MASI - Earnings call transcript Q4 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to Masimo's Fourth Quarter and Year-End 2019 Earnings Conference Call. The company's press release is available at www.masimo.com. [Operator Instructions].

I am pleased to introduce Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations.

Eli Kammerman

Thank you, and hello, everyone.

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

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

You Relations will the of section Investor find these in our website.

a call will generally of this GAAP. that these Also, measures principles, financial are accounting calculated include We with discussion accordance non-GAAP certain to refer as in financial generally or not measures. accepted

intended the additional to budget, the assesses measures In and enable investors evaluate operating to company's such to non-GAAP measure provide an indicator same results, addition results. measures to GAAP way assess information to and in these sees as results the non-GAAP uses management these results performance Management are company's financial company directly are reflect earnings information of ongoing financial and and transparency of the performance increase measures financial GAAP our the performance. on better the non-GAAP these believes underlying to most measures the business website. business. that these of included financial Reconciliation financial within comparable measures the company's release The supplementary

in XX-K XX-Q, our with the filed and reports SEC, to consider should with investment most statements of all recent our together Investors make decisions. Form today, our including informed order

website the we this the posted quarterly the addition covering earnings release have supplement afternoon. presentation earnings within content our Relations of to Investor a be issued we today, will section In to

Kiani. call the Joe I'll now pass to

Joseph Kiani

postsurgical including and Call. wards, nearly you SpHb leading the Good every adoption wide of Fourth another afternoon, together XXXX year to us revenue Year-End in of year category. acceleration in earnings double-digit XXXX, with important our growth. in and record-breaking adoption We Earnings saw Patient Thank we was XXXX joining and objectives promising hospital Masimo's for SafetyNet And in many you, of Eli. thank for a achieved prestigious Quarter in delight, hospitals.

care to records. only Our significantly care these intensive have and our reduce shown Clinical achieve has customers overall reduces of studies us enabled outcomes ROP wards. overdose in with in to that ability cost in while SET neonatal help improve reliably SafetyNet, units, detects newborns team wards, transfers maternal response in CCHD ICU and reducing from lives in and rapid postsurgical opioid dramatically activations combination saves Patient

study transfusions. SpHb decreased shown XX%. rainbow and recent a have landmark France studies And reduce addition, that in and SpHb showed blood In help PVI PVI clinicians by mortality

We and are experience At improving these operational rainbow worldwide our team objectives the seeing time, independent reinforce of our while expanding products. life-saving clinical efficiencies, succeed portfolio with hospitals technology same our our and SET continues to study findings. in actual

We expectations set quarter are stage year year to the report happy and and for fourth full results ahead. that promising exceeded a

constant million, For reach the XX% currency our for full XX% more product grew delivered we to increased non-GAAP EPS in EPS year, growth. XX% share. revenues growth fourth non-GAAP today. the And and $XXX I'll to $X.XX product our the XX% revenue and call discuss nearly per quarter,

an year review ask more our full and to Now, QX overview guidance. results you provide and financial in Micah detail I'll XXXX with our of

Micah Young

you, everyone. Joe, afternoon, good and Thank

Form well today's non-GAAP filed as the supplemental earnings SEC financial quarterly further X-K the be our will presentation, reconciliations. basis measures release, as financial to refer you noted otherwise. a primarily remind the for me let information started, unless get our that earnings for covering on financial be today we information non-GAAP we with and regarding will the Before and measures website I Please

we product and segments saw multiple multiple growth geographies. across business XXXX, steady Throughout our in

-- our and operating fourth another non-GAAP In of double-digit to in earnings significant per growth revenue growth, margin margin share. quarter results expansion included double-digit addition quarter our also

of noninvasive per During consistent XX,XXX we monitors, technology which expectations our with quarter, is shipped quarter. and drivers XX,XXX-plus boards the

XX% For a on approximately which currency the to quarter, growth the that constant product million under Please percentage basis. $X ASC X revenue fourth our growth this note for our product monitoring or of $XXX.X revenues million, revenue were roughly growth recognized equipment quarter our revenues reflecting included contributed of XXX, XX.X% point quarter.

