Q2 2026 Haemonetics Corp Earnings Call
Good day and thank you for standing by. Welcome to the second quarter 2026. Hey, Benedict's Corporation, earnings conference 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 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, investor relations and treasurer.
Please go ahead.
Good morning, and thank you all for joining us for a Haemonetics second quarter fiscal year 2026 conference call and webcast.
I'm joined today by Chris Simon our CEO and James dka our CFO.
The materials, including our earnings release form 10 q and supplemental. Earnings presentation are available on our investor relations website. And through this morning's press release,
Before we begin, I'd like to remind everyone that we will use both organic and reported Revenue growth rates.
In case of organic growth rates those exclude, the impact of effects that a vast majority of the whole blood product line and the exit of certain liquid solution products.
Organic growth acts CSL also excludes the impact of the previously. Disclosed transition of csl's us disposable 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.
a full list of excluded items, reconciliations to our Gap results and comparisons with the prior year periods, our provided in our earnings release
Our remarks today include forward-looking statements in our actual results May differ materially from 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 our ECC filings,
We do not undertake any obligation to update this forward-looking statements.
And now I'd like to turn it over to Chris.
Thanks Olga. Good morning everyone and thank you all for joining us.
Second quarter Revenue was 327 million and 649 million year to date. Each reflecting a 5% reported Revenue decline driven by 48 million and 101 million in last year's portfolio. Transitions respectively.
Excluding these transitions organic growth X CSL was 9% in the quarter. And 11% year to date adjusted, EPS increased 13% in the quarter and 11% year to date to a dollar 27 and 2 dollars 366 respectively.
Our results, reflect discipline execution, delivering strong core product growth record, margin expansion, and solid earnings that convert the cash while advancing our portfolio and Company transformation to sustain this momentum well beyond our long-range plan.
The focus on Nexus tag and vascade continues to advance our leadership and fuel growth.
We are gaining plasma share through best-in-class collection Solutions.
We are reinforcing tag leadership in viso elastic testing and we are executing targeted. Vascular closure initiatives to strengthen performance and return Interventional Technologies to growth,
turning now, to our individual business performance,
Hospital Revenue was 146 million in the second quarter and 285 million. Year-to-date up 5% on a reported basis and 4% organic in both periods.
Strong blood management, Technologies performance, offset softness and Interventional Technologies underscoring, the resilience and diversified of our Diversified portfolio and multiple drivers of performance.
Blood management Technologies delivered. Strong growth up. 12% in the quarter and 13% year to date driven by sustained strength in hemostasis management.
Growth was fueled by higher tag, disposable utilization and the ongoing rapid adoption of the global heper neutralization cartridge.
In October, we reinforced our Global Leadership in viso elastic. Testing by launching the hn cartridge in emea and Japan.
The broader portfolio also contributed to growth with transfusion management, achieving double-digit growth supported by heightened demand for transfusion, safety and efficiency.
Interventional Technologies declined, 5% in the quarter and 6% year to date reflecting softness in the esophageal cooling against accelerating. PFA adoption.
While modest in size at approximately 3 million dollars in Revenue. In the second quarter esophageal cooling remains a disproportionate driver of near-term underperformance.
Vascular closure grew 2% in the quarter and 3% year to date, led by MVP and MVP Excel and electrophysiology growing 4% and 5% respectively.
These gains were partially offset by continued softness. In Legacy vascade concentrated in lower growth, coronary, and peripheral procedures.
solid progress with Savvy wire in the US, delivering consistent double-digit growth as we build its foundation and broader our broaden our relevance in structural heart
We are updating our Hospital Revenue growth. Guidance to 4 to 7 percent with reported and organic reflecting sustained double-digit growth in blood management Technologies and little to no contribution from Interventional Technologies.
This Outlook reflects our focus on taking the steps necessary to drive long-term value, Creation with Interventional Technologies. Expected to play a larger role in accelerated growth and margin expansion Beyond FY, 26
Moving to plasma Revenue was 125 million in the quarter and 255 million year to date down, 10% and 7%. On a reported basis, respectively, reflecting the CSL transition, excluding CSL, organic Revenue, grew 19% in the quarter and 23% year to date.
Second quarter results, were driven by share gains robust growth in US Collections and ongoing benefits from innovation.
