Stephen P. MacMillan
Chairman, President and Chief Executive Officer at Hologic
Thank you, Ryan, and good afternoon, everyone. We are pleased to discuss our financial results for the third quarter of fiscal 2023. Our results were solid. Total revenue was $984 million, and non-GAAP earnings per share were $0.93. Revenue exceeded our prior guidance and EPS finished at the high end of our range. These results showcase the power of our transformed business and demonstrate that Hologic is built for the long-term with the broadest strongest foundation we've ever had. On top of this transformation, with our strong cash flow and outstanding balance sheet, we continue to operate from a position of strength with strong operational discipline as we forge ahead. Once again, the proof is in the numbers.
Total company organic growth excluding COVID was rather remarkable at 18.4%. By division, we posted 11.8% organic diagnostics growth ex-COVID, and 14.5% growth in Surgical. Standing alone, these growth rates are impressive. Given a wider context, we view these performances as exceptionally strong, because we delivered these results on top of 15% growth in Diagnostics, and 9.7% growth in Surgical in Q3 of 2022, both very high bars from a year ago. And in Breast Health as expected, we delivered another strong quarter of 27.5% growth as chip supply and gantry availability continue to improve and track to our expectations. For this fiscal year, we remain on pace to achieve or exceed our 2023 low-double-digit organic growth targets excluding COVID. In fact, our expected growth rate for fiscal '23 is now more than double, our 5% to 7% long-term growth target.
Based on our strong performance for a number of quarters now, combined with our continued confidence in our growth ahead, we've recently given serious consideration to raising our long-term target. But given the uncertain macro-environment we face, 5% to 7% is still very much a solid long-term outlook. Put simply, there are two reasons, why? First, as you all well know, growing 5% to 7% on top of double-digit growth is clearly more challenging than growing 5% to 7% against single-digit comps. For example, in fiscal 2024, we will lap several prior periods of double-digit growth throughout the year. Net, we will be entering 2024 already much bigger and stronger than when we first set the goal. And second, there are macro business and geopolitical challenges that persist today, which did not exist back in 2021, when we first set our guide. We will expand on this aspect later in today's call. Taken together, overcoming this combination of challenges, while maintaining 5% to 7% growth is in some ways, an even last year goal than when we first established it.
On that note, let's move on to our focus for today. First, we will highlight the strengths of our business that underpin our strong Q3 results. Our strengths are diverse and durable. And second, with the discussion of the unique advantages we provide our customers, we hope you'll share our confidence that Hologic is built for the long term. Moving forward to our Q3 growth drivers. As mentioned, excluding COVID, each division posted double-digit organic growth for the quarter. Equally impressive with the year-over-year consistency of our growth drivers, a direct result of execution against our business strategy.
In Diagnostics, the division's overall 11.8% organic growth rate, excluding COVID was again driven by strong performance in molecular. For the quarter, Molecular Diagnostics posted approximately 13% growth ex-COVID on top of growing over 20% a year ago. Growth in molecular was driven by a combination of both newer assays like BV, CV, TV, and contributions from M. gen [Phonetic] and HSV, each growing well into the double-digits, as well as strong growth from our long-standing women's health menu. Rounding out Molecular Diagnostics, our Biotheranostics acquisition continues to shine being both accretive to our top and bottom lines.
Cytology and Perinatal led by Cytology also contributed strong growth this quarter, growing nearly 10%. Cytology's elevated growth for Q3 was driven by the timing of a few large orders placed in the last week of the quarter before the extended July 4, holiday. We view this as a one-time lift as opposed to a shift in the trajectory of the business. That said, co-testing, which includes the Pap plus HPV continues to be the preferred cervical cancer screening method for medical practitioners. These are the same practitioners who are on the front lines who know the science and who have seen the overwhelmingly positive impact of the PAP and co-testing firsthand.
By our estimates, nearly 99% of cervical cancer screening today in the United States is performed using a combination of the Pap alone or co-testing. Why? The reason is clear. The Pap test has been the most successful cancer screening test in history. Since the Pap was introduced over 80 [Phonetic] years ago, the rate of cervical cancer, which was the leading cause of death among women has fallen by more than 70%. As an advocate of women's health for over 35 years, we continue to support best-in-class care for women and for cervical cancer screening, the gold standard is co-testing with ThinPrep, the Pap plus HPV.
Shifting to Breast Health. As expected, we posted another exceptional quarter growing revenue 27.5%. This strong performance was driven primarily by the ongoing return of our mammography business as well as solid contributions from service. In mammography, as we guided in May, we delivered more gantries in Q3 than Q1 and slightly less than in Q2. Demand for our clinically differentiated gantries remains high. In addition, our backlog is still at historically elevated levels. We are in great shape to work down this backlog to more normal levels throughout our fiscal 2024 and possibly beyond. In Breast service, our business continues to grow and is becoming an even larger part of the division's mix. Our strong service performance represents stable, contracted, recurring revenue, and demonstrates deepening relationships with our customers.
Now, moving on to Surgical and our International business. The newer pillars of growth from our company that may not be fully appreciated. In Surgical, the business continues to grow stronger for longer, growing 14.5% in Q3. Revenue growth was again driven by MyoSure and the Fluent Fluid Management System, with contributions from NovaSure V5 and our newer laparoscopic portfolio. Specifically, while still early days and smaller dollars Bolder continues its strong growth as we leverage our relationships with organic customers and explore adjacent surgical channels.
The transformation of our Surgical business over recent years has been phenomenal. It underscores the value of both internal innovation plus product-line additions through M&A, a winning formula across Hologic. In Surgical, the sum of both strategies has injected new life into the business and transformed it into a meaningful growth driver for the company. Our International business also continues to impress, growing 20.9% in the quarter, excluding COVID. In May, our global leadership team traveled to our Brussels office as part of our annual strategic planning process. Spending a week in Brussels reinforced the sense of pride within our leadership team. We are proud of the strides we've made in expanding our global footprint and even more important, we are proud of the energy and culture we've built around the world. Coupled with the strong base of talent we have developed over the past few years, we firmly believe our highly engaged workforce and purpose-driven culture truly set us apart.
As we've said before, the revenue growth rate for our international business is accretive to our overall growth rate. We expect this trend to continue throughout our long-term horizon. Related earlier in today's call, we referenced persistent macro challenges in the context of our long-term guide. When we first announced our 5% to 7% guide, we were expecting tailwinds in places like China and Russia rather than the headwinds they have become. Despite these challenges, we remain committed to our targets, and with strong performance in other geographies where we operate, our international growth remains on track. This is a testament to the commitment, grit, and determination of all our employees that support and drive our efforts around the world.
Now, shifting gears to discuss the advantage we provide to our customers and how we are poised for long-term success. To fully appreciate where we're going, we must reflect on where we've been. From there we will shed light on our unwavering patient and customer focus, which sets the stage for our bright future. Our transformation has been years in the making. It started even before COVID, and as we know accelerated during the pandemic. In the early days of COVID, when fear and uncertainty led to closures and shutdowns, we delivered our highly accurate COVID molecular diagnostic tests around the globe playing a pivotal role in helping get the world back on its feet.
With COVID surges and high testing volumes now further in the rearview mirror, our ongoing performance shows that we are much more than a great pandemic story. Without a doubt, we are a bigger, stronger company with more durable and diverse growth drivers and positioned well for the long haul. On top of this transformation, with our strong cash flow and exceptional balance sheet, we operate today from a position of strength and continue to exercise operational discipline.
As we look ahead, we are laser-focused on our purpose, passion and promise and never lose sight of the needs of our patients and our customers. This is the magic within our business. Today, our customers face the challenge of navigating this new operating environment. They seek vendors who can help them operate as efficiently as possible. For labs and hospitals, pressures from inflation and labor shortages remain, despite recent improvements. With efficiency a priority, when our customers think of Hologic, they see opportunity. The opportunity to consolidate around our portfolio of products in Diagnostics, Breast Health, and Surgical that offer innovative solutions to dramatically improve their operational efficiency. Seconds can turn into minutes and days of time and labor savings throughout the course of a year.
In each of our businesses, we feature products that streamline workflows and create real advantages that our customers not only love but need. From our sophisticated automation with Panther and advances in AI with digital cytology in Diagnostics, to our industry-leading gantries scan speed and streamline biopsy process with Brevera in Breast Health. And finally, our efficient fluid management approach with Fluent in Surgical. Workflow efficiency is in the DNA of our entire portfolio. In addition, the fact that we have specialized service teams to focus on the unique needs of our customers adds to our competitive advantage. Our customers know that when they choose Hologic, they not only receive world-class products, but also world-class service.
Between our robust portfolio of industry-leading products and specialized service capabilities, we create a very attractive opportunity for our customers. We offer real and measurable efficiencies that improve their bottom lines and more importantly, improve the standard of care for patients. This combination sets us up well to meet our customers' needs both today and into the future and creates an incredible pathway for Hologic's success.
In closing, there are many companies that can sell products. There are fewer who can consistently deliver so many leadership brands and sector-leading margins over the long term. And there are even fewer who can succeed financially, while also helping the world. At Hologic, we do all three. We are tremendously proud to continue our journey, delivering outstanding topline growth and profitability, driving value for all our stakeholders and further enabling our ability to make a profound impact on patient's lives and women's health around the world.
With that, I will now turn the call over to Karleen.
