Hologic (HOLX) 1 Feb 242024 Q1 Earnings call transcript

Good afternoon, and welcome to the Hologic First Quarter Fiscal 2024 Earnings Conference Call. My name is Cynthia, and I am your operator for today's call. Today's conference is being recorded.

[Operator Instructions]

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

Executive Good Officer. First Cynthia. today thank for Mitchell, and you Steve Financial our Thank and Officer; Fiscal afternoon, XXXX Hologic's Essen Chief President Chairman, Quarter the Chief me Karleen Earnings joining Oberton, MacMillan, Chief Operating you, our company's and Officer; Call. are With

of Our first available is website. release now on our quarter press the Investors section

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

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

sales COVID-XX and non-GAAP revenue, owned X revenue, organic define one, measures excluding discontinued two, assay to these organic in acquired from and and by year; products which from revenue, we excludes divested revenue COVID-XX, which of Two Hologic further are: for than diagnostics. businesses, revenue businesses as less excluding COVID-XX revenue, related

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

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

and Ryan, good you, afternoon, Thank everyone.

first our fiscal financial are of We quarter XXXX. to results for discuss the pleased

of earnings was revenue guidance. and billion our and Both per end above in the quarter, revenue was the $X.XX high For share total EPS came $X.XX. non-GAAP

'XX, revenue Despite compared XX.X% our faced revenue proper important prior quarters even difficult a nearly Simply revenue comps. year COVID surgical solid fiscal ex QX diving against of days growth selling organic to ex grew in 'XX of of Before a Diagnostics X results, COVID, prior incredibly and a X.X%. performance total fewer first having we rate perspective. the and to XX%, our year it QX is our growth Molecular view put, X into growth

we impressive, for X our exceptionally for strong growth more adjusting results well Even to we the results an the perform selling against total taller. the as long-term the company comps days, adjusted are These when On ex to QX ex-COVID in period. incredibly fewer single against continue COVID, estimate our digits revenue X% high organic was stand target. basis, challenging X%

given showcase off on today contemplated. to our our and are Keep impressive continue and revenue in maintaining mind targets across base long-term we long-term a are delivering broad both more We divisions, much larger our strength targets. our guidance short-term durability that growing than our we originally

before, said can we've to on count us you As deliver.

focus During conference building ago. we JPMorgan today, the messaging from our our call weeks upon will X on

are During faster, poised continued new for bigger, presentation, that and stronger highlighted success. we we our a Hologic,

insights more of our fully will in are that strategy, our our what growth about as future shed part of to He view also the confidence of on business. elements share success. As we discussion, recognize underappreciated helpful Essex potential our will high light our

from over Davos. Forum results, our financial Before will Economic discuss in our participation then we call detailed World to at turning Karleen the the to reflections share

progress to go. it we elevating While way make is have we continue clear long a health, still to women's

the current there certainly frankly, that X growth That realize recognizes camps complexity. We our same There not. quite potential. camp future results drivers is there one we time, that are meetings at of JPMorgan. camp At said, is the investors. and our understands does our with Starting transformation appreciate powering another the and

clouding chip of challenging and pieces, challenges, moving that past interpret many the semiconductor the from been moving of to still we've only downs have become, force ups to and has Each contributed a to to be there years, comps the may supply irregular revenues following model. difficult COVID X selling narrative to past the few. normalizing naming dynamics Over days also

We appreciate represents be each must layer fully of to complexity that that strength business. appreciate of pulled the underlying a back our

really growth. performance the our beyond we steady for further and nuances, are bigger, all, Looking quarterly poised time over shines. stronger faster, Above

margins, balance a and engaged and are growth disciplined sheet all, company an workforce. durable We group-leading strong above employee with a operations, and talented diversified peer exceptionally

We faster. the bottom to top growing are poised continue to line growth line while even drive

our gives what on light Essex. in pass more it us confidence I'll high shed future, To over to

Steve, and everyone. you, good afternoon, Thank

doubt, back posted and As the our we XXXX uncertain Diagnostics then then, testing lot Yet same a understand peaks dramatically potential. there to through over future and to that pandemic. on a Hologic we've results. the further some as of still the recently, new claims grown our Steve business prevalence, our and up transformed breast have our of several Surgical growth away Many is [indiscernible] approximately our ex-COVID we built business, the since long unpack compared there we as business, where the were At These our we of business. nearly the have we've Since our mentioned, story past fiscal for from much recognize exceptional more to challenges time, moved Molecular nearly commented More quarters, term. without than results XX%, a are XXXX. COVID are we a and business COVID XX% in XX%. fully are we

taking is well performed must our the period, exclusively be easy wins. see assumption peers of it's share. that As time some The true also winners not to underlying over this have

there it. reality, more to was much In

and world-class commercial making execution Hologic's competing then share, is centered taking to addition In drive and leveraging innovation teams. to We on this our sales by innovation growth share.