Our plasma business is stronger than ever delivering Revenue growth and margin expansion enabled by best-in-class solutions, that help improve customer for performance to drive our share games.
Based on customer forecast and strong sentiment from ppta. We have renewed confidence in the sustained. Robust growth of the plasma Therapeutics Market particularly imunoglobulina,
Our second quarter results, reinforce that view with us collections growing in the high single digits and European collections continuing to grow double digits.
Given stronger than anticipated first, half performance. We are raising our full year, reported plasma Revenue, guidance, to a decline of 4 to 7% or 14 to 17% organic growth. X CSL
Second quarter collections growth was very encouraging. However, our guidance remains grounded in the factors we can control primarily share games.
Blood center, reported Revenue, decline of 18% in the quarter and 21% year to date reflecting the impact of the whole blood diversity, organic Revenue, grew 4% in the quarter and 5% year to date driven by resilience in our core apheresis business. We are raising our full year blood center guidance to reflect this performance. Now expecting reported revenues to CL
9 17 to 19% as we fully anniversary the whole blood divestiture and our Granite growth to be approximately flat.
Overall Revenue. Amen. Remains Strong. Underpinned by growth and expanding profitability across our businesses, despite 153 million.
Dollars in last year's portfolio. Transitions to our 3 Groth franchises continues to deliver outsized organic growth while we strengthen our commercial execution for renewed, sustained. Success in IBT
Reflecting better than expected first. Half performance across more than 80% of our portfolio. We are raising full year, Revenue guidance from a reported decline of 3 to 6% to a decline of 1 to 4% and organic growth X CSL from an increase of 6 to 9% to an increase of 7 to 10%.
Over to you, James.
Thank you, Chris and good morning, everyone.
We delivered another strong quarter of profitable growth.
Our results highlight the benefits of our strategic portfolio transformation, ongoing productivity initiatives and disciplined approach to cost management contributing to continued Improvement in margins and earnings growth.
Adjusted gross margin reached, 60.5% in the second quarter and 60.6% year to date up 380 and 460 basis points respectively.
The expansion was driven by the continued adoption of our Persona technology price initiatives across the portfolio and favorable product mix. All of which are expected to continue to support margins in the second half.
Software license fees in the first quarter, contributed roughly 100 basis points of gross margin benefit year to date.
A decrease of 1.5 million or 1%.
The decline reflects lower freight costs coupled with disciplined expense management. And continued, focus on efficiency across GNA, while prioritizing targeted Investments to support Innovation, and long-term growth.
Adjusted operating expenses year to date were 229 million slightly up from 227 Million last year predominantly due to the timing of certain R&D Investments.
The strength of our core portfolio and our ability to drive margin expansion is evident in our results.
Year to date, we've absorbed 101 million dollars of Revenue impact from last year's portfolio, transitions all while growing our adjusted operating income.
This performance, reflects the strength and higher profitability of our base business and disciplined cost management.
holding GNA flat and delivering additional productivity savings that help offset continued, strategic investments in growth initiatives that strengthen our long-term trajectory
Adjusted operating income increased 5% in the second quarter to 87 million with adjusted, operating margin expanding, 250 basis, points year-over-year to a new record of 26.7%.
Turning to the segment level performance. In the second quarter in hospital, adjusted, operating margins expanded by 370 basis points. Predominantly on continued strong momentum in blood management Technologies and higher operating Leverage.
In plasma adjusted, operating margin expanded by 190 basis points, driven by prior technology, upgrades share gains and the full transition of our legacy US pcs2 business, partially offset by additional investments into innovation.
Blood center, adjusted operating margin expanded, 320 basis points driven by the whole blood diversity. A stronger core apheresis mix,
And continued productivity gains from the ongoing portfolio rationalization.
Adjusted operating income for the total company year to date was up 7% to 165 million, with adjusted operating margin of 25.4%, and Improvement of 270 basis points versus the prior year.
We expect continued margin expansion in the second half and reaffirm our total company full year. Adjusted operating margin guidance of 26% to 27%.
The adjusted tax rate was 24.7% for the quarter compared with 25.1% in the prior year, year to date the adjusted tax rate was 24.8% and we expected to remain consistent for the remainder of the fiscal year.
