Q1 2026 Haemonetics Corp Earnings Call

Good day, and thank you for standing by. Welcome to the humanetics corporation. First quarter 2026 earnings call at this time. All participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising you that your hand is raised to withdraw your question. Please press star 1 1 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Olga Guyette, Vice President of Investor Relations and Treasury. Olga, you have the floor. Good morning, and thank you for joining us for Haemonetics' first quarter fiscal year 2026 conference call and webcast.

I'm joined today by Chris Simon our CEO and James dereka, our CFO.

This morning, we posted our first quarter fiscal year 2026 results and full year fiscal 26 guidance to our investor relations website.

The same information was made available via the press release issue this morning.

As we provide our business and financial update this morning, I would like to remind everyone that we will use both reported and organic Revenue. Growth numbers that exclude the impact of effects. The Devastator of the whole blood business and the exit of liquid solution products.

Are getting Revenue growth X CSL also excludes the impact of the previously discussed transition or csl's, us disposables business.

We'll also refer to other non-gaap Financial measures to help investors understand humanetics ongoing business performance.

Please note, that these measures exclude certain charges and income items.

The full list of excluded items, reconciliations to our Gap results and comparisons with the prior year periods. I provided in our first quarter of fiscal year 2026 earnings release available on our website.

A remarks today include forward-looking statements in our actual results May differ materially from the anticipated results.

factors that may cause a results to differ include those reference in the safe harbor statement in today's earnings release, and in other SSD filing,

We do not undertake any obligation to update these forward-looking statements.

And now I'd like to turn it over to Chris.

Thanks Olga. Good morning, everyone and thank you for joining.

We started our first quarter fiscal 2026, the fourth, and final year of our long-range plan, by delivering solid results. And advancing toward our ambitious growth, targets for Revenue earnings margin and free cash flow.

We reported revenue of 321 million down 4%, due to the anticipated 52 million impact from portfolio transitions. But up 13% organically X CSL

strong growth in our base, business margin expansion and the most recent share, BuyBacks drove, 8% adjusted, EPS growth to a dollar 10.

Our business is straightforward with nearly 85% of total revenue driven by 3 core products, Nexus tag and vascade all of which are concentrated here in the US.

Balance of focus and resilience, enabling revenue growth and continued margin expansion despite macro and market challenges.

In plasma we're reinforcing our Global Leadership through Nexus technology, upgrades and share gains in hospital, strong adoption of tag. 6s continues to fuel growth in blood management Technologies. While we take decisive actions to strengthen execution in Interventional Technologies through key leadership, editions organizational, realignment and targeted commercial initiatives.

Moving to our businesses.

Our Hospital business, the largest in our portfolio with 2 core growth. Drivers delivered, 140 million dollars in Revenue in the first quarter up 4%, reported and organic.

Strength in blood management Technologies, more than offset temporary softness and Interventional Technologies reflecting the resilience of our Diversified portfolio and multiple drivers of performance.

Blood management, Technologies grew 14% led by another standout quarter in hemostasis management, which delivered 22% growth overall and 27% growth in the US.

Performance was fueled by strong tag disposable utilization continued rapid adoption of the global hemus basis hn cartridge.

Accelerated, new account, openings and customer conversions from the lab-based tag, 5000 to our Advanced point of care tag 6s system.

The BMT franchise also benefited from continued growth in transfusion management. Partially offset by distributor order timing and self Sagar.

Interventional Technologies decline 7% in the quarter primarily due to tough comparisons from prior. Year OEM to stocking in sensor guided Technologies and PFA related pressures in esophageal cooling which were anticipated in our fiscal 26 guidance,

Vascular closure grew 3% led by 6% growth in MVP and MVP XL. This was partially offset by continued softness. In our Legacy vascade concentrated in lower growth coronary, and peripheral procedures, representing about 15% of vascular closure Revenue.

Despite increased competition, we remain confident in the clinical and economic advantages of our vascular closure portfolio.

We do recent softness, as executional, not structural, and we have taken decisive steps to strengthen our performance.

With new franchise leadership including several key hires a more clinically focused sales force and targeted commercial initiatives underway. We expect to regain momentum in the second half of FY 26 so that vascular closure can contribute to revenue growth and margin expansion.

We are reaffirming our full year Hospital guidance of 8 to 11% reported and organic growth, reflecting strong momentum in blood management Technologies which enables us to drive, meaningful, Revenue, growth and margin expansion. As we work the strength in our Interventional Technologies franchise.

Moving to plasma where Nexus are third and largest growth driver delivered. 130 million in Revenue in the quarter down 4% on a reported basis.

And up, 29% organic X CSL driven by favorable impact from our prior Persona and express plus upgrades in the US and a 1-time revenue benefit from the renegotiation of a long-term software agreement, which accounted for roughly half of the organic growth in the quarter.

This agreement, reinforces our 80% market share in plasma, DMS, software, and underscores the strength of the next link which when integrated with our broader next platform, delivers unmatched, value to customers consistent with our expectations growth in the US. Plasma collection. Vol was in the low single digits.

We are reaffirming our full year fiscal, 2026, plasma guidance, including a reported Revenue decline of 7 to 10%, but organic growth. X CSL of 11 to 14%

growth is expected to be supported by Price benefits from prior technology, upgrades continue, share gains, and the possibility of a modest recovery in US plasma collections in the back half of this fiscal year as customer yield and productivity gains annualized.

Blood center Revenue declined 22% on a reported base to 52 million reflecting the divestiture of the whole blood business.

Organic Revenue grew 4% driven by continued strength and favorable order timing in the core apheresis portfolio.

We are reaffirming our full year. Guidance of 23 to 26% decline on a reported basis. As we fully anniversary, the whole blood diversity, and a 4 to 6%, organic decline as we continue to streamline, the apheresis portfolio and reallocate resources to higher growth areas.

Our Revenue outlook for the corporation is firmly on track driven by strong performance in our growing and increasingly profitable base businesses.

