized also

fewer who who are over three. fewer There leadership Hologic, consistently there many sector-leading deliver the and we the succeed are companies can all even margins while can so there closing, long-term and In do At sell many that world. products. financially, are can helping also brands

We and are journey, all women's a tremendously make proud for world. stakeholders and health our ability lives growth value outstanding further enabling to delivering Driving to continue and the impact top-line patients' profound around on our profitability. our

turn With Karleen. call that, to I now the will over

Karleen Oberton

statements everyone. will our good speak our a walk flow and afternoon, divisional Steve, In you, Thank to revisit items. my results, statement, and revenue few today, cash balance down we income briefly and sheet

We for up XXXX. guidance full-year the our fourth will of and quarter wrap with fiscal

our came diversified per As high non-GAAP $XXX quarter Total our $X.XX, financial showcasing and and exceeding guidance earnings million, of of the revenue growth. the at were our share to meeting strong, third our end contributions were our range. Steve highlighted, the results estimates, business previous durability in

Now revenue global Diagnostics, declined starting $XXX.X In million XX.X%. our of divisional revenue with performance.

excluding related XX.X% grew division and quarter. in However, the assay revenues, ancillary COVID the

underlying of again the reinforces the We are Diagnostics performance, solid thrilled our business. strength which once by

quarter, Diagnostics XX% third Molecular our approximately COVID. grew As impact shared, excluding during of Steve the

fiscal business the and posted Cytology our in XX% Additionally, third growth quarter. Perinatal nearly

Cytology reasons For forward to of extrapolate would Perinatal when level advise going our segment. we growth and modeling, discussed, not this previously to

products for to third these Health. division's $XXX.X of QX of million increased quarter our strong revenue conjunction Total Breast results services. and portfolio Moving the XX.X%. performance, demand with provide In of evidence further

by prior year, the our supply cares current the increasing are assisted encouraged headwinds rate the and supply. predictability growth business we the revenue trajectory chain chip of the by was While semiconductor in of

to Moving Surgical. next

of quarter million year. increased nearly Third revenue XX% to $XXX.X compared the prior

execution, revenue increasing $XX.X strong, Skeletal in international are acquisitions efforts, very an to also diverse business, finally, was R&D laparoscopic and robust And internal contributed recent increasingly business. of XX%. our Our million and

sales of on Now rest X.X%. by the above P&L our lower operating by the testing nominally slightly $XXX.X Gross and offset of quarter third was XX.X% by marketing of non-GAAP business, higher by driven increased Total million came margin expenses, our the spend. in R&D strong revenues, expectations. and the let's This partially expenses in to increase COVID-XX third but which base move for driven was quarter. in performance

again represented other operating income, gain quarter. third income in our Below once a fiscal

to benefit cash expense impact debt. $X.X on balance the income our hedge higher interest our and higher interest more than continue interest We from favorable rates interest our nearly as has from offset rate floating of rate of billion,

Our Non-GAAP and income domestic tax tax million for EPS these period came represents together, losses QX this we which a rate outside the by net at than The anticipated. XX% driven to and and stronger XX.X%, than from increase non-GAAP XX.X%. at from rate margin this tax performance $X.XX. QX higher in cannot in time. our in margin quarter's for rate Putting U.S., tax was $XXX.X XX.XX%. forecasted increase at finished The effective current benefit in the was our XX.X% is was previously claim net pieces annual operating cumulative catch-up to rate in fiscal XXXX increase

Finally, we to clear, we we financial while its continue related To excluded potential. impairment about up excited have to discussed to which be it's be to is feel out long-term from this our a and important Mobidiag results. charge non-GAAP call non-GAAP Mobidiag, point, metrics, non-cash

we've market expectations. shared, the to due entry challenges model U.S. previously various initial be our our beyond materially As to deal will

lower strategic Mobidiag's annual need became the in the to evident. planning value primarily our of During intangible QX process carrying assets

booked but million quarter a to expenses. of we the in Mobidiag, result, operating write-down a As GAAP primarily $XXX impacts which cost, also specific

our quarter. We the in ended from of Moving ratio $XXX.X leverage $X.XX and billion cash sheet of operations balance million the was P&L. our on quarter with a Cash third net X.Xx. on flow from

have of of shares million. In million X.X repurchased we X.X addition, we million $XXX Year-to-date, million shares purchased $XXX the in period.

