HAE

Overall Business Highlights

• The company delivered broad-based execution and another quarter of profitable growth to start FY27, with investments in portfolio enhancement, operating model improvement, and commercial execution driving consistent growth and strong cash generation.
• Dr. Martin Medeiros was added to the board of directors, bringing deep global healthcare transformation and value creation experience to support long-term strategy execution.

MedSurg Operational Updates

• VASC-AID MVP XL received FDA expanded indication for use up to 17 French outer diameter, and a large 1,600-patient real-world study at Emory University demonstrated rapid hemostasis, >92% same-day discharge, and an excellent safety profile for large-bore sheath procedures, strengthening competitive positioning and physician adoption outlook.
• The HN cartridge continues to drive innovation and expansion of clinical applications for visceral elastic testing, extending the growth runway for hemostasis management. Transfusion management is seeing faster software implementation and customer activation, expanding the recurring revenue base.

Apheresis Operational Updates

• Total first quarter revenue was $191 million (5% reported, 6% organic year-over-year growth), representing 56.3% of total company revenue. Plasma revenue grew 8% organic, with double-digit global disposable growth partially offset by a difficult prior year software comparison.
• Persona Plus, a firmware upgrade for integrated plasma collection platforms that increases plasma yield and lowers cost per liter for customers, is rolling out ahead of schedule, with early adopters seeing >5% yield improvements over prior Persona offerings. U.S. customer plasma collections grew high single to low double digits, with continued strong demand for immunoglobulin (IG).
• Other apheresis revenue declined 3% organic, reflecting portfolio optimization and order timing.

Financial and Operational Highlights

• First quarter gross margin was 60.4%, down 40 bps year-over-year due to a $14 million software license benefit that boosted prior year gross margin by ~200 bps; adjusted gross margin expanded after excluding this impact, driven by favorable product mix, Persona Plus adoption, pricing actions, and strong execution.
• Operating expenses increased 7% year-over-year to $126 million, driven by higher personnel costs, the Vivashore medical acquisition, and higher freight costs. Adjusted operating margin was 23.4%, down 70 bps year-over-year but expanded after normalizing for the prior year software benefit.
• Adjusted diluted earnings per share increased 4% year-over-year to $1.14, with headwinds from higher interest expense, unfavorable foreign exchange, and a higher tax rate offset by lower share count from 2026 share repurchases.
• Cash generation was very strong: 12-month trailing free cash flow conversion reached 106% of adjusted net income. First quarter operating cash flow was $52 million (3x prior year), free cash flow increased nearly 15-fold year-over-year, and first quarter free cash flow conversion hit 75% of adjusted net income (an exceptional result for the seasonally weakest cash inflow quarter).
• The company repaid $100 million of revolving credit debt (half in Q1, half post-quarter), ending with $223 million in cash and a net leverage ratio of 2.69x EBITDA as of quarter end. Capital allocation prioritizes disciplined deleveraging, with capacity for innovation investment, long-term growth, and opportunistic share buybacks.

• Full year 2027 reported revenue growth guidance was raised to 5-8% from prior levels, and organic revenue growth guidance was raised to 4-7%, reflecting Q1 outperformance with balanced, largely unchanged assumptions for the remaining three quarters.
• Apheresis full year 2027 revenue growth guidance was raised to low to mid single-digit growth, reflecting Q1 outperformance, with unchanged balanced expectations for the remainder of the year supported by share gains, Persona Plus adoption, and modest market growth assumptions.
• Management reaffirmed guidance for 50-100 bps of adjusted operating margin expansion in fiscal 2027, with expected sustained external cost pressures more than offset by revenue growth, favorable mix, Persona Plus adoption, productivity improvements, and tariff recovery.
• Adjusted diluted full year 2027 earnings per share growth is expected to be broadly in line with the increased reported revenue growth guidance.
• Full year 2027 free cash flow conversion guidance of ~80% of adjusted net income is reaffirmed, despite Q1 outperformance, to maintain discipline in the evolving operating environment.
• Management maintains its expectation for mid-single digit full year MedSurg growth in fiscal 2027, with Q1 2027 growth at the high end of this range.

