Hologic (HOLX) 29 Jul 242024 Q3 Earnings call transcript

Good afternoon, and welcome to the Hologic's Third 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. Please go ahead.

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

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

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

A referenced release safe our Before we and like discuss materially statements to included in be that cause you involve SEC statement and make certain in the call, or from inform to that non-GAAP These uncertainties include those we expressed we earnings today harbor begin, we results forward-looking. revenue, revenue reconciliation less during risks implied. filings. Also would as certain actual statements this of assay Such unknown measures. may known will and organic differ financial define and those found will we businesses factors for earnings to from Hologic and revenue, which acquired are: our be products non-GAAP revenue measures these sales owned two, which GAAP excluding divested to organic X one, businesses COVID-XX can excluding year; further discontinued excludes by revenue, COVID-XX, related and Diagnostics. revenue in other than release. COVID-XX Two in from

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

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

afternoon, good Ryan, you, and everyone. Thank

our XXXX. Total of both billion, was earnings $X.XX share and for the of results We guidance. $X.XX, for are financial QX discuss pleased the revenue above end was third per high non-GAAP quarter again to fiscal our

revenue are returned our that in growth. rearview now with to mostly COVID Importantly, reported the has we excited mirror,

the the strong line Our throughout performance and top shines P&L. goes beyond

deployed XX% revenue translates and very and in, flip the reported to operating now, bottom delivered EPS solid a the quarter also shares. we on a quarter, $XXX the EPS repurchase encouraging to million X.X growth XX.X% script to growth result margin the very in again. and as we For All $X.XX strong line, million during the

to of our knew were underlying the our These some still followed by fiscal of strength questions the we of back Looking durability uncertainty, start were We the by investors' questions there on shortage. the as pandemic, created about a that year. period certain chip minds exited surfaced and true global business.

we and Hologic. much to many of investors and potential unanswered of some transformed we understood stronger long-term barriers our these power questions newer the While those business, acknowledge created for that

indeed words, that that usual, performance As before bigger, company are would it rely than clearly knew rather a we than emphatically would we and questions stronger demonstrate faster, pandemic. the our these answer on be

Our QX, XX top bent the line third curve quarter declines. after should make performance green of we COVID-driven this quarters very to clear. In

top Organic last of healthy XX.X% reported revenue ex-COVID we And we on these strong X.X% growth returned X.X% achieved growth. top exceptionally ex-COVID, year. growth line last versus Our delivered year. results at to strong organic

for themes today. our to Turning

First, by investors' X answering we our performance would like since questions which of were the on to the fiscal key minds. start recap year many

USPSTF its continue update growth will billion five, cervical And to our margins? theme. to elements adverse Four, over guidelines? The deploying Hologic international pass if Two, top Essex to industry-leading be as first or On M&A utilization Second, broad-based return Health can doubt, Breast our delivering well highlight have which cervical without out and capital? all issues as there. One, we'll to on the call is, with a will will X finally, market yes. a cash to X position, Three, overlooked leadership? grow? leadership The in XX% will short questions, cancer an will maintain and full certain Hologic Hologic of maintained operating $X.X path to activities. successful cancer been who return answer strength screening screening plus provide

continue we'll take to each here, will From question We order. thrive. in

Molecular our much Diagnostics to it continues than First, pandemic. was and bigger to stronger is business prior and deliver the so

Our global solid. is now Panthers installed base and of exceeds rock X,XXX

our Molecular now by rate. In We've us Panther in prior delivered and performance grew customers XX.X% More and bright. remains competitive expanding being and In growth continue the last quarters. simple Panther double-digit and to high XX growth environment. continues quarter, importantly, deliver outlook drive Panther's expanding our and of menu in the constantly to ease praise grow, of top on with workflow, superior our platform. XX revenue of XX.X% to quite the demand after year-over-year, metric terms, simple QX, continue run to utilize per number for use year assays single Quarter our utilization period. COVID, differentiate to Diagnostics automation, a of we molecular excluding business, continue our in

to Second, our cancer continue results Breast Health screening. a breast in profound strength demonstrate

well continue leadership recover position. gantry maintain shortage, from to on pace chip to our business fully is the Our and we

time of chain and much customers still as in and experience. Over our Hologic improved leaders including breakthrough image the is shortage now customer supply leaders performance, a decade scan the fortified and service navigating from satisfaction. Our leaders initial view in XD quality successfully from chip in launch mammography,

our in is revenue Letting year of Health, we in and top the prior more continuing growth delivered growth Endomagnetics to the Breast diverse on than business in numbers acquisition. speak The XX.X% for ever in add period. more recurring X.X% QX, with themselves, even

