Hologic at Morgan Stanley Conference: Navigating Growth and Challenges

On Tuesday, 09 September 2025, Hologic Inc. (NASDAQ:HOLX) participated in the Morgan Stanley 23rd Annual Global Healthcare Conference. CEO Steve MacMillan outlined a strategic overview, highlighting both the resilience and challenges faced by the company. While the breast health business is poised for a turnaround, external factors like tariffs continue to pose challenges. Hologic remains committed to growth through acquisitions and innovation.

Key Takeaways

• Hologic expects to achieve 30% operating margins this year, despite tariff-related challenges.
• The Molecular Diagnostics business, driven by the Panther platform, remains a key growth engine.
• The Envision mammography platform is set for launch next year, promising better imaging and patient experience.
• Mid-single-digit sales growth is projected for the next fiscal year.
• The international market presents significant growth opportunities for mammography.

Financial Results

Hologic is on track to close the year with approximately 30% operating margins. Despite the pressures from tariffs, the company anticipates mid-single-digit sales growth next year, supported by its diagnostics, breast health, and surgical divisions. A notable $20 million revenue contribution from Endomag was recorded in Q3, underscoring its role as a growth driver.

Operational Updates

Molecular Diagnostics:

• Panther platform utilization is increasing, with expansion plans including the Fusion add-on.
• New assays are in development, focusing on gastrointestinal panels and healthcare-associated infections (HAIs).

Breast Health:

• Organizational changes aim to improve sales execution.
• The upcoming Envision mammography platform will offer enhanced imaging and comfort.
• Efforts continue to convert 2D gantries to 3D systems in the U.S.

Surgical:

• Integration of Gynesonics is progressing well.
• There is a focus on raising awareness for minimally invasive fibroid treatments.

Acquisitions:

• Endomag is performing robustly, contributing positively to growth and margins.
• Gynesonics expands options across the fibroid treatment continuum.

Future Outlook

Hologic is optimistic about returning to stronger growth. Despite tariffs potentially impacting gross margins, the company expects to maintain a low 30% operating margin. The diagnostics segment is anticipated to continue its upward trajectory, while the breast health business is set to shift from a decline to positive growth. The surgical division is also expected to see accelerated growth.

Q&A Highlights

• On self-collection testing, Hologic remains skeptical, citing insufficient scientific backing compared to existing methods.
• Internationally, the mammography market is underdeveloped, presenting a substantial growth opportunity. Hologic holds an 85% market share in the U.S.
• The Envision mammography platform’s tilt feature is expected to enhance both patient and technician experiences.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Okay. Thank you, everyone. I think we can get started. Callum Tishmarsh here from the Life Sciences team at Morgan Stanley. Really pleased today to be joined by the team from Hologic. We have Steve MacMillan, Chair, President, and CEO, and we have Michael Watts, Corporate Vice President and Investor Relations. Before we get started, I’ve been told by the guy at the back that I have to read out these disclosures or they get angry at me. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/research-disclosures. Steve, Mike, thanks so much for being here. Maybe just to set the stage, can you talk about how this fiscal year has played out for you so far versus your initial expectations? What are you most proud of? Maybe talk us through some of the challenges you’ve encountered thus far.

Steve MacMillan, Chair, President, and CEO, Hologic: Sure. It’s been certainly a more unusual year. I think if I think back to a year ago at this conference, I was signaling that the first half of the year, breast health was going to be a little softer, and we sensed that. Now it’s turned out to be, you know, it went even a little deeper. I think we’re seeing that now. As we also think about our fiscal year, which starts October 1, none of us anticipated when we put together a budget for this year quite what would happen in terms of the U.S. election, the geopolitical tariffs, you know, PEPFAR, all the international aid. We sort of had everything come to a head in our first, second quarters of our fiscal year between external events and, frankly, our own missed execution.