Adjusted net income, Rose 5% to 60 million dollars. In the second quarter and 4% year to date to 114 million adjusted EPS increased 13% to a $1.27 in the quarter and 11% year to date to $2.36.
The combined impact of share repurchases, tax interest and FX provided a 6-cent benefit to quarterly adjusted eps.
And a 5-cent benefit year to date.
We are raising our full year adjusted EPS guidance to $4.80 to $5 a share.
At the midpoint of our revised fiscal year guidance, we assume approximately 35 million in interest and other expenses. Generally comprised of net, interest expense, and foreign exchange, hedge contracts, and approximately 47.6 million in diluted shares outstanding at year end.
Turning to cash flow and the balance sheet. We continue to enhance working Capital Management to optimize value creation. Generating a 100 111 million in operating cash flow in the second quarter.
Up 128% year-over-year.
6-fold, increase when compared with the same period last year primarily due to improved, Inventory, management, including the buildout of Nexus devices, which impacted our cash flow in the prior year.
Free cash flow was $89 million in the quarter and $91 million year to date, with the free cash flow to adjusted net income conversion ratio of 147% and 80% in the quarter and year to date, respectively.
Our ability to generate cash, remains strong supported by disciplined execution and renewed focus on Cache efficiency.
We are raising our full year free cash flow. Guidance to 170 to 210 million and reaffirming our expectation for the free cash flow to adjusted. Net income ratio to be in excess of 70% for the full fiscal year.
Underscoring our commitment to Performance cash discipline and capital stewardship.
Turning to the balance sheet.
We ended the quarter with 296 million in cash down 10 million from the beginning of this fiscal year, primarily reflecting 75 million in share repurchases and additional strategic Investments. Partially offset by higher net. Income translating into an even stronger, cash flow.
Our capital structure remains unchanged with total debt of 1.2 billion.
No borrowing under our revolving credit facility and a net leverage ratio of 2.5.
Has defined by our credit agreement.
This positions us well to meet near-term debt, obligations fund operations, and pursue value, creating opportunities, including additional share, purchases, when appropriate.
Before we begin Q&A.
I'd like to close with a few thoughts.
We continue to execute our plan with strength and discipline delivering profitable growth.
Expanding margins across all segments and translating our adjusted earnings to cash.
Despite 153 million in last year's portfolio, transitions impacting, this fiscal year, most of which are now behind us. We remain on track to achieve our updated guidance, for the year and meet all our long-range plan targets.
Our growth and profitability are anchored in the success of our 3. Core products, Nexus tag and Vascular closure supported by companywide initiatives, that continue to drive productivity and operational excellence.
Margin expansion remains a Hallmark of Heyman addicts. And with plasma and blood management, outperforming and progress underway in Interventional Technologies.
We are building a strong foundation for continued. Margin expansion Beyond this call 26,
company, our results, reflected discipline, execution, and
High performance culture and when combined with strong cash generation and a solid balance sheet, this positions us to further enhance long-term value creation.
For fiscal 26. Our priorities remain focused, on being debt. Obligations returning excess cash to shareholders via BuyBacks when appropriate and advancing targeted investments in our growth products.
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 we wait for your name to be announced.
To withdraw your question. Please press star 1 1 again.
Our first question comes from the line of Rohan Patel of J.P. Morgan. Your line is now open.
Hey uh, thanks so much for taking the question. I just wanted to start off.
Style.
that with, um,
The strong fcsl growth, maybe with your longer term, sustainable, Outlook, and plasma.
I wrote and it's Chris. Thank you for the question. Yeah, we had, um, a really Stellar quarter with, with plasma Stellar, first half. And, uh, and I think you see that in the organic results, the second quarter was propelled, uh, by 3 things in order of priority, share gains as we continue to pick up, uh, additional centers, uh, on our devices, the benefits of innovation, uh, pricing, you know, premium pricing for what is a superior product. And, um, now, uh, collections volume growth, we had always predicted, volume growth in the back, half of the year. It started, uh, early in the second quarter and that's a, that's a powerful Trifecta. Um, to be specific about the volume growth, we experienced High single digits, uh, in the US, double digit growth in Europe. And, you know, we see that as a return, um, from the normal cyclicality that has, uh, defined this industry for a very long period of time. So we, uh,
We remain really bullish on the and market demand for IG, derived therapies. And you see that in our, our customers earnings discussions as well. So, um, plasma goes from strength strength. We're we're very optimistic about its continued success.