Even as we navigate 153 million in planned portfolio, transitions our 3 core products position us to deliver robust organic growth. X CSL expand margins and strengthen our leadership. In the markets, we serve

We are reaffirming full year Revenue, guidance of 3 to 6% reported Revenue decline. But 6, to 9% organic growth. X CSL,

Over to you, James.

Thank you, Chris, and good morning, everyone.

As you heard from Chris, this morning, we're off to a strong start to fiscal 26, delivering, solid Financial results and meaningful margin expansion in the first quarter.

Our financial performance reflects disciplined execution, across the organization and benefits from our strategic portfolio transformation, including the destitute of the low margin, whole blood business, our leading innovation in plasma and sustained growth momentum in Tech.

Productivity initiatives across the Enterprise are helping us better align our resources and those efforts are beginning to show up in our results.

In the first quarter of fiscal. 26, the adjusted gross margin reached 60.8%.

Of 550 basis points. Year-over-year driven by the benefits of our Persona technology and price initiatives across the portfolio. Favorable product mix and a 1-time. 210 basis point benefit from license fees associated. With the red. Negotiated plasma software agreement, Chris referenced earlier,

Adjusted operating expenses in the first quarter were 118 million an increase of 3 million or 2% compared with the first quarter of the prior year.

The modest increase in adjusted operating expenses, reflects targeted, R&D, Investments to support, Innovation, and long-term growth, while effectively managing GNA, and other overhead costs.

despite a 52 billion Revenue headwind in the first quarter, adjusted operating income increased 9% to 78 million or 24.1% of Revenue up, 300 basis, points year-over-year,

We expect these gains to build throughout the year supported by continued. Share gains in plasma

Strong momentum in tag improving contributions from Interventional Technologies in the second half of this fiscal and additional savings as we scale our operations to support our transformed portfolio.

We are reaffirming our fiscal 26. Adjusted operating margin. Guidance of 26% to 27% with stronger. Margins anticipated in the second half as product. Mix stronger, commercial execution, and continued cost discipline increase, operating

Leverage.

The adjusted income tax rate was 24.9% in the quarter up from 19.9% last year, reflecting lower benefits from performance share vesting.

For the full year. Fiscal 26, we expect the adjusted tax rate to be approximately, 24.5%.

Adjusted. Net income was 53 million.

2% year-over-year and adjusted diluted EPS was A110 up. 8% from q1 of fiscal 25.

Million dollar share buyback.

We are reaffirming our full year adjusted EPS guidance of $4.70 to $5.00, which reflects the benefit of disciplined capital deployment.

This includes the offset of a higher expected income tax rate and interest expense with a lower diluted share count as a result of the most recent share buyback as well as the assumed use of cash on hand to retire, their remaining 300 million of 2026 convertible Securities at maturity,

Turning to cash flow and the balance sheet.

We generated 700 million in operating cash flow in the first quarter driven by improved working Capital Management, particularly in inventory.

Capital expenditures were 3.8 million and we placed 11.5 million worth of devices at customer sites reflected as an increase in CA capex, and a reduction in inventory, but with no impact on cash outflow for the period.

Free cash flow was 2.5 million. A significant improvement from the 17th of favorable working capital.

As a reminder, first quarter free cash flow tends to be lower due to typical seasonality and the payout of Prior year. Approvals including performance-based compensation. We expect stronger cash generation over the remainder of fiscal 26 and are reaffirming our full year free cash flow. Guidance of 160 to 200 million with a free cash flow. Conversion rate above 70% of adjusted, net income, reflecting our renewed emphasis on cash, discipline and capital stewardship.

Let me also add a few comments on the balance sheet, which remains a key enabler of our operational resilience and strategic optionality.

We ended the quarter with 293 million in cash down 14 million, from fiscal year, end reflecting additional strategic Investments.

Net leverage as defined in our credit agreement was 2.53 times ibida at quarter end with no material changes to our debt structure.

We maintain strong, liquidity and financial flexibility supported by up to 1 billion dollars in additional available capacity by the end of this fiscal year, including full access to our 750 million revolving credit facility.

This positions us well to meet our obligations, fund operations, and pursue other value-creating opportunities, including share buybacks when the opportunity arises.

In closing, I'd like to reinforce some of the key messages from our call.

Fiscal 26 is off to a strong start and we remain on track to meet our full year guidance and long-range plan targets including low. Double-digit compounded annual growth rate in revenue and mid-20s adjusted EPS kager excluding CSL.

Adjusted operating margin expansion in the high 20s in fiscal 26 and cumulative. Free cash flow of 600 billion to 700 million.

Revenue, growth, and margin expansion are largely driven by three key products.

Plasma hemostasis management and Vascular closure.

With 2 out, performing highlighting, the resilience of our Diversified portfolio. We are confident in our ability to meet Financial objectives.

Our plasma business continues to outperform and is expected to be larger and more profitable than originally assumed in our long range plan by the end of this fiscal.

IG demand remains strong, and we continue to grow our share both in the U.S. and Europe, establishing our portfolio as the leading solution for driving efficiency and reducing cost per liter for our customers.

Food, commercial strategy.

With renewed focus on free, cash flow, strong balance sheet, flexibility, and ongoing Market expansion. We have the tools to invest in organic growth,

Meet debt maturities, and build a foundation for sustained. Long-term value creation for our customers and shareholders.

Thank you.

Operator, please open the line for questions.

Thank you. At this time. We will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced.

To withdraw your question. Please press star 1 1, again please, stand by while we compile the Q&A roster.

Our first question comes from Robin. Patel with JPM Robin. Go ahead with your question.

Hey, uh, it's Rohan and thanks for taking the question. Um, I want to start with plasma, you had a really strong performance in the quarter. Um is there any detail that you can provide on the drivers of this? You'd initially communicated limited collections recovery.

Until the second half. So is it fair to assume? This is primarily share games, you also called out a 1-time revenue benefit from software, I believe what was the contribution from that in the quarter and how should we think about the new growth Trend settling out over the course of the Year given the guide is staying put

Yeah, good morning Robin. It's Chris. Thanks for the question. Um, yeah, we're really enthusiastic about what the plasma team is. Delivering, you know, driven by our Innovation, you know, with both, you know, for pricing and share gains. Our plasma franchise is stronger than it is ever been. It is larger.