What I feel great about today is I feel so much better about the trajectory of our breast health business in the company today than necessarily a year ago. I think we’ve dealt with all the challenges. Playing it out at the highest level, our breast health business, as we said earlier in the year, the second quarter was going to be kind of a stabilization quarter, third quarter would show some progress, and by our fourth fiscal quarter, which I know there were still a lot of questions about, we actually saw ourselves returning to growth, which is the current quarter, and feel really, really good about all the changes we put in place in our breast health business and that that is coming back. Obviously, as that gets back to growth, the implications for the whole company getting back to more traditional levels of growth feel good about.

We also absorbed some body blows. Our HIV business in Africa had been becoming a big driver of growth, and all of a sudden, with the all-international aid cuts and everything else, that took a hit, tariffs, all that stuff. I’m really proud of the resilience of our organization, the adaptability of our organization, and where we stand as we start to exit fiscal 2025 and enter 2026, that all of the business is in very good shape and strengthening. I probably leave people with one thought I always say to our teams that sometimes the numbers are better than the business, than the underlying foundation. During times of inflection, the foundation gets better before the numbers become obvious. I think that’s exactly that situation that we’re in right now.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Great. Let’s dig into that. Let’s start with MolecularDx. It continues to do well again, minus those HIV testing headwinds you called out. I wanted to zoom out and ask about the growth sustainability for this business. Maybe just talk about your portfolio, where you’re seeing the most strength today, and what gives you confidence looking forward.

Steve MacMillan, Chair, President, and CEO, Hologic: Sure. I think we feel great about our diagnostics business. It’s been just a rock-solid engine of growth. It clearly played a major role as well in the world during the pandemic. That gave us some opportunities for huge Panther placements, everything else. Now we’re back to the core growth areas of our diagnostics business. It’s really built off of the foundation of our Panther platform and then the assays that we have from there. The assays, particularly in the women’s health business, where we’ve had a long-time strong stable, and then we’ve added new growth drivers like BVCV that have become big additional growth drivers to it and a great complement to our cytology business as well. Because we placed so many Panthers during COVID, now the real magic that we have is we’ve got this great installed footprint.

We’re expanding our Panther capacity with what we call the Fusion add-on. That’s our sidecar that enables PCR capabilities to be run alongside our TMA capabilities in our Panther. What that also does is it dramatically expands the available menu per Panther. As we’ve been developing more assays and then expanding the capability of our Panthers to do that, we’ve got five years of runway really just off of the established base of Panthers adding Fusions and the existing menu. We’ve got new menu coming as well because now that we’re into PCR technology, it opens up faster development of things like we’ve got GI panels and HAIs and other things coming here that we’ve spoken about publicly that they’ll be coming into the pipeline here in the coming years also. I think we just feel great about that business. There’s the biothermostics piece as well.

Great tuck-in acquisition we did a few years ago. We’ve roughly tripled the size of that business over a four to five-year window, feeling really good about that ability as well. Really love where the diagnostics business is going right now.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Mike, maybe one for you, but in the past, you’ve shared stats on how many customers are using multiple assays. Any updates you can give us here?

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. I think it’s easy to get a little bit too tied up maybe in those kinds of metrics. I think what really matters in our molecular business is revenue, right? Revenue has been growing in that kind of high single-digit range at some of the headwinds from HIV that we talked about. I will tell you, the average pull-through on Panther continues to grow. It’s never been higher than it has been in recent quarters. That’s a good sign. The average customer probably only uses three or four assays versus a menu of 23, I think, in the United States. Still a lot of headroom to go both in terms of utilization and new assays.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Zooming out here, the pandemic, we obviously saw a decentralization of some of these testing volumes. Where do you think we stand today in that shift? Where do you think we’ll be five years from now?

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. I think in the long run, I think we still see the broader diagnostics business as being a growth business as they do become more decentralized. We think we’ve been very well positioned, certainly in both the high-throughput labs, as well as the decentralization out to, you know, smaller hospitals, smaller labs, everything else like that. The additional step will be, you know, obviously towards the point of care and more acute care, that we’re not as big a player in. I think we see that as continuing to grow the market and bring more folks in. I think we feel really well positioned that, frankly, having the size footprint of our Panther, it was one of the big reasons so many international countries, especially a lot of the European countries, adopted Panther during COVID, because of its small footprint and high throughput.