Humanetics operates three core product segments under its new 2026 segment structure, with total first quarter 2027 revenue of $339 million:

1. MedSurg: First quarter revenue was $148 million, representing 43.7% of total company revenue. Revenue increased 6% year-over-year on both reported and organic basis. Within MedSurg:

• Blood management technologies: 8% organic year-over-year growth, with double-digit growth in hemostasis and transfusion management partially offset by slowing cell salvage demand tied to capital upgrades. Hemostasis management posted mid-teens disposable growth driven by higher installed base utilization and share gains, led by the successful HN cartridge.
• Interventional technologies: Returned to organic growth of 3% year-over-year. Vascular closure grew low double-digits year-over-year, outperforming the market, with strength in the U.S. from Fascade MVP and MVP XL and electrophysiology offsetting softness in peripheral/coronary procedures and esophageal cooling.

• Actual results may differ materially from forward-looking projections, with key sources of variability referenced in the company's Safe Harbor statement and SEC filings.
• Sustained external cost pressures including higher oil prices, transportation costs, and material inflation remain headwinds for full year margin performance.
• U.S. BMT revenue was meaningfully lower sequentially in Q1 after an unusually strong Q4 2026, creating sequential operating margin pressure that is expected to reverse as the year progresses.
• OEM business within interventional technologies saw sequential backsliding, creating a minor drag on segment performance that management is working to address.
• Plasma collection volume growth is outside of Humanetics' direct control, creating uncertainty around top line performance even as the company is well positioned to benefit from stronger-than-forecast volume.

Q: Anthony Petrone (Mizuho) asked for additional detail on interventional vascular closure share dynamics, the extent of recapture of previously lost accounts, and penetration of VASC-AID in pulse field ablation (PFA) procedures. / A: CEO Chris Simon confirmed 3% organic Q1 IVT growth led by low double-digit vascular closure growth outperforming the market. PFA penetration for atrial fibrillation has stabilized at 80-85%, bringing overall access site growth to 6-7% year-over-year. Growth comes from three sources: stabilizing overall category growth, improved commercial execution from prior sales and marketing investments, and share gains driven by MVP XL label expansion and growing real-world clinical evidence that supports new contracting and higher utilization.

Q: Alan Gong (JP Morgan) asked how gross margins are expected to progress for the remainder of FY27 after Q1's normalized expansion. / A: CFO James D'Arecca explained Q1 lapped a 200 bps gross margin headwind from 2026's software benefit, which was almost entirely offset by favorable mix and manufacturing execution. Sequential Q1 margin decline stemmed from lower Q1 MedSurg revenue after a strong Q4, not structural cost issues. SG&A is expected to stay stable in dollar terms, so sequential margin expansion will occur as revenue grows through the year, supported by Persona Plus pricing and mix benefits. Management reaffirmed full year margin guidance despite offsetting impacts from a planned Q2 $7 million tariff refund, which will be offset by later year cost headwinds.

Q: Marie Thibault (BTIG) asked about the Persona Plus rollout timeline and updated underlying plasma collection volume growth assumptions after the apheresis guidance upgrade. / A: Chris Simon noted Persona Plus delivers ~5% additional yield (more in early adopters) as a simple firmware upgrade that can be rolled out to 30-40 centers per week. Rollout is progressing ahead of schedule, but guidance only includes contracted, visible adoption to maintain prudence, leaving potential upside from accelerated adoption or new share gains. Underlying collection volume guidance remains 0-2% year-over-year, as the guidance increase only reflects Q1 outperformance and management does not control collection volumes, so it avoids building in stronger uncontrolled growth.

Q: Andrew Cooper (Raymond James) asked what would make management comfortable raising its conservative 0-2% collection volume guidance, and for updates on XL Japanese regulatory approval and the PercQL launch. / A: Chris Simon confirmed management is bullish on plasma demand but maintains de-risked guidance to only forecast factors it can control (share gains, Persona Plus rollout, global growth). XL regulatory submission in Japan is progressing favorably, with approval expected later in FY27, and no revenue from approval is built into current guidance. The PercQL Elite launch is expected in FY27 following FDA review, with all launch costs included in guidance but no revenue built in, representing potential upside.

Q: Michael Petoskey (Barrington) asked how pricing flexibility for vascular closure has impacted the recent growth recovery. / A: Chris Simon confirmed pricing flexibility has helped win back lost accounts and gain new share, alongside stabilizing market growth and sales/marketing investments. Improved manufacturing efficiency has offset incremental pricing concessions, and label expansion and unique clinical evidence have strengthened differentiation against competitors, with momentum expected to build throughout the year.