Latest news with #KatieSzyman
Yahoo
29-06-2025
- Business
- Yahoo
The 5 Most Interesting Analyst Questions From Masimo's Q1 Earnings Call
Masimo's first quarter results were met with a significant negative market reaction, reflecting investor concern over new headwinds despite revenue and adjusted earnings surpassing Wall Street expectations. Management attributed the strong revenue growth primarily to solid demand across core healthcare offerings and the timing of a large tender contract, which temporarily boosted capital equipment sales. CEO Katie Szyman highlighted the company's operational improvements and the expansion of recurring consumable and service revenue, while also noting areas for improvement in commercial execution. CFO Micah Young pointed to meaningful operating margin expansion driven by last year's cost optimizations and a renewed focus on the core healthcare business. However, the company acknowledged that timing-related lumpiness in tender contracts led to lower consumables sales, with expectations that these trends will normalize in future quarters. Is now the time to buy MASI? Find out in our full research report (it's free). Revenue: $372 million vs analyst estimates of $367.9 million (9.5% year-on-year growth, 1.1% beat) Adjusted EPS: $1.36 vs analyst estimates of $1.22 (11.5% beat) Adjusted EBITDA: $123.8 million vs analyst estimates of $108.5 million (33.3% margin, 14.1% beat) Management lowered its full-year Adjusted EPS guidance to $4.98 at the midpoint, a 5.2% decrease Operating Margin: 21%, up from 15.6% in the same quarter last year Constant Currency Revenue rose 10.5% year on year (-12.5% in the same quarter last year) Market Capitalization: $9.04 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Frederick Wise (Stifel) asked about the impact of the large tender contract on future quarters. CFO Micah Young clarified the effect was timing-related and expects normalization in upcoming quarters. Vik Chopra (Wells Fargo) questioned whether tariffs would alter long-term margin goals. Young responded that underlying margins remain strong and mitigation plans are in place, but the ultimate impact depends on trade policy resolution. Jason Bednar (Piper Sandler) inquired about hospital capital spending trends and the effect of a recent IT incident. Young stated that recurring revenue is robust and the IT issue should not change guidance based on current information. Mike Matson (Needham) queried the rationale for prioritizing share repurchases over debt reduction following the Sound United sale. Young said capital allocation will depend on market conditions but buybacks are currently prioritized. Matt Taylor (Jefferies) sought clarification on margin expansion and the practical impact of tariff mitigation initiatives. Young emphasized ongoing investments and noted that the real benefit of mitigation actions may materialize toward year-end and into next year. Over the next few quarters, the StockStory team will be closely monitoring (1) the execution of tariff mitigation strategies and any relief from trade negotiations, (2) the effectiveness of the new regionally-focused sales force in driving cross-category product growth, and (3) the pace and impact of innovation in next-generation monitoring devices and algorithms. Additionally, updates on the deployment of Sound United sale proceeds and operational performance normalization after recent contract timing shifts will serve as key indicators of Masimo's ability to navigate current market challenges. Masimo currently trades at $164.49, up from $160.67 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
20-05-2025
- Business
- Yahoo
MASI Q1 Earnings Call: Revenue Tops Expectations, Focus Shifts to Healthcare Core Amid Tariff Headwinds
Medical tech company Masimo (NASDAQ:MASI) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 9.5% year on year to $372 million. The company expects the full year's revenue to be around $1.52 billion, close to analysts' estimates. Its non-GAAP profit of $1.36 per share was 12.6% above analysts' consensus estimates. Is now the time to buy MASI? Find out in our full research report (it's free). Revenue: $372 million vs analyst estimates of $367.9 million (9.5% year-on-year growth, 1.1% beat) Adjusted EPS: $1.36 vs analyst estimates of $1.21 (12.6% beat) Adjusted EBITDA: $123.8 million vs analyst estimates of $108.5 million (33.3% margin, 14.1% beat) Management lowered its full-year Adjusted EPS guidance to $4.98 at the midpoint, a 5.2% decrease Operating Margin: 21%, up from 15.6% in the same quarter last year Free Cash Flow Margin: 7.7%, down from 11.1% in the same quarter last year Constant Currency Revenue rose 10.5% year on year (-12.5% in the same quarter last year) Market Capitalization: $8.44 billion Masimo's first quarter results were driven by double-digit growth in core healthcare sales, margin expansion, and operational efficiencies. CEO Katie Szyman attributed performance to strong demand for patient monitoring products, a successful large contract renewal, and improved cost controls. She also cited early progress in her commercial strategy and highlighted the company's commitment to innovation as foundational for future growth. Looking ahead, management's guidance reflects the impact of new tariffs and continued investments in commercial and R&D initiatives. CFO Micah Young described the tariff environment as fluid, noting that mitigation plans are in progress but difficult to quantify for the full year. The company's outlook is further shaped by the sale of its consumer audio business, with proceeds expected to support share repurchases. Szyman acknowledged ongoing uncertainty from tariffs and emphasized Masimo's focus on operational