They’ve been adopting our menu subsequent to, you know, the COVID business rolling off. I think we feel really good about where we’re going there.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: You called out BVCV earlier. It’s been one of the fastest growing assays. When you have high growth, you see competitors want to jump in and also get involved there. How are you feeling about the competitive mode and just the broader space today there?

Steve MacMillan, Chair, President, and CEO, Hologic: We feel really good about particularly our BVCV business in the competitive mode, particularly in the United States, from a standpoint of it’s run out of the same collection device that we run our other tests and everything else. It’s not, you know, it may look as a standalone assay, but it’s a composite of a business that we have very strong relationships with all of the key customers. Outside the United States, we actually see competition as probably an opportunity that will help grow the market because we’re able, because of our presence in the United States, we’re really able to help create markets. If you think about BVCV, we’ve really helped drive that through our physician salesforce, through guidelines, everything else.

Outside the United States, we’re still such a small player in areas like that that having a competitor bringing attention to it will probably be beneficial to help grow the market together with us.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Beyond BVCV, anything that excites you assay-wise that you’re expanding into longer term that you can flag today?

Steve MacMillan, Chair, President, and CEO, Hologic: I think it’ll be more kind of some of the panels. There’s probably no one product quite on the horizon of the magnitude of BVCV. It’s probably the rest are going to be much more like we traditionally have of, you know, collections of assays that accumulated over time. It’ll be bigger. I’m sure somewhere in the next few years, maybe we discover another thing like a BVCV, but we don’t have any, you know, exactly in the horizon like that right now.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Understood. Cytology, I think the business as a whole has been flatish over the last 10 years, factoring in U.S. and OUS. What kind of impact could we expect from GeneX and maybe just touch on how the whole digital shift and, you know, AI movement is playing into your DX business?

Steve MacMillan, Chair, President, and CEO, Hologic: Sure. I think the sheer fact that cytology has been flat over 10 years relative to, I think, anybody’s expectations a decade ago when intervals were expanded, USPST, everything, that’s always been one that people had forecasted going away. I think we’ve done a wonderful job. Frankly, it’s because the science is still there. The co-testing is still very, very important. The biggest barrier, and I remember one of the very first times I went and visited Quest when I came into this role over a decade ago, was really talking about the workflow challenges in cytology. When you think about the pap test, up until, still today, most pap tests in the world are still read by a cytologist looking through a microscope at a glass slide. The traditional pap smear, that’s how they’re being done. We always looked at it and said, this is image recognition.

Back in the day, machine learning, AI stuff. We said, wait a minute, if we digitize these slides and can develop a digital reader to help, that’s going to be a game changer from a workflow standpoint. Because of both the technical challenges to do that, the regulatory barriers, the workflow issues, all that stuff, it’s taken us a while. The magic now is we’re showing up with a system that is dramatically preferred by our customers. I think it is watching the biggest labs be incredibly excited about what this means. It also opens up the cytology business more outside the U.S., where frankly, there’s not a lot of cytologists. One of the barriers to adoption traditionally for especially pap outside the U.S. has also been the lack of cytologists. We see this as being really helping to unleash.

Because it’s very integrated also with our collection on our women’s health assays, there’s kind of a magic there between them. Very excited by what it means. We’re really in the early innings of that rollout. Now, is it going to dramatically grow the cytology business? It’s probably not, but incrementally, continues to keep it as a strong business and will open up a few new opportunities.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Got it. Co-testing is still supported with a Grade A rating, with some guideline language supporting self-collection as well. Again, just frame us how you feel about that environment at this point in time.

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. The self-collection piece, there’s been, I view this as much more hype than likely reality. This is, you know, with one quick caveat. First off, we never take anything lightly. I will also say that I was in the chair at all of these conferences. There was a woman named Elizabeth Holmes that was celebrated at every one of these things and kept saying, "I was told we had our head in the sand and our business was going to go away." We said, "Just keep looking at the science." Easier to say today, but it was very hard to endure that at the time when everybody thought we were nuts, and our business was going to go away.

