Haemonetics Corporation Q1 FY2026 earnings call

Management Statement and Operational Highlights

• Business Start: FY 2026 started strong with solid results, revenue $321M, down 4% due to portfolio transitions but up 13% organically ex CSL. 3 core products (NexSys, TEG, VASCADE) drive ~85% of revenue.
• Hospital Segment: Blood Management Technologies showed resilience with 14% growth. Interventional Technologies faced challenges but Vascular Closure had 3% growth. Reaffirm 8%-11% organic growth for full year.
• Plasma Segment: NexSys technology upgrades and share gains drive growth. Software agreement provided a one-time revenue benefit, reinforcing 80% market share in plasma DMS software. Reaffirm 11%-14% organic growth ex CSL for full year.
• Financials: Adjusted gross margin reached 60.8% in Q1, up 550bps Y/Y. Adjusted operating income rose 9% to $78M, with adjusted EPS at $1.10, up 8% Y/Y.

Segment Performance

• Hospital Business: Generated $140 million in revenue in Q1, up 4% reported and organic. Blood Management Technologies grew 14%, led by hemostasis management with 22% growth overall and 27% in the U.S. Interventional Technologies declined 7% due to prior year OEM destocking and PFA-related pressures. Vascular Closure grew 3%, with MVP and MVP XL up 6%, but legacy VASCADE was soft.
• Plasma: NexSys, the largest growth driver, generated $130 million in Q1, down 4% reported but up 29% organic ex CSL. Driven by Persona/Express Plus upgrades and a software agreement. Organic growth ex CSL expected to be 11%-14% for full year.
• Blood Center: Revenue of $52 million in Q1, down 22% reported, but organic revenue grew 4% due to apheresis portfolio strength. Reported decline guidance of 23%-26%, organic decline 4%-6% for full year.

Guidance

• Revenue: Reaffirm full year reported revenue decline of 3%-6%, but organic growth ex CSL of 6%-9%.
• EPS: Full year adjusted EPS guidance of $4.70-$5, reflecting disciplined capital deployment.
• Free Cash Flow: Reaffirm full year free cash flow of $160M-$200M, with conversion rate above 70% of adjusted net income.

Risks

• Market Competition: Competition in Interventional Technologies, particularly in legacy VASCADE, poses challenges.
• Cyclicality: Plasma collections have cyclicality, with potential temporary softness impacting performance.
• Execution: Temporary softness in Interventional Technologies is seen as executional, not structural, but requires ongoing efforts to resolve.

Question and Answer

Q: Rohin Patel asked about plasma performance drivers and software contribution.

A: Chris Simon responded that plasma growth is driven by innovation and share gains, with the software agreement contributing ~half of the 29% organic growth ex CSL.

Q: Anthony Petrone inquired about plasma share gain timing.

A: Chris Simon stated share gains are on track, ahead of schedule, driving 11%-14% organic growth for the year.

Q: David Rescott asked about confidence in Interventional Tech reversion.

A: Chris Simon noted hospital segment strength and investments in Interventional Technologies to regain momentum.

Q: Mike Matson asked about Interventional Technologies competition.

A: Chris Simon detailed new leadership, organizational realignment, and strategic initiatives to address competition.

Q: Marie Thibault asked about Interventional Technologies product progress.

A: Chris Simon discussed efforts in structural heart products like SavvyWire and the focus on vascular closure as the largest opportunity.

Q: Andrew Cooper asked about EP business execution.

A: Chris Simon outlined new sales/marketing leadership, organizational changes, and strategic account capabilities to improve EP business performance.

Q: David Turkaly asked about share buybacks and transition impact.

A: James D'Arecca clarified no share buybacks in Q1, and Chris Simon explained the $52M revenue headwind from portfolio transitions.

Q: Michael Petusky asked about TEG region performance.

A: Chris Simon noted TEG is concentrated in the U.S., with growth potential in Europe and Japan once regulatory approvals are received.