Haemonetics Q1 2027 Earnings Call Transcript

Haemonetics (NYSE: HAE ) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

14. The company raised its fiscal 2027 guidance, expecting reported revenue growth of 5% to 8% and organic growth of 4% to 7%, driven by consistent execution across its business segments. MedSurg revenue grew 6% year over year, with notable strength in blood management technologies and transfusion management, while apheresis revenue grew 5% reported and 6% organic, driven by plasma revenue and the rollout of Persona Plus. , supported by expanded clinical evidence and product innovations.

Haemonetics continues to focus on portfolio enhancements, commercial execution, and strategic investments to sustain long-term growth, with strong cash flow conversion providing financial flexibility. The company highlighted the addition of Dr. Martin Medeas to the Board of Directors, bringing valuable strategic and operational expertise to support ongoing transformation and execution. Full Transcript OPERATOR Good day and thank you for standing by.

Welcome to the Haemonetics Corporation first quarter 2027 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone.

You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Olga Gallette, Vice President, Investor Relations and Treasurer.

Please go ahead. Olga Gallette, Vice President, Investor Relations and Treasurer Good morning and thank you for joining us for Haemonetics first quarter fiscal year 2027 conference call and webcast. I'm joined today by Chris Simon, our CEO, and James D'Arecca, our CFO. This morning we reported first quarter fiscal '27 results and raised our fiscal 2027 guidance.

Our earnings release, supplemental presentation and related materials are available in the Investor Relations section of our website. First quarter results are reported under the new reportable segment structure announced on June 5, 2026. Additional information, including historical recast financials and the presentation describing the changes, is also available on our Investor Relations website. Before we begin, I'd like to remind everyone that we will use both reported and organic revenue growth rates that exclude the impact of FX and the exit of liquid solutions, and our fiscal year 2027 guidance is also adjusted for the impact of the 53rd week.

We'll refer to other non-GAAP financial measures to help investors understand Haemonetics' ongoing business performance. Please note that these measures exclude certain charges and income items. A full list of excluded items and reconciliations to GAAP results and comparisons with the prior-year periods are provided in our earnings release. Our remarks today include forward-looking statements and our actual results may differ materially from the anticipated results.

Factors that may cause our results to differ include those referenced in the safe harbor statement in today's earnings release and in other SEC filings. We do not undertake any obligation to update these forward-looking statements and with that I'd like to turn the call over to Chris. Chris Simon, President and Chief Executive Officer Good morning everyone. Thank you for joining.

We started FY27 strong with broad-based execution driving another quarter of profitable growth. 14. Investments we have made to enhance our portfolio, improve our operating model and strengthen commercial execution are fueling consistent growth and strong cash generation. All three of our core platforms contributed to our performance this quarter, demonstrating the breadth of our business and reinforcing the confidence in our ability to deliver sustainable long-term growth.

Before discussing our business results, I'd like to welcome Dr. Martin Medeas to our Board of Directors. Martin has built a distinguished career leading global healthcare businesses through transformation, strengthening execution and creating long-term value. His strategic perspective and operating experience will be invaluable as we continue executing our strategy and we're delighted to welcome him to the Board.

Now let's discuss our business results. MedSurg's revenue increased 6% year over year, reported and organic, to $148 million with growth across both franchises. Blood management technologies grew 8% organically with double-digit growth in hemostasis and transfusion management, partially offset by slowing cell salvage capital upgrades. Hemostasis management is the definition of durable growth with mid-teens disposable growth in the quarter driven by higher utilization across the installed base and continued share gains.

The ongoing success of the HN cartridge underscores our ability to innovate, expand the clinical applications of viscoelastic testing and further strengthen our leadership position, creating a longer runway for sustainable growth. Transfusion management also continued to build momentum with another quarter of strong software implementations. Faster customer activations are expanding our recurring revenue base and enhancing the durability of revenue growth for this franchise. Interventional technologies returned to growth, growing organically 3%.

Vascular closure grew above market, increasing in the low double digits year over year and low single digits sequentially. S. with Vascade MVP and MVP XL in electrophysiology more than offsetting softness in peripheral and coronary procedures and esophageal cooling. Three factors are driving our vascular closure outperformance.

First, the re-acceleration of access site growth following the stabilization of PFA and atrial fibrillation procedures. Second, stronger commercial execution resulting from the investments we've made in sales and marketing. And third, the momentum created by the Vascade MVP XL expanded indication up to 17 French in outer diameter. Higher utilization, account wins and the expanded XL use case are driving broader adoption and positioning the franchise for resurgent growth.

We continue to strengthen the clinical evidence in large-bore venous closure with the largest real-world study of Vascade MVP XL to date. The study conducted at Emory University in more than 1,600 patients demonstrated rapid hemostasis, greater than 92% same-day discharge and an excellent safety profile in large-bore sheath procedures like PFA and LAAC. Together, the expanded indication and growing body of real-world clinical data further strengthen our competitive position and provide the foundation for broader physician adoption.

MedSurg is re-emerging as a driver of Haemonetics long-term growth with two growth-oriented franchises supported by strong innovation, expanding adoption and improving market fundamentals. Solid first quarter performance reinforces our confidence in delivering mid-single-digit MedSurg growth in fiscal 2027. Turning to apheresis, revenue grew 5% on a reported basis and 6% organic to $191 million. Plasma revenue grew 8% organic, reflecting double-digit growth in disposables globally, partially offset by a difficult prior-year software comparison.

Growth was supported by share gains, strong plasma collection trends and the rollout of Persona Plus. S. customers increased in the high single to low double digits, including favorable order patterns, reinforcing continued IG demand and strong market fundamentals. Persona Plus is delivering meaningful economic benefits to our customers and reinforcing the unique value proposition of our integrated plasma collection platform.

Through a simple firmware upgrade, Persona Plus helps our customers increase plasma yield, improve center productivity and lower cost per liter. The rollout is progressing ahead of schedule and early adopters are achieving yield improvements in excess of 5% compared with our earlier Persona offerings. Other apheresis revenue declined 3% organic, reflecting portfolio optimization and order timing. Following a strong first quarter, we are raising our fiscal 2027 apheresis revenue guidance to low- to mid-single-digit growth.

The increase reflects first quarter outperformance while our expectations for the rest of the year remain balanced and largely unchanged, supported by share gains, Persona Plus adoption and modest market growth assumptions. Our first quarter performance reflects the strength of the overall business. Consistent execution across plasma, blood management technologies and interventional technologies demonstrates that our growth is becoming increasingly durable. Accordingly, we are raising our full-year reported revenue growth guidance to 5% to 8% and organic growth guidance to 4% to 7%.

We remain confident in our outlook while maintaining a disciplined approach to guidance for the rest of the year. James, over to you. James D'Arecca, Chief Financial Officer Thank you, Chris, and good morning, everyone. Chris highlighted the continued strengthening of our business, and our financial results reflect that same story: broader base growth, improving revenue quality, favorable portfolio mix, and an earnings algorithm that continues to strengthen through disciplined execution.

As our portfolio continues to shift toward higher-margin, recurring revenue and differentiated technologies, we're beginning to realize the operating leverage from the investments we've made over the past several years. 4%, down 40 basis points from the prior year. The comparison was impacted by upfront software license revenue recognized in the first quarter of fiscal 26, which benefited prior-year gross margin by approximately 200 basis points. Excluding the software benefit, adjusted gross margin expanded, driven by favorable product mix, continued Persona Plus adoption, pricing actions, and strong commercial execution.

Operating expenses increased 7% to $126 million, primarily reflecting higher personnel costs, including self-insured benefit plans, the Vivasure Medical acquisition, and higher freight expense. 4%, down 70 basis points year over year, but expanded meaningfully after normalizing for the prior-year software benefit. Sequentially, margin declined 100 basis points, primarily due to lower Med Surg revenue following a strong fourth quarter and external cost pressures, partially offset by Persona Plus and disciplined execution. We remain confident in delivering 50 to 100 basis points of our adjusted operating margin expansion in fiscal 27.

Our outlook incorporates sustained external cost pressure, which we expect to more than offset through revenue growth, favorable mix, Persona Plus adoption, productivity, and tariff recovery. 9% in the prior-year period, primarily reflecting lower tax benefits associated with equity compensation. 14, reflecting strong underlying operating performance. Earnings growth was achieved despite higher interest expense, unfavorable foreign exchange, and a higher tax rate, with those headwinds largely offset by the benefit of a lower diluted share count resulting from last year's share repurchases.

