MASI Stock Slips Despite Q2 Earnings and Revenue Beat, Margins Expand

Masimo Corporation MASI delivered adjusted earnings per share (EPS) of $1.33 in the second quarter of 2025, up 46.2% year over year. The figure beat the Zacks Consensus Estimate by 8.1%.

The adjustments include acquired intangible asset amortization, and acquisitions, integrations, divestitures, and related costs, among others.

GAAP EPS for the quarter was 82 cents, up 78.3% from the year-ago period’s EPS of 46 cents.

MASI’s Revenues in Detail

Masimo registered revenues of $370.9 million in the second quarter, up 7.9% year over year on a reported basis. The figure beat the Zacks Consensus Estimate by 0.6%.

At constant exchange rate (CER), revenues were $370.3 million, up 7.4% year over year.

Per management, the top line was aided by increased consumable sales, which were offset by lower capital sales.

The shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, totaled 63,100 in the second quarter of 2025, up 7.7% year over year.

Shares of this company lost nearly 2.7% in yesterday’s after-hours trading.

Masimo’s Segmental Details

Masimo derived its revenues from two business sources — Revenue (excluding related party revenues) and Related party revenues.

Revenue (excluding related party revenues) in the second quarter totaled $345.1 million (up 8.2% year over year on a reported basis), while Related party revenues were $25.8 million (up 2.8% year over year on a reported basis).

Segment-wise, Masimo derived its revenues from Healthcare and Other.

Healthcare revenues in the second quarter totaled $370.3 million, up 7.7% on a reported basis and 7.4% at CER year over year. This compares to our projection of revenues of $368.3 million in the second quarter.

Within Masimo’s Healthcare segment, the consumable and service revenues grew 8.4%, while capital equipment and other revenues declined 2% year over year.

Other revenues in the second quarter amounted to $0.6 million. This compares to our projection of revenues of $1 million in the second quarter.

Masimo Corporation Price, Consensus and EPS Surprise

Masimo Corporation price-consensus-eps-surprise-chart | Masimo Corporation Quote

MASI’s Margin Analysis

In the quarter under review, Masimo’s gross profit increased 12.5% year over year to $233.3 million. The gross margin expanded 262 basis points (bps) to 62.9%. We had projected a gross margin of 63.2% for the second quarter.

Selling, general & administrative expenses increased 9.9% year over year to $138.9 million. Research and development expenses declined 23.5% year over year to $29.9 million. Total adjusted operating expenses of $168.8 million increased 2.1% on a year-over-year basis.

Total adjusted operating profit totaled $64.5 million, reflecting a 53.9% surge from the year-ago quarter. The adjusted operating margin in the second quarter expanded 521 bps to 17.4%.

Masimo’s Financial Position

Masimo exited second-quarter 2025 with cash and cash equivalents of $149.6 million compared with $130.8 million at the end of the first quarter. Long-term debt at the end of second-quarter 2025 was $598.7 million compared with $636 million at the first-quarter end.

Cumulative net cash provided by operating activities from continuing operations at the end of second-quarter 2025 was $99.5 million compared with $106 million a year ago.

MASI’s Guidance

Masimo has upped its outlook for 2025.

For 2025, total revenues are now expected to be in the range of $1,505 million to $1,535 million (up 8-11% at CER from the comparable 2024 period), up from the prior outlook of $1,500 million to $1,530 million (up 8-11% at CER from the comparable 2024 period). The Zacks Consensus Estimate is pegged at $1.52 billion.

Excluding the impact of tariffs, the adjusted EPS for 2025 is now projected to be in the range of $5.45-$5.70 (reflecting growth of 30-36% from the comparable 2024 figures), up from the prior outlook of $5.30-$5.60 (reflecting growth of 22-29% from the comparable 2024 figures). The Zacks Consensus Estimate is pegged at $4.98.

Including the tariff impact, the adjusted EPS for 2025 is now projected to be in the range of $5.20-$5.45, up from the prior outlook of $4.80-$5.15.

Our Take on Masimo

Masimo exited the second quarter of 2025 with better-than-expected results. The solid top and bottom-line performances and uptick in Healthcare revenues were encouraging. The continued strength in the consumable and service revenues looked promising. The expansion of both margins bodes well for the stock.

On the earnings call, management shared that Masimo is currently working toward mitigating the tariff impact. This raises our optimism.

On the flip side, lower capital equipment and other revenues were disappointing.

MASI’s Zacks Rank & Key Picks

Masimo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are GE HealthCare Technologies Inc. GEHC, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX.

GE HealthCare, sporting a Zacks Rank #1 (Strong Buy), reported second-quarter 2025 adjusted EPS of $1.06, beating the Zacks Consensus Estimate by 16.5%. Revenues of $5.01 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

GE HealthCare has a long-term estimated growth rate of 5.8%. GEHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.5%.

West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.

West Pharmaceutical has a long-term estimated growth rate of 8.4%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.

Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).

Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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