Hologic 2025 Q2 Earnings Misses Targets with Net Income Down 110.2%

Hologic (HOLX) reported its fiscal 2025 Q2 earnings on May 01st, 2025. The company missed expectations, reporting a net loss of $17.4 million, a stark contrast to the previous year's net income of $169.9 million. Despite a slight revenue beat, the results were marred by impairment charges that pushed GAAP diluted EPS to a loss of $0.08. Hologic maintained its annual revenue guidance but lowered EPS guidance due to tariffs and geopolitical challenges.

Revenue

Hologic's total revenue for Q2 2025 was $1.01 billion, reflecting a 1.2% decrease from Q2 2024. Diagnostics revenue rose to $453.6 million, driven by molecular diagnostics sales. Conversely, Breast Health revenue declined by 7.4% to $356.2 million, mainly due to weaker mammography equipment sales. GYN Surgical revenue increased by 4.2% to $162.5 million, bolstered by the acquisition of Gynesonics.

Earnings/Net Income

Hologic swung to a loss of $0.08 per share in 2025 Q2 from a profit of $0.72 per share in 2024 Q2. The net loss of $17.4 million marks a 110.2% deterioration from the net income of $169.9 million achieved in the previous year. The EPS reflects poor financial performance due to impairment charges.

Price Action

The stock price of Hologic has edged down 0.45% during the latest trading day, has edged down 1.73% during the most recent full trading week, and has dropped 7.27% month-to-date.

Post Earnings Price Action Review

Despite revenue slightly exceeding guidance and strong non-GAAP EPS figures, Hologic's stock price has seen mixed reactions due to negative net income and impairment charges impacting GAAP EPS. The revenue beat signals robust business performance, which might have driven positive sentiment initially. However, the negative net income from non-cash impairment charges likely overshadowed other positive metrics, leading to investor caution. While the non-GAAP EPS met the high end of the guidance range, indicating profitability and financial health, the stock's movement reflects the market's weighted consideration of both favorable and unfavorable aspects of the earnings report.

CEO Commentary

Steve MacMillan, Chairman, President & CEO, expressed optimism about Hologic's performance, stating that the company met its financial commitments and made progress in reinvigorating growth despite challenging macroeconomic conditions. He highlighted total revenue of $1.005 billion, slightly down but near the upper end of guidance, driven by growth in the Diagnostics business and recovering supply constraints in the skeletal franchise. MacMillan emphasized the importance of their diverse portfolio and strong customer relationships, noting that 21% of total revenue came from non-product revenue, which grew by 12%. He acknowledged geopolitical challenges affecting growth in regions like Africa and China but remained confident in accelerating growth starting in Q4 2025.

Guidance

Hologic expects total revenues for Q3 2025 to be between $1 billion and $1.01 billion, with non-GAAP EPS projected in a range of $1.04 to $1.07. For the full fiscal year, revenue guidance remains at $4.05 billion to $4.10 billion, despite lowering EPS guidance by $0.10 to a range of $4.15 to $4.25. The company anticipates a headwind of $20 million to $25 million per quarter from tariffs, particularly impacting costs from Costa Rica and China. Hologic expects mid-single-digit growth in the Diagnostics business while projecting continued challenges in Breast Health, with expectations for an eventual return to growth in Q4 2025.

Additional News

In recent developments, Hologic has made strategic moves by electing Wayde McMillan to its board of directors, effective April 4, 2025. McMillan brings extensive financial expertise from his previous role as CFO at Solventum Corporation and 3M Company’s health care business group. Additionally, Hologic continues its active share repurchase program, spending $267 million in Q1 2025, signaling management's confidence. The program is part of a $1.5 billion authorization aimed at boosting shareholder value. These actions reflect Hologic's commitment to strengthening its governance and enhancing shareholder returns amidst challenging market conditions.