MASI - Earnings call transcript Q1 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to Masimo's First Quarter 2019 Earnings Conference Call. The Company's press release is available at www.masimo.com. At this time, all lines have been placed on mute to prevent any background noise. 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.

Eli Kammerman

everyone. Hello,

statements, are Finance Joe Micah our and call contain today Vice and Young. expectations and current will of Masimo's financial President Chief forward-looking regarding Chairman fiscal me certain performance. Kiani; CEO, Executive This judgment XXXX Joining including reflect of which Financial Officer,

projections materially. discussed risks to could that cause detail actual results However, to that periodic the cause factors and they filings are are actual SEC. Risk could materially and from in our our differ uncertainties in subject results forecasts to differ with our

Relations You will will to these find GAAP. section certain not these of financial discussion Generally non-GAAP a as accordance website. in financial call or the Accepted this in generally that Principles are Investor calculated We Also, refer of measures. measures our include with Accounting

Form the to and of order underlying website. to our including XX-Q the consider all the together to to decisions. non-GAAP business earnings our intended uses measures an Company's and measures, and assess the performance In the results. reflect and recent release the transparency our informed assesses filed performance financial measures Investors these today Company's XX-K on investment investors make financial believes SEC provide of Company's such additional Reconciliation are indicator measures results business. the within included better ongoing sees increased results, same should with financial operating most measure these addition financial to of GAAP reports of The to our results these in enable these management and most non-GAAP as Company statements with in the the that non-GAAP are GAAP measures way directly information financial to performance. comparable budget, supplementary information Management evaluate

I'll this the we the today, to be Relations Kiani. covering the a addition to call within content supplement In pass earnings will presentation the our now Investor we Joe of release afternoon. issued posted quarterly have section website to

Joe Kiani

Masimo's it's first we the able great thank Eli. exceeded Good And results and quarter again you, month, earnings Thank XXth first XXXX afternoon Masimo's celebrating quarter joining that for anniversary Incorporation. once of to be expectations. call. us report to This you for are

results of care. our breakthrough care Our and the to their the of illustrate improve quarter ability first and strength reduce technologies, cost patient

we Our product QX, revenue $XXX.X boards technology as And the future better and to quarter, constant technology as raising our reach important Due later. and basis future million. yet, a the we of continue. revenue XX% of that shipments. a in XX,XXX we increased technology will to fore-teller revenue on XXXX. I'll guidance a first we monitors. noninvasive over for the the And in XX,XXX in boards just the monitors to are call benefit once as strength saw we In momentum expect discuss patient expect record our of earnings shipped currency strong and quarterly is business XXXX, again rest and the ship more

provide guidance. you ask first an on will in financial with our XXXX I to detail and Now, results Micah update quarter Micah? review our more

Micah Young

afternoon good and everyone. Joe, you, Thank

adoption. term current of the adopt Before that and being to financial made costs which that I transactions of most as the related level, Number the At moment a first the of recognize at during accounting lease the here the ASC XXX customer standard available significant to accounting we the contract. get adjustment high is equipment discuss two standard Masimo. the the of with now period to to method ASC started we update, impact a for at quarter will I had customer the accounting primary with types long-term monitoring compared want one, using sensor time XXXX purchase for new new contracts take the to fixed XXX, is changes the to recognized commitments, equipment the over of revenue

our not While profit to in overall implementation the The obligation leases right-of-use and accounting two, on this and may margins of economics adjustments customer operating we as resulted now for cash for lease related leases. where recognize margins related we that our by the monitoring the impact $X.X the standard with sheet flows the Number our our quarter timing product the million should approximately costs, associated a monitoring contracts. equipment the balance of and impact revenue. will of equipment but the make increased new lower lessee, for the payments our product of revenue operating revenues asset current decreased are under result the it liability

moment. expect the may not accounting but our XXXX. in just more the revenue standard of our costs, the a detail new of XXX will discuss impact We and impact impact timing results equipment year in that I full ASC should for

our the for quarter. to financial on results Moving

earnings filed well operational non-GAAP measures most that to and we be the that measures for Form be historical and further on comparable periods presentation SEC, as revenues impact primarily noted the investor today non-recurring information the basis, regarding and view non-GAAP a reconciliations. year-over-year with the have financial as other basis. we remind updated royalty me the release, X-K the I'll www.masimo.com exclude on now Let Please you supplemental of our financial Furthermore, measures financial on covering to unless non-GAAP and will our provide otherwise. refer a of our quarterly today's performance to information

and operating product As expectations. Joe mentioned, quarter XXXX great margin with revenue had start again to growth, that we've exceeded a of once expansion performance earnings strong another

monitors, the metric. not cannulas. year until direct we quarter, and driver businesses. this to and launched disposable now prior this Up cannula we our boards Masimo we the OEM in XX.X% monitors quarter. capnography XX,XXX in related growth did disposable technology The our including are to both demand that the in and reflects Also over boards beginning year quarter, our XXXX, new our was which line this customer provide growth shipments due During shipped of strong

base. We revenue for cannulas disposable capnography expect provide to our recurring installed

other we total including revenue revenue XXXX, royalty million. and reported For the $XXX.X quarter first of of

were $XXX.X million reflects currency constant XX.X% revenues a growth XX.X% of which basis. on growth product for quarter, the Our or

I for final million previously first revenue mentioned our last for to revenue this rate product million revenue X of monitoring our As of from October a of the the XXX, included growth XXXX year. to included Medtronic our compared and for million accrued quarter quarter of Royalty the expired $XXX,XXX under true-up approximately equipment other to on that $X.X contributed quarter royalty and previously, X.X% $X.X ASC recognized was $X.X revenues which roughly quarter.

first of to engineering into $XXX,XXX our the had we revenue technologies of quarter, also Masimo During monitors. related non-recurring the integration OEM

to let's Now the of the return P&L. rest

gross decreased XX compared XX.X% product to non-GAAP in our quarter, first to basis the prior year the XX.X% margin points period. For

decreased basis decreased As I product in was general product period. to of implemented manufacturing of X.X% and we've to XXX improve Non-GAAP prior additional in charges, compared margin quarter. ASC X.X% Non-GAAP mentioned XX to prior under XX.X% XX.X% for revenue by benefits margins. development research product year administrative points the expenses expenses revenue, compared by product and decreased offset This points and previously, basis points the the the XXX approximately to basis year selling, to inventory efficiencies, XXX period. mix operational our favorable lower lower gross activities, related margins increased equipment cost recognized the improvements reduction

non-GAAP period. quarter, first compared operating the in XX% the XXX prior margins points to For year profit to increased our XX.X% basis

lower the of Our under operating operating margin XXX. recognized lease margins expansion rate expenses driven at partially increased was the of ASC equipment spending our as primarily half growth, points was revenue our basis XXX which our by monitoring by on controlled offset product

Non-operating million the the cash interest increase compared prior on due non-GAAP our was year period. $XXX,XXX driven an income in on in a invested to Moving was net further down approximately yields to realized position to cash. higher and P&L. $X.X stronger our primarily by quarter income interest increase for basis The

Turning prior rate in rate year to non-GAAP non-GAAP quarter first expense XX.X% effective tax period. to a non-GAAP the of taxes, effective $XX.X tax of our XX.X% resulting a tax compared in the million was in

for shares compared was the XX.X in period. average XX.X to quarter weighted Our prior year the outstanding million million

our first quarter. $X.XX share. diluted income non-GAAP non-GAAP diluted or the per EPS net was year income per million comparison, million $X.XX quarter, growth XXXX $XX.X reflects, was This net or prior For share. non-GAAP In quarter the first of $XX over XX%

