Masimo’s third quarter results for 2025 were met with a significant negative market reaction, despite the company surpassing Wall Street’s revenue and adjusted profit expectations. Management attributed the quarter’s topline performance to robust contracting activity, with CEO Catherine Szyman highlighting “strong underlying demand” for Masimo’s healthcare technologies and an 8% year-on-year increase in shipments of technology boards and monitors. CFO Micah Young emphasized that margin expansion was primarily driven by operational improvements and cost efficiencies, partially offset by tariff-related headwinds. The company also closed the divestiture of Sound United, which provided capital for share repurchases and debt reduction.
Is now the time to buy MASI? Find out in our full research report (it’s free for active Edge members).
Masimo (MASI) Q3 CY2025 Highlights:
- Revenue: $371.5 million vs analyst estimates of $366.5 million (8.2% year-on-year growth, 1.4% beat)
- Adjusted EPS: $1.32 vs analyst estimates of $1.20 (10.3% beat)
- Adjusted EBITDA: $116.2 million vs analyst estimates of $111.4 million (31.3% margin, 4.3% beat)
- The company reconfirmed its revenue guidance for the full year of $1.52 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $5.71 at the midpoint, a 7.1% increase
- Operating Margin: 22.5%, up from 11.1% in the same quarter last year
- Constant Currency Revenue rose 7.6% year on year (5.4% in the same quarter last year)
- Market Capitalization: $7.76 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Masimo’s Q3 Earnings Call
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Frederick Wise (Stifel) asked about drivers of continued outperformance and guidance implications. CFO Micah Young pointed to strong contracting trends and expected acceleration in consumables growth, while CEO Catherine Szyman discussed cost optimization and share buybacks as contributors to improved profitability.
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Jason Bednar (Piper Sandler) inquired about market share opportunities with Philips. Szyman explained that Masimo’s share in the Philips installed base is still below its global average, with significant growth potential as the partnership expands.
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Michael Polark (Wolfe) questioned the slow consumables growth in Q3 and its outlook. Young clarified that tough year-over-year comparisons impacted results, but double-digit growth persists over multi-year periods, and sequential improvement is expected in Q4.
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Michael Matson (Needham) sought details on the wearables strategy and AI algorithm commercialization. Szyman described current pilots with the Radius VSM and W1 devices, and said AI-enabled opioid monitoring will be launched in hospitals toward the end of next year.
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Vikramjeet Chopra (WF) asked about capital allocation post-Sound United sale and the Philips partnership’s impact on product mix. Young cited an ongoing focus on share repurchases and tuck-in technology acquisitions, while Szyman said the partnership will gradually increase advanced sensor penetration without a dramatic short-term mix shift.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace of consumables revenue acceleration and contract pull-through, (2) progress in expanding Masimo’s share within the Philips installed base, and (3) execution of new AI-enabled product launches and regulatory milestones. Updates on the commercial rollout of wearable monitoring solutions and additional strategic partnerships will also be important markers for assessing long-term growth potential.
Masimo currently trades at $144.50, down from $148.97 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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