our growth positioned and products expanding education, underpenetrated in tapping is Instead, innovative As operate. today, the derived much and is through less awareness, markets. trenches hand-to-hand from where we growth into markets growing about the new future we are of our markets combat

As lines revenue over X our earlier of alone and an line largest each BV/CV since in X of Moreover, million and product delivered essentially XXXX. more falls lines in COVID, example, launched [indiscernible], our nonexistent was That Fluent. or each still one XXXX strategies, market-creating their into collectively revenue XXXX. These product our excluding start stages to Biotheranostics $XXX in is growth.

revenue have could these Similarly, of their we time. which top in outside lines over $XXX X, since And are opportunity the XXXX, also product lines individually other of number new a million growth. each represent still innings earlier of

'XX. gantry rate installed products of we GYN and continue deep user portfolio expansion large surgical our and channels. the our top customer our few, assays, in and each relationships each core Through for hysteroscopic laparoscopic have each division. of portfolio, our market we unique On surgical drive of further a fiscal leveraging incredibly scopes Panther, growth bases highlight respiratory to our our in activity, To double-digit delivered growth by

products Post opportunity innovation, this the for leaders Hologic workflow introduced to from COVID, world Earning associate doors. technologies, supercharge solutions. best-in-class and us with our health our channel. into ever. differentiated our Moreover, strong automation points call open to around a advantage unique champions and provides ongoing continues than growth as industry-leading women's are stronger Customers reputation

continue even claim categories, that many it there are in winners, be out we to there lead year-over-year. to While

come. and We create core in gain confident core Similarly, market well we and future to are our our opportunities incredibly healthy for are equally and well Steve? we believe growth. many in extremely for share confident for still the to With All businesses of lines. out ability in positioned products innings. in our early our performance maintain across growth positioned carve our are product to driving strong maintain demonstrated we years in, the ability to our

Thank you, Essex.

significant continue outside still while of grow our have the U.S. much growth greater opportunity and To presence make build discussion close progress out to the tremendous of internationally. a to prospects, we we

from to turning the Karleen, Shifting time at like we'd in Forum our reflections Davos. gears, before to share over Economic World the call

For continues the major health. Index. Forum of results largest annual women's examining a we women's opportunity dedicated the state row, our kind, improving overall presented support from Health well-being, to study generate health in where Global had of its year Women's participate and organizations the The third index, tremendous the Hologic a third of which is at to to the we

before, we has reality all that women's that tremendous index the the we wrong be direction. screened, health may with greatest not stand XX% the that contribution As lead of in data screened results single stagnated to year's shows this is to we way our the XX% time, were we've a globally moving world The to over women and the have only show sadly over The This for of is need being women's we more harsh believe and not only the health women make said are cancer opportunity Billions for ever. behind women only STIs. portfolio. at change but Hologic. than that must year, past

key takeaway our The their of in early reaching that potential. many innings markets are still is in here ways, the

ahead, look we our more promise. to live inspired passion are even purpose, we into and As

have commitment and women's proven our can we through health. drive We to that we believe, continue to unwavering results

Our purpose. our from strong strong results come

only outstanding technology. diagnostics path, system received Food clearance night, And trail focus our digital is our Administration. proud AI of finally, imaging advanced to by is only first U.S. incredibly genius our genius just and system algorithm with creativity, diagnostic system new our deep in accomplishment late breaking combines FDA-cleared digital that cytology learning-based from are possible with Drug to announce made the that the news, and dedication we This the and team. last blaze cervical the Continuing AI

and It can workflow patient help and care. more improved enhance accurately cancer, cytology ultimately cervical detect

We time continue a to women deliver it and need at most. when

Karleen. me over to let the hand that, call With

everyone, Thank and team. you, Steve, and diagnostics to afternoon, again congratulations our good

divisional performance a walk for will additional that year. second finish 'XX provide and quarter fiscal guidance broad-based also an our touch highlights with of our and revenue few the key income statement across financial of today, on the I overview the full statements metrics my strong In our results down business. and our will I

quarter and the We $XX was in exceeded at midpoint that on Jumping we million. came pleased about financial of by strong. our guidance bottom Total top line. right both first billion, our expectations to revenue in, performance share beating $X.XXX are our the

