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Masimo Corporation MASI delivered adjusted earnings per share (EPS) from continuing operations of $1.32 in the third quarter of 2025, up 37.5% year over year. The figure beat the Zacks Consensus Estimate by 10.9%.
The adjustments include acquired intangible asset amortization, and acquisitions, integrations, divestitures, and related costs, among others.
GAAP EPS from continuing operations for the quarter was 99 cents, up 120% from the year-ago period’s EPS of 45 cents.
Masimo registered revenues of $371.5 million in the third quarter, up 8.2% year over year on a reported basis. The figure beat the Zacks Consensus Estimate by 1.3%.
At constant exchange rate (CER), revenues were $369.2 million, up 7.6% year over year.
Per management, the top line was aided by increased capital equipment sales and other revenue.
The shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, totaled 66,000 in the third quarter of 2025, up 9.1% year over year.
Shares of this company gained nearly 1.7% in today’s pre-market trading.
Masimo derived its revenues from two business sources — Revenue (excluding related party revenues) and Related party revenues.
Revenue (excluding related party revenues) in the third quarter totaled $343.1 million (up 8.5% year over year on a reported basis), while Related party revenues were $28.4 million (up 4.4% year over year on a reported basis).
Segment-wise, Masimo derived its revenues from Healthcare and Other.
Healthcare revenues in the third quarter totaled $371.2 million, up 8.1% on a reported basis year over year. This compares to our projection of revenues of $365.5 million in the third quarter.
Within Masimo’s Healthcare segment, the consumable and service revenues grew 1%, while capital equipment and other revenues grew 67% year over year.
Other revenues in the third quarter amounted to $0.3 million. This compares to our projection of revenues of $0.6 million in the third quarter.
Masimo Corporation price-consensus-eps-surprise-chart | Masimo Corporation Quote
In the quarter under review, Masimo’s gross profit increased 8.7% year over year to $230.6 million. The gross margin expanded 29 basis points (bps) to 62.1%. We had projected a gross margin of 60.4% for the third quarter.
Selling, general & administrative expenses decreased 14.8% year over year to $116.4 million. Research and development expenses declined 18.2% year over year to $30.5 million. Total adjusted operating expenses of $146.9 million decreased 15.5% on a year-over-year basis.
Total adjusted operating profit totaled $83.7 million, reflecting a 119.1% surge from the year-ago quarter. The adjusted operating margin in the third quarter expanded 1140 bps to 22.5%.
Masimo exited third-quarter 2025 with cash and cash equivalents of $312.3 million compared with $149.6 million at the end of the second quarter. Long-term debt at the end of third-quarter 2025 was $559.1 million compared with $598.7 million at the second-quarter end.
Cumulative net cash provided by operating activities from continuing operations at the end of third-quarter 2025 was $156.9 million compared with $135.5 million a year ago.
Masimo has revised its outlook for 2025.
For 2025, total revenues are now expected to be in the range of $1,510 million to 1,530 million (up 8.2%-9.7% on a reported basis and 8.5-10% at CER from the comparable 2024 period), narrowed from the prior outlook of $1,505 million to $1,535 million (7.9%-10% on a reported basis and 8.4%-10.6% 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 $5.62-$5.79, up from the prior outlook of $5.45-$5.70. The Zacks Consensus Estimate is pegged at $5.30.
Including the tariff impact, the adjusted EPS for 2025 is now projected to be in the range of $5.40-$5.55, up from the prior outlook of $5.20-$5.45.
Masimo exited the third 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, and capital equipment and other revenues looked promising. The expansion of both margins bodes well for the stock.
Management shared that Masimo closed the sale of Sound United to Harman and announced the expansion of its strategic partnership with Philips during the quarter. These raise our optimism.
On the flip side, management narrowed Masimo’s total revenue outlook for 2025 partly due to its expectations of the impact of a switchover to a distributor model in some international markets. This raises our apprehension.
Masimo currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation BSX, West Pharmaceutical Services, Inc. WST and Exact Sciences Corporation EXAS.
Boston Scientific, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outpaced the consensus mark by 1.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term estimated growth rate of 16.4%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.4%.
West Pharmaceutical reported third-quarter 2025 adjusted EPS of $1.96, beating the Zacks Consensus Estimate by 17.4%. Revenues of $804.6 million surpassed the Zacks Consensus Estimate by 2.4%. It currently carries a Zacks Rank #2.
West Pharmaceutical has a long-term estimated growth rate of 9.8%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.5%.
Exact Sciences reported third-quarter 2025 adjusted EPS of 24 cents, beating the Zacks Consensus Estimate by 84.6%. Revenues of $850.7 million surpassed the Zacks Consensus Estimate by 4.9%. It currently sports a Zacks Rank #1.
Exact Sciences has a long-term estimated growth rate of 30.1%. EXAS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 352.3%.
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This article originally published on Zacks Investment Research (zacks.com).
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