Great. And and then also just turning the hospital. Maybe if you can provide an update on some of the commercial work to get IBT back on track, I appreciated the additional color and disclosure you provided um, in that business. And and also just it seems from your disclosures that um, the hospital business actually drove a lot of the incremental margin benefits, um, in the quarter. So maybe if you could just talk about, um, some of the levers, you're pulling to drive operating margin and how you're balancing that with any of this additional, um, commercial, spend to get those products back on track, thanks.
Sure again, thank you. Um yeah hospital was the single largest contributor to what continues to be really robust margin expansion. We're trying to provide more detail to be you know as true as transparent as possible. As we calculate the the segment uh p&ls the Hospital operating income expanded 370 basis points in the quarter and to your point, that's, that's mixed that's volume and increasingly now. That's operating leverage which we're we're really Keen to see. Obviously there's there's 2 parts to the hospital, blood management Technologies continues to excel uh, which is allow
Allowing us to put the appropriate focus and resources uh, on on driving ivt. And so, you know, ivt is defined by vascular closure. You saw the numbers in the quarter, um, happy to go through as, as much detail as you want on that, but we remain confident in both the clinical and the economic differentiation of our vascular closure portfolio. And um, we're taking the right actions. We're being decisive to regain growth momentum uh in the latter part of this year and into FY, 27,
Great. Thank you.
Thank you.
our next question comes from the line of Marisa bolt of btig, your line is now open,
Good morning. Thanks for taking the questions and congrats on a nice quarter. Wanted to follow up there on, rohan's question about the, um,
Ivt commercial efforts, you've mentioned some of the progress underway. Can you give us a little more detail on what exactly is happening? Um, some of the, you know, Green shoots that you're starting to see, um, just any more detail on that turnaround.
Yeah. Thanks Marie. Good to hear from you. Um, so I'd summarize it this way. I am highly confident in our team. They're taking the right actions in the right way and they're fully resourced. And so the the things we are highlighting, you know, that commercial leadership group, you know, from from first level sales supervisor,
The art. So we feel quite good about Salesforce excellence.
The other part of this is we've meaningfully strengthened our corporate accounts group that will help us with idns and increasingly with the asc's, as, as those become an important driver for the market, where we think our value proposition is is is even more distinct
We have successfully completed the MVP XL trial, and we're able to make a timely submission to FDA prior to the shutdown. So that that should bode well, you know, as we get here later in this fiscal year and next in terms of stronger, clinical evidence and an opportunity to leverage that trial outside, the US, particularly in Japan. Uh, and then, you know, we've we've gotten very targeted in our competitive response and I know there's concern about, you know, is this going to be meaningfully? Diminished your gross margins. It will not, uh, we think we can actually maintain excellent margin and execute well to hold uh to regain and to expand share across the board.
Thanks sorry. Yeah, very helpful. Chris and thanks for all that detail. Sounds like things are uh improving for sure. Um and then I wanted to follow up here and talk about blood management Technologies. Uh again very very strong performance uh help us think about the sustainability of that, over the next few quarters. How should we think about, you know, the Cadence of launches that you've recently put out, um, the length of the rollouts and, and some of the benefits that you tend to see again, sort of growing above, uh, historicals thanks again.
Yep. Thanks for the question. I think blood management Technologies continues to be a un, or undersong hero in the portfolio. Grew 12% in the quarter and, and 13% year to date, you know, that's, I don't know how many quarters. Now, in a row of double digit growth, we feel from the launch of the global heper neutralization cartridge that that franchise has hit a new inflection point. And we think that double digit growth is absolutely sustainable. For about as far as we can see, it's driven by a combination of Capital Equipment, um, disposable utilization and of course, the adoption of that heper neutralization cartridge. I I called out and the prepared remarks that, um, we were pleased to launch the cartridge both in Europe and Japan here in October. And we think that, you know, helps us again go from strength to strength for our business that's uh, you know, as a market that the team helped create and you know, we have the leadership share.
