Hologic's Q2 2025: Unpacking Contradictions in Diagnostics Growth, Tariff Effects, and Breast Health Strategy

Diagnostics business growth and market share, Tariffs and cost management, Breast health business strategy and gantry replacements, Capital expenditure and hospital investment, and Tariff impact and mitigation strategies are the key contradictions discussed in Hologic's latest 2025Q2 earnings call.



Financial Performance and Guidance:
- Hologic reported total revenue of $1.005 billion for Q2 fiscal 2025, which was down 0.5% in constant currency, but within the upper end of guidance.
- Non-GAAP earnings per share were $1.03, reaching the high end of guidance and remaining flat compared to the previous year.
- The guidance for fiscal 2025 was lowered by $0.10 due to tariff impacts, with revenue expected to be between $4.05 billion and $4.10 billion.

Diagnostics Segment Growth:
- Diagnostics revenue grew by 1.5% or 5.2% excluding COVID-related sales.
- This growth was driven by strong performance in molecular diagnostics, BV/CV/TV assays, and respiratory assays.
- The increase in respiratory assays was due to the severe flu season, which boosted interest in the Panther Fusion system.

Breast Health Segment Challenges:
- Breast Health revenue declined by 6.9% or 9.2% organically, excluding SSI and Endomagnetics.
- The decline was attributed to a planned decrease in gantry placements and challenges in China and Africa.
- Hologic is working on a strategic reorganization of the sales team and selling Endomagnetics products directly to address these issues.

Skeletal Business Recovery:
- Skeletal revenue grew by 22.9%, driven by strong progress in partnering with a third-party manufacturer to accelerate production.
- This growth was supported by improved market conditions and increased production capabilities.

Tariff Impact and Mitigation Efforts:
- Hologic forecasts the gross impact of tariffs to be $20 million to $25 million per quarter, with roughly two-thirds relating to Costa Rica products and 15% from China.
- The company is exploring mitigation efforts to offset these increased costs and remains flexible in its approach.