Steve growth with X%. the impact mentioned, As of excluding X% days revenue of delivered to despite target quarter, growth selling in in X.X%, fewer of revenue organic we the our long-term COVID X line

exceeding lines. Overall, on high guidance. $X.XX, performance was top and share continue the per earnings end both non-GAAP we robust the our of to addition, deliver In bottom

we willingness a divisional a environment remains and Before moving that again to our of that dynamic. want balance our emphasize remain in results, to to business macro capital strength deploy sheet our core

our our of also and stock debt. repurchase floating paid $XXX purchased down additional an an our below authorization, and range, As and well balance million opportunity initiated a roughly arise. million rate we million We we of significant first should million a target example, have ratio $XXX $X.X program. accelerated further billion, of share current capital, in cash quarter, With $XXX our on deploy to repurchase $XXX share a leverage remaining the firepower flexibility

our first to $XXX.X results. million Turning XX.X%. divisional quarter revenue Diagnostics, of In declined

selling revenue for COVID mid-single we ancillary year. Excluding X.X%. and the days, related revenue, compared adjusted we declined to prior estimate assay Yet Diagnostics digits grew

As posting a for XX.X% very XX.X% COVID growth ex 'XX COVID. growth Diagnostics, quarter QX reminder, was Diagnostics a strong Molecular ex and

doubt, without of year. QX of drive our single Within mid- compared delivering impact ex to X results, days digits when impacted Diagnostics, continues a 'XX days. by Molecular to high for growth COVID or our results selling the prior fewer division's was the X.X% fewer adjusted to And business the selling

continue We early in still innings see grew in underlying our adoption of the BV/CV/TV, its by XX% more strength and to quarter is in which customers. than

More our derived BV/CV/TV than incredible revenue U.S., longer-term representing the of internationally. is opportunity in XX%

of expectations ahead RSV demand stronger-than-anticipated we experienced In addition, delivered [indiscernible] non-COVID our for and flu revenue as our respiratory assays.

Our published ramped of virus data positivity, the CDC respiratory final responding the quarter. on up in sales weeks with

and growth Finally, business for accretive the in performance period. revenue delivered a of driver Biotheranostics remains positive molecular our

a to double-digit our showcasing Total million give also first moving our Health. remains XX.X%, and Now elevated our forward. revenue strong business, interventional Breast gantry in delivered quarter. this strong continues growth. gantries increased from to of business of robust, $XXX.X Demand solid to quarter our us performance business continue the backlog of we high cadence confidence in a benefit In orders going for

from by impacted see Finally, remains Interventional, were needle targets in [indiscernible] financial X well in continue used we as [indiscernible] strong we performance on our our as supply. in lesions from to for as Health marking in a markers results biopsy In reminder, QX 'XX 'XX. performance franchise our strong suspicious tissue. to quarter, fiscal sites deliver the believe constrained positioned Leveraging Breast well its

Continuing next to Surgical.

increasing for million laparoscopic selling by an system related digits fluid increased when high $XXX.X from to quarter our division's The of portfolio. adjusted in fueled continues days. with X.X% be revenue single Our first contribution or MyoSure the growth

QX as And the product's of our NovaSure the anticipated, business, price upgrades. declined introduced before selling revenue from just declined fiscal 'XX. quarter lapped placement VX As and from in capital contribution we first X.X% $XX.X in million extension Skeletal finally, lower

let's in on favorable quarter. P&L higher-than-expected Now revenues, which our non-GAAP for our rest and move performance the impact to the to COVID driven of carries Gross XX.X% of the strong margin primarily business a by was base margins. first

However, as amortization the headwind. results our higher gross at costs remains of anticipated, to purchased during due chip ongoing semiconductor depressed margin chips temporarily supply the

we high-priced through are margins away from we to As we farther inventory. this to cycling progress as from as we expect continue continue to year. benefit this the And result, deploy a moving gantries, inventory

of decreased expenses Total recently costs X.X%. spend, This in and $XXX.X in business. the divested lower the days Shifting SSI by driven the marketing operating to due from by lower decrease less first expense period quarter operating million to fewer expenses. was

For translates operating this QX line our with to 'XX, expectations. a margin, in XX.X%

deliver continuously to seek While improve operating we where our peer continue margins, to continue sense exercise makes discipline we for operational business. to and it group-leading

represented income operating quarter. first gain net, fiscal our other a in Below income,

cash As expected, balance rates, cash significant in high quarter. from we elevated deployed we benefited even though the interest and

was tax rate in XX.XX% QX expected. our Finally, as

Cash Moving in quarter. P&L. on from the from was the $XXX million first flow operations

our $XXX to confidence previously in as shares activity bet well In ASR, and showcasing QX, business addition, we a ourselves mentioned, initiating repurchased $XXX above million as strategy capital. million. to as and high million our willingness This X.X beyond for ongoing our on was during deploy

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

we 'XX, QX range $X. to of to fiscal expecting and the EPS total $X.XX our million revenue of For billion are in $X.XX $XXX

that are and of 'XX, $XX and And the of this Much of QX an marginally QX. remainder throughout million year 'XX. to of EPS assumes $X.XX year. billion With full in million exchange foreign we to remain assuming the of the $X.XX will billion respect foreign for FX estimate to was tailwind For we fiscal $X.XX. guidance revenue our for realized to tailwind $X.XXX exchange, neutral favorable $X therefore,

