MASI - Earnings call transcript Q1 2021

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Operator

Good afternoon, ladies and gentlemen and welcome to Masimo's First Quarter 2021 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. Hello, everyone.

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

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

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

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

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

Joe Kiani

Eli. for you, for XXXX Good joining us Thank thank and quarter you first call. Masimo's afternoon everyone, earnings

are pre-COVID expect development for and demand census but and in to hospital There many the a and where only of by and not well customers XX% delivering and I'll customers eventually double of illustrates the are also existing moment lifesavers. first the innovative product, following was the revenue pandemic, see and States expectations resiliency seeding our the in of our exceeded XXXX, growth results a to most delivered world. will by vaccines the two-times deployment over XXXX United we around We're new our improve to due rise size met business, products with number shipments ahead, a believe digit first driver and received The in in usual revenue of more shipped be more the we quarter drivers unprecedented discuss successful COVID States the we achieved of later growth fulfilling over our countries which quarter. pandemic that in to the the call. levels. in by in advancements We new happy this the year that

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

Micah Young

Thank good afternoon, you, everyone. Joe and

start. solid XXXX We have begun with a

adhesive same time. As sensor up at have revenues gross the are improved and our sequentially margins

our monitors addition very the are to In on for of year. our shipments and target reach much to track technology boards

moving The business bed have those is new while meaningfully expanded back increasing use Our sensor traditional simultaneously customers their mix to for our and monitors. towards counts sensors orders their capital. with monitor

turn, for and we which technology approximately instruments, the instruments XX the In quarter, technology During noninvasive XX,XXX exceeded boards last quarter. over X.X shipped years. the expectations we shipped and have boards our million

base has quarter XX% of installed of the end at over end the the installed base our of As grown quarter, the first that approximately our XXXX. first expect of we

growth million, or For X.X% revenues $XXX product currency growth of XX.X% were on our quarter the basis. XXXX, first reflecting a constant

If product growth higher quarter due our growth first began year-over-year earnings than the XX% we usual double-digit demand revenue from delivered last of that exceeded preparing COVID. XXXX you Despite delivered in as April, quarter our we recall for comparisons, for this the sensors, tough hospitals to call revenue expectations.

encouraging of our our normal single most of we just to Masimo down than X% worldwide COVID use up our Our were instruments results, adhesive and patient the year-over-year set strong comparison This sensors steady volumes. What's inventory. increased compared equipment. to despite for boards reinforces quarter sales sensor XXXX fourth I in sensor surgical technology to XXXX X% that and due using are revenues adhesive demand higher mentioned. related their that improvement first quarter belief worldwide related we pulse due our a of up is oximeters rebound XX% were sales seeing Also tough saw sequentially when hospitals

the Moving P&L. down

we results first expenses XX.X% improve to to as of throughout points margins the reduce the to saw when important safety inventory within gross due quarter are our original for XXXX. expenses assumptions to adhesive quarter and gross stocking higher guidance the expenses recover that manufacturing coming COVID normal XXX to present -- margin related still fully a incurring compared These XX.X% basis XXXX extra products. year risk of our returns we've than gross year-over-year to primarily period. sensors protocols that product non-GAAP compared preparedness, prior margins These our points higher of note It's XXXX confirm quarter a decline from ago. other margins our related than the continue our addition basis proportion increased Also, implemented fourth of include will first for usual facilities. the our last sensors in having to revenue XX% charges was COVID gross to Our weren't COVID The freight costs decreased margins with other to in to sequentially mix year XX.X%. we year to related of that XXX our

Our XX.X% year expenses in to as a to non-GAAP prior XX.X% and selling, general compared decreased of revenue the XX points administrative percentage basis quarter.

