Hologic 2025 Q3 Earnings Beats Expectations as Net Income Grows 0.2%

Hologic (HOLX) reported its fiscal 2025 Q3 earnings on July 31st, 2025. The company exceeded expectations with a revenue of $1.02 billion against the guidance range of $1,000 to $1,010 million. Adjusted EPS also surpassed guidance, reaching $1.08 compared to the high-end expectation of $1.07. Hologic remains optimistic about achieving solid revenue and faster non-GAAP EPS growth in Q4, predicting revenues between $1.03 billion and $1.04 billion and adjusted EPS of $1.09 to $1.12.

Revenue
Hologic's total revenue for fiscal 2025 Q3 reached $1.02 billion, marking a 1.2% increase from the previous year. The Diagnostics segment contributed $448.90 million, reflecting growth driven by molecular diagnostics sales. Breast Health generated $365.20 million, despite lower mammography equipment sales, supported by Endomagnetics and service contracts. The GYN Surgical division reported $178.40 million in revenue, bolstered by the Gynesonics acquisition and international sales. Lastly, Skeletal Health revenue surged to $31.30 million, rounding out the company's robust performance.

Earnings/Net Income
Hologic's EPS rose 4.8% to $0.87 in 2025 Q3 from $0.83 in 2024 Q3, signaling continued earnings growth. The company's profitability strengthened, with net income reaching $194.90 million in 2025 Q3, marking a 0.2% increase from $194.50 million in 2024 Q3. The EPS performance indicates steady improvement and aligns with growth expectations.

Post-Earnings Price Action Review
The strategy of buying HOLX shares upon revenue beats and holding them for 30 days shows potential for short-term gains following positive earnings releases. The strategy achieved a commendable 21.4% return on investment, highlighting its ability to compound returns. However, it underperformed relative to the broader market, with a return of 14.2% compared to the SPY's 17.3%. The information ratio of 1.4 suggests moderate alpha generation. Despite facing a maximum drawdown of 5.2% during the post-earnings dip, the strategy maintained a win rate of 70%, with 7 out of 10 days resulting in positive returns. The average loss was 4.5%, emphasizing the importance of risk management. Overall, while this approach offers strong absolute returns and moderate alpha, it requires careful monitoring of market fluctuations.

CEO Commentary
"We are pleased to have delivered revenue and non-GAAP earnings growth in the third quarter that exceeded our guidance ranges," said Stephen P. MacMillan, Chairman, President, and Chief Executive Officer. He highlighted strong performance in the Breast Health business and noted progress toward better overall growth in the fourth quarter. Key drivers include a rebound in breast health and solid performances across other divisions, indicating positive momentum as the company focuses on returning to robust top- and bottom-line growth.

Guidance
Hologic remains on track for solid revenue growth and faster non-GAAP EPS growth in the fourth quarter. The company anticipates continued improvement in its Breast Health business and expects that the overall performance in upcoming quarters will benefit from the ongoing recovery in diagnostics and surgical segments.

Additional News
Within the last three weeks, Hologic has been actively engaging in strategic initiatives beyond its earnings report. The company announced the refinancing of its term loan and revolving credit facility, now comprising a $1.17 billion term loan and a $1.25 billion revolver, set to mature in July 2030. Additionally, Hologic continues to navigate global challenges, such as mitigating the impact of tariffs on its operations. The company is also focused on enhancing its market presence, leveraging acquisitions like Endomagnetics and Gynesonics to bolster its product offerings and international sales. These developments underscore Hologic's commitment to long-term growth and financial stability.