It is faster growing, it's increasingly, more profitable and more Diversified and what you see in our first quarter results is the benefits of that. Uh, we had some ongoing price benefit from technology Innovative technology that was rolled out last year.

All of which is contracted for and the beginnings of this more rapid, uh, share conversion which will gain momentum over the course of this year. Again, already contracted for. So we feel good short and long term. As you point out, the software agreement was an important. Contributor roughly half of the growth at 29% growth quarter over quarter was, uh, was driven by the software agreement. But the remainder, you know, 14 or 15% as that or slightly above the high end of our guidance range. We anticipate that the software agreement this year. We were on

Uncertain in terms of the exact timing um and the real benefit of that software agreement, obviously it's it's contributing to the quarter and it's very profitable.

But what that does for us is essentially, um, solidify our position with roughly 80 share of the US, uh, DMS market. And so, um, that that's just really powerful for us. We've talked about this before. But, you know, this software is our secret sauce, uh, the Standalone software. It makes uh, the bidirectional connectivity possible. It it helps, you know, roughly 1,000 centers that we support, and in the US gives us deep insight and and a level of connectivity that, uh, you know, we are the only 5 10K uh approved DMS software available for commercial sale in the US and we just Advanced that leadership. So we're quite proud of it.

Thank you. And I also wanted to ask on the hospital business and specifically Interventional Technologies.

Um, you talk to roughly 3%, vascular uh closure growth in the quarter and I may have missed this, but um, what was the MVP MVP XL growth rate? And is there anything that you can speak to just with regards to the recovery and the Legacy vascade product or anything else you're seeing on the demand front worth calling out. Um, and how you see that playing out over the course of the year? Thanks.

Is some executional challenges. It's things that uh, really across all 3 products but particularly base vascade, it's a roughly, 15% of of the total closure opportunity for us. But um, in those PCI procedures, we have more to do to regain our competitiveness,

Thank you so much.

Bye for our next question.

Our next question comes from, Anthony Patron with mizuho Americas, Anthony. Go ahead with your question.

Uh, thanks and good morning, everyone. Congrats on a a clean quarter here particularly in plasma and at the margin, maybe 1 on Plasma 1 on on Hospital.

Uh on plasma you know you spoke quite a bit past few quarters uh about the share game Tailwind here.

So, maybe just, uh, giving that the installation Cycles take, take a little bit of time, there's multiple contracts, that have reset. What do you think? The timing is to have those share gains fully deployed, you know, at the center level

and you know, can you quantify actually what that can mean just in terms of

Um, you know, kind of a growth Tailwind to the business and then all the follow up on Hospital.

Yep, thanks Anthony. So the, you know,

Price increases propelled us through most of last year and through most of this quarter as well, the share gains come in on top of that they're fully on track actually a tad ahead of schedule which is great. Uh, we're finding tremendous demand, um, for those customers who want to get more of their Network, you know, on the best available technology. So that that will continue to gain momentum. In fact, that's going to be the primary driver of what we estimate will be that 11 to 14% uh organic growth for the year. Um, and we definitely want to push into that. Some of that will carry over into FY 27. It's an ongoing cycle as you pointed out. But uh, we also, I mean, this is when I step back right, our our competitive differentiation, as I said, we significantly strengthen the business. We've now, you know, last year was a major Milestone. We transitioned all of our us customers to Nexus with Persona and express. Plus this year will be about expanding on the

Agreements. We've reached with 2 of the large collectors to get more of their Network converted over and that's an exciting opportunity as well as what we're doing in Japan with the Red Cross.

Um, you know, it's I pointed out that the health of the business and 1 of the things, I think that gets lost, you know, we're working very closely with these customers to keep an ongoing Innovation pipeline. We'll have more to say about that as the year progresses. But the interesting thing for us while we value all of our customers today, no 1 customer represents more than 9 or, or 10% of our total volume for the corporation. In fact, the top 3 plasma customers now are less than 25%. So it's it's a significantly more diverse business and and 1 that, you know, we think um, has real potential and and real growth and um, we're going to continue to do what we need to do, from an R&D perspective to build on that and we're aggressively defending our our yes. And Persona patents to make sure we expand that exclusivity.

No very helpful. And then, you know, Switching gears over to hospital and digging in a little bit more to electrophysiology. You know, Pulse Field ablation volumes by the companies that have reported is it still, uh, in in a um, you know, in a high growth part of their product cycle. Uh, MVP had a good attach rate there. Obviously, decelerates the Q over Q, just wondering from a, you know, competitive dynamic,

Um, how significant was that on the US side, you know, where their centers that were lost? And if so what is the path to sort of getting basket? MVP back, uh, into those centers and attached? Uh, to PFA volumes, thanks?

Market for the reasons, I just outlined. We don't believe it's the product either. Um, vascade has a clear and differentiated value proposition, the clinical performance, the workflow efficiencies are, you know, they lead the category. Um we offer a a pain-free narcotic free leak-free alternative that reduces ambulation on average from 6 hours down to 2 hours and ensures that, you know, essentially, everybody goes home the same day, that's a really powerful work. You know, overall proposition. We've got the clinical and, and the other support to back it up, we need to execute against that. Uh, and we need to continue to do our work to expand the label and and strengthen the product development, all of that underway. Um, so it's executional and we need to own that. We we do, um, a couple things that lie behind that this is worth kind of grounding on, you know, we always knew the game was going to shift from new account openings when we got above.

500 of the T600, you know, the remaining accounts are smaller. They're more difficult. They're largely affiliated with idns Etc. So the game is predominantly about driving utilization. It's a different mindset. It's a different capability Set, uh, along the way, we woke the competition and, and we definitely, as you highlight our facing into some of that, you know, 1 of the 1 of our competitors was the prior industry standard. The other is a, you know, low cost alternative, that's competing solely on.