'XX, COVID. divisions. We to reiterate the excluding to our with full impact to that Diagnostics. business to expect Turning want X% X% at we of grow least each for Starting the fiscal

for our business to the expect We X% within of remainder to fiscal grow 'XX. framework X% long-term the

period. level QX, in impact due fewer While of compared the primarily to performance this was days below to selling the prior year

We and of expect growth QX return to year. division fiscal to normal the remainder the our in for more

We and growth. Biotheranostics contributions with expect continue the to improving coupled drive utilization from menu molecular ongoing on Panther to expansion

and revenue QX Closing out [indiscernible] we year. expect approximately non-COVID $XX diagnostics, of for million on million in $X the

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

Health. Moving Breast to

to expect for showcase demand our 'XX of continue products services. fiscal and strong We portfolio to

the on, will important dynamics moving through While 'XX. business to comp it's that breast the understand fiscal impact

QX As due a to supply constraints. was previously noted, comp 'XX shipped softer

in than QX As And chip these of in and a QX. 'XX, of pent-up both of customer supply strong a gantry days 'XX placements deliveries reminder, delivered during were to earlier QX demand recovery. meet quarter QX lower we

a We expect in improve that health 'XX. back this the year-over-year of rate dynamic fiscal in lower will half growth to QX result in breast

in expect year, to chip demand full we further more from than as maintaining the the headwinds excellent move 'XX gantries fiscal we visibility. while 'XX to supply in deliver For continue

revenue long-term fiscal at our year to be end 'XX high of full growth to our anticipate we X% the target. Surgical, in X% Finally,

QX expect and Although by we started QX to the fewer impacted business fiscal perform year selling the of year. days, remainder the strong, in and the well

margins. Moving next to

Our of margin. both fiscal guidance operating a gross cadence throughout for assumes and improvement margin 'XX

to anticipate QX, we low margin, in the levels year similar fiscal XXs. QX gross For the exiting

our margins XX%. assumes operating 'XX QX QX approaching with As guidance exit rate XX% well, around the

down Continuing the P&L.

to operating QX. We from QX expect down step expenses

highest as quarter show as RSNA. kick meetings typically is As a spend sales seasonally QX fiscal major internal and we with off the reminder, trade global our such year our events

of the million about to $XXX $XXX operating For million. to year, anticipate balance be the we quarterly expenses

an to fiscal we Below 'XX of QX between in approximately in $XX other full operating the income, estimate income expense year. be for million $XX $XX net to million an expense and million

we fiscal in increase previous guidance remainder of to our to current expect guide income have higher interest a assumes the Our as cash throughout an year. balance relative the

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

QX us for up was a conclude, businesses across rest nicely of the of strong each our To quarter and year. the sets

fiscal on As And around QX with shareholders, world. and delivering the in we good moved we commitments advancing and QX, on we to customers health employees, always, patients the as forward to momentum. our promises closed our focused 'XX remain around world while women's

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

Instructions] [Operator

We will Morgan with take Tejas our first Stanley. Savant question from

Congrats start bit Molecular I to Steve, with on little franchise. the want I about there. here. ask solid to performance you a the Aptima Diagnostics want

dynamics about franchise? on volumes? factors you gating You've differences any testing competitive said, time for the change. should the move if for those versus talked to co-testing, guidelines HPV what, ThinPrep to about embrace That of the the it transitioning upside and if Aptima, to there will sort think past of benefits physicians any Are alone, the in the any, take be how do HPV in

stronger to get business, workflow forward which we our what see being got It's the I with we with the XX If is improve think market, it's bring of it's of our night probably entrenched. but digital well co-testing biggest probably as to guidelines, it's It cytology last we in regardless think to the going just going efficacy. cytology the appreciated, I fully improve anything, happens the for years. -- as step that probably dramatically to going as not in improvement customers. approval just

it's a strongly. Aptima as cytology. very and as believing our incredibly remain as device is we reminder, a committed HPV that the well So for both way, collection By used single

the the you results. additional get no for patient or it's doctor the work So and

So anything our be combined very business if forward. HPV we excited excited cytology about and going to probably with our continue business more

for you then, Got one it. That's helpful. And on margins. Karleen,

sort what talked Can of So gantry the about here from with parse coming are fiscal about of you those XX% which you optimization see this us that the 'XX, And should impacts through look of the off as higher backlog good to relative dynamics the jumping out chips just X plans, thinking we expansion? XX%. help at as a you exiting drivers. expect point, network year be off versus quarter-over-quarter we the your of cost to

Yes.