margins. operating Third,

higher-priced delivered a level, moving by XX As purchased XX% the during the maintaining on focus quarter, the capital period over our year profile and our we international Consistent even on with pre-COVID margin point deployment, basis our flow was XX.X% recaptured cash prior of with Karleen our third XXX our we sector than basis remain incredibly detail and and larger being shortage. Fourth, operational back chip in improvement business to margins it XXXX. later, balance sheet operating amortization will sequentially. the improvement now efficiency an from we margin robust. At in are delivering a point share chips in more highest expectations, strong past

to repurchase accretion Endomag week, are on bet fairway breast closed that time. willing down margin revenue, of recently closing we interventional we last deal, have incredible view to improve as add for terms ] EPS deal an straight women. On demonstrate care of opportunity top to investment execution expect Overall, to the the in of over is the we continue a and we we shares. our Endomagnetics we M&A that [ announced the ourselves and Together, a acquisition, transaction prudent As strategy. capital that within broader

We there, we with strong As dilution to offset a looking cash And million on plans. repurchased baseline, call shares intend are before allocation layer USPSTF. repurchases. And share to continue XX.X our we additional internal look on to have over M&A and for repurchases. capital and our our our to plan share Fiscal million. for turning share strategy deployment $XXX path we from to finally, Essex, the position, year-to-date, fully from include both

navigate the health. our strong its cervical years cervical nearly matter cancer we the remain focus for maintaining our will cancer and landscape direction results achieved the XX no done we may for and strong. Overall, USPSTF to by screening, women's long-term in take we've guidelines, As commitment

in sum the QX on shared of the our lies of strength Hologic we parts. call, our As

more call I'll answer and share to themselves, demonstrate international for expect drivers strength, to that, on growth to quarter-after-quarter, continue We we to our to results speak the call continue our the insight on over and durable while year-over-year. With turn Essex Endomagnetics.

growth strategy, you, diagnostics Thank specific to from Overall, surgical. drivers to the our Steve. sometimes implementation international into multiple of building U.S. because Today, durable drivers growth quarter and are our These around performance world. franchises we'd speaks like growth in shares overlooked strong third of the market the their highlight three drivers our quickly successful

opportunity growth However, of expanding the and sum [ internationally, all our we still parts States. That cytology underscores delivered in ] ability United This reinforces growth said, to the markets. STI of the molecular have quarter. opportunity outside our by power grow MyoSure, of the a and and testing, nice great

category maintained the the for business. Internationally, expanded our the Panther and leveraging we Global base. testing, days installed category, early STI in Molecular still our are with start SBI U.S., in leadership our Let's largest of years. we and largest earned testing is In Diagnostics have

a categories where have the across our increase offer to we opportunity sizable not We share, all testing but only STI testing. in

market. be for tests contribution We us fire, long time cervical cytology ahead have as our we've for the in of driven In to to a and in we more first are on more screening. time, said irons systems. The market markets new by world, Panther growing some same over layer of runway we cancer subsequently several and the volume the regions bringing to liquid-based entered. Pap more can we the expect build continue the assays and the With

U.S. overshadowed has by time. Shifting to revenue that While Surgical revenue, MyoSure. the the meaningful testing cytology, STI international moved needle like and over

portfolio that that MyoSure it rate strong what this to the not markets to a more that In still products are internationally. the minimally U.S., are there certain vastly meaningful should option underpenetrated, because invasive treating high is invasive it's obvious This the while alternative is regions, minimally these even U.S., complete is many the all in for invasive hysterectomy. are uterine our first opportunities and clear option. All belief MyoSure demand expansion women is we same our in, across our And growth international fibroids. and access International only is for While in as growing minimally is for possible have polyps established market higher. products remained and

women's turning areas, more [ Karleen, to growth for like these and call health, on ]. I'd to over opportunity. And in positioned leaders As this before finally, we well on capitalize detail champions Endomagnetics global provide are the to

revenue our corporate our Overall, has with and to provide well excited meet expect proven both that and demand interventional time. we to us expect even to de above As channels, differentiated the adoption earnings we surgery the accepted has Steve lesion over visualize done Breast investment breast Health and on-market accretion device to rooted go and has team seasoned countries. by incredible company XXX mentioned, [indiscernible] includes what to portfolio strong women with products job and lymphatic in Endomag Endomag localization, R&D wireless we hospitals business for and Trace to a capabilities, become welcome That to perspective, Hologic. easy-to-use and forces are and robust today. employees workflows. an well markers also offerings ] into over margin and determine aligns growing the products an for the to XXX,XXX it established growing [indiscernible] With treated the in sales are join market. From franchise amplify business average management Mag simple, both. growth directly further enables plus together. [ our clinical over include [indiscernible] are tracing X,XXX XX handheld to pleased

Now the call Karleen. over I'll turn to

certain and showcasing for fiscal our Essex, afternoon, performance, everyone. and our of good walk revenue an XXXX. income financial our and overview my today, In strong you, with touch statement on Thank key provide statements guidance I down quarter will metrics, finish fourth the full results,

were expectations at COVID. building revenue again once and the Our excluding $XX our first exceeding of We of X.X%, revenue in organic momentum third high-level the results the prior million. guidance growth X.X% total robust, financial of year. our beating delivered from recap and by growth on To revenue came profitability, $X.XX the billion, midpoint quarter on results, revenue half

share In prior and $X.XX, high growing addition, our per end of guidance XX% exceeding non-GAAP the $X.XX. by earnings were

announced strength we results, of $XXX over of with want Endo-Magnetics. million ending balance sheet, we Before deployed to in highlight operating the franchise on moving our on cash activities, continued from balance the million QX, share the generated $X.X sheet. quarter the on billion $XXX our acquisition and In repurchases to

and We the us continue cash below fund leverage range our of strategy, to to ability demonstrate at pull M&A tuck-in to levers cash that same and capital target flexibility consistently allocation our share repurchases innovation ratio both and the well generate time. balance, strong our provides

opportunities we forward, still to arrive. deploy capital as diligently firepower have Moving significant to continue

results. of $XXX.X franchise In X.X%. our Diagnostics, revenue grew quarter to million third Turning

continues Diagnostics and Excluding by related Molecular XX.X% Within grew COVID growing Worldwide Diagnostics contribute X%. excluding significantly, to COVID. assay revenue, Diagnostics,

[ continues which growth ], We our see in has and strength outstanding second continue largest trajectory globally. BBCBTV become assay underlying to its

from QX, with Additionally, as expected, the sequentially line non-COVID flu season. sales respiratory declined in assay

cytology Plex U.S. B and However, with business. Rounding Biotheranostics A, to strong continues year-over-year Blue declined assay. growth for X.X% declines, Diagnostics, growth finally, Four and RSV adoption to the growth our remains accretive highlighted partially [ be of, Blue continued Essex by earlier. ] perinatal And molecular out international solid offset highlighting as COVID, globally

price shipping sales prior levels inventory X U.S. in period. up to due cytology As QX in elevated a 'XX, leading constraints reminder, customers in to in built year fiscal the third the 'XX,

year-over-year business growth largely returned the impacted. normal, to rates were has While cytology

cytology modest flat in ahead, business. the Looking expect growth to we

Moving Health, X.X% million by Total $XXX X.X% primarily SSI. and imaging, Health. on by excluding growth of growth, contributing revenue to or XX.X% SSI. when and was driven domestic third with solid Breast increased X.X% quarter breast international Within Breast respectively, excluding results,

was meaningfully. Continuing performance driven gantry that next to by service revenue to contribute continues and quarter Third robust increased shipments largely growth Surgical.

quarter growth continues and X.X%. Third increased MyoSure fluid their to Surgical fueled million of related $XXX.X system. revenue fluent be management by

[ the progress nicely. laproscopi quarter grew ] business, dollars, which Our smaller in in and to while continues significantly

international to be in a just the spot, bright XX% growing Additionally, under continues quarter.

a issue. DEXA million due ] Skeletal revenue resulting of Finally, declined stop horizon related nonconformance [ temporary to Business, shipments third quarter a $XX lower our in from XX.X% to ship

and resume the the with We are fiscal resolve quarter situation first to XXXX. of to expect during our working shipments supplier

of Now Gross from year to was be headwind. basis revenue XX for the the the margin quarter. prior though let's on non-GAAP move even XX.X% the quarter, third continue a to point the COVID for P&L assay declines period, a rest improvement

income decrease favorable in the QX, gross elimination sequentially by expanding related This primarily Total of driven by SSI the quarter decreased the of we Additionally, throughout driven million expenses operating top in was operating quarter. -- XXX net sorry, year. XX other The third lower from XX fiscal of expanded operating I'm expected, by Interest product due third increase cash for margins represented line driven quarter. operating margin completed third basis income QX. Below higher largely from points $X expenses by margins businesses. Operating margin to to expenses. $XXX.X nearly repurchases mix. lower was primarily have points divested an fiscal XX.X% year-over-year share gross basis of X.X%. expanded lower in expenses expense fiscal million and from QX, the points basis is growth, balances was lower XX Sequentially, and our the significant as gross from operating margin income,

