Haemonetics Earnings Call Highlights Growth Amid Headwinds

Haemonetics ((HAE)) has held its Q4 earnings call. Read on for the main highlights of the call.

Haemonetics’ latest earnings call struck an overall optimistic tone, as management highlighted strong organic growth in core franchises, widening margins and robust cash generation despite pockets of weakness. Executives acknowledged near‑term pressures from tariffs, softer interventional performance and higher tax and interest costs but argued that portfolio transitions are largely behind them and that the company is entering FY 2027 with solid momentum.

Quarterly Revenue and EPS Growth

Haemonetics reported fourth‑quarter revenue of $346 million, up 5% on a reported basis and 9% organically excluding CSL, underscoring healthy underlying demand. Adjusted earnings per share rose 4% year over year to $1.29, reflecting continued cost discipline even as the company faced higher tariffs and incremental investments.

Full Year Financial Performance

For the fiscal year, revenue reached $1.3 billion while adjusted EPS climbed 9% to $4.96, signaling steady profit growth. The company expanded its adjusted gross margin by 280 basis points to 60.3% and boosted adjusted operating margin by 140 basis points to 25.4%, demonstrating meaningful operating leverage.

Strong Free Cash Flow and Cash Conversion

The company generated $45 million of free cash flow in the fourth quarter and $210 million for the full year, providing ample flexibility for investment and shareholder returns. Free cash flow conversion reached an impressive 89% of adjusted net income, and cumulative four‑year free cash flow totaled $636 million.

Plasma Franchise Momentum

Plasma remained a key growth engine, with fourth‑quarter revenue of $130 million, up 3% reported and 13% organically excluding CSL. For the full year, plasma revenue declined 2% reported but surged 20% organically ex‑CSL, beating revised guidance as U.S. collections gained high‑single‑digit share and Europe posted double‑digit growth.

Record Performance in Blood Management Technologies

Blood management technologies delivered a record quarter, with revenue up 21% in Q4 and 14% for the full year, underscoring the strength of the hospital portfolio. Hemostasis management grew in the high teens, while transfusion management made outsized contributions and accounted for nearly half of the franchise’s overall growth.

Product and Portfolio Progress

Management emphasized a series of product and regulatory wins, including U.S. clearance for Persona PLUS and an expanded indication for VASCADE MVP XL. The company also advanced label expansion for VASCADE in Japan, completed the Vivasure acquisition and continued rolling out tools like Device360 and Express Plus to enhance yield, efficiency and market positioning.

Fiscal 2027 Guidance and Margin Expansion

Haemonetics guided to reported revenue growth of 4% to 7% in fiscal 2027, or 3% to 6% organically after adjusting for an extra week and foreign exchange. Adjusted operating margin is expected to improve by 50 to 100 basis points, with adjusted EPS growing broadly in line with reported revenue and free cash flow conversion targeted around 80%.

Capital Allocation and Balance Sheet Actions

The company continued to balance shareholder returns with strategic investment, repurchasing about $175 million of stock, or more than 3 million shares. It also deployed roughly $61 million for the Vivasure deal, ending the year with $245 million in cash, $1.2 billion of total debt and a net leverage ratio of about 2.73 times EBITDA following refinancing activity.

Interventional Technologies Weakness

Interventional technologies remained a soft spot, with revenue falling 10% in Q4 and 9% for the year as vascular closure declined 8% in the quarter. Management cited electrophysiology share loss affecting MVP and MVP XL volumes, OEM‑related softness, procedure mix shifts and PFA‑driven impacts on esophageal cooling demand.

Q4 Margin Pressure and Expense Headwinds

Despite full‑year expansion, margins came under pressure in the quarter, with adjusted gross margin slipping 50 basis points to 59.7% and adjusted operating margin down 50 basis points to 24.4%. Operating expenses rose 5%, driven by Vivasure‑related spending, elevated tariffs, higher self‑insured benefits claims and stepped‑up strategic investments.

Tariff Exposure and Cost Assumptions

Tariff costs were higher than expected in the fourth quarter, undercutting near‑term profitability and prompting a reset of cost assumptions. Management has now built a 15% tariff rate into FY 2027 standard costs, versus around 10% currently, which will weigh on comparisons even as they pursue efficiency and pricing actions.

Portfolio Transition Effects and Divestitures

Reported revenue for the year declined 2% as portfolio transition effects and divestitures, including the whole blood business, weighed on the top line. Blood center revenue was down 15% for the year, and management highlighted about $153 million of nonrecurring prior‑year revenue that requires normalization when assessing underlying growth.

Vivasure Dilution and Launch Uncertainty

The recently acquired Vivasure platform is expected to be a strategic growth driver but will dilute earnings in the near term, costing roughly $0.05 per share in Q4 and an estimated $0.20 for a full year. Fiscal 2027 guidance assumes a full year of Vivasure dilution with no associated revenue and excludes any contribution from PerQseal Elite pending regulatory timing.

Higher Tax Rate and Interest Headwinds

The company’s adjusted tax rate rose to 24.8% in the fourth quarter and for fiscal 2026 from 22.2% in the prior‑year period, reflecting a less favorable mix and other factors. Looking ahead, management expects both interest expense and taxes to run higher, with the tax rate about 100 basis points above fiscal 2026, partially offsetting operating leverage gains.

Quarterly Cash Flow Timing Variability

Fourth‑quarter free cash flow declined versus the prior year, largely due to the timing of income tax payments and accounts receivable collections. This volatility led management to adopt a slightly more conservative stance on fiscal 2027 free cash flow conversion, guiding to roughly 80% versus the 89% achieved in the latest year.

Forward‑Looking Guidance and Strategic Outlook

Management’s fiscal 2027 outlook combines mid‑single‑digit growth expectations for plasma and hospitals with a mid‑single‑digit decline in blood center as transitions continue to wash through. They see gross margin improvement driven by plasma innovation, favorable hospital mix and operating leverage even as they absorb higher tariffs, ERP costs, Vivasure dilution and elevated tax and interest burdens.

Haemonetics’ call painted a picture of a company navigating short‑term noise while steadily strengthening its core franchises and profitability profile. Investors will be watching execution on plasma and hospital growth, the recovery in interventional technologies and the ramp of Vivasure, but for now management’s confident guidance and solid cash generation appear to support a constructive long‑term view.