continue delivering basis to in we rate increased the product research as improvement points as our year. primarily higher SG&A the technologies as to expenses growth. percentage grew expenses project revenue slower increased marketplace. our our to and at to revenue demonstrate last development XX.X% levels to related invest of than XX.X% clear same non-GAAP in due and to a quarter compared This We operating costs, a And was in innovative a continue staffing much XXX leverage,

increased gross margin decreased period. operating to of basis our and the margin a non-GAAP year prior our points As R&D result investment, the -- of XX.X% XXX compared to year-over-year in headwinds XX.X%

Moving further down the P&L.

income decreased our interest to the income, non-GAAP due the yields to for million Our approximately on cuts. $XX,XXX was year to of comprised driven which non-operating realized of $X.X by quarter decrease XX% The interest the in invested lower compared is period. impact prior rate cash Fed

in the compared was Our million non-GAAP non-GAAP our quarter a to XX%. the period. expense in tax XX.X And quarter outstanding of million, in resulting XX.X tax prior weighted was year million rate $XX.X for shares first the average

was In income For diluted or $X.XX quarter, comparison, income per $XX.X $XX.X per share. was non-GAAP million net the net our million first or diluted share. first quarter XXXX non-GAAP $X.XX

GAAP was shipments share. of Turning in was and in XXXX our million to sensor of income million In earnings gross prior $X.X for $X.XX in the tax importantly, first GAAP driver improvements when quarter benefits approximately income our saw summarize to compared we compared difficult or quarter diluted XXXX we first growth $XX.X GAAP adhesive excess results. comparison. million compensation per diluted a quarter, very stock-based margins million from per revenue comparison, period. year revenues quarter delivered the against sequential net the $X.XX our year-over-year net the was and double-digit quarter XXXX share. $XX.X or first GAAP Included our for for results. to fourth exceeded expectations Most To $X.X

like an XXXX year on I'd full to guidance. Now, provide update financial our

guidance, increasing basis currency a which X.X% growth For represents our a basis. guidance billion, increase reflects $X.XXX X.X% a on constant revenue our to million are now net above $X XXXX, or This reported year-over-year product of of on we reduction major a volume, offset increase the dollar prior benefits to U.S. due a of partially due to year-end. is million the currencies currency by million since most against foreign which $XX of comprised $X in strengthening stronger sales

year-over-year As includes of $XX a of currency to result, compared our $XX million prior guidance tailwinds guidance our now million.

guidance Our our over non-GAAP the which increase non-GAAP year. gross XX%, represents at basis operating And unchanged unchanged XX.X%, improvement our at remains a margin point remains a which XXX point guidance margin XXXX basis XXX results. reflects prior over

Moving P&L. further down the

for we that XXXX non-GAAP rate be are are we of our estimating average income be shares weighted outstanding projecting And now million. to is and XX.X Our expected negligible, a tax will non-GAAP non-operating XX.X%.

guidance from tax shares GAAP stock. During of are we GAAP And and above The of projecting we rate guidance. the approximately our is share share on assumptions, XXX,XXX GAAP repurchased EPS for weighted perspective, now updated these $X.XX non-GAAP represents guidance. XX% of which shares to common increase our prior an impact year. these of financial on of the all average our $X.XX, we reflected earnings outstanding increasing a repurchases in $X.XX Based quarter, are of first per Masimo our

conclude, digit operating also XX% XXXX. profitability our highlight supplemental within fiscal to two-year year. operating Investor XXXX a GAAP look earnings on this respectively, single revenue turn earnings details masimo.com. is our results. growth the to will and and non-GAAP updated it information website imply we the XXXX important additional To difficult growth back profit today's definitely to us off revenue are of growth guidance our perspective, growth per a Relations to XXXX a that, at mid you call full is in very good year from rates dollar for growth that following revenue double-digit Despite product to projecting stack the share, when guidance start financial when dollar XXXX of and compound and For refer and at terms I Joe. annual compared year With profit off comparisons, XX%, It year-over-year and section our please release -- of for strong financial