rates. is expense higher interest interest Additionally, up to due

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

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

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

strong million. million lowered $X.XX. midpoint For fiscal year an headwind headwind this the the $X.XXX guidance our assuming and to guidance, Unpacking represents stop X.XXX QX billion, of $XX ship previously of by of mentioned, million. and inclusion partially now a our revenue full skeletal the $X.XX offset by to revenue of the $X billion have million foreign closed revenue temporary a related about we in have respect QX assumes we of $X XXXX, to guidance ] of acquisition. With we performance to to Endo-Magnetics that are EPS about exchange, estimated the prior This $X [ health our million $X in from will

For $X now about full slight the of we year, tailwind expecting are million. a

franchises. our to Turning

to Surgical year and the excluding full mid-single impact XXXX, fiscal of and Breast digits Diagnostics, Health expect COVID. grow QX We in

digits fiscal fewer to the more mid-single of 'XX, buildup Sequentially, to the perinatal, selling headwind in points QX compared business broad X year. Starting fiscal In Diagnostics our to of utilization to typical 'XX continue patterns drive flat menu. In and expect expect the the QX, to for below COVID, we last expect ordering dropped with to high for growth of customers in 'XX. estimated we we however, has year, quarter. a fourth we adopt QX growth, as In QX. Panther cytology due inventory sales and the which perform to a Diagnostics. reminder, full be Molecular XXX than days business As excluding drive single-digit basis

and out cytology year blood perinatal 'XX. Closing year. in on for diagnostics, the expect million to revenue of comps non-COVID approximately stabilize $X expect million $XX fiscal in we and We QX

be are COVID expect about for expected the in about $XXX items In 'XX terms of approximately related million and million to fourth $XX about $X million and full to the COVID quarter million in we be full sales COVID QX revenue, year. year. the $XX assay for

quarter. for Breast the mid-single grow Moving We pace business the fourth to Health. on digits to on remain

placements we last more demand products delivered delivering orders. We solid portfolio remains in steady we for our and Further, continuing remain the strong, see our solid visibility have confidence of expect year to have The and high. gantry gantries into year-to-date. QX, performance services gantry in than

We constraints. successfully are managing as availability both install resource our our staffing customers elevated among need screening and teams balance customers, the and for meet demand to

grow digits. we to Surgical, revenue in Finally, mid-single anticipate QX

growth to come to MyoSure from laparoscopy division the fluent We business. expect -- and continue our

next Moving margins. to

moving to improvements assume of Our cadence guidance continues into QX. a

the we low on the margin For margin. exit to gross year margin, pace both remain gross operating in for fiscal XXs and

assumes of and also margins an between operating to we in are period 'XX be guidance which income the to $X XXs, and $XX income, includes QX fiscal finish stub to low other we for full of in operating million expense the million XX%, pace Endo-Magnetics. Below estimate fiscal Our QX the year. approximately XX% on 'XX net

on diluted based $XXX approximately to Our the tax and approximately year. To outstanding quarter rate for be effective million annual was guidance full conclude, Hologic. QX expected an XX.XX%, is another of for strong are shares

deliver growth to continue quality earnings. robust We and

ahead additional sheet. fiscal we our XXXX, and excited to by franchises across we all As and year strength end the the by the pristine provided balance XXXX performance of are approach look a

to always, can around state the while health open ask us call questions. our the As we women's stakeholders that, world. With operator on to of count the for advancing deliver also the

Donnelly first take will with our Patrick We question from Instructions] [Operator Citi.

I piece. guess you Steve, the Karleen a a just business the the guide. is of probably seems about like the talked little core just going XQ It there. seems all Has relative XQ lot bit skeletal think skeletal, months talk Obviously, is how just want like inbound on It here. around a it biggest to through it's it into few the but into and ago? feeling to XQ. anything gotten core business I anything worse? you're about changed when Has

it, that. piece, Patrick. And It is are probably for we Diagnostics, businesses business. Breast all It's but Skeletal is really a going Health, of are the just nailed feeling You reflection noncore. completely and supplier it in little good. the great, we our Surgical, because skeletal our little really, the had with issue X of alarming core a hiccup a But

is headwind, And Yes. add point just just, quarter $XX to specifically. million the fourth million a it. Patrick, to to finer $XX the about Of related

