Executive Summary

Q2 FY25 revenue was $1.005B and non-GAAP diluted EPS was $1.03, both at the high end of guidance; GAAP EPS was ($0.08) due to $220.9M of intangible asset impairments, driving GAAP gross margin down to 37.5% .
Diagnostics grew modestly on higher molecular assays and Biotheranostics; Breast Health declined on weaker mammography capital sales; Surgical grew mid‑single digits; Skeletal rebounded as supply constraints eased .
Company maintained FY25 revenue guidance ($4.05–$4.10B) but lowered GAAP and non‑GAAP EPS guidance to $2.47–$2.57 and $4.15–$4.25, citing tariffs and geopolitical factors (including China) as new headwinds; Q3 revenue/EPS guidance set at $1.00–$1.01B and $1.04–$1.07 (non‑GAAP) .
Street context: Q2 beat consensus on revenue and EPS by ~0.5% and ~1.4% respectively; watch for tariff‑related COGS step‑ups into Q4 and China/Africa de‑risking to temper FY EPS trajectory (details below; S&P Global consensus) *.

What Went Well and What Went Wrong

What Went Well

Diagnostics resilience: total diagnostics +0.8% (CC +1.5%); molecular +1.0% (CC +1.7%) with ex‑COVID molecular +7.2% (CC +7.8%); management highlighted ongoing BV/CV/TV adoption and Biotheranostics growth .
Strong recurring/service mix and cash: service/non‑product revenue grew strongly (management cited 12% non‑product growth), with Q2 operating cash flow of $169.5M and cash/equivalents of $1.43B; net leverage ~0.8x; $200M buybacks (3.0M shares) executed .
Surgical momentum: revenue +4.2% (CC +5.1%); International +16.2% (CC +16.2%); integration of Gynesonics tracking to plan; new Fluent Pro supporting MyoSure adoption .

Quote: “We delivered on our financial commitments… revenue and non‑GAAP EPS finished at the high ends of our guidance ranges” — CEO Stephen MacMillan .

What Went Wrong

GAAP loss and margin compression from non‑cash impairments: $220.9M intangible charges (Acessa, Bolder, Mobidiag, Diagenode) drove GAAP EPS to ($0.08) and GAAP gross margin to 37.5% (‑1,580 bps YoY) .
Breast Health softness: segment revenue ‑7.4% (CC ‑6.9%); organic breast health ‑9.7% as gantry replacements slowed ahead of next‑gen platform; management reorganized sales and refined EOL upgrade strategy .
External headwinds: reductions in Africa HIV testing (infrastructure/funding disruption) and a China de‑risking cut to FY revenue (~$20M) contributed to lowering EPS guidance; tariffs to raise COGS with P&L impact peaking in Q4 .

Financial Results

Key metrics by quarter (oldest → newest):

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$987.9	$1,021.8	$1,005.3
GAAP Diluted EPS ($)	$0.76	$0.87	($0.08)
Non-GAAP Diluted EPS ($)	$1.01	$1.03	$1.03
GAAP Gross Margin (%)	56.5%	56.8%	37.5%
Non-GAAP Gross Margin (%)	61.5%	61.6%	61.1%
Non-GAAP Operating Margin (%)	30.0%	29.4%	30.0%
Adjusted EBITDA ($M)	$323.7	$326.0	$325.8
Cash from Operations ($M)	$367.1	$189.3	$169.5

Segment revenues ($M) (oldest → newest):

Segment	Q4 2024	Q1 2025	Q2 2025
Diagnostics	$443.3	$470.6	$453.6
Breast Health	$375.5	$369.1	$356.2
GYN Surgical	$156.5	$166.3	$162.5
Skeletal Health	$12.7	$15.8	$33.0

Selected KPIs and other items:

KPI	Q4 2024	Q1 2025	Q2 2025
Molecular Diagnostics ($M)	$319.3	$341.1	$326.0
Organic Molecular ex‑COVID YoY	+13.2%	+10.9%	+7.2%
COVID‑related revenue ($M)	$40.0 (assay $15.2 + other $24.8)	$43.6 (assay $16.9 + other $26.7)	$37.1 (assay $10.5 + other $26.6)
Share repurchases ($M)	$58	$517	$200
Cash & Equivalents ($B)	$2.16	$1.78	$1.43

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$4.05B–$4.10B	$4.05B–$4.10B	Maintained
GAAP EPS	FY 2025	$3.51–$3.61	$2.47–$2.57	Lowered
Non‑GAAP EPS	FY 2025	$4.25–$4.35	$4.15–$4.25	Lowered
Revenue	Q3 2025	—	$1.00B–$1.01B	New Q3 guide
GAAP EPS	Q3 2025	—	$0.85–$0.88	New Q3 guide
Non‑GAAP EPS	Q3 2025	—	$1.04–$1.07	New Q3 guide

Management cited tariffs and China as the key drivers of EPS guide down; FX and lower China revenue offset at top line, keeping revenue guide intact .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Tariffs/geopolitics	No tariff P&L impact; flagged IV fluid shortages; cautious on FX	$20–$25M/quarter gross tariff cost; ~$5M COGS impact in Q3, ~$20M in Q4; China FY reduction ~$20M; EPS guide cut	Deteriorating macro, EPS headwind
Breast Health capital/new gantry	Expect normalization; next‑gen gantry impact mainly FY26; gantry volumes may be “a touch slower” in FY25	Reorg sales (capital vs disposables), EOL upgrade push; Breast Health ‑6.9% CC; expect Q4 improvement	Stabilizing with H2 recovery plan
Diagnostics (BV/CV/TV, BCI)	Molecular ex‑COVID +9% FY24; BV/CV/TV “several hundred million” run‑rate; BCI double‑digit	Diagnostics +1.5% CC; molecular ex‑COVID +7.8% CC; respiratory strength; BCI growth continues	Solid, mid‑single to high‑single growth ex‑COVID
Africa HIV funding	Not highlighted	HIV testing in Africa disrupted; excluding Africa, core molecular would have been low‑double‑digit growth	Headwind
China exposure	Not highlighted materially	Lowering FY China revenue to ~$50M; largely de‑risked	Headwind, de‑risked
Service revenue	Service supporting Breast Health; attach up	Non‑product up ~12%; service now >45% of Breast Health revenue	Positive mix shift
Panther Fusion adoption	Building footprint; higher Fusion attach supports menu	~1/3 of customers have Fusion; respiratory season drives interest	Improving penetration

Management Commentary

“We took a step in the right direction this quarter by meeting our financial commitments… Non‑GAAP EPS were $1.03, at the high end of our guidance” — CEO Stephen MacMillan .
“We forecast a gross impact of $20–$25 million a quarter from tariffs… roughly two‑thirds relates to Costa Rica and about 15% from China” — COO Essex Mitchell .
“We are lowering our non‑GAAP EPS guidance… while maintaining full‑year revenue guidance… as the weakening U.S. dollar roughly compensates for the reduction in China revenue” — CFO Karleen Oberton .
“Breast Health… we reorganized our sales team… and are rolling out a new strategy to upgrade older units” — COO Essex Mitchell .

Q&A Highlights

Tariff mitigation/pricing: Company expects offsets; most affected sales on long‑term contracts limit near‑term pricing, but mitigation actions underway .
Breast cycle and Envision: Replacement cycles extending to 10–12 years; few customers delaying for Envision; mix of current 3D upgrades plus Envision in FY26 .
Africa/China: Assuming Africa testing is “gone” near term; FY25 China revenue lowered to ~$50M to de‑risk .
Panther Fusion: ~1/3 of customers have Fusion capability; respiratory demand boosts adoption; multi‑year menu expansion opportunity .
Service revenue: Breast Health services grew strongly; service revenue now >45% of Breast Health .

Estimates Context

Consensus vs. actuals and guidance (S&P Global):

Item	Period	Consensus*	Actual/Guide	Surprise/Comment
Revenue ($M)	Q2 2025	1,000.35*	1,005.30	Beat (~+0.5%)*
Primary EPS ($)	Q2 2025	1.016*	1.03	Beat (~+1.4%)*
Revenue ($M)	Q3 2025	1,005.71*	Guide: 1,000–1,010	In line*
Primary EPS ($)	Q3 2025	1.051*	Guide: 1.04–1.07	In line to slight beat at mid‑pt*
Primary EPS ($)	FY 2025	4.237*	Guide: 4.15–4.25	Slightly below mid‑pt*

Values retrieved from S&P Global.

Implications: modest Q2 beat on revenue/EPS; FY25 EPS guidance trimmed below prior consensus midpoint on tariffs/China; estimate models should incorporate tariff COGS timing (greater in Q4) and lower China/Africa contributions .

Key Takeaways for Investors

Defensive Diagnostics engine offsets Breast Health softness: ex‑COVID molecular growth and BCI adoption underpinned results; expect sustained mid‑single digit Diagnostics growth despite Africa/China headwinds .
Breast Health transition year: capital demand slower ahead of Envision; reorg and EOL upgrade playbook should support a sequential improvement with growth exiting Q4 .
Tariffs/China shift EPS cadence: tariff P&L impact ramps into Q4; FY25 EPS guide reset while revenue guide intact; watch for mitigation updates and any pricing actions .
Balance sheet and capital returns: $1.43B cash, 0.8x net leverage, continued buybacks ($200M in Q2) provide cushion to navigate macro while funding tuck‑ins (Endomag, Gynesonics) .
Service mix and recurring revenue: Service now >45% of Breast Health; non‑product growth supports margin durability through capital cycles .
Near‑term catalysts: clarity on tariff mitigation, Q3 execution vs guide, and Breast Health order trends; medium‑term upside from Envision launch and Fusion/menu expansion .

Appendix: Additional Product/AI Updates in Q2

AI mammography: New data on Genius AI Detection (MGH retrospective study; workflow/time savings up to 24%) presented at SBI; continued AI integration messaging .
Oncology diagnostics: ASCO 2025 presentations reinforce BCI’s role in extended endocrine therapy decision-making; registry evidence expansion to 2,800+ patients .
Real‑world evidence: Hologic joined NEST Governance Committee to advance RWE use in medical device evaluation .

HOLOGIC INC (HOLX)·Q2 2025 Earnings Summary