70% plus and and we intend to build and expand upon that. Fortunately for us in the quarter um blood management Technologies was also benefited from transfusion management growing double digits which is you know it's a smaller line of business but 1 that um is really attractive on many dimensions and continues to contribute positively. So we're excited about the prospects for blood management. Technologies going forward.
Very good. Thank you so much.
Thank you.
Our next question comes from the line of Mike Matson of Needham & Company. Your line is now open.
Hi everyone. It's Joseph on from Mike. Could you just touch on blood center growth a little bit? Just I guess. Why was it so strong? I think 4% organic. Can you just talk about some of the growth drivers there? The
Um, you know what you benefited from in the quarter?
Yep, happy to talk about it. So Joseph. Yep. Blood center. Uh, again that's that's the real unsung success story here. I guess and it's meaningfully benefiting from Focus as you know. Um, at the end of last calendar year, we divested the whole blood franchise and some of the supporting products, like, with Etc, that were really a drag on, on our margin and, and the distraction from a focus area. So, with those uh, behind us, we've really been able to focus on what is increasingly plasma apheresis done in Blood Centers often with our Nexus device and you see that growth and you know 1515 of the corporate Revenue but it's a solid source of ebit Da and return on invested capital and free cash flow as you see from our numbers in the quarter. Um the operating income in that business on a stands loan segment basis, we estimate expanded its operating margin by 320 basis points.
Again benefiting from the destitute and an ongoing effort to rationalize that portfolio. We we talk about the regional and Market alignment program, that's the focus there, so that gave us a lot of confidence to raise the guidance and now on on the, you know, organic basis. We expect that business to hold serve and and finish flat for the year.
Okay, great. Yeah, it's very clear. You guys are benefiting from the rationalization. Um,
I guess 2 more uh, unrelated but they're quick, I'll just ask them together. Uh, how much did the share repurchase? Add to the um to the EPS uh in the quarter, or sorry the the EPS uh raise for fiscal 26.
And then, um, I guess just on.
Vascade and and vivasure are you still committed to the large 4 market? And are you are you still planning on proceeding with that acquisition of beaver share?
Yes, I it's James here. I thought, I, I jump in on the, on the, on the first question on, uh, the share buyback in the quarter. Um, it was a few cents and it's included, uh, in the, in the 6 cents, uh, below the line item, um, until that that I gave earlier.
Yep, and and just jumping over to to Viva Shore. Um, large, foreclosure, we are very committed to to consummating that acquisition, that, you know, I would describe that as near final, um, successful submission to the FDA. If if anyone has an opportunity to attend, uh, the most recent TCT, you would have heard about some really impressive results coming out of the patch trial, um, just in terms of, you know, reduction in in vascular complications medium, time to hemostasis near instantaneous. Um, really, really exciting. We think that, um, you know, it'll be an FY 27.
Event just given the timing of of FDA release, but that's a, you know, high growth Market. Uh for large bore arterial, access in Tavern. And Ivar the products, meaningfully differentiated fully absorbable suture list implant free really. Um as we look at it, you know, from the submission FDA was a best-in-class safety and and ease of use and for us it it's highly synergistic. It is a closure product, which is our primary focus in ivt and it's, you know, goes against structural heart, which will have call Point Synergy with our, um, Savvy wire business. So yep. We're excited. Uh, bit more work to be done but, um, you know, we'll have more to say about that. I think, uh, later this year,
Okay, that's great to hear and congrats on the quarter.
Thank you.
Thank you.
Our next question.
Comes from the line of David reskit of beard. Your line is now open.