execution and margin discipline. Masimo's management identified several drivers behind Q1 performance and upcoming changes to its business focus. The sale of the consumer audio division and a renewed emphasis on healthcare technology are central to its evolving strategy. Divestiture of Sound United: Masimo entered an agreement to sell its consumer audio business, Sound United, allowing the company to concentrate resources on its healthcare segment. Management stated that the sale will help sharpen the company's focus on patient monitoring and hospital solutions. Operational margin gains: Operating margin improvement was attributed to last year's cost optimization measures and a shift towards higher-value healthcare products. CFO Micah Young noted that these actions resulted in a 750 basis point annual increase. Sales force restructuring: CEO Katie Szyman outlined a transition from product-based to regionally-focused sales teams. This shift is intended to leverage the full product portfolio and increase market penetration for advanced monitoring categories such as capnography and hemodynamics. Product innovation pipeline: Szyman highlighted next-generation patient monitors with AI-based algorithms as a key area of investment. These upcoming launches aim to expand Masimo's presence in acute and post-acute care settings. Tariff mitigation planning: Management discussed detailed scenario planning to address new U.S. and China tariffs. Young explained that supply chain adjustments and sourcing changes are under evaluation, with mitigation steps expected to be phased in as regulatory clarity improves. Masimo's forward-looking performance will depend on its ability to offset tariff pressures, execute its healthcare strategy, and maintain commercial momentum while investing in innovation. Tariff cost management: Management is actively scenario-planning to mitigate the impact of recently imposed tariffs, including supply chain shifts and potential pricing adjustments, with the goal of reducing margin pressure through 2025. Healthcare business refocus: The sale of the consumer audio division will free up resources to accelerate investments in patient monitoring technologies, AI-driven products, and sales force expansion—all positioned as growth catalysts for the core business. Operational investments and risks: Increased spending on commercial excellence and R&D, coupled with macroeconomic uncertainties such as labor costs and regulatory shifts, may create short-term margin volatility even as management expects long-term leverage. Frederick Wise (Stifel): Asked about the revenue and margin impact of a large contract and how underlying growth trends will normalize next quarter. Management explained the timing effect and stated that underlying demand remains strong, with seasonality expected to drive Q2 results. Vik Chopra (Wells Fargo): Queried whether tariffs will affect long-term margin goals and sought clarification on use of proceeds from the Sound United sale. CFO Micah Young confirmed ongoing margin expansion is expected and that share repurchases are prioritized over debt repayment. Jason Bednar (Piper Sandler): Requested insight into OEM partner signals on hospital spending and the rationale for confidence in guidance despite a recent cybersecurity incident. Management cited recurring revenue strength and robust protocols for addressing the incident. Mike Matson (Needham): Probed the strategy for hemodynamic monitoring and whether share repurchases will take precedence over debt repayment. CEO Szyman described the plan to integrate hemodynamics into next-gen monitors and focus on mid-to-low acuity hospital segments. Matt Taylor (Jefferies): Sought details on the margin expansion potential and the cadence of tariff impacts throughout the year. Management highlighted ongoing investments and explained that tariff effects will be weighted toward the fourth quarter. In the coming quarters, the StockStory team will monitor (1) the progress of Masimo's sales force restructuring and its effect on new product adoption, (2) execution of supply chain and sourcing adjustments in response to tariffs, and (3) the pace and success of innovation in AI-based patient monitoring. Updates on the Sound United sale closing and deployment of proceeds will also be key markers for fundamental performance. Masimo currently trades at a forward P/E ratio of 28.7×. Should you load up, cash out, or stay put? Find out in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
Masimo's (NASDAQ:MASI) Q1: Beats On Revenue But Stock Drops
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Masimo's recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 7.3% over the last two years. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Masimo's sales grew at a solid 15.1% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers. Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ:MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement. Katie Szyman, Chief Executive Officer of Masimo, said, 'Since joining Masimo as CEO three months ago, I have been focused on immersing myself in our business. I have visited customers, employees, manufacturing and R&D sites, evaluated our innovation pipeline, and attended national meetings with our sales team. My key takeaways are that our technology advantage is real, we have a stellar team that is enthusiastic about the path forward at Masimo, and we have an opportunity to build and improve from a position of meaningful strength. Our first quarter results clearly demonstrate the earnings power of our core business as we delivered double-digit revenue growth and exceptional earnings growth.' Is now the time to buy Masimo? Find out in our full research