Hologic Q3 2025 slides: modest growth amid mixed segment performance

Introduction & Market Context

Hologic, Inc. (NASDAQ:HOLX) presented its Q3 2025 corporate results on July 30, 2025, highlighting modest overall growth amid mixed performance across its business segments. The women’s health-focused medical technology company reported total revenue of $1,023.8 million, representing a 1.2% increase year-over-year, or 0.4% growth on a constant currency basis.

The company’s stock closed at $66.04 on the day of the presentation, down 1.57% from the previous close. Hologic shares have been trading well below their 52-week high of $84.67, reflecting ongoing market challenges despite the company’s solid financial foundation.

Quarterly Performance Highlights

Hologic reported Q3 2025 non-GAAP earnings per share of $1.08, representing a 1.9% increase compared to the same period last year. While organic revenue excluding COVID-related products declined by 1.7% in constant currency, the company maintained strong profitability with a non-GAAP operating margin of 30.1%.

As shown in the following comprehensive financial overview:

The company’s gross margin experienced slight compression, decreasing 80 basis points year-over-year to 60.3% on a non-GAAP basis. Operating expenses increased by 2.2%, contributing to the 110 basis point decline in operating margin compared to Q3 2024.

Segment Analysis

Hologic’s performance varied significantly across its business segments in Q3 2025, with strength in Surgical and Skeletal Health offsetting weakness in Breast Health:

The Diagnostics segment, which represents the largest portion of Hologic’s business, delivered modest growth of 0.9%. Notably, organic Diagnostics revenue excluding COVID-related products grew by 2.9%, demonstrating the underlying strength of this business despite the continued decline in COVID testing.

The Breast Health segment faced challenges, with revenue declining 5.8% overall and 10.8% on an organic basis. This contrasts with the GYN Surgical segment, which grew 6.3%, and the Skeletal Health segment, which showed remarkable growth of 62.1%.

Long-Term Growth Trajectory

Despite quarterly fluctuations, Hologic emphasized its consistent long-term growth trajectory. The company has delivered a 4.8% compound annual growth rate (CAGR) in total sales from 2014 to 2024, with all three major segments contributing to this expansion:

Even more impressive has been Hologic’s non-GAAP EPS growth, which has outpaced revenue growth with a 10.8% CAGR over the same ten-year period:

This sustained performance has been driven by Hologic’s market-leading platforms. The Panther molecular diagnostic system has seen its installed base grow more than sixfold since 2014, now exceeding 3,300 placements globally:

Similarly, the company’s Breast Health 3D gantry installations have grown from approximately 2,200 in 2014 to around 15,000 in 2024, representing a sevenfold increase:

Financial Position & Capital Allocation

Hologic maintains what it describes as a "fortress balance sheet," providing significant strategic flexibility. The company has deployed over $5.7 billion since FY2020, allocating $3.6 billion to share repurchases and $2.1 billion to acquisitions.

As illustrated in the following chart, Hologic has dramatically improved its financial position over the past decade, reducing net debt from $3.5 billion in 2014 to just $0.8 billion in Q3 2025, while decreasing its leverage ratio from 4.0x to 0.6x:

The company’s cash generation capabilities remain exceptional, with a free cash flow conversion rate of 96%, significantly outperforming the industry average of 80%. Adjusted free cash flow has grown at a 14% CAGR from 2019 to 2024:

Forward Guidance

Looking ahead, Hologic provided guidance for both Q4 and the full fiscal year 2025:

For the full year, the company expects revenue between $4,081 million and $4,091 million, representing growth of 1.3% to 1.5%. Non-GAAP diluted EPS is projected to be between $4.23 and $4.26, an increase of 3.7% to 4.4% compared to the previous year.

For Q4 2025, Hologic anticipates revenue of $1,030 million to $1,040 million, representing growth of 4.3% to 5.3%, with non-GAAP diluted EPS between $1.09 and $1.12, an increase of 7.9% to 10.9% year-over-year.

Strategic Initiatives

Hologic continues to emphasize its unique corporate culture as a key competitive advantage. The company boasts employee engagement in the 98th percentile compared to similar companies, with 99% of employees feeling their job is important:

The company is also focused on expanding internationally, with international organic revenue growing at a 6.5% CAGR from 2014 to 2024. Additionally, Hologic continues to invest in organic innovation and strategic acquisitions to drive future growth, particularly in areas like digital cytology and fluid management.

Hologic’s long-term financial goal remains consistent: to deliver double-digit non-GAAP EPS growth through a combination of mid-single-digit revenue growth, modest operating margin expansion, regular acquisitions, and meaningful share repurchases.

Full presentation:

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