Joe Kiani

hospital the monitoring value of for ever in Masimo utilization what Brazil, what But potential and reserved other where is well and vital in well-positioned are as Thanks, hospitalization expand continued elective decline And hearing longer to next patient for Micah. monitoring you There than those patients as our most future in noninvasive breadth new open the offers COVID much. measurements most are COVID we're company lower to of increasing, our innovation we're seeing implement technologies hospitals And has under clear with and being understand and now and reports of Thank Masimo are places. and taking that. and no that of field the up higher technologies business before. research for and non-COVID of investments, surgeries increasing, more regretful acuity With monitors and and as of very due settings. and to for No do beds our counts monitoring development we rainbow. many beds the to like made more India mission countries continuous business for accuracy hospitalizations of in COVID we means. we admissions. -- our as is noninvasive happening and case sites is our reliability, applications we're obviously, are existing meet the demands the SET from Optimism history business. signs sensor

NantHealth the year eventful monitoring to proceeding products will is many closed we launched internally new Care broadening our an acquired business be this are Medical Masimo as Lidco the TNI for significantly and activities well We're to on well integration to hemodynamic's acquisitions. of develop new The multiple emerging products as has launching, XXXX technologies recently or are we that the based from businesses. markets Connected entering. operations expect be acquisition have and The And with underway. integration next-generation fully both business led integrated. of already recently business We

too. automation more is revenues three On basis, business times. year-over-year hospital increased hospital than Our accelerating a automation

screen dioxide new other of care bearing and quarter, Our revenues. automation considerable improving the as many can capabilities. Radius to patient These larger innovation generating a monitor tetherless which is in first carbon potential PCG, all new Root's connect for advantages connectivity and that the we during Root the meaningful investment products products includes with and entitled fruit, introduce hold

use upgraded in an announced multimodal hand-held that also We now thermometer Rad function. for device compact G of a oximetry, field our non-contact a adapted pulse version the includes

rainbow, Within launch NomoLine, respiratory During in SedLine, business distress. announced initial due therapy first we our elective the flow quarter, with patients nasal product high also surgeries. the for grew treating of parameters U.S. the and core are strongly cannula softFlow rise to OX

Europe, launch CE continuing opioids of SafetyNet await promising gearing studies are countries clinical up use opioids in early and with results. FDA for States. for the use for we illicit are in approval The SafetyNet for United for We prescription opiod and very while

We we patient year care applications. products questions. expect open contribution improve Operator? we this the see be to great outcomes, reduce that, new a a monitoring as new and sites growing take product will noninvasive of our adoption the further to includes that In closing, and With mission they gain to XXXX the call have on and from cost worldwide. developed many we'll acquired to for potential deliver

Operator

Lawrence from Thank question Raymond you. [Operator James. Keusch Instructions] Your from line the of first comes

Your line open. is

Lawrence Keusch

of prepared bit sensors them. number little Great. your provided Thanks monitors Joe, associated remarks if commentary -- some you about everyone. Wondering, brief the can in bed with and talk a you

I You about, those with you're the fourth to the new the what color beds call quarter on getting monitors. did field give utilization also from think relative those some of

is help just about quite us there's often? So, think comes if there can you utilization that -- any question up that update, I if wonder

Joe Kiani

Certainly. Certainly.

depleted Micah some we've are X% gross But we -- as elective sensor where delayed of full after feel saw year, all we QX bought a think And there were story. because have were good our tell look that declining, increase, doesn't tell of really because our sense mentioned, volume, surgeries flat inventory. most of in of inventory capital. last last business sensor because like stocking isn't volume a but They sequential made huge -- have either due sensor is this that's really now where the of growth time or them, is to COVID. quarters percentage margins I to volumes we this enough who of being the incredibly them which it's -- the customers of to seen story few a that not saw

