Key Points
- Consolidated revenue for Q2 2024 was $496.3 million.
- GAAP net income per diluted share was $0.29, while non-GAAP net income per diluted share was $0.86.
- Full-year guidance was updated, with increases in both healthcare revenue projections and non-GAAP EPS estimates.
Masimo (MASI 1.60%), a medical technology company known for innovations in noninvasive monitoring, released its second-quarter 2024 earnings report on 2024-08-06. The company announced consolidated revenue of $496.3 million, within the management’s expected range of $480 to $510 million. It reported GAAP net income per diluted share of $0.29, matching the lower end of the expected range. However, non-GAAP net income per diluted share exceeded expectations at $0.86. Overall, the quarter showcased robust growth in the healthcare segment but highlighted ongoing challenges in non-healthcare revenue.
| Metric | Q2 2024 | Q2 2024 Estimates | Q2 2023 | % Change (YoY) |
|---|---|---|---|---|
| Consolidated revenue | $496.3M | $480 to $510M | $455.3M | 9.0% |
| Healthcare revenue | $343.9M | $330 to $340M | $281.1M | 22.4% |
| Non-healthcare revenue | $152.4M | $150 to $170M | $174.2M | -12.5% |
| GAAP net income | $16.0M | Not Provided | $15.7M | 1.9% |
| Non-GAAP net income | $46.6M | Not Provided | $41.2M | 13.1% |
| GAAP EPS (per diluted share) | $0.29 | $0.26 to $0.33 | $0.29 | 0.0% |
| Non-GAAP EPS (per diluted share) | $0.86 | $0.73 to $0.79 | $0.76 | 13.2% |
| Source: Expectations based on management's guidance, as provided in 2024-05-07 earnings report. |
Overview of Masimo
Masimo is a leading medical technology company that specializes in noninvasive monitoring devices. It develops innovative technologies used in pulse oximetry, providing critical health metrics such as oxygen saturation and hemoglobin levels noninvasively. The company's recent focal points have included enhancing its core healthcare offerings and expanding into the consumer health sector.
Masimo's business success hinges on several factors: continuing technological innovation with its Masimo SET® and rainbow® Pulse CO-Oximetry technologies, diversification of its product portfolio, strategic OEM partnerships, maintaining regulatory compliance, and expanding its market presence.
Quarterly Highlights and Performance
This quarter, Masimo saw significant growth in its healthcare segment. Healthcare revenue rose to $343.9 million, surpassing the upper end of management's guidance. This was largely driven by continued trust and reliance on their advanced monitoring technologies, such as Masimo SET® Pulse Oximetry and rainbow® Pulse CO-Oximetry.
Technological shipments also marked a strong quarter with 58,600 units of non-invasive technology boards and instruments being delivered, excluding handheld and fingertip pulse oximeters.
However, the company's non-healthcare segment faced challenges, with revenue decreasing 12.5% year-over-year to $152.4 million. This was attributed to a broader market downturn and lessened demand for consumer health products. Despite this, the company’s diversification strategy helped mitigate some of the impacts.
GAAP operating income was $28.3 million, which fell below the lower end of management’s estimate of $33 to $38 million. This suggests higher-than-expected operational costs or one-time expenses. Nevertheless, non-GAAP operating income met expectations, coming in at $72.9 million.
The quarter also saw a record-breaking level of contracting efforts by Masimo, contributing over $100 million in true incremental contract value.
Forward Looking Insights
Looking ahead, Masimo's management has raised its full-year guidance for healthcare revenue to $1,385 to $1,405 million, up from $1,355 to $1,385 million. This shows confidence in the sustained demand for its healthcare products. Similarly, the consolidated earnings per diluted share (Non-GAAP) was increased to a range of $3.80 to $4.00, from the previous $3.54 to $3.70.
For the third quarter of 2024, the company expects consolidated revenue between $495 to $515 million, with non-GAAP earnings per share ranging from $0.81 to $0.86. Upcoming quarters will require a keen focus on overcoming challenges in the non-healthcare segment and streamlining operational efficiencies to maintain growth momentum in healthcare.