take So in let parts. it me X

chips probably headwind improving the in So efforts we over basis of gross of line, sight about line see margins. XX-point optimization have network to course to on -- that the a the to the the gross year. XX- margin again, are And

prepared mentioned closer on of would seasonally expenses have we operating expenses, impact high -- at the looked been to just you XX%. operating the our you if remarks took operating margins kind in As out of if QX, QX

point. dynamics to at think that the exiting through of sight year, the I gross jumping we is So see the just new XX%. step-down the in at year see operating a off and line good moving do we expenses, as margin those

significant with really, digital benefits R&D into sure operating we and amount last make would those caution back the there, always approval over of the of see to are peer-leading want innovation the that are expenses, I we to 'XX ] [ cytology. investing from we right continue saw like night we improvement said, and our and from course the think as I given

We our Patrick question with Citi. will Donnelly take next from

It Steve, there. the X% hang for business. kind inside you of maybe are X that framework to to on sounds around going the rest Diagnostics the like X% year of

a the utilization. improved one of COVID. big out was I as been utilization focus of the for uptick come piece reasons has Obviously, think we that

talk on seeing? the about hopefully, Now helpful -- on Any the trajectory? without can stable What metrics be a gives testing that you're we're COVID, relatively in guys there. that that environment you side you metrics utilization relatively confidence would just

Yes. Sure, Patrick.

customer, we and is with our customers purely and continue customers if our time I obviously, some the go you internals menu things other metric, products. are largest over revenue. additional feel biggest Tigress grow we the But just they portfolio on track we not to lot them opening think to our are is overlooked customer think U.S. as of continue of in up from to opportunities that a our good. I And adopting BV/CV for shift to it be be the Panther, like to by

about those the time, innings U.S. And frankly, really during bring see X growth or then online. COVID is businesses, they customers what Panthers good We're early-ish we these experience to the and as all the more. I international we at they with largest think still get those they in what are internationally assays coming more see continuing our love expansion X So on I placed a is and bring also and we're in

it's so And like one-off lap. might short be that, to pop in harder term better but frankly, a not the

have with good installed makes as more the just new very that. we us menu that either of about drive we are additional so or to assays through base throughput just on really is we're future. come to over that Panthers And all build the really on place, out able And being gradually around the feel bringing customers going what world able what

I'll that, just Patrick. to X add points

around metric XX% While customers that's double asasys running are to more X we at that we Panther probably of close [indiscernible] 'XX. went other were [ back grow And the end seeing I the Panther would of year-over-year. that utilization, a haven't to given par we our I utilization give ] say you would is here XXXX, that

Panther the confidence the stickiness of things give and us that should the the adding customers those menu. are So of are

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

Steve, there's season next enough. soon always

a also is Essex right. Eagle's big fan. That's

related just Cancer to growth little Diagnostics selling for wanted think, the Could Well, runway you it your but Index be about Was bit? test? update, an I And did the you mentioned get that to growth just would I business crane us give Or accretive, any was the color Karleen, at thoughts days? pain talk Breast slow a Biotheranostics. the on great. Yes,

Yes.

think, of opportunities Jack, think team test the us, become. we're the that ahead and BCI and on the operate. I since I still the owned the at look we've can we earlier in there's innings business And -- it, watching more what

just I long-term incredibly feel think about potential. good the we

it here. So it, was to the it down feel still good We out don't given well the size really, want accretive and just level nicely opportunity. still the growing but be breaking to of about really

of right. on labs the as And color continue balance sheet, you recent that questions med if in cash of The specialty world. around Biotheranostics great. get doing any of could the M&A lot in around And foray be questions been team, kind things the then I Just tech the just was like that. world that wondering priorities for interest using we've to Hologic. have just of a on All the M&A on got comment a world? would on kind into strategy then

Yes.

breast Jack, additional some us And both surgeon your first to or build diagnostics surgical our that business and the the that think, things. breast that question, we does opportunity our cancer, seeing it we're the open are think for platform to REIT I of allow med tech would interesting because areas. things magic part I up on

a of valuations I areas. some diagnostics in for in the continue areas we of those might bit And better look frankly, little think ones. to the those than, say, some be example, So

part specialty the aisle I So back can Coming certainly think to can shop second question, shop we in your that we other the in of labs. aisle.

really of of we're of lot a I lot the Biotheranostics profit. money, the and expense top labs, actually of but line much specialty great it proud there's things that you makes of revenue, not with know which lot a one well think is very a

bottom think Karleen that to at staring generating is thinking hard so And right we things can continue be to me be as now. about I line want

her of I'm part to worked up, discipline. making that I've enough know with but long

dilutive mindful careful So like that are and We don't we're them us the to continues think that existing take pretty have cash, I we know ability want to we're to wildly give the space at our good businesses the assets very we we performance continuing because operating on patient. be patient and that feel what things of -- taking on be and just and underlying to well. to and market continue being is in

gave the Jack. So hopefully, that here, you landscape

We our with question from John next Sourbeer will take UBS.

