Haemonetics (HAE) Q4 2026 Earnings Transcript

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Date

Thursday, May 7, 2026 at 8 a.m. ET

Call participants

• Chief Executive Officer — Christopher Simon
• Chief Financial Officer — James D'Arecca
• Vice President, Investor Relations — Olga Guyette

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Takeaways

• Total revenue -- $346 million in Q4, a 5% reported increase and 9% organic ex-CSL increase; full-year revenue of $1.3 billion.
• Adjusted EPS -- $1.29 for Q4, up 4%; full-year adjusted EPS of $4.96, a 9% increase, with portfolio transitions now fully completed.
• Adjusted gross margin -- 59.7% in Q4, a decrease of 50 basis points, mainly due to the loss of prior-year CSL shortfall payment and new tariffs; full-year adjusted gross margin expanded to 60.3%, up 280 basis points.
• Adjusted operating margin -- 24.4% in Q4, a decline of 50 basis points; full-year margin rose 140 basis points to 25.4%.
• Free cash flow -- $45 million in Q4; $210 million for the year, with a conversion ratio of 89% relative to adjusted net income.
• Capital deployment -- $175 million was used for share repurchases, over 3 million shares bought back; $61 million deployed for the Vivasure acquisition.
• Debt structure -- Total debt is $1.2 billion; $700 million in convertible notes (due 2029), $239 million term loan A, and $300 million revolver balance; net leverage at 2.73x EBITDA.
• Hospital segment revenue -- $160 million in Q4, up 8% reported and 7% organic; full-year hospital revenue reached $588 million, representing 4% reported and organic growth.
• Blood management technologies -- Q4 revenue growth was 21%; full-year growth was 14% with broad product adoption, especially TEG 6s and related disposables.
• Hemostasis management -- High teens percentage growth in Q4, driven by TEG 6s utilization and strong European demand post-HN cartridge launch.
• Interventional technologies (IVT) -- Q4 revenue declined by 10%; full-year IVT revenue declined 9%, with headwinds that drove approximately 80% of the decline in fiscal 2026. First, OEM-related softness in sensor-guided technologies. Second, PFA impacts on esophageal cooling have now been lapped or reduced to a nonmaterial base.
• Vascular closure -- Revenue down 8% in Q4 due to a 6% decline in MVP and MVP XL for electrophysiology and continued coronary/peripheral softness.
• Plasma segment revenue -- $130 million in Q4, a reported increase of 3% and a 13% organic ex-CSL increase; full-year plasma revenue of $524 million, down 2% reported but up 20% organic ex-CSL.
• Blood center segment revenue -- $56 million in Q4, up 1% reported and 6% organic; full-year revenue of $221 million, down 15% reported due to the whole blood divestiture but up 5% organic.
• 2027 revenue guidance -- Projected total revenue growth of 4% to 7% reported and 3% to 6% organic, adjusted for the extra week and FX.
• 2027 margin guidance -- Adjusted operating margin expected to expand by 50 to 100 basis points; adjusted EPS to grow in line with revenue, with tax rate rising by 100 basis points.
• 2027 free cash flow guidance -- Targeting approximately 80% conversion, mainly due to increased inventory requirements.
• Innovation and portfolio progress -- FDA clearance received for Persona PLUS, VASCADE MVP XL label expansion, and Japanese submission for VASCADE; acquisition of Vivasure completed for large-bore closure platform.
• Persona PLUS yield enhancement -- Average additional 5% yield over previous Persona platform, supported by a randomized clinical trial of 30,000+ donations; multiple adoptions underway.
• Share in plasma collections -- U.S. plasma collection share grew in the high single digits; European plasma grew at double-digit rates.
• PerQseal Elite launch preparation -- Launch investment ongoing with all costs included in 2027 guidance; no associated revenue assumed in the forecast as FDA review is still pending.
• Vivasure dilution -- Reported as roughly $0.05 per share in Q4; projected full-year dilution of about $0.20 for 2027.

Summary

Haemonetics (NYSE:HAE) detailed a transition year characterized by significant advances in revenue quality, margin expansion, and execution of a focused high-growth portfolio strategy. Origination of growth in both plasma and TEG platforms supported positive organic momentum, while the conclusion of portfolio transitions removed headwinds from reported results. With the full impact of the CSL transition and whole blood divestiture now complete, management delivered forward guidance underscored by targeted innovation launches—most notably Persona PLUS and VASCADE MVP XL—supported by disciplined capital deployment prioritizing both organic growth and shareholder returns via buybacks. Tight inventory management and tariff cost integration were emphasized as near-term working capital priorities, anticipating stable cash generation and further deleveraging capacity.

• Christopher Simon stated, "Fiscal 2026 marked the culmination of our long-range plan for transformational growth, whereby we fundamentally repositioned Haemonetics into a more focused, higher quality, and more resilient company with significantly stronger growth, margins, and cash flow."
• Persona PLUS was highlighted as "Persona on average gave 10% benefit. This is another 5% on average above that. Tremendous acceptance into the market. We've already begun the upgrade cycle. And while we don't talk about price explicitly, the value of dropping that additional 5% yield to our customers creates a lot of room for mutual benefit, right? So you should absolutely expect price to be part of the equation as we roll forward this year. But as our convention, we won't put it into the guide until it's fully contracted and we have a committed timeline for implementation. So more to come there. We think it gives us some breathing room as the year progresses, some potential upside, but really excited about it, puts just another step forward for the platform to advance and really be unrivaled in the market."
• Guidance for 2027 revenue and margin expansion explicitly excludes any PerQseal Elite revenues, reflecting a conservative stance until FDA market clearance is received.
• Strategic capital allocation included a $175 million buyback, Vivasure acquisition, and sustained organic investment, with year-end cash at $245 million and a reaffirmed focus on supporting future innovation launches and opportunistic shareholder returns.
• No further material impact from CSL transitions is expected; 2027 is described as "I used the phrase in a public setting recently that the fog is clearing and it's going to reveal the forest for the trees. I think the $153 million of overhang or hangover depending on who you're talking to, does clear entirely. And it will be nice to be able to talk with you guys without the asterisks and the but fors and what sounds like a list of apologies, just durable growth, cash flow and return on capital, which that business is known for. So yes, we are very much looking forward to a clean print in fiscal 2027 and beyond." The year is set to reflect core operating traction without headwinds from portfolio restructuring.

Industry glossary

• TEG: Thromboelastography—an analyzer system assessing patient hemostasis and coagulation characteristics.
• MVP XL: A larger sheath version of the VASCADE vascular closure device for electrophysiology procedures.
• Persona PLUS: Next-generation plasma collection platform designed to further increase collection yield per donation.
• PerQseal Elite: Large-bore vascular closure device under development and FDA review, intended for use in structural heart and other high-volume procedures.
• Vivasure: Acquired firm and platform focused on large-bore vascular closure products for interventional procedures.
• PFA: Pulsed Field Ablation—a cardiac ablation modality affecting demand for certain vascular closure products.

Full Conference Call Transcript

Olga Guyette: Good morning, and thank you for joining us for Haemonetics' Fourth Quarter Fiscal Year 2026 Conference Call and Webcast. I'm joined today by Chris Simon, our CEO; and James D'Arecca, our CFO. This morning, we released our fourth quarter and full fiscal 2026 results and issued fiscal year 2027 guidance. The materials, including our earnings release and supplemental earnings presentation, are available on our Investor Relations website and also in this morning's press release. 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, the divestiture of the whole blood product line, and the exit of certain liquid solutions products.

Organic growth ex-CSL also excludes the impact of the previously disclosed transition of CSL's U.S. disposable business. Our fiscal year 2027 organic revenue 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, reconciliations to our 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 now, I'd like to turn it over to Chris.

Christopher Simon: Thanks, Olga, and good morning, everyone. We delivered fourth quarter revenue of $346 million, up 5% reported and 9% organic ex-CSL, with adjusted EPS of $1.29, up 4% year-over-year. For the full fiscal year, revenue was $1.3 billion, and adjusted EPS was $4.96 per share with improved adjusted earnings, higher adjusted margins, and stronger free cash flow than in the prior year despite $153 million of nonrecurring revenue from portfolio transitions. Our performance reflects the strength of our core platforms with plasma and TEG driving momentum, margin expansion, and reinforcing our leadership in attractive end markets. This foundation enabled targeted investments to position interventional technologies to contribute to growth in fiscal '27 and beyond.

At the same time, we advanced our innovation agenda with U.S. FDA clearance of Persona PLUS, the expanded indication for VASCADE MVP XL, a submission to expand the VASCADE label in Japan and the acquisition of Vivasure. Moving on to our business unit results. Hospital revenue was $160 million in the fourth quarter and $588 million for the full year, growing 8% in the quarter and 4% for the year, or 7% and 4% on an organic basis, respectively. Results were supported by strong performance in blood management technologies, partially offset by interventional technologies, consistent with trends we've discussed throughout the year.

Blood management technologies delivered a record quarter with broad-based performance driving revenue growth of 21% in the quarter and 14% for the year. Hemostasis management grew in the high teens, fueled by sustained strength in TEG 6s, higher disposable utilization, continued capital placements and strong European momentum following the HN cartridge launch. Transfusion management delivered outsized growth in the quarter, contributing nearly half of the franchise growth as we continue to gain share through the adoption of our integrated solutions that enhance hospital safety and efficiency. In interventional technologies, revenue declined 10% in the quarter and 9% for the full year.

Vascular closure was down 8% in the quarter, reflecting 6% decline in MVP and MVP XL in electrophysiology and continued softness in lower growth coronary and peripheral procedures. Performance in EP was affected by share loss in the first quarter of fiscal 2026 and evolving procedure dynamics. Sequentially, EP grew 8% and sensor-guided technologies returned to growth, partially offsetting the continued impact of PFA on esophageal cooling. Over the past year, we strengthened our commercial organization, equipped our teams with better tools and advanced our product portfolio. Q4 was our strongest quarter of fiscal '26, and we have renewed confidence in the trajectory of IVT. Importantly, the headwinds that drove approximately 80% of the decline in fiscal '26.

First, OEM-related softness in sensor-guided technologies. And second, PFA impacts on esophageal cooling have now been lapped or reduced to a nonmaterial base. With the expanded MVP XL label and the anticipated release of PerQseal Elite, we are strengthening our competitive position and reenergizing the business as we enter fiscal '27. Turning to plasma and blood center. Plasma momentum continued with another quarter of growth driven by category leadership, differentiated innovation, and strong market fundamentals. The franchise delivered $130 million in revenue in Q4, up 3% reported and 13% organic ex-CSL as we annualized the last of the discontinued CSL U.S. disposable supply agreement.

Full year revenue was $524 million, down 2% reported, but up 20% organic ex-CL (sic) [ ex-CSL ] above our revised guidance range of 17% to 19%. Market fundamentals remain highly attractive, supported by resilient immunoglobulin demand and continued global expansion in plasma collections. Our share of U.S. plasma collections grew in the high single digits in both the quarter and full year with double-digit growth in Europe as customers increasingly rely on our platform to drive efficiencies. Persona PLUS is the next step in our innovation cycle, further strengthening our competitive position by enhancing percent yield by mid-single digits on average, supported by a large randomized clinical trial of over 30,000 donations and underpinned by our proprietary patent-protected technology.

It has been met with strong customer enthusiasm with multiple adoptions underway. Blood center also contributed positively to the fourth quarter, generating $56 million in revenue, up 1% reported and up 6% organic. For the full year, revenue was $221 million, down 15%, reflecting the whole blood divestiture, but up 5% on an organic basis. Performance was driven by continued strength in global plasma demand and stable and growing U.S. red cell collections despite our ongoing portfolio rationalization efforts. For the full year, total company revenue declined 2% reported due to portfolio transitions, but grew 10% organically ex-CSL, at the upper end of our guidance.

We expect growth to continue in fiscal '27 with projected revenue growth of 4% to 7% reported and 3% to 6% organic adjusted for the extra week in FX. In hospital, we expect mid-single-digit growth with both franchises contributing. We anticipate continued expansion of the TEG 6s installed base and increased HN cartridge utilization in blood management technologies. In IVT, we are ending the year with a stronger commercial organization, improving market dynamics, and a more competitive portfolio, supported by the MVP XL label expansion. With most headwinds now behind us, we are focused on translating these improvements into consistent growth. Our guidance excludes any contribution from PerQseal Elite, which is currently undergoing FDA review.

In plasma, consistent with our FY '26 approach, our mid-single-digit growth outlook is grounded in controllable drivers, share gains, the rollout of Persona PLUS and modest collection volume growth while retaining upside if collection trends remain strong and/or adoption accelerates. We remain confident in the durability of growth and our ability to further extend our leadership in this attractive market. In blood center, strong plasma-driven demand and customer relationships will continue to support performance. However, ongoing portfolio rationalization remains a near-term headwind, and we expect revenue to decline in the mid-single digits. We're encouraged by our progress, and we remain focused on consistent execution to deliver growth and sustainable value for our customers and our shareholders. James, over to you.

James D'Arecca: Thank you, Chris, and good morning, everyone. We closed the year with strong execution and meaningful progress in strengthening the quality of our earnings, expanding margins, improving cash flow, and further aligning our portfolio with higher growth, higher-margin markets that will continue to support our growth aspirations in the long run. Adjusted gross margin in the fourth quarter was 59.7%, down 50 basis points year-over-year, primarily reflecting the absence of the prior year CSL shortfall payment and the impact from tariffs enacted earlier in the year, partially offset by a structurally higher margin portfolio.

For the full year, adjusted gross margin expanded 280 basis points to 60.3%, driven by portfolio transformation, strong volume growth in plasma and blood management technologies, and continued strong demand for our market-leading innovation. Adjusted operating expenses in the fourth quarter were $122 million, up 5% year-over-year, largely driven by the addition of Vivasure and the impact from tariffs, coupled with higher-than-expected costs from the self-insured portion of our benefits plan, higher performance-based compensation, and a deliberate step-up in targeted investments to strengthen our commercial capabilities. Together with the adjusted gross margin dynamics in the quarter, this resulted in adjusted operating income of $85 million and adjusted operating margin of 24.4%, down 50 basis points year-over-year.

Adjusted operating expenses for the full year were $465 million, up 2%, driven by continued investment in R&D and selling and marketing, the acquisition of Vivasure, and higher performance-based compensation. Adjusted operating margin for the year expanded 140 basis points to 25.4%, reflecting structural improvement from portfolio transformation even as we continue to invest for future growth and absorb macro cost headwinds. The adjusted tax rate was 24.8% in the fourth quarter and fiscal year '26 compared to 22.2% and 23.2% in the prior year, respectively. Adjusted EPS increased 4% to $1.29 in the fourth quarter, inclusive of a modest benefit from share count, which was more than offset by higher interest, tax, and FX.

For the full year, adjusted EPS was $4.96, up 9%, demonstrating the strength of the underlying business and disciplined capital allocation that helped offset the impact of portfolio transitions, which are now fully behind us, partially offset by higher interest and tax. Now turning to the balance sheet and cash flow. Cash generation continues to be a defining strength of the business and a key source of strategic flexibility. With our major device investments and productivity initiatives largely behind us, the business has returned to a strong and sustainable cash flow profile.

In the fourth quarter, we generated $45 million of free cash flow, bringing the full year free cash flow to $210 million with the free cash flow to adjusted net income conversion ratio of 89%. While free cash flow in the quarter was down versus last year, mainly due to the timing of income taxes paid and accounts receivable, full year free cash flow increased by $65 million, largely driven by better working capital management and less CapEx.

We ended the year with $245 million in cash after deploying $175 million to repurchase over 3 million shares, investing $61 million in the Vivasure acquisition and continuing to fund organic growth, reflecting a balanced capital allocation approach that supports both organic growth and shareholder returns. We enhanced capital structure flexibility and positioned the business for continued deleveraging that can be supported by strong cash flow.

While total debt remained unchanged at $1.2 billion, we refinanced $300 million of convertible notes with the revolving credit facility, ending the year with $700 million of convertible notes due in 2029, $239 million of term loan A debt and a revolver balance of $300 million with a net leverage ratio as defined in our credit agreement at 2.73x EBITDA. On that note, let's move on to discuss the rest of our fiscal year '27 guidance. Consistent with the strong foundation and momentum Chris outlined, we expect fiscal 2027 revenue growth of 4% to 7% reported and 3% to 6% organic.

We expect continued margin expansion with adjusted operating margin improving 50 to 100 basis points year-over-year, driven by continued strong momentum across our growth franchises, innovation, and operating leverage as we begin to scale IVT. Also included in that expectation is a full year of dilution from the Vivasure acquisition with no associated revenue in our fiscal year '27 guidance, additional impact from tariffs, ERP-related costs, and continued investment in targeted high-return growth initiatives.

At the earnings level, we expect adjusted EPS to grow broadly in line with revenue as improvements in operating leverage and mix benefits are assumed to be largely offset by higher interest and tax, which is expected to be higher by about 100 basis points than in fiscal '26. Importantly, the business is expected to continue to demonstrate strong earnings quality, supported by a highly recurring revenue model and disciplined capital deployment. We expect free cash flow conversion of approximately 80%, reflecting a disciplined approach to working capital that preserves flexibility to manage inflationary and tariff pressures and invest in growth while enabling organic investment, deleveraging, and opportunistic share buybacks.

With that, I'll turn it back to Chris for closing remarks.

Christopher Simon: Thanks, James. I want to share a few closing thoughts about our journey over the last 4 years. Fiscal '26 marked the culmination of our long-range plan for transformational growth, whereby we fundamentally repositioned Haemonetics into a more focused, higher quality, and more resilient company with significantly stronger growth, margins, and cash flow. We evolved and rebalanced our portfolio. In plasma, we drove broad adoption of NexSys and Persona while advancing the next wave of innovation with Express Plus to reduce procedure times, Persona PLUS to further improve yield and Device360 to digitize and streamline center operations. We rationalized our blood center portfolio, including the divestiture of whole blood to drive margin expansion.

We broadened the clinical utility of TEG 6s with the HN cartridge, extending into high acuity settings such as cardiovascular surgery and liver transplantation and advanced international expansion with CE Mark certification. We strengthened the VASCADE platform with MVP XL for larger sheath procedures, enhanced our clinical evidence, scaled commercially, and expanded into large bore closure with PerQseal Elite. We also revamped the operating model of the company, advancing operational excellence, scaling and automating our manufacturing and supply chain capabilities, progressing our ERP digital transformation, and building the commercial and clinical infrastructure required to sustain growth, including a robust NexSys capital cycle to support ongoing global share gains.

The results, low teens compounded average organic revenue growth ex-CSL, high teens adjusted EPS CAGR, low 60s adjusted gross margins, 660 basis points of adjusted operating margin expansion, and $636 million of cumulative free cash flow, results achieved while investing for growth, navigating dynamic markets and macro environments, and overcoming $153 million of nonrecurring revenue from portfolio transitions. With the transitions behind us, we expect growth to reaccelerate and become more consistent, supported by a structurally more attractive mix of recurring revenue from high-growth, high-margin platforms. Our priorities for fiscal '27 are clear: Continue to win in plasma, extend our leadership in TEG and reinvigorate growth in vascular closure while driving greater operating efficiency.

Quality earnings growth will further strengthen our balance sheet and create opportunities for value creation through disciplined capital allocation, including organic growth, delevering and opportunistic returns of capital to shareholders via buybacks when appropriate. Thank you, operator. Please open the line for questions.

Operator: [Operator Instructions] Our first question comes from the line of Andrew Cooper from Raymond James.

Andrew Cooper: Maybe first on plasma. I don't think you shared, and apologies if I missed it, but U.S. collection volume trends you saw in the quarter at kind of the market level. And then as you think about the end market views for '27, given discussions with fractionators, would love just kind of the latest and greatest thinking that's included in the guide. And then secondly, if you could give a little bit more on the Persona PLUS rollout in terms of how the base has adopted it, how much has adopted it thus far? And then are you able to take some price with that? Or is this more of a tool to extend contracts, ensure stickiness, et cetera?

So just would love kind of how that rollout is shaping up.

Christopher Simon: Andrew, thanks for the question. Look, FY '26 was a record year for plasma. We overcame that hangover that's been out there for a bit now and had what we describe internally as the trifecta of growth, where we had price from the remaining Persona rollout. We had a meaningful uptick in share gains, which is something we're obviously quite proud of and a return to double-digit growth on collection volume in the latter part of the year. So real strength there. In the fourth quarter, in addition to the normal seasonality, we lapped our price gains on Persona. So that was not a meaningful contributor in the quarter.

We do have some ongoing share gains from earlier transformation, earlier transitions, modest tick down in collection volume. But again, quite consistent with what we see as kind of the long-term trend for growth. FY '27 guide, we took a page out of our playbook for FY '26, and we're really only talking about the things that we directly control, the annualization of share gains and the committed upgrade to Persona PLUS. We didn't really include any collection volume, I think 0% to 2% again this year. We don't control that.

Obviously, as I said in the prepared remarks, if collection volumes remain hot and/or the pace of adoption of Persona accelerates, then we have meaningful upside from what we otherwise view as very prudent guidance with mid-single-digit growth for the year. In terms of PLUS, it's the next stage of our advancements. Nobody can match it. It's another -- Persona on average gave 10% benefit. This is another 5% on average above that. Tremendous acceptance into the market. We've already begun the upgrade cycle. And while we don't talk about price explicitly, the value of dropping that additional 5% yield to our customers creates a lot of room for mutual benefit, right?

So you should absolutely expect price to be part of the equation as we roll forward this year. But as our convention, we won't put it into the guide until it's fully contracted and we have a committed timeline for implementation. So more to come there. We think it gives us some breathing room as the year progresses, some potential upside, but really excited about it, puts just another step forward for the platform to advance and really be unrivaled in the market.

Andrew Cooper: And if I can just ask one more, maybe on margins. I think you sort of forecasted the 50 to 100 basis points as a reasonable starting point, but you're coming off a little bit lower of an exit rate here. So when we look at 4Q for you, James, maybe you called out increased investments, some of which I assume will persist versus things that are maybe a little bit more onetime in terms of benefit costs. I think you called out performance comp and tariffs. So just if you could break that down for us a little bit more and lay out how those things flow into the '27 guide as well.

James Owens: Yes, sure. Thanks, Andrew. On Q4 operating margins, the results certainly were lower than we initially expected, and it really comes down to the 3 items, which I think you mentioned. First, tariffs were higher than anticipated. We saw roughly 60% of the annual impact in Q4 as our plasma inventories were depleted. Second, as you mentioned, we had the higher claims expense for our self-insured medical plans. And third, we stepped up sales and marketing investment ahead of our FY '27 launches, including MVP XL and PerQseal Elite. When I look to FY '27, we expect the operating margin expansion to be driven primarily by gross margin improvement, but also by greater operating leverage.

So on gross margin, we expect the benefits from our plasma innovation cycle, which Chris just talked about, including Persona PLUS, along with volume-driven leverage. And we also expect a favorable mix shift as hospital, which runs close to 70% gross margins contributes more of the growth. Offsetting some of that, we did incorporate higher tariff costs into our standard costs and we're assuming a 15% tariff level versus the current 10% that we're paying. So that differential is already built in. Overall, on operating expenses, I'd say we're investing. So expenses are going to be up, including with Vivasure, but we're expecting operating leverage as revenue growth and gross margin expansion outpace expense growth.

We're staying disciplined, and we're looking to protect our profitability while funding the launches. So overall, we do think some of those items will recur like the tariffs we're building in, higher costs for medical, and we do have those bigger investments in there for S&M. But that's all built in to the guide. And we look forward to improved operating margins next year.

Operator: Our next question comes from the line of Marie Thibault from BTIG.

Marie Thibault: Maybe I'll pick up where Andrew left off and ask about hospital. I thought it was really encouraging to hear. You're feeling reenergized about the interventional tech trajectory. So just want to get a little bit more detail on the dynamics you're seeing stabilization, signs of improvement. Certainly, you've got the expanded label for MVP XL. So I would love more details on that and the cadence for how you think fiscal '27 could unfold for this part of the business?

Christopher Simon: Yes. Thanks, Marie. We -- I think quite clearly, whether it's 6 or 9 or 12 months from now, we will look back at this point and say that was the inflection point. Fourth quarter of fiscal '26 is when Haemonetics IVT turned the corner. And we understand we were down 9% for the year. When you step back from that number, and there's no apologies here, but the reality is fully 80% of that 9% decline was attributable to 2 factors: the releveling of the guidewire OEM business with J&J's acquisition of Abiomed, they took the inventory down, rebalanced their sourcing a bit, and that was a big chunk of the hit.

The other hit, of course, was ensoETM, which is on the wrong side of the PFA adoption curve. The good news is we've lapped the first, and the second is now at a level where roughly $2 million per quarter, it can't hurt us. So what you will see from us going forward is threefold. You will see a return to growth at or above market rates for vascular closure led by electrophysiology. You'll see SavvyWire, the direct retail business that we control, growing disproportionately. And with any luck, we'll launch the PerQseal Elite product later this year, and we think that's a novel offering for large-bore closure, which gives us a lot of encouragement.

In short, the enthusiasm you're hearing from us is a better team, better tools, a better product and a more accommodating market overall. So we understand our win-loss ratio. We understand what this team is capable of. We've equipped them. You heard from James, the investments we've made throughout the year, but especially in the fourth quarter, to position them for stellar performance in FY '27, and that's exactly what we expect.

Marie Thibault: A quick one maybe for James here. Free cash flow conversion, I think you cited 89% this fiscal year, which is tremendous. You're pointing to 80% conversion next fiscal year. Obviously, nothing to sneeze at. It's still very impressive. But what's behind that trajectory, the 80% versus the nearly 90% this year?

James Owens: Yes. For the most part, Marie, that's just a bit of conservatism being built in. We know that we have to increase our inventory levels. So it's working capital related really driving most of that, but also a healthy dose of conservatism in there.

Operator: Our next question comes from the line of Anthony Petrone from Mizuho.

Anthony Petrone: Maybe one on plasma, one on IVT. On plasma, maybe just a recap on the landscape there. Some chatter that there's some discounting going on by some of the fractionators in that space. And then in addition to that, there's a shift as it relates to CIDP prescriptions. In other words, the FcRn competition question. So maybe what's the latest in terms of what you're hearing just on just finished good IG inventory as well as FcRn competition in CIDP? And I'll have a quick follow-up on VASCADE MVP.

Christopher Simon: Hello, Anthony, it's Chris. Thanks for the question. We remain really bullish on plasma. It defines durable growth in our portfolio and is a major source, not only of earnings, but free cash flow and return on invested capital. So we look at this. There are certainly others that are more expert beginning with our customers. But our understanding is quite positive with regards to the long-term demand of IG-derived pharmaceutical therapies. What gets lost in the chatter, I think, is that fully half the market -- more than half the market and a disproportionate source of growth of the category is primary and secondary immune deficiencies, which tragically are being driven incidence and prevalence by cancer therapy.

And so there is no alternative to IG in that space, and we see that growth unabated. On the other side, autoimmune, what we look to primarily is new patient starts. And what we see is IG remains the standard of care. Now I think folks misinterpret that when they see growth in VYVGART that, that must come at the expense of IG. And the reality is that's just a misinterpretation of the facts. The reality is both can grow because the primary use for VYVGART in those autoimmune categories is as secondary therapy for when their patient is nonresponsive to IG or that they want to overlay anti-FcRn in addition to IG to get an optimal result.

There's very few examples of naive IG patients being started on the alternative therapy. And there's none that I'm aware of where someone is being switched off of IG who was otherwise well tolerated and well treated. Some of that's economics, some of that's just the base underlying efficacy of IG therapy. So there will always be noise in the system. There will always be a degree of cyclicality. Inventory levels are more art than science as we understand it. But we remain very bullish on the near, the intermediate, and the long-term demand for IG therapy and the need to collect accordingly.

Anthony Petrone: And then just quick on MVP, VASCADE. All of the PFA companies reported here, it looks like the market for cardiac ablation slowed a little bit in 1Q. Just from the vantage point of Haemonetics, where does it see just the underlying market for EP volumes?

Christopher Simon: Yes. Thanks, Anthony. I think one of the positive silver lining, if you will, of the pace of PFA adoption and the changing modalities associated with it is that it is very quickly settling in, which is helpful for us because we have a dual effect. Higher procedure volumes is obviously a good thing, but the reduction in access sites works against demand for our product. Because this is now leveling, you will increasingly see demand for closure track with the underlying demand for procedures, which is meaningfully ahead. When we go back and estimate FY '26, the underlying growth in access sites was probably mid-single digits, perhaps as low as 3.5% or 4%.

What we expect for this year is certainly higher than that, probably in the mid- to high-single digits, which bodes well for us given our aspiration to grow at or above the market fairly quickly here. So from our vantage point, we're ubiquitous, particularly with the label expansion and the added clinical evidence, which is really outstanding. We are indifferent between which therapy is used. We have the best access closure for small and mid bore, soon to be large bore as well. And so from our vantage point, we think we can grow at or above market.

If the market modulates down a tad, that probably just gives us a chance to catch our breath and get back on our front foot.

Operator: Our next question comes from the line of Allen Gong from JPMorgan.

K. Gong: I guess like one that I have is on PerQseal. I know you're not including any contribution in your current guidance, but just remind us on the pathway to market there and potential upside to the guide from that.

Christopher Simon: Yes. Hello, Gong. As is our convention, we've included all of the launch expense, which actually began last quarter to prepare the team, the product and the market for a truly outstanding launch whenever that comes this year. The product has been submitted to FDA. It's under review. We'll have the normal ongoing process. I don't want to comment about the timeline. It's just unpredictable in that regard, particularly in this current environment. But we really like the data submission. It's based on a set of trials that have been well vetted by the academic community. And so we feel quite confident in the product's profile and its eventual approval.

We didn't include any of the revenue because we don't control it. And so whenever it comes, we will be ready to go. And we think this will really be a meaningful novel offering for large-bore closure up to 26 French outer diameter. And so we think it will strengthen our play, not only in vascular closure more broadly, but in structural heart as well. So it's a nice complement. It's a true tuck-in. We don't need to add additional resources beyond what we already have in place. We just need to make sure those resources have the tools and are properly trained and equipped to be able to create launch intensity, which we expect later this year.

K. Gong: And then just as a quick follow-up to an earlier question just on plasma supply. I just wanted to confirm when we think about some call-outs of maybe abnormal stocking and potential destocking dynamics in the quarter, that's not something that you're seeing. That's not something that you're necessarily concerned about for the rest of the fiscal year. I just want to make sure that's the right way to think about it.

Christopher Simon: Yes, Allen, I'd just go back to our guidance at mid-single digit. We have included 0% to 2% collection volume growth for the year. So if what you are describing is right, we're indemnified from it, right? We didn't anticipate collection volume growth. Anything that is above that 0% to 2% is going to be upside for us as the year progresses. What we'll lean into is an expedited rollout of Persona PLUS, where we have meaningful innovation-based pricing that will really help the market. There have been -- in prior yield rollouts, there have been trade-offs made where folks collect less because -- less total collections because they're getting more per collection from us.

That's part of our value proposition. It drives margin expansion, and it helps with the overall profitability and the durability of what we're doing. But the actual inventory levels, I think the numbers get confusing because you've got individual customers at very different stages in the life cycle. So for us, with north of 50 share of the total collection market between the U.S. and Europe, we have more ability to kind of balance that out perhaps than some.

Operator: Our next question comes from the line of Larry Solow from CJS Securities.

Lawrence Solow: It's [ Pete Lucas ] for Larry. Just following up on PerQseal. Should we expect incremental sales and marketing investment in fiscal year '27 ahead of when approved? And how should we kind of think about that?

Christopher Simon: Yes. I'll let James walk through the details of it, Pete. But we -- our guidance of mid-single-digit growth for hospital and 100 basis points of margin expansion fully anticipates the resourcing of that launch for success. And good news is we were able to do a bunch of that work in the fourth quarter. Some of it will continue into the year, but it's fully reflected in our guidance. What's not reflected from my answer to the prior question is any revenue attainment. We'll -- if and when, we'll adjust accordingly.

James Owens: Yes. When you look at the numbers, it was -- Vivasure was roughly $0.05 or so dilutive in Q4. If you take that and multiply it by 4, that would give you about $0.20 dilution for Vivasure for the full year.

Operator: Our next question comes from the line of David Rescott from Baird.

David Rescott: Two quick clarification questions and then I had a follow-up. And it sounds like you kind of just answered part of the first one as it relates to the contribution from these launch investments for Vivasure. But maybe can you think about or help us think about when we look at the margins in the quarter, I think operating margins in plasma was down 650 basis points year-over-year. If you know, what maybe that baseline operating margin, overall was in -- in your mind, maybe taking out that $0.05 kind of gets you to what that adjusted ex-Vivasure number is. And then as it relates to the guide for 2027, you called out EPS growth comparable to that of revenue.

Just curious if that's specific to the reported revenue growth or the organic revenue growth guidance for the year? And then I had a follow-up.

James Owens: Yes. On the second one, the EPS is commensurate with the reported revenue growth because that includes all 53 weeks. On the operating margin question on plasma, there's a couple of things that drove the decline versus Q4 in the previous year. One, I would say, as I mentioned, was we had some tariff expense that came in, in the quarter that was higher than what we anticipated. That pushed it down. The other thing that pushed it down was as we got into the fourth quarter, we hit some of the higher tiers on our volume-based pricing, and that also pushed it down a bit as well.

But the baseline plasma operating margin, if you took the average of the year, excluding the $16 million that was in the first quarter for software, that should get you something close to a baseline amount there for plasma.

Christopher Simon: David, it's Chris. If I could just jump in on that, if I may, because I think one thing that may get lost in the shuffle is we fully expect FY '27 to be a robust year of product launches. It will include the heparinase neutralization cartridge, which is now in Europe, but we will take more broadly, the MVP label expansion, which gives us tremendous cache at IDNs and ASCs and just a broader opportunity to promote the product directly in the market. We talked about Persona PLUS and what we think that will mean. We expect everyone to adopt that over the course of time here. And then PerQseal Elite when it comes.

And so we factored in what we believe are the costs associated with making sure this goes. That's part of the guide. If we surprise ourselves positively, then the revenue forecast and the associated margins with that will look prudent in hindsight.

David Rescott: And then maybe on the assumptions for the plasma guide in the year. I appreciate the color you provided on that already. But when we look back to the NexSys Persona Express Plus launch a couple of years ago, you had the improved yield benefits coming out of that in the period exiting that, the underlying plasma market growth declined or was slower than expected. And I know we don't definitively know what the reason was, but perhaps you could assume that better yield was a factor there.

As you think about launching the new Persona PLUS system with a better yield enhancement coming with it, how, I guess, do you potentially expect that to impact the overall plasma collections if, again, perhaps the reason why you had slower growth in the prior couple of year period may have been related to the initial new product launch? And feel free to tell me if you think that's wrong as well.

Christopher Simon: David, I don't think we have clairvoyance on this, right? We continue to believe plasma will play an outsized role in terms of durable growth, free cash flow and return on invested capital. The guidance of mid-single-digit growth for FY '27 includes the annualization of share gains, which have already been implemented, right? So share gains, we grew 20% in fiscal '26, as you know, fully half of that growth or share gains. And so that is still annualizing as we speak and will continue certainly through the first part of the year. Innovation-based pricing, important lever for us. We've annualized all the Persona gains previously built in.

What we will have is potential upside associated with the Persona PLUS and accelerated adoption there, given what that means to the market. In terms of volume, again, 0% to 2% because we don't control it. The dynamic you described is very much what took place for the second wave of Persona rollout where some of the largest collectors took the 10% yield and met their annual objectives, and we're able to meaningfully lower cost per liter as a result. The first wave of Persona rollout was the opposite effect, which is folks that were intended to grow 10% for the year grew 20% to meet their individual demand at the time. So it will vary by individual customer.

It's really difficult to call. We feel like we're well insulated at that mid-single-digit overall guide given that 0% to 2% is what's attributable to volume at this point.

Operator: Our next question comes from the line of Mike Matson from Needham.

Unknown Analyst: This is [ Joseph ] on for Mike. Maybe just one on plasma and then a quick follow-up on Vivasure. So 4Q looks like plasma growth ex-CSL maybe slow compared to the last 3 quarters. But I'm just wondering, was there any weather disruptions early in the quarter that affected plasma there? And how should we be thinking about Q1? I believe it's usually the seasonally weakest. So should we expect sequential decline from here? And then just with fiscal '27 being, I guess, the first clean year without the impact from CSL. Can you maybe tell us if there's any residual impact on the business that maybe investors aren't considering? Or is it completely headwind free from here?

Christopher Simon: Yes. Hello, Joe, thanks for the questions. Let me answer them in reverse order. I used the phrase in a public setting recently that the fog is clearing and it's going to reveal the forest for the trees. I think the $153 million of overhang or hangover depending on who you're talking to, does clear entirely. And it will be nice to be able to talk with you guys without the asterisks and the but fors and what sounds like a list of apologies, just durable growth, cash flow and return on capital, which that business is known for. So yes, we are very much looking forward to a clean print in FY '27 and beyond.

In terms of the fourth quarter, first quarter dynamic, you are right in the seasonality. Actually, our fiscal fourth quarter, which is the first calendar year that we just concluded, typically is the weakest collection period of the year. There's lots of things that get attributed this year to your point. Yes, we had some heavy storms that prevented donors from getting into the centers back at the very beginning of the quarter, that seemed to normalize and correct out. There are a lot of speculation about tax refunds and given the changes in the tax laws that refunds were larger, but then some were delayed.

And so I don't really know how to handicap the ups and downs on that. We had a good quarter. Plasma did what we needed it to do to round out the year. In terms of first quarter softness, it's not what we're experiencing, but again, we don't control it. So we're going to remain prudent and conservative around that. But typically, first quarter begins to build, and it gains real momentum in second and third quarter, and we would expect this year to look similar.

Unknown Analyst: And then yes, just a quick one. Are you guys seeing any early commercial signals? Obviously, not launched, but any early signals with your customers for interest in the Vivasure platform, PerQseal? And maybe how large could that opportunity be in fiscal '27? I know it's more of a second half later in the year launch, but any help -- any color there would be helpful.

Christopher Simon: Sure. The early signals are overwhelmingly positive. I think the readout of the various DCT and HRS and elsewhere have been uniformly positively met that there's a novel new therapy coming for large-bore closure where there's just tremendous unmet need in the market today given the existing therapies. The product is approved for sale in Europe. We've intentionally not leaned in because as part of our integration planning, we have work to do in terms of manufacturing scale-up, reduction in cost of goods sold, make the product accretive, not just on a top line basis, but also to our margin expansion. So we are working diligently on that.

What we see in Europe, though, because we've done a very controlled process where we're working with major academic centers around Europe is really meaningful interest and excitement about what the product means for the marketplace. When we step back on a global basis, we estimate the TAM for that opportunity at roughly $300 million. And we know where we sit vis-a-vis the competition. We know what we need to do to be successful on the launch. Let's wait for the release from FDA and the ultimate label that we receive, and then we'll be more than happy to drill down on exactly what this means.

And when I use the term launch velocity, we'll put numbers behind it, that will be easily quantified.

Operator: There are no questions at this time. I would like to thank you for your participation in today's conference. This does conclude our program. You may now disconnect.

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