So, the things great growth these we beds. they set reported. our who the have that stronger that as turned year, continue bought And we that be into of monitor is sequential of seem utilized all non-monitored -- we've extra of beds monitors think beds the last than again. to to one were talking before customers X% the They're

beds, to Patient the that last by they predicted used SafetyNet, monitoring they would by that We a to eventually floor up we beds. maybe had become As we monitoring several general thousand bed increase of year went with year. a have number XXX,XXX technology, maybe XXX,XXX think that number

feels more maybe general So, seems a these even we've drivers, like their order XX on like seen them top sequentially surveys done our monitoring market has rates from and that it the been it worldwide what with new utilizing we've of stronger, received And like floor gotten close has basis. customers to magnitude growth penetrated. they're than

Lawrence Keusch

you're I just difficult when one take know to engaged FDA, the just of I me. thinking the for but quarter with -- That commercialized know again about And obviously in the clearance if really you your want that second disappointed you'd last in you're And indicated temperature it's then, this Opioid wasn't be Okay. how guess, there I here that's on sort year. helpful. SafetyNet the U.S. it's

there. So get again, your Thanks. updated wanting thoughts to just

Joe Kiani

more. no once Well, but it’s less, maybe every the event, hope Yeah. look, XXX-year pandemic,

our went surprise, we before. event we'd a So, And through FDA seen in speed obviously never last XXX-year year. once at to moved

staff deal been But people delayed approved they patients. trying decks. of what than is. And the everybody totally You to sad got with more new keep and And clear how on dying knows overwhelmed. overdose FDA. the don't help before, ever get opiod telling despite going I COVID that still incredible the to our good product we're us. push Unfortunately remember technologies SafetyNet for they've on They've they fast Masimo has big how year one of story -- FDA last no clear COVID help to unfortunately, that's

issues, is is the just but our survey there with France, cultural C on. So, as we're outside did go not we to know as to let's the due I the as lot it The it's just is I they leading big. mean, U.S., the a and think what lot we you Switzerland, in And the problem we to when, a problem to a about in of opioid The we're receive -- Germany, it. Europe, products. about be the basically was getting problem Spain, think I don't is Italy, talked opioid but eager here. big know they're U.S., goes In countries don't seem to saying U.K., I what have Europe. think list doing just talked

for in So, get lucky as distribution to by and going we'll But or we're by the the channel U.S.'s gearing cranking. with to then we're middle we hope Europe U.S. up be we're clearance. if of And our Canada, year without and be well. going

Lawrence Keusch

Thanks, Terrific. Appreciate Joe. it. Okay.

Joe Kiani

Thank you.

Operator

next line from Rick Wise Stifel. comes of from Your question the

line open. Your is

Rick Wise

aspects could of incremental about you Joe, Maybe two innovation. talk

You you're you've recently your or and continue well. highlighted seems if you they're going of But likely couple think urgently to comments we it. listening? What about like I a and kind process about hinting new inmate over focused or is talk thought how beyond? the of thoughts sounded to Am you and other maybe But the years you in done XXXX transactions XXXX to -- learned in they're product. it else in on like I listen carefully see were your I've could opening over that

Joe Kiani

you're Rick, an excellent listener.

listening. You over are not

for one dramatic out the of business have nine on call, think successful. before done been nine about of and we results done couple years last and all -- we've reflecting and every eight of shown have all I of them them were XX the a years, but done. we've first last In the M&A So, all, of we've few, this

we've The acquisitions. is other face. really soon with be one to going beautiful us showing our been But happy

We acquisitions. any haven't bad picked up

due really hour in process add of acquisitions good. that got the love to due listen with we is have to pulled we gone up despite there's just diligence. to our in. out we the I our did diligence team being data when And and XXth think what not thought when the a lot been and companies And the

So, to active we're still answer M&A. questions, one, things yes, your two in

closing. thinking Although, have horizon near that anything I don't the on of we're

us any ideas. open help And new not to we're pigeonhole open continue to to we're our We're ourselves. going that will that are in. We business businesses also expanding