The way we look at the self-collect, back to a lot of headlines, first and foremost, a lot of the self-collect science and data is not as strong around the actual specificity and sensitivities. The other realities are some of the self-collects, everybody immediately when they hear self-collect, they assume home collect. A lot of the self-collects and the initial approvals are self-collect in the doctor’s office, so there’s a distinction there. There’s also the ability to cervical swab versus the quality of a swab that a woman would get versus the quality of a swab that a physician is going to get, and also even the desire to do these at home. There’s the Netherlands that put in a program trying to really move the whole country to home collect, and they’re seeing dramatic unreturn rates. They’re actually seeing a decline in testing.

There are all of these variables where the headlines can sound interesting. Because it’s so important, that’s why we’re staying very, very close. We believe in the long run, there will be a self or home collect option that probably will drive more incremental because it’s people that are not currently getting tests done. Ultimately, what we also look at is, and I watched this during COVID when every diagnostics company wanted, all these tiny little startups that had billion-dollar valuations and thought they had the next big thing and they were going to replace everything with home testing and all this kind of stuff.

There’s also still an economic piece to the reimbursement rates and the economics of large-scale testing, where it’s much cheaper to still do it in a lot of the big labs versus a lot of the home testing options and everything else where the costs and the reimbursements don’t even cover the COGs. As you peel back the layers, we continue to look at all of these options that are on top of all of them. We see ultimately probably being more market additive than replacing.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Understood. Let’s shift over to breast health now. You called out earlier, it’s been a bit softer this year. A lot of moving parts. We have new products, replacement cycle dynamics, competition. Just give us, you know, the state of the union for breast health.

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. I think, where we feel about our breast health business, we made a series of organizational changes, kind of the end of the calendar year into kind of the December, January timeframe. We had done such a job of holding on to our sales team during first COVID where they couldn’t access, and then we had the chip shortage, where we were just trying to kind of go hand-to-mouth and embrace our customers and put our arms around them. We sort of stopped learning how to, we forgot how to sell. Once we got through the chip shortage and started to get back, we weren’t quite as close as we thought we were. We brought in a new sales leader with a very different fire in the belly and performance orientation.

I will tell you, I’ve been amazed at how quickly that leader has gotten that organization back on track. On top of it all, he, it’s a guy that joined us from another company. He came in and he basically bifurcated the salesforce from capital, or into capital and disposables instead of having them together. I was a little nervous that a new leader coming in making that kind of a change, you’re going to have a further setback. They’ve hit every number for every month now, every month through this calendar year. They’re clearly back on track. What we’re seeing is the disposable businesses and especially Endomag, that acquisition is looking really good for us. The capital business is back on track. They’re just getting it all back from an execution standpoint, doing very well. We have the Envision launch coming next year at last.

It’s been a little delayed because of the chip shortage, of this and that. We finally have that on the horizon. As I sit here today, feeling dramatically different about that trajectory of our breast health business.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Sounds sticking. Let’s spend some time on Envision. For those perhaps new to the story, talk us through why is it different and why we should be excited about it.

Steve MacMillan, Chair, President, and CEO, Hologic: Sure. I would tell you, we’ve always gotten the question, well, the next thing, you know, the 2D to 3D conversion is huge. We’ve always said, look, the next big innovation won’t be as big as 2D to 3D. I’ve said it’ll be more like an incremental to substantial. I will tell you, having seen the product now in action and talking to some of the early users that have been using it, obviously, just to get early user experience, I’m more excited about what it’s bringing to the market than what I’d previously thought. That is the biggest aspect. Obviously, it’s got better imaging. It’s got faster scan time, all the stuff you would expect of Hologic to stay a step ahead of everybody else. This tilt feature that we have with it is dramatically changing not only the patient experience, but the tech operating experience.

In simple terms, all mammograms historically, a woman has to stand upright. It’s incredibly uncomfortable on multiple fronts, one from having the breast squished, but more importantly, also having to have their shoulders back and putting yourself into a machine. It’s a very uncomfortable experience. We’ve always thought one of the biggest things we can do in terms of image, not just image quality, is make the experience better. People want to make sure they go and have their annual mammograms. By just tilting the arm where the person can lean into the machine, which I thought, this seems like a nice feature, what we’re hearing from the patients who’ve experienced is it just, it’s dramatically more comfortable as the chest wall goes up against the machine.

What we’re also seeing from the techs, the ability to get the placement accurate and get a great image the first time without a whole bunch of fidgeting and everything else is also dramatically better. That’s the piece I hadn’t fully grasped yet. I heard our teams talk about it, but we kind of downplayed it. Yeah, yeah, you know. In the real world, that’s exactly how it’s playing out. The benefit is the mammogram is going much quicker for the patient. We’re getting a better image, better capture. The other part is that in a lot of cases, the realities of these are, as you’ve put a woman into this uncomfortable position, you go back, you press the button, you do the scan, you come back, they look at it.

It’s like, "Ooh, I didn’t quite get a great image." We’re seeing much better image capture, so they’re not even having to do immediate redos either, which improves the throughput and everything. The excitement from the techs who are doing these things is clear. There are all kinds of other features that we’re putting in from an AI standpoint, like prior authorizations, knowing how much we compressed the breast for that patient the previous time, and all the priors. There’s a whole bunch of software that’s making it so much also better for the technologists. Of course, just for the radiologists, it’s a clear, even a clearer image with less tissue and other stuff around it. I think it’s going to be a bigger deal than even what I said.

It’s still not going to be the transformative nature of 2D to 3D, but I think much more in that substantial innovation range.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Given that and given the improvements we’re going to see, you may have customers that potentially delay until the new one comes out. Is that something you’re considering?

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah, a little bit, but I think we’re in pretty good shape right now. Part of what our current team is doing is they’re really focusing on, there’s still several thousand gantries just in the United States that are still 2D, the old ones that, you know, these are the slow folks who have not, you know, moved over, that we can convert into our existing 3D over the coming months until the Envision Mammography Platform really becomes available later next year. I think we now have a good line of sight, and then we’ll be able to take pre-orders and get that off to a good start as well later next year.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: What is the ceiling for the new commercial structure? How efficient could these reps become? You said you’re already seeing quite meaningful benefits thus far.

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. I think we just feel really good that, you know, the team’s in place now. They’re, you know, closer to their customers, closer to really understanding both the capital plans and then for our disposable folks, you know, case coverage, those kinds of things. I feel like that execution, you’re just, you’re going to see that more just in the quarters that come, as the numbers improve. It’ll be a lot because of, you know, really execution and then further market penetration and development next year.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Okay. Exciting. We focused a lot on the U.S., but want to touch on OUS as well. You have an 85% share in 3D in the U.S. Talk to us about the OUS opportunity. Any numbers you can maybe give us around where you stand today and where you potentially want to be in the longer term?

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. We’re still way underdeveloped. I would say two things. The mammography market is still significantly underdeveloped internationally, as are we. If 85% here, we’ll call it a third of the market ballpark. It’s hard to get full data internationally. Big opportunity. The bigger opportunities are, to a large degree, many countries, I mean, the UK really being a shining example on the positive side of having a great screening program. Australia has a great screening program and leveraging 3D. To much of the rest of the world, there still aren’t necessarily great screening programs in place. A lot of times, mammographies are still default if somebody thinks they have something or whatever else. There’s still a lot of 2D in the screening program, and 3D is reserved as a diagnostic opportunity once they think they’ve got something.

I think still there’s, over the next decade, and a lot of it is still about policy and getting further adoptions and guidelines to help create and keep building that market. A long way to go for us still and a lot of runway. What I’m proud of for our international business, we’ve had a leader in place there for about eight years now. He’s done an amazing job with the team that we have, generally delivering accretive growth rates to the whole company. I think we continue to see that as far as the eye can see. Our STRAT plan has the international business continue to grow a little faster. They’ve faced a few more headwinds this year with the PEPFAR stuff and tariffs and retaliations in China and some of those things. The underlying fundamentals for our international business continue to be really strong.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Fantastic. Endomag exceeding expectations thus far. I think $20 million revenue contribution in Q3. Talk to us about the value proposition of this and how we should be thinking about the ramp here across the midterm.