P&L. Moving down the

for activities This XX.X% non-GAAP points in compared we've margin manufacturing increased product gross fourth increased basis period. primarily to margins. the by product improve to prior mix, favorable driven implemented efficiencies, to other cost customer improvement quarter Our reduction XX.X% XXX was the and year and

as revenue to the to points in X.X% prior compared Our non-GAAP our to same the product basis And expenses administrative and research general quarter. compared of product quarter increased in basis XX XX last compared expenses XX.X% a to point XX.X% year to XX.X% non-GAAP points a percentage development as and of revenue percentage selling, decreased year. XX X.X% --

margin XX.X% non-GAAP our points to period. operating to the year result, compared XX.X% in prior XXX basis a increased As

We achieving. are the that are with very operating leverage pleased we

Our further global which the across operational that required enables organization innovation company, increased to productivity deliver fuels us we are growth the business. continues in to to discipline the seeing the demonstrate reinvest in

for fourth our prior Nonoperating Moving effective $X.X the million tax expense year tax further in prior The low $XX.X non-GAAP the was down non-GAAP quarter the And effective resulting basis tax the in in of comparison. year rate difficult prior period. on was quarter, to the the led in non-GAAP rate rate of compared P&L. a approximately a year-over-year in XX.X% compared to year non-GAAP million income period. $X.X a XX.X% million, a to

If government our This XXXX, reduction methodology year, foreign determining in provided the we XXXX, quarter clarification November earnings recorded for had the which last of XXXX. resulted tax the you on in fourth which fiscal our U.S. $X.X a for credits. regulations the tax million call provision year issued in recall from to

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

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

for GAAP Turning GAAP of the diluted was growth was XXXX per XX.X%, operational income long-term to of net efficiencies currency points towards we operating expanded In income of million great gains delivered non-GAAP as $X.XX growth increasing quarter non-GAAP product $X.XX reach $XX.X operating per our XX.X%. we a delivered goal fourth was have GAAP to share. goal margin clearly or net or million for share. year XXXX illustrate progress basis our $XX.X of XX%, quarter by our XXXX our results. comparison, the XXX fourth drive we achieved margin. in to The XXXX constant Masimo of made for results XX% Overall, revenue and EPS profit diluted our profit

revenue time, We the investment double-digit are these proud our and while profitability, to recording same increasing in overall achieve R&D business. at gains the growth in

Now press more guidance last I'd detail financial in release month. that year outlined like go to into our full we on our XXXX

million year-over-year a For a are projecting product currency additional basis. revenues $X,XXX,XXX,XXX, reported is on $X approximately million by of our we Included XX.X% $X growth towards in an guidance XX% XXXX, basis. year of are growth contribute product of headwinds, offset revenue roughly on or Care expecting roughly a year-over-year revenue week currency full which basis, point transaction of to constant of reflects that shortened rate we guidance holiday related will extra And selling constant end the percentage X our the growth XX% at quarter. currency Connected the on XXXX revenue fourth of

approximately a XX-basis-point which gross represents over XX-basis-point product XX%, non-GAAP guidance of XX.X% our which And increase results. increase guidance revenue, year. is is margin reflects the non-GAAP expense prior product Our XXXX our over a operating

as expense in increased the operating incremental expansion, ongoing costs to Connected expenses related continued business, our are being Our sales force offset legal and as increased efforts guidance includes deliver Care which operational R&D efficiencies. by investments largely well to

operating guidance of points XX.X%, offset our guidance which reflects which is transaction. improvements basis leverage the prior and by operational points business, profit headwinds for roughly of a non-GAAP the improvement over in to our is year. Care XX-basis-point basis existing XX approximately XXX Our related Included from Connected is margin

the further down Moving P&L.

We represents interest interest is comprised non-operating prior of expect reduction the result from million approximately primarily income in heading into to This a rate million of non-GAAP environment lower the $X.X $XX in as generate income. a year XXXX, which XXXX.

prior XX.X%. be are roughly projecting non-GAAP of average the And year. estimating We reflects roughly are over that $XX of increase approximately shares tax will our weighted we which year an rate also a for X% the million, outstanding

reflects from projecting profit on XX%. is rate It growth projecting and EPS our XX%. to year-over-year higher roughly earnings interest these the to dollar are and partially $X.XX, note our we projected This with growth GAAP X a of a of we to continued reflects are share perspective, is that which XX% of count. assumptions, approximately headwinds share by offset per leverage mostly of points year. non-GAAP tax GAAP EPS lower for Based percentage of all approximately important earnings operating growth $X.XX And growth GAAP of rate income due a