strong As from longer-term underlying of continue operate a growth in each it our with allocation position relates to we of our strength to capital businesses. strategy, organic

and than in years we have growth margin rate accretion achieve today, hurdle profile With the past. to our notably higher is

to are no larger, want means by make slightly transactions addition, only to In in funnel. open while at looking we our now are be we clear that could the that these targets

the We deals patient. active, and necessarily larger are and to right prioritizing be diligent, deals continue not

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

to of our implies quarter one $X.XX For are With at increasing billion the revenue we this to the to and $X.XXX $X.XX. million and of to our in quarter. and midpoints fiscal guidance year, $X.XXX expect $XXX XXXX, full-year fiscal EPS total revenue again our $X.XX of $X.XX guidance billion in $XXX fiscal only range million for annual fourth of remaining EPS

to we With to $XX previous a full-year, than million the assuming an FX less improvement respect exchange, guidance. for our compared slightly foreign are headwind marginal of

should divisions. business our to impact fiscal to that want grow the We in COVID. double-digits each of Turning reiterate XXXX, excluding our

important is a is to fiscal year. that it However, remember XXXX unique

XXXX. to on in weak fiscal of As COVID's our volumes been a supply and due headwinds chain has impact part this reminder, comps elevated procedural growth year from

XXXX our than discussed, we is more outlined appropriate Steve's business closer a range. Steve it as previously long-term revenue introduced is and recent X% our environment. base XX-week addition, target we within outperformance is to comments, X% growth when growth move Reinforce to fiscal headwinds our XXXX, to given Therefore, even from model this macro our the as the In fiscal base business year. impressive

with Starting Diagnostics.

another by with year close the molecular. to strong expect We out quarter led

to with menu the continues from increasing expansion improving for revenue growth Closing out on non-COVID $XX be and million we Biotheranostics. Our contribution approximately blood by expect coupled driven diagnostics, utilization year. Panther,

related slightly slightly the to items XXXX our expect the expected $XX than than full-year. in are we $XX more revenue, COVID and for for approximately assay and $XXX of the be more quarter than sales quarter fourth COVID million million slightly million fourth to full-year. be in COVID terms of In $XXX million less

to of revenue, demand although significant conservative are for areas As abate. we public mirror. estimates, guidance Therefore, upside in COVID our the disease rearview look forward the plan continue with testing in COVID COVID to concern our likely we and financially

several headwind will as this that also accretive an quarters, revenue is lower product is a to key represent the recognize COVID in and next It shift margins. COVID to testing therefore,

to in as similar Breast weak weak QX, prior comps to aided by delivering anticipate well QX, revenue double-digit the as comps we In demand Moving prior periods. period, in performance growth Health. as strong

assume we the double-digit Finally, but in rates will expect we moderate in prior Surgical, healthy the full-year, elevated growth year. for in comparable start growth to period given the revenue QX generated

to down P&L. Moving

low profile, we margin to our been elevated in related expect operating our we incorporated our Within percentage For margin guidance. non-GAAP the point, operating this less non-GAAP and receiving. current prices, our in margin approximately spot we be this to is everyone On the to again full-year, elevated pressures movements which percentage be have cost that XXs XX%. in profile remind cost temporary have gross

semiconductor the at procured example, drivers our primary higher For one of is previously chips, of have assumed higher costs prices. we

backlog Breast persist several this P&L fiscal As work amortized we the see our our Health, over higher and cost the into through down quarters next XXXX. we'll in

P&L. We down the continue to work

We expect income, $XX in than compared flat Below operating that income other be of be expenses in assume operating to QX. relatively QX more QX. an million net expense we slightly to to

tax for based rate be $XXX is outstanding annual guidance approximately diluted to XX.XX%, are Our the of million expected and full-year. shares approximately an on effective

durable To long-term. conclude, strong business to sustainably that over our third is a results quarter highlights grow the poised

the double-digits business in was COVID. quarter growing organically, growth each diverse, excluding with again Our

each pristine and the and provided we unique look about to our close drivers optionality we are growth XXXX, by As in sheet. franchises of fiscal balance the out our excited XXXX our

women's of health. can advancing on our global commitments, against financial to Hologic stakeholders deliver count state the Our also while

call we that, open ask With to the questions. the for operator

Operator

take Donnelly Citi. go with Patrick Instructions] we from will [Operator question our you. Please And ahead. Thank first

