Haemonetics Corporation (HAE) Q4 2025 Earnings: Margin Expansion Fuels Long-Term Growth

Haemonetics Corporation (NYSE: HAE) delivered a robust fourth-quarter performance, underscoring its transition to a higher-margin, growth-oriented business model. The Q4 2025 earnings call, held on May 8, 2025, revealed strong financial results, strategic portfolio shifts, and ambitious guidance for FY2026. Let’s dissect the key takeaways and assess their implications for investors.

Financial Highlights: Margin Strength and Segment Performance

Haemonetics reported $331 million in Q4 revenue, exceeding expectations, while full-year revenue reached $1.4 billion—a 4% reported increase. The star performers were the Hospital and Interventional Technologies segments, which grew 12% and 21% reported, respectively, driven by advanced products like the TEG-6S hemostasis system and vascular closure devices (e.g., Bascade MVP). These segments now account for ~85% of revenue, signaling a successful pivot toward high-margin areas.

The adjusted gross margin expanded to 60.2% in Q4, a staggering 620 basis-point improvement year-over-year, fueled by volume growth in hospital products and cost discipline. This margin strength translated into adjusted EPS of $1.24, up 39% year-over-year, and a full-year EPS of $4.57, a 15% increase.

Strategic Shifts and Buyback Bonanza

The company executed a $150 million share repurchase program, retiring ~2.4 million shares, and announced a new $500 million buyback authorization—a clear vote of confidence in its long-term prospects. Management emphasized leveraging free cash flow ($145 million in Q4) to return capital to shareholders while investing in high-growth segments.

A critical strategic move was the divestiture of the whole blood business (completed in January 2025), eliminating lower-margin operations and redirecting resources to hospital and plasma technologies. This decision, paired with tariff mitigation strategies (e.g., 70% of revenue now USMCA-compliant), positions Haemonetics to navigate macroeconomic headwinds.

Segment Breakdown: Winners and Challenges

• Hospital Segment:
• Blood Management: U.S. revenue grew 20%, driven by TEG-6S adoption and new account openings.

• Interventional Technologies: Vascular closure revenue surged 28% in Q4, with the Bascade MVP gaining traction in electrophysiology (EP) markets.

• Plasma Segment:

• Revenue declined 9% in Q4 due to the CSL transition, but organic growth (excluding CSL) hit 11%, reflecting U.S. share gains and technology-driven efficiency.

• Blood Center Segment:

• Revenue fell 22% in Q4 due to the whole blood divestiture, but apheresis growth (2% organic) and a new Japanese Red Cross contract highlight resilience in core areas.

FY2026 Guidance: Navigating Headwinds with Confidence

Despite near-term headwinds—such as the $153 million revenue drag from divestitures and the CSL transition—management projects:
- Organic revenue growth of 6-9% (excluding CSL), driven by hospital and plasma segments.
- Adjusted operating margins of 26-27%, up 200-300 basis points from FY2025.
- Free cash flow of $160-$200 million, targeting a >70% conversion ratio.

The $4.70-$5.00 EPS guidance reflects disciplined capital allocation and operational efficiency, even as tariffs and interest rate changes pose minor headwinds.

Risks and Mitigations

• Tariffs: Management estimates a $0.20 annual EPS drag, but supply chain adjustments and USMCA compliance reduce exposure.
• Competitive Pressures: Growth in vascular closure and hemostasis faces competition, but Haemonetics’ innovations (e.g., sensor-guided technologies) aim to maintain leadership.
• Plasma Demand: Long-term demand for immunoglobulin therapies is strong (mid-high single-digit growth), but near-term U.S. collection declines may persist.

Conclusion: A Buy for Patient Growth Investors

Haemonetics’ Q4 results and FY2026 guidance paint a compelling picture of a company transitioning from cyclical to structural growth. Key positives include:
- Margin Expansion: Gross and operating margins are set to hit multi-year highs, driven by high-margin hospital products.
- Strategic Focus: Divesting non-core assets and capitalizing on secular trends in blood management and vascular closure position HAE for durable growth.
- Shareholder Returns: The $500 million buyback and robust free cash flow (projected $160-$200 million in FY2026) highlight management’s commitment to value creation.

While risks like tariffs and plasma market volatility linger, Haemonetics’ execution to date—evidenced by 39% EPS growth in Q4 and a 60.2% gross margin—suggests it can navigate these challenges. With a stock price up 3.7% to $66.60 post-earnings and analyst price targets as high as $120, the stock appears undervalued relative to its long-term potential.

For investors seeking exposure to a medtech leader with low double-digit revenue CAGR targets and mid-20s EPS growth, Haemonetics remains a compelling buy. The path to its $600-700 million cumulative free cash flow goal through 2026 is clear, and the execution of its long-range plan could make HAE a standout performer in the coming years.