Haemonetics Earnings Call: Strong Core, IVT Drag

Haemonetics ((HAE)) has held its Q3 earnings call. Read on for the main highlights of the call.

Haemonetics Balances Robust Growth with Interventional Headwinds in Upbeat Earnings Call

Haemonetics’ latest earnings call struck a broadly positive tone, with management emphasizing strong and durable organic growth, particularly in plasma and blood management technologies, along with notable margin expansion and accelerating cash generation. The company’s decision to raise both revenue and free cash flow guidance underscored confidence in the core business. While executives were candid about ongoing weakness in Interventional Technologies and vascular closure, they framed these as manageable, cyclical and product-cycle issues rather than structural problems, pointing to funded remediation plans and a path back to growth in the medium term.

Solid Revenue Momentum and Organic Growth

Haemonetics delivered Q3 revenue of $339 million, bringing year-to-date sales to $988 million, supported by broad-based strength across most of its portfolio. Organic revenue growth excluding the CSL plasma supply agreement reached 8% in the quarter and 10% year-to-date, impressive figures considering a $153 million drag from prior-year portfolio transitions such as the whole blood divestiture and exit of certain liquid solutions. The company’s ability to post high single- to double-digit organic growth despite these reported headwinds positions the underlying business as sturdier than headline revenue trends suggest.

Earnings Power Strengthens with Higher EPS Outlook

Profitability continued to track ahead of revenue growth, with adjusted earnings per share rising 10% year-over-year to $1.31 in Q3 and 11% year-to-date to $3.67. Reflecting that momentum, management raised full-year adjusted EPS guidance to a range of $4.90 to $5.00 per share. The upgraded earnings outlook signals that Haemonetics is converting top-line growth into bottom-line gains, even as some segments, notably Interventional Technologies, weigh on the overall mix in the near term.

Plasma Franchise Accelerates as a Core Growth Engine

The plasma business remains Haemonetics’ standout growth driver. Q3 plasma revenue reached $139 million, up 3% on a reported basis but far stronger underneath the surface, with organic plasma growth excluding CSL soaring 20% in the quarter and 22% year-to-date. U.S. plasma collections grew in the low double digits, reflecting both higher donation activity and continued adoption of Haemonetics’ technologies. Confidence in this segment led management to raise full-year plasma organic growth guidance ex CSL to 17%–19%, up from 14%–17%, reinforcing plasma as a central pillar of the company’s medium-term growth story.

Margin Expansion Across the P&L

Haemonetics delivered substantial margin expansion, signifying better pricing, mix and operational efficiency. Adjusted gross margin climbed 250 basis points year-over-year to 60.2% in Q3 and is 60.5% year-to-date, up 390 basis points. Adjusted operating margin also improved, reaching 26.3% in Q3 (up 60 basis points) and 25.7% year-to-date (up 200 basis points). Management continues to project full-year adjusted operating margin around 26%–27%, suggesting that the company is increasingly operating as a highly profitable, asset-light medtech platform with room for ongoing leverage as volumes grow.

Free Cash Flow Surges and Cash Guidance Raised

Cash generation was a clear highlight. Free cash flow reached $74 million in Q3 and $165 million year-to-date, with operating cash flow of $94 million in the quarter and $222 million year-to-date. Free cash flow conversion was particularly strong at 121% of adjusted net income in Q3 and 95% year-to-date, well above many peers. Reflecting this strength, Haemonetics raised its fiscal 2026 free cash flow guidance to $200 million–$220 million, up from $170 million–$210 million, and now expects full-year conversion to exceed 80%. The combination of expanding margins and strong cash conversion gives the company significant strategic flexibility.

Healthy Growth in Blood Management Technologies

Blood management technologies continued to deliver outsized gains, with revenue up 8% in Q3 and 11% year-to-date. Growth was driven by increased adoption of the Nexus/Persona platforms, strong demand for TEG 6s disposables, and uptake of the heparinase neutralization cartridge. Management highlighted a meaningful runway to upgrade a large installed base of legacy TEG systems and to drive higher utilization of existing platforms. For investors, this suggests a recurring-revenue dynamic and a multi-year cycle of capital upgrades and consumable growth within the hospital ecosystem.

Improved Revenue Guidance Despite Portfolio Headwinds

Reflecting confidence in underlying trends, Haemonetics raised its full-year reported revenue guidance to a decline of 1%–3%, a slight improvement from the prior range of down 1%–4%, and lifted organic revenue guidance ex CSL to 8%–10%, with the midpoint up roughly 50 basis points. These numbers are tempered by known portfolio effects, including the whole blood divestiture and product exits that still weigh on reported figures. Even so, the guidance revision points to resilient demand in the core business and a trajectory of improving organic growth.

Capital Deployment and Strategic Tuck-In Acquisition

Management continues to balance shareholder returns with strategic investment. Haemonetics repurchased roughly 360,000 shares for about $25 million late in the quarter, on top of $75 million in earlier buybacks, returning cash to shareholders while signaling confidence in the stock’s valuation. The company also completed a $61 million tuck-in acquisition of VIVUSHORE / PercuSeal Elite, aimed at strengthening its Interventional Technologies portfolio. With $363 million of cash on hand, up 18% since the fiscal year began, Haemonetics has the liquidity to pursue further bolt-on deals while supporting ongoing share repurchases and debt management.

Interventional Technologies Under Pressure

The Interventional Technologies segment remained a weak spot, with revenue down 12% in Q3 and 8% year-to-date. The bulk of the decline came from softness in esophageal cooling products as the market shifts toward pulsed field ablation (PFA) procedures, as well as OEM-related headwinds in sensor-guided technologies. SavvyWire and other OEM manufacturing rebalancing also weighed on results and is expected to remain a drag for at least one more quarter before normalizing. Management outlined remediation plans, including label expansion for MVP XL and the PercuSeal Elite launch, and expects IVT to return to growth by fiscal 2027, suggesting that current weakness reflects timing and product-cycle disruption rather than permanent impairment.

Vascular Closure Faces Competitive and Procedural Shifts

Vascular closure revenue declined 4% in Q3, pressured by prior share loss, order timing issues in several large accounts, and procedural shifts such as increased PFA adoption that alter case mix. Softness in MVP and MVP XL segments further dragged performance. While management expects new offerings, including PercuSeal Elite, to help stabilize and eventually reignite growth, vascular closure is likely to remain a more competitive and choppy category in the near term, with performance heavily dependent on execution, innovation and recaptured share.

Hospital Segment Growth Muted by IVT Weakness

The hospital segment generated $144 million of revenue in Q3 and $429 million year-to-date, down 1% in the quarter and up only 2% year-to-date on an organic basis. The softness reflects the drag from Interventional Technologies, which pulled down an otherwise healthier hospital franchise anchored by blood management technologies. The uneven performance in this segment caused modest margin pressure and constrained operating leverage for the quarter. Management cautioned that quarterly results by segment can be volatile due to product mix and timing of expenses, but reiterated expectations for hospital revenue to grow around 4% for the full year.

Operating Expenses and Segment Variability

Adjusted operating expenses rose to $115 million in Q3, up $3 million or 3% year-over-year, mainly due to higher performance-based compensation tied to improved results. Management underscored that quarterly segment performance may remain uneven, influenced by product mix, timing of orders, and cadence of investment spending. Despite these fluctuations, the company’s overall operating margin trajectory remains positive, signaling that spending increases are targeted and disciplined rather than structural cost inflation.

OEM and Manufacturing Headwinds Weigh on IVT

Beyond demand-related softness, Haemonetics is dealing with manufacturing and OEM-related challenges in its guidewire and sensor-guided products. SavvyWire and related OEM rebalancing were notable headwinds in the quarter and are expected to drag on Interventional Technologies for at least one more period before stabilizing. While these issues are temporary, they add another layer of pressure on IVT revenue and margins at a time when the segment is already contending with market shifts like PFA adoption.

Reported Revenue Still Distorted by Portfolio Transitions

Reported results remain meaningfully affected by prior portfolio transitions, including the divestiture of the whole blood business and exit from certain liquid solutions, which together represent a cited $153 million impact. The blood center segment, for instance, is still guided to a full-year reported revenue decline of 16%–18%, even though organic growth is modestly positive. This gap between reported and organic trends is important for investors: it suggests that top-line declines in certain segments are more about portfolio reshaping than underlying demand erosion.

Debt Profile and Financial Headwinds from Note Repayment

Haemonetics ended the period with total debt of approximately $1.2 billion and a net leverage ratio of 2.37x EBITDA, levels that remain manageable given the company’s cash generation. The balance sheet includes no borrowings under its revolving credit facility. Management did flag incremental interest and tax headwinds associated with the repayment of $300 million in zero-coupon convertible notes, which could modestly pressure near-term EPS. However, robust cash flow, margin expansion, and the raised EPS outlook suggest the company is well-positioned to absorb these financial headwinds over time.

Upgraded Guidance Points to Confidence in Core Growth

Looking ahead, Haemonetics raised full-year fiscal 2026 guidance across key metrics following the strong Q3. The company now expects reported revenue to decline 1%–3%, an improvement on the previous range, while organic revenue excluding CSL is forecast to grow 8%–10%. Plasma remains the standout, with organic growth projected at 17%–19%, and the blood center business, despite a reported decline of 16%–18%, is expected to grow 1%–3% organically. Hospital revenue is guided to roughly 4% growth, both reported and organic. Adjusted EPS guidance has been lifted to $4.90–$5.00, with adjusted operating margin still projected in the 26%–27% band and an adjusted tax rate around 25%. Free cash flow is now expected to land between $200 million and $220 million with full-year conversion above 80%, underscoring the company’s confidence in sustained profitability and cash generation.

In sum, Haemonetics’ earnings call painted a picture of a company with powerful growth engines in plasma and blood management technologies, steadily improving margins, and strengthening cash generation, offset by tactical challenges in Interventional Technologies and vascular closure. While these weaker areas are likely to keep segment results uneven in the near term, management’s remediation plans and upgraded guidance suggest the broader investment case remains intact. For investors, the story is increasingly one of durable growth, high and expanding margins, and growing cash returns, with IVT recovery representing potential upside rather than a core dependency.