Q3 2024 Hologic Inc Earnings Call
Operator: Please stand by. Good afternoon, and welcome to 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. All lines have been placed on mute.
Unknown Executive: Good afternoon and welcome to Hologic's third quarter fiscal 2024 earnings conference call.
Speaker Change: Please stand by.
Cynthia: 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. All lines have been placed on mute.
Unknown Executive: My name is Cynthia, and I am your operator for today's call. Today's conference is being recorded. All lines have been placed on mute.
Ryan M. Simon: I would now like to introduce Ryan Simon, Vice President of Investor Relations, to begin the call. Please go ahead. Thank you, Cynthia. Good afternoon, and thank you for joining Hologic's third quarter fiscal 2024 earnings call. With me today are Steve MacMillan, the company's Chairman, President, and Chief Executive Officer, Karleen Oberton, our Chief Financial Officer, and Essex Mitchell, our Chief Operating Officer. Our third quarter press release is available now on the investor section of our website.
Ryan Simon: I would now like to introduce Ryan Simon, Vice President, Investor Relations to begin the call. Please go ahead.
Cynthia: I would now like to introduce Ryan Simon, Vice President, Investor Relations, to begin the call. Please go ahead.
Ryan Simon: Thank you, Cynthia. Good afternoon, and thank you for joining Hologic's third quarter fiscal 2024 earnings call. With me today are Steve MacMillan, the company's chairman, president and chief executive officer; Karleen Oberton, our chief financial officer; and Essex Mitchell, our chief operating officer.
Ryan M. Simon: Thank you, Cynthia. Good afternoon, and thank you for joining Hologic's third quarter fiscal 2024 earnings call.
Speaker Change: With me today are Steve MacMillan, the company's Chairman, President, and Chief Executive Officer, Karleen Oberton, our Chief Financial Officer, and Essex Mitchell, our Chief Operating Officer.
Ryan Simon: Our third quarter press release is available now on the Investor section of our website. We will also post our prepared remarks to our website shortly after we deliver them, as well as an updated corporate presentation. And the replay of this call will be available on our website for the next 30 days.
Speaker Change: Our third quarter press release is available now on the investor section of our website. We will also post our prepared remarks to our website shortly after we deliver them, as well as an updated corporate presentation. And a replay of this call will be available on our website for the next 30 days.
Ryan M. Simon: We will also post our prepared remarks on our website shortly after we deliver them, as well as an updated corporate presentation. And a replay of this call will be available on our website for the next 30 days. Before we begin, we would like to inform you that certain statements we make today will be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied.
Ryan Simon: Before we begin, we would like to inform you that certain statements we make today will be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. Such factors include those referenced in the safe harbor statement included in our earnings release and SEC filing.
Speaker Change: Before we begin, we would like to inform you that certain statements we make today will be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied.
Ryan M. Simon: Such factors include those referenced in the Safe Harbor Statement included in our earnings release and SEC filings. Also, during this call, we will discuss certain non-GAAP financial measures. A reconciliation to GAAP can be found in our earnings release. One of these non-GAAP measures is organic revenue, which we define as revenue excluding divested businesses and revenue from acquired businesses owned by Hologic for less than one year.
Speaker Change: Such factors include those referenced in the Safe Harbor Statement included in our earnings release and SEC filings.
Ryan Simon: Also, during this call, we will discuss certain non-GAAP financial measures; a reconciliation to GAAP can be found in our earnings release. Two of these non-GAAP measures are one, organic revenue, which we define as revenue excluding divested businesses and revenue from acquired businesses owned by Halogen for less than one year. And two, organic revenue excluding COVID-19, which further excludes COVID-19 assay revenue, other revenue related to COVID-19, and sales from discontinued products in diagnostics. Finally, any percentage changes we discuss will be on a year-over-year basis, and revenue growth rates will be in constant currency unless otherwise noted.
Speaker Change: Also, during this call, we will discuss certain non-GAAP financial measures. A reconciliation to GAAP can be found in our earnings release.
Speaker Change: Two of these non-GAAP measures are one, organic revenue, which we define as revenue excluding divested businesses and revenue from acquired businesses owned by Hologic for less than one year.
Speaker Change: 2. Organic revenue excluding COVID-19, which further excludes COVID-19 assay revenue, other revenue related to COVID-19, and sales from discontinued products in diagnostics.
Stephen P. MacMillan: Finally, any percentage changes we discuss will be on a year-over-year basis, and revenue growth rates will be in constant currency unless otherwise noted. Now, I'd like to turn the call over to Steve MacMillan, Hologic CEO .
Steve Macmillan: Now, I'd like to turn the call over to Steve McMillan, a Logic CEO. Thank you, Ryan. Good afternoon, everyone. We are pleased to discuss our financial results for the third quarter of fiscal 2024. Total revenue for Q3 was $1.01 billion and non-GAAP earnings per share was $1.6, both again above the high end of our guidance. Importantly, we are excited that with COVID now, mostly in the rearview mirror, our reported revenue has returned to growth. Our strong performance goes beyond the top line and shines throughout the P&L. For the quarter, we delivered a solid 31.2% operating margin and deployed $100 million during the quarter to repurchase 1.4 million shares.
Ryan M. Simon: And two, organic revenue excluding COVID-19, which further excludes COVID-19 assay revenue, other revenue related to COVID-19, and sales from discontinued products in diagnosis. Finally, any percentage changes we discuss will be on a year-over-year basis, and revenue growth rates will be in constant currency unless otherwise noted. Now, I'd like to turn the call over to Steve MacMillan, Hologic CEO. Thank you, Ryan. Good afternoon, everyone.
Stephen P. MacMillan: We are pleased to discuss our financial results for the third quarter of fiscal 2024. Total revenue for Q3 was $1.01 billion, and non-GAAP earnings per share was $1.06, both again above the high end of our guidance. Importantly, we are excited that with COVID now mostly in the rearview mirror, our reported revenue has returned to grow. Our strong performance goes beyond the top line and shines throughout the P&L. For the quarter, we delivered a solid 31.2% operating margin and deployed $100 million during the quarter to repurchase 1.4 million shares.
Stephen P. MacMillan: Thank you, Ryan, and good afternoon, everyone. We are pleased to discuss our financial results for the third quarter of fiscal 2024.
Speaker Change: Total revenue for Q3 was $1.01 billion and non-GAAP earnings per share was $1.06, both again above the high end of our guidance.
Speaker Change: Importantly, we are excited that with COVID now mostly in the rearview mirror, our reported revenue has returned to growth.
Speaker Change: Our strong performance goes beyond the top line and shines throughout the P&L.
Speaker Change: For the quarter, we delivered a solid 31.2% operating margin and deployed $100 million during the quarter to repurchase 1.4 million shares.
Steve Macmillan: All in, the $1.6 in EPS translates to 14% growth on the bottom line, a very strong result, and also very encouraging as we flip the script now to reported revenue and EPS growth again. Looking back to the start of our fiscal year, we knew there were certain questions on some investors' minds about the true strength and durability of our underlying business. Business. These were questions that surfaced as we exited a period of uncertainty created by the pandemic, followed by the global chip shortage. While we and many long-term investors understood the power and potential of our transformed, much stronger business, we acknowledged that these unanswered questions created barriers for some of those newer to Hologic.
Stephen P. MacMillan: All in, the $1.06 in EPS translates to 14% growth on the bottom line, a very strong result and also very encouraging as we flip the script now to reported revenue and EPS growth again. Looking back to the start of our fiscal year, we knew there were still certain questions on some investors' minds about the true strength and durability of our underlying business. These were questions that surfaced as we exited a period of uncertainty created by the pandemic, followed by the global chip shortage.
Speaker Change: All in, the $1.06 in EPS translates to 14% growth on the bottom line. A very strong result and also very encouraging as we flip the script now to reported revenue and EPS growth again.
Speaker Change: Looking back to the start of our fiscal year, we knew there were still certain questions on some investors' minds about the true strength and durability of our underlying business.
Speaker Change: These were questions that surfaced as we exited a period of uncertainty created by the pandemic, followed by the global chip shortage.
Stephen P. MacMillan: While we and many long-term investors understood the power and potential of our transformed, much stronger business, we acknowledge that these unanswered questions created barriers for some of those newer to Hologic. As usual, we should rely on numbers.
Speaker Change: While we and many long-term investors understood the power and potential of our transformed, much stronger business, we acknowledge that these unanswered questions created barriers for some of those newer to Hologic.
Steve Macmillan: As usual, rather than rely on words, we knew it would be our performance that would emphatically answer these questions and clearly demonstrate that we are indeed a bigger, faster, stronger company than before the pandemic. Our third quarter performance should make this very clear. In Q3, we bent the top line curve to green after 11 quarters of COVID-driven declines. Our top line reported revenue returned to growth at 3.1% versus last year. Organic ex-COVID, we delivered healthy 5.8% growth. And we achieved these strong results on top of exceptionally strong 18.4% organic ex-COVID growth last year. Turning to our themes for today.
Speaker Change: As usual, rather than rely on words,
Stephen P. MacMillan: We knew it would be our performance that would emphatically answer these questions and clearly demonstrate that we are indeed a bigger, faster, stronger company than before the pandemic. Our third quarter performance should make this very clear. In Q3, we bent the top line curve to green after 11 quarters of COVID-driven decline. Our top-line reported revenue returned to growth at 3.1% versus last year. In organic xCOVID, we delivered healthy 5.8% growth. And we achieved these strong results on top of exceptionally strong 18.4% organic ex-COVID growth last year. Turning to our themes for today,
Speaker Change: We knew it would be our performance that would emphatically answer these questions and clearly demonstrate that we are indeed a bigger, faster, stronger company than before the pandemic.
Speaker Change: Our third quarter performance should make this very clear.
Speaker Change: In Q3, we bent the top line curve to green after 11 quarters of COVID-driven declines. Our top line reported revenue returned to growth at 3.1 percent versus last year.
Speaker Change: Organic X-COVID, we delivered healthy 5.8% growth.
Speaker Change: And we achieved these strong results on top of exceptionally strong 18.4% organic ex-COVID growth last year.
Steve Macmillan: First, we would like to recap our performance since the start of the fiscal year by answering five key questions, which were on many investors' minds. Second, we'll pass the call over to Essex, who will highlight certain overlooked elements of our broad-based international growth, as well as provide an update on M&A activities. On to our first theme, the top five questions which have been out there. One, we'll pass our utilization, continue to grow. Two, we'll breast health return to full strength and maintain market leadership. Three, we'll hold logic return to delivering industry-leading 30% plus operating margins.
Stephen P. MacMillan: First, we would like to recap our performance since the start of the fiscal year by answering five key questions which were on many investors' minds. Second, we'll pass the call over to Essex, who will highlight certain overlooked elements of our broad-based international growth, as well as provide an update on M&A activity.
Speaker Change: Turning to our themes for today.
Speaker Change: First, we would like to recap our performance since the start of the fiscal year by answering five key questions which were on many investors' minds.
Speaker Change: Second, we'll pass the call over to Essex who will highlight certain overlooked elements of our broad-based international growth as well as provide an update on M&A activities.
Essex D. Mitchell: On to our first theme, the top five questions which have been out there. One, will Panther utilization continue to grow?
Stephen P. MacMillan: Will Panther Utilization Continue to Grow? 2. Will breast health return to full strength and maintain market leadership? 3.
Essex D. Mitchell: 2. Will Breast Health Return to Full Strength and Maintain Market Leadership?
Stephen P. MacMillan: Will Hologic return to delivering industry-leading 30%-plus operating margins? For..., with a $2.4 billion cash position, will Hologic be successful in deploying capital? And finally, five, can Hologic maintain its cervical cancer screening leadership if USPSTF issues an adverse cervical cancer screening guideline? The short answer to all five is, without a doubt, yes.
Essex D. Mitchell: Three.
Speaker Change: Will Hologic return to delivering industry-leading 30% plus operating margins?
Steve Macmillan: Four, with a $2.4 billion cash position, we'll hold logic be successful in deploying capital. And finally, five, can hold logic maintain its cervical cancer screening leadership. If USPSTF issues an adverse cervical cancer screening guideline. The short answer to all five is, without a doubt, yes, we will continue to thrive. From here, we'll take each question in order. First, our molecular diagnostics business continues to deliver and is so much bigger and stronger than it was prior to the pandemic. Our global install base of Panthers now exceeds 3,300 and is rock solid. More importantly, our customers continue to praise and utilize our platform.
Speaker Change: Fear
Speaker Change: With a $2.4 billion cash position, will Hologic be successful in deploying capital?
Speaker Change: And finally, 5. Can Hologic maintain its cervical cancer screening leadership if USPSTF issues an adverse cervical cancer screening guideline?
Speaker Change: The short answer to all five is, without a doubt, yes.
Stephen P. MacMillan: We will continue to thrive. From here, we'll take each question in order. First,
Speaker Change: We will continue to thrive.
Speaker Change: From here, we'll take each question in order.
Stephen P. MacMillan: Our molecular diagnostics business continues to deliver and is so much bigger and stronger than it was prior to the pandemic. Our global installed base of Panthers now exceeds 3,300 and is rock solid. More importantly, our customers continue to praise and utilize our platform because of Panther's Superior Workflow.
Speaker Change: First, our molecular diagnostics business continues to deliver and is so much bigger and stronger than it was prior to the pandemic.
Speaker Change: Our global installed base of Panthers now exceeds 3,300 and is rock-solid.
Speaker Change: More importantly, our customers continue to praise and utilize our platform.
Steve Macmillan: Panthers' superior workflow, automation, ease of use, and constantly expanding menu continues to drive demand and differentiate us in a competitive environment. Inc. Simple terms, revenue per panther, and number of assays run per panther continue to grow, with the simple metric being our molecular diagnostics growth rate. In Q3, our molecular business excluding COVID grew 10.5%, on top of 12.9% growth in the prior year period. We've now delivered high single to double-digit performance in 13 of the last 15 quarters. Quarter after quarter, year over year, we continue to deliver by expanding utilization, and our outlook remains bright.
Stephen P. MacMillan: Automation, ease of use, and a constantly expanding menu continue to drive demand and differentiate us in a competitive environment. In quite simple terms, revenue per panther and the number of assays run per panther continue to grow, with the simple metric being our molecular diagnostics growth rate. In Q3, our molecular business, excluding COVID, grew 10.5%, on top of 12.9% growth in the prior year period. We've now delivered high single-digit to double-digit performance in 13 of the last 15 quarters. Quarter after quarter, year over year, we continue to deliver by expanding utilization, and our outlook remains bright. Our breast health results continue to demonstrate a profound strength in breast cancer screening.
Speaker Change: Panther's Superior Workflow
Speaker Change: Automation, ease of use, and constantly expanding menu continues to drive demand and differentiate us in a competitive environment.
Speaker Change: In quite simple terms, revenue per panther and number of assays run per panther continue to grow, with the simple metric being our molecular diagnostics growth rate.
Speaker Change: In Q3, our molecular business, excluding COVID, grew 10.5% on top of 12.9% growth in the prior year period.
Speaker Change: We've now delivered high single to double-digit performance in 13 of the last 15 quarters.
Speaker Change: Quarter after quarter, year over year, we continue to deliver by expanding utilization and our outlook remains bright.
Steve Macmillan: Second, our breast health results continue to demonstrate a profound strength in breast cancer screening. Our cancer business is well on pace to fully recover from the chip shortage, and we continue to maintain our leadership position. Our supply chain is much improved and now fortified from successfully navigating the chip shortage experience. Over a decade from the initial launch of our breakthrough 3D mammography, customers still view a whole logic as leaders in performance, including image quality and scan time, leaders in service, and leaders in customer satisfaction. Letting the numbers speak for themselves, in Q3, we delivered 7.1% growth in breast health, on top of 27.5% growth in the prior year period.
Speaker Change: second
Speaker Change: Our breast health results continue to demonstrate a profound strength in breast cancer screening. Our gantry business is well on pace to fully recover from the chip shortage and we continue to maintain our leadership position.
Stephen P. MacMillan: Our gantry business is well on pace to fully recover from the chip shortage, and we continue to maintain our leadership position. Our supply chain is much improved and now fortified from successfully navigating the chip shortage experience. Over a decade from the initial launch of our breakthrough 3D mammography, customers still view Hologic as leaders in performance, including image quality and scan time, leaders in service, and leaders in customer satisfaction.
Speaker Change: Our supply chain is much improved and now fortified from successfully navigating the chip shortage experience.
Speaker Change: Over a decade from the initial launch of our breakthrough 3D mammography, customers still view Hologic as leaders in performance, including image quality and scan time, leaders in service, and leaders in customer satisfaction.
Stephen P. MacMillan: Letting the numbers speak for themselves, in Q3, we delivered 7.1% growth in breast health on top of 27.5% growth in the prior year period. The business is more diverse than ever and is continuing to add even more recurring revenue with our endomagnetics acquisition.
Speaker Change: Letting the numbers speak for themselves, in Q3 we delivered 7.1% growth in breast health, on top of 27.5% growth in the prior year period.
Steve Macmillan: The business is more diverse than ever, and continuing to add in even more recurring revenue with our endomagnetic acquisition. Third, operating margins. As Carleen will share in more detail later, we delivered a 31.2% operating margin in our third quarter, a 230 basis point improvement from the prior year period, and an 80 basis point improvement sequentially. At the highest level, we are now back to delivering pre-COVID margins, even with our international business being over 40% larger than it was in 2019. Consistent with our expectations, we recaptured our strong sector margin profile by maintaining focus on operational efficiency and moving past the amortization of higher price chips purchased during the chip shortage.
Speaker Change: The business is more diverse than ever and continuing to add in even more recurring revenue with our endomagnetics acquisition.
Stephen P. MacMillan: Operating Margin. As Karleen will share in more detail later, we delivered a 31.2% operating margin in our third quarter, a 230 basis point improvement from the prior year period and an 80 basis point improvement sequentially. At the highest level, we are now back to delivering pre-COVID margins, even with our international business being over 40% larger than it was in 2019, which is consistent with our expectations. We recaptured our strong sector margin profile by maintaining focus on operational efficiency and moving past the amortization of higher-priced chips purchased during the chip shortage. Fourth, on capital deployment, our balance sheet and cash flow remain incredibly robust. As announced last week, we recently closed the endomagnetics acquisition.
Speaker Change: Third, operating margins.
Speaker Change: As Karleen will share in more detail later, we delivered a 31.2% operating margin in our third quarter, a 230 basis point improvement from the prior year period, and an 80 basis point improvement sequentially.
Karleen M. Oberton: At the highest level, we are now back to delivering pre-COVID margins, even with our international business being over 40% larger than it was in 2019.
Karleen M. Oberton: Consistent with our expectations, we recaptured our strong sector margin profile by maintaining focus on operational efficiency.
Karleen M. Oberton: and moving past the amortization of higher priced chips purchased during the chip shortage.
Steve Macmillan: Fourth, on capital deployment, our balance sheet and cash flow remain incredibly robust. As announced last week, we recently closed the endomagnetic acquisition, a transaction that we view as straight down the fairway in terms of execution within our broader M&A strategy. Overall, the deal is a prudent investment of capital that we expect to add revenue, margin, and EPS accretion over time. Together, we have an incredible opportunity to improve interventional breast care for women. On top of closing the end of Magdeal, we continue to demonstrate that we are willing to bet on ourselves and repurchase shares. As a baseline, we are looking to offset delusion from our internal share plans.
Karleen M. Oberton: Fourth, on capital deployment, our balance sheet and cash flow remain incredibly robust.
Karleen M. Oberton: As announced last week, we recently closed the endomagnetics acquisition, a transaction that we view as straight down the fairway in terms of execution within our broader M&A strategy.
Stephen P. MacMillan: This transaction is one that we view as straight down the fairway in terms of execution within our broader M&A strategy. Overall, the deal is a prudent investment of capital that we expect to add revenue, margin, and EPS accretion over time. Together, we have an incredible opportunity to improve interventional breast care for women.
Karleen M. Oberton: Overall, the deal is a prudent investment of capital that we expect to add revenue, margin, and EPS accretion over time.
Karleen M. Oberton: Together, we have an incredible opportunity to improve interventional breast care for women.
Stephen P. MacMillan: On top of closing the EndoMag deal, we continue to demonstrate that we are willing to bet on ourselves and repurchase shares. As a baseline, we are looking to offset dilution from our internal share plan. And from there, with our strong cash position, we look to layer on additional share repurchases. Fiscal year to date, we have repurchased 10.5 million shares for $750 million.
Karleen M. Oberton: On top of closing the ENDO-MAG deal, we continue to demonstrate that we are willing to bet on ourselves and repurchase shares.
Karleen M. Oberton: As a baseline, we are looking to offset dilution from our internal share plans. And from there, with our strong cash position, we look to layer on additional share repurchases.
Steve Macmillan: And from there, with our strong cash position, we look to layer on additional share repurchases. We plan to continue on our capital allocation path and fully intend for our deployment strategy to include both M&A and share repurchases.
Karleen M. Oberton: Fiscal year to date, we have repurchased 10.5 million shares for $750 million.
Stephen P. MacMillan: We plan to continue on our capital allocation path and fully intend for our deployment strategy to include both M&A and share repurchase. And finally, before turning the call over to Essex, I want to say something about the USPSTF. As we've done for nearly 30 years in cervical cancer screening, no matter the direction the USPSTF may take for its cervical cancer guidelines, we will navigate the landscape and remain strong. Overall, we achieved our strong results by maintaining our long-term focus and commitment to women's health.
Karleen M. Oberton: We plan to continue on our capital allocation path and fully intend for our deployment strategy to include both M&A and share repurchases.
Steve Macmillan: And finally, before turning the call over to Essex, USPSTF. As we've done for nearly 30 years in cervical cancer screening, no matter the direction the USPSTF may take for its cervical cancer guidelines. We will navigate the landscape and remain strong. Overall, we achieved our strong results by maintaining our long-term focus and commitment to women's health. As we shared on our Q2 call, the strength of Hologic lies in the sum of our parts. We expect our results to continue to answer the call. And speak for themselves while we continue to demonstrate our durable strength, quarter after quarter, year over year.
Essex D. Mitchell: And finally, before turning the call over to Essex, USPSTF.
Essex D. Mitchell: As we've done for nearly 30 years in cervical cancer screening, no matter the direction the USPSTF may take for its cervical cancer guidelines,
Essex D. Mitchell: We will navigate the landscape and remain strong.
Essex D. Mitchell: Overall, we achieved our strong results by maintaining our long-term focus and commitment to women's health.
Stephen P. MacMillan: As we shared on our Q2 call, the strength of Hologic lies in the sum of our parts. We expect our results to continue to answer the call and speak for themselves while we continue to demonstrate our durable strength, quarter after quarter, year over year. With that, I'll turn the call over to Essex to share insight on international growth drivers and more on endomagnetics. Thank you, Steve.
Essex D. Mitchell: As we shared on our Q2 call, the strength of Hologic lies in the sum of our parts.
Essex D. Mitchell: We expect our results to continue to answer the call and speak for themselves while we continue to demonstrate our durable strength, quarter after quarter, year over year.
Essex Mitchell: With that, I'll turn the call over to Essex to share insight on international growth drivers and more on endomagnetics. Thank you, Steve. Overall, our third quarter performance speaks to the successful implementation of our growth strategy, building multiple durable growth drivers into our franchises around the world. Today, we'd like to quickly highlight three specific growth drivers from international diagnostics and surgical. These drivers are sometimes overlooked because of their strong market shares in the US. However, we still have a great growth opportunity outside of the United States. That said, internationally, molecular SDI testing, psychology, and mild sure, all delivered nice growth in the quarter.
Essex D. Mitchell: With that, I'll turn the call over to Essex to share insight on international growth drivers and more on endomagnetics.
Essex D. Mitchell: Overall, our third quarter performance speaks to the successful implementation of our growth strategy, building multiple durable growth drivers into our franchises around the world. Today, we'd like to quickly highlight three specific growth drivers from international diagnostics and surgeons. These drivers are sometimes overlooked because of their strong market share in the U.S. However, we still have a great growth opportunity outside of the United States. That said, international, Molecular FBI
Essex D. Mitchell: Thank you, Steve. Overall, our third quarter performance speaks to the successful implementation of our growth strategy.
Essex D. Mitchell: Building multiple durable growth drivers into our franchises around the world.
Essex D. Mitchell: Today, we'd like to quickly highlight three specific growth drivers from international diagnostics and surgical.
Essex D. Mitchell: These drivers are sometimes overlooked because of their strong market shares in the U.S. However, we still have a great growth opportunity outside of the United States.
Essex D. Mitchell: That said, internationally, molecular SDI testing, cytology, and MyoShore all delivered nice growth in the quarter.
Essex D. Mitchell: Psychology, and Mileshore, all delivered nice growth. This underscores the power of the sum of our parts and reinforces our opportunity and ability to grow by expanding markets. Let's start with SDI, the largest category in our Global Molecular Diagnostics business.
Essex Mitchell: This underscores the power of the sum of our parts and reinforces our opportunity and ability to grow by expanding markets. Let's start with SDI testing, the largest category in our global molecular diagnostics business. In the US, SDI testing is our largest category, and we have earned and maintained leadership for years. Internationally, we are still in the early days of leveraging our expanded Panther install base. We have a sizable opportunity to increase our share not only in SDI testing, but across all the categories where we offer testing. We have a long run way ahead of us as we continue to build the new markets we've entered.
Essex D. Mitchell: This underscores the power of the sum of our parts and reinforces our opportunity and ability to grow by expanding markets.
Essex D. Mitchell: Let's start with SDI testing.
Essex D. Mitchell: The largest category in our global molecular diagnostics business.
Essex D. Mitchell: In the U.S., SDI testing is our largest category, and we have earned and maintained leadership for years. Internationally, we are still in the early days of leveraging our expanded Panther install base. We have a sizable opportunity to increase our share, not only in SDI testing but across all the categories where we offer it. We have a long runway ahead of us as we continue to build the new markets we've. With several irons in the fire, we expect a later and more contribution over, driven by more assays and more volume on our Panther. The same can be said for cytology and cervical cancer.
Essex D. Mitchell: In the U.S., SDI testing is our largest category, and we have earned and maintained leadership for years.
Essex D. Mitchell: Internationally, we are still in the early days of leveraging our expanded Panther install base.
Essex D. Mitchell: We have a sizable opportunity to increase our share, not only in SDI testing, but across all the categories where we offer testing.
Essex D. Mitchell: We have a long runway ahead of us as we continue to build the new markets we've entered.
Essex Mitchell: With several irons in the fire, we expect to later end more contribution over... time, driven by more assays and more volume on our Panther systems. The same can be said for psychology and cervical cancer screening. In some regions of the world, we are bringing liquid-based pat tests to the market for the first time and subsequently growing the market. While overshadowed by the US revenue, international psychology likes SDI testing at the meaningful revenue that moves the needle over time. Shifting to surgical and myosaur, while myosaur is still growing strong in the US, the myosaur international growth rate is even higher.
Essex D. Mitchell: With several irons in the fire, we expect to layer in more contribution over time.
Essex D. Mitchell: Driven by more assays and more volume on our Panther systems.
Essex D. Mitchell: The same can be said for cytology and cervical cancer screening.
Essex D. Mitchell: In some regions of the world, we are bringing liquid-based path tests to the market for the first time and subsequently growing the market. While overshadowed by U.S. revenue, international psychology, like SDI testing, adds meaningful revenue that moves the needle over time.
Essex D. Mitchell: In some regions of the world, we are bringing liquid-based path tests to the market for the first time and subsequently growing the market.
Essex D. Mitchell: While overshadowed by the U.S. revenue, international psychology, like SDI testing, adds meaningful revenue that moves the needle over time.
Essex D. Mitchell: While Mileshore is still growing strong in the U.S., Mileshore International's growth rate is even higher. This is possible because international markets are vastly underpenetrated and demand remains high for a minimally invasive option for treating uterine polyps and fibrosis. In many regions, we're the first and only minimally invasive alternative to a complete hysterectomy.
Speaker Change: Shifting to Surgical in Myoshore.
Speaker Change: While Mileshore is still growing strong in the U.S., the Mileshore International growth rate is even higher.
Essex Mitchell: This is possible because international markets are vastly under-penetrated and demand remains high for a minimally invasive option for treating uterine polyps and fibroids. In many regions, we are the first and only minimally invasive alternative to a complete hysterectomy, and it's our belief that all women should have access to this minimally invasive option. All in, while it is clear that certain products across our portfolio are more established in the US, what is not as obvious is that there are meaningful market expansion opportunities for these same products internationally. As leaders in these areas and champions for women's health, we are well positioned to capitalize on this global growth opportunity.
Speaker Change: This is possible because international markets are vastly underpenetrated and demand remains high for a minimally invasive option for treating uterine polyps and fibroids.
Speaker Change: In many regions, we are the first and only minimally invasive alternative to a complete hysterectomy, and it's our belief that all women should have access to this minimally invasive option.
Essex D. Mitchell: And it's our belief that all women should have access to this minimally invasive option. All in all, while it is clear that certain products across our portfolio are more established in the U.S., what is not as obvious is that there are meaningful market expansion opportunities for these same products internationally, as leaders in these areas and Champions for Women's Health. We are well-positioned to capitalize on this global growth opportunity. And finally, before turning the call over to Karleen, I'd like to provide more detail on endomagnetism.
Speaker Change: All in, while it is clear that certain products across our portfolio, more established in the U.S.,
Speaker Change: What is not as obvious.
Speaker Change: is that there are meaningful market expansion opportunities for these same products internationally.
Speaker Change: As leaders in these areas and champions for women's health, we are well positioned to capitalize on this global growth opportunity.
Essex Mitchell: And finally, before turning the call over to Carlene, I'd like to provide more detail on endomagnetics. As Steve mentioned, we are pleased to welcome the endomagnetic team to Hologic. 150 employees strong and with season management and R&D capability, the company has done an incredible job growing the business to what it has become today. That includes 500,000 plus women treated in adoption by over 1,300 hospitals in over 4,500. Endomagn products include mag seed markers for wireless lesion localization, mag trace for lymphatic tracing, and Symptomac, a simple, easy to use hand-held device to visualize both. Endomagn portfolio enables us to provide robust and differentiated offerings to meet the man in the growing interventional threat surgery market.
Speaker Change: And finally, before turning the call over to Karleen, I'd like to provide more detail on endomagnetics.
Essex D. Mitchell: As Steve mentioned, we are pleased to welcome the Indomag team to Hologic. 150 employees strong and with seasoned management and R&D capabilities. The company has done an incredible job growing the business to what it has become today. That includes 500,000 plus women treated in adoption by over 1,300 hospitals in over 45 countries. Indomag products include MagSeed markers for wireless lesion localization.
Karleen M. Oberton: As Steve mentioned, we are pleased to welcome the Indomag team to Hologic.
Karleen M. Oberton: 150 employees strong, and with seasoned management and R&D capabilities, the company has done an incredible job growing the business to what it has become today.
