Hologic, Inc. (HOLX) 2024 Q3 Earnings Call Summary
July 29, 2024 
Hologic, Inc. (HOLX)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
Strong Financial Performance: Hologic reported Q3 fiscal 2024 revenue of $1.01 billion and non-GAAP earnings per share of $1.06, both above guidance. Operating margin was solid at 31.2%, with a 14% growth in EPS.
Return to Growth: After eleven quarters of COVID-driven declines, reported revenue returned to growth at 3.1% versus last year. Organic ex-COVID growth was healthy at 5.8%.
Molecular Diagnostics Growth: The molecular diagnostics business, excluding COVID, grew 10.5%, showcasing high-single to double-digit performance in 13 of the last 15 quarters.
Breast Health Strength: Breast Health delivered 7.1% growth, demonstrating strong market leadership and recovery from the chip shortage.
Capital Deployment: Hologic deployed $100 million to repurchase 1.4 million shares and closed the Endomagnetics acquisition, indicating strong capital allocation strategy.
Pessimistic Highlights
- Skeletal Health Stop Ship: A temporary stop ship related to a non-conformance issue in the Skeletal business resulted in a decline of 29.7% in revenue for the segment.
Company Outlook
Q4 and Full Year Fiscal 2024 Guidance: For Q4, revenue is expected to be between $970 million to $985 million, with EPS of $0.97 to $1.04. Full-year guidance assumes revenue of $4.012 billion to $4.027 billion and EPS of $4.04 to $4.11.
Continued Growth: Diagnostics, Breast Health, and Surgical are expected to grow mid-single digits in Q4 and full year fiscal 2024, excluding the impact of COVID.
Margin Improvement: Operating margins are expected to improve, with Q4 operating margins in the low 30s and full-year margins between 30 to 31%.
Q & A Highlights
Q: On the 4Q guide and core business outlook into 4Q (Patrick Donnelly, from Citi)
A: The core businesses are performing well, with the guidance primarily impacted by the Skeletal business stop ship. Diagnostics, Breast Health, Surgical are all strong (Stephen MacMillan).
Q: On underlying algorithm for EPS growth and balance between margin expansion, repos, and dilution from tuck-ins (Tejas Savant, from Morgan Stanley)
A: High single-digit EPS growth is a fair expectation, balancing the whole P&L, not just margin expansion (Karleen Oberton).
Q: Update on Boulder and Endomag, particularly in expanding to the OB/GYN channel and market disruption potential (Tejas Savant, from Morgan Stanley)
A: Boulder is seeing success expanding outside the pediatric channel, particularly in thoracic. Early days for Endomag, but excited about the prospects (Essex Mitchell).
Q: On Panther placements and BV CV/TV assay growth (Jack Meehan, from Nephron Research)
A: Panther placements are modestly moving up but not back to pre-COVID levels. BV CV/TV could potentially become the largest assay (Stephen MacMillan, Karleen Oberton).
Q: On the impact of the BioZorb recall and facility integration opportunities from recent acquisitions (Ryan Zimmerman, from BTIG)
A: BioZorb recall was administrative and unrelated to Endomag. Facility integration is ongoing, with opportunities for optimization in the supply chain (Essex Mitchell, Karleen Oberton).