Oh great. Uh, thanks, uh, for taking the questions and congrats on the, the progress here. Um, 2 questions from us and I'll, I'll ask them both up front. Um, first, uh, on the plasma side. Um, you know, seems like a a, pretty, uh, substantial, uh, step change in the US collection. Uh, volumes that are going out. I know you've talked in the past and
Have remained committed to the fact that uh, there's es and flows in in the market and, um, you know, had expected it to get better in the second half of the year. It's, it's clearly coming, uh, sooner than expected. So I I'm curious on on, on what you're seeing on, on the ground level, as to why, again a multi-quarter kind of low single flat. Uh, growth number has now uh a stepped up to this, uh, you know, High single digit level in in, in the US. And just, you know, you're interested to hear on on your confidence, that, you know, maybe this isn't just a, a 1-time thing, you know, should we expect the, the, the cyclicality on a quarterly basis? Maybe to even step back down, and, and step back up, as, as this multi-year, um, you know, return to high single digit, uh, plays through, that's the first question. And, and then second on, uh, the the vascade business
I know there was some some comments around some of the competitive, uh, nature in that market. Uh, last quarter, um, you know, your your your focusing on uh, getting the uh, sales force reinit initiative, realigned here. So, um, you know, just just curious to hear if you could parse out, maybe the, the, the benefits you've seen from the work that you've done versus the overall Market acceptance versus some of the, the things on the competitive side. That that again, give you the confidence that um, you know, you you can continue to progress here uh through the year. Thank you.
And Beyond and we're benefiting because our customers are taking share in the End Market enabled by Nexus. And the outperformance there, the guidance that we've put forth, right? Because we grew 23% through the first half.
The guidance we put forth is more modest and we don't control collection Vol. While we have every confidence that they continue and grow from here, our guidance reflects, what we can control, which is share gains and and the annualization of those, uh, prior technology, roll outs, which are are happening. This quarter, third quarter. So, um, from our vantage point, we'll, we'll guide to what we control. We have continued share gains at hand, and we feel great about that. And so, that's what you see in our forecast, with regards to, to vascade and the competition. It is a competitive market. We clearly woke up. Um, both of the direct competitors. We, we faced their
But when we look at the trial data coming off of excel, when we look at, you know, the actual head-to-head in accounts, we are very confident that we can regain share. Um, we have green Chute examples of that as we speak and we um, you know, we think that, you know, we go from strength to strength there, you'll know and you'll see our progress in the upcoming results. It'll be first and foremost with vascade and electrophysiology. Um, Savvy wire is an important, contributor much smaller, but Savvy wire will be, you know, is is the the second priority for that team and we expect continued double digit.
Growth, uh, Xoom. And then, you know, when uh I spoke a minute ago about Perky Seal Elite coming in from Vivasure, that'll be a third priority when we get into FY 27. So, um, the guidance there is more modest. We felt like the right path was just to be prudent, and so, you know, we've narrowed and lowered that range. We don't expect a meaningful contribution this year, but the green shoots we are observing tell us that, again, right team, right actions being done in the right way to reestablish growth in that category going forward.
Okay, thanks for the questions.
Thank you.
Our next question comes from the line of Travis Steed of BFA Securities. Your line is now open,
Thanks. This is na on for Chavez. I wanted to ask on Best Day understands the competitive. Discounting environment and lacking the Japan launched.
Um, do you think the sales force changes, really get you back to Market above market growth? And when should we expect the Japan label expansion? How significant would that be? Thank you.
Yep. Um, we absolutely have confidence that the changes we've made will return us to, you know, above market growth rates and Beyond. And so, um, it's a really good product clinically, you know, economically differentiated in in the right hands. Um, there's a lot of upside potential, particularly with MVP and MVP excel in electrophysiology with regards to Japan. Yeah, historically Japan, you know, this fiscal year was an important growth contributor for us.
The launch of PFA changes that Dynamics. But PFA looks meaningfully different in Japan as you would hear from some of the, the folks behind that, right? It's um, it's a much, um, more modest uptake, uh, in part because I think the Japanese Market, you know, prioritizes safety first. So we see a slower adoption curve. And then the mix within that adoption is much more, um, evenly split between the lead players, which is important for us because they've accepted MVP Excel into the market and we have reimbursement on the base label. And that's, that's important because we're now indicated for so many more of those procedures. In fact, all all. But 1 modality at this point, that gives us confidence that the, you know, the second part of this year and Beyond Japan becomes an important contributor. They've also agreed to accept the US data as part of our submission for regulatory approval and release for the larger um access site uh indic.
Applications. So, there's more to be done. I don't want to call the timing on that because we don't control it, but, uh, but as we get both the, uh, the approval for the expanded label and that reimbursement, which has been very favorable for, for MVP, and MVP Excel and their base indications. Uh, we have a lot of confidence, particularly in the distributor, we're using there. There'd be some movement quarter to quarter order, timing, Etc. But, uh, Japan will be a source of growth for us going forward.
Great. Thank you.
Thank you.
City, your line is open.
Hey, good morning. This is Anthony on for Troan. Thanks for taking the questions. Could you maybe, um, characterize a bit more? I know it's early, but just how the launch of the HN cartridge is going in EMEA and Japan? And if it's tracking similarly to how the U.S. launch was in the first few months.
Yeah, so it'll look different in those markets because the markets you know they're viso. Elastic testing is is really different. We um the the product gives us broad base application. And if what we see in the US holds true, we're just seeing a far higher, uh number, you know, the dollar Revenue per device is meaningfully increased with the heper neutralization cartridge here in the states. We expect that part of of the launch will be very similar, uh, but it is a different starting point. We don't have nearly as many tag 5000s, the predicate product in the market in either of those places. So, um, less opportunity for that conversion, they are smaller markets. But again, uh, we have the ability to lead and our teams are excited. They are those markets reflect, the more of a hybrid approach. Some of them are direct. Um, for instance, the UK Germany, um, in parts of Japan, others are are through Distributors. So they'll be a a lag time as those Distributors come up.
Up to speed on the new product, new new cartridge, and, uh, and get established in the market. But long term, it's an important source of sustainable, double digit growth for that business, and that franchise,
Great. Thank you.
Thank you.
Our next question comes from the line of Andrew Cooper of Raymond James. Your line is now open.
Hey everybody, thanks for the time. Um,
Maybe starting, you know, I think Chris, you said a couple times vascade was economically. Differentiated can you just give a little bit more color on sort of what you mean by that? Versus the competition. And then talk a little bit about how pricing in your approach to the market. There has evolved competitively. Um, have you made, you know, changes to price and do you feel like from here? We're in the right spot. Uh, where it's going to be a little bit, steadier, uh, I I know you said margins would hold in there but, uh, just would love any thoughts on on the top line and, and the price component.
Sure. Thank you Andrew. Yeah the the product you know when you look at the metrics in terms of uh time to ambulation um you know time to discharge uh it is at or above anything else in the marketplace the the real benefit and I think you're seeing this with a heightened Focus even in the you know, post PFA environment is the Improvement in workflow productivity uh as
The center adopts MVP and MVP XL, their ability to really move quickly with these patients, you know, get them, get them closed, get them ambulated and and and almost all cases, send them home, uh, the same night really powerful. Um, the other factor. And and you hear this in the verbatim from the the clinicians repeatedly is it's a pain-free solution suturing works and and suturing has, you know, a reasonable profile but it hurts a lot and and often comes with the use of Narcotics which have their own complications, we eliminate all of that. And so so the speed in the workflow, the absence of of you know, pain medication and and just a much better um patient verbatim helps a lot. As I said earlier.
Um, as this Market increasingly moves to the asc's that difference will be all the more powerful. And so, um, we're we're enthusiastic about it, and, with regards to pricing, you know, as we've dug into this, we look very carefully. Now, with the, the account level detail that we have at, you know, where we're gaining where we're losing, it's almost never about the actual price of the product. We may have needed to be more, um, flexible with regards to, you know, initiation, trials, or or other work, done jointly with facts to get those remaining accounts. Um, converted but you know, in the head-to-heads that we're observing, you know, very modest degree of flexibility.
So um, what you'll see going forward is as we as we, you know, layer on the volume is increasing operating leverage. So we we don't have any worries. The Investments have already been made in Opex and, you know, the price, you know, concessions are modest at best. And so from our Vantage Point, uh, our margin expansion and the growth that we're anticipating. Um, top and bottom line are, are absolutely achievable.
That's great. And then I wanted to ask 1 more um, on on blood management as well, just giving the traction there, not to jump too far ahead of ourselves but, you know, it's clear that that that the hn cartridge has done a lot for driving that growth.
When you look into the future, from an innovation perspective are there other you know, menu items to add that could be similar in magnitude. Um, and if so, can you give any any color on what they might be or or maybe when we could think about more of that, menu expansion to continue driving penetration with tag?
