Haemonetics Corp (HAE) (Q2 2027) Earnings Call Highlights: Raised Guidance and Expanded CSL ...

Negative Points

• Adjusted operating margin declined 40 basis points in Q2 and 50 basis points in H1, with fiscal 2027 expansion guidance lowered to 0-50 basis points from 50-100 basis points.

• Higher performance-based compensation, elevated production costs, and freight inflation are pressuring near-term margins.

• Haemonetics Corp ( NYSE:HAE ) is incurring transitory costs to scale manufacturing and supply for the CSL rollout, with benefits not expected until fiscal 2028.

• Interventional Technologies grew only 3% organically, impacted by a challenging prior year comparison in esophageal cooling.

• Blood Management Technologies growth slowed in Q2 due to order timing and a hangover from prior strong performance, though expected to be time-bound.

Q & A Highlights

Q: Can you level set us on the CSL opportunity what should we anticipate in terms of top-line and margin contribution, and what is contemplated in the FY27 outlook? A: CEO Christopher Simon said the expanded CSL relationship is a significant, multiyear growth opportunity that validates Haemonetics' technology leadership through higher yield, improved center productivity, and dependable execution. For confidentiality and competitive reasons, the company will not disclose customer-specific economics or plans. FY27 guidance includes only completed center conversions, pilot work done in September, full-scale conversion that began in October, and formally notified conversions through the end of fiscal Q3 2027 (December 31). Additional fiscal Q4 2027 conversions are expected but not included in guidance.

Q: Did the second quarter include any CSL contribution, and what drove the revised operating margin outlook? A: CFO James D'Arecca confirmed CSL contribution in the quarter was de minimis. Operating margin was down 40 basis points year-over-year, driven by three factors: higher personnel-related costs including self-insured medical claims and higher performance-based compensation tied to outperformance against the original plan; higher freight costs from volume, fuel prices, and expedited shipments; and investments in the business including Vivasure and two interventional technology launches. FY27 operating margin expansion guidance was lowered to 050 basis points from 50100 basis points, reflecting investment ahead of plasma share gains, higher performance-based compensation, and continued inflation. Second-half margin expansion is expected to be weighted toward the fourth quarter.

Q: Does the CSL contract include Persona Plus, and how should we think about the margin contribution? A: CEO Christopher Simon confirmed CSL will take the full suite of Persona, Persona Plus, and updated software offerings. On margins, he said that while near-term guidance was reduced to accommodate growth and inflationary pressures, the business can still deliver high-20s operating margins or better as it scales. Plasma is "the definition of operating leverage," and adding approximately 50% more volume creates the ability to capture real operating leverage once transitory costs are behind the company. CFO James D'Arecca added that meaningful CSL margin contribution is more of a fiscal 2028 and beyond story, as ramp-up costs (increasing production by over 40% and higher performance-based compensation) are expected to be transitory and largely eliminated as operations normalize.

Q: What are the launch plans for PerQseal Elite and PacePro, and how do the two guidewires differ? A: CEO Christopher Simon said both products were unveiled at TCT and are in very early stages of launch. PerQseal Elite enters large-bore closure for TAVR and EVAR procedures, which he estimates is a $300 million global opportunity growing in the high single digits, with about two-thirds in the US. It is the first bioabsorbable sutureless patch requiring no pre-close preparation. The company will take a stepwise approach emphasizing physician education and training, learning from prior failed launches in the segment. PacePro is a workhorse TAVR guidewire cleared for LV pacing, complementary to SavvyWire and tapping different physician preferences, which should limit cannibalization. Together with SavvyWire, the portfolio strengthens Haemonetics' relevance in structural heart.

Q: Global plasma collections grew high single digits what are you seeing in the US, and what are your expectations for the back half? A: CEO Christopher Simon said the plasma business "continues to fire on all cylinders," driven by annualization of prior share gains and Persona Plus adoption at or ahead of schedule. US collections trended into the mid-to-high single digits, while OUS collections tracked well into the double digits. The updated high single-digit Apheresis guidance does not include collection volume growth not because the market is weakening, but because the company does not control it. Instead, guidance relies on share gains with CSL and other customers and accelerated Persona Plus adoption.

Q: Does bringing CSL back require a growth CapEx cycle, and was there any impact from the cyber attack on plasma and blood banks in Paris? A: CFO James D'Arecca said yes on CapEx, in two dimensions: manufacturing capacity expansion (line extensions, additional lines, packaging, warehousing) that would be needed anyway given strong growth, and additional devices that flow through inventory and then CapEx when placed. This ignites a new CapEx cycle with elevated capital expenditures over the next two years, but he called the return on those investments one of the best uses of capital. On the cyber attack, CEO Christopher Simon said Haemonetics was not affected and has safeguards in place. He also noted the company is re-engaging with EFS, a major collector in France, and that transition to its product line is underway.

Q: What has worked in the vascular closure competitive response in EP, and what is the outlook? A: CEO Christopher Simon said the company has "laid the groundwork for success" and now needs to live into it. Second quarter was affected by order timing, which has already corrected. MVP and MVP XL carry the business today, supported by regulatory approvals in Europe and Japan. He described a three-part equation: a much stabilized market with resumption in access site growth post-PFA adoption (high single-digit growth as the baseline), a stabilized and fully resourced field force with appropriate quotas and targeting, and a superior value proposition backed by clinical data and expanded indications. He is cautiously optimistic and expects meaningful growth acceleration in the second half of the fiscal year and beyond.

Q: How does the CSL win affect capital allocation and potential M&A? A: CEO Christopher Simon said the CSL win does not change capital allocation priorities near or intermediate term. The highest priority is investing in organic opportunities like CSL device production, disposable capacity expansion, distribution readiness, and expedited freight especially while the base plasma business is growing in the high teens. Robust cash flow provides flexibility to strengthen the balance sheet; the company repaid $100 million on its revolver in the first half and may do more given interest rates. He would not take share repurchases off the table, with $325 million remaining on the existing board authorization.

Q: Can you size the moving parts behind the operating margin guidance cut from 50100 basis points to 050 basis points? A: CFO James D'Arecca said the biggest piece is performance-based compensation, followed by elevated production costs and the effects of higher oil prices roughly a 60-40 allocation between the two. These headwinds are meaningful,

For the complete transcript of the earnings call, please refer to the full earnings call transcript .