Patrick Donnelly

Steve, started against obviously, side, question. taking start we come Hey molecular maybe here. the can difficult comps to guys, on thanks more some for the up

metrics just I'm point as talk to you've want few guys here? just you out non-COVID dive X% put the guys contributor next I can know numbers. growth a You about assays Any terms performance you big have Can assays, metrics? a a utilization but to up to called don't know into usage that good wanted that obviously anymore, Panther to I well, some any just year underlying bit? X% in growth, talk on you I of a little the to sure. bit. future the

Stephen MacMillan

Yes.

think I And additional continues obviously what during I getting well. those COVID. Patrick women's the placed do is We've piece. fully think all the keeps big core menu to health got, not Panthers appreciated, we

We out. kept playing that's are saying many what going those of our and be exactly to new adopting seeing we're menu,

So replace frankly, products, at just become will the growth the has the largest of not developed to off then BV/CV, that's health core exactly some of new assays the and the really start. COVID, rapidly been going especially of certainly it organically. one ever a States, which while to outside women's menu, virals United we've organic its peak, And the tremendous not

keep years up. I we growth keep Karleen? come tremendous just seeing ramping really they think to So as for

Karleen Oberton

add And that continues just grower Yes. Biotheranostics performance. the would strong contributing I to molecular to be a double-digit

Stephen MacMillan

turned Almost that. Yes.

Patrick Donnelly

Yes. Karleen, the then, margins. Okay, helpful. one And that's on maybe

cost. of the pandemic bit whether talked You COVID headwinds, little about chip a it's the some or

year. change Second XX% half, the XX% I and second in out margins. is I terms next is believe of almost Street the think the half

work cadence the just to the way think right our as about what's next into So we year. way

growth, to exit on some margin side, we here or seeing closer be margin the the a obviously next but a resetting that side? little on rate bit of we're little do headwinds at talked the what alleviate those year You should about

Karleen Oberton

Yes.

So comments. a of couple

as here that operating call. the what improve fiscal inflationary and do I and for exact doing on expect the course seeing First, QX would abate improve to low, we say pressures trough of QX for Again, of 'XX, in time. we're and that over in we do over from range 'XX. of but haven't some probably haven't margins XX% expect not we're provided are would that the this guidance given them that margins here the to we percentage,

Operator

Mike question next & our will Needham go ahead. We take Company. with Matson from Please

Michael Matson

Thanks. Yes.

here. see Let's

much And guess and you slowdown little Russia, going talk of exposure? detail that? I Russia China latest longer-term with you Is business is zero starting maybe So comments a a there? think that the China, then on in guess can provide sanctions? How just there. there's Can more the your do about, because you kind to I of

Stephen MacMillan

Yes, for virtually developed Russia to we really went in was the plan, Mike, expand. but us had were we I Russia, When our plans to think we opportunistic. to X% strat We big X%. nonexistent

losing the the upside. the It's and opportunity of part lack So really business. not good we're is the

China, pretty all X% given that to frankly, going X% of now we're issues our China of comes there. on happy from only revenue the right

going able be again, again, think just we've been expected. that I would that have growth So And reasonably to to storm we weather the well. not it's

that think saw way about and accretive to China X%, we we to higher that. put I So is think to the this out the clearly when X% becoming Russia

flatlined -- had zero, or and Russia effectively not hoped. is now China the at that the tailwind They're is headwind we

our is it had at what what even and time. than businesses really faster core geographies that are growing our modeled means we So originally core

Michael Matson

back Obviously, and for COVID have of non-COVID from that mean, then. between, that kind there of business now. in that kind XX% like reason Okay. term I decline at to of any the of can't it your other because I levels didn't Or the XXs really high And XXXX, to really think due back the inflation? we XX% to are in look those fiscal that range. the margin, decline go terms -- but to but in pretty you're it you XXs was the business longer 'XX the just get factors? all far that the Because I deal, mix back different there in was have Is to low is Aesthetics kind of operating

Karleen Oberton

Yes.

of tackle So couple this I'll points. a with

we point double-digit, XX.X%. margins, faster X% likely If which one, you low top growing ourselves growth. to to QX want operating If EPS X% about the in we was range. 'XX, that earnings to So than we talk that we line in in ground ourselves double-digit from and ground

a compared compared the probably diversified I think and XXXX, outside U.S. a XXXX. more to business is going I -- back business to the think little growing

half So then know, as the 'XX, from has as kind on is top of into looks out We is to low of line, been the improvement the the of 'XX we 'XX this continuing kind as higher point as of growing total such over XXXX I of about, back of we costs XX%. would semiconductor perspective. talked there other year. well inflationary margin diluted as kind pressures expect the it the as higher into on OUS the continue double-digits of abate as but like course And freight move

what things to exactly manage, again, R&D driving in still historical margin growing initiatives marketing the to I line, double-digit that EPS low So not we grow investing and and operating think top try like percentage. to

Operator

next from go will question Meehan our with Research. Jack Please We Nephron take ahead.

Jack Meehan

Thank you. Good afternoon.

Stephen MacMillan

Hi, Jack.

Jack Meehan

number Steve, Hologic Illumina. actually to getting related question so the is one on I've been

just on just could share decision brief thoughts was ongoing join as CEO? there Chairman Hologic commitment comment you as your on and and to if I your some Chairman wondering So to

Stephen MacMillan

Yes, sure.

am terms be end life to a my shareholder through really for. at what Hologic a built I've the personally Hologic. reminder in everybody, useful XX And clear. for, Let's of in top as I'm worked of I

also help of out role, have This company Board. love. is troubled a is that's to different my passion. in Chairman I is could this So the What my This away, five see is minutes the I as day that is I thought, job. which my frankly,

a there, great I can both. didn't be at a also that then team in If probably do think making to proud very be obvious. Chairmanship over And be Hologic I normal are there, decisions of I'm we're have just around which it's wouldn't going getting And place. CEO a key Frankly, And going great able to. there. couple me to it's I about from the pretty

my is fully I'm and and passion frankly, my this So love engaged. where

Sometimes more teams would my than like.

Karleen Oberton

week, I engaged Steve had all that teams business reviews quarterly as the as ever. our would last was together we for add. Jack, and

Stephen MacMillan

to add… want I

Jack Meehan

want I what That's it. love to hear. I

good. Sounds

think is get question, as another I to investors from a guidelines it then on co-testing. And Okay. lot pertains just

I strong So your cytology was it USPSTF. to the the share good latest you was hoping could but on see thinking quarter, just

cervical a Thank have some screening If on on and latest just thinking you sense not may or that come might cancer impact for the how update business? how -- you. may when

Stephen MacMillan

Jack, Yes, I the time from any as guidelines, screening, we time, could they late be the months next. relook It cancer be exact now. on an could USPSTF It think line. is don't cervical this interesting early could stuff be at have year,

You're never out. that quite where plays sure

cervical screening I the marketplace way is breast I physicians. the biggest get the think with the cancer whether the guidelines, all of at those it's of it And there's of how day there's this plays piece, in headline any look or reality the cancer guidelines tweaked. out then the

those much. the back to like changed kind in XX shifts, USPSTF years XX when XX you instead just came much as that women dramatically change of and it because just the first And of they're reversed that, now it's until think medical that practice I change didn't going they age have and raised it to And when place. Mammography never not ago said, and wait of should really

as women's true of cervical one very The how way cervical is how of probably food cancer going has well performed test chain well that been truly has down gold the it's that Pap time. of of women as because terms of from to killers it's think health been more in had one well one over said, the we've cancer. We and in impact standards, changing on the number --

to somebody procedure over greatest to necessarily not worked the well out to going incredibly it's strong. has be It have. while time, so to have And think for continue and we

be little will stuff. it a headline So

properly a certainly you. will and think medical little much. Thank opinions community's very We patient frankly, even our guideline then the I year shouldn't several And impact change period. hope still that, do, they over frankly, if groups business listened be to to. But the

Operator

our question take will Evercore We ISI. from Vijay Please with Kumar next go ahead.

Vijay Kumar

be they give for X% base made? is and give thanks are, thinking commentary, if And 'XX when first half you're so headwind a on 'XX, to the headwinds. given how fiscal maybe I you much on Steve, headwinds some you to Are inclusive be X%, my just bottom Hi, color of taking X%, could my of should commentaries perhaps this X% -- are. Steve, China about Russia perhaps the should business, what to understand questions. that we some macro of fiscal saying one ex-COVID just you there so the

Stephen MacMillan

Yes. of is Russia answered and earlier related lack like China, to just growth X% Russia we which they're it X% a The as is opportunity. to I basically

headwind. of tailwind So been it's not an plan. in what a our lack not the just it's could strat a It's headwind -- have yes,

So good in range. I on think call. about feel guidance being our we that give November We'll very

Vijay Kumar

Sorry, is Steve, China next for headwind, a year?

Stephen MacMillan

to this minds year, in probably. additionally Not our

Vijay Kumar

Understood. Understood.

Stephen MacMillan

feel We very good.

I geographies here we trying base we that say think gist feel of all better the and of businesses growth is in our about today. core the our to better keep

Vijay Kumar

Understood. Karleen, one down. came for you. Gross margin sequentially here

about through P&L. inventories talking flowing the You're

So to year. OpEx could cost just it margins? any is this any item? be P&L next how about Are the through controls, like some we given we at Or looks expecting offsets there think this of the we year? to expansion dynamics, next first line half flow should -- the Should

Karleen Oberton

Yes.

the had I gross as primarily to COVID think go margin lower QX -- from QX, revenue. I declines if So you

and we million just QX of had in assay revenue over $XX million QX. in again, So COVID under $XX here

their bigger corporate accretive the are Health the probably our gantry in business, gantries as lower revenue, which our margins that's average. Breast So gross to as well

sequential. the explains that So

half business, and had XX% in probably 'XX, roughly that headwinds call. of on we the talked will higher 'XX, is November we'll the course should margin but the some operating here the revenue improvement guidance costs operating we growth those over have give margins, of as this we as also of again, abate about I point year. second the As through And see we base move low on the on feel in

Operator

We will next Tim take Fargo. Please Daley our with go from ahead. question Wells

Timothy Daley

Great, thanks.

in remarks, reason comps tough the growth the called macro prepared factors long-term raising with Steve, for not out So the is outlook. you along

this breast. get dynamic to hoping just to on bit a So specifically more color

work Or about? revenues rate quarterly still case. quarter. I just fourth curious guess like high around on, that or upside million maybe or on by think for the And for is think the $XXX the to end backlog the a clean the if on guidance gets down run I chips impacted that's so to

of Just curious moving about think of forward from? kind about as clean quarterly number can kind how that we a grow should we

Karleen Oberton

little unreasonable probably not historical an low levels. still say number. would I a It's from Yes. it's

prior headwind, think we chip X,XXX supply to in do the that quarter I QX. QX level each in seemed a quarter. and is would, to X,XXX below This roughly gantries

'XX. I think our we're we as worked the recovery look think I business the into be having course we 'XX, will in backlog over through still of breast as believe

Timothy Daley

then And Mobidiag. touch to Helpful. right. wanted on just All

calculations. So nearly quarter the the to just write-down of price equated acquisition rough a

can an USA I you are give the dynamics time So us update Novo launch how line any update on either, European you. of guess, going? Or [ph]? on the Thank

Stephen MacMillan

Yes.

U.S. the feeling six it get did us in certainly growth you work, I as for acquisitions to little of five delivering we know, right them overall, Mobi really about is frankly, COVID think that to just now. time, market. good more good are a

the redesign and As little got. both machine more we in is dug required and deeper, of a what we the cartridge

later a it just the But to the and so with dug for rates still positive the But bring. plan it's the we a going going come flows, that about and all strat it's still frankly, good are will will that. further hit us. out, looks horizon, time in that technology. in of in, in at just affected little be way, growth cash and years as few our combined good a is next for interest anyway, very weird excited what We like but the the really to And we

Operator

from take Please question will Tejas Stanley. our We with Morgan go Savant next ahead.

Tejas Savant

for time. evening the guys. thanks Good and Hey

And of stole hustles you your Steve, becoming at my stay side guys your open question to you your I glad sizes in being to hear the I'm full-time maybe hustles. on question all M&A. mentioned one remarks. Jack of My know on sort So prepared Hologic. is deals

over a testing of people bunch can the few And you've share called I on that us the you've in being push bigger larger perhaps note, and those had on PCR-based testing, making pipeline sort for about, quarters. But success like often that for the precursor a think color out related you last you pretty NGS-based out Biotheranostics, Could not approaches? cancer think a but the pipeline active called Karleen in the a also assets needle-moving any tuck-in here. seeing be

Stephen MacMillan

strategy us some the look alone have you good. as Karleen with profile, I largest about now month-ish, and us our think Yes, reminding rate shareholders that think M&A fundamental to growth and looks margin our of Tejas, damn and pretty I all reminded that, out way our right and last at been the over think that our I they've

really find or And accelerated our it's deals rate enhance to either as it's structure. are hard going margin growth our that to

so sort because you, we so are that And of And areas, looking beauty would of a business, but I base cautious. tell we luxury performance. on time strong of base it's in have now side of think right are we the being those our the I

stretch. opens dilutive more good likely we've deals portfolio, And at a our a the the more and to wildly to efficiencies to established nothing marketing we already in look those here, that cautious the like operational then that but any certain with our base So I think have that up of Obviously, and we an continuing revenue with by turbocharge areas. just done. Biotheranostics bit forces it sales little our stay drive things, things like Biotheranostics in can the aperture

those So be I areas. will think it in

Tejas Savant

outside on here that on moderating follow-up Got of situation I guys. think, quarter-over-quarter it. a the and in about outside the that's just Makes X% Steve, hospital talked now Any 'XX. sort sense. And thinking it fiscal updates a in quarter to And was for portfolio Surg. be double-digit there a tough that than low past, talked staffing I on I is you of is then you else basis. you've growing GYN MyoSure think there growth presumably, quick And of NovaSure. better about comps, about? of almost anything mean

share to just color can as So curious there. any you

Stephen MacMillan

Yes.

catch-up many that. efficiencies, Fluent. some are add to think the and still general, in I like of figure how I that. again there's and I our But year, overall, tight. there's manage is it hospitals figuring we figuring Hospital procedures, so products out staffing to things including some think this in frankly, probably earlier this clearly clearly, think of that But help manage We're as, how come. to out

really we're and portfolio in the addition the of for feel having go-to a hospitals, I good a so think hysteroscopic. about both And just really partner kind a now laparoscopic to --

Karleen Oberton

add base, for quarters, a or the just really seen to Surgical would starting four Surgical last We've business. on I six traction. the small international probably Yes. five, take but turbocharge business, really over the

Operator

take will Souda go Please We our Leerink from next Partners. Puneet question with ahead.

Puneet Souda

Steve. the questions. Thanks taking for

Stephen MacMillan

Thanks, Puneet.

Puneet Souda

Thanks. great. Hey,

Are you're versus you've I customers So It's bit, for tests. terms first But customers? -- two customers in given those more just are certain it that versus three versus us tests talked that a labs on understand there year today reference know out what aggressively are versus ago hospital in they Panther of landscape the of percentages are utilization. about using sort are help not? that using seeing quite Maybe labs. and a wondering

bit in of a picture those because totally past more for just the where stand of of percentage you cleaner color utilization on some time But those more numbers understand I average. in -- seeing Because this get the utilization? you is point you this to some that trying today a more are provided Where COVID. are past, at

Stephen MacMillan

both It's and COVID placed were also of and footprint broad-based in menu terms also broad-based labs of customers, our hospital the that and increasingly so we many pretty It's between remarkably international. geographic smaller the labs. the during the big Panthers the

well. we're so seeing that And as

hard -- from hey, just sit the it's few of It's we area. So like fully it's remarkably say, not customers XX% or to there come a an additional has can and really broad-based.

Puneet Souda

bit this AI, -- about it. to broader bit little a of one regarding a if And I if Good is talked question, Thanks. you hear. Okay. a may ask

given seeing AI we're that some Just momentum in MedTech essentially for the technologies.

Just Maybe you AI, through discussion bit. there AI. bit Hologic's product. expect quite a how utilize do trying understand where a AI us Obviously, to walk on does out of augment to just there's

sense that? So a get I Hologic at looking just to of is want how

Stephen MacMillan

Yes.