Yeah, Andrew, we we absolutely see additional opportunity for the growth of viso. Elastic testing we, we target, for example, in the US, you know, a t700, um, nearly half of them, have have not adopted the so elastic testing, we have 70 share of the market. Obviously we we intend to retain and grow that, but our biggest opportunity is is taking, you know viso, elastic testing to the other sector of the market. It doesn't have. It heft neutralization helps do that because it gives you a broader spectrum of testing. Uh, but we
Also have additional indications that we are pursuing in additional applications of the product that, uh, we'll talk about more probably in the spring. When we do our next investor day, we'll, we'll pull back the veil, a bit and and talk more about the really exciting, um, portfolio pipeline that we've got going behind tag.
Okay, I'll leave it there. Thank you.
Our next question comes from the line of Michael piski of bington research. Your line is now open.
Hey, good morning. Um
So Chris, I I and I, I will admit, I missed it part. There's a ton of companies reporting this morning and I I missed a part of your prepared remarks. So, I'm just curious, I'm that that's their closure. If you're looking at over at the last 12, 13, 14 weeks since, uh,
You know, we last talked on a conference call and uh, you know, you would you'd put in all these initiatives to try to, sort of turn the business and I'm sure you're looking at this uh, if not day by day, certainly week by week. I mean are you? I I and I I certainly heard the, the green shoots commentary but you know, are you seeing
Progress, you know, week by week, even even through, you know, the end of the quarter into where we are now. Like, are you seeing enough evidence to say? Yeah, we've, we've bottomed. We've turned this. It's, it's, it's, it's not an overnight, uh, uh, back to, uh, where we were. But we've, we've turned this or, or at least now, we're trading punches as opposed to just taking punches like where where what are you seeing and where are you sort of in in you know if you're you know calling as a sort of a comeback story hopefully uh you know where are you in that? Thanks.
Yeah, thanks Mike. I appreciate the question and uh yeah and I appreciate the interest on this. We are absolutely anticipating a comeback story right? Um,
And I think this 1's going to be exciting and interesting to watch as it develops. We are confident that the actions that we have taken year to date uh have stabilized this performance. And so we we don't expect any further uh deterioration and performance.
we see green shoots with new account openings, we see green shoots with
Greater utilization, we see green shoots with competitive win backs or, or just, you know, healthy head-to-head that we've come out on top on. So, um, we do expect meaningful growth going forward. However,
Okay. Okay, all right. Great. And just a quick 1 for James James as as as you obviously you guys have been aggressive here recently with Sheri purchases you just sort of think I guess longer term not looking for specific guidance for next year or longer term, but just generally speaking. I mean, would you expect? Uh, the share count to sort of Romaine sub 50 million over the next uh, over the next few years. Like are you guys going to like continue to be pretty active in Cherry purchase as you think about? You know, Capital, allocation Beyond, uh, fiscal 26. Thanks.
Yeah. Uh, thank thanks. Mike. Um
So there's uh, there's roughly, you know, 47 million is, uh, shares outstanding now. So, um, I think a lot a lot would have to happen to get get above that 50, uh, million Mark. So, you know, the thought process here, uh, is that, you know, uh, you know, certainly, uh, you know, we would, we would aim to, to keep, you know, dilution in checks, uh, for sure. And then, um, you know, I mean, let's face it, you know, 1 of 1 1's of having, a strong balance sheet, um, you know, is that we do have, you know, some optionality on on, uh, on Capital deployment so that yes, that includes, uh, you know, buying back shares. Also debt, paid down and, and, and so forth, but uh, yeah, for the foreseeable future, you know, lower than 50. Uh, pretty good bet.
Yeah, Mike, it's Chris, if I could just pile on there, um, you know, from a capital allocation perspective exactly as James, just highlight it. Um, we're going to focus on on, paying down our debt, being opportunistic with the share BuyBacks. We'll make targeted organic Investments as we have, um, to advance new new technology into the market, but again, we we feel we've fully resourced from an Opex perspective. You see that you see that in our our our leverage uh and obviously you see that in our our uh robust cash flow and a really healthy, uh, free cash flows and net income conversion ratio. Um, but we're focused on what we have. We're focused on making the most of the portfolio. As I've said repeatedly, we'll do vevor when the final set of Milestones are hit and we're ready to go there beyond that. Um,
M&a's off the table, until we have IBT exactly where we need to to go.
All right, very good. Thank you.
Thank you.
I am showing no further questions at this time.
Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect