Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Haemonetics Corp (NYSE:HAE) reported solid earnings growth in Q4 2025, with robust margin expansion and strong cash flow. The company achieved a total revenue of $1.4 billion, reflecting 4% growth on a reported basis and 8% organic growth excluding CSL and whole blood divestiture. Haemonetics Corp (NYSE:HAE) executed a $150 million share buyback, reflecting strong conviction in its long-term growth trajectory. The hospital business showed significant growth, with hospital revenue increasing by 12% in the quarter and 24% in fiscal 2025. The company expects continued double-digit revenue growth in vascular closure driven by growth in procedures, share gains, and improved utilization.

Negative Points

Plasma revenue declined 9% in the quarter and 6% in fiscal 2025 due to the planned CSL transition. Blood Center revenue declined 22% in the quarter and 8% in fiscal 2025 on a reported basis due to the whole blood divestiture. The company expects plasma revenue to decline 7 to 10% on a reported basis in fiscal 2026. Haemonetics Corp (NYSE:HAE) faces ongoing impacts from pulse field ablation on its esophageal protection business. The company anticipates a decline in blood center revenue by 23 to 26% on a reported basis in fiscal 2026 due to portfolio streamlining.

Q & A Highlights

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Q: Hi, thanks for taking the question and congrats on a good quarter. I wanted to start with plasma. You had a nice beat in the quarter and the guide for fiscal '26 came in at 11 to 14%, excluding CSL, which was ahead of expectations. Can you talk more about what you're seeing in the collections environment and what's assumed in guidance between pricing, share gains, and volumes? A: Morning, Rohan. It's Chris. We remain very bullish on plasma, near and longer term. The underlying demand for IG remains robust. The 11 to 14% growth is almost entirely share gains and a premium associated with our upgraded technology adoption. We don't see meaningful growth in the first half of fiscal '26 in terms of collection volume, but we believe that will change in the second half of the year.

Q: Can you elaborate more on the EPS guidance of $4.70 to $5 in fiscal '26, which includes a 26 to 27% operating margin? What are the drivers here from a gross margin and OpEx standpoint? A: Hi, Rohan, it's James Dereka. We see continued improvement in gross margin mix driving the operating margin of 26 to 27%. As we rationalize the portfolio, gross margins have continued to improve. Regarding tariffs, we've built in an annualized impact of $0.20 at the midpoint of our range, and we have the ability to continue mitigating tariffs as we move forward.

Story Continues

Q: Hi, thanks for taking the questions. Wanted to drill down more on the vascular closure portfolio. You reported nice growth from newer products like MVP and XL. What are you seeing in terms of share gains and new account penetration with these products? A: Thanks, Marie, it's Chris. We published supplemental tables to clarify the opportunity set and total addressable market. For FY '26, we're looking at high single-digit growth in the US. We're impressed by the team's results with MVP and MVP XL, but we need to address the drag from coronary and peripheral. We've targeted our US field force to focus on vascular closure and structural heart, which is producing interesting new growth opportunities.

Q: Can you talk about any changes to strategy following the management change in the hospital segment? Also, can you give an idea of the margin expansion seen in this segment? A: Thanks, Marie. The hospital segment is a big contributor to margin expansion. We're playing and winning in collections, which is an important source of baseline growth. The gross margin of the hospital business is in excess of 70%, with operating income in the high 20s. Roy Galvin brings a skill set to help franchise presidents take their business to the next level, and we're excited about the opportunity in front of us.

Q: Just looking at where you guided for '26 from an organic perspective, does that imply you'll be at the lower end of the mid to high single-digit growth target post-fiscal '26? A: Mike, we'll issue a new LRP later this year. We've grown this business 10% organically over the four-year period of this LRP. We expect to replicate that performance going forward, knowing we're doing it off a much larger and more profitable base. We play in winning markets with leading products, and we're targeting top quartile medtech categories that support high single-digit or better growth rates.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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