Price. We've got to respond to that, we are. Um and as I said, we we've taken the actions. There's there's some International play with Japan as well. But, you know, there's a series of actions. I'm happy to walk through those if it's relevant. But uh, we view it as as temporary. We view it as executional and we intend to solve it, we intend to solve it this year.

Thank you.

Stand by for our next question.

Our next question comes from David reskit with beard David. Go ahead with your question.

Great. Um, thanks for for taking the questions. Um, I wanted to follow up on the uh, Interventional, uh, uh, tech and and BMT bucket, um, uh, uh investigate. Um, you know, I think originally, you had talked about this kind of similar split of contribution for hospital and Interventional Tech versus um blood management. Um and you know it looks like just just to start the year off. You you've got obviously outperformance in the blood management business, you know uh a little bit of of underperformance and and Interventional Tech as it relates to the 11 to 8 to 11% um Hospital guide. So so when I think about the different moving pieces specifically in Interventional Technologies versus the outperformance and and BMT I guess what, what's giving you is the confidence that ultimately you

A reversion in the Interventional Tech bucket. Um as it relates to the fall, your guide and I guess is is it still fair to assume that that there should be a relative level of kind of even growth contribution from both of those broader buckets?

Morning, David. Thanks for the for the question, and welcome to the call. Um, you know, Hospital, grew 12%, organic last year, we're expecting based on the current guidance for us to grow double digits, again this year. It's now our largest segment approaching 50% of of corporate revenue and it's a major driver, not only of growth and revenue and Marv, earnings growth, but margin expansion. Uh, particularly from higher gross, margins and, and ultimately as we improve performance improved, operating leverage, you know, we when we looked at this, at the outset of the year, we assumed roughly, uh, comparable contributions from DMT, and from ivt clearly. The success we're having with tag in ivt is, is is driving us at this point. We think that will certainly be the story through the second quarter. Given that the nature of what we're we're working through with IBT, but we do expect ivt to recover. And so is it going to be 50/50 know. That's

Unlikely. Um, are we going to deliver? Yes, and and we get there because of the strength that we have with the tag business. Hopefully we'll get to talk a bit about that this morning but what that that team is delivering is, is more than covering as we put the energy and the Investments and the focus on getting vascular closure backwards. Capable of going

Well, I, I know you called out the, um, you know, some some product mix, uh, Better Price across the portfolio. And I'm wondering if, if you could unpack that a little bit, I know in the, the, the IBT the hospital segment, you've got a bit of a benefit there. Um, you know, from a contribution perspective, same thing on plasma, which again, was head of our expectations. I know within plasma, you have a little bit better of an argument to make for pricing and the non CSL accounts. So can you help us? Think about maybe what? What all went, right? Uh, in the quarter to to deliver the gross margin, you know, guide that that a result that you had. And then, as you think about that in the back half of the Year, we're some of those uh, moving pieces are kind of shaking out, uh, as it relates to the the full year guide. Thank you.

Yep. Thank you, David. Let me start and then I'll ask James to to weigh in and fill in the details. You know, we're off to a good start um with 2 of our 3 primary growth drivers, you know, really delivering and we feel quite good and and we're you know more than confident to reaffirm our 26 to 27% operating income margin which from where we sit reflects, you know, roughly a 300 basis points Improvement. That's a similar Trend to what we had last year. We started the year at 21%, which looked a lot like the year before, and then built accordingly. And that, that that's a story that will play out again for us. This year, based on our, our forecast volume major, driver of gross margin expansion. You saw the, you know, 60 plus that was

The target for the lrp. We expect to hold that throughout the year at this point. Um delighted to get it this early. Uh shifting portfolio mix is the single largest contributor to gross margin expansion. It includes not only some outstanding performance in the hospital segment. Um, but also um reducing uh, contribution from both uh CSL and from the whole blood diver which were gross margin dilutive to us. And so having them pass through is you're seeing the benefit, you know, quarter over quarter, I think you know the outperformance we're having in plasma. Uh so this outstanding and and because of the way it's coming it's relatively neutral in terms of the impact on our gross margins at the corporate level. But as you can imagine, highly accretive to our operating margin expansion. Um, especially with all the US business. Now with uh, with Nexus with Persona, um, we do have productivity initiatives underway, we can talk more about them, the largest

Amongst them is the regional and Market alignment program that we've called out teams working hard to hold GNA flat. Uh in dollar terms while we continue to invest in the areas, we need to sales and marketing R&D Etc. So, you know, as the year progresses, we'll get all those things and then we'll, you'll see increasing operating leverage, which is the dynamic. You would expect in a high performing med, surg business. So, you know, we can walk through any and all of that, but that's, that's the story.

Yeah, and I, I'll just I'll just add to to Chris, uh, Chris's explanation there, you know, just on, um, on the ivt, uh, BMT Dynamic. You know, we, we have, uh, you know, similar, uh, gross margins, uh, among those 2 businesses. So, um, if if BMT is doing a little better and IBT then IBT that really has no effect, um, if anything, it might be slightly positive to, uh, to our gross margin.

Great, great. Thanks.

Stand by for our next question.

Our next question comes from Mike Matson with Neiman Company. Mike, go ahead with your question.

Yeah, thanks. Um so

You know, just a couple more on interventional technologies. So, um, I want to clarify: are you seeing increased competition in the mid-bar categories, MVP, MVP Excel? Or is it really just concentrated in the 15%, the smaller more products?

Like we're seeing it across the board, um, you know, we we we see it, you know?

Both called out last quarter. We've reorganized into 2 dedicated teams, 1 for vascular closure. And and really vascular closure is everything here for IBT. But we also have the structural heart team to enable deeper clinical engagement and and better resource alignment. You know, we're definitely investing in our toolkit more sales, enablement, getting deeper at an account level, so we can compete proactively rather than responsively. Uh, We've overhauled Performance Management, quotas comp plans, training for reps and for supervisors alike, we are building a strategic accounts management team which is 1 of the bigger gaps that we have identified and collectively we're putting together account specific competitive responses. The answer is different in PCI than it is for aib, for example. But we need you know, we need to action both and so you know, we'll have more to say as the year progresses but that's the Playbook and we're on it.