I about And well that's a cytology both that to we the FDA pattern we've EU. some well programs had in that computer-rated but simplest things in United as as -- approved for mark we've to to -- refer it of our is the the as a back the we're when number or learning. thing by technology as what go got States. working I of been of think breast, digital EC machine now cytology that got And Mammography basically you think When lot really underlies the recognition. system, that's our within also mark design get the is cleared

within But doing knowledge, able our is installed able to our about think and the two Breast Again, in get we to ability some through play been them good roles, sheer of really recognition. we've pattern where lot think size And big. And our space. those sample I getting in and the it's the the thing particularly a same data strong those. agency terms partnerships to owning be base, I of areas. the Health to of complexities, that the really There's get feel it's clearly just

Karleen Oberton

in great for unscheduled certain downtime, service just unscheduled with to that coordinate to which also, field analytics using even us. visits, customers is allow operational to our efficiency we're predict our would failures organization, part I creates prevent Yes. and add customers that for predictive the us

Stephen MacMillan

Puneet. Thanks,

Operator

will Mizuho We next the go take question Please Anthony Group. ahead. our from Petrone with

Anthony Petrone

excluding maybe you to a line, is profile one, low been And double-digit Karleen. there, Steve, question of to macro Maybe, as for it to organic well you headwinds here, businesses. Steve, those as mentioned Thanks. COVID. top extent were then and but feasible the profile called has not that high-level the a both is out right? geographically modeling aspirational just a X%, some X% there, sustainable year, operational some If The

two could just the Karleen here, have settled for model. some So if I'll on three these follow-up next of we have then to And it headwinds how years? maybe thoughts didn't on in the a out have

Stephen MacMillan

this environment feel what in the about There I'd X% really great a you. double Anthony, X% we count no was be said, to of delivering for like aspirational X% company at feel but we to number. about an X%. all year, to and Yes. reference can that. people correct to we on This good We are that, the is

Anthony Petrone

the quick ones nonoperational Health achieve quarter? And That's an us you double-digit backlog again. give lower Can think just you Karleen, the earnings maybe the about then in on Breast growth, helpful. need what profile? And Thanks when to the idea costs was of then recapture earnings we low couple model. of do

Karleen Oberton

Yes.

So haven't we backlog given recapture. specifics on

I through we work to continues over to the said something backlog that will several think have be It's what that quarters is high. come.

results. earnings we're looking always think drive efficiencies at to operational I

about higher that 'XX, we always best revenue between at at As I I growth. deliver margins think looking think hit the how of do earnings our operating manage to expenses some and P&L growth, probably improvement we'll gross kind whole

Operator

from We Zimmerman ahead. will next question Ryan with take our go BTIG. Please

Ryan Zimmerman

for as squeezing keep thanks as the try I on Hey, me tight here. and in it questions can. I'll

Just a clarification. quick point of

I look at And think next about at Street like it's looking you revenue growth, X.X%. year's the is X.X% If organic.

of at about the capacity. right to So Again, make is but today? to low the we the to sure I excuse is the think would Street what relative that at I X% it in X%, to is appreciate end, is your where long-term unreasonable me, you Street or just X%, X% below guidance kind want said to number the be clear that X%

Stephen MacMillan

lot more Yes. estimates. We numbers COVID our people's next year. of My for kind business to there's a as still run opposed the is Street in hunch

really about we is good think I feel what base. the

Ryan Zimmerman

mostly me. MedTech And I right. last that, appreciate for but then on one about Talked I'm we're one All Okay. analyst. M&A, simple focused Steve. diagnostics, a

the tuck-in doing But aperture beyond, on You're in laparoscopic. you're robotic with health, make think that your day doing technologies there laparoscopic mean, surgery, I portfolio could GYN Bolder, shift particularly the it that Hologic's one mean a in to to arena? are understand, Surgical robotic side? unreasonable mean, is say all in that us is well women's I it I well help in into

Stephen MacMillan

both into traditional to pediatrics but in world, Bolder guidance. of GYN surgery getting about the within our more it's looking We're Surgical gotten us because us things into addition business, like of have specialty kind thinking also at sort

Bolder of about things company able we're aperture and the Diagnostics return better give point or think to could generate to I your MedTech a the So ability it out understanding spend I the and way, done MedTech. with where opening flow and as possibly right of we're to like world think our is it lot our MedTech we've is cash now

a other of be in spent things. and little while probably some or space a NIPT There'll a a the once lot money areas piece. But every bit is robotics now. at, that looking that me right they've -- chasing reminds we also robotics in other that of whether spaces be will frankly, That's some -- of

to looking the be going we're can for to So continue where profits be generated.

