Masimo (MASI) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenue reached $504.6M–$505M, up 5%–5.4% year-over-year, driven by 11.5%–12% healthcare revenue growth and a 5.7%–6% decline in non-healthcare revenue.

• Leadership transition included the termination of the former CEO, appointment of an interim CEO, and board expansion; no critical talent departures or disruptions reported.

• Strategic review of the consumer business is ongoing, with Centerview Partners, Morgan Stanley, and legal advisors engaged to evaluate potential separation.

• Focus on optimizing R&D and product portfolio, prioritizing high-return projects and discontinuing less promising initiatives.

• No impairment charges recorded in Q3 2024; prior year Q3 included a $7.0M impairment for non-healthcare trademarks.

Financial highlights

• Q3 2024 healthcare revenue was $343M–$343.3M (up 11.5%–12% y/y); non-healthcare revenue was $161M–$161.3M (down 5.7%–6% y/y).

• Q3 2024 gross profit was $263.2M–$272M, with gross margin of 52.2%–54%.

• Q3 2024 non-GAAP operating profit was $80.8M–$81M (16% margin); GAAP operating income was $30.1M (6% margin).

• Q3 2024 non-GAAP EPS was $0.98 (up 31% y/y); GAAP EPS was $0.18.

• Cash and cash equivalents at quarter end were $158.5M; working capital was $642.3M.

Outlook and guidance

• FY 2024 consolidated revenue guidance: $2,075M–$2,105M; healthcare $1,390M–$1,400M; non-healthcare $685M–$705M.

• FY 2024 non-GAAP EPS guidance raised to $3.95–$4.10; operating margin guidance at 15.7%–16%.

• Q4 2024 non-GAAP EPS guidance: $1.35–$1.50; non-GAAP operating income: $103M–$114M.

• Healthcare Q4 revenue guidance: $363M–$373M; non-healthcare Q4 revenue: $218M–$238M.

• Management remains optimistic about long-term growth due to new product launches and market expansion.