Okay. Got it. And then um, you know, just wanted to ask about your appetite for for further m&a. Um, you know I know it's mostly been in hospital in Interventional Technologies but you know, given the challenges there um

Are you going to try to fix that business before you go out and do any more m&a there?

Sure to answer Mike is yes. Um I'll let James weigh in on the he he wants but if we did 225 million in share BuyBacks, last year and our board authorized a new 500 million uh program for the next 3 years. You know, we bought back shares because we you know, believe deeply in our plan and we think our stock is significantly historically undervalued. So you know, I think from our vantage point is we deliver on FY 26 guidance and an annualized, the impact of that 153 million we called out earlier.

Both our customer and our shareholder value creation is going to become a lot more clearer, um, that's good. It gives us the ability to invest and, and to drive the performance improvements that we're making, um, in in the near to intermediate term m&a's off the table,

The only thing we're going to consider, I'm happy to give the background on. It is to action our option with be the shore so we can get uh the perky seal Elite product which we think is, you know, potential Game Changer and enclosure for procedures like Dabber and Evar. But um other than that, we're heads down. Um we got our ears pinned back and we're driving execution.

Okay, got it. Thank you.

Stand by for our next question.

Our next question comes from Joanne, Wisin with City Joanne. Go ahead with your question.

Hey, good morning, excuse me. This is Anthony on for Joanne. Thank you for taking our questions. Um, just going back to plasma and please, correct me if I'm wrong, but did your outlook for us collections change this year in the back half? Um, I think the language last quarter was you were expecting, um, a modest Rebound in volume. And then I the language is quarter was, um, a possibility of a recovery. So just just want to see if anything changed in your near-term outlook.

Yep. Anthony thanks for the question. You heard that, exactly, right. Um, Let me let me comment, you know, on the existing guidance but also the the long term Outlet because I think there's a lot of speculation out there around both. So the plan this year, price gains tied to the Innovation that's already been rolled out the share gains, that are well underway. That's what propels us. That's what we control and and that's how we'll make plans. Um, we do, see the the pullback in collections somewhat, you know, enabled by our productivity gains for the customers is being short-term and and you know temporary in nature. It's just there.

There's a cycle. We've lived through this, you know, multiple times over multiple decades. So I think our our long-term models, you know, understand this quite well and we we expect, there could be, you know, low single-digit growth above historical seasonality in the back half of the year, as some of this Nexus technology enabled gains, uh, annualize but but that remains to be seen. And we don't control that. And, and I know there's very different views out there in the market when we step back from this,

Frenchman Etc. You know, from our vantage point we support a 30 billion biofarm Market, you know, we don't see the demand for immunoglobulins going away anytime soon and in fact, you know we look at our leading customers right? If they're all public ticada and Grifs and you know CSL they they're reporting double digit or high single digit growth and they're reaffirming that guidance and their IG franchises. So you know, we look at that, we look at the long term potential. We know we think at this point where their inventories are and that bows very well, it's an outstanding environment for collections right now. So I think the forces are lining up in in ways that we would would hope and anticipate, um,

You know, there's wreck combinate therapy out there, that's a good thing for patients, but eiji remains Irreplaceable for the vast majority, certainly primary and secondary immune deficiency. And then I think, even on the autoimmune side, just the, you know what, we're seeing new patients starts versus versus versus, you know, incompetent therapy kind of tells the story. So, you know, we like plasma near intermediate and longer term.

Okay, thank you for that. Um, and then in chemistry is just management. Um, as you continue to roll out, the new heper, nice, um, cartridge. Um, how long do you think this, um, benefit from that could last or I guess in other words like how how far into this role out uh, in the US?

Yeah, early innings for sure. Um, you know, and what's

Pretty clear to us. Now, in hindsight, is the introduction of our heper neutralization cartridge last year has proven to be a, a watershed moment in the space. If you go back, you know, we helped Drive the creation of of Visto elastic testing as a Marketplace, we are the market leader with something around 70%, share and the broadest body of clinical evidence. And you know, track record of usability uh supported by a really outstanding team that that's just firing on all cylinders. You know, if the category itself, the underlying, you know, treatment areas, probably, mid single digit growth, you know, on an ongoing basis. But do your question about the sustainability? We're in half of what we believe are, the t700 accounts, the largest procedure-based hospitals. We're in less than half when I think about Europe and and Japan where we don't yet have the heper neutralization cartridge, you know, more more on. That is the year.

Progresses. We think about the tag 5000 conversions that are underway driven by the, the adding of this additional assay. We've converted roughly half of our current, you know, tag 5000 users to to tag 6s. So they'll be Capital, they'll be the initial buy-ins. And then, of course, there's the utilization. So, you know, we like our what we see here and I think we have, you know, renewed enthusiasm about the long-term uh value that this franchise can bring is 1 of our, you know, top 3, value drivers and currently our fastest growing and largest hospital product.

Great. Thank you.

Our next question comes from Larry solo with CJs Securities, Larry go ahead with your question.

all right, uh,

Good morning, everyone.

Chris it's fine. Just follow up on the on the question on tag so is that you mentioned the 70%, share it? The cartridge is clearly um driving a lot faster growth. You and it's

As you go through your existing uh, share base. Are you actually taking share to is this a share driver? I mean, do you take share back, you know, do you see that actually changing with with this? Um, cartridge is, is there anything else on the, you know, if there's a competitor have a similar thing or maybe in the in their pipeline or they call her on that?

Interventions. And so, we see that in terms of clinical outcomes, but the other part of this is almost without exception, when a hospital or a hospital group adopts Peg, we watch their blood, uh, usage contract. Because they're just they're not making unnecessary interventions, they're not. And when they intervene, they intervene with exactly the right combination of of, you know, blood products. So, that's really powerful. That's our biggest opportunity is, is driving that utilization. We think the US is probably close to 50% of of, you know, that today at 50%. Utilization is probably closer to 30% outside the US. So more to come,

Gotcha. Okay. And switching get just a plasma, just on the, on the, on the global on the macro. So, um, it sounds like you're still building in, you know, outside of, uh, your market share games, generally flat Market collections, maybe I'm just reading around, but like, on the Griff's on their last call that that they spoke to double digit volume games. Now obviously there's and they also spoke to a lot of productivity efficiencies which is clearly being driven sounds like by, you know, by Persona, particularly that they actually called out. But I'm just curious when they, they talk about double digit volume games, that's not collections specifically. But um, is that different well? And they're just 1 collector obviously. But there are, you know, I think second largest right. So, is that difference mostly just productivity or are they just 1 customer or 1 View?