EPS are extremely margin organization non-GAAP points global delivered and first financial expansion $X.XX happy XX%, growth currency GAAP results. growth GAAP we performance diluted per XX%. quarter the revenue share. was operating basis as million our first income quarter share. was diluted $XX.X quarter income $XX.X to for net XXXX of Overall, or $X.XX or net first non-GAAP in XXXX of constant GAAP Turning the our of In product per XXX with million of comparison, our

financial like guidance. full Now to you our update XXXX I'd on year

As prior XXXX product first of to $X on growth represents our of in an performance of million. above quarter, revenue or are year-over-year XX.X% our currency increasing basis increase guidance XX.X% which guidance a a on of $XXX reflects result strong reported constant a basis. million, This the now we $XXX million our

to operating XXXX revenue. unchanged margin gross XX%. XX.X% product product and non-GAAP point represents profit to the continuing Based XX.X% of of This our on year margins assumptions, non-GAAP prior non-GAAP XXX expense guidance operating a project in these period. Our are remains we operating basis at remains improvement guidance in compared unchanged margins at

P&L, the non-operating to expect primarily $XX we interest non-GAAP, income generate down approximately income. comprised in XXXX, Moving in of further is which million

$X.XX. year approximately not rate weighted does tax for the average XX% million, prior and that all will which shares above increase any additional increasing unchanged estimating are share at are be assumptions, XX.X outstanding EPS non-GAAP our our $X.XX, represents which on of our repurchases Our reflect remains guidance we we in $X.XX non-GAAP guidance of XXXX. an Based these now of to

EPS perspective, of XX.X% are from over GAAP guidance a which And year. a our $X.XX. As of tax of a an grow rate non-GAAP prior GAAP increase $X.XX to earnings our $X.XX GAAP share projecting the for per from approximately represents now is and projected result, prior year, XX% of the we

GAAP turn on release earnings financial to Relations that, of and supplemental per call today's section financial the For website additional I'll at to earnings Joe. back please guidance details the share, our year Investor XXXX for information non-GAAP full refer masimo.com. within and With our

Joe Kiani

and seeing well delivering innovative solutions system of Thank in for services. products you, a first patient unmatched We introductions key customers terms as To outcomes as which we productive of of new cost our start, more care, embrace had positive Micah. patient improving are reduce are customers and quarter very with care.

Our data solutions because is information more, issues and right in at of they porosity unprecedented it. more secondary for will provide the hospital that patient an a hospital which data good out the need and decision is get that looks need One, from arising are are predictive of noninvasive analytics we either two, care. critical for perspective not harnessing, substandard reliable analytics, time, need it data care patient data. they of support, to Or the for and the monitoring breadth looks at way first paid if algorithms in age

our ability going data from you their garbage get only to and monitor, not medical you such optimizing to mindfulness MyView clinicians the room, systems the UniView, available have as room in Root in as SafetyNet from, now And outside Patient record. and but If solutions potentially these everything better have awareness data the situational IARS, from electronic we're such patient analytics garbage Replica, with based and out.

XXX network management, Luke's use As of of in regional St in a March, results hospital of cost XX% mortality, following reduction and ward and a with sites Hospital the Network year a in implementing our care with is savings installed affiliated Health an administration, University changes impressive expanding technologies in and in reduction Bethlehem their SafetyNet results Luke's outcomes estimated in wearable and XX% impressive achieved variety of practice at Masimo in their automation alarm a performance, its of XXXX Masimo example, Then announced including Patient tetherless a transfers, St compared Pennsylvania Starting XX a a implementation XXXX hospitals in and in utilization clinical that Pulse the site. trauma pilot avoidance. outcome orthopedic in critical program, XXXX, of telemetry, XX% a together XX% an to CO-Oximeters. reduction and clinicians financial Root Radius-X naloxone reduction $XXX,XXX after in XX-bed