report . Medical tech company Masimo (NASDAQ:MASI) reported Q1 CY2025 results exceeding the market's revenue expectations , but sales fell by 24.5% year on year to $372 million. The company expects the full year's revenue to be around $1.52 billion, close to analysts' estimates. Its non-GAAP profit of $1.36 per share was 12.5% above analysts' consensus estimates. Story Continues Masimo Year-On-Year Revenue Growth We can dig further into the company's sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 5% year-on-year declines. Because this number is better than its normal revenue growth, we can see that foreign exchange rates have been a headwind for Masimo. Masimo Constant Currency Revenue Growth This quarter, Masimo's revenue fell by 24.5% year on year to $372 million but beat Wall Street's estimates by 1.1%. Looking ahead, sell-side analysts expect revenue to decline by 21.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Masimo was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.2% was weak for a healthcare business. Analyzing the trend in its profitability, Masimo's operating margin decreased by 32.8 percentage points over the last five years. The company's two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 19.5 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn't pass those costs onto its customers. Masimo Trailing 12-Month Operating Margin (GAAP) This quarter, Masimo generated an operating profit margin of 21%, up 14.1 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Masimo's EPS grew at a solid 8% compounded annual growth rate over the last five years. However, this performance was lower than its 15.1% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes. Masimo Trailing 12-Month EPS (Non-GAAP) Diving into Masimo's quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Masimo's operating margin improved this quarter but declined by 32.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. In Q1, Masimo reported EPS at $1.36, up from $0.77 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Masimo's full-year EPS of $4.99 to grow 8.5%. Key Takeaways from Masimo's Q1 Results We were impressed by how significantly Masimo blew past analysts' constant currency revenue and EPS expectations this quarter. On the other hand, its EBITDA missed and it lowered its full-year EPS guidance. Zooming out, we think this was a mixed quarter. The market seemed to be hoping for more, and the stock traded down 5.9% to $151.25 immediately after reporting. So should you invest in Masimo right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Business Wire
06-05-2025
- Business
- Business Wire
Masimo Reports First Quarter 2025 Results
IRVINE, Calif.--(BUSINESS WIRE)--Masimo Corporation (Nasdaq: MASI) today announced its financial results for the first quarter ended March 29, 2025. First Quarter 2025 Results From Continuing Operations(1): GAAP revenue of $372 million, representing 10% on a reported basis; Non-GAAP revenue of $371 million, representing 10% on a constant currency basis (3) ; ; GAAP net income per diluted of $0.86; and Non-GAAP net income per diluted share(3) of $1.36, which grew 56% versus prior year period. First Quarter 2025 Results From Discontinued Operations(2): GAAP loss from discontinued operations, net of tax was ($218) million, which included an impairment of intangibles of $295 million for the non-healthcare consumer business. Katie Szyman, Chief Executive Officer of Masimo, said, 'Since joining Masimo as CEO three months ago, I have been focused on immersing myself in our business. I have visited customers, employees, manufacturing and R&D sites, evaluated our innovation pipeline, and attended national meetings with our sales team. My key takeaways are that our technology advantage is real, we have a stellar team that is enthusiastic about the path forward at Masimo, and we have an opportunity to build and improve from a position of meaningful strength. Our first quarter results clearly demonstrate the earnings power of our core business as we delivered double-digit revenue growth and exceptional earnings growth.' 2025 Outlook For Continuing Operations(4): Non-GAAP revenue of $1,500 to $1,530 million, increasing 8% to 11% on a constant currency basis(3); Excluding the impact of new tariffs (for comparison purposes only to prior guidance, which excluded new tariffs): Non-GAAP operating profit of $420 to $436 million; Non-GAAP operating margin of 28.0% to 28.5%; and Non-GAAP earnings per diluted share of $5.30 to $5.60. Updated guidance now includes the impact of new tariffs before any mitigation: Non-GAAP operating profit of $383 to $403 million; Non-GAAP operating margin of 25.5% to 26.4%; and Non-GAAP earnings per diluted share of $4.80 to $5.15. We have developed a number of mitigation plans and will continue to reassess and modify our plans as the situation merits. These plans include adjusting our product sourcing and operations to mitigate some of the impact, which is dependent on different tariff scenarios. ________________ (1) The financial information reflects the continuing operations of Masimo's healthcare business. (2) The financial information reflects the Sound United business which is being classified as 'held-for-sale' and reported in discontinued operations. (3) Represents a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is included in this earnings release. (4) Represents updated guidance provided May 6, 2025. Financial guidance includes forward-looking non-GAAP financial measures for which reconciliations to the most directly comparable GAAP financial measures are not available without unreasonable efforts. See 'Forward-Looking Non-GAAP Financial Measures" within this earnings release, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures. Guidance does not include any use of proceeds from a sale of Sound United and/or any potential benefits from new tax policies. Guidance includes the financial impact of one additional calendar week, which occurs every five or six years based on Masimo's 4-4-5 fiscal calendar. Guidance also includes the estimated financial impact of new tariffs (in place as of May 1, 2025), before any mitigation. The implementation of tariffs remains a dynamic and uncertain situation that could cause our actual results to be materially different from our projections and forecasts. Expand Conference Call The Company will conduct its first quarter 2025 investor conference call today, May 6, 2025 at 4:30 p.m. Eastern Time. To register for the conference call and receive the dial-in number, please use the following link: A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the Company's website. Website Information To access important information related to Masimo's first quarter 2025 investor conference call, including the audio webcast and investor presentation, please visit the Investor Relations sections of Masimo's website at Non-GAAP Financial Measures The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measures presented exclude the items described below. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results. Furthermore, management also believes that these items are not indicative of the Company's on-going operating performance. These non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Company's business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies. The Company has presented the following non-GAAP measures to assist investors in understanding the Company's net operating results on an on-going basis: (i) constant currency revenue and constant currency revenue growth percentage, (ii) non-GAAP net income, (iii) non-GAAP (net income) earnings per diluted share and (iv) non-GAAP operating income/margin. These non-GAAP financial measures may also assist investors in making comparisons of the Company's operating results with those of other companies. Management believes constant currency product revenue growth, non-GAAP operating income/margin, non-GAAP net income and non-GAAP earnings per diluted share are important measures in the evaluation of the Company's performance and uses these measures to better understand and evaluate our business. The non-GAAP financial measures reflect adjustments for the following items: Constant currency revenue adjustments Some of our sales agreements with foreign customers provide for payment in currencies other than the U.S. Dollar. These foreign currency revenues, when converted into U.S. Dollars, can vary significantly from period-to-period depending on the average and quarter-end exchange rates during a respective period. We believe that comparing these foreign currency denominated revenues by holding the exchange rates constant with the prior year period is useful to management and investors in evaluating our revenue growth rates on a period-to-period basis. We anticipate that fluctuations in foreign exchange rates and the related constant currency adjustments for calculation of our revenue growth rate will continue to occur in future periods. Acquired tangible asset amortization These transactions represent amortization expense in connection with business or assets acquisitions associated with acquired tangible assets and asset valuation step-ups. Business transition and related costs These transactions represent gains, losses, and other related costs associated with business transition plans. These items may include but are not limited to severance, relocation, consulting, leasehold exit costs, asset impairment, and other related costs to rationalize our operational footprint and optimize business results. Acquired intangible asset amortization These transactions represent amortization expense in connection with business or assets acquisitions associated with acquired intangible assets including, but not limited to customer relationships, intellectual property, trade names and non-competition agreements. Acquisitions, integrations, divestitures, and related costs These transactions represent gains, losses, and other related costs associated with acquisitions, integrations, investments, divestitures, assets impairments, and in-process research and development. Litigation related expenses and settlements These transactions represent gains, losses, and other related costs associated with certain litigation matters, which can vary in their characteristics, frequency and significance to our operating results. We have been engaged in various legal proceedings against Apple since January 2020, including various proceedings in the federal courts, various proceedings in the U.S. Patent and Trademark Office (the 'PTO proceedings'), and a proceeding in the U.S. International Trade Commission (the 'ITC proceeding'). Although we previously excluded only expenses relating to the ITC proceeding from the definition of 'Litigation related expenses and settlements', beginning with the first quarter of 2024, we have revised the definition of 'Litigation related expenses and settlements' to exclude not only expenses relating to the ITC proceeding, but also all other Apple litigation expenses, including those relating to the federal court proceedings and the PTO proceedings. We believe all of the Apple litigation expenses are unique in nature and not indicative of the Company's on-going operating performance, and this updated definition will provide more useful information to investors by facilitating period-to-period comparisons of our financial performance that otherwise may be obscured by the significant fluctuations in Apple-related litigation expenses. Other adjustments In the event there are gains, losses and other adjustments which impact period-to-period comparability and do not represent the underlying ongoing results of the business, the Company may choose to exclude these from non-GAAP earnings. Realized and unrealized gains or losses These transactions represent gains, losses, and other related costs associated with foreign currency denominated transactions and investments. Changes in the underlying currency rates relative to the U.S. Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash. Unrealized and realized gains and losses on investments may impact the Company's reported results of operations for a period. These items are highly variable, difficult to predict and outside the control of those responsible for the underlying operations of the business. Other items also included here are mark-to-market gains and losses of derivative contracts that are not designated as hedging instruments or the ineffective portions of cash flow hedges. Financing related adjustments The Company may enter into various financial arrangements whereby costs are incurred and certain instrument features are valued and expensed accordingly but are not necessarily indicative of the on-going cash flow generation of the Company and therefore excludes these costs from non-GAAP earnings. For GAAP earnings per diluted share purposes, the Company cannot reflect the anti-dilutive impact, if applicable, in its diluted shares calculations. However, the Company believes that reflecting the anti-dilutive impact of these instruments in non-GAAP earnings per diluted share provides management and investors with useful information in evaluating the financial performance of the Company on a per share basis. Tax impact of non-GAAP adjustments In order to reflect the tax effected impact of the non-GAAP adjustments, the Company will adjust the non-GAAP earnings by the approximate tax impact of these adjustments. Excess tax benefits from stock-based compensation expense GAAP requires that excess tax benefits recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. As these excess tax benefits may be highly variable from period-to-period, the Company may choose to exclude these tax benefits from non-GAAP earnings to facilitate comparability between periods and with peers. Forward-Looking Non-GAAP Financial Measures This presentation also includes certain forward-looking non-GAAP financial measures. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of certain charges related to acquisitions, integrations, divestitures and related costs; business transition and related costs; litigation related expenses and settlements; realized and unrealized gains or losses; tax related adjustments; and other adjustments. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management's plans may change. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures. Forward-Looking Statements All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expectations regarding updated full-year 2025 financial guidance, including GAAP and non-GAAP revenue and revenue growth percentage, operating profit/income, operating margin, net income from continuing operations, and net income from continuing operation per diluted share. These forward-looking statements are based on management's current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to: our dependence on Masimo SET® and Masimo rainbow SET® products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors' assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; our ability to address and expand into new markets; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; matters relating to future board and management leadership; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; the ability to effect any potential separation of our non-healthcare consumer audio business and to meet any of the conditions related thereto; the approval of any such potential separation by Masimo's board of directors; the ability of any separated businesses to be successful; potential uncertainty during the pendency of any such potential separation that could affect Masimo's financial performance; the possibility that any potential separation will not be completed within the anticipated time period or at all; the possibility that any such potential separation will not achieve its intended benefits; the possibility of disruption, including changes to existing business relationships, disputes, litigation or unanticipated costs in connection with any such potential separation; the impact on our employees; the uncertainty of the expected financial performance of Masimo prior to and following completion of any such potential separation; negative effects of the announcement or pendency of any such potential separation on the market price of Masimo's securities and/or on the financial performance of Masimo; evolving legal, regulatory and tax regimes; potential negative effects or impact on our business from new international trade tariffs, changes in general economic and/or industry specific conditions; actions by third parties, including government agencies; and other factors discussed in the 'Risk Factors' section of our most recent periodic reports filed with the Securities and Exchange Commission ('SEC'), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC's website at Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. MASIMO CORPORATION GAAP TO NON-GAAP FINANCIAL MEASURES(1) (unaudited, in millions) Three Months Ended (in millions, except percentages) March 29, 2025 March 30, 2024 GAAP revenue $ 372.0 $ 339.6 Business transition and related costs (0.9 ) N/A Non-GAAP revenue 371.0 339.6 Constant currency revenue adjustments 4.1 N/A Non-GAAP constant currency revenue $ 375.2 $ 339.6 GAAP revenue growth percentage 9.5 % Non-GAAP constant currency revenue growth percentage 10.5 % Expand Three Months Ended March 29, 2025 March 30, 2024 (in millions, except per diluted share amounts) $ Per Diluted Share $ Per Diluted Share GAAP net income from continuing operations $ 47.2 $ 0.86 $ 32.1 $ 0.59 Non-GAAP adjustments: Acquired intangible asset amortization 0.9 0.02 1.1 0.02 Acquisitions, integrations, divestitures, and related costs 3.8 0.07 6.0 0.11 Business transition and related costs 4.5 0.08 2.1 0.04 Litigation related expenses, settlements and awards(2) 19.7 0.36 5.8 0.11 Other adjustments — — 4.0 0.07 Realized and unrealized gains or losses 2.5 0.05 1.3 0.02 Financing related adjustments 0.5 0.01 0.5 0.01 Tax impact of non-GAAP adjustments (7.6 ) (0.14 ) (4.3 ) (0.08 ) Excess tax benefits from stock-based compensation (2.9 ) (0.05 ) (1.3 ) (0.02 ) Tax-related adjustments 5.9 0.11 — — Total non-GAAP adjustments 27.4 0.50 15.2 0.28 Non-GAAP net income from continuing operations $ 74.7 $ 1.36 $ 47.3 $ 0.87 Weighted average shares outstanding-diluted 54.8 54.2 Expand Low High (in millions, except percentages) Full-Year 2025 Guidance(3) Full-Year 2025 Guidance(3) Full-Year 2024 Actual GAAP revenue $ 1,501 $ 1,531 $ 1,395 Business transition and related costs (1 ) (1 ) — Non-GAAP revenue 1,500 1,530 1,395 Constant currency revenue adjustments 13 13 N/A Non-GAAP constant currency revenue $ 1,513 $ 1,543 $ 1,395 GAAP revenue growth percentage 8 % 10 % Non-GAAP constant currency revenue growth percentage 8 % 11 % Expand Expand (1) May not foot due to rounding. Please visit the Investor Relations sections of Masimo's website at for Masimo Non-GAAP Definitions. (2) Includes litigation expenses for certain matters: (i) all Apple litigation which is unique in nature and not indicative of the Company's on-going operating performance; and (ii) certain other litigation matters, which can vary in their characteristics, frequency and significance to our operating results. (3) Updated guidance provided on May 6, 2025. Expand MASIMO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions) March 29, 2025 December 28, 2024 ASSETS Current assets Cash and cash equivalents $ 130.8 $ 123.6 Trade accounts receivable 271.2 268.9 Related party receivables 14.8 14.3 Assets held-for-sale — 17.4 Inventories 301.2 294.8 Other current assets 111.6 103.4 Other current assets, held-for-sale 354.4 403.4 Total current assets 1,184.0 1,225.8 Lease receivable, non-current 59.3 58.7 Deferred costs and other contract assets 60.3 61.0 Property and equipment, net 332.1 337.0 Intangibles assets, net 60.5 61.6 Goodwill 98.3 96.7 Deferred tax assets 119.2 118.4 Other non-current assets 45.1 51.3 Other non-current assets, held-for-sale 334.3 615.2 Total assets $ 2,293.1 $ 2,625.7 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 124.9 $ 129.0 Accrued compensation 62.0 78.7 Other current liabilities 118.2 115.4 Deferred revenue and other contract liabilities, current 72.6 76.9 Other current liabilities, held-for-sale 168.8 217.7 Total current liabilities 546.5 617.7 Long-term debt 636.0 714.3 Deferred tax liabilities 0.2 0.2 Other non-current liabilities 73.3 70.9 Other non-current liabilities, held-for-sale 90.7 170.7 Total liabilities 1,346.7 1,573.8 Commitments and contingencies Stockholders' equity Common stock 0.1 0.1 Treasury stock (1,169.2 ) (1,169.2 ) Additional paid-in capital 881.4 838.3 Accumulated other comprehensive loss (86.1 ) (108.2 ) Retained earnings 1,320.2 1,490.9 Total stockholders' equity 946.4 1,051.9 Total liabilities and stockholders' equity $ 2,293.1 $ 2,625.7 Expand MASIMO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions, except per share amounts) Three Months Ended March 29, 2025 March 30, 2024 Revenue: Revenue - (excluding related party revenue) $ 340.2 $ 309.0 Related party revenue 31.8 30.6 Total revenue 372.0 339.6 Cost of goods sold 138.0 133.0 Gross profit 234.0 206.6 Operating expenses: Selling, general and administrative 119.4 115.7 Research and development 33.9 37.8 Litigation settlements 2.7 — Total operating expenses 156.0 153.5 Operating income 78.0 53.1 Non-operating loss (9.6 ) (11.6 ) Income from continuing operations before provision for income taxes 68.4 41.5 Provision for income taxes 21.2 9.4 Net income from continuing operations, net of tax 47.2 32.1 (Loss) from discontinued operations, net of tax (217.9 ) (13.2 ) Net (loss) income $ (170.7 ) $ 18.9 Net (loss) income per share: Basic income per share - continuing operations $ 0.87 $ 0.61 Basic (loss) per share - discontinued operations (4.04 ) (0.25 ) Basic (loss) income per share $ (3.17 ) $ 0.36 Diluted income per share - continuing operations $ 0.86 $ 0.59 Diluted (loss) per share - discontinued operations (3.98 ) (0.24 ) Diluted (loss) income per share $ (3.12 ) $ 0.35 Weighted-average shares used in per share calculations: Basic 54.0 53.0 Diluted 54.8 54.2 Expand The following table presents details of the stock-based compensation expense that is included in each functional line item in the consolidated statements of operations (in millions): Three Months Ended March 29, 2025 March 30, 2024 Cost of goods sold $ 0.2 $ 0.3 Selling, general and administrative 4.2 4.7 Research and development 4.7 3.7 Total $ 9.1 $ 8.7 Expand MASIMO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) Three Months Ended March 29, 2025 March 30, 2024 Cash flows from operating activities: Net (loss) income $ (170.7 ) $ 18.9 Loss from discontinued operations, net of tax (217.9 ) (13.2 ) Net income from continuing operations 47.2 32.1 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 8.6 10.0 Stock-based compensation expense 9.1 8.7 Gain on disposal of equipment, intangibles and other assets (0.1 ) — Provision for credit losses 0.3 0.1 Provision for deferred income taxes 5.9 — Amortization of debt issuance cost 0.5 0.5 Changes in operating assets and liabilities: (Increase) decrease in trade accounts receivable (2.9 ) (14.6 ) (Increase) decrease in related party receivable (0.5 ) — (Increase) decrease in inventories (6.6 ) 2.8 (Increase) decrease in other current assets 5.5 10.3 (Increase) decrease in lease receivable, net (0.6 ) 0.7 (Increase) decrease in deferred costs and other contract assets 0.7 (0.6 ) (Increase) decrease in other non-current assets 4.4 (2.7 ) Increase (decrease) in accounts payable (6.1 ) (7.8 ) Increase (decrease) in accrued compensation (17.0 ) 5.0 Increase (decrease) in accrued liabilities (8.1 ) (4.1 ) Increase (decrease) in income tax payable 0.2 (1.0 ) Increase (decrease) in deferred revenue and other contract-related liabilities (1.9 ) (3.3 ) Increase (decrease) in other non-current liabilities (0.7 ) 2.5 Net cash provided by (used in) operating activities from continuing operations 37.9 38.6 Net cash provided by (used in) operating activities from discontinued operations (6.8 ) 7.2 Net cash provided by (used in) operating activities 31.1 45.8 Cash flows from investing activities: Purchases of property and equipment (2.6 ) (6.1 ) Proceeds from sale of property and equipment 19.6 — Increase in intangible assets (1.5 ) (4.6 ) Other strategic investing activities — (0.1 ) Net cash provided by (used in) investing activities from continuing operations 15.5 (10.8 ) Net cash provided by (used in) investing activities from discontinued operations (4.8 ) (8.1 ) Net cash provided by (used in) investing activities 10.7 (18.9 ) Cash flows from financing activities: Borrowings under line of credit — 64.0 Repayments on line of credit (78.8 ) (91.9 ) Proceeds from issuance of common stock 43.1 7.1 Payroll tax withholdings on behalf of employees for vested equity awards (11.3 ) (5.3 ) Net cash provided by (used in) financing activities from continuing operations (47.0 ) (26.1 ) Net cash provided by (used in) financing activities from discontinued operations (0.8 ) (0.4 ) Net cash provided by (used in) financing activities (47.8 ) (26.5 ) Effect of foreign currency exchange rates on cash 1.1 (4.6 ) Net decrease in cash, cash equivalents and restricted cash (4.9 ) (4.2 ) Cash, cash equivalents and restricted cash at beginning of period 181.4 168.2 Cash, cash equivalents and restricted cash at end of period $ 176.5 $ 164.0 Expand About Masimo Masimo (Nasdaq: MASI) is a global technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, patient monitors, and automation and connectivity solutions. In addition, Masimo Consumer Audio is home to eight legendary audio brands, including Bowers & Wilkins® , Denon® , Marantz® , and Polk Audio®. Our mission is to improve life, improve patient outcomes; and reduce the cost of care. Masimo SET® Measure-through Motion and Low Perfusion™ pulse oximetry, introduced in 1995, has been shown in over 100 independent and objective studies to outperform other pulse oximetry technologies. Masimo SET® has also been shown to help clinicians reduce severe retinopathy of prematurity in neonates, improve CCHD screening in newborns, and, when used for continuous monitoring with Masimo Patient SafetyNet™ in post-surgical wards, reduce rapid response team activations, ICU transfers, and costs. Masimo SET® is estimated to be used on more than 200 million patients in leading hospitals and other healthcare settings around the world, and is the primary pulse oximetry at all 10 U.S. hospitals as ranked in the 2024 Newsweek World's Best Hospitals listing. In 2005, Masimo introduced rainbow® Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively, including total hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth Variability Index (PVi®), RPVi™ (rainbow® PVi), and Oxygen Reserve Index (ORi™). In 2013, Masimo introduced the Root® Patient Monitoring and Connectivity Platform, built from the ground up to be as flexible and expandable as possible to facilitate the addition of other Masimo and third-party monitoring technologies; key Masimo additions include Next Generation SedLine® Brain Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography with NomoLine® sampling lines. Masimo's family of continuous and spot-check monitoring Pulse CO-Oximeters® includes devices designed for use in a variety of clinical and non-clinical scenarios, including tetherless, wearable technology, such as Radius-7®, Radius PPG® and Radius VSM™, portable devices like Rad-67®, fingertip pulse oximeters like MightySat® Rx, and devices available for use both in the hospital and at home, such as Rad-97® and the Masimo W1® Medical Watch. Masimo hospital and home automation and connectivity solutions are centered around the Masimo Hospital Automation™ platform, and include Iris® Gateway, iSirona™, Patient SafetyNet, Replica®, Halo ION®, UniView®, UniView :60™, and Masimo SafetyNet™. It's growing portfolio of health and wellness solutions includes Radius T0® and Masimo W1™. Additional information about Masimo and its products may be found at RPVi has not received FDA 510(k) clearance and is not available for sale in the United States. The use of the trademark Patient SafetyNet is under license from University HealthSystem Consortium. Masimo, SET, Signal Extraction Technology, Improving Patient Outcome and Reducing Cost of Care... by Taking Noninvasive Monitoring to New Sites and Applications, rainbow, SpHb, SpOC, SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of Masimo Corporation.
Yahoo
08-04-2025
- Business
- Yahoo
Q4 Patient Monitoring Earnings Review: First Prize Goes to Masimo (NASDAQ:MASI)
Let's dig into the relative performance of Masimo (NASDAQ:MASI) and its peers as we unravel the now-completed Q4 patient monitoring earnings season. Patient monitoring companies within the healthcare equipment industry offer devices and technologies that track chronic conditions and support real-time health management, such as continuous glucose monitors (CGMs) and sleep apnea machines. These businesses benefit from recurring revenue from consumables and software subscriptions tied to device sales (razor, razor blade model). The rising prevalence of chronic diseases like diabetes and respiratory disorders due to an aging population as well as growing adoption of digitization are good for the industry. However, these companies face challenges from high R&D costs and reliance on regulatory approvals. Looking ahead, the sector is positioned for growth due to tailwinds like the rising burden of chronic diseases from an aging population, the shift toward value-based care, and increased adoption of digital health solutions. Innovations in AI and machine learning are expected to enhance device accuracy and functionality, improving patient outcomes and driving demand. However, there are headwinds such as pricing pressures as healthcare costs are a key focus, especially in the US. An evolving regulatory landscape and competition from more tech-forward new entrants could present additional challenges. The 5 patient monitoring stocks we track reported a strong Q4. As a group, revenues beat analysts' consensus estimates by 1.9% while next quarter's revenue guidance was in line. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 13.1% since the latest earnings results. Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ:MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement. Masimo reported revenues of $600.7 million, up 9.4% year on year. This print exceeded analysts' expectations by 1.5%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' EPS estimates and full-year operating income guidance exceeding analysts' expectations. Katie Szyman, Chief Executive Officer of Masimo, said 'I am extremely excited about the opportunity to lead such an innovative organization as we refocus on our core healthcare business. There are numerous unmet clinical needs that we are well-positioned to address and we have strong momentum behind us. I look forward to interfacing with our customers and discussing our differentiated solutions for patient care. Our 2024 results clearly demonstrate the strong growth and earnings power of our healthcare business. We had a record year in terms of gaining share through customer contracts. As a result of our strategic realignment efforts in the fourth quarter, we expect to see increased earnings and cash flow in 2025 and beyond.' The stock is down 7.9% since reporting and currently trades at $155.78. Is now the time to buy Masimo? Access our full analysis of the earnings results here, it's free. Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ:PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line. Insulet reported revenues of $597.5 million, up 17.2% year on year, outperforming analysts' expectations by 2.5%. The business had a very strong quarter with an impressive beat of analysts' constant currency revenue and EPS estimates. The stock is down 10.2% since reporting. It currently trades at $259.01. Is now the time to buy Insulet? Access our full analysis of the earnings results here, it's free. Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ:DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks. DexCom reported revenues of $1.11 billion, up 7.6% year on year, exceeding analysts' expectations by 0.9%. Still, it was a slower quarter as it posted a significant miss of analysts' EPS estimates. DexCom delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is down 25.7% since the results and currently trades at $62.45. Read our full analysis of DexCom's results here. Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ:IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders. iRhythm reported revenues of $164.3 million, up 24% year on year. This number topped analysts' expectations by 3.9%. Overall, it was a very strong quarter as it also logged a solid beat of analysts' EPS estimates. iRhythm scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 4.8% since reporting and currently trades at $107. Read our full, actionable report on iRhythm here, it's free. Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE:RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use. ResMed reported revenues of $1.28 billion, up 10.3% year on year. This result beat analysts' expectations by 1%. It was a strong quarter as it also recorded a narrow beat of analysts' constant currency revenue estimates and a decent beat of analysts' EPS estimates. The stock is down 16.6% since reporting and currently trades at $214.69. Read our full, actionable report on ResMed here, it's free. Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. Sign in to access your portfolio