Market any any color on that?

Yeah, um again we we read the same releases, we have lots of conversations, I won't comment on kind of the, you know, the, the inside baseball if you will. But from our vantage point, when we look at their, you know, all of our, uh, customers readouts. We know, you know, there's bass volume demand, there's clearly price, Etc. There's always a lag because of what they collect, you know, what they're talking about, what those double digit growth is plasma, that was collected last year, or previously. And so, we have to be mindful of that the performance in the quarter is flat, you know, on a historical seasonal basis. We we didn't see any meaningful uptick in collection volumes. Our outperformance is, you know, Nexus and and Nexus, adoption, Etc. So um, we think based on our reading of this, that in the back half of the year, we have the opportunity to get above historical seasonal averages, but we don't control that. And, and we want to be conservative about that because it's been difficult to forecast.

You know, with Precision in in a given, you know, period in a given quarter long term, we're enthusiastic. We don't imagine this goes much Beyond this year, without a sizable uptick we'll have more to say about that later as as Things become more, clear, but right now, given our guide, given the performance. We just delivered, we're confident for the year that, you know, controlling what we can control.

We're going to have a really good year on plasma.

I appreciate that caller, if I can just squeeze 1 more for James, just obviously, operating margin view building in, you know, an acceleration of the Year progresses any more color just on Cadence.

It should be kind of a linear step up. You know, through the next few chord. 2 3 quarters or do we really be focused more on the on the the back half anything in particular their next

Yeah. It's uh, it's it's really um more towards the back half, I would say the the Q2 to Q3 uh jumping operating margin is is, is probably most uh, significant and then, you know, a little bit more from there. Uh, q1's is Q2, we should see, uh, a nice bump up, uh, as well uh, to to get, you know, to our, uh, to our guidance point. So, um, overall on on EPS, uh, I would say, you know, it's probably 45% front half of the year and 55% uh, back half of the year in terms of uh, Cadence down there to the bottom line.

Great, thanks. Appreciate it.

Our next question comes from Marie sibo. With btig Murray, go ahead with your question.

Hi. Good morning. Um, wanted to ask here about another product in Interventional Technologies. I haven't heard mentioned yet, um, the options portfolio. Can you tell us a little bit about uh, any progress or Salesforce is making with that? I know there was some um, handholding and and Doc learning involved with that product.

Wire, uh, it gets masked by the OEM situation that we called out on our prepared remarks, but the underlying demand for the product is, is quite good. And we need to lean in and and continue to cultivate and develop and build the market. What what that product offers uh, is meaningfully differentiated in terms of kind of a 3-in-1 option where we we do hemodynamic monitoring on a real-time basis with essentially no drift. So it's it's a step change Improvement in guide wire technology. Uh we are learning how to commercialize it. We are long-term optimistic on on the presence in that space and and what we can deliver it will take time. And so I just I don't want to you know kind of confuse anybody on it. Our success in Interventional Technologies is

predicated upon winning in vascular, closure it is by far, the largest, it's the biggest opportunity and as I called out and might prepare remarks, it's 1 of 3 things that drive us along with tag and and Nexus

Thank you. And then

I could get a little more.

More detail. You told us about the, the growth in vascade MVP and Excel. I think that was on a global basis and you mentioned some weakness and international could you break out for us with the growth was like, here in the US. I know we're a few quarters into the launch their of Excel and uh any details on. Um the magnitude of the the decline in this quarter and Legacy of asking

Yep. Thanks Marie. But this proportionately by far the growth was here in the US and as you point out on the XL product, the attach rate for Excel on PFA is outstanding, right? It's, it's 1 of the things that continues, uh, you know, to to be a core strength for of opportunity. Interestingly, you know, I'd made mention of the fact that is the game shifted from new account openings, which are team was excellent. At is excellent at to uh, driving utilization. It, it got masked a bit, you know, about this time last year when we introduced MVP Excel to the market because the uptake has been so, uh, strong that, you know, for a period of time. And and it's again, it's a similar skill set. You're, you're launching a new product as opposed to, you know, launching a new category for us but we're we're launching Excel, you know, visa vpfa and you know it's that that propels the team and that's a good base of strength that we

We can build on to correct what we need to correct, elsewhere.

From Andrew.

Cooper with Raymond James, Andrew, go ahead with your question.

Hey everybody, thanks for the question. You know, maybe 1 more on the EP business if we think about

The 6% growth, you know, relative to what you did last year last quarter.

Fiscal Q1 was kind of the last one where you didn't have full market release of Excel, so you know, probably the easiest comp of the year. Maybe just help us think about some of those moving parts on the execution side that you called out.

I think Chris you mentioned there's a series of actions that you could walk through if if relevant I think it's uh it might be relevant and would love to hear the details on on some of the things beyond what you've already discussed.

Sure, Andrew thanks. Um, yeah. Look

It's 3 products to find the corporation within an Interventional. It's based within vascade. It's the US EP market, right? Let's just be very specific about it. We need to win there. We look at the underlying Market, you know, there's puts and takes, there's lots published about this much of it wrong, uh, but the underlying growth in EP, as we measure it for Access sites is high single digits roughly 8 and a half 8.6 to be precise uh this year, that's what we're running to. So you know that 6% there's obviously comps involved as you point out, but that's below.

um, the the bifurcation which you know happened,

Through sales comp in the fourth quarter, but really organizationally in this first quarter is going to be powerful in the early stages. It's disruptive and we're working our way through that. So I I wouldn't extrapolate a lot from the first quarter in terms of, you know what that will ultimately mean for us. It does allow us to to up our game clinically in terms of our clinical support, in terms of our ongoing trial work and and how we communicate that message uh, to our customers. Um, we've done some Basics and I I've said this on a prior call, you know, getting a a product from from 25 or 50 million to, to 200 million is 1 Thing. Taking it from 200 plus is a different game and it requires sales, enablement tools, that help you focus at an account level, where necessary it involves building a strategic account capability. We didn't have that historically, we're, we're leaning into that. That will meaningfully strengthen our relationship.