XX ward, use campus. additional expanded additional units in successful Patient pilot to on the of program Luke's two their an orthopedic St the SafetyNet its beds across Bethlehem Following

once in Masimo again of is other Now three hospital years their later, network solutions its Patient use expanding automation total. almost to XXX and SafetyNet beds

also initiative who measurement value whole led to constant announced physically So to I is he from further that Management we view hospitals helping we by hospital. connecting remote Luke's patient of about announced engineer keep Luke's data platform and February, automation diagnostic of information for St an help identifying high existing Vital caregivers. to enabling a and the Signs transcription to doctors oxygen biomedical can device. Management gradual help monitoring, our devices and automatically and all to Patient record Check, of have based behaviors upgrades. and solutions. may system, Also improve to automation, the detailed such status we while need will technology of of errors. to longer Luke's our that transferred the data the Doctella, This response patients. our for designed professional to provide designed consumption, hospital now likelihood bedside clinicians new emergent better in to safety data important connected helping with an System Critical that such conditions and all patient the changes so launch Clinical that and Chairman commented our throughput and automation being St remotely for cloud-based maintenance the sometimes the for the enable Device Masimo threats important multiple of reducing healthcare Iris hospitals all communications to measures Device initiative, engagement the career. my eight US when each implemented at signs critical used as care will clinicians many and application checks optimize population most physiological and and devices productivity throughout connected SafetyNet is condition. patient Recently, vital monitors their a develop the have track provider and easy-to-use missed glance, devices result homecare In Masimo driven with allows our to and dashboard medical Epic Through level gauge review Monitoring patients President abreast a The enrichments launch minimize more Root and Department to therapeutic our a and allows efficacy of to Carmona, Masimo statement the of and The alert in electronic interact secure this that various devices Senior Iris plans without software conditions facilitates at as will to management Doctella easily quicker feature will hospital safety that intervention needs and or and the and prioritize work saturation protocols streamline situations. outcomes. stated such they the institution inpatient hospitals patient streamline to home monitoring poor safe, handle automation pipeline, until remain on solution deploy other be patient The developments R&D in collect unstable data St In provider Integration treatment clinicians now IT connectivity of sensed, workflows avoiding when deterioration their solutions. return and stakeholders become portal multiple how Dr. be portal needing Vice needed Care systems System are health no In medication, decisions. using of of of Anesthesia nurses can project is discharges, management patients, of patient will Aldo of

XXth. XXth our our anniversary, to plan things many As do to it we is celebrate

in year-old next-generation of new the March, pediatric One clearance, SedLine monitor. Mark receipt CE product With month are CE keeping with the every this available one announced for brain launch and we of In of all the to indication a for benefits our for XXXX. this above, countries. things now is function Mark next-generation SedLine in our the those of goal, intention patients

maintaining a performance can these of pediatric uses to and Masimo's Patient each patients. on Index process in generation faster to use for signal related useful patients. its of next young in anesthesia engine on SedLine from pediatric adults, appropriate enable use processing differ State events can level Because pediatric the Our SedLine for order be anesthesia parameters, patients prevent anesthesia for specific the of an recovery boost

product FDA and SpHb this in improved during technology new quarter field Another for measurement through the Reusable enhanced faster was clearance the note, repeatability. results the generation CO-Oximeters release hemoglobin allows of SpHb device, ranges the RAD-XX next Spot-check Pulse Sensor. of Monitoring next The DCI-mini generation across all and performance used with rainbow

has all in SpHb day founding of of of a surprises when team. for improve management improving patient until hemoglobin hope a system treat the outcomes we'll With interactive and automation headquarters for SET the as see week the going public for our to our that we in closing, has to our Day We from see to vision Operator? couple continue call an third that, patient, in went opportunity to enabling ahead great level here too. of our Investor continuous benefit and help for next open potential XXth of a on it every In attendees XXXX the We in May monitoring giving our see year, noninvasive XX this most. will to it's we're when We're up work patients technology hospital since anniversary we unsolvable plans the you Irvine until great fulfilling also with we solutions. Masimo on going to demonstration to to years of solving all every hospital of and you not problems even our questions. host share we the many to the XX, May cost performance Irvine. provide at to value celebrate achieving We're more our and by clinician care reduce our opportunity every mission needed

Operator

question And the with UBS. our from Matt first Instructions] comes Taylor [Operator line of

Matt Taylor

Thank for question inclusion result. the Board's one apples-to-apples made. try about get year? about the want and the you of comparison to ask of just Hi. much taking I to prior to capnography. you I the question, a number for an that just with wanted nice difference talk how Can

Micah Young

of are the the Yes, been this is Micah strip by that Matt, year-over-year. year-over-year XX% normalized if instead you to about you capnography were growth if were growth to would -- way, out have XX.X%

strong, it help that in as to line. But very remarks, still recurring contribute definitely expect with we do but prepared to that's stream So, number. generate disposable mentioned revenue cannula that new the I going that

Joe Kiani

about units. It's X,XXX

Micah Young

about Yes, XXXX units.

Matt Taylor

clear growth? XXXX but in just outsized be year, was or not last that because was year And of to this just that in

Micah Young

this in It's included launching that we just line. in now metric year. the because we're -- product We

Matt Taylor

Got you.

a Okay. metrics more little And then you Can adopting about transit detail, more adopted? being you're you high parameters rebuild value total bit seeing talk or any mentioned evidence that you're that the more anecdotes people solutions. seeing or in of

Joe Kiani

Yes.

of at rich who We hospital pipeline have looking a implementing customers automation. are

on. many We a full other amount here it had first we revenue but of going I pieces the in is customers are on the used of year and customers which expanding like launching that have year We've St also already or suite. pilots have mentioned Luke's expecting we're full automation hospital California, large

with only SedLine, Company. But which ones, twice XX% lines, obviously the Rainbow expansion. in OX, market we other think those we're parameters growth NomoLine, the at the over of Rainbow, as far the product is As seeing we're it's other like rate least with

Matt Taylor

for questions. very taking Thanks much Great. the

Joe Kiani

Thank you, Matt.

Micah Young

Matt. you, Thank

Operator

the is of from next with line your line Stifel. your question Caller, Rick And open. Wise comes

Rick Wise

a XXth the Joe, to Hi you. year. Thank great anniversary start Micah. It's hi

Joe Kiani

Thank you.

Rick Wise

with gross understood your you make moving when correctly, product the on I sure again, down understood I of about a accounting lot should of if if by because comments pieces quickly, talked cost change. here, cutting. I I offset correctly, you understand bps, margins Micah, all XXX the that you But you

for through -- will as the year? this roughly affairs, we product things. more longer-term -- that Can Just of I Is keep in like first you year-end? And dial go the and this state look a steady help just the you larger it as the efficiencies. put could. have accounting is So in you've what just the at change Is you couple perspective, just offsetting some know optically gross offset? if COGS new of beyond there you quarter, manufacturing more

Micah Young

Yes.

ASC Rick address XXX. just to So,

mentioned, So, this resulted revenue million $X.X as in it additional quarter. we of

Our equipment forecast have tells us in because we higher placements of historically our QX.

tells on that more of us If timing timing is you go issue. back full this a the historically year, that

So just guidance result result not also -- of on a the it's as revenue our that's as of our year, we're timing. still margin we XXX. or changing changing And do not we full gross a XXX. And margin guidance our we're believe a because

had XXX, to were expectations slightly we're expected quarter. charges maybe the and in tracking expectations ASC tracking initiatives, we're year-over-year, exclude in inventory If where terms better than line reduction we our even lower this cost you with we of but

think this that's of I it's issue -- timing to a think I how So it look at need year. you more

Rick Wise

thing? Okay. Philips Should are more sold driver should assume Phillips said, impressive or all whole Is is Philips, sustain, here. quarter, from And OEMs? than this per shipments you obviously in your we but Joe, largely based we more broadly numbers. very only that this XX,XXX from -- the great does is the sorry, drivers where assume I were it

Joe Kiani

of based broadly More our all OEMs. from

yes, fact, we're across In it's to with an our continue an base will drivers. installed Philips. existing really to not But OEM expansion going and the soon announce that add to Board, to related

Rick Wise

us going you color update And with are great. can Philips? And on be things would just any how

Joe Kiani

well going Philips. with are things Yes,

some end their overall next year and have next into our We've be that. released Philips. OX and we're like We year, expect continued will had line, and year Masimo looks available NomoLine and of doing not Sedline only this of well SedLine and before next NomoLine end adoption integration of one and Rainbow the I this will may with delays, OX be of and rise by next SET it Philips we product made but in and middle of SedLine, with expect SET year. SedLine terms up, year before NomoLine, OX those of through

Rick Wise

me, Great. products, you about, months I you've just in story. know been SedLine talk the about we and Masimo and recent quarters. last and pieces in moving a And from lot back obviously NomoLine, But about talking mean, the when of just stepping all the

the Now announce you you're your incremental month accelerate saying How in about 'XX year. all impact Is so we XXth -- growth, of but plan, just term, hope is honor that? obviously, could is this will us an that. to new or this going to a longer to help do in understand it much. have an this think this impact have product every Thanks

Joe Kiani

extra our you. Thank beat being certainly I conservative broader will Well, we the one just in have our guidance and It's we instead plan of in forward help it XXXX. XXXX no fact and feel But on increased despite doubt And you. they think reason in markets going on. feeling keeping based our positive, soft, cushion. that Thank will about bullish year.

expensive our how half state more of to we'll problem, business. release and big Some they've a the where to the the the with in a SafetyNet solution our about having product. consumer -- used of in product. waiting And epidemic of large a second on our year. impact business. them. we're FDA one will potential products the one proportions We're will helped have we've solution Utah opioids and working that already think we'll to that release truly could We I is that's given mentioned product really hope be project seen first to profound of the very have that And impact healthcare deal be the launch, with and problem that I

that could in putting not either it's how but it but not be, because really of consumer into we're will putting or digital hoping that could effort, other can our that lot guidance this And big, our business, nothing be healthcare we're projected be in been in a be numbers business never big. seen it Now year. for we've we've companies

Rick Wise

Thanks, Joe.

Joe Kiani

much so you seeing Look Thank Rick. to you. forward

Operator

Piper And Bill your Jaffray. next from question of line ahead. go with comes the Quirk Caller,

Bill Quirk

Great, thanks. afternoon, Good everybody.

Joe Kiani

Hi, Bill.

Bill Quirk

Hi.

to contemplated the ASC quarter to I'm it I -- was guidance? transcripts. didn't I guess -- just in was the kind of... XXX sorry fourth Micah, But So, again. reference see original something I'm back to that go in I there trying a to just

Micah Young

been mean, of No, it took we the a lot through process past it of takes knew year, because working I very we a were, of but contracts. -- working over we've this change course it of through lengthy

customers. better of we of make that we have early to through more timing to drove equipment impact a like So feel first quarter the we we based the when will now on it. continue and timing clarity when work And in much us available understanding the of of that we

So in clear that's make we us call that impact the why quarter. we it, to want sure that we're on the amounts

rate, but It we you extremely that million. when can had the we, without strong on quarter strip -- that XX.X% impact have So out, $X.X again would on we grown still growth the understand revenue. a you product

it's of going quarter. forward. year first And timing the on strong based very throughout and it's before, So just mentioned as more shipments the I --

So or overall economics of our we impact not the of contracts. related the don't it a contract does flows -- cash

Joe Kiani

the we it year, So don't impact. for make think will an

this while the have So we year then saw in projected in flat. quarter, we'll increase, quarters But will be decrease. And the we it. it a an see future for

I think is it's you not Masimo. just XXX company, know every impacting ASC

XXXX. again, be had we go thought flat it flat. when in announced So ASC with looks and ago, it And couple we years it to had going we they predicted effective be of that to would a like it's

Bill Quirk

this a about contributing if capture this revenue is the Thanks, from had of a should you we think regarding the back Joe you earlier bit that thinking you if going Micah. maybe Joe. And little something several Thanks, systems interest or approach. that Can 'XX that? years? Thanks. And us to helpful. building be should based meaningfully in upon about very that's be expand Okay, comment of and over help Thanks. terms in an hospitals period

Joe Kiani

high, thousands miles to customers working they both is team. from tell to our us Sure, miles to just the Bill. them and excitement I our can with few a implement. had away, away tell own implement, we're of you from We've customers want

of products think that's year year. than hospital all before this associated launch the of for amount done launched, we've new ever the automation I of we've the revenue highest in

tells expecting going can size pretty we and that see big this still can well. we year. So we the what that's accomplish revenue from And are pipeline us

hopeful a become sizable business. I'm So will this

of what new and hospital that the opioid share you well talking at we've will as SafetyNet as with We think size for the us things business be we Analyst been Day automation about. could two

have better sense for hopefully, what we So are projecting. you'll a

Bill Quirk

And then to us from that just one Very me, product? on update last ORI, good. anything

Joe Kiani

ORI, positive Keep to so XXXX then extremely FDA marketing been great reserve it a used studies to extent. we are since that's and being soon have every in can fingers we're that come your the and US. people any get clearance we crossed, hoping launched cleared it to using in the US start from is it out obviously been data get outside working the with have

Bill Quirk

Got it. guys. Thanks

Joe Kiani

so you Bill. much, Thank

Operator

line And ahead. go Needham of Mike with question your the next Matson comes Caller, from & Company.

Joe Kiani

Hi, Mike.

lost we've Mike. think I

Micah Young

Mike. Hello,

Operator

And Mike, is your line open.

Mike Matson

me? guys you Can hear

Joe Kiani

now. can We Yes.

Mike Matson

right. All

that. about Sorry

far But overall about business So has of that talked each three kind combined I XX%, growth you X% X%, the kind those measurements know the XX% categories. of Rainbow growth exceeding then for and broken have of your that of of revenue growth if implies. been that you other kind out and respectively between guys SET, kind to

or -- if So is in it example. wondering three well those -- Rainbow Is just is really what's could the out of for really terms maybe across you break upside? it driving the categories doing where there Board just

Micah Young

it Board. seeing this We're is the Mike, Micah. across Yes.

are strong that SET of other mentioned think prior parameters, Rainbow are X% growth long-term call, that those X% is XX% and assumed mentioned growth, advanced and XX% in seeing about our quarter And rate and -- our SedLine across I those As about capnography, call exceeding XX% on performance growth, of of of back the plan. three our last of all we OX. to X% I I to

we're that area, So not is product it's one just based platform broader it seeing. strength

Mike Matson

on business versus kind the question hear US just on international, kind then OUS a of And I'd of thanks. call. the similar a ton Okay, comments of about

in Is then and performing. any various of on kind guess. that's or comment how faster, US of line curious just worse, regions better it you're And slower? I kind where with just So growing Thanks. doing --

Joe Kiani

Xx faster countries just product, Yes, direct, -- we rate markets, and for as lot but weren't more growing of certain demand is smaller we've a gone of at we're almost we're direct the that that in getting also established we is for so, traction. US. a our is additional OUS are there in

Mike Matson

Thanks a Okay, great. lot.

Joe Kiani

Thank you.

Operator

line of the Capital Caller, next question your with Misra comes Ravi line is Markets. And Berenberg open. your from

Ravi Misra

for taking Thanks question. the

as two think So just I I have quick ones.

to Thank three the kind of Just guys? on communicated SedLine of for needle needs you've Rainbow, in neutralize franchises? accounting And reimbursement update place past business into opportunity you guidance of the are move for really as for we of exciting the kind of second, for three SET and kind kind capnography segments us come the still the in that, to when to those growing your you. opioid between this then what

Micah Young

then will Yes. first Micah. I'll Joe on second, and on the Ravi, one, the reimbursement. follow-up take is this that

implies So implied you look lower in the quarters. on in at that million in by be will we last guidance, QX, timing revenue our the if $X.X the equipment of three million that $X.X

guidance we've -- And quarters. and it's is and three broad as and accounting effectively of last also strength channel. change the our outside technologies, in raised platform, based across seeing, the So we're we mentioned we're distribution before product across our geographies our across the that product seeing our broad revenue

to expecting that our that to are long-term laid we out. plan outperforming So we continue see

So hopefully that that answer question your helps -- there.

Joe Kiani

only Cures it reimbursement that it recent XXst now. take of not will by passed reimbursement did like prescribe the were and for. considering that But they of clinicians survey of. pay they did There out it, right would of might patients marketing that could studying rules but already said prices will ones at it the we course Century say majority be a for we're majority Act were recently advantage the we pocket And customers

But we're we're the it reimbursement. may without may not value And for understand its what the we implications. that at going brings, once does, considering even of reimbursement we we So look successful they be for it, take welcome cost Ravi, we to fully think think or will advantage aboard.

Ravi Misra

the Thanks. call. the... nice Appreciate It's to be been on

Micah Young

Ravi. you, Expecting to have

Operator

comes from And Raymond question go Lawrence final of James. please ahead. line the with Keusch your Caller,

John Hsu

on Hsu John it's Yes, for Larry.

you the kind guess, that is in had way But Just change be XXXX really seeing right it a the outside due the I to change or think based cannula. clear, the obviously including from net to talking some Joe, I me. prior that this from now, the you're been few XX,XXX broader is plus drivers guess of is capnography, shipments you're new to capno? quarter what just about there of about strength for

Joe Kiani

we take how record memory, XXX% about even shipments our we this, from out of I'm my SET and had Rainbow. not but drivers normal capno quarter if

consumable. So of because year capnography We now we seeing include SET adoption to are chose increased and we Rainbow. have this

from the of So business. the revenue in the hardware our number for all of capnography come installing just years, past not from been has we've and consumable

can are. there's the plus now cannulas it And that large we have we we sold first the provide than of but for. time that QX, very for our in not capnography in technologies products, quarter installed shipped past this capnography base is ever, own So a only new we X,XXX

John Hsu

unless have that more, is later Okay, on accelerating But on great. like sounds and that XXXX. XX% missing advanced presumably XXXX Philips with parameters start in in should growth that then an couple fair? will And just really the rate, it that I'm impact to kick a something, early

Joe Kiani

NomoLine I patient with world launching monitors that sales SedLine, should in so, are think XX% XX% for think strong to our obviously with Philips, the I was in them wins those of Philips, and large a put parameters. such footprint OX,

John Hsu

something year the then Okay, with study a time. transfusion measurements, you've last to bit long-term SpHb talked at little the less ability natural great. this over to a the about looking of ability influence blood great And one, is -- study influence but news, that the all

in study when might that of So to able mid-XXXX. Is completion of some and was the data? kind date like that see it looks fact still be on we that track

Joe Kiani

and doing thank their you it our analysis enrollment You're absolutely for data are has you that. trial us we'll soon. of on reminding in investigators be update and now submitting and that understanding is terms to completed right the for That publication

John Hsu

Thank you me. from much. all That's so great. Okay,

Joe Kiani

all thank for you joining you hope so Thank all today. you us We're see up Well looking Thank of so fast. to much. coming I to you forward much. next week it's it.

Operator

concludes wonderful and a Ladies and your conference. gentlemen, you have day. Thank for participation this today's

You may all disconnect.

Masimo (MASI) 6 May 192019 Q1 Earnings call transcript