Our outcomes a base and of mission is applications. do improved patient cost take and reduce and sites care monitor,

we're business a So, that. of

we're abilities cool question, are to some your then to all have got open we're said, second fulfill that of increase could So excited and tab if of see to light really And about year. mission. as things do hopefully, we pretty the -- the going I far think as of we've part stuff And it'll our day our that. may this And dramatically finally that it. our yes,

Rick Wise

just could subsequent in that incremental it's And sure more be no, that make forecast impactful to year imagine -- this years? that likely projection, or forecast we the to should

Joe Kiani

believe wise. side. We might on the it will rollout be associated incremental expense cost revenue the be There with

sure are to we on the our want the haven't rollout. about may incremental wise. our future in want of the into to want opportunities it there we We're anything, what and great including very that until the because And our So, everything. products think we We don't numbers, to We we meticulous earnings protect But quality, are delivers make not be promise pipeline put our R&D own count on them yet out. years. brand.

not years, of because to ourselves. of that, of get all history So, XX ahead the then we're going

launched about a have I lot we're my as been carefully things even proposed statement, said very in that excited have and things. already However, that new of we

we be think I like good So, it's feel a to going really together, year.

Rick Wise

Yeah.

cardiology increasing feeling certainly a could for like beyond one Sounds there suites second, ICU, But areas. from of ways, And directly ward, opportunities as specialty exciting. were the the patients like curious to monitored these or I'd number room, Thank a in and from we to recently ER, post-COVID I other was about Masimo hospital areas And opportunities spoke think just of in that. or Masimo also sort be the home do How two hospital, one we hear or hospital -- the the administrators, directly orthopedic left general forward. of beyond equipment. these directly be meaningful discharging you. no nichey they new the going emergency about by

Joe Kiani

in in at welcome, to You're be Rick. Masimo tetherless of hospitals to meaningful. XXX anywhere, it's SET product the be our was technology or experience it with whether it patient. seen was of they're sent and the patients, power help taking firsthand wearable could a helping a We what or going believe think COVID, with COVID that is parking receding And heart home got patients. that they're lung lot jumped high-risk as We to least patients while it’s hospitals, home was plus the we those now whether

a And some and is the dealing of I of country, think say bellwethers you lot that look, the things of it see but rollout countries. think this dealing I who got dive deliver, truly is really news times other people them delivered. exciting. and So, it product, best -- strong product problem sounds that new that in of that believers. one our a it doesn't COVID, cool, with have are good And it so hospital I was pretty happening could can this the terrible with to become systems firsthand And

forward. at telemonitoring give again, it not names for detail I while be at us. a could state And your I question could liberty to could home, real it big So, I'm to be thing more opportunity think, drive our telehealth, you ask a that or business think

Rick Wise

much. very you Thank

Joe Kiani

you, Thank Rick.

Operator

line from Masimo. comes Taylor of Matt question from next The

open. is line Your

Matthew Taylor

Hi. question. the taking for Thank you

wanted clarify on and your just from comments call. last I guidance there to So, the

year, nasal guidance you that about is opioid, off think be new things upside that transcript, upside these be starting are and you would upside products or cannula, the If get to true? of environment you of like remember new likely contemplated in of most a kind just something through of these in that source sources Is potentially? I this talked could get like improvement TNI, that the the else? products. of some do number or So, further the some really I ground, that's the other guess it not

Joe Kiani

well ORi, on the But enough that is the we improving the hopefully are the OX, that have become become softFlow be in guidance. growth Matt, not as in U.S We a our hopefully us put course, becomes already percentage are have yeah, in a the is it not U.S. things and that distribution, it put of mid as could be we U.S. woods for out guidance. June NomoLine, grow that talk real, absolutely feeling for in not opiod immunity. It to nice areas then area had I census SafetyNet in having could opioid you're way surgery, will business baked by right. going people to other couldn't herd people softFlow the for we have We for are in new could of maybe for that and out good our we really projecting. execute vaccinated of in digit pipeline the the by so like single that uncomfortable us. is had into And just growth the hemoglobin used which a how the points, SafetyNet think number, big. just depends SedLine, things And,