With the idns which are a big part not only of that that last, you know, 75 or 80 accounts to be open, but driving utilization across all of them. So, you know, is it is an increasingly managed market and we need to, to approach it as such. Um,

I think as we lean into that there's obviously developments, you know, on the horizon, uh, we think some of the interesting changes that are underway with regards to, you know, from from CMS going into asc's. We think that could be a real Tailwind for us because of the value proposition that vascade represents, but we need to face into it. And we need to manage it at a corporate strategic accounts level. We are putting in place the capabilities to do that, it won't happen overnight. I want to be crystal clear about that. We do believe, it's all executional. We do believe we can do this this year, but it's going to be a build from where we sit.

Okay, that's super helpful. Um,

Maybe just 1 on margins as well. I know you you talked a little bit James about some of the trends throughout the year. I just want to make sure with this software piece uh that you did see in 1 Q, how much of that drops to the bottom line and and you know, how much of that was maybe in the annual plan and, and just movement from quarter to quarter, uh, versus potentially a little bit bigger change or something. We need to think about from a jumping off point from 1, Q into 2 q and the rest of the year.

Yeah, sure Andrew. So that it was, uh, 210 basis points on, um, on gross margin and it all it all drops. Uh, there's, you know, there's no real um, uh, other expenses associated with it. Uh, so it was um, you know, contemplated in our plan for the year. It was just, I think it's Chris referenced earlier. It was really just a matter of um, of timing and it just happened to be uh, you know, in in the first quarter. Um, you know, and it, you know, Chris pointed out all the benefits in terms of how it solidifies our our position. But but the other thing, you know, it's it's also an annuity right and it'll, um, it'll continue to, to, to drive, uh, you know, our software revenue and in the years to come. Um, so, you know, in the full, you know, it was, it was always contemplated. It was in our full year, guidance. It it helped uh the quarter by about 210 basis points that will you know, that will, you know, fall off, obviously next quarter. Um, so you know

Our, our gross, you know, our gross margin, um, won't won't benefit from that, but we will continue to have uh, even more um, benefits from the mix and price. Uh that that Chris alluded to earlier when he was discussing uh gross margins. So we expect our gross margins to to pretty much hold, you know, right around this level. You know, for the remainder of of the year

Okay, helpful. And then I'm going to sneak 1 more in just on plasma quickly. Uh, can you give a little bit more flavor? I think the comment was share games were, were kind of on track or a little ahead? When you think about what was already assumed in the guide, what inning are we in? Whether it's, as of end of 1 2, or, or kind of, at present, in terms of those incremental centers that you were hoping to have, uh, have your footprint in that you weren't in Pryor?

That's great. And if they want to speed up, we'll be there with them. We've we've laid out based on what we've discussed and what we're experiencing, and that that's heavily influenced in that 11 to to 14% guide for the year. So, um, terms of innings, you know, we're we're we're Midway through we haven't hit the seventh inning stretch at this point, we have, you know, more ahead of us than behind us for sure. But, um, you know, it's on track and it's moving. And if I could, and I'm going to take a half a step back and talk about guidance, um, at the corporate level because you know, our strategy is working and we view the in aggregate. The first quarter results is very solid but we're going to remain conservative. And as a matter of practice, we don't, you know, we we kind of want to refrain from changing guidance after only 1 quarter, uh, it's just not right? And so, you know, and if you look at the guidance, right? It it delivers fully

Against what most thought were highly ambitious, maybe even, um, beyond that uh long range plan goals and I won't reiterate them all here. But within the year that has us growing plasma 11 to 14 and has this growing Hospital 8 to 11 with with mid 20s growth on EPs and the way my math behind that if you will is backing out CSL backing out whole blood. You know it's somewhere between 70 and 90 cents of eps last year that won't repeat this year. So to deliver, you know, at the midpoint of our guidance, we're already talking about something that that is mid.

Money's growth and we have the same mid 20s. Growth projection for cash flow, which is what we delivered last year as well. So, you know, we're going to, we're going to guide for what we can control. There's obviously a whole lot going on out there geopolitically macroeconomic cyclically that we don't control. Um, so we're focused on what we can control and, and delivering against that, and that's what's reflected in our guidance.

Great, appreciate the time I'll stop there. Thanks everybody.

Our next question comes from David Turley with citizens. David go ahead with your question.

Good morning. Um,

I think you guys said uh Jim. I think you said he did 150 million in buyback and record. I just want to confirm that and if you have the price, that that was at

Uh, no, no. We didn't buy it back. Uh, this quarter, that was last quarter.

So you did did, did you do none this quarter?

He did not. Yeah we did not buy back. We we repurchased that he shares we had a a new authorization as well that that Chris uh that Chris spoke about but we haven't, we haven't acted against it.

Okay. And the uh the 52 million impact that you called. I think that was a quarterly headwind from all the was it from the transitions? Is that is that something that is easily broken into the buckets or no?

Yeah. Dave we'll we'll break that out for folks. It's pretty straight forward. Yeah. It's what, what we're referring to so I quote it 153 million for the year that there's 2 factors. 1 is, uh, the transition from CSL. So there is no. Us pcs2 disposable Revenue in the quarter. So that's out that was 35. 37 million. I think was, was this time last year? The remainder is whole blood uh, which we divested, right? And so the combination of those 2 are the 52 million that we see um it'll be comparable numbers for the next quarter and then drop off pretty significantly in the third and fourth quarter which is I think going to be pretty interesting to see because it's you know, our expectation is that's when the The Fog begins to clear and the underlying health and performance of this business starts to stand alone without the need to say, you know, X this or post that or anything else. It's just straight up, you know, High single digit, Revenue growth mid,

20s earnings growth.

You know, on our way.

It's, uh, 35 and 17, Mr. Breakout between, uh, CSL and whole blood this quarter

Thanks a lot for that and uh last 1 I'll just leave you with is uh 1. Can we expect the next lrp Chris?

And I'll add 1, which we didn't say back then. But as as James has communicated, as part of our overall guidance, a a cached, net income conversion ratio that uh should be defined as top quartile for us. Certainly north of 70% and when we we start when that slides printed and and in fact then we'll talk about where we go from there, okay?

So think, think, spring or summer?

Our final question comes from Michael petuski from bington research. Michael, go ahead with your question.

I guess I really need to dial in Faster. Um, so

So, uh, Chris, I didn't catch this if you, if you talked about this, but the, uh, sort of the geographic, uh, performance of tech, can you just speak to, uh, you know, how Tech did em EA region China and any anywhere else you might want to talk about. Thanks,

Yeah, tag tag is really concentrated. The outperformance in particular, is concentrated for us. In the US, we, we were high twenties growth for tag in the US. We, we were, you know, low to mid 20s kind of in aggregate, but it's it's for now, you know, it's, it's a 7030 play where 70% of that is, is coming through, you know, in the US it's actually interesting if you step back from our portfolio, right? 75% uh probably closer to 80% now of our Revenue comes from tag vascade and Nexus.

Here in the US, right? People talk about how complicated we. We may be some or we're not complicated. We're 3 products in the US market that defines us. We do want to grow meaningfully outside. The US, we think the value proposition for viso. Elastic testing in Europe. And in Japan is largely untapped. We like the changes we've made there with our team. We are waiting um regulatory release for for the heper neutralization cartridge in EMA. We expect that release to have the same catalytic effect that it has had in the last 6 quarters for the US so stay tuned with more to say there but um but for now Mike it's it's us.

Can I can I just push a little bit? Any anything on China? I think you had talked about Market challenges in China, which doesn't seem super surprising in the current environment, but I'm just curious if there's any any comment there.

Yeah, we've taken our lumps in China, over the prior 1, or 2 years, that that's largely normalized. Now China is less than 4% of our corporate Revenue. Um, you know, across the entire portfolio, uh, tag in particular, it's the older product tag. 5,000 success is not not released there, but the the tag 5000 has local competition. We took a beating on some of the local efforts that the government had put in place that's all stabilized. We actually grew tag in the in the quarter, pretty nicely, but off of a really modest base. Um, but there's more, we can do there for sure. We'll have it. We seem to be

Kind of navigating the the Tariff structure in a way that our our products, you know, we can supply out of Asia. Etc. So we've, we, we've kind of largely not, um, sidestepped that and, and we're there to support the market, but it's a really modest contributor. Um, you know, Le less than 5% overall.

Okay, great. And just just the last 1, uh, going back, I guess to the USC ET Market. Uh, you know, you've gone out of your way to say, hey, look, uh, you know, some of these changes is going to take time, but we we've made changes. We're making changes brought in you know, sales marketing leadership and and and you know you know or essentially calling this uh you know within your control. You guys got to execute, it's not structural. Um, but I'm just curious as as you sort of look at the first quarter performance and then, you know, measure that up against the, you know what, you sort of consider market growth of 8.6% access sites growth

Uh, you know, the the I guess I'm asking you looking at Crystal Ball here but I I guess what I'm wondering is, you know, over the next quarter or 2, uh, is it likely that that that the let's say mid single digits sort of sticks or possibly even takes a a minor step back before you guys sort of get the momentum that you hope to get uh, towards the high single digits. I'm just curious of sort of the Cadence of how you see changes you've made and how they flow through, say, over the next 4. 4 6, 8 quarters, thanks,

With all the aligned incentives makes the right Investments. We're not, you know, there's no shortcuts here. We're not, we're not doing this for we'll deliver FY 26, we'll deliver the 4-year lrp. This is about the next lrp. This is about the long-term growth. We believe we're building something that has real scale potential in Interventional Technologies and blood management Technologies alike and we're going to make the Investments and give the team the necessary time, you know, sooner is better, of course. Um, but you know, we need to gain back what we've lost. We need to build upon that and and, and widen and deepen, the moat that we believe is capable for vascade. So um, more to come, um, you know, success, be get success, sometimes you win by not losing, um, that teams got a Playbook and I'm cautiously optimistic, but it will be a build. It won't happen overnight. And and I think you'll see that in our quarterly results in FY, 26.

Chris can I just think 1 1 more quick 1 and I just thought of just in terms of the sales and marketing leadership that you brought in? I mean, how many, how many are we talking just a couple 2 3 folks or or is it, or is it is it a number and and you care to call out any of the category companies? Some of these folks may have come from. Thanks.

No, I'm not going to go in the details of it, but I I'll tell you this, right? And now now, I'm going back to my prior Life as a, as a consultant, been been through more than a few, uh, turnarounds and launches Etc. You know, it we're talking change management at a very fundamental level. Yeah, we've changed at the top, but we're also changing throughout the ranks and and I mean, individual reps and clinicals that have the right experience and pedigree. Uh, first level sales supervisors, every sales force I've ever been around, you know, succeeds or fails on the caliber, and the commitment of that. First level supervisor, we're making the Investments there and, and, and then up through the rest of the chain. We're building out the key account capabilities. I, I referenced obviously, there's some marketing work behind the scenes, you know, up and down streams. So there's a lot as we, as we prepare this business to go to a fundamentally different level, right? Like, we're we're investing heavily because we think the demand in IBT in BMT

Across the medical-surgical opportunities, there is much more.

Addressable much more controllable by us. Um, we love plasma but plasma has inherent cyclicality and and some systemic risk associated with it. We've called that out what we like about what we're building in hospital is we have more of an ability to control and particularly as we scale and we scale these Investments, you're going to start to see the operating Leverage come through. That's what takes this to another level. And, um,

That's the Investments we're making.

Great. Thank you.

This ends the question and answer session. Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect