Q2 2024 Masimo Corp Earnings Call Transcript
Key Points
- Healthcare revenues grew 23% year-over-year, driven by strong hospital conversions and rising hospital admissions.
- Gross margins increased significantly, benefiting from cost reduction initiatives and the relocation of sensor manufacturing to Malaysia.
- Record level of new hospital conversion contracts amounting to $134 million, a 28% increase versus last year.
- Non-GAAP earnings per share grew 13% to $0.86 for the second quarter.
- Strong cash flow generation allowed the company to pay down $93 million of debt, reducing outstanding debt to $782 million.
- Non-healthcare revenues declined 11% year-over-year, affected by a weakening environment for luxury consumer purchases and a slow housing market.
- Rainbow consumable revenues declined 5% due to the timing of shipments outside the US.
- Non-GAAP operating margin for the consolidated business declined modestly versus last year due to the return of performance-based compensation to normalized levels.
- The potential separation of the consumer business is still under consideration, creating uncertainty about the future structure and financial impact.
- The company faces ongoing litigation with Apple, which could take another two to three years to resolve.
(audio in progress) (Operator Instructions) After the speakers' remarks, there will be a question and answer session. I'm pleased to introduce Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations.
Thank you, and hello, everyone. Joining me today are Chairman and CEO, Joe Kiani; and Executive Vice President and Chief Financial Officer, Micah Young. This call will contain forward-looking statements, which reflect management's current judgment, including certain of our expectations regarding fiscal year 2024 and 2025 financial performance.
However, they are subject to risks and uncertainties that could cause actual results to differ materially. Risk factors that could cause our actual results to differ materially from our projections and forecasts are discussed in detail in our periodic filings with the SEC. You will find these in the Investor Relations section of our website.
This call will also include a discussion of the potential separation of our
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