start like there? many Just the what that just have? that a compare on a business? off backlog Any looks And of in backlog question that -- on to business. Breast the how Health would quarters updates the how on backlog to you And normal

Yes.

capital supply nature put see it, of at I backlog this customers. given backlog and back the next several business, of quarters we going early have think we call through elevated our probably to X as work we but X into the certainly probably have gantries traditionally, for 'XX it what the I'll elevated being for that We, quarters to levels.

any not provide I Fusion and with mean a of that on bit, pull-through on or you're I Got it. And Panther, type what the providing the you're of like to business improvement just addition seeing qualitatively, a the side there, then spending car? but way follow-up, Diagnostics on appreciate as just the customer quantitative

on at customers of the menu is as upside that in in respiratory I on certainly, well. assays as take the But So Diagnostics growth that's would longer the cars that the some about, most our where really term, opportunity point, we business in talked but the respiratory legacy leading BV/CV through say also menu. primarily coming the we've fusion see and U.S. Molecular seeing is this what that's is women's health internationally, a great side

whole So is point. the about menu growth, led that this feel good by BV/CV driving at the but

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

And I'm first for sustainably? one be my high what for helpful was of what revenues growing investors think mid-single-ish? you X, What your single growing curious, revenues of Have looked you percentage to maybe those sum to are you segments. you could on should here. the about curious Steve, at on business parts It of the analysis? with do when you say percentage talk the low X when are get comfortable how drivers. that percentage I'm growth singles? between just do they

Yes.

about I think of said, I be X%. by really what business we've Vijay, X% think should think segment. is to this businesses And that our each we that within year it

got that if product the Obviously, to out, lower have you within really played you to going MyoSure us right? than that, each got it right? you line of I not we're has growing that, think down So Fluent and NovaSure feel right? by than go faster We've But I line, good. think at businesses. of each that certainly businesses, Surgical, product think slightly about those to would range. our I end beyond. the of not always tell businesses of way internationally, good really is each the that in you we And across that the businesses higher range, that if But feel it growing about is

magically, in aren't business what nature every drivers. always So one that we've across I it the beast. as any the -- we're like a overall, fast. And again, has few that's of growth our that growing And frame. businesses business, is think there's got every of just But

the about days X.X any annual the normalization it one you for What's you be for step from I [ driving QX, the should in the in X.X]. maybe guide think Karleen, XQ? think half? versus other the is despite when hit we days about half is guidance to came is headwinds, like you the up just half at in QX about X on first -- mid-singles guidance, half? just XQ Or And did comps? Understood. the Why the for back just drivers back back the when looking And

issue here Yes. that QX is is that. comps the The in biggest driving

if So almost COVID QX over you 'XX, XX%. XX%, at and over XX%, that, of surgical looked XX% [indiscernible] breast almost grew Molecular grew within

So an is QX of I quarter. think been saying that proud we've outstanding what quarter, was along just that all

that half. QX, back QX were As we that and in growth improved rate comps that the going have we went drive against into more normalized

our with We question will Anthony next take Group. from Mizuho Petrone

year-over-year. on like about like of the that? like QX, ask bit quarter. stronger seems slowed a ex think expectations should you like on And just Molecular quarter little might see kind Congratulations This color speaking down just respiratory COVID, for season? to have we Diagnostics a is that versus this quarter virus I this it and Anthony. Dmitry about like your for it more great How wanted

Yes.

rate the growth you rate, year big days ] quarter days. run overall off that It's I selling rate knocked both between very the depending that, think how now quarter, fall. But And single [ about. now, molecular and quarterly if the points the molecular good growth disposable piece think in going a is strong we're that and quarter quarter percent these that XX-ish in ridiculously think a this from And of size are business sheer and over against the we I on the business. frankly, the about X comps the biggest XX the second ago. run feel that of exactly fewer affected was X basis the

guys COVID. gave you And baseline about great. guidance of full year going we now Should forward? kind that new the thinking be for Sounds

Yes.

about, as we've think COVID as talked upside. of think I we

next COVID. the it would the each is upside. again, just So guide indicate season really looking another I But step flu down -- to quarter. continued a as little drives hard elevated tell us a we're year it's that we at mean,

would than so less think for something we're anticipating maybe about even and 'XX. what 'XX And I

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

and if apologize same, this, just know maybe as any DX margins a Karleen. missed Steve, little adoption -- just And on result? Genius that's changes I so Can I follow-up you I first pricing of X system. me, already? I to or have you digital fairly remind a established this then talk in how the you a ThinPrep see about just And do can for market bit remains but the a

