Q3 2025 Masimo Corp Earnings Call Transcript
Key Points
- Masimo Corp (MASI) reported an 8% revenue growth in the third quarter, driven by strong demand for its innovative technology.
- The company achieved a 450 basis points expansion in operating margin and a 38% increase in adjusted earnings per share year-over-year.
- Masimo Corp (MASI) successfully closed the sale of Sound United to Harman, marking a key milestone in its strategic initiatives.
- The company announced an expansion of its strategic partnership with Philips, which is expected to significantly increase its market share over the next five years.
- Masimo Corp (MASI) is investing in AI and machine learning to enhance its intelligent monitoring capabilities, with plans to launch next-generation smart sensors and AI-enabled patient monitors.
- The company's gross margin declined by 70 basis points due to tariff impacts outweighing operational improvements.
- Consumables growth was only 1% this quarter, compared to a 20% growth rate in the third quarter of 2024, indicating a slowdown.
- Tariffs increased the cost of sales by $5 million this quarter, negatively impacting margins.
- The shift to a distributor model in some international markets created a $6 million headwind to full-year revenue guidance.
- Capital equipment and other revenues experienced a decline last year, and although they grew 67% this quarter, the growth is partly due to a low base effect.
Good afternoon, ladies and gentlemen, and welcome to the Masimo third-quarter 2025 earnings conference call. The company's press release is available at www.masimo.com.
(Operator Instructions)
I'm pleased to introduce Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations.
Thank you. Hello, everyone. Joining me today are CEO, Katie Szyman; and CFO, Micah Young.
Before we begin, I would like to inform you that this call will contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our periodic filings with the SEC.
Also, this call will include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We generally refer to these as non-GAAP or
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