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah. I think, you know, we’re feeling really good about it. It’s a Cambridge, UK-based company with a couple of products, but really helping the surgeon. You know, we can implant a little marker so that the breast surgeon knows exactly where to go in, exactly where a lesion might be. It’s wireless, and there’s some magical technology, very quick to use. What we love is it’s our breast care continuum where we’re finding the cancers and then we’re going in and identifying them and being able to treat them. That magic. It’s a disposable. It’s recurring revenue, you know, real breakthrough product that we’re seeing. I think there was a little confusion, frankly, earlier in the year on the quarters because our first calendar quarter, we were transitioning from a distributor. It was distributor-led in the U.S., and we were taking it direct.

Revenue in that January to March quarter looked like it took a little step back from the previous quarter. It was classic. The distributor kind of had sold a bunch in. We had to deal with that cleanup in the first quarter and our first calendar quarter. The third quarter or second calendar quarter was the first clean quarter we had where we’re now selling it in the U.S. I think that’s starting to be on that trajectory. Between that and the international opportunity, feeling really good that that’s going to be an accretive driver to our growth and our margins going forward.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Ticking with acquisition, but moving on to the surgical side. Gynesonics was completed in JAM this year. How’s the integration progressing so far?

Steve MacMillan, Chair, President, and CEO, Hologic: We’re very pleased with how that integration is going as well. It gives us basically across the fibroid continuum, really gives us the options that we can offer. Any doctor can go the whole gamut from very small fibroids to large fibroids. This is an RF technology for larger fibroids. We’re very excited by it. It’s also off to a really nice start. It allows our reps to really be able to speak to the full continuum and have effectively a menu of options. What’s best for any individual patient? Instead of just force-fitting one product that we might have in our bag, we really have a range of options to offer depending on the size of the fibroid, where the fibroid is embedded. You can go laparoscopically. You can go in through the uterus. We’ve got different ways to go.

Feeling really, really good about where that will go as well.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: What’s market awareness like for these minimally invasive fibroid treatment options?

Steve MacMillan, Chair, President, and CEO, Hologic: It’s great you’re asking that. I would say market awareness in general for a lot of our surgical intervention businesses is still very low. This is one of the areas that I still get incensed about that, you know, women that have heavy menstrual bleeding, quite often it is downplayed by physicians when quite often it is often triggered by fibroids or other things. It’s amazing how many times it’s triggered by fibroids, and how quickly doctors will just say, "Deal with it." Part of what we see are huge opportunities to raise patient awareness and, you know, not necessarily, you know, broad-scale pharmaceutical kind of DTC, but more targeted interventions to raise the awareness as we’re raising the awareness of the physicians that there’s more options out there. Women, it’s, you know, it’s generally documented are going almost seven years longer than having an intervention than they should.

In a lot of cases, too, doctors then go, frankly, all the way to a hysterectomy instead of dealing with taking out fibroids or whatever else. I always look at it, if it’s men, we’re not quick to rip out organs. With women, we take different approaches. This is one that I think we see huge opportunities, both domestically and our surgical business has been growing really strong outside the United States, just our core products of MyoSure and NovaSure, but ultimately, opportunities there for Gynesonics as well.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Yeah. Outside of Gynesonics, how would you say the rest of the portfolio has been performing in the U.S.?

Steve MacMillan, Chair, President, and CEO, Hologic: In the U.S., NovaSure has been in long-term decline. We’ll probably continue to be down a little bit ever since, really, the Affordable Care Act came in and made IUDs an alternative. That’s really become more first line, and NovaSure has taken a slight step back. It’s been kind of hold on. MyoSure continues to be a very nice grower for us. The key is to minimize the declines on NovaSure and keep that closer to flat, and then the gains in MyoSure continue to show through. I think we took our eye off the NovaSure ball a little bit also earlier in the year, got that back together, and Surgical is back on track as well.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Fantastic. Okay. Five minutes left. Let’s hit on some financials. Like on track to finish the year around 30% operating margins. Understandably, a lot of margin headwinds from tariffs. How should we be thinking about potential progression from here? How do you frame up, you know, guide for next year in light of a lot of moving pieces?