X% could growth. when XX% promised with of But the it. think and took double-digit we went in have revenue those to years with advantage it's that. it have of So, past -- several we be last better earnings I than I growth comfortable additive. we things that, ran We're year like all and

the So, to year we'll how see turns out. have

Matthew Taylor

hoping And bought and well could over the just back lot couple done I the of stock last in you really a the of the Great. years. you was about period recent that talk fact Okay. shares

and you one-time was a how can of maybe So, new purchase, purchase, ongoing for thing? did you this that think talk plans about about kind or

Joe Kiani

million stock a flow we cash guys under of you you million, remember, year. like about from Also $XXX think is to just buy we to value. cash generating beyond flow million $XX we've when $XX have gone Well, of

buy. bought we our we the we So, -- to while we actually do amount prices, subject beautiful ability the like too. stock beholder, wild, it’s And to within think find the small, -- beauty not it

the not there. only ones out You're

So we some a thought then And did. shares. to buy it's we good idea

Matthew Taylor

in, jump let a comments. Okay. but Fantastic. thanks I for lot the others

Joe Kiani

Thank you.

Operator

question comes from of Jason Sandler. Bednar the Piper Your line next from

open. is line Your

Jason Bednar

everyone. Hi. taking the different way. topic to here in Wanting a Good afternoon, the Thanks for back questions. guidance to come

the I to returning the there on And you're the are volumes think were maybe about you or remarks slight path this your seeing made us influencing to here assumptions is on guidance to you're in you've of I for that's raise what's a the a year? balance business. call prepared talked in and your levels those look that the that on quantitative critical this procedure through update today? what think what comment before. But qualitative And towards procedure volumes like the here

Joe Kiani

of by we we the of revenue our currencies with. Well, even have dollar wise, strengthening deal $XX thought increase we though million on we a $X million, guidance most raised by $X the revenues versus the million, would headwind because

very the now, that. far than -- over some census As as having well-known hospitals destination seeing hospitals, capacity, improvement, more right reaching some we're hospitals XXX% even

-- half capacity see So we to be. what of it hospital children's at used yet and about

get there's issues a late need and we confidence, herd procedures. in believe of going we to And safe being believe, care against to to improve running that's And to people as in immunity is think, we I have lack hospitals. they that get what confidence fixed. So able be

prior sensor better. our but customers in tells going it better. is logically looks reduction even of to some volume major surveying X% The included get improvement of a it's So, like even better, getting inventory which think quarter, customers of we our it’s utilization is getting us from

if that the together. don’t answer you kind to using want but feel know future. of if the don't add were good about I some we I So, to question, I know, Micah,

Micah Young

the the Joe's of stable to provided. hospital assume pick just come rebound. to earlier, of see that mentioned into volume we patient Jason, pre-COVID guidance to and where To rebound there, a course levels. can as -- we've steady start the Joe confidence we the year, basically rebound, upside that to Yeah. be back that's But earlier, if we back up, or the higher stable kind point to kind of a add steady assumed over

Jason Bednar

sense. makes that. for That all Thanks Okay.