I in Sure. Thanks, any change don't assume margin structure. the Puneet. real Yes,

workflow. I incredibly real key here win you tell the think the will our I customers excited. are is

is well psychologists, right workers read to you As especially trying biggest know, and everything the else issues one labs, now these slides. right, of running

concern. X discussions and very workflow when with with that back ago, process. meeting it I around meetings biggest tell got the years of one and of cytology a my ago almost labor-intensive been X role Quest first XX called the I It's going you to was I in manual of can years this

has it's going we European growth what's And of that gone team in addressing our there. having that. that the to internationally out as our starting unleashing the So as be are well, drive magic been and really I is been think part has to already business approval over

as that going the really negatives, false just forward. the frankly, it's much good and accurate more reduction feeling So of well so as,

has the -- been to particularly, us. for going new some it's it's customers it's think excitement going be life, part that So I we think think I been bring galvanizing our from the to

And I rate the Got helpful. And was the result XX% about ask it. if are global then, tax tax through should then effects, about longer That's thinking credit Karleen, with implemented? tax net tax of passing that think tax those you rate very to rate. wanted How house? the we in about just Hologic? bill of term R&D came the Netting for sort the the how that

Yes.

minimum first extent global effect, is fiscal to to let us for rate doesn't in 'XX. us, frame So the impact tax that me it the

but for tax the a But So the just we've expense, that. would it's the any us, in to would change And say U.S., some in our the impact R&D deal hard on we is. say But event. favorable before be amortization issue have with to probably what the of it tend mineral I timing already is legislation to given lack that time to over think I the minimally given regards really XX%. here a that's the side rate more impact in would got really minimal in really given for

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

moving much things AI and has software the to relative help of think detection in [indiscernible] because of gantries of for is given Genius understand what normalize us the we're And to time team like And just Breast the curious a I'm growth new mix the is from the this that's at the equipment away maybe to kind bit. software. I sockets. some coming way with business spend and opportunity right placement of Breast more just to at comps, growth from want how the where we in Eric now with to Health just gantries like start the RSNA. that. increase Health little you about mentioned as and And

Yes, be I there's gantry wouldn't continued Ryan, still underestimate going to placement. that

So about a service continue lot feel I the we a of from it's placements it very to sell -- the revenue think core and things the underneath is replacements. we and But then the in really AI actually additional gantry couple standpoints. still good the that it. other gantry And of

adopters the to also still to there's of to tail XD mode to of off, gantries. the those need end now early really First we've made XD, And we're of kind the all enhancements of machines the be now but system, XD. Their upgraded. place are the with going from additional we into continue

So a I at gantries into key think -- a very our the more are component of it's diversified strength it we've business. business. certainly still But of turned core, the much foundational the

We've peers to assessment environment. heard the get helpful, already. piggybacking of on just from That's CapEx off then And your Okay. love mean, some I your Steve. that,

equipment making I'd CapEx be year from into to back to which We not that's way its the demand. view may on hospitals, kind may of have its or perspective? making get But capital your of some demand the of XXXB money love kind Hologic's ahead way

Yes.

we continue pretty the good side. to CapEx of from around I feel most think our customers

we certainly X least back piece. big I way we're business. in, it people a not And think the bits are reasonable iron ERP to still capital dramatic X.X too. any biggest that's But the our If for position the hospitals ago, as think and we're in changes okay. year, one the again, more not seeing of at other, when overall, were affecting kind felt or a we component was fine, the dribble or systems think like there's fearful, I little years

regardless, So in a we position. like continue we're to good feel

our question take with JPMorgan. We'll from Casey next Woodring

for one Karleen. Maybe

please other other specific full $XX and what you're income XQ getting income guiding year. million $X other the income, interest for the other of the and and million $XX on XQ you're math, On to income of for line, interest year. non-GAAP million expense assuming I'm be my to can net for expense By interest you the and for

the So the year. just to trying bridge rest XQ through of

Yes.

XQ is unique a little pieces. X So in

Our in that was actually interest interest income expense, of place, the than December. still favorable end a interest actually we at given rate our expired had higher which hedge

year, will than million. which be debt moving income the to offset Also $X QX that cost drives expense $X they our our that below EPS the So roughly basis $XX increase had to really average interest points million forward, slip higher of the weighted as about really compensation. deferred benefit liability we interest the expense, of of on which to through investments will our neutral XXX interest balance are $XX from is tune of million million line mark-to-market about mark-to-market in the and

operating don't any we again, to that in forecast So really benefit this offset related expense expenses. or because

contract a and rate we maintaining exit some expense. assuming that of deployment that as year, really but that interest it's high balance it's hedge So the expiration really drives cash higher interest

if Got more just it. one can in. then I And sneak maybe helpful. That's

XX% inherently strong know in growth currency average, margin. the international piece, there On above very fleet lower constant I breast. international saw is the think, I revenue

contribution But fleet versus making any there higher, you're that You've anything if you're to forward? how average think U.S. the should margin talked doing the moving kind outside about about before. And we that expansion drive curious international of investments margin

time. selective Yes. team been teams the We're lessen what at our gap cost being very a dilutive really so been our disciplined is help we're doing growth opportunities. proud but dilutive and international the disciplined to the operating margin, gross of that margin -- certainly very on are has looking that side pricing They've and trying on over touch still in international still the to

typically do margin revenue performance, as And I better opportunities go the see to think usually that not accretive we only markets, Yes. there's as in key is we direct line but well.

with Derik We America. our next question Bank De will Bruin from take of

I I don't don't typically -- sports do references. do Sorry,

testing. it Because do so I like of what Or about How your growth. SDI viral sort BV/CV/TV in just the for of can of expanding a I I think So beyond market trench mean, what's competitors do what you're load say just you know are we warfare. about assays of talk really these? make But pipeline stagnant? and then testing -- I'm like out what be should they you and other added. sort be can testing is the one. of about sort mean And I market the sort the But won't just I market's you not market around? mean have sort strong shares of bit and that of little your curious have are you molecular

what's are Mike, question some say, hadn't and it's competitive So and opportunities that markets pipeline? of in what's would market a grown versus new historically lot I the the on expansion more, these a

when as MyoSure that NovaSure for launched first have markets, big to strongly. now moment. NovaSure Surgical someday certainly and miss to Derik, we right? face is, consistently a have would very -- lot And I that still is would there's a it there The dwarfs to the ever and and starting there's is think flip hand-to-hand imagined be it. go growing opportunity let's much -- Nobody our is of formidable it we piece is people side competitors, as how combat. expand gotten And

come sometimes we're it's doing. BV/CV to may become largest fully market It's and -- we've with As assay. understand impact our hard the the size out the that BV/CV, of creation

And sits still at a That alone it, XXx. STIs. understand the probably identify what building globally it's all consider because got to even for and it we women market you only XX% in data that health the sits of you and people global the want Women's is just testing the right? when should that of is If of would say world fraction tested be, Index, where should we markets. got we're to hard that some from growing these So Health fully women's look

the Now years we're realize in either. next to not X going that

at we're between. in XXx So it's to level, call available the quite that accessible market where it's total truly not because

to grow the that new think create I So time. over we is and assays new gist markets continue and products, pioneer these

We from Needham with Company. & take Matson question will Michael next our

question the in to mammography business. earlier the wanted follow on the just I gantries Yes. up on

believe But forth. for you've made and now. So while so been I understand of a enhancements around that a the I number platforms fairly

once trying and as platform I be boom is like new to a a any to kind I But all know you're that So company while. focused, bust mean, -- capital in stuff. of has every got it every launch seems not there and

mean is So that maybe? could something I see in term we near the

completely. Yes,

recall we've So through. first, and is all reminder, detection our gradually improving did that been as better and our launch a then XD we what XD, performance better doing on and imaging, working

though even next and And approved. not years. along the we're on products gantry we like got since years the a are But XD had product having few XX that XX we it's over said working So as the little a way. evolve that, it's XX-year-old selling -- years we've now been -- here selling hardware additional newer will we changes well

the kind that you found you thing or if hit commented billion-plus. past larger, of of deals but another of like at, you're potentially deals, I feel are potential because mean, I I you open directly in looking just maybe $X then of and that about to it Steve, the wanted kind just size M&A, by I right was the about guess to there on And kind larger areas think the ask I Okay. question

I Yes, it if consider EBITDA. something range think revenue would we in brings significant and that frankly,

losing say something would something money. not us early something of going size that do a like or you stage that's that. on to embark something for we're expect would So to science project or only I

few to be but not we things think us. things, could we a a contribute to it that pretty be We but would have capacity terms disciplined, upon continue of have in would asset. of in range. ability looking established we it but at improve to are special And incredibly be the to we're their a There's businesses that there lot

we'll time, take is Ryan. X Cynthia, this In consideration of question. final

we Ty will Navann BNP. to go next with And

differences? regarding following your the a versus and with discuss up that question, versus of my can of AI your any question, innovation competitors? And you're the Can Maybe discuss competition the the U.S. structural path recent on potential you needing. including size opportunity the comments international outside capabilities second first the if you long-term

Yes.

to our and relative it edge CAD been program. -- time to the the some for as programs relates on Genius the between we've the think A I Breast Health, AI detection leading front quite AI

linkage So workstations it particularly and to the feel workflow our products. our the very and to we continue as relates to advantages good

question and to again, X years our continue to second better the for rate been X overall I accretive excluding come. growth our the international, on international to the or business generating, CovaDish for frankly, see here think, And last for international being we've of for double-digit growth years part,

So thank very you much.

Quarter session. evening. Earnings And XXXX This have Call. this concludes and concludes you, Conference good Hologic's a now question-and-answer today's Fiscal Thank First