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

revenue on steadfast are we to revenue growth operating and profit XX% operating plan we in And most margin XX% about margin. operating as of and for outlook our excited dollar growth. long-term very our our commitment summary, drive of both remain In goal we long-term growth delivering XX% XXXX product expansion importantly, towards our

back I'll that, Joe. to With turn the call

Joseph Kiani

some highlights. the Further great in new beginning to Thank record-breaking thanks the this you, the I business Micah. At had our we the discussed call, in of in SpHb. part mentioned we most year incremental XXXX, and history, of contracted

quarter Nieves can and Baptist significant de hospital Spain. include the Virgen the discuss in U.S. customers of from of new Some las fourth the XXXX Health in we

from In addition, and under hospitals new X Turkey we in Arabia new Saudi won in construction. business

Hospital. captured and and MHH Hannover our Hospital also Seattle a with renewal We renewed Children's contract with Germany expanded in significant

XX%. was Our and terms platform that which continuous our of measures full for the proprietary and U.S. adopted technology, a expense new benefit XXXX more growth Also, in for by growth our rainbow hemoglobin clinical business above being hemoglobin reduction long-term monitoring. continuously broadly This year customers see from SpHb winning technology noninvasively. record goal hospitals year total achieved is of revenue

well XX%. above oximetry monitoring goal grew long-term Brain XXXX, For and seeing our technologies. growth OX our these of of X Function Monitoring, organ strong We're NomoLine SedLine adoption gas monitoring Capnography and

XX for hospital automation fourth bringing category total quarter, more also we X XXXX. the our to this products In our in customer installed customers launched installs since we systems, of

Our automation, UniView for and such and by innovative are being contribute streamline applications potential patient they well users hospital as management. received workflow suite because software better of Replica, to

oximetry pulse through measurements, and our priorities and reduce of overload automation hospital support, strategic continuum decision care. hope Through is high-veracity our errors to of cognitive physicians and great reduce algorithms of we SET noninvasive omission. predictive unique to the One connectivity, the for improve

our to As connecting connectivity technology to products us that we expands complement our portfolio, increases automation will implementation the and and through successful assets is we marketing, in other sales, Masimo's platform, presence and customer footprint commercial with leader announced solutions the a our acquisition current to device January, health in combination or established NantHealth hospital in professionals. collection service growth this information hospitals, iSirona the systems. medical provides products an our technical streamlined vendor-agnostic adding not only area. We clinical team iSirona accelerate portfolio. providing a believe iSirona of records but by The field with enabling of of from electronic also data connectivity storage acquired iSirona

happy FDA also system our submitted to have opioid for clearance. monitoring net SafetyNet report the we are We called Masimo that to safety

may from that for from We opioid have XX,XXX use, believe even high for at was perhaps to people home. it prescription reported people product opioid at opioids up XX,XXX home. die In the taking more this died do people in overdose people XXXX, year. hopes what same We illicit over

Based opioid of opioid on believed data is with the number SET people their we SET of the of opioid the experience hospitals' it died oximetry; that on SafetyNet recommending near-perfect die Darthmouth-Hitchcock we awareness too and of pulse the on many still use, specificity of sensitivity of people opioids on for approximately fewer home in use difference patients a use in people's confident wards; on pulse prescription the and that dangers opioids, SET is in with XXXX, since and XXX increased will Utah from use While law in patients in at opioids; Patient postsurgical patients prescription large. clinical oximetry groundbreaking Patient wards SafetyNet from studies on from the the thanks postsurgical make to lives. SET are

the our In of be our abilities but fulfill closing, of we and reduce care. mission proud XXXX, as patient our we can't outcomes to to improve and in enter help optimistic outlook cost

With that, call we'll Operator? questions. to open the

Operator

[Operator Instructions].

from first question Wise Stifel. Your from comes Rick

Andrew Ranieri

Rick Drew for actually It's on tonight.

plan Just wanted to start on first. the long-range

Just year Masimo's consistently excluding your the acquisition. of of LRP, and growth LRP the you high-end towards have end delivered upper tap, on another

Just business like growth opioid putting plus have the new today, maybe hospital Masimo you XX% aside the some baseline for automation the be as a kind safety moment, of forward? initiatives at for you shouldn't of look just why going and