Karleen M. Oberton: That includes 500,000 plus women treated in adoption by over 1,300 hospitals in over 45 countries.
Karleen M. Oberton: Indomag products include MagSeed markers for wireless lesion localization, MagTrace for lymphatic tracing, and Symptomag, a simple, easy-to-use, handheld device to visualize both.
Essex D. Mitchell: MAC Trace for Lymphatic Trace, and Synti-Mac, a simple, easy-to-use, handheld device to visualize, the Endomag Portfolio enabled us to provide robust and differentiated offerings to meet demand in the growing interventional breast surgery market. From an investment perspective, the business directly aligns with our breast health franchise, and has proven on-market products that are well-accepted in clinical work. With our established, deep-rooted sales channels, we expect to amplify revenue growth well above our corporate average and also expect both margin and earnings accretion over time. Overall, we are excited to join forces and determined to go even further together. Now, I'll turn the call over to Karleen.
Speaker Change: Endomag Portfolio enabled us to provide robust and differentiated offerings to meet demand in the growing interventional breast surgery market.
Essex Mitchell: From an investment perspective, the business directly aligns with our breadth health franchise and has proven on-market products that are well accepted into clinical workflows. With our established, de-booted sales channels, we expect to amplify revenue growth well above our corporate average and also expect both margin and earnings accretion over time. Overall, we are excited to join forces and determine to go even further together.
Speaker Change: From an investment perspective, the business directly aligns with our breast health franchise and has proven on-market products that are well-accepted into clinical workflows.
Speaker Change: With our established, deep-rooted sales channels, we expect to amplify revenue growth.
Speaker Change: Well above our corporate average and also expect both margin and earnings accretion over time.
Speaker Change: Overall, we are excited to join forces and determined to go even further together.
Karleen Oberton: Now, I'll turn the call over to Carleen. Thank you, ethics, and good afternoon everyone. 1. In my statements today, I will provide an overview of our revenue results, walk down our income statement, showcasing strong performance, touch on certain key financial metrics, and finish with our guidance for the fourth quarter in full fiscal 2024. To recap high-level results, total revenue came in at 1.11 billion, leading the midpoint of our prior guidance by $11 million. We delivered 3.1% revenue growth in organic revenue growth of 5.8% excluding COVID. In addition, non-GAAP earnings per share will $1.6 growing 14% and exceeding the high-end of our prior guidance by 1 cent.
Karleen M. Oberton: Thank you, Essex, and good afternoon, everyone. In my statements today, I will provide an overview of our revenue results. We will walk down our income statement, showcasing strong performance, and touch on certain key financial measures. And we will finish with our guidance for the fourth quarter and full fiscal 2020. Our third quarter financial results were robust, once again exceeding our expectations on revenue and profitability. Building on the momentum from the first half of the year, CAP High-Level Results.
Speaker Change: Now, I'll turn the call over to Karleen.
Karleen M. Oberton: Thank you, Essex, and good afternoon, everyone.
Karleen M. Oberton: In my statements today, I will provide an overview of our revenue results,
Karleen M. Oberton: Walk down our income statement showcasing strong performance.
Karleen M. Oberton: Touch on certain key financial metrics, and finish with our guidance for the fourth quarter and full fiscal 2024.
Karleen M. Oberton: Total revenue came in at $1.11 billion, beating the midpoint of our prior guidance by $11 million. Delivered 3.1% revenue growth, in organic revenue growth of 5.8% excluding COVID-19. In addition, non-GAAP earnings per share were $1.06, growing 14% and exceeding the high end of our prior guidance by 1%. Before moving on to our franchise results, we want to highlight the continued strength of our balance. In Q3, we generated over $400 million in cash from operating activities, ending the quarter with $2.4 billion on the balance.
Karleen M. Oberton: Our third quarter financial results were robust.
Karleen M. Oberton: Once again, exceeding our expectations on revenue and profitability.
Karleen M. Oberton: Building on the momentum from the first half of the year.
Karleen M. Oberton: To recap high-level results, total revenue came in at $1.11 billion.
Karleen M. Oberton: Leading the midpoint of our prior guidance by $11 million.
Karleen M. Oberton: We delivered 3.1% revenue growth.
Karleen M. Oberton: and organic revenue growth of 5.8% excluding COVID.
Karleen M. Oberton: In addition, non-GAAP earnings per share were $1.06, growing 14% and exceeding the high end of our prior guidance by $0.01.
Karleen Oberton: Before moving on to our franchise results, we want to highlight the continued strength of our balance sheet. In Q3, we generated over 400 million in cash from operating activities, ending the quarter with 2.4 billion on the balance sheet, deployed 100 million on share repurchases, and announced the acquisition of Endomagnetics. We continue to demonstrate that our strong cash balance, leverage ratio well below our target range, and the ability to generate cash consistently provided us flexibility to fund innovation and pull both lovers of our capital allocation strategy. Tuck in M&A and share repartises at the same time.
Karleen M. Oberton: Before moving on to our franchise results, we want to highlight the continued strength of our balance sheet.
Karleen M. Oberton: In Q3, we generated over $400 million in cash from operating activities.
Karleen M. Oberton: Ending the quarter with $2.4 billion on the balance sheet.
Karleen M. Oberton: Employed $100 million on share repurchase. They announced the acquisition of endometriosis. We continue to demonstrate that our strong cash balance, Leverage ratio well below our target range, and the ability to generate cash consistently provides us flexibility to fund innovation and pull both levers of our capital allocation strategy, tucking in M&A and share, at the scene.
Karleen M. Oberton: Deployed $100 million on share repurchases and announced the acquisition of Endomagnetics.
Karleen M. Oberton: We continue to demonstrate that our strong cash balance
Karleen M. Oberton: Leverage ratio well below our target range, and the ability to generate cash consistently provides us flexibility to fund innovation and pull both levers of our capital allocation strategy.
Karleen M. Oberton: Tuckin' M&A and Sherry Purchases.
Karleen Oberton: Moving forward, we still have significant firepower to continue to deploy capital diligently as opportunities arise. Trying to our franchise results in diagnostics, third quarter revenue of $440.8 million group 0.7%. Excluding COVID assay in related revenue, worldwide diagnostics grew by 6%. Within diagnostics, molecular diagnostics continues to contribute significantly, growing 10.5% excluding COVID. We continue to see underlying strengths in BBC TV, which continues its outstanding growth trajectory and has become our second largest assay globally. Additionally, as expected, non-COVID respiratory assay sales declined sequentially from Q2, in line with the flu season. However, year-over-year growth remains strong, highlighting the continued adoption of our four-plex COVID, flu A, flu B, and RSV assay.
Karleen M. Oberton: Moving forward, we still have significant firepower to continue to deploy capital diligence as opportunities arise. Turning to our franchise results, in Diagnostics, third quarter revenue of $440.8 million, Group 0.7%, including COVID assay and related revenue. Worldwide Diagnostics Group. Within Diagnostics, molecular diagnostics continues to contribute significantly.
Karleen M. Oberton: at the same time.
Karleen M. Oberton: Moving forward, we still have significant firepower to continue to deploy capital diligently as opportunities arise.
Karleen M. Oberton: Turning to our Franchise Results.
Karleen M. Oberton: In Diagnostics, third quarter revenue of $440.8 million grew 0.7%.
Karleen M. Oberton: Excluding COVID assay and related revenue, worldwide diagnostics grew by 6%.
Karleen M. Oberton: Within Diagnostics, Molecular Diagnostics continues to contribute significantly, growing 10.5% excluding COVID.
Karleen M. Oberton: We're on 10.5% excluding COVID, and we continue to see underlying strength in BVCV TB. This continues its outstanding growth trajectory and has become our second largest assay globally. Additionally, as expected, non-COVID respiratory assay sales declined sequentially, in line with the. However, year over year, growth remains strong. Highlighting the continued adoption of our 4-Plex COVID Flu A, Flu B, and RSVF. And finally, biotheranostics continues to be an attractive accretive to growth for our molecular... Rounding out diagnostic, psychology, and perinatal decline, 2.9% global. The U.S. declined, partially offset by solid international growth, as Essex highlighted earlier.
Karleen M. Oberton: We continue to see underlying strength in BVCV TV, which continues its outstanding growth trajectory and has become our second largest assay globally.
Karleen M. Oberton: Additionally, as expected, non-COVID respiratory assay sales declined sequentially from Q2, in line with the flu season.
Karleen M. Oberton: However, year-over-year growth remains strong, highlighting the continued adoption of our 4-Plex COVID Flu A, Flu B, and RSV assay.
Karleen Oberton: And finally, bio-theranostics continues to be accreted to growth for our molecular business. Rounding out diagnostics, psychology, and perinatal decline 2.9% globally.
Karleen M. Oberton: And finally, biotheranostics continues to be a creative growth for our molecular business.
Karleen M. Oberton: Rounding out diagnostics, psychology and perinatal decline 2.9% globally.
Karleen Oberton: With U.S. declines partially offset by solid international growth as Essex highlighted earlier. earlier. As a reminder, in fiscal 323, customers built up psychology inventory levels in the US due to third-party shipping constraints in Q223, leading to elevated sales in the prior year period. While the psychology business has largely returned to normal, year-over-year growth rates were impacted. Looking ahead, we expect flat, modest growth in the psychology business. Moving on to breast health, total third quarter revenue of $385 million increased by 7.1%, or 8.2% when excluding SSI. Within breast health, growth was primarily driven by breast imaging, with solid domestic and international results, contributing 7.2% and 12.1% growth, respectively.
Essex D. Mitchell: With U.S. declines partially offset by solid international growth as Essex highlighted earlier.
Karleen M. Oberton: As a reminder, in Fiscal 3-23, customers built up psychological inventory levels in the U.S. due to third-party shipping constraints in Q2, leading to elevated sales in the prior year. While the psychology business has largely returned to normal, year-over-year growth rates for Unknown Speaker, we expect flat to modest growth in those types of areas. Moving on to breast health, the whole third-quarter revenue of $385 million increased by 7.1%, or 8.2% when excluding certain items. Within Breast Health, growth was primarily driven by the breast.
Speaker Change: As a reminder, in Fiscal 3-23, customers built up psychology inventory levels in the U.S. due to third-party shipping constraints in Q2-23.
Speaker Change: leading to elevated sales in the prior year period.
Speaker Change: While the psychology business has largely returned to normal, year-over-year growth rates were impacted.
Speaker Change: Looking ahead, we expect flat to modest growth in this cytology system.
Speaker Change: Moving on to Breast Health, total third quarter revenue of $385 million increased by 7.1% or 8.2% when excluding SSI.
Speaker Change: Within breast health, growth was primarily driven by breast imaging, with solid domestic and international results.
Karleen M. Oberton: Solid Domestic and International Results. Contributing 7.2% and 12.1% growth, respectively, excluding ethnicities. Third quarter performance was driven largely by increased gantry and Robust Service Revenue Growth that continues to contribute. Continuing next to surgery. The recorded revenue of $166.6 million increased 6.2%.
Speaker Change: Contributing 7.2% and 12.1% growth, respectively excluding SSI.
Karleen Oberton: Third quarter performance was driven largely by increased gantry shipments and robust service revenue growth that continues to contribute meaningfully. Continuing next to surgical, third quarter revenue of $166.6 million increased 6.2%. Surgical growth continues to be fueled by Myosure in the related fluid management system. A laparoscopy business, which swaps smaller in dollars, grows significantly in the quarter and continues to progress nicely. Additionally, international could be a bright spot, growing just under 20% in the quarter. Finally, in our skeletal business, third quarter revenue of $19 million declined to 29.7%. Due to lower horizon dexter shipments resulting from a temporary stop ship related to a non-conformance issue, we are working with our supplies to resolve the situation and expect to resume shipments during the first quarter of fiscal 2025.
Speaker Change: Third quarter performance was driven largely by increased gantry shipments and robust service revenue growth that continues to contribute meaningfully.
Speaker Change: Continuing next to Surgical, the recorded revenue of $166.6 million increased 6.2%.
Karleen M. Oberton: Surgical growth continues to be fueled by MyoShore and their related Fluent Fluid Manage. A laparoscopy business, which traded smaller in dollars, grew significantly in the quarter and continues to progress. International continues to be a bright spot, growing just under 20. Finally, in our skeletal business, third-quarter revenue of $19 million declined to $29.7 million.
Speaker Change: Surgical growth continues to be fueled by MyoShore and their related Fluent Fluid Management System.
Speaker Change: A laparoscopy business which, while smaller in dollars, grew significantly in the quarter and continues to progress nicely.
Speaker Change: Additionally, International continues to be a bright spot, growing just under 20% in the quarter.
Speaker Change: Finally, in our skeletal business, third quarter revenue of $19 million declined 29.7% due to lower horizon DEXA shipments resulting from a temporary stopped ship related to a non-conformance issue.
Karleen M. Oberton: Due to lower horizon DEXA shipments resulting from a temporary stop ship. We are working with our suppliers to resolve this situation. We expect to resume shipments during the first quarter of fiscal 2025. Now let's move on to the rest of the non-GAAP P&L for the third quarter. Gross margin was 61.1% for the quarter.
Speaker Change: We are working with our suppliers to resolve this situation and expect to resume shipments during the first quarter of fiscal 2025.
Karleen Oberton: Now let's move on to the rest of the non-gap P&L for the third quarter. Gross margin was 61.1% for the quarter, a 30 basis points improvement in the prior year period, even though COVID-19 revenues declined to continue to be a headwind. Additionally, gross margin expanded 40 basis points sequentially from fiscal Q2, primarily driven by favorable product mix. Total operating expenses of $302.8 million in the third quarter decreased by 3.5%. This decrease was driven primarily by elimination of expenses related to the bested SSI businesses. Operating margin was 31.2% for the third quarter. The year will be year increase of 230 basis points was driven by top line growth, expanding gross margins, and lower operating expenses.
Speaker Change: Now let's move on to the rest of the non-GAAP P&L for the third quarter.
Speaker Change: Gross Margin was 61.1% for the quarter.
Karleen M. Oberton: A 30 basis points improvement from the prior year period. Even though COVID assay revenues decline continue to be, Additionally, gross margin expanded 40 basis points sequentially from fiscal Q2, primarily driven by favorable, Total operating expenses of $302.8 million in the third quarter decreased by $3.5 million. The increase was driven primarily by elimination of expenses related to the divested SSI.
Speaker Change: A 30 basis points improvement from the prior year period, even though COVID assay revenues declines continue to be a headwind.
Speaker Change: Additionally, gross margin expanded 40 basis points sequentially from fiscal Q2, primarily driven by favorable product mix.
Speaker Change: Total operating expenses of $302.8 million in the third quarter decreased by 3.5 percent.
Speaker Change: This decrease was driven primarily by elimination of expenses related to divested SSI businesses.
Karleen M. Oberton: Operating margin was 31.2% for the third quarter. The year-over-year increase of 230 basis points was driven by top-line growth. Consequently, as expected, operating margins expanded by 20, I'm sorry, 80 basis points from Q2, largely from lower operating expenses and higher gross margins. Below operating income, other income net represented an expense of nearly $3 million in our fiscal third quarter. Interest income is lower due to lower cash balances from the significant share repurchases we have completed throughout the fiscal year.
Speaker Change: Operating margin was 31.2% for the third quarter.
Speaker Change: The year-over-year increase of 230 basis points was driven by top-line growth.
Karleen Oberton: Equentially, as expected, operating margins expanded 20.8 basis points from Q2, largely from lower operating expenses in higher gross margin and Q3. Low operating income, other income net, represented an expense of nearly $3 million in our fiscal third quarter. Interest income is lower due to lower cash balances from the significant share repurchases we have completed throughout the fiscal year. Additionally, interest expenses up due to higher interest rates. Finally, our tax rate in Q3 was 19.75% as expected.
