Masimo (MASI) Q3 2024 earnings summary

Executive summary

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

• Non-GAAP EPS was $0.98, up 31% year-over-year; GAAP net income was $9.8M ($0.18 per diluted share).

• Leadership transition included the termination of the former CEO, appointment of an interim CEO, and addition of new board members; search for a permanent CEO is ongoing.

• Strategic review of the consumer business is ongoing, with financial and legal advisors evaluating potential separation.

• Focus on high-return R&D, discontinuing underperforming products and feasibility studies.

Financial highlights

• Q3 2024 revenue: $504.6M (up 5.4% y/y); healthcare revenue: $343.3M (up 11.5% y/y); non-healthcare revenue: $161.3M (down 5.7% y/y).

• Q3 2024 non-GAAP operating profit: $80.8M–$81M (up 23% y/y); GAAP operating income: $30.1M.

• Q3 2024 gross margin: 52.2%–54%; healthcare gross margin: 62.9%; non-healthcare: 34.6%.

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

• Q3 2024 net income: $9.8M; non-GAAP net income: $52.9M.

Outlook and guidance

• Full-year 2024 consolidated revenue guidance: $2,075M–$2,105M; non-GAAP EPS: $3.95–$4.10.

• Healthcare revenue for FY 2024 expected at $1,390M–$1,400M; non-healthcare at $685M–$705M.

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

• FY 2024 non-GAAP operating margin guidance: 15.7%–16%; Q4 non-GAAP operating margin expected at 18%–19%.

• 2025 healthcare operating margin expected to reach at least 26%, with ongoing cost and margin initiatives.