Micah Young

Yes. in automation we've at have or Drew, range our that without as -- the we Massimo business, upper-end think yes, been of our layering core SafetyNet, initiatives or hospital about been for we even better. delivering

and also going plan, and we also we provide internally. achieving. is, And a of get guidance, -- prudent ourselves. want a prepare we far it how got be As our and But give to guidance guidance into multiyear a we're couple high the as have -- a of it's we want have think plan. guidance rate that long-range a we confidence -- how to ahead that as provide how drive of understanding don't about growth to year, philosophy high and -- want to in, much thoughtful in the And don't so years we number higher confidence we both guidance over about a we but we you've business

Andrew Ranieri

on it. for touching And allocation just Got a then capital moment.

sheet capital acquisition. did, just priorities you How we additional for the very recent maybe think in M&A still M&A? something And Could recent the allocation solid. are XXXX? approaching closed you could just a or about see balance thinking on just deals even we moment. You The larger? Should remains transaction mirror that potential

Joseph Kiani

acquisition. our the a thinking think XXXX, of I similar size to and saw more just things NantHealth type with you about we pipeline see deal in the

few We the pipeline. in things have a

think will thing. going slightly we're yes, M&A. XXXX. bigger. XXXX the things I something our to tell be capital like I -- to hard digestible. it's we're use But what's think they so be way stages, It could towards But best we early and that. happen it's don't complementary to is at looking also a But think it's to currently

Andrew Ranieri

it. with then just transaction automation, accelerate new -- should Got the And the mentioned hospital recent you there. initiatives

pilot program like sounded you XX in You have have XX -- it your now.

automation expectations XXXX? kind double in your XXXX? that of in are does So Just what for hospital your program

Joseph Kiani

this of was call I count. fun that the given One preparing a for wasn't things

just We it's signed the wasn't that been But pipeline, business have so well closing. that and quickly much in me. we've our new working team product installed pipeline as as grab haven't to there our of on strong. Both an easy is really deals number to give the up

showcased see the about the get we excited that the really are where reaction automation day what from hospital we every year success for had and through we people come and We hospitals. in do discovery first can lab the

Operator

UBS. Matt from comes line question Taylor from of next Your the

Matthew Taylor

to Do it how get the develop cash product. you, about that submitted could -- could for it you now wanted think ask still opioid this in possible difference your be Any have reimbursement year? thoughts it? Just Or pay? that is feel you'd you

Joseph Kiani

Matt, same one, its We we're hope about what we finds the way. number think we the excited FDA submitted. adequate. think, We

opioids on more technology We this are the FDA, do can collection for -- at data our about through people confident what for home.

reimbursement seen discussion immediately, reimbursement, in yet years, As technologies concrete. far we there's and as become at but that X may some breakthrough that relooked get then haven't

the specific we it's then X some something reimbursement until can So year telemonitoring years. developed cash that our more first for X our use. for is reimbursement But assume second last we patients. line from to from were to product, reimbursement hope codes gets expectation have line, we take that concrete, of And therefore, going revenue telepresence, to

Matthew Taylor

just could they these Got and you. I could hospital automation how was contracts you material about are, hoping grow? talk

Joseph Kiani

America system every world, mean, even are to most And we've Well, around these other But with that I and it. about are just from material piloting in met to more the the hospitals done obviously, way East, entire -- in invest of because Africa. that in into expect they're North do wants significant, a And not in believe customer I they they all heavily are happening they locations. Europe, it and Middle they're investing they it. to they about it, haven't just are

So we think this is going to become significant.

taken that revenue. with a bolus we've going see our not But going capital-based revenue approach model, stable, taken base we've Now a to oximetry of not We've like model. a which means to hopefully, of built you're technology. pulse you're see more growing SaaS

Operator

from the Piper line from Bill of comes question Sandler. Quirk next Your

William Quirk

worry I guess, China the there to you're about least appreciate bit. suggests that seeing situation providing, chain So over there's with guess, at be down little And that potential supply may I given anything there? we a that But be the from in respect is that to -- is, may any news that I question conversely, then settling situation? first anything, lift are you some products

Joseph Kiani

do side, On supply the we chain about it. worry

However, yet. we're problems not any seeing

Just planning up in from the problems to get build we future, in from become might we're case more China. there things inventory

get what enclosure and just from is limited, really is and China for our the some our monitors, cables plastic. we very it of Fortunately,

made which we to here. anyway nonetheless, internally are inventory. -- we've do safe, plans the just plastic But So getting to already additional be

We that, any As some we've but of enhancements there, not our seen far have who we yet. know of not as OEMs happening seen seen revenue from any. have what's

flu business business just the the normal we Our is see in season.