Speaker Change: Expanding Growth Margins and Lower Operating Expenses.
Speaker Change: Sequentially, as expected, operating margins expanded 20, I'm sorry, 80 basis points from Q2, largely from lower operating expenses and higher gross margin in Q3.
Speaker Change: Below operating income, other income net, represented an expense of nearly $3 million in our fiscal third quarter.
Speaker Change: Interest income is lower due to lower cash balances from the significant share repurchases we have completed throughout the fiscal year.
Speaker Change: Additionally, interest expense is up due to higher interest rates.
Speaker Change: Finally, our tax rate in Q3 was 19.75% as expected.
Karleen Oberton: Now let's move on to our non-GAAP financial guidance for the fourth quarter and full year fiscal 2024. For Q4 2024, we are expecting total revenue in the range of $970 to $985 million and EPS of $0.97 to $1.04. For the full year fiscal 2024, our guidance assumes revenue of $4.012 to $4.027 billion. In EPS of $4.04 to $4.011. I'm packing this guidance. We lowered the midpoint of our prior revenue guidance by $5 million. This represents about a $20 million headwind related to the temporary skeletal health stop ship previously mentioned. Our set by our strong performance in Q3 in the inclusion of an estimated $4 to $5 million of revenues from endomegnetics now that we have closed the acquisition.
Karleen M. Oberton: Additionally, interest expense is up due to higher interest rates. Finally, our tax rate in Q3 was 19.75%, as expected. Now, let's move on to our non-GAAP financial guidance for the fourth quarter and full year fiscal 2020. For Q4 2024, we are expecting total revenue in the range of $970 to $985 million. EPS of $0.97 to $1.00. For the full year, fiscal 2024, our guidance assumes revenue of $4.012 to $4.027 billion and EPS of $4.04 to $4.11. We lowered the midpoint of our prior revenue guidance by $5 million. This represents about a $20 million headwind related to the temporary skeletal health stop shift previously.
Speaker Change: Now, let's move on to our non-GAAP financial guidance for the fourth quarter and full year, fiscal 2024.
Speaker Change: For Q4 2024, we are expecting total revenue in the range of $970 to $985 million.
Speaker Change: an EPS of $0.97 to $1.04.
Speaker Change: For the full year, fiscal 2024, our guidance assumes revenue of $4.012 to $4.027 billion.
Speaker Change: and EPS of $4.04 to $4.11.
Speaker Change: Unpacking this Guidance
Speaker Change: We lowered the midpoint of our prior revenue guidance by $5 million.
Speaker Change: This represents about a $20 million headwind related to the temporary skeletal health stop shift previously mentioned.
Karleen M. Oberton: Partially offset by our strong performance in Q3, and the inclusion of an estimated $4 to $5 million of revenues from endomagnetics now that we have closed the... With respect to foreign exchange, we are assuming Q4 will have a headwind of about $3 million. For the full year, we are now expecting a slight tail end of about $3 million. Turning to our franchise, we expect growth in mid-single digits in Q4 and full-year. As a reminder, Fiscal 24 has four fewer selling days compared to Fiscal 25. We estimate it to be a headwind of more than 100 bases, starting with diagnostics.
Speaker Change: Partially offset by our strong performance in Q3.
Speaker Change: and the inclusion of an estimated four to five million dollars of revenue from endomagnetics now that we have closed the acquisition.
Karleen Oberton: With respect to foreign exchange, we are assuming Q4 will have a headwind of about $3 million. For the full year, we are now expecting a slight tailwind of about $3 million. Turning to our franchises, we expect diagnostics, breast health, and surgical to grow mid-single digits in Q4 and full year fiscal 2024, excluding the impact of COVID. As a reminder, fiscal 24 has four fewer selling days compared to fiscal 23, which we estimated to be a headwind of more than 100 basis points for the full year. Starting with diagnostics, in Q4, we expect molecular diagnostics business to drive high single-digit growth, excluding COVID, as customers continue to adopt and drive utilization of our broad Panthermenium.
Speaker Change: With respect to foreign exchange, we are assuming Q4 will have a headwind of about $3 million.
Speaker Change: For the full year, we are now expecting a slight tailwind of about $3 million.
Speaker Change: Turning to our franchises, we expect Diagnostics, Breast Health, and Surgical to grow mid-single digits in Q4 and full year fiscal 2024, excluding the impact of COVID.
Speaker Change: As a reminder, Fiscal 24 has four fewer selling days compared to Fiscal 23, which we estimated to be a headwind of more than 100 basis points for the full year.
Karleen M. Oberton: We expect the molecular diagnostics business to drive high single-digit growth, excluding COVID. Thank you for joining us. Thank you. Thank you. In cytology and perinatal, we expect growth in the mid-single digits for the fourth quarter. Consequently, however... We expect the business to perform flat to Q3. Last year's sales dropped below typical ordering patterns due to the inventory buildup in Q3. We expect cytology and perinatal comps to stabilize in fiscal year 2020. Closing out on non-COVID diagnostics
Speaker Change: Starting with diagnostics. In Q4, we expect molecular diagnostics business to drive high single-digit growth, excluding COVID, as customers continue to adopt and drive utilization of our broad PANTHER menu.
Karleen Oberton: In cytology and perinatal, we expect growth in the mid-single digits for the fourth quarter. Sequentially, however, we expect the business to perform flat to Q3. In Q4, last year's sales drops below typical ordering patterns due to the inventory build-up in Q3 of 23. We expect cytology and perianatal costs to stabilize in fiscal year 25. Closing out on non-COVID diagnostics, we expect blood revenue of approximately $6 million in Q4 and $20 million for the year. In terms of COVID revenue, we expect COVID assays sales to be about $7 million in Q4, $24 million, and about $70 million for the full year.
Speaker Change: In Cytology and Perinatal, we expect growth in the mid-single digits for the fourth quarter.
Speaker Change: Sequentially, however, we expect the business to perform flat to Q3.
Speaker Change: In Q4 last year, sales dropped below typical ordering patterns due to the inventory build-up in Q3 of 23.
Speaker Change: We expect cytology and perinatal comps to stabilize in fiscal year 25.
Karleen M. Oberton: We expect blood revenue of approximately $6 million in Q4. $20 million. In terms of COVID revenue, we expect COVID assay sales to be about $7 million in Q4 2020 and about $70 million for the full year. Related items are expected to be about $25 million in the fourth quarter and approximately $105 million for the full year. Moving on to Breast Health, we remain on pace to grow the business mid-single digits for the fourth quarter.
Speaker Change: Closing out on non-COVID diagnostics, we expect blood revenue of approximately $6 million in Q4 and $20 million for the year.
Speaker Change: In terms of COVID revenue, we expect COVID assay sales to be about $7 million in Q4-24 and about $70 million for the full year.
Karleen Oberton: COVID-related items are expected to be about $25 million in the fourth quarter, and then approximately $105 million for the full year.
Speaker Change: COVID-related items are expected to be about $25 million in the fourth quarter and approximately $105 million for the full year.
Karleen Oberton: Moving on to breast health. Council. Remain on pace to grow the business mid-single digits for the fourth quarter. We expect to see solid, gantry placements in Q4, continuing the steady performance we have delivered year to date. The demands of for our portfolio, products and services remain strong, and we have solid visibility into gantry orders. Further, our confidence in delivering more gantries than last year remains high. We are successfully managing resource availability among both our install teams and our customers. As customers bounce, the need to meet elevated demand for screening and staffing constraints. Finally, in Surgical, we anticipate Q4 revenue to grow mid-single digits.
Speaker Change: Moving on to Breast Health.
Speaker Change: Remain on pace to grow the business mid-single digits for the fourth quarter.
Karleen M. Oberton: Expect to see solid gantry placements in Q4. Continuing the steady performance we have delivered year-to-year, the demand for our portfolio of products and services remains strong. We have solid visibility into... Further, our confidence in delivering more gantries than last year remains high. We are successfully managing resource availability among both our installation teams and our customers. Customers balance the need to meet elevated demand for screening and staffing constraints.
Speaker Change: We expect to see solid gantry placements in Q4, continuing the steady performance we have delivered year-to-date.
Speaker Change: The demand for our portfolio of products and services remains strong, and we have solid visibility into gantry orders.
Speaker Change: Further, our confidence in delivering more gantries than last year remains high. We are successfully managing resource availability among both our install teams and our customers.
Speaker Change: As customers balance the need to meet elevated demand for screening and staffing constraints.
Karleen M. Oberton: Finally, in surgical, we anticipate Q4 revenue to grow mid-single-digit. We expect the growth to continue to come from myoshore, fluent, and alaprascopy. Moving next to margins, our guidance continues to assume a cadence of improvements moving into Q4. We remain on pace to exit the fiscal year in the low 60s for growth. Our guidance also assumes Q4 operating margins in the low 30s, and we are on pace to finish fiscal 24 between 30 and 31. This includes the stub period of endometriosis.
Speaker Change: Finally, in Surgical, we anticipate Q4 revenue to grow mid-single digits. We expect the growth to continue to come from MyoShore, Fluent, and our Laparoscopy division business.
Karleen Oberton: We expect the growth to continue to come from my ashore affluent and alaproscopy division business. Moving next to margins, our guidance continues to assume a cadence of improvements moving into Q4. For both growth margin and operating margin, we remain on pace to exit the fiscal year in the low 60s for growth margin. Our guidance also assumes Q4 operating margins in the low 30s, and we are on pace to finish fiscal 24 between 30 to 31 percent, which includes the stub period of Endomagnetics. Below operating income, we estimate fiscal 24 other income net to be expensive approximately $8 million in Q4 and $11 million for the full year.
Speaker Change: Moving next to margins. Our guidance continues to assume a cadence of improvements moving into Q4.
Speaker Change: for both growth margin and operating margin.
Speaker Change: We remain on pace to exit the fiscal year in the low 60s for gross margin.
Speaker Change: Our guidance also assumes Q4 operating margins in the low 30s, and we are on pace to finish fiscal 24 between 30 to 31 percent, which includes the stub period of endomagnetics.
Karleen M. Oberton: Below operating income, we estimate fiscal 24 other income net to be at the expense of approximately $8 million in Q4 and $11 million for the full fiscal year. Our guidance is based on an annual effective tax rate of approximately 19.75%, and Deluded Shares outstanding are expected to be approximately $238 million for the full year. To conclude, Q3 was another strong quarter for Hologic. We continue to deliver robust growth and quality earnings as we approach the end of fiscal year 2024 and look ahead to 2025.
Speaker Change: Below operating income, we estimate fiscal 24 other income net to be an expense of approximately $8 million in Q4 and $11 million for the full year.
Karleen Oberton: Our guidance is based on an annual effective tax rate of approximately 19.75 percent and diluted shares outstanding expected to be approximately $238 million for the full year.
Speaker Change: Our guidance is based on an annual effective tax rate of approximately 19.75% and diluted shares outstanding are expected to be approximately $238 million for the full year.
Karleen Oberton: To conclude, Q3 was another strong quarter for holograms. We continue to deliver robust growth and quality earnings. As we approach the end of fiscal year 2024 and look ahead to 2025, we are excited by the performance across all our franchises in the additional strength provided by a pristine balance sheet. As always, our stakeholders can count on us to deliver while also advancing the state of women's health around the world.
Speaker Change: To conclude, Q3 was another strong quarter for Hologic.
Speaker Change: We continue to deliver robust growth and quality earnings.
Speaker Change: As we approach the end of fiscal year 2024 and look ahead to 2025, we are excited by the performance across all our franchises and the additional strength provided by a pristine balance sheet.
Karleen M. Oberton: We are excited by the performance across all our franchises and in the additional strength provided by a pristine balance. As always, our stakeholders can count on us to deliver while also advancing. With that, we ask the operator to open the call to questions. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment.
Speaker Change: As always, our stakeholders can count on us to deliver while also advancing the state of women's health around the world.
Unknown Executive: With that, we ask the operator to open the call for questions.
Speaker Change: With that, we ask the operator to open the call for questions.
Unknown Executive: Thank you. If you would like to ask a question, please sign up by pressing Star 1 on your telephone keypad. If you are using a speaker phone, please make sure your meet function is turned off to allow the signal to reach our equipment.
Speaker Change: Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment.
Unknown Executive: We ask that you please limit yourself to one question and one follow-up question. Again, press star 1 to ask a question, and we'll pause for just a moment to assemble the queue.
Speaker Change: We ask that you please limit yourself to one question and one follow-up question. Again, press star 1 to ask a question, and we'll pause for just a moment to assemble the queue.
Patrick Donnelly: We will take our first question from Patrick Donnelly with City. Please go on the 4Q guide. It seems like a lot of it is around the skeletal piece. When you think about the core business going into 4Q, has anything changed relative to a few months ago? Has anything gotten worse? It seems like it's all skeletal, but just want to talk through the core business and how you feel about it again.
Operator: We ask that you please limit yourself to one question and one follow-up question. Again, press star one to ask a question, and we'll pause for just a moment to assemble the questions. We will take our first question from Patrick Donnelly with Citi. Please go ahead.
Speaker Change: We will take our first question from Patrick Donnelly with Citi. Please go ahead.
Patrick Bernard Donnelly: Hey guys, thank you for taking the question. Steve, probably the biggest inbound is just on the 4Q guide. I've seen Karleen talk through it a bit there.
Patrick Bernard Donnelly: Hey guys, thank you for taking the questions.
Speaker Change: Unknown Speaker ... ... ... ... ... ... ... ...
Stephen P. MacMillan: Steve, probably the biggest inbound is just on the 4Q guide. I've seen Karleen talk through it a bit there. It seems like a lot of it is around the skeletal piece. I guess just when you think about the core business going into 4Q,
Stephen P. MacMillan: It seems like a lot of it is around the skeletal piece. I guess just when you think about the core business going into 4Q, you know, has anything changed relative to a few months ago? Has anything gotten worse? It seems like it's all skeletal, but I just want to talk through the core business and how you're feeling about it in 4Q. You nailed it, Patrick.
Speaker Change: You know, has anything changed relative to a few months ago? Has anything gotten worse? It seems like it's all skeletal, but I just want to talk through the core business and how you're feeling about it in 4Q here.
Steve Macmillan: You nailed it, Patrick. It's probably a little alarming because of the skeletal piece, but the three core businesses are all going great, and it is completely a reflection of that. And you know we just had a little hiccup with a supplier issue in our skeletal business; it is our non-core, but for diagnostics, breast health, surgical, we are feeling really, really good.
Stephen P. MacMillan: It is. It's probably a little alarming because of that skeletal piece, but the three core businesses are all going great, and it is completely a reflection of that.
Stephen P. MacMillan: You nailed it, Patrick. It is. It's probably a little alarming because of the skeletal piece, but the three core businesses are all going great.
Stephen P. MacMillan: We just had a little hiccup with a supplier issue in our skeletal business. It is our non-core, but for diagnostics, breast health, and surgical, we are feeling really, really good. Yeah, and just, Patrick, just to add a final point to it, of the $20 million, Headwind, about $15 million is related. Okay. That's helpful.
Patrick Bernard Donnelly: and it is completely a reflection of that.
Stephen P. MacMillan: and.
Stephen P. MacMillan: You know, we just had a little hiccup with a supplier issue in our skeletal business. It is our non-core, but for diagnostics, breast health, surgical, we are feeling really, really good.
Karleen Oberton: Yeah, and just Patrick, just to add a finer point to it, of the $20 million, $20 million ahead of when about $15 million is related to the fourth core specifically.
Speaker Change: Yeah, and just, Patrick, just to add a final point to it, of the $20 million headwind, about $15 million is related to the fourth quarter specifically.
Karleen Oberton: Okay, that's helpful, and then Karleen, you know maybe one of the questions that we get broadly is on the margin, the margin profiles we work our way forward here. I think there's some fear that you guys could be a little more kind of heading towards the peak margin.
Karleen M. Oberton: And then Karleen, you know, maybe one of the questions that we get broadly is on the margin, the margin profile, as we work our way forward here. I think there's some fear that you guys could be a little more kind of heading towards the peak margin. Can you talk about, I guess, the 4Q piece, the moving pieces, you talked a little bit about the exit right there, and just how you think about the build going forward when you think about the algorithm, the keys to getting that margin continuing to expand as we go forward, and just broadly how to think about the jumping off point as we look to 25. Thanks.
Patrick Bernard Donnelly: Okay, that's helpful.
Karleen M. Oberton: And then Karleen, maybe one of the questions that we get broadly is on the margin, the margin profile as we work our way forward here. I think there's some fear that...
Karleen Oberton: Can you talk about, I guess, the four key pieces moving piece? Who you talk a little bit about the exit right there and just how you think about the build going forward? And you think about the algorithm, you're the keys to getting that margin continuing to expand as we go forward and just broadly how to think about the jumping off point as you look for 25. Thanks so much. Yeah, I think we like to ground people in the pre-pandemic operating margins 31 and a half percent, and I think as you see as we execute four, we'll be right in that range and really thinking about that we've added a lot of revenue growth drivers that have a lower operating margin profile than the legacy business. So, feel really good about achieving that as we exit 24.
Speaker Change: You guys can be a little more kind of heading towards the peak margin. Can you talk about, I guess, the 4Q piece, the moving pieces? You talked a little bit about the exit right there. And just how you think about the build going forward when you think about the algorithm.
Speaker Change: You know, the key to getting that margin continuing to expand as we go forward, and just broadly how to think about the jumping off point as we look to 25. Thanks so much.
Karleen M. Oberton: Yeah, I think we'd like to ground people on pre-pandemic operating margins of 31.5%. And I think, as you see, as we exit Q4, we'll be right in that range. And really thinking about that, we've added a lot of revenue growth drivers that have a lower operating margin profile than the legacy business. So I feel really good about achieving that as we exit 24.
Speaker Change: Yeah, I think we'd like to ground people in the pre-pandemic operating margins of 31.5%. And I think as you see, as we exit Q4, we'll be right in that range and really thinking about that. We've added a lot of revenue growth drivers that have a lower operating margin profile than the legacy business. So feel really good about achieving that as we exit 24. For the full year, 24 will be a little bit below that, as we said in our prepared remarks, between 30 to 31. But I have good confidence that as we look to 25, we will be squarely for the full year at those pre-pandemic levels.
Karleen Oberton: So the full year 24 will be a little bit below that, as we said, not prepared remarks between 30 to 31. But you know I have a good confidence, as we look to 25, we will be squarely for the full year at those pre-pandemic levels.
Karleen M. Oberton: For the full year 24, we'll be a little bit below that, as we said in our prepared remarks between 30 and 31. But, you know, I have good confidence that as we look to 25, we will be squarely for the full year at those pre-pandemic levels. And just to walk through some of the components, again, as I mentioned, the recent acquisitions will have lower margin profiles, the international business has a lower margin profile, and we're still working through some of the higher supply chain costs, primarily related to chips, as well as as we integrate certain facilities, we have double costs; we'll see those primarily work through over the course of 24. We will take our next question from Tejas Savant with Morgan Please go ahead. Hey guys. Thanks for your time here.
Karleen Oberton: And just to walk through some of the components again, as I mentioned, you know the recent acquisitions will have lower margin profiles; the international business has a lower margin profile, and we're still working through some of the higher supply chain costs, primarily related to chips as well.
Speaker Change: And just to walk through some of the components, again, as I mentioned, you know, the recent acquisitions will have lower margin profiles, the international business has a lower margin profile, and we're still working through some of the higher supply chain costs.
Karleen Oberton: As we integrate certain facilities, we have double cost; we'll see those primarily work through over the course of 25.
Speaker Change: primarily related to CHIPS, as well as, as we integrate certain facilities, we have double costs. We'll see those primarily work through over the course of 25.
Tejas Savant: We will take our next question from Tejas Savant with Morgan Stanley. Please go ahead. Hey guys, thanks for the time here. Karleen, I just want to follow up on Patrick's line of questioning there on a second question. You know, can you just help us think through sort of underlying algorithm for EPS growth, you know, five to seven for the top line, presumably it stays intact for next year as well. As you think through the different buckets here, right between the margin expansion piece, which you said, you know, it sounds like you're on track to achieve, but then you've also got reposed, and then you've got, you know, a little bit of dilution from potential tokens, including once you might do in the next 12 months or so.
Speaker Change: We will take our next question from Tejas Savant with Morgan Stanley . Please go ahead.
Tejas Rajeev Savant: Karleen, I just want to follow up on Patrick's line of questioning there on the second question, you know, can you just help us think through sort of an underlying algorithm for EPS growth, you know, five to seven for the top line, presumably it stays intact for next year as well? As you think through the different buckets here, right between the margin expansion piece, which you said sounds like you're on track to achieve, but then you've also got repos.
Tejas Rajeev Savant: Hey guys, thanks for the time here. Karleen, I just want to follow up on Patrick's line of questioning there on the second question. You know, can you just help us think through sort of underlying algorithm for EPS growth, you know, 5 to 7 for the top line, presumably it stays intact for next year as well. As you think through the different buckets here, right, between the margin expansion piece, which you said, you know, it sounds like you're on track to achieve, but then you've also got repos, and then you've got, you know, a little bit of dilution from potential tuck-ins, including ones you might do in the next 12 months or so. So as we think about those multiple pieces in the context of EPS growth next year, is sort of high single digit essentially a fair way to think about it, or could it be a little bit different?
Tejas Rajeev Savant: And then you've got, you know, a little bit of dilution from potential tuck-ins, including ones you might do in the next 12 months or so. So as we think about those multiple pieces in the context of EPS growth next year, is sort of a high single-digit essentially a fair way to think about it? Or could it be a little bit better than that?
Karleen Oberton: So, as we think about those multiple pieces in the context of EPS growth next year, is sort of high single digit essentially a fair way to think about it? Could it be a little bit better than that?
Karleen Oberton: Yes, so first of all, Tejas, I would say that we have we're not giving guidance for 2025 at this point. We're still working through our budget cycle, and we'll be doing that in come totality in the November call. What I would say, the high level we think about earnings, yes, we want to grow earnings faster than revenue. So again, that five to seven would lead you to the high single digit slow double digit or earnings growth. And we do think about that as balanced using the whole P&L, not just margin expansion, but cherry purchase of potentially some favorability on the tax line as well. But, you know, again we will be giving that full guidance on.
Karleen M. Oberton: Yeah, so first of all, Tejas, I would say that we haven't given guidance for 2025. At this point, we're still working through our budget cycle, and we'll be doing that in totality in the November call. What I would say at a high level, when we think about earnings, yes, we want to grow earnings faster than revenue.
Speaker Change: and a little bit better than that.
Karleen M. Oberton: Yeah, so first of all, Tejas, I'll say that we have, we're not giving guidance for 2025 at this point. We're still working through our budget cycle and we'll be doing that.
Speaker Change: totality in the November call.
Speaker Change: What I would say at a high level when we think about earnings, yes, we want to grow earnings faster than revenue, so again, that five to seven would lead you to the high single digits, low double digit earnings growth. And we do think about that as balance, using the whole P&L, not just margin expansion, but share repurchase and potentially some favorability.
Karleen M. Oberton: So again, that five to seven would lead you to high single-digit, low double-digit earnings growth. And we do think about that as using the whole P&L, not just margin expansion, but share repurchase. www.fema.gov Okay. Fair enough. And then a quick follow-up on some of the recent tuck-ins here. I'll start with Boulder, actually, perhaps for you, Steve.
Speaker Change: On the tax line as well. But, you know, again, we will be giving that full guidance on the November call.
Tejas Savant: In November call. Got it, fair enough.
Tejas Savant: And then a quick follow-up on some of the recent tuck-ins here.
Speaker Change: Got it. Fair enough. And then a quick follow-up on some of the recent tuck-ins here. I'll start with Boulder, actually, perhaps for you, Steve. Could you just give us an update on where things stand on expanding from the pediatric setting there to the OB-GYN channel? Obviously, you've flagged a lot more lab procedures there on the OB-GYN side. And then a similar sort of question, you know, early days on Endomag, but how should we be thinking about the status quo in that market that Endomag can really help displace, particularly in the U.S. where it's underpenetrated? And what's the feedback been like from physicians from any early conversations ahead of deal-close?
Tejas Rajeev Savant: Could you just give us an update on where things stand on expanding from the pediatric setting there to the OB-GYN channel? Obviously, you flagged a lot more lab procedures on the OB-GYN side. And then, similar sort of question, you know, early days on Endomag, but how should we be thinking about the status quo in that market that Endomag can really help displace, particularly Great, we'll kick that right to Essex to handle. Great, yeah, so I'll start with Boulder.
Steve Macmillan: I'll start with Boulder, actually, perhaps for you, Steve. Could you just give us an update on where things stand and expanding from the pediatric setting there to the OBGYN channel? Obviously, it flagged a lot more lab procedures there on the OBGYN side.
Essex Mitchell: And then some of the sort of question, early days on Endomag, but how should we be thinking about the status quo in that market that Endomag can really help this place, particularly in the US, where it's under-penetrated? And what's the feedback being like from physicians from any early conversations ahead of deal costs?
Essex Mitchell: Great. We'll kick that right to Essex, to hell. Great.
Essex D. Mitchell: And so we're seeing great success expanding outside of the pediatric channel. I would say our fastest growing area is actually in Thoracic with the Reveal product. So we're seeing nice, it's an open product. We're getting to new customers, really honing in and focusing similar to our strategies that we've utilized with gynecology, where we focus on a specialty, really understand our differentiated position with the product, and expand from there. So I feel really good about the success thus far with Boulder.
Essex Mitchell: Yeah, so I'll start with Boulder. And so we're seeing great success expanding outside of the pediatric channel. I would say our fastest growing area is actually in thoracic with the Reveal product. So we're seeing nice. It's an open product. We're getting to new customers, really honing in and focusing, similar to our strategies that we've utilized with gynecology, where we focus on a specialty, really understand our differentiated position with the product, and expand from there. So it's still really good about success thus far with Boulder. And still quite a bit of meat on the bone left, I would say, with pediatrics, as we look to focus there, moving forward.
Essex D. Mitchell: Great, we'll kick that right to Essex to handle it.
Stephen P. MacMillan: Great. Yeah, so I'll start with Boulder. And so we're seeing great success expanding outside of
Stephen P. MacMillan: The Pediatric Channel, I would say our fastest growing area is actually in Thoracic with the Reveal product. So we're seeing nice, it's an open product.
Stephen P. MacMillan: We're getting to new customers, really honing in and focusing similar to our strategies.
Stephen P. MacMillan: that we've utilized with gynecology.
Stephen P. MacMillan: where we focus on a specialty, really understand our differentiated position with the product.
Essex D. Mitchell: And still quite a bit of meat on the bone left, I would say, with pediatrics as we look to focus there moving forward. With regard to Indomag, these are very early days, I would say we just closed, feel really great about that team, excited to have them as part of the Hologic family, and know that we'll do great things together. As far as feedback from customers is concerned, I don't have anything to comment on that right now but feel really good about the prospect of this business, especially with the strong channel of relationships that we have. We will take our next question from Jack Meehan with Nefron Research. Please go ahead. Thank you. Good afternoon,
Stephen P. MacMillan: and expand from there. So I feel really good about success thus far with Boulder.
Stephen P. MacMillan: And still quite a bit of meat on the bone left, I would say, with pediatrics as we look to focus there moving forward.
Essex Mitchell: With regards to Endomag, very early days, I would say we just closed. I feel really great about that team. Excited to have them as part of the Hologic family and know that we'll do great things together. As far as feedback from customers, I don't have anything to comment on that right now, but I feel really good about the prospect of this business, especially with a strong channel and relationship that we have today.
Stephen P. MacMillan: With regards to Indomag, very early days, I would say we just closed.
Stephen P. MacMillan: I feel really great about that team, excited to have them as part of the Hologic family and know that we'll...
Stephen P. MacMillan: do great things together. As far as feedback from customers, don't have anything to comment on that right now, but feel really good about the prospects of this business, especially with the strong channel of relationships that we have today.
Jack Meehan: We will take our next question from Jack Mean with Neffron Research. Please go ahead. Thank you. Good afternoon. I wanted to focus on the diagnostic business here, starting with Panther. So I think I heard over 3,300 in the field now. So it feels like that stepped up a little bit. You know, pre-COVID, you were placing about 50 a quarter. I was wondering if you felt like you see any signs you might be getting back to those levels or still a bit of a COVID hangover on placement.
Speaker Change: We will take our next question from Jack Meehan with Nefron Research. Please go ahead.
Jack Meehan: I wanted to focus on the diagnostic business here, starting with Panther. So I think I heard over 3,300 in the field now. So it feels like that stepped up a little bit. You know, pre-COVID, you were placing about 50 a quarter. I was wondering if you felt like you saw any signs you might be getting back to those levels or still have a bit of a COVID hangover.
Jack Meehan: Thank you. Good afternoon.
Jack Meehan: Wanted to focus on the diagnostic business here.
Jack Meehan: Starting with Panther, so I think I heard over 3,300 in the field now, so it feels like that stepped up a little bit. You know, pre-COVID, you were placing about 50 a quarter. I was wondering if you felt like, or you see any signs you might be getting back to those levels, or still a bit of a COVID hangover on placement?
Steve Macmillan: Yes, still lower on the placements.
Stephen P. MacMillan: Yes, still lower on the placements, you know, our clearly this chapter of our growth Jack is expanding the utilization per panther, but we are still seeing modestly increasing, which we consider, But yeah, not back at that pre-COVID level. Okay. And then on BVCB TV, I think I also heard the second largest assay globally. Would that put it, you know, in the quarter, kind of a floor of $40 million or so?
Steve Macmillan: You know, our clearly this chapter of our growth, Jack, is expanding the utilization for Panther. But we are still seeing them modestly move in up, which we consider to be good. But yeah, not back at that pre-COVID level.
Speaker Change: Yeah, still lower on the placements. You know, clearly this chapter of our growth jack is expanding the utilization for Panther, but we are still seeing them modestly moving up.
Speaker Change: which we consider to be good, but yeah, not back at that pre-COVID level.
Jack Meehan: Got it. Okay.
Stephen P. MacMillan: And would you care to wager where this could land in terms of, you know, overall size at some point? What's driving the growth? Yeah, I think that's a fair estimate of where it is. And, you know, I think we would be comfortable saying that it could be our largest asset. Operator, next question.
Jack Meehan: And then on BVCV TV, I think I also heard second largest asset globally. Would that put it, you know, in the quarter, kind of a floor, $40 million or so? And would you care to wage your, you know, where this could land in terms of, you know, overall size at some point? What's driving the growth? Yeah, I think that's a fair estimate of where it is. And, you know, I think, I think we would, I would be a comfortable saying that it could be our largest asset someday. So, to put it in perspective, there's still room for growth there.
Speaker Change: Got it.
Speaker Change: Okay, and then on BVCB TV, I think I also heard second largest assay globally, would that put it, you know, in the quarter, kind of a floor $40 million or so? And would you care to wager, you know, where you, you know, where this could land in terms of, you know, overall size at some point, what's driving the growth?
Speaker Change: Yeah, I think that's a fair estimate of where it is and, you know, I think we would be comfortable saying that it could be our largest assay someday. So to put it in perspective, there's still room for growth there.
Unknown Executive: Right. Okay.
Speaker Change: Break.
Vijay Kumar: Operator, next question. We will take our next question from Vijay Kumar with Evercore. Please go ahead.
Stephen P. MacMillan: We will take our next question from Vijay Kumar with Evercore. Please go ahead. Hi Steve, good afternoon.
Speaker Change: Operator, next question.
Speaker Change: We will take our next question from Vijay Kumar with Evercore. Please go ahead.
Steve Macmillan: Hi Steve, we're Afternoon. Congrats on the nice print, and thanks for taking my question. I guess my first one on this on this skeletal in a shipholder issue. How is that in the backlogs, Steve?
Vijay Muniyappa Kumar: Congratulations on the nice sprint and thanks for taking my question. I guess my first one is on the skeletal, you know, shiphold ratio. How is that in the backlog, Steve?
Vijay Muniyappa Kumar: Hi Steve, good afternoon. Congrats on the nice sprint and thanks for taking my question.
Vijay Muniyappa Kumar: I guess my first one on the skeletal, you know, shiphold ratio, how, is that in the backlogs, Pete? So is this, could this now be a tailwind for fiscal 25, or are those more like lost revenues?
Stephen P. MacMillan: So is this, could this now be a tailwind for fiscal 25, or are those more like lost revenues? It could potentially be a little bit of a blip, but it won't be lost revenue. I think we feel pretty good. There'll be, you know, a couple of tiny ones.
Steve Macmillan: So could this now be a tailwind for fiscal 25, or are those more like a loss driving news? It could potentially be a little bit of a it won't be lost revenue. I think we feel pretty good. There'll be, you know, a couple of tiny ones, but overall I think we feel pretty good. So it might be a modest tailwind for next year, but we don't want to get too far out of ourselves. But we're fixing it and feel very good. We'll be back in place by the beginning of 25.
Stephen P. MacMillan: But overall, I think we feel pretty good. So it might be a modest tailwind for next year. But we don't want to get too far ahead of ourselves. But we're fixing it, and feel very good. We'll be back in place by the end of the day. That's helpful, Steve. And Karleen, maybe one for you on margins here for Q4. Did those expectations change versus prior, and mostly because of the deal and perhaps the revenue push out? If so, what is the underlying jump-off point?
Pete: It could potentially be a little bit of a, it won't be lost revenue. I think we feel pretty good. There'll be, you know, a couple of tiny ones, but overall, I think we feel pretty good. So it might be a modest tailwind for next year, but we don't want to get too far ahead of ourselves, but we're fixing it and feel very good. We'll be back in place by the beginning of 2025.
Karleen Oberton: That's helpful, Steve.
Karleen Oberton: I mean, Carly, and maybe one for you and margins here for Q4. Did that expectations change versus prior and mostly because of the deal and perhaps the revenue push out? If so, what is the underlying jump-off point, and is that a relevant number to be thinking of for modeling the company? Yes, I think, as I talked about, you know, we'll end the full year between 30 to 31, which would give you something higher than 31 in the fourth quarter. I would say I wouldn't, you know, from an annualized basis, I'd jump off the midpoint of the 30 to 31 and think that we're going to get back to probably that 31 and a half range, but there is some seasonality to margins, and typically Q1 is our lowest operating margin for us.
Stephen P. MacMillan: That's helpful, Steve. And Karleen, maybe one for you on margins here for Q4.
Speaker Change: Did the expectations change versus prior, and mostly because of the deal and perhaps the revenue push out?
Karleen M. Oberton: And, you know, is that a relevant number to be thinking of or modeling the company? Yes, I think, as I talked about, we'll end the full year between 30 and 31, which would give you something higher than 31 in the fourth quarter. I would say I wouldn't, you know, from an annualized basis, I'd jump off the midpoint of the 30 to 31 and think that we're going to get back to probably that 31 and a half range.
Speaker Change: If so, what is the underlying jump-off point and, you know, is that a relevant number to be thinking of for, to be modeling the company?
Karleen M. Oberton: But there is some seasonality to margins, and typically, Q1 is our lowest operating margin quarter. So I would bring off a Q4 to a higher, We will take our next question from Anthony Petrone with Mizzouho Group. Please go ahead. Thanks and congrats on the quarter here.
Karleen M. Oberton: Yes, I think as I talked about, you know, we'll end the full year between 30 to 31, which would give you something higher than 31 in the fourth quarter.
Karleen M. Oberton: I would say I wouldn't, you know, from an annualized basis, I'd jump off the midpoint of the 30 to 31 and think that we're going to get back to
Karleen M. Oberton: Probably about 31 and a half range.
Karleen Oberton: I wouldn't like spring off of Q4 to a higher number and Q1.
Anthony Patrone: We will take our next question from Anthony Patrone with Mizzouho Group. Please go ahead. Thanks and congrats on the quarter here.
Karleen M. Oberton: We will take our next question from Anthony Petrone with Mizuho Group. Please go ahead.
Anthony Charles Petrone: Maybe I'll just throw two out there quick on psychology testing. I know the comps were a little bit bifurcated the last two quarters, but the business itself just generally has been a little bit lumpy. So maybe just what you're seeing there, do you think there's any changing patterns ahead of the preventative task force rule? You also have the upgrade cycle with the digital platform, so just a little bit on the lumpiness in cytology, and then the second one on Panther utilization. Can you actually provide the range of assays used in the post-pandemic systems? I know the average is two.
Anthony Patrone: I'll just throw two out there quick, just on psychology testing. I know the comps were a little bit bifurcated the last two quarters, but the business itself just generally has been a little bit lumpy. So maybe just what you're seeing there, do you think there's any changing patterns ahead of the preventative task force rule? You also have the upgrade cycle with the digital platform.
Anthony Charles Petrone: Thanks and congrats on the quarter here. Maybe I'll just throw two out there quick just on...
Anthony Charles Petrone: cytology testing I know the comps
Speaker Change: We're a little bit bifurcated the last two quarters, but the business itself just generally has been a little bit lumpy.
Speaker Change: So maybe just what you're seeing there, do you think there's any changing patterns ahead of the Preventative Task Force rule? You also have the upgrade cycle with the digital platform. So just a little bit on the lumpiness in cytology.
Anthony Patrone: So just a little bit on the lumpiness and psychology, and then the second one on panther utilization. Can you actually provide the range of assays used in the post-pandemic systems? I know the average is two, but what is that range set? What is the upper hand of that range, and what is the lower end of that range? Where could it trend over time? Thanks.
Stephen P. MacMillan: But where does that range sit? What is the upper end of that range? And and what is the lower end of that range?
Speaker Change: and then the second one on on panther utilization can you actually provide the range of assays
Speaker Change: used in the post-pandemic systems. I know the average is two. But where does that range sit? What is the upper end of that range? And what is the lower end of that range? Where could it trend over time? Thanks.
Stephen P. MacMillan: Where could a trend be seen over time? Thanks. If we take the first part of that, the first part is we are not seeing any shift in the market in terms of cytology usage, Anthony. It is really, it's more because we changed a third-party vendor last year. It kind of made a little bit of lumpiness between the Q2, and Q3 last year comparisons, but the underlying is very consistent. And the initial stages are digital cytology, which is further ahead in Europe, looking very good, and we're in the early stages of some very positive consumer, or I'm sorry, customer acceptance, of that in the United States.
Steve Macmillan: Let me take the first part of that. The first part is we are not seeing any shift in the market in terms of psychology usage happening. It is really more because we changed the third party vendor last year.
Speaker Change: Let me take the first part of that. The first part is we are not seeing any shift in the market in terms of cytology usage, Anthony. It is really, it's more because we changed a third-party vendor last year, it kind of made
Steve Macmillan: It kind of made a little bit of lumpiness between the Q2, the Q3 last year comparisons, but the underlying is very consistent and the initial stages are digital psychology, which is further ahead in Europe, are looking very good and we're in the early stages of some very positive consumer, or I'm sorry, customer acceptance of that in the United States. I think we continue to feel good about our psychology.
Anthony Charles Petrone: A little bit of lumpiness between the Q2, the Q3 last year comparisons, but the underlying is very consistent.
Anthony Charles Petrone: And the initial stages on our digital cytology, which is further ahead in Europe , are looking very good. We're in the early stages of some very positive customer acceptance.
Stephen P. MacMillan: So I think we continue to feel good about our cytology. On the PANTHA utilization, of the new customers we talked about, over 55% are running two or more assays. But when we look at the US in total, that we look at over a third of our customers are running four or more assays. So I would kind of anchor into that four; four to six is the likely target range. That's over a third at the end of 23 compared to just under 20% at the end of 19.
Anthony Charles Petrone: of that in the United States. So I think we continue to feel good about our cytology business.
Unknown Executive: E-Business on the Path of Utilation.
Steve Macmillan: So Anthony, on the Path of Utilization on the new cost, as we talked about, over 55% are running two or more assays, but we look at the US in total that we look at over a third of our customers are running four or more assays.
Anthony Charles Petrone: On the PANTHA utilization, on the new clusters that we talked about, over 55% are running two or more assays.
Anthony Charles Petrone: But when we look at U.S. in total,
Anthony Charles Petrone: that we look at over a third of our customers are running four or more assays. So I would kind of anchor into that four, four to six is the likely target range.
Steve Macmillan: So I would kind of anchor into that four or four to six is the likely target range. That's over a third at the end of 23 compared to just under 20% at the end of 19%. So you can see that growth that we're able to achieve as we drive utilization on the Panthers that are out there.
Anthony Charles Petrone: That's over a third at the end of 23 compared to just under 20% at the end of 19, so you can see that growth that we're able to achieve as we drive utilization on the Panthers that are out there.
Unknown Executive: Thank you. Great.
Unknown Executive: Thanks.
Speaker Change: Thank you.
Mike Matson: We will take our next question from Mike Matson with Needham and Company. Please go ahead. Yeah, thanks. So I want to ask one on the psychology business, OUS, sounds like that is a growth driver for you guys, but just want to kind of understand what's happening in those markets and what's driving the growth and kind of what you're seeing there with path versus primary to be testing in the different regions of the world. Yeah, we're seeing some nice acceptance to our digital psychology. One of the challenges outside the United States is not as many psychologists around.
Stephen P. MacMillan: So you can see that growth that we're able to achieve as we drive utilization on the PANTHAs that are out there. Thank you. Great. We will take our next question from Mike Matson with Needham & Company. Please go ahead. Yeah, thanks. So I want to ask one about the psychology business, OUS.
Speaker Change: Great, thanks.
Speaker Change: We will take our next question from Mike Matson with Needham & Company. Please go ahead.
Michael Stephen Matson: Sounds like that's a growth driver for you guys. But just want to kind of understand what's happening in those markets and what's driving the growth and kind of what you're seeing there with PAP versus primary HPV testing in the different regions of the world. Yeah, we're seeing some nice acceptance for our digital cytology. You know, one of the challenges outside the United States is that there are not as many cytologists around.
Michael Stephen Matson: Yeah, thanks. So I want to ask one on the psychology business, OUS.
Michael Stephen Matson: Sounds like that is a growth driver for you guys. But just want to kind of understand what's happening in those markets and what's driving the growth and kind of what you're seeing there with PAP versus primary HPV testing in the different regions of the world.
Stephen P. MacMillan: And so the ability to help with the workflow is a big win. And so rolling out our digital cytology, the genius cytology there is good. And we continue to work with guidelines. You know, I think that the hidden piece that's been missed for everything that we did in the pandemic to provide a COVID test is that we established much stronger relationships across the world with ministries of health and everything else. And we're having more conversations that are going to benefit so many of our businesses, including our surgical businesses, our breast interventional business, and really just changing guidelines.
Speaker Change: Yeah, we're seeing some nice acceptance to our digital cytology. You know, one of the challenges outside the United States is
Steve Macmillan: And so the ability to help on the workflow is a big win. And so at rolling out our digital psychology, the genius psychology there is good and we continue to work with guidelines. You know, I think the hidden piece that's been missed for everything that we did in the pandemic to provide the COVID test is we established much stronger relationships across the world with ministries and health and everything else. And we're having more dialogues, really, that's going to benefit so many of our businesses, including our surgical businesses, our breast interventional business, and really just shifting guidelines.
Speaker Change: Not as many psychologists around.
Speaker Change: And so the ability to help on the workflow is a big win, and so rolling out our digital cytology, the genius cytology there is good. And we continue to work with guidelines. You know, I think the hidden piece that's been missed...
Stephen P. MacMillan: And so there's more discussions, you know, Germany's gone to a co-testing model in cytology and HPV over the last few years that we're benefiting from, and working those those angles really country by country. Okay, thanks. And then I think I heard Karleen call out tax rates as a kind of opportunity over the next few years.
Speaker Change: for everything that we did in the pandemic to provide the COVID test.
Speaker Change: We establish much stronger relationships across the world with ministries of health and everything else, and we're having more dialogues, really, that's going to benefit so many of our businesses, including our surgical businesses.
Steve Macmillan: And so that more discussions, you know, Germany's gone to a co-testing model in psychology and HPV over the last few years that we're benefiting from and working those angles really country by country.
Speaker Change: Our breast interventional business and really just shifting guidelines and so there's more discussions You know Germany's gone to a co-testing model in Cytology and HPV over the last few years that we're benefiting from and working those those angles really country by country
Karleen Oberton: Okay, thanks. And then I think I heard Tarleen call out tax rate as an opportunity over the next few years. So, you know, your tax rate is a little bit on the higher side. Well, it's a larger company. So can you maybe elaborate on that? Yeah, I think as we look at our operations and supply chain and even more specifically continue to lever leverage Costa Rica from manufacturing, especially as we acquired new new companies and optimize their supply chain. We try to leverage those points to contribute to favorability on the tax rate.
Karleen M. Oberton: So, you know, your tax rate is a little bit on the higher side relative to some of the larger companies. So can you maybe elaborate on that? Yeah, I think as we look at our operations and supply chain and, even more specifically, continue to leverage leverage Costa Rica for manufacturing, especially as we acquire new facilities. We try to leverage those points to contribute to favorability. We will take our next question from Casey Woodring with J.P. Morgan. Please go ahead.
Speaker Change: Okay, thanks. And then I think I heard Karleen call out tax rate as a kind of opportunity over the next few years. So, you know, your tax rate is a little bit on the higher side relative to some of the larger companies. So can you maybe elaborate on that?
Speaker Change: Yeah, I think as we look at our operations and supply chain and even more specifically continue to leverage Costa Rica for manufacturing, especially as we acquire new companies and optimize their supply chain, we try to leverage those points to contribute to favorability on the tax rate.
Casey Woodring: We will take our next question from Casey Woodring, which AP Morgan. Please go ahead. Great. Thank you for taking my questions. So I wanted to talk about the strong molecular growth in the quarter here that kind of a half percent number. You know, one of the larger players in the molecular space that sits more in the point of care market has been seeing strong growth rates on the non-restriatory side as well now for several quarters in a row. You know, this competitor's called out sexual health and virology specifically as areas of growth, you know, just given your menu overlap, can you help frame up how the panthers coexisting in the market now with some of these growing point of care platforms and just your way to start around any potential shareships one way or the other in that market.
Speaker Change: We will take our next question from Casey Woodring with J.P. Morgan. Please go ahead.
Casey Rene Woodring: Great, thank you for taking my questions. So I wanted to talk about the strong molecular growth in the quarter here, that 10.5% number. You know, one of the larger players in the molecular space that sits more in the point-of-care market has been seeing strong growth rates on the non-restoratory side as well now for several quarters in a row. This competitor has caught up with sexual health and virology specifically as areas of growth.
Casey Rene Woodring: Great, thank you for taking my questions.
Casey Rene Woodring: So I want to talk about the strong molecular growth in the quarter here, that 10.5% number.
Speaker Change: One of the larger players in the molecular space that sits more in the point of care market has been seeing strong growth rates on the non-respiratory side as well now for several quarters in a row.
Speaker Change: This competitor has called out sexual health and virology specifically as areas of growth. Just given your menu overlap, can you help frame up how the Panther is coexisting in the market now with some of these growing point-of-care platforms and just your latest thoughts around any potential share shifts?
Casey Rene Woodring: You know, given your menu overlap, can you help frame up how the Panther is coexisting in the market now with some of these growing point-of-care platforms and just your latest thoughts around any potential share shifts one way or the other in that market? And then I have a follow-up. Yeah, I think we continue to feel really, really good that, you know, most of the screening is asymptomatic, it's standard testing, and the economics are still going to work very well for the labs. And so I think we love our position.
Casey Woodring: And then I will follow.
Casey Woodring: Yeah, I think we continue to feel really, really good that most of the screening is asymptomatic, it's standard testing that the economics are still going to work very well for the labs, and so I think we love our position. And there's always going to be people punching around on the edges that will help expand the market probably as well, but we feel really good about where we're going.
Stephen P. MacMillan: And, you know, there's always going to be people punching around on the edges, that will probably help expand the market probably as well. But we feel really good about it. It's helpful. And then just, you know, my follow-up here quickly on that 5 to 7% top line algorithm you previously talked about surgical is probably at the higher end of that range, breast on the lower, and diagnostic somewhere in the middle when including cytology. So, just is that the right way to think about 2025 on an ex-COVID basis? Maybe just walk through the moving parts there as you see them next year.
Speaker Change: One way or the other in that market, and then I have a follow-up. Thanks.
Speaker Change: Yeah, I think we continue to feel really, really good that, you know, most of the screening is asymptomatic, it's standard testing, that the economics are still going to work very well for the labs, and so I think we love our position, and, you know, there's always going to be
Speaker Change: people punching around on the edges that will help expand the market probably as well but we feel really good about where we're going.
Casey Woodring: That's helpful, and then just, you know, my follow up here quickly on that five to seven percent top line algorithm. You previously talked about surgical is probably at the higher end of that range, breast on the lower, and diagnostic somewhere in the middle, when including psychology. So just is that the right way to think about 2025 on a Mexico basis? Maybe just walk through the moving parts there, as you see in the next year, thank you.
Speaker Change: That's helpful. And then just, you know, my follow up here quickly on that five to seven percent top line algorithm, you previously talked about surgical is probably at the higher end of that range, breast on the lower and diagnostic somewhere in the middle when including cytology. So just is that the right way to think about 2025 on an ex-COVID basis? Maybe just walk through the moving parts there as you see them for next year. Thank you.
Casey Woodring: Yeah, probably not quite ready to give individual line forecast for 2025, but I think we feel good overall as to, you know, any given year, any given quarter, any given business, maybe slightly above, slightly below. But I think we like where we're headed, so we'll give you more of that detail, Casey, when we guide in November. Thank you.
Casey Rene Woodring: Thank you. Yeah, probably not quite ready to give an individual line forecast for 2025. But I think we feel good overall, as to, you know, any given year, any given quarter, any given business, maybe, you know, slightly above, slightly below, but I think we like where we're headed. So we'll give you more of that detail, Casey, when we guide you. Thank you. We'll take our next question from Michael Riskin with Bank of America. Please go ahead. Thanks for taking the question, guys. Just a couple, kind of some loose ends for me.
Speaker Change: Yeah, probably not quite ready to give individual line forecasts for 2025, but I think we feel good overall as to, you know, any given year, any given quarter, any given business may be, you know, slightly above, slightly below, but I think we like where we're headed. So we'll give you more of that detail, Casey, when we guide in November .
Michael Ryskin: We'll take our next question from Michael Riskin with Bank of America. Please go ahead. Thanks for taking the question, guys. Just a couple of kind of smooth sense for me. Going back to the skeletal of the stop ship, I think you talked about confidence that that's getting resolved in fiscal one queue. You think you talk about 15 million in the fourth quarter just any sense of timing when in the quarter. You're going to have it resolved and just sort of, if you could frame the range of outcomes there, you know, could this extend a little longer?
Casey Rene Woodring: Thank you.
Speaker Change: We'll take our next question from Michael Riskin with Bank of America. Please go ahead.
Michael Leonidovich Ryskin: Going back to the skeletal, the stop ship, I think you talked about confidence that that's getting resolved in fiscal 1Q. I think you talked about 15 million in the fourth quarter. Just any sense of timing when you're going to have it resolved and just sort of, if you could frame the range of outcomes there, you know, could this extend a little bit longer? Do you really have a good line of sight on the resolution?
Michael Riskin: Hey, thanks for taking the question guys. Just a couple kind of some loose ends for me going back to the skeletal
Michael Riskin: of the the stop ship. I think you talked about confidence that that's getting resolved in fiscal 1Q. I think you talk about 15 million in the fourth quarter. Just
Speaker Change: Any sense of timing, when in the quarter you're going to have it resolved, and just sort of, if you could frame the range of outcomes there, you know, could this extend a little bit longer, do you really have a good line of sight on the resolution?
Steve Macmillan: Do you really have a good line of sight on the resolution? We do have good line of sight; we're not expected to go out, you know, far into queue one of 25, so you should be able to count on it again. We'll guide by that point, but we fully expect we back in the market by then.
Stephen P. MacMillan: We do have a good line of sight, and I would not expect it to go out, you know, far into Q1 of 25. So you should be able to count on it again. We'll guide you by that point. We fully expect feedback. Okay, okay. And on the capital deployment side, you talked about balance sheets, strong free cash flow year to date, and then obviously, you've got both share buybacks and M&A kind of going on at the same time. Just remind us sort of how you frame those two options right now.
Speaker Change: We do have a good line of sight. We're not expected to go out, you know, far into Q1 of 25, so you should be able to count on it again. We'll guide by that point, but we fully expect to be back in the market by then.
Karleen Oberton: OK, OK, and on the capital deployment side, you talked about balance. She's strong free cash flow year to date, and then obviously you've got both share buybacks and M&A kind of going on at the same time. Just remind us sort of how you frame those two options right now. Obviously, just got a couple deals under your belt recently, but still in a good position. So just going forward, priorities between the two and how you see that trading off. Yeah, it was certainly, you know, as we look at our cash flow generation with a very strong balance sheet and a, you know, very competitive credit agreement.
Speaker Change: Okay, okay. And on the capital deployment side, you talked about balance sheets, strong free cash flow, year-to-date, and then obviously you've got both share buybacks and M&A kind of going on at the same time. Just remind us sort of how you frame those two options right now. Obviously, just got a couple deals under your belt recently, but still in a good position. So just going forward, priorities between the two and how you see that trading off.
Stephen P. MacMillan: Obviously, you've just got a couple deals under your belt recently, but you're still in a good position. So just going forward, the priorities between the two, and how you see that trading off. Yeah, certainly, you know, as we look at our cash flow generation, with a very strong balance sheet and, you know, a very competitive credit agreement. Our focus is on deploying that free cash flow as well as the cash that we've built on the balance sheet at this point in time.
Speaker Change: Yeah, certainly, you know, as we look at our cash flow generation with a very strong balance sheet and, you know,
Karleen Oberton: Our focus is on deploying that free cash flow as well as the cash that we've built on the balance sheet at this point in time. The priority continues to be tuck-in MNA, you know, acquisitions that give us confidence in our ability to grow our revenue. Hopefully, agree to our current growth rates, and then it would be shared repurchased as we stated in our remarks at a minimum to manage delusion from our equity plans and then opportunistic as we seek disconnect and valuation in the market.
Speaker Change: Very competitive credit agreement. Our focus is on deploying that free cash flow as well as the cash that we've built on the balance sheet at this point in time.
Stephen P. MacMillan: The priority continues to be Tuck and M&A, acquisitions that give us confidence in our ability to grow our revenue, hopefully at a rate greater than our current growth rates. And then it would be share repurchase, as we stated in our remarks, at a minimum to manage dilution from our equity plans, and then opportunistics as we seek disconnect and valuation. We will take our next question from Navann Thai with BNP
Speaker Change: The priority continues to be Tuck and M&A, acquisitions that give us confidence in our ability to grow our revenue, hopefully aggrieved to our current growth rate.
Speaker Change: And then it would be share repurchase, as we stated in our remarks, at a minimum to manage dilution from our equity plans, and then opportunistics as we seek disconnects and valuation in the market.
Navan Ty: We'll take our next question from Navon Ty with B&P Paribal. Please go ahead. Hi, thanks for taking my question. I wanted to ask about the M&A pipeline with your two-and-a-half billion cash available for acquisition. What are you seeing at the moment? And also, if you could discuss the innovation, including the next-generation entry system and in breast health and AI, thank you. I think on the M&A front, we're obviously very pleased we closed the Endomag deal last week. We continue to look at other deals in that size, a little bit bigger, or whatever. But, you know, again, you can only make them when they're available.
Speaker Change: We will take our next question from Navann Thai with BNP Paribas. Please go ahead.
Navann Thai: Hi, thanks for taking my question. I wanted to ask about the M&A pipeline with your $2.5 billion cash available for acquisition. What are you seeing at the moment?
Navann Thai: Hi, thanks for taking my question. I wanted to ask about the M&A pipeline with your $2.5 billion cash available for acquisition. What are you seeing at the moment? And then also if you could discuss the innovation including the next generation gantry system in breast health and AI. Thank you.
Stephen P. MacMillan: And then also, if you could discuss the innovation, including the next generation gantry system in breast health and AI. Thank you. I think on the M&A front, we obviously were very pleased we closed the endomag deal last week. We continue to look at other deals in that size, a little bit bigger or whatever. But, you know, again, you can only make them when they're available. As we said last quarter, we'd love to do kind of one endomag every quarter. But it doesn't always work out that way.
Speaker Change: I think on the on the M&A front we obviously were very pleased we closed the endomag deal last week. We continue to look at other deals in that size a little bit bigger or whatever but you know again
Steve Macmillan: As we said last quarter, we'd love to do kind of one endomag every quarter. Doesn't always work out that way. So we're in this great position of being able to be disciplined buyers as we continue to watch things shake out and also being able to redeploy onto our own cash by buying back our own shares along the way. So it's not an either-or given the incredible cash position we have.
Speaker Change: You can only make them when they're available. As we said last quarter, we'd love to do kind of one endomag every quarter.
Stephen P. MacMillan: So we're in this great position of being able to be disciplined buyers as we continue to watch things shake out and also being able to redeploy our own cash by buying back our own shares along the way. So it's not an either-or situation given the incredible cash position we have. So we like where we are.
Speaker Change: It doesn't always work out that way. So we're in this great position of being able to
Speaker Change: Be disciplined buyers.
Speaker Change: As we continue to watch things shake out, and also being able to redeploy,
Speaker Change: on to our own cash by buying back our own shares along the way. So it's not an either or given the incredible cash position we have. So we like where we are on that.
Steve Macmillan: So we like where we are on that. Yeah, in regards to innovation, you know, certainly we've talked about a next-generation entry that really continues to focus on workflow, patient experience, and image quality. Those are the key drivers of innovation in that space and certainly layer on AI. How can we help the radiologists in assessing risk within those images? And again, assessing or helping improve workflow is the use of AI, not only in brass, but also in genius digital psychology.
Essex D. Mitchell: Yeah, in regards to innovation, you know, certainly, we've talked about a next generation gantry that really continues to focus on workflow, patient experience, and image quality. Those are the key drivers of innovation in that space, and certainly layer on AI, you know, how can we help the radiologist in assessing risk within those images, and again, assessing, We'll take our next question from Ryan Zimmerman with BTIG, please go ahead. Thanks for taking the questions. Maybe, Karleen, just to follow up on your next-gen gantry, I mean, you made the comment, [inaudible] I don't know if you'll be comfortable answering this yet, but do you expect to grow gantries in 25? Coincidentally.
Speaker Change: Yeah, in regards to innovation, you know, certainly we've talked about a next generation gantry that really continues to focus on workflow, patient experience, and image quality. Those are the key drivers.
Speaker Change: Innovation in that space and certainly layer on AI. How can we help the radiologists in assessing risk within those images and again assessing or helping improve workflow is the use of AI not only in breath but also in genius digital psychology.
Ryan Zimmerman: We'll take our next question from Ryan Zimmer with BTIG.
Karleen Oberton: Please go ahead. Thanks for taking the question. Maybe, Carly, and just to follow up on your next-gen gantry, I mean, you made the comment today that, you know, you're on pace to grow gantries this year.
Speaker Change: We'll take our next question from Ryan Zimmerman with BTIG. Please go ahead.
Ryan M. Simon: Thanks for taking the questions.
Ryan Benjamin Zimmerman: Maybe, Karleen, just to follow up on your next-gen gantry. I mean, you made the comment today that, you know, you're on pace to grow gantries this year. And I don't know if you'll be comfortable answering this yet, but, you know, do you expect to grow gantries in 25? And, you know, coincidentally, can you...
Karleen Oberton: And I don't know if you'll be comfortable answering this yet, but, you know, do you expect to grow gantries in 25, and, you know, coincidentally, can you just give any color on kind of timing of a next-gen gantry? Yeah, I don't think we're going to give any specifics on timing. I think likely, as we look towards RSNA, would be a time that we would highlight that for a certain of our customers and probably give a little more specifics on what we're expecting for 2025 and beyond. Okay.
Ryan Benjamin Zimmerman: I can't give any color on the kind of timing of next gen. Yeah, I don't think we're going to give any specifics on timing. I think, likely, as we look towards RS&A, would be a time that we would highlight that for certain of our customers and probably give a little more specifics on what we're expecting for 2025. I've just got two quick questions. One, what's the status or impact that you're seeing from the BioZorb recall dynamics? How does that impact? with endomagnetic.
Speaker Change: Just give any call around kind of timing of a next gen gantry.
Carleen: Yeah, I don't think we're going to give any specifics on timing. I think likely, as we look towards RS&A, would be a time that we would highlight that for certain of our customers and probably give a little more specifics on what we're expecting for 2025 and beyond.
Ryan Simon: Just to follow up, two quick questions. One, what's the status or impact that you're seeing from the biosorb recall dynamics? How does that impact, you know, with endomagnetic, if they're, if at all?
Speaker Change: Okay.
Speaker Change: Just to follow up, two quick questions.
Speaker Change: One, what's the status or impact that you're seeing from the BioZorb recall dynamics?
Essex D. Mitchell: If at all, and then the second thing that I wanted to just ask about is unrelated. We've had, you know, a number of these deals. Go back to kind of the earlier margin question. Is there an opportunity in any way for some facility integration or manufacturing integration? Transcripts provided by Transcription Outsourcing, LLC, www.patreon.com talking too much about. Thanks. Yep, this is Essex.
Speaker Change: How does that impact, you know, with endomagnetics?
Karleen Oberton: And then the second thing that I wanted to just ask about unrelated was you've had, you know, a number of these deals, and to go back to kind of the earlier margin question, is there an opportunity in any way for some facility integration or manufacturing integration that hasn't, you know, been kind of contemplated or discussed yet? Because it would seem like, with the number of deals you've done over the past years, you know, there could be some sub low hanging fruit there. And I just don't recall; you guys really talking too much about that. that does far.