Operator

Please question We Andrew go with our James. next Raymond will Cooper take from ahead.

Andrew Cooper

everybody. for we're at the I here. Hey Thanks the questions. know end

on about the couple be So today guide ago I I'll this just here But are what that sit there in of Maybe this maybe next the sense when XX going at understand just comfortable are how and a give how you down, year? and the of trajectory sustainability from of a quarters ago you should backlog we that hearing think course you're perspective, you July or visibility sort suppliers 'XX the think sort and the you quick. year here. to point. of out a when you try on from about and for not versus us Can quarters. you're end of to work fully the one where the over quarter of for visibility chip supply

Stephen MacMillan

now the incredibly we're chip right we on comfortable where with supply. stand Yes,

So good. feel really

Karleen Oberton

Yes, our business. we've deepened

Andrew Cooper

you are Is looking for? that translates that allocations that getting safe that, to the to assume

Stephen MacMillan

Yes. Yes.

Andrew Cooper

thank you. Okay,

Operator

Andrew our question from Brackmann William take Blair. with next We'll

Stephen MacMillan

Yes.

more close today. call take this out for and we'll one the So question to

Andrew Brackmann

keep a of updated Okay. what USPSTF cervical the Jack's it said. you that of just Mammography talk patterns? about in you to maybe But just around maybe I'll for ago, Steve, you going few mentioned recommendations customers ACS Thanks. from question sort sort spirit I following giving to maybe of and whatever one. USPSTF back decision, what guidelines. saw in their saw market guidelines. just around believe investors' cancer years But Thanks. utilization the Can you confidence their

Stephen MacMillan

Yes.

is look about, that glacially. Health in headline X% guidelines I moves more little happen change, to create was way At but way over go slow think headlines, the end or in very the any really XX May in for came recently, And the noise of impact minimal in now day, all like guidelines been moves much care they changes. the one headline these back XX-plus it the know question. investors other reality new I And -- Final the changes these I've have the are even and very of -- I at. short-term health the when of practice Breast more stock even things these minutes. our as years, much get -- out.

Andrew Brackmann

Thanks.

Operator

Please UBS. We'll question go final ahead. Liza take our Garcia from with

Elizabeth Garcia

for in appreciate much Really it. so Thanks guys. me squeezing

Stephen MacMillan

It is pleasure.

Elizabeth Garcia

Great.

kind margins we're broadly? think of what to -- the and correct, the kind could about on think how that could that since to be just long-term to just and more possibly models about the mix make get [indiscernible] sure I question know I about backlog know quickly that Just think a XXXX, about caught algo since beyond if just broader context, and think the comments wanted of of that our modeling we bigger maybe that. to into kind then think as working factors parlay to XXXX and just but touch I I that's and I that. through how to some and about beyond Steve to now fiscal segment And if and through

Stephen MacMillan

Yes, currently we'll to we worth as the on think much the get picture of -- I pretty look more a years-plus meantime. the continue I in we've backlog, big is, backlog think question got we'll orders and

that keep out. well pushing So that backlog will

So that over that's And part the piece. highest hand question Karleen. to level of the harder I'll

Karleen Oberton

Yes.

higher when we Diagnostics be about we lower all and the the X%, to talked of long-term the would about to and basis think the end rate, So think a range. Surgical that worldwide talked Breast in growth I the on Health about range divisions X% of about think the we've end to the kind that range,

Molecular even that. potentially earlier, talked And we about above as

good feel all we being the growth in about that again, range. businesses So

faster we'll we hitting we 'XX, the international bigger And but the continue low growing piece at as the that the and of we see being of We business I've back work talked we're pressures through for improvements subside. of a margins of guidance about mark U.S. 'XX, backlog believe given to than the see here and that previously, as some inflationary half haven't

Elizabeth Garcia

Thanks. Great.

Operator

That Hologic's Have conference earnings good concludes And evening. now question-and-answer session. concludes quarter call. this a today's fiscal XXXX third

Hologic (HOLX) 31 Jul 232023 Q3 Earnings call transcript