Hologic(HOLX) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $987.9 million, representing a 4.2% increase year-over-year, and 5% organic growth excluding COVID [32] - Non-GAAP earnings per share (EPS) for Q4 were$ 1.01, a 13.5% increase [32] - For the full fiscal year 2024, total revenue was $4.03 billion, a slight decline of 0.2%, but grew 5.3% organically excluding COVID [33] Business Line Data and Key Metrics Changes - Diagnostics revenue for Q4 was$ 443.3 million, growing 6.2%, and 9.2% organically excluding COVID [21] - Molecular Diagnostics grew 9.1% in Q4 and 9% for the full year, driven by BV/CV/TV assays [22] - Breast Health revenue for Q4 was $375.5 million, increasing 6.2% or 5.3% organically [25] - Surgical revenue for Q4 was$ 156.5 million, up 5.4% year-over-year [25] - Scalable business revenue decreased 54.9% to $12.7 million due to a temporary stop ship of Horizon DXA [26] Market Data and Key Metrics Changes - The international business has grown nearly 50% compared to 2019, with significant growth opportunities still available [27] - The company anticipates that international growth will outpace domestic growth in fiscal 2025 [74] Company Strategy and Development Direction - The company is focused on M&A strategies, having acquired Endomagnetics and planning to acquire Gynesonics, which align with its women's health focus [11][35] - Hologic aims to leverage its strong balance sheet for both organic growth initiatives and share repurchase programs [12][35] - The company is committed to advancing women's health globally and expects to deliver durable long-term results [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's ability to navigate transitory headwinds and expects accelerated revenue growth in the latter half of fiscal 2025 [65][66] - The company anticipates challenges in the first half of fiscal 2025 due to supply chain issues and strong prior year comparisons [40][66] - Management highlighted the importance of innovation and market creation as key drivers for future growth [16][18] Other Important Information - The company announced a new$ 250 million accelerated share repurchase program [12][35] - Gross margin for Q4 increased to 61.5%, up 110 basis points year-over-year [36] - Operating margins for Q4 finished at 30%, with net margin at 24% [38] Q&A Session Summary Question: Can you discuss the margin outlook for fiscal 2025? - Management indicated that transitory headwinds in the first half of the year would impact margins, but they expect improvements as these issues are resolved [52] Question: What is the outlook for the Breast Health business? - Management expects a slower growth rate in the Breast Health segment prior to the launch of new gantry products, but remains optimistic about existing products [54] Question: Can you provide sales figures for key growth drivers like Biotheranostics? - Management indicated that BV/CV/TV is expected to generate several hundred million dollars in revenue, while Biotheranostics is projected to be around $100 million [56] Question: What are the expectations for the international business growth? - Management expects international growth to outpace domestic growth in fiscal 2025 [74] Question: How is the company addressing the IV fluid shortage? - Management acknowledged the impact of the IV fluid shortage on surgical procedures and indicated it is a transitory issue [66] Question: Can you elaborate on the Gynesonics acquisition? - Management stated that Gynesonics complements the existing surgical portfolio and aligns with current procedures [62] Question: What is the expected impact of the skeletal stop ship on revenue? - Management estimated a loss of approximately$ 5 million per month due to the skeletal stop ship, with expectations to resume shipments in the latter half of Q1 [70]