Hologic’s first quarter saw results broadly in line with Wall Street expectations, yet the company’s shares declined after the report as investors digested softer demand in select segments and international pressures. Management pointed to strong recurring revenue growth—especially in breast health services—as a stabilizing factor, while acknowledging that tariff costs and funding cuts in Africa weighed on diagnostic sales. CEO Steve MacMillan highlighted, “our Diagnostics business continued to grow nicely, despite steep declines in our Africa business following funding cuts,” and noted that recurring revenue now makes up a substantial portion of total sales.
Is now the time to buy HOLX? Find out in our full research report (it’s free).
Hologic (HOLX) Q1 CY2025 Highlights:
- Revenue: $1.01 billion vs analyst estimates of $1 billion (1.2% year-on-year decline, in line)
- Adjusted EPS: $1.03 vs analyst estimates of $1.02 (1.4% beat)
- Adjusted EBITDA: $325.7 million vs analyst estimates of $324.9 million (32.4% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $4.08 billion at the midpoint
- Management lowered its full-year Adjusted EPS guidance to $4.20 at the midpoint, a 2.3% decrease
- Operating Margin: -0.7%, down from 20.7% in the same quarter last year
- Constant Currency Revenue was flat year on year, in line with the same quarter last year
- Market Capitalization: $14.32 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Hologic’s Q1 Earnings Call
- Patrick Donnelly (Citi) asked about the extent of supplier price increases from tariffs and mitigation strategies. CEO Steve MacMillan responded that the company expects offsets but is not seeing major supplier discussions yet.
- Tejas Savant (Morgan Stanley) questioned whether the guidance haircut reflected more than just China and tariffs. CFO Karleen Oberton clarified that increased weakness in Africa and China were the primary factors.
- Jack Meehan (Nephron Research) inquired about the rationale for lowering China expectations and the outlook for utilization trends. MacMillan said derisking China was prudent and described a steadier utilization environment.
- Puneet Souda (Leerink Partners) asked about supply chain changes in response to tariffs and capital spending pressure for new gantries. MacMillan said the current manufacturing footprint is well-positioned, and hospital budgets are not a major barrier for planned equipment upgrades.
- Casey Woodring (J.P. Morgan) probed the sustainability of service revenue growth in breast health. Oberton cited increased attach rates and a growing installed base as key drivers, with expectations for continued outperformance.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will be watching (1) the pace and effectiveness of breast health sales force changes and gantry replacement initiatives, (2) the company’s ability to mitigate the financial impact of tariffs and navigate international market volatility, and (3) the sustained growth trajectory of molecular diagnostics and service revenue. Progress on integrating recent acquisitions and successful new product launches will also be critical signposts.
Hologic currently trades at $64.27, up from $57.25 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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