Looking ahead, we expect adjusted earnings per diluted share to grow broadly in line with our increased reported revenue growth guidance in fiscal 27. Now turning to the balance sheet and cash flow. Strong earnings once again translated into strong cash generation, reinforcing both the quality of our earnings and the durability of our operating model. Over the last 12 months, our cash earnings exceeded our P&L earnings, with free cash flow conversion reaching 106% of adjusted net income.

We believe this level of cash conversion reflects the strength of the business and provides the financial flexibility to invest behind our strategic priorities while continuing to strengthen the balance sheet. That strength was also evident in the first quarter. Operating cash flow was $52 million, approximately three times the prior-year period, while free cash flow increased nearly 15-fold year over year.

Free cash flow conversion reached 75% of adjusted net income, an exceptional result for what is typically our seasonally weakest net cash inflow quarter, driven by disciplined working capital execution and fewer device placements, partially offset by higher capital expenditures. Our capital allocation actions reflect that financial strength. 69 times EBITDA. Subsequent to quarter end, we repaid an additional $50 million, reducing the outstanding revolver balance to $200 million as of today's call.

We continue to prioritize disciplined deleveraging while maintaining ample capacity to invest in innovation, long-term growth, and opportunistic share buybacks. We are reaffirming our fiscal 2027 free cash flow conversion guidance of approximately 80% of adjusted net income. While the first quarter cash generation exceeded our expectations, maintaining our full-year outlook reflects a disciplined approach in an evolving operating environment and preserves flexibility to proactively manage inventory and working capital throughout the year. Before we open the line for questions, I'd like to leave you with three key takeaways from today's call.

First, we continue to strengthen our portfolio—Persona Plus is extending our differentiation in plasma utilization, and software share gains are enhancing the quality and durability of Blood Management Technologies—and Interventional Technologies is now positioned to become a more meaningful contributor to long-term growth and profitability. Second, we remain confident in our fiscal 27 outlook.

While we have increased both revenue and earnings guidance to reflect first quarter outperformance, our assumptions for the next three quarters remain balanced and largely unchanged, relying on continued execution and business momentum to further strengthen performance through the year. And finally, strong earnings and free cash flow provide flexibility to invest in growth, strengthen the balance sheet, and pursue disciplined capital allocation, including opportunistic share repurchases. Thank you for joining us this morning. Operator, please open the line for questions.

OPERATOR Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star 1 again. We'll pause for a moment while we compile our Q&A roster.

Our first question comes from Anthony Petrone with Mizuho Financial Group. Your line is open. Anthony Petrone, Analyst at Mizuho Thank you, and congrats on the strong print here. I hope everyone's doing well.

Maybe, Chris, Jim, one on IVT and then I'll have one on plasma. 5%. You gave some details there in your prepared remarks, Chris, but maybe a little bit more color on the dynamics of share shift. A few quarters ago there was some dynamics from a private competitor plus a larger public competitor that has a consolidated approach.

To what extent have you recaptured previously lost accounts, and what is the underlying attach rate to pulse field ablation for Vascade as we enter August here? And then I'll have a follow-up on plasma. Chris Simon, President and Chief Executive Officer Morning. Anthony.

Yeah, the IVT returned to growth in Q1, growing 3% organically, and that was most definitely led by low double-digit growth in vascular closure, which is what we've expected. I think overall it reflects a better market backdrop. We now see PFA at somewhere between 80% and 85% penetration. That's effectively stabilizing the access site growth rate for us, and we now think that growth rate is probably in the 6% to 7% range.

We, of course, grew in excess of that. To your question, it's around driving greater utilization and additional share capture. When I called that out, I think there's really three things going on. A rising tide raises the whole category—that's the access site growth resuming and eventually regressing to whatever the AFib growth rate is, probably in the low to mid-teens.

I think the second thing is our commercial execution—the investments we've made in sales and marketing. That team is really beginning to hit their stride. And then I think the third thing is the MVP Excel label expansion, coupled with a growing body of real-world evidence, has enabled us to both contract for and pull through that utilization. So that's helping gain share; it's helping us drive utilization.

We're benefiting by both levers.