Micah Young

is And we we exited Jason, one add as in trend volumes stronger the a more saw just thing to quarter. also

than and stronger and March in did in saw March. trends January we April, So, back we volume sensor

Jason Bednar

going guys. be markets, think U.S. just an and to SafetyNet Okay. the All offering opportunity then fair is -- the to right just markets? the an in about to is might way a then topic. earlier your this international that to maybe opportunity Is right. Canada? Or and to What's to Very be to that this going from planning the in into Europe back Just come just first to helpful. Thanks going the question what's be the opiod it Micah. take the think those overall home? strategy that assume you're hospital what go-to-market that maybe right to And in on in way about Thanks, and differ how

Joe Kiani

Sure.

in country. post-surgery think of And we opioids markets two market So, opioids. roughly illicit of we very segments, size think And different in U.S. the the international of the also each are we prescription the is the the -- market same market. and use

the make both, without some themselves people. and pharmacies prescription. countries, in the it to even a though Some over-the-counter idea, countries, some to doctor's a order, if sure business call pharmacists and they is make it's by get countries, but of a what doctors to really give of In lot want they still can it's good it's think in

we -- we are those So, that have about second think and I we pharmacies consumer like people markets, I around trying of part marketing question products hire this in execution -- your the in other of incidents. in around are distribution channels. to experienced and us

gearing and done hope well So, we've it's in the can execute as up, something as we business. we're we hospital that

Jason Bednar

you. Thank

Operator

line from from question next Baird. Your comes Michael Polark the of

is open. line Your

Michael Polark

like in or a sounds acknowledging the today? different local access kit. as is and with I'm on paid Opioid that working Masimo physician to SafetyNet providing where good quite reimbursement there for be country it authorities? curious, channels something will Hey, is on Maybe it's What well Or to the a patients landscape the afternoon. may in pharmacies what is get the offices the just hospitals follow-up country and establish the solution from -- Europe. that

Joe Kiani

Yeah.

We -- will selling surveyed they customers are we a at the be But of working of of with local buy price said them it. these authorities we were them the vast in majority lot point is thinking pleasant would countries, on when surprise reimbursement. that it in

just the it's well, that a of but think message I also matter -- be getting to true, proving out. a obviously So,

to had So a people the know it's there, with. But making business be going there's think sure community reimbursement, and as well recommended. we it medical we that yeah, trust as without

Michael Polark

COVID-XX different roughly surveyed that envisioning mark Is we the as you something U.S., Europe started? ASP saw SafetyNet the what you for here $XXX the in or you in get are

Joe Kiani

is it right into it I that. It's higher want don't than higher. now, to but higher It's -- than it's get that.

Michael Polark

about this how next? heard just If the other rest much, there, by may cadence any of and pipeline, what pipeline so, quantification that on revenue the automation. the up the period. on times year-on-year? sequentially of comment, is more be that the the business selling I think rest question eager sales as opportunity down year opportunity of three XXXX? understand Maybe to in Is Okay. one you My hospital into the of

Joe Kiani

I world, mean EMR. not the about all going things, most promise the actionable. most talking Southern to data really I will go I can and times is I'm from out what connecting And things, in strong so have well believe solution, we Western, you Eastern that corner complete of automation. automation, the hospital Well, to to that United and say world. literally data not of pioneers the interest there I'm every that then two growth. over the connect I'm as make to thought hospital States, saying those

the clinician room the be, enter to the is You about or outside might make the that data clinician useful into. including room wherever

Another is And in demand a is another Patient it, had they once I implement UniView around Replica. that get and out that, besides variable XX we of ION, buff Halo -- believe think the healthy that I and other like like solutions SafetyNet indication hospitals that typically there UniView pipeline, interested installation.

great expand hospital had only ours to we a be not which of vision hospitals, but quarter those even prior nice, think are uptick, I of the going into So, customers to healthy QX, our in automation.

Operator

comes Doug line [indiscernible] next Berenberg. Your from the of from question

Your line is open.

Ravi Misra

Hey, it's actually Ravi on. guys doing? How you

Joe Kiani

How you doing? are Good.

Micah Young

Hi, Ravi.