Okay. of as we maybe our margin broadly get work the helpful. one the here. is And forward Karleen, That's on way questions then, profile we

you just algorithm, I think about there. we little there's about, as point be heading the XQ of And more think towards when I margin. Can to guess, about margin forward getting piece, think the keys you build the exit and some as bit broadly a to expand how You to to off could talked you rate look fear that the you the jumping the about the think moving pieces? guys go that forward little how about talk a we just the continuing kind going 'XX? peak

Yes.

margins people have a operating we'll growth that right and we've than that like range lower ground we in the really a XX.X%. be the added lot And as business. of thinking as margin profile we'd revenue think in operating at you drivers to legacy about QX, I pre-pandemic see, exit think I that

we So achieving good really exit as that about feel XX.

little we're of XX. 'XX. year primarily some international will to margin integrate through the business we'll working as work costs, be have mentioned, and prepared acquisitions certain we we And full a squarely I a the higher in as as to have said walk full just to double lower again, those pre-pandemic margin see the recent over through But will still chips some we components, year, The of related levels. XX good look as that, the bit chain confidence profile, course those through facilities, primarily we We'll for of well have as 'XX, to remarks, I costs. lower the at between supply has 'XX, we profiles. be the below For our

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

line want through questioning Can it just question. of Karleen, for line, I us you for of the top growth, on the on next to just algorithm X% to there follow stays year underlying Patrick's X% intact think second as for well. presumably, sort help up EPS

buckets you've ones which piece, you're different do between the a to you've got through but got might margin expansion including of here, little you like think repos. then it you And bit dilution you XX As potential track the on so. right, or months achieve, the from in also then next said sounds tuck-ins,

year, better it? it those digit pieces the next of sort growth So high a bit be Or of context single think that? about is to in little essentially as about fair could a we way multiple think EPS than

Yes.

not than in through November that doing giving XXXX So at say all, first we'll we think budget and call. What faster that working for a level -- still point. when guidance of grow the Tejas, I'll cycle, in have we about at our to We're we're earnings want totality be say revenue. high earnings, this yes, we would I

But again, be high on expansion, lead So earnings low well. just to giving call. as again, do about balance whole potentially November to but we and X% not X% tax growth. some P&L, think the the guidance on the you will as we share the double-digit line margin that that that using repurchase favorability And single-digit, would full

like Endomag ahead procedures what's but thinking early particularly quo then been U.S. sort feedback conversations question, early should that And market a more Steve. us any Fair the the underpenetrated? Endomag pediatric [ with some about the on [indiscernible]? OB/GYN there enough. an there really ] And then stand lot in for of it's just how displace that start where in actually, can and follow-up on give flagged update expanding the the Could of tuck-ins Boulder status to you [ a I'll side. And in help recent be where LAP a we from you Got ] channel. here. you, physicians similar things the of on it. OB/GYN from quick days Obviously, setting perhaps from

kick right Essex to We'll to Great. handle. that

Yes. Great.

with So I'll Boulder. start

success say reveal area thoracic great in And seeing of outside fastest-growing so the actually channel. pediatric we're I our is product. expanding would with the

an So differentiated utilized gynecology, from open position We're and strategies we with specialty, with on product where really our there. expand nice, new focusing similar and really we're it's honing to customers, the that focus the product. our we've in seeing getting understand to

to we So feel we would good of thus as still with Endomag, about focus very we'll with early excited of there look the part really days. great far I regard success bit on would say great a meat family bone we I the know to moving just them things that quite about forward. With and closed, as say, Hologic have and I do the left, feel team, really to pediatrics that Boulder together.

customers from channel feedback as on now, business, but feel this have that anything and relationships that today. have prospects far the to we with especially of really right about good strong comment the As don't

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

Wanted the Panther. starting business on here, to with diagnostic focus

X,XXX in now. over field I heard think the I So

XX quarter. stepped up still be about placements? like it that bit were those of on you felt a to might Pre-COVID, little So was like getting a back wondering bit. a any COVID hangover a signs you seeing are you I feels you placing levels or if

up, Clearly, a still expanding the to but growth, placements. utilization still seeing are pre-COVID level. be we not this at that Yes, moving modestly the yes, But chapter Jack, lower consider for good. our of on Panther, is which back we

it. Got

largest million where terms would second floor heard some And of in land also a that kind $XX globally. I of driving could the this or so? Would think care put I BV/CV/TV, size point? you on in to it quarter assay wager at then overall And growth? What's the Okay.

