• Total Revenue: $1.005 billion, a decrease of 0.5% in constant currency.
• Non-GAAP Earnings Per Share (EPS): $1.03, flat compared to a year ago.
• Gross Margin: 61.1%, an improvement of 40 basis points year-over-year.
• Operating Cash Flow: $169.5 million generated in the second quarter.
• Cash and Equivalents: $1.43 billion at quarter end.
• Short-term Investments: $192 million.
• Adjusted Net Leverage Ratio: 0.8x.
• Breast Health Service Revenue: $212.6 million, representing 21% of total revenue, grew by 12%.
• Diagnostics Revenue: $453.6 million, grew 1.5% or 5.2% excluding COVID-related sales.
• Breast Health Revenue: $356.2 million, declined 6.9% or 9.2% organically.
• Surgical Revenue: $162.5 million, increased 5.1% or 1.1% organically.
• Skeletal Revenue: $33 million, grew 22.9%.
• Share Repurchases: $200 million in the second quarter.
• Full Year Revenue Guidance: $4.05 billion to $4.10 billion.
• Full Year Non-GAAP EPS Guidance: $4.15 to $4.25.
• Third Quarter Revenue Guidance: $1 billion to $1.01 billion.
• Third Quarter Non-GAAP EPS Guidance: $1.04 to $1.07.

• Warning! GuruFocus has detected 1 Warning Sign with HOLX.

Release Date: May 01, 2025

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

Positive Points

• Hologic Inc (NASDAQ:HOLX) reported total revenue of $1.005 billion for the quarter, which was toward the upper end of their guidance.
• Non-GAAP earnings per share were $1.03, at the high end of the guidance range, reflecting solid gross margin expansion.
• The Diagnostics business showed strong growth, particularly in molecular diagnostics, with a 5.2% increase excluding COVID-related sales.
• The company has a strong balance sheet with $1.43 billion in cash and equivalents, providing strategic and financial flexibility.
• Hologic Inc (NASDAQ:HOLX) has a highly engaged workforce, with employee engagement scores in the 98th percentile compared to similar companies.

Negative Points

• Total revenue decreased by 0.5% in constant currency, indicating a slight decline compared to the previous year.
• The Breast Health segment experienced a revenue decline of 6.9%, with challenges in gantry replacements and market conditions.
• The company is facing increased costs due to tariffs, with an estimated impact of $20 million to $25 million per quarter.
• Sales expectations for China have been lowered due to geopolitical turbulence, impacting overall revenue forecasts.
• Funding cuts in Africa have led to a significant disruption in the Diagnostics business, particularly affecting HIV testing.

Q & A Highlights

Q: Can you discuss the potential impact of tariffs and any mitigation efforts you are considering? A: Stephen Macmillan, CEO: We don't anticipate a dramatic impact from tariffs. Our Costa Rica footprint is the primary concern, but we believe we can offset any additional costs. We are not having major discussions with suppliers about price increases, but we remain vigilant given the volatile environment.

Q: How is the Breast Health division performing, and what are your expectations for the future? A: Stephen Macmillan, CEO: The Breast Health business has been volatile due to COVID-19 and chip shortages. However, we expect it to stabilize and return to steady growth as we exit fiscal 2025 and enter 2026. We have reorganized our sales team to focus on both capital and recurring revenue, which should support future growth.

Q: What factors contributed to the 60 basis point reduction in organic constant currency growth guidance? A: Karleen Oberton, CFO: The reduction is primarily due to lower revenue expectations from China and greater-than-expected declines in Africa due to funding cuts. These factors are the main drivers of the guidance adjustment.

Q: Are you considering adjusting the pricing strategy for the upcoming Envision gantry launch? A: Essex Mitchell, COO: We are confident in the value of our Envision product and do not plan to adjust its premium pricing. We are exploring creative acquisition models to partner with customers and ensure they receive the best-in-class technology.

Q: How is the situation in China affecting your business, and what segments are impacted? A: Stephen Macmillan, CEO: We are de-risking our exposure to China, which primarily affects our diagnostics business. We have reduced our revenue forecast for China to reflect the challenging geopolitical environment, but this represents a small portion of our overall business.

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