William Quirk

this that don't breakeven, you of how our any about way models. want But needle to too then appreciate question ahead the Micah. this around I 'XX in here. the to I and the ourselves we idea Is is for Care think Connected for a help And to dilution of it. of slight secondly, the move about appreciate far the the there can Is trying got comments a earnings. Okay, 'XX? to Micah? something think company? Just accretion the magnitude rough get in that should get

Micah Young

Bill. Yes,

basis of positive earnings this believe think move -- But as we to XXXX. headwinds slightly into about mentioned to going be in we XX look points it, share. year year, it's X. operating that's So neutral the we on at we And per as we that on margin, dilutive

business. So we drive leverage there will grow have that we an to additional opportunity some as

Operator

Raymond Your next from Larry question Keusch comes from James.

Lawrence Keusch

Joe, you prepared times script. in mentioned the SpHb multiple

that's little bit things certainly Can that? it do are your what up driving gaining a growth? about out think you comments, like -- you sounded so can And sense pick stood us it talk And of did traction. Because to there. from that, again, it you starting is some give

Joseph Kiani

are. Yes. Yes, they

ones We are especially maybe -- launched who've it's it's great see XX I studied been that are those we since nearly to XX as looking as years to more new think, it. hospitals commit well it, years, at and hemoglobin, it for

I fully hospitals every up and where the and operating with practically think seeing is they SpHb they rooms devices it of equipped be for. used days it their handful are be need they on patients at recovery what's versus were might early in that nice ICUs and signing on for using to patient thought we're rooms, a buying

mortality additional, body has we're It that's we've about. of clinical study is proven takes evidence budget maybe morbidity And it it the think occurring used France, on XX% surprise. a they reports after for they caught a it But up for to I about a secondly, to heard of think, hidden. or SpHb earlier Limoges, shot and it of To now, surgery. every XX clinically that's where We've have some of dis-installed technology technology back in difference. earlier that mortality bleeding then and the this was X the pleasant do de-installed make And for who been with why it they mortality part -- saving come the year a when mentioned following was. -- to because of the -- in seen I XX practically to XX where adoption didn't future, reduction saw it using our phenomena and years year, was in. because the patient, XX people days to is I lives use industry

use yes, that beginning is probably they think and its additional published an data of magnitude was so repeating people is it. has to And real We're just, think year hospitals study time impact. I up, last that finally, several confirm and to results. that it's are see I catching to at this hopefully had But need

Lawrence Keusch

Okay. Perfect. guess, other ones. two I

think First that have automation. to to you off, the sets I just guys hospital coming of one, variety a of the could months more back comments to probably if Again, in caught feature your about the you offer. woods, X think, been But from installations not I the installation, if your that experience that I local the of you back comprehensive. that come the now, first approaching neck was was longer. date. sort It's Maybe talk

So just that question.

And the that Micah, get for XX% then, indicated should around years any confidence I the just about that you brackets out? achieve Or margin. to when we again, just long of again, want how might sort over be five is margin a your operating in of, term. XX% thinking I guess, sense But you

Joseph Kiani

Sure.

the installed deal second hospital initial automation Let deal question. has Micah first customers on I'll question. And excellent. The with have experience the me your that have with been

be have customers installations. to just of In -- yesterday here visiting agreed accounts these we customers reference fact, had that are some they and

in -- been it's good. so So so so far,

more for initiative for to And make and useful us, all over expand stays important products for coming useful it and Now clinicians And hospitals, it's that out the enhancing we experience the an from improves. more continue this patients. the sure to the of we're, the group, more good. making product, because more continues it that it obviously, as

delighting -- continue have doubt about our I So no that it'll customers.

