Masimo (MASI) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached $496.3M, with healthcare revenue up 22–23% year-over-year to $343.9M–$344M, driven by strong contract wins and normalized hospital census; non-healthcare revenue declined 11–13% due to weaker consumer demand and housing market softness.

• Non-GAAP EPS was $0.86, up 13% year-over-year and above guidance midpoint; GAAP net income was $16.0M ($0.29 per diluted share).

• Gross margin improved to 51.3–54.2%, driven by higher healthcare revenue, cost reductions, and favorable product mix.

• The company is actively evaluating the separation of its consumer business, with a potential JV partner under exclusivity and ongoing strategic discussions.

• Operating cash flow was $75M for Q2 and $120.3M for the first half of 2024; $93M in debt repaid, reducing outstanding debt to $782M.

Financial highlights

• Q2 2024 consolidated revenue grew 9% year-over-year to $496.3M; healthcare segment up 22–23%, non-healthcare down 11–13%.

• Non-GAAP gross margin was 54–54.2%; healthcare gross margin at 62.5%, non-healthcare at 34–35.4%.

• Non-GAAP operating profit was $73M, with a 15% margin; GAAP operating margin was 5.7–6%.

• Non-GAAP EPS was $0.86, up 13% year-over-year; GAAP EPS was $0.29.

• Unrecognized contract revenues reached $1.6B, up 16% year-over-year.

Outlook and guidance

• Q3 2024 consolidated revenue guidance: $495M–$515M; healthcare: $335M–$345M (9–12% growth); non-healthcare: $160M–$170M.

• Q3 2024 non-GAAP EPS guidance: $0.81–$0.86 (8–15% growth).

• Full-year 2024 consolidated revenue guidance: $2,085M–$2,135M; healthcare: $1,385M–$1,405M (9–10% growth); non-healthcare: $700M–$730M.

• Full-year non-GAAP EPS guidance: $3.80–$4.00; non-GAAP gross margin projected at 53% (healthcare: 62.5%, non-healthcare: 34%).

• Guidance now excludes all Apple litigation expenses from non-GAAP results.