Ravi Misra

Good. Thanks. Thanks for taking the question.

the I more compare So obvious the there out looks just that volumes margin got profile commentary XXXX margin business. sensor it that stepped definitely pull of you take up kind like sensor gross through of guys similar the because and got on has to a period. quarter, of XQ XXXX, your question on If you and the since

mix it So, towards kind onboarded we or about And new all Capnography more what than longer fair to now comes install thinking floor? last of your beds, term it you kind [ph] you've when what's and used mean just say sensors. be benefit we general had the kind sensors. have OX, it. opportunities, is rainbow speak being mix curious, kind could it come I How from shots gold base, of that are related comes that be perhaps of that, more that more to on to the the in here that to these Would to sell year do this are moving of the the think should the of you've parameters that when opportunity so? larger so

Joe Kiani

Sure.

And can that. me to detail you some hit Let it. maybe add Micah,

say year being they'll XXX,XXX about the top base not normal they're happened all plus year to on installed But what's for maybe of is that have being to were So, last they the not stop sensors a we utilized, volume, level, we we is sell so that afraid were into. from that of And might high not if that utilized came drivers utilized. one bigger be worried far our a things now of and part, it. most

margin, that high, will abnormally numbers, a drivers don't for as be in we think a our our company. to what higher as XXXX that margin before, bode it well should level see, same to should of kind should are that sensors year be should higher So, given lead our And ratio. that gross higher capital should a sensor we a especially mean we the capital think drivers and that

have other margins far those as the As other sensors. similar parameters parameters,

beds that patients. see electric into in and There's So, care It monitoring, back, they're for being analysis ORi. Capnography activity again in the before take now more the surgery turn in hospital, exchange drivers and the going higher utilization. ICU coming COVID it ORis ORi. was the lot used that the saturation of now oxygen beds casts are wasn't but a using monitoring. at But sedation the used of and to monitoring, brain one ICUs in been airway to We're of

pulse protected it not a see one at We there's to we say, oximeters it day the general part like in It technology give lot but SET any become in to. to if every the looks expect may patients be supposed happen. that follow they and the denominator last your COVID the environment. doesn't Perfusion. of has I oximeters, so kind does oximeters. alarms will it's the that like like Look, they been general them, to proven what's of and parameter protect false far maybe the for where see floors would the was what have home floor. effective? And think Low Motion pulse I the how pulse -- common that. work needed And general the of to then floor, in just just to through other related and ICU ICU But question No What's going need

technology, were of fact, around, that alarms. In response monitored not the $X in in patients the Dartmouth-Hitchcock neighborhood false a They some nurses comments oximeters, they and study no more only rapid completed the the and the reduced bull a where in great because right year other putting showed by dead taken but the came because that technologies environment excessive they reduction of and publication. into pulse cost activation were -- when bed million early product. they loved ICU XX-year without other of back team XX% being out

every cold dead the alarm but cold out it say, before crap of were my You years this of get Once this it four had can ago, -- because where first insane. our they general is out with adapt they minutes. pulse only competitive false fingers driving them the get nurses here oximeter, was to a

to add Micah, answer anyway, So, that? I I to hope your you question. want anything else

Micah Young

hear about -- margins to -- I you mentioned years two gross you Ravi, ago. back mentioning did comparing

about in now continue first So as from quarter. you rebound XXXX the gross QX looking mentioned, are we're there, and improves. to up we're at in XX.X% margins we and And up XXXX, XX.X% mix to

installed seeing we're the revenue of that leveraging to per more things get we drivers. Some are is continuing that We're base.

of Joe to engineering on there. our and and of lot We've teams hit think costs products that of things also I terms reduce our done time. over in a manufacturing great our improve

those things when this guiding are some normalized some XX%. look you that showing really of that the margins. are of to that's years to of couple we a back So improvement year that in gross Keep mind

basis into that each stepped assumes sequential XX numbers. about quarter look or So, implies that, a those points improvement up you at get if XX to to

as of the gross exit to XX%, So, pre-COVID back margin, we we're those expecting kind to the get year.

Ravi Misra

on automation Thanks. just Great. more then business. one the And

kind do guys. around terms