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Medical tech company Masimo (NASDAQ:MASI) reported Q1 CY2025 results topping the market’s revenue expectations , with sales up 9.5% year on year to $372 million. The company expects the full year’s revenue to be around $1.52 billion, close to analysts’ estimates. Its non-GAAP profit of $1.36 per share was 12.6% above analysts’ consensus estimates.
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Masimo (MASI) Q1 CY2025 Highlights:
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Revenue: $372 million vs analyst estimates of $367.9 million (9.5% year-on-year growth, 1.1% beat)
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Adjusted EPS: $1.36 vs analyst estimates of $1.21 (12.6% beat)
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Adjusted EBITDA: $123.8 million vs analyst estimates of $108.5 million (33.3% margin, 14.1% beat)
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Management lowered its full-year Adjusted EPS guidance to $4.98 at the midpoint, a 5.2% decrease
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Operating Margin: 21%, up from 15.6% in the same quarter last year
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Free Cash Flow Margin: 7.7%, down from 11.1% in the same quarter last year
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Constant Currency Revenue rose 10.5% year on year (-12.5% in the same quarter last year)
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Market Capitalization: $8.44 billion
StockStory’s Take
Masimo’s first quarter results were driven by double-digit growth in core healthcare sales, margin expansion, and operational efficiencies. CEO Katie Szyman attributed performance to strong demand for patient monitoring products, a successful large contract renewal, and improved cost controls. She also cited early progress in her commercial strategy and highlighted the company’s commitment to innovation as foundational for future growth.
Looking ahead, management’s guidance reflects the impact of new tariffs and continued investments in commercial and R&D initiatives. CFO Micah Young described the tariff environment as fluid, noting that mitigation plans are in progress but difficult to quantify for the full year. The company’s outlook is further shaped by the sale of its consumer audio business, with proceeds expected to support share repurchases. Szyman acknowledged ongoing uncertainty from tariffs and emphasized Masimo’s focus on operational execution and margin discipline.
Key Insights from Management’s Remarks
Masimo’s management identified several drivers behind Q1 performance and upcoming changes to its business focus. The sale of the consumer audio division and a renewed emphasis on healthcare technology are central to its evolving strategy.
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Divestiture of Sound United: Masimo entered an agreement to sell its consumer audio business, Sound United, allowing the company to concentrate resources on its healthcare segment. Management stated that the sale will help sharpen the company’s focus on patient monitoring and hospital solutions.
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Operational margin gains: Operating margin improvement was attributed to last year’s cost optimization measures and a shift towards higher-value healthcare products. CFO Micah Young noted that these actions resulted in a 750 basis point annual increase.
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Sales force restructuring: CEO Katie Szyman outlined a transition from product-based to regionally-focused sales teams. This shift is intended to leverage the full product portfolio and increase market penetration for advanced monitoring categories such as capnography and hemodynamics.
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Product innovation pipeline: Szyman highlighted next-generation patient monitors with AI-based algorithms as a key area of investment. These upcoming launches aim to expand Masimo’s presence in acute and post-acute care settings.
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Tariff mitigation planning: Management discussed detailed scenario planning to address new U.S. and China tariffs. Young explained that supply chain adjustments and sourcing changes are under evaluation, with mitigation steps expected to be phased in as regulatory clarity improves.