Yes.

comfortable is. fair would where our think I I it that a I we assay could that's be it would -- largest someday. be of estimate think think I And saying

So there's to perspective, for still room it in there. put growth

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

backlog, on Steve. ratio. my that the is nice I first ship [indiscernible]. one home Steve. on the -- skeletal How guess in Congrats

-- So revenues? this be lost tailwind 'XX? those is a a fiscal more this Or for like are could now

won't -- little lost a potentially be be could a of revenue. it It bit

feel we think good. will pretty I pretty of be think But I a we overall, good. ones. tiny couple There feel

So we're far of we to tailwind fixing by place be But back it the it might but too feel be for next get We'll and of beginning modest year, want good. don't in very ourselves. a 'XX. ahead

maybe and so, prior underlying Steve. of perhaps And helpful, is And Karleen, Did to that point? revenue to relevant push what QX. and a deal one because you here be If for modeling company? is for that the the expectations That's versus be thinking jump-off of out? on mostly the margins change the number

Yes.

off quarter. typically, is our to back is to jump range. talked in think that lowest higher something I And fourth year the basis, operating midpoint going I I which get I'd as XX, than and QX XX XX end the the would to think that to of you between XX margins. give margin we'll full annualized from probably say the XX.X XX we're -- about, to would But an quarter. would there some I seasonality

like in a off So higher number I to wouldn't QX. spring of QX

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

throw two the quarter on out just Congrats here. Maybe there I'll quick.

bit quarters, bifurcated has a last the a been generally testing. X know cytology I bit but were little just business itself the lumpy. on comps Just the little

any just there's cycle the platform. So force task upgrade you there? Do maybe the with changing what ahead patterns you're also preventative think rule? digital have seeing of You the

on of So that range lower could assays that what one then know And range? end sit? the of is on the it upper bit does average is that where time? Panther Where is you two, What of the used end the range? lumpiness cytology. And second but trend provide utilization. the I the in range the Can just systems? post-pandemic in a little actually over

Let me take of that. the first part

positive any seeing year consistent. And United very is year, is good, vendor of very in some of the little looking terms the Anthony. is comparisons, It made not I'm more digital we we're which stages Europe, QX shift last a of because QX but kind are the in lumpiness last customer very between of changed and the cytology underlying is consumer we in part in sorry, the really ahead usage, first a third-party that stages acceptance The -- or in our to early it's further States. -- it on bit are the initial cytology, of market

we think I continue good feel about So business. to our cytology

On the we'll Panther utilization, take...

Sure. Yes.

over So about four on assays. we of running two are over total, Anthony, look we on XX% when the new that we in customers, are assays. But the running our utilization Panther more look customers at at or more or U.S. talked X/X

target X at of the So end just that -- compares likely of range. of to under 'XX, I over at kind X to the end Xis the would anchor 'XX. into That X/X XX%

on can we're achieve you growth Panthers that able So we utilization to there. that are out the drive as see that

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

Yes.

So understand the OUS. regions one the and But sounds ask business, and I versus to like the to of want seeing what's driving that kind different with want in is you world? in -- for markets It testing just there what guys. growth you're what's of driver kind of growth the cytology PAF those a HPV primary on happening

nice acceptance cytology. seeing digital our to we're Yes, some

One not the challenges cytologists many as outside of is around. States the United

work good. our cytology big the And And cytology, digital is rolling so guidelines. win we genius the to workflow with there the ability to a continue and out is help on so

many did in stronger so I that's businesses, shifting ministries that's we been test, of interventional guidelines. to relationships including hidden everything dialogues that more and the much breast just really everything world benefit of going is with having for and business pandemic to think COVID across provide establish our we're businesses, the surgical our our else. missed health piece And we really the the

and benefiting in gone few And that angles years working really cytology and to so those from model a the country. by we're has more there's discussions. country Germany over HPV co-testing last

as Karleen think And opportunity Okay. then heard the currently a I rate out tax of call next few I over years. kind

rate your is larger So on tax companies. some a bit higher relative side the little of to the

can that? -- So maybe you on elaborate

Yes.

on rate. for tax acquire at Rica as try those their and especially the to continue think leverage our we we supply to leverage optimize favorability and Costa to supply specifically, chain even manufacturing, more chain, companies new operations I we to points look contribute as and

Casey with Woodring from JPMorgan. question We will take our next

to XX.X% So molecular wanted strong ] number. quarter in the that about I the here, [ talk growth

more in has competitors seeing the growth side that nonrespiratory rates row. One health virology quarters the areas of growth. of of as point on in larger out strong in as several molecular now market specifically called and care sexual a space well the players the sits This for been

I given you share a or now with help other growing market just way Just some any thoughts your And then follow-up. around frame your of Panther menu overlap, point-of-care can coexisting platforms? how the And these the that potential shifts up is have in in latest one market? the

Yes.

labs. we asymptomatic. the well really, think for that is to the to It's the I are feel good of most standard going really very work continue screening still economics testing that

think we where on around there's will as we that love And the punching our but going. And well, edges position. the good so going help about expand people I always we're feel be to probably really market

surgical algorithm, is previously then you lower the helpful. And just cytology. range, of somewhere talked that top the X% rest end about line including when higher X% middle quickly, and probably that in diagnostic the at to That's here on my follow-up on

them to is next you walk moving way just Maybe about right there that -- the XXXX the just year. ex-COVID for think parts on as basis? see So an through

Yes, XXXX, probably individual overall. feel I give quite but ready line forecast not for good think we to

year, slightly we're we'd think I given business, maybe but above, headed. As slightly any any given like given below, any where quarter,

Thank we'll you when of you. Casey, So in give that detail, we more guide November.

from Bank We our next with will Ryskin take America. Michael question of

me. ends of kind loose couple -- Just a for

skeletal, Going stop the the back to ship.

talked I I fourth in you million getting confidence think the about $XX think quarter. XQ, resolved in you that about talked fiscal

of Could of resolution? you frame of sort in really the when this outcomes extend range little longer? you're have on resolved? And bit if to any quarter Just could just Do there? have sight a the good timing of the going line it sense you

have of expect to QX We of out 'XX. We're not into do sight. go it good line far

the again. able So market guide to back in then. to fully you should point, expect but be on we count by it We'll be by that

Okay.

And you've at capital M&A share then balance the about same deployment got And on Okay. free you strong cash of flow obviously, buybacks kind sheet, going and side, time. the year-to-date. both talked on

just right recently, a frame sort couple two Obviously, remind you those deals position. your a but under how us now? good Just in got of of still belt options you

two trading between how that priorities going and just the see forward, So you off?

strong Yes. and generation credit Certainly, sheet a at competitive cash with as balance flow very we very agreement. our look

our as built our sheet be us is grow give the revenue, it current that share in well on we've M&A, tuck-in to rate. The hopefully ability time. then flow that Our our focus growth accretive as balance confidence acquisitions on And to deploying point in cash free the cash at to would this priority that continues repurchase. be

in our our dilution as in and valuation plans a stated disconnects equity see we've from market. opportunistic we remarks and to then minimum As at manage the

We question will Paribas. Navann Ty BNP take our from with next

about M&A are ask for with gantry system What seeing you Breast if moment? available innovation, the next-generation you could acquisition? I And billion also and the discuss your wanted then the AI? to $X.X Health at pipeline in cash the including

Sure.

we the last on pleased deal think I week. the obviously we were very front, M&A closed Endomag

look But deals to bit only can bigger again, other make available. at or them continue whatever. a you We size in when little that they're

last one to we work It out kind we'd do said quarter, every quarter. doesn't of way. As always Endomag that love

we're So being shares on buying to being shake along out and be things continue by to the our able able we also back buyers this to own of redeploy our great watch way. own disciplined position as in cash

either/or have. it's position So an not given incredible the we cash

we that. So on are where we like

that Those in to really quality. innovation that the cytology. images also and in assessing certainly, patient workflow we've continues in the and assessing gantry is experience next-generation again, on image we of those drivers risk of Yes. workflow, a In only the helping about are or regards AI, within breast talked on not innovation, radiologist improve digital and space focus layer Genius AI. How certainly but to key use in help can

We'll take next BTIG. Ryan Zimmerman our question with from

your year. gantries comfortable don't Karleen, do in mean Maybe made but kind today this just coincidentally, the answering if be timing gantry. color a gantries you're you up any you'll you give next-gen yet, on grow of can just comment of you pace next-gen I gantry? I And know follow this that grow 'XX? And on to to on expect to

specifics probably a for time likely that would give give and I more Yes. I RSA be we're think towards we of expecting specifics as timing, to we any on on don't we're a certain XXXX what for would highlight going think our and that customers little look beyond.

Okay.

it way discussed is there opportunity kind Because just facility there been question, Just just much a manufacturing talking any years, ] follow-up, for all? And in that two status margin quick had or the far. really kind that a an seeing be or deals over number about, of impact seem go I BioZorb How that you're questions. recall back at then that the like the some recall thing with the wanted with was I you've Endo-Magnetic, One, dynamics? of that unrelated, could low-hanging if or of the the from impact integration And deals. guys you second And hasn't does yet? integration past contemplated don't some to you've ask to there. these number would [ too what's fruit done earlier to thus of about

on Essex. I'll jump Yes. the [indiscernible] question. This is in

of would recall [ in PI other, that from update insert. But we two, So our Endomag I needed BioZorb language one. the an completely recall to number and number our administrative or ] more each is unrelated was say, are [indiscernible] where

integration, are regard on Karleen are that? jump about don't wants to we selling I still So working great through that. With and our it facility know to if product, feel

Yes, sure.

Breast some as our acquisitions, now. different of facility business they all have doing right So we're From we've profiles. integration each in the Health highlighted,

to on Some stages they're alone of in integration. look and as as And makes and always at do always we stand are sense various I make they continue the sense optimization. to continue integrate others for we to do, I to chain, think over those supply our look would next years, opportunities. X And at we'll our opportunities say, realize focus and network

We next Stephens. take Carrico with will question from our Mason

some on adoption is molecular business, On sidecar recently. how the could fusion the trending color you provide for

rate You those what expectations new installed customers? And really How for COVID. can longer then where as base a move doubled are adoption your Panther follow-up, term? attach that has the during fusion among been

adoption each even if focusing Yes, we're menu. have will capability. sidecar, up ] the adopting -- of to mean customer know, It customer every fact, being, fusion. [indiscernible] what in of needs steady as total maybe does seeing that a comes the we're even more by customers We're probably X/X seeing end And opens [ along. our I go quarter-over-quarter, Panther which the it doesn't necessarily customer. on don't up it it Fusion really What Fusion we down Panthers, really is the is is

growth. focal good steady big our we're and and been that's so And seeing point, adoption

take will Cooper with question Raymond We from our Andrew next James.

A lot asked. has been

year, as is a think of on flowing and the for in bit one, core from operating operating in XQ a of little just versus fiscal you could maybe margins, maybe much little nit picky but of a bit the So that just how give pretty a for a full anything us margin little modest year 'XX? about in driver versus terms decremental for more bit we margin skeletal flavor headwind Endomag but the change the

Yes.

ship to have ship noncore as a skeletal say but X even revenue months, is about more it's Think the the franchise on going stop margins. for So Endomag certainly on towards the small versus very stop I on would impact geared Endomag. an only

really, to think it, with too, The margins our about I is that, way are good. really looking think still

more agreed. of And sure just caught one margins. kind want something said then Karleen, make to No, on correct. you I just I again But

said something through I think costs or fiscal I facilities 'XX. and through about chip facilities integrating and chip you costs, the say, should working -- elevated integrating

of terms you a be terms and in the has quickly you're cost of themselves? expect to normal more get how to in chips those at chip when changed kind working through anything of levels wanted Just higher-cost sense,

Yes.

in chip was the having manufacturing 'XX. as think when half increase integration prior business the first into what is facility yes, reduced little and through had substantially I production -- we the of probably be because at supply. The is think breast really go least we integration specifically a the will of But bit facility 'XX. overall, than absorption we're through favorable as getting we're exit them we 'XX what more I

Lou [ with Lee question UBS. next ] our We from will take

Great.

one I just think breast. quick a on

if back to you specific think strong payment? COVID number one can pacement then the quarter. a one-way, the pretty strong. pre you is mentioned on also, pacement the is wonder in gantry I it The like get And pretty really is way? I the

levels real we Yes. grown we've going total grow year-over-year. -- in numbers to gantries. levels, think to are we've I don't have on that but XXXX. quite back gantries at Again, pre-pandemic we'll the confidence not those given be specific We're

[indiscernible]

I'm that? can repeat sorry, you

gantry in sorry, I'm to comment call the that want out you regional pacement? yes. any And

No, not specifically.

And we will take Souda with Partners. our last question Puneet from Leerink

it it question. I'll out round one out round with just I'll

for -- that Just at the assessment, skeletal, competitively you're there the in changed On seeing view? anything measurement that in to get fracture look when wanted you and just market a pushouts [indiscernible] and about has to density bone the your confirm wanted I confirm quarter? view

still another we quarter and strong. still are feel and very supplier and to great that be that great well, total very, truly is we'll our so the meantime, pickup it delivering [indiscernible] businesses what core in This And we right business, the market a about smallest all about very products. on within Yes, obviously, the through our the expect. back is

but no about Puneet, concern nothing -- different, yes, it. So

This And this does Have Third Hologic's XXXX a Call. concludes Quarter Earnings Fiscal session. Conference evening. question-and-answer now good conclude today's