Speaker Change: If at all. And then the second thing that I wanted to just ask about, unrelated, was you've had, you know, a number of these deals and to go back to kind of the earlier margin question.
Speaker Change: Is there an opportunity in any way...
Speaker Change: for some facility integration or manufacturing integration.
Speaker Change: that hasn't, you know, been...
Speaker Change: Ryan Simon, Stephen MacMillan, Unknown Executive, Essex Mitchell
Speaker Change: Thanks for taking the questions.
Unknown Executive: Thanks for taking those questions.
Essex D. Mitchell: I'll jump in on the BioServe question. So, Endomag and BioServe are completely unrelated to each other, number one. But number two, I would say, is that the BioServe recall was more of an administrative issue where we needed to update. Our PI or our language in our insert. So we are still selling our product, feel great about it, and are working through that. With regard to facility integration, I don't know if Karleen wants to jump on that.
Essex Mitchell: Yep, this is Essex. I'll jump in on the biosurve question. So Indomagn biosurve are completely unrelated from each other, number one. But number two, I would say, is that the biosurve recall was more of an administrative recall where we needed to update our PI or language and our insert. So we are still selling our product, so great about it, and are working through that with regards to facility integration.
Essex D. Mitchell: Yep, this is Essex. I'll jump in on the BioServe question. So, ENDO-MAG and BioServe are completely unrelated from each other, number one. But number two, I would say, is that the BioServe recall was more of an administrative...
Essex D. Mitchell: recall where we needed to update.
Essex D. Mitchell: Our PI or our language in our insert. So we are still selling our product, feel great about it.
Karleen Oberton: I don't know if Karleen wants to jump on that. Yes, sure. So, as we've highlighted, we're doing some facility integration in our breast health business right now. From each of the acquisitions, they all have different profiles. Some make sense to stand alone as they are, and others do make sense to integrate in their various stages of integration. And as we always do, we always look at our supply chain, look at our network, and continue to focus on opportunities for optimization. And I would say over the next five years, I think we'll continue to realize those opportunities.
Carleen: With regards to facility integration, I don't know if Karleen wants to jump on that. Yeah, sure. So, as we've highlighted, we're doing some facility integration in our breast health business right now.
Essex D. Mitchell: Yeah, sure. So as we've highlighted, we're doing some facility integration in our breast health business right now. From each of the acquisitions, they all have different profiles. Some make sense to stand alone as they are, and others do make sense to integrate, and they're in various stages of integration.
Speaker Change: From each of the acquisitions they all have different profiles, some make sense to stand alone as they are and others do make sense to integrate and they're in various stages.
Karleen M. Oberton: And as we always do, we always look at our supply chain, look at our network, and continue to focus on opportunities for optimization. And I would say over the next five years, I think we'll continue to do that. We'll take our next question from Mason Carrico, with Stevens. Please go ahead.
Speaker Change: of integration. And, you know, as we always do, we always look at our supply chain, look at our network and continue to focus on opportunities for optimization. And, you know, I would say over the next five years, I think we'll continue to realize those opportunities.
Mason Carrico: We'll take our next question from Mason Carrico with Stevens. Please go ahead. Hey, thanks for taking the questions.
Speaker Change: We'll take our next question from Mason Carrico with Stevens. Please go ahead.
Mason Owen Carrico: Hey, thanks for taking the questions. On the molecular business, could you provide some color on how adoption is trending for the fusion sidecar recently? You doubled the panther install base during COVID.
Mason Carrico: On the molecular business, could you provide some color on how adoption is trending for the fusion sidecar recently? You doubled the Panther install base during COVID. How has adoption really been among those new customers?
Mason Carrico: Hey, thanks for taking the questions.
Mason Carrico: On the molecular business, could you provide some color on how adoption is trending for the fusion sidecar recently? You doubled the Panther install base during COVID. How has adoption really been among those new customers? And then as a follow-up,
Mason Carrico: And then, as a follow-up, what are your expectations for where that fusion attach rate can move longer term? We're seeing steady adoption of the fusion sidecar, which is dying wet because it really opens up the menu. We're focusing on customer by customers. What we're seeing is quarter over quarter, more customers adopting the fusion as we go along. It doesn't necessarily mean every panther needs a fusion. And in fact, it will probably end up being, I don't know, maybe even a third of our total Panthers, even if that. What it really comes down to is, does each customer have the capability?
Essex D. Mitchell: How has adoption really been among those new customers and then as a follow-up? What are your expectations for where that fusion attach rate can move longer term? Yeah, we're seeing steady adoption of the Fusion sidecar, which is dynamite because it really opens up the menu.
Speaker Change: What are your expectations for where that fusion attach rate can can move longer term?
Essex D. Mitchell: We're focusing on customer by customer. So, what we're seeing is, quarter over quarter, more customers adopting the Fusion as we go along. But it doesn't necessarily mean every Panther needs a Fusion.
Speaker Change #100: Yeah, we're seeing steady adoption of the Fusion sidecar, which is dynamite, because it really opens up.
Speaker Change #101: We're focusing on customer by customer. So what we're seeing is quarter over quarter, more customers adopting the fusion as we go along. It doesn't necessarily mean every panther.
Speaker Change #101: needs a fusion. And in fact, it'll probably end up being, you know, I don't know, maybe even a third of our total Panthers, even if that what it really comes down to is does each customer have the capability. And so that's been our big focal point. We're seeing good adoption and steady growth.
Mason Carrico: And so that's been our big focal point. We're seeing good adoption and steady growth.
Andrew Cooper: We'll take our next question from Andrew Cooper with Raymond James. Please go ahead. Hey, everybody. Thanks for the time. Lots been asked.
Essex D. Mitchell: And in fact, it'll probably end up being, you know, I don't know, maybe even a third of our total Panthers, even if that what it really comes down to is whether each customer has the capability. And so that's been our big focal point. And we're seeing good adoption and steady growth. We will take our next question from Andrew Cooper with Raymond James. Please go ahead. Hey, everybody, thanks for the time. Lots of questions have been asked, so maybe just one, a little bit nitpicky on margins, but could you give us a little bit more flavor for, you know, the pretty modest change for the year, but just how much of a driver is endomag flowing in versus maybe a little bit of the decremental from the skeletal headwind versus anything in the core in terms of as we think about that 4Q, 4Q Yeah, so I would say it's more geared toward the stop ship on the skeletal versus the endomag.
Speaker Change #102: We will take our next question from Andrew Cooper with Raymond James. Please go ahead.
Andrew Cooper: So maybe just one, a little bit nitpicky on margins, but could you give us a little bit more flavor for, you know, the pretty modest change for the year, but just how much of a driver is endomaggy flowing in versus maybe a little bit of a decremental from the skeletal headwind versus anything in the core in terms of, as we think about that 4Q operating margin and full year operating margin for fiscal 24? Yeah, so I would say it's more geared toward the stop ship on the skeletal versus endomag. Think about Endomag is very small revenue for only two months, but certainly stop ship on even a non-core franchise is going to have an impact on margins.
Andrew Harris Cooper: Hey everybody, thanks for the time. A lot's been asked, so maybe just one...
Andrew Harris Cooper: A little bit nitpicky on margins, but could you give us a little bit more flavor for, you know, the pretty modest change for the year, but just how much of a driver is endomag flowing in versus maybe a little bit of the decremental from the skeletal headwind?
Speaker Change #104: It's worth anything in the core in terms of as we think about that 4Q operating margin and full year operating margin for fiscal 24.
Speaker Change #105: Yeah, so I would say it's more geared towards the stop ship on the skeletal versus the endomag. Think about endomag as very small revenue for only two months, but certainly a stop ship on even a non-core franchise is going to have an impact on margins.
Andrew Harris Cooper: Think about endomag as a very small revenue for only two months, but certainly, a stop ship on even a non-core franchise is going to have an impact. The way to think about it, too, is that with that, I think our margins are still looking really, really good.
Karleen Oberton: I think the way to think about it too is with that. I think the margins are still looking really, really good.
Speaker Change #105: I think the way to think about it, too, is with that, I think our margins are still looking really, really good.
Puneet Souda: So I agreed, and then I just one more again kind of on Martin, but Karleen, I just want to make sure I caught something you said correct. I think you said something about working through chip costs and integrating facilities, or the elevated chip costs, I should say, and integrating facilities through fiscal 25. Just wanted to get a sense, has anything changed in terms of how quickly you're working through those higher cost chips and when you expect to be, you know, at kind of more normal levels in terms of the chip costs themselves? Yeah, I think we're substantially through them, you know, as we exit 24, and you have to probably a little bit into 25, but I think what we're having is, as we increase productions overall, you know, getting more stable absorption than what we had prior when I mean factoring was really reduced because of the chip supply. Okay, great. I'll stop there. Thank you so much. Thank you for taking my question. I think just a point one on brass, I think you mentioned the placement is pretty strong against your pace and it's pretty strong in a quarter. I wonder if you can get like specific number on the placement, and then also is it really back to the one way pre-proclaimed from me? Thank you. Yeah, I don't think we've given specific numbers on Gantries. Again, we've grown, we have real confidence that the total Gantries are going to grow year-to-year. We're not quite back to pre-pandemic levels; that will be in those levels in 2025. I'll be paced. I'm sorry, I'm sorry, can you repeat that? I'm sorry. Yeah, and any regional common that you want to call out in the Gantry pace? And we'll take our last question from Puneet Suda with their ring partners. Please go ahead. Hey, thanks, Steve, thanks for spitting me in here. Just I'll just round it out with thanks. I'll round it out with one question. I'll discuss all. I just wanted to confirm when you look at the market for bone density measurement and fracture assessment, has anything changed there competitively in your view? I just wanted to confirm that and get a view about the scum, so you know, push out that you're seeing in the quarter. Yeah, we still feel great about the market, great about our products. This is truly a supplier induced pickup on our, you know, smallest business, and we'll be through it within another quarter and right back to what we expect. In the meantime, obviously, the core businesses are all delivering very, very well, so that the total is still very strong. So, but yeah, nothing different than a no concern. Got it. Okay, okay, super. Okay, thank you. All right, thank you.
Karleen M. Oberton: And then just one more again, kind of on the margins, but Karleen, I just want to make sure I caught something you said correctly. I think you said something about working through chip costs and integrating facilities, or the elevated chip costs, I should say, and integrating facilities through Fiscal 25. Just wanted to get a sense of whether anything has changed in terms of how quickly you're working through those higher-cost chips and when you expect to be, you know, at kind of more normal levels in terms of the chip costs themselves. Yeah, I think we're pretty much through them. You know, as we exit 24, and you probably have to be a little bit into 25.
Speaker Change #106: So agreed, and then just one more again kind of on margins, but Karleen, I just want to make sure I caught something you said correct. I think you said something about
Speaker Change #107: working through chip costs and integrating facilities, or the elevated chip costs, I should say, and integrating facilities through Fiscal 25. Just wanted to get a sense, has anything changed in terms of how quickly you're working through those higher cost chips and when you expect to be, you know, at.
Speaker Change #107: Kind of more normal levels in terms of the chip costs themselves.
Andrew Harris Cooper: But what I think we're having is, as we increase production overall, you know, getting more favorable absorption than what we had prior when manufacturing was really reduced. Okay, great. I'll stop there. Thank you so much. The facility integration in the breast business specifically will go through at least the first half. We will take our next question from Lou Lee with UBS. Please go ahead.
Speaker Change #108: Yeah, I think we're substantially through them, you know, as we exit 24, and yeah, there will probably be a little bit into 25, but I think what we're having is, as we increase productions overall, you know, getting more favorable absorption than what we had prior when manufacturing was really reduced because of the chip supply.
Speaker Change #109: Okay, great, I'll stop there. Thank you so much. The facility integration in the breast business specifically will go through at least the first half of 25.
Speaker Change #110: We'll take our next question from Lou Lee with UBS. Please go ahead.
Lou Lee: Great. Thank you for taking my question. I think just a quick one on the breast. I think you mentioned the placement is pretty strong. The gantry placement is pretty strong in the quarter.
Lou Lee: Great. Thank you for taking my question. I think just a quick one on breadth. I think you mentioned the pacement is pretty strong, the gantry pacement is pretty strong in quarter. I wonder if you can get like specific number on the pacement and then also is it really back to the one way?
Stephen P. MacMillan: I wonder if you can get like a specific number on the placement and then also if it is really back to the old one way, the pre-COVID one way. Thank you. Yeah, I don't think we've given specific numbers on gantries. Again, we've grown, and we have real confidence that the total number of gantries is gonna grow year over year. We're not quite back to pre-pandemic levels, but we will be at those levels in 2020.
Speaker Change #112: Pre-COVID from May. Thank you.
Speaker Change #113: Yeah, I don't think we've given specific numbers on gantries. Again, we've grown. We have real confidence that the total gantries are going to grow year over year. We're not quite back to pre-pandemic levels, but we'll be at those levels in 2025.
Stephen P. MacMillan: Pacement, sorry. I'm sorry, can you repeat that? I'm sorry, yeah, and any regional comment that you want to call out in the GANCHI placement?
Speaker Change #113: We're now in the basement, sorry.
Speaker Change #114: I'm sorry can you repeat that? I'm sorry yeah and any regional comment that you want to call out in the GANCHI placement?
Operator: Now. Now. And we will take our last question from Puneet Souda with Lear Inc. Partners. Please go ahead.
Speaker Change #115: And we will take our last question from Puneet Souda with LearRing Partners. Please go ahead.
Puneet Souda: Hey, thanks, Steve. Thanks for spacing me in here. I'll just round it out with one question. On the skeletal, I just wanted to confirm that when you look at the market for bone density measurement and fracture assessment, has anything changed competitively there, in your view? I just wanted to confirm that and get a view about the skeletal, you know, push out that you're seeing in the quarter. Yeah, we still feel great about the market, great about our products.
Puneet Suda: Hey, thanks Steve, thanks for including me in here. I'll just round it out with
Puneet Suda: Thanks.
Puneet Souda: I'll round it out with one question. On the skeletal, I just wanted to confirm, when you look at the market for bone density measurement and fracture assessment, has anything changed there competitively in your view? I just wanted to confirm that and get a view about the skeletal, you know,
Speaker Change #118: Push out that you're seeing in the in the quarter.
Puneet Souda: This is truly a supplier-induced hiccup on our, you know, smallest business, and we'll be through it within another quarter. And right back to what we expect. And, in the meantime, obviously, the core businesses are all delivering very, very well, so that the total is still very strong.
Speaker Change #119: Yeah, we still feel great about the market, great about our products. This is truly a supplier-induced hiccup on our, you know, smallest business, and we'll be through it within another quarter, and right back to...
Speaker Change #119: to what we expect. And in the meantime, obviously, the core businesses are all delivering very, very well, so that the total is still very strong.
Stephen P. MacMillan: But yeah, nothing different than a. No concern. Got it. Okay, super. Okay, thank you. All right, thank you. This does conclude today's question and answer session, and this now concludes Hologic's third quarter fiscal 2024 earnings conference call. Have a good evening.
Speaker Change #119: So, but yeah, nothing different than eight.
Speaker Change #120: No concerns. Got it.
Speaker Change #121: Okay, super. Okay, thank you.
This does conclude today's question and answer session, and this now concludes.
Speaker Change #122: All right, thank you.
Speaker Change #123: This does conclude today's question and answer session and this now concludes Hologic's third quarter fiscal 2024 earnings conference call. Have a good evening.