Hologic (HOLX) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 revenue reached $1.011 billion, up 2.7% year-over-year, exceeding guidance, with non-GAAP EPS of $1.06 and GAAP EPS of $0.82, both surpassing expectations.

• Organic revenue excluding COVID-19 grew 5.8% year-over-year, with strong performance in Breast Health, Surgical, and Diagnostics (ex-COVID).

• Operating margin was 31.2% (non-GAAP), up 230 basis points year-over-year; GAAP operating margin improved to 24.1%.

• Net income for Q3 was $194.5 million, up from a net loss in the prior year, reflecting improved operating performance.

• The Endomagnetics (Endomag) acquisition was completed, expanding the breast surgery localization portfolio.

Financial highlights

• Diagnostics revenue was $440.8 million, up 0.7%; organic diagnostics ex-COVID grew 6%.

• Molecular diagnostics (ex-COVID) grew 10.5% year-over-year.

• Breast Health revenue was $385 million, up 7.1% (8.2% organic), driven by strong gantry shipments and service revenue.

• Surgical revenue reached $166.6 million, up 6.2%, with international growth just under 20%.

• Gross margin improved to 61.1% (non-GAAP), up 30 bps year-over-year; GAAP gross margin was 55.4%.

Outlook and guidance

• FY2024 revenue guidance is $4.012–$4.027 billion; non-GAAP EPS guidance is $4.04–$4.11.

• Q4 2024 revenue expected between $970 million and $985 million; non-GAAP EPS guidance is $0.97–$1.04.

• Organic revenue excluding COVID-19 projected to grow 5.2–5.8% for FY2024.

• Guidance reflects a $20 million headwind from a temporary skeletal health stop ship, partially offset by Endomag revenue.

• Four fewer selling days in FY24 expected to be a headwind of over 100 bps.