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Hologic Fiscal Q2 Revenues up 5 Percent Excluding COVID-19 Sales

NEW YORK – Hologic reported after the close of the market Thursday that its fiscal second quarter revenues rose 5 percent year over year, excluding COVID-19 sales. 

Marlborough, Massachusetts-based Hologic reported that for the three months ended April 1, it had $1.02 billion in total revenues, down 1 percent compared to $1.03 billion in the year-ago quarter, driven mainly by lower COVID-19 testing sales. It beat the Wall Street consensus prediction of $1.00 billion. 

The firm recorded $450.1 million in diagnostics revenue for Q2, down about 3 percent from $464.7 million a year ago. 

Excluding COVID-19 sales, diagnostics revenues grew 10 percent to $390.0 million from $355.0 million in Q2 2023. 

Molecular Diagnostics revenues declined 6 percent year over year to $322.7 million from $342.2 million but were up 11 percent excluding COVID-19 revenues. On a conference call to discuss the firm's financial results, Hologic CEO Stephen MacMillan said that the Molecular Diagnostics business saw double-digit growth in the US led by ongoing adoption of Panther vaginal health assays for bacterial vaginosis, Candida vaginitis, and Trichomonas vaginalis, and strong contributions from the respiratory testing suite on its Fusion instrument. It also saw continued growth from its Biotheranostics business. 

MacMillan added that the next phase of growth for the Molecular Diagnostics business will be focused on menu adoption and "driving more volume by focusing largely on existing customers while adding more geographies." 

In non-molecular diagnostics, Hologic's cytology and perinatal testing revenues were up 8 percent to $120.5 million from $111.9 million a year ago, and its blood screening test revenues were down 35 percent to $6.9 million from $10.6 million. MacMillan said that the international cytology business was accretive to the firm's worldwide diagnostics growth, driven by adoption of the company's Genius digital cytology platform outside of the US. 

Hologic CFO Karleen Oberton noted that Hologic has been partnering with laboratory customers in the US on integrating the Genius platform into their existing workflow. 

Meanwhile, Hologic's breast health business was essentially flat year over year at $384.6 million in Q2 2024 compared to $385.4 million in the prior-year quarter. 

Hologic's GYN Surgical business rose 8 percent year over year to $156.0 million from $144.8 million. The business was up 7 percent at constant currency. 

Lastly, the skeletal health business's revenues fell 14 percent to $27.1 million from $31.6 million a year ago. 

Hologic executives emphasized the importance of the international business on the conference call, with Chief Operating Officer Essex Mitchell saying that the firm's strong international growth is a "direct result of identifying and capturing underpenetrated market opportunities with steady execution." He noted that the company's international business has grown more than 40 percent since 2019 but that there are "still significant market adoption opportunities ahead of us." 

Hologic posted net income of $169.9 million for the quarter, or $.72 per share, for Q2 2024 versus $218.5 million, or $.87 per share, a year ago. It reported adjusted EPS of $1.03, beating the analysts' consensus estimate of $.98 per share. 

The firm ended the quarter with $2.18 billion in cash and cash equivalents. 

The company's "strong cash flow" allows Hologic to fund "key in-house initiatives" and deploy cash on M&A and share repurchases, Mitchell said. The firm is focused on tuck-in opportunities for its three core franchises and prefers potential deals with a "clear line of sight to accretion on both top and bottom lines," he added. 

For fiscal Q3, Hologic expects revenues of between $992.5 million and $1.01 billion. EPS is anticipated to be $.80 to $.87, while non-GAAP EPS is expected to be between $.98 and $1.05. 

For full-year 2024, the company is guiding to revenues of between $4.0 billion and $4.05 billion. EPS is expected to be $3.45 to $3.55, while non-GAAP EPS is anticipated to be $4.02 to $4.12. 

Oberton said that Hologic expects each of its franchises to grow at least 5 percent to 7 percent excluding COVID-19 in fiscal year 2024. Molecular Diagnostics revenues are expected to grow in the high-single-digit percent range in fiscal Q3 excluding COVID-19 as customers continue to adopt the firm's expanded menu. Meantime, cytology and perinatal revenues are expected to grow minimally because of built-up inventory related to a third-party shipping issue in Q3 2023, and blood testing revenues are expected to be about $7.0 million in the quarter and $28.0 million for the full year. 

COVID-19 assay sales are expected to be between $5.0 million and $10.0 million for the third quarter and between $60.0 million and $65.0 million for the full year. 

The breast health business is on pace to grow within the expected 5 percent to 7 percent range for the year, and the surgical business's revenue growth is expected to be on the high end of the 5 percent to 7 percent target for the full year, Oberton said.