Steve MacMillan, Chair, President, and CEO, Hologic: Yes, sure. Moving pieces by the day. Obviously, we will guide officially in November when we report. I think a high level to think about it is, you know, we’re feeling good and we intimated on our last call from a, you know, sales growth standpoint, getting back to better growth. Our margins, you know, are already very healthy. We are absorbing much more tariff impact for next year, that I think we’ll find savings elsewhere. You probably wouldn’t expect a lot of gross margin expansion next year that we would have had without tariffs. The tariffs will probably eat up some of that expansion, but we’re already best in class, you know, in that low 30% operating margin, probably in that range still next year, not needing to take a step back, despite the tariff pieces. I think feeling pretty good about that.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Good. You mentioned the top line, I think, soft guided mid-single digits for next year. Just give us some of the puts and takes around that number.

Steve MacMillan, Chair, President, and CEO, Hologic: I think the biggest piece, diagnostics will continue to be a nice grower. Finally, we’ll get the rest of the COVID revenue kind of behind us. I think our comparisons, we realize for people not close to the story, it’s been so lumpy over the last few years with COVID and then this and the chip shortage and this and that. I kind of look forward to next year being, and really this year, sort of, except for the geopolitical stuff, being a cleaner year. I think you see that breast health moves from a decliner to a positive. That becomes the big positive. Surgical probably accelerates a little bit from where it’s been. I think it sets up for a pretty nice story for us next year.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: The balance sheet obviously remains pretty strong. How are we thinking about capital allocation from here?

Steve MacMillan, Chair, President, and CEO, Hologic: You know, we continue to, frankly, be able to do both acquisitions and buybacks. We continue to prioritize the acquisitions. I think we’ve gotten a lot better over the last few years as you look at the biothermadiagnostics, as you look at Endomag, Gynesonics, these ones, you know, even Boulder, these things delivering far better as our team’s got a lot tighter. I think the more that we can ultimately accelerate that top line growth without taking on, you know, any undue risk, that still is a big focal point while we’re also still able to, you know, offset dilution and, you know, do other buybacks given the strength of the balance sheet.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Fantastic. Two minutes left. I’ll ask this to each of you. What’s something you wish investors asked you more frequently or something that you think we should be paying more attention to?

Steve MacMillan, Chair, President, and CEO, Hologic: I think a couple of things. One, Hologic is an indispensable part of women’s healthcare in the world, right? Whether you look at our breast health business, with mammography screening or diagnostics or surgical, really cool products that have created and built markets and today maintain very high market shares, which leads to very strong cash flow generation and a really, really fortress balance sheet. I think that’s one piece that’s been a constant over the years. In the near term, obviously, some challenges that we’ve talked about in breast health that we needed to kind of reset expectations and execute against the path that we laid out at the time. I think, you know, two quarters in, we’ve done that, and the business has responded. The stock has begun to respond.

I think to the extent that we continue to execute on those goals, the stock will continue to work its way up. As we talked about, we feel good about being able to do that.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Great.

Steve MacMillan, Chair, President, and CEO, Hologic: Yeah, it’s funny. You know, we got so much credit during COVID for helping to save the world and coming to things. The interesting part I find that’s been true almost through, I think, the entire existence that I’ve been here, we haven’t been able to shake is because of our three different businesses, I think we tend to oftentimes trade down to the problem du jour. Whether it’s USPSTF guidelines or, you know, the breast health business. If people just look at the performance over time of the total, instead of chasing a headline where I think, you know, some people get the benefit of the doubt, we sort of, I think, a lot of times are the opposite. You know, we continue to want to prove that differently. I think ultimately, it’s getting all the businesses performing.

Even when they’re performing, sometimes you have those goofy headlines out there. I think we can keep making a difference in the world and keep growing the business and things take care of themselves over time.

Callum Tishmarsh, Life Sciences Team, Morgan Stanley: Perfect. I think that takes us to time. Steve, Mike, thank you so much.

Steve MacMillan, Chair, President, and CEO, Hologic: Thank you, Callum. Thanks, Callum. Thanks for having us.

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