Micah Young

points in per question at operating of We over look still XX% terms XXX basis getting long-term our second plan. the Larry, year. margins to great. that to as Okay, committing

basis XX existing was business of and by business about that acquisition we Connected course, offset for XXX had by Of the about -- to points we Care build basis up the -- points. the XXXX, originally had

we marching as towards from that XX%, of committed the we Connected us XX-basis-point to And XXX So year. about that may as basis that this Care some see puts But we are still at improvement improvement go coming think into tailwinds per we year. points business XXXX.

was should Bill's this flip earlier start and as I into year, As tailwind that to XXXX. question become of what on headwinds more move a mentioned we

Operator

Your the next of Matson Company. Needham question from Mike from comes line &

Michael Matson

just I Is and upfront the you automation on hospital us guess then back subsequent how the sort it deals, an walk revenue end to on maybe fees? of of back through basis? service just in these can subscription purchase with terms that? fees Or of works kind an there or with all annual capital these just is

Joseph Kiani

Well, options we our they model. provide it, SaaS so customers or the capital to do them a can acquisition of we give

charge take getting an So an customer. over investment but ends time, more for initial what I we because rolling. upfront to competitors. it it, don't revenues generally, us, more in up more say capital obviously, us, to to have the is the we that But we the for model being want SaaS And

price we for. yet there's charging to from no has a I at to it a competitor seems one we're direct Although us asking because countries, were high-resource very countries tell can like what told we're no doing. low-resource you, has what bought one reasonable

Michael Matson

have? of giving didn't into Okay. goal? products you That's some acquisition. automation fits with just the bit that talk business? maybe And that Care Connected helpful. sort Or you just is new Is more Can it how you hospital or accounts some a the it you getting then about little

Joseph Kiani

largest Well, first iSirona of there. was the device Connected Care second all, out

that So in nice that sense, have it's business. to

a a we have device that's a of has hub stand-alone being they from things, which, to are so where do forth. other connecting connecting to and for course, device small UniView features monitoring a Secondly, route for

have itself, that hub and it maybe just areas, for the certain a root the small device, sense OR So to make device. installations, ICU, other and in the might in

that ourselves team really, that biggest the the there. was reason But business to we wanting was buy found

automation. with frankly, more rapidly if hospital And very have scaling we those are support we help could could We customers people us customers. more to have

the iSirona from installation acquisition with got with hospital marketing total us product and automation. we is that people previous not what sales fantastic our their only of experts, help a but team portfolio products, So can NantHealth

Michael Matson

Joe, CNBC Okay. about And on kind rules supporting proposed finally, access data. were their you giving patients of I health HHS then saw to increased these

that kind revenue what from that new some really additional and create opportunities of perspective And Just for business a mean? does products Masimo? to does for Masimo,

Joseph Kiani

Well, really first and of of If us patients the of we benefit, for us to none help all, share ultimately, patients. could philanthropy. support bit benefit, have all all we little then data, data to a don't to do create of type the decision that can

business. us the can't. price But pay business in now, So to to care. that have Yes, no. with we I given and right especially are we think think help yes, health we it's it we yes and will automation -- hospital before, of ultimately our And in may data been the able sell our

Operator

the Your Misra of next question comes line from Ravi Berenberg from Capital.

Ravi Misra

call above guidance growth opportunity, still another, little XXXX. XX%, couple there's bit about kind in full speaking one maybe just long-term yet asking year conservatism, a I'm on SpHb confidently a your and all just here the curious, embedded also rainbow, someone heard a of on about line of the me level of then questions So prospects another Joe, you in I -- more who we're the automation. of about think,

stays those are I some automation uptick to have maybe margin historical the targets. pulls upside as that? that keeps related of business going And of we then then the line? of kind us looking the kind are if What within XX%, there's think help we rainbow, of the gross looking about one to the over top on after one rest the of pushes with that. shift on that, model kind So at and at in the over kind mix And

Joseph Kiani

always God wished I've for CFO, gave and for Well, a conservative one. Sure. Christmas me

make So -- optimists, we can want do nature, conservatism. you sure forecast. we our appropriate, for thank him to And blame to because, the him but so by best we're deliver. It's or obviously, we

upside, our the of As business is same probable. upside think the before the in kind far and seen you've as confidence I

think that reflect I so signed we not did for these up in I'm XXXX revenues even confidence our SpHb happy the SpHb, contracts gained we've in about.

You're them that. an going XXXX. to start seeing of acceleration there's And in

making customers what in mouth to because we our Now just keep word is expected factor get of business. the our most have important they sure

think So prepared And but about help as I'm hope comments, can't to we I beyond delivering optimistic the in promised. be -- what we I continue said, I future. my

last the that's question is think I So -- a there second?

Micah Young

more. one there's Yes,

Joseph Kiani

One more, sorry.

Ravi Misra

, follow-up mind. you if don't one Just

Joseph Kiani

all. at Not

Ravi Misra

-- to the customer how long a you them. us just Can XX said you onboard? in base. when to sign takes through now, installed then only Not the walk that up onboard process kind onboard you and hospital The quarter. of Up fourth X

if could that'd million just could related if one. to sneak kind $X revenue, great. that Is mentioned. contracts? last these you I be Micah, monitoring of That of just bucket, define you And in what's one that that automation Or

Joseph Kiani

that is and Well, I for can expected of go it were year. want contracts ahead the tell of And had signed said for the you earlier, pipeline to deeper. number that is we the that automation the on hospital I deep, what installations of we customers

do far you the As Micah, your $X about want as question million, to?

Micah Young

Yes.

revenue matches on under could million, really that's the provide of on customers sell any contracts, we equipment $X XXX have we cost. long-term So in to to that equipment that -- that are we tied that time sensor-based terms the Ravi, contracts ASC

rate revenue of that's look within to really accelerate revenue understand all caused this can strip why that's quarter quarters. the out investors growth really us the to core they and that's in to -- lay some business. at you changed And kind year, some recognize the it's every so that out that we that So

So your you had this for Hopefully, basis contribution hospital this in constant-currency past XX.X% necessarily tied that X year, what directly It's and XXX. that point from a question. year, of XXXX, on ASC answers that's example, growing is. about percentage really to not automation. And

Joseph Kiani

their the now, capitalized to. in And a accounting the [Indiscernible] of version, to the take not rules were past, revenue. have you portion

way, Now XXXX, still... that to or being we're going it's in given continue going to

Micah Young

have Now we'll comps. similar

report year-over-year to should we be right revenue. it that forward. just of going as be flat will so So XXXX revenue growth know, expecting year-over-year as we're a in the or that both relatively consistent. slight And ASC comps, be out XXX revenues now, well you But

Joseph Kiani

comps out. out we are them XXXX to even XXXX going the the was new standard in call because or not given we same, the it them that forward, And call a now But may in may years. prior compared

I think for one question. we more have time

Operator

question line the from of from comes next BTIG. your Marie Thibault And

Marie Thibault

that you set I -- quarter, the Great. you of least And sneaking fourth XX,XXX here. the shipped at goal it. shipments XX,XXX that Thanks monitors. last shipped me more or and out for boards know I In year, you appreciate you in of Do should see to of set a have to that due And the popularity for quarter. goal higher each parameters? the we your continue along you'd trend advanced lines, same with to shipments out like XXXX? those ASPs

Joseph Kiani

and yes yes. Yes,

of X do yes, though And hemoglobin LEDs and socket So per XX we're what OX question. and the yes, higher to ASPs we that and does the that ASP because thank are XX,XXX and a forecasting. ORI we rainbow parameters XXXX increasing so products. LED the that CO; and boards quarter, sensor from RPVi, more that's you do believe Nomoline -- SedLine, more for for good We X expect that to or the is continue quarter that any

Micah Young

is then we one X% ago. roughly into saw well, about gets per as And last our business past -- Joe, we we're base the XX% is installed growth one can revenue there thing seeing driver you in And which our contributing I to year. -- X%. years of add this XXXX that base to that's just think XX% up X%, a few growth in when Marie, our that growing been about from about add has installed in thing? XXXX, X% to

So that used to X% X% be to around before.

So rainbow as we move to we're seeing the sensors. continuing parameters more it's through that that's growth advanced -- why driver rates. and and continuing And more sensors. towards we're those step-up premium-based revenue growth those in We're drive to advanced see per

Marie Thibault

see. great to to I'm if wasn't asked surprised see. That's it great And I That's could, yet.

a that's to color season. love far on double second hump year. how kind flu you to peak, we're the looking hear have seeing the this On season, of I'd a so any

Joseph Kiani

Yes, tracking flu volumes volume. yes, going the are disclosing we because Yes, how did it should we sensor the often -- be the been ones with the sensor a higher I've one-for-one is than season. almost the flu And said normal. has bad

for Thank Thank see so in announcing that frame. call. next We us. we'll time So we'll be much. you impact for joining which QX, April, April you to all look forward our

Operator

conference gentlemen, participating. for Thank you Ladies today's and this call. concludes

You now may disconnect.

Masimo (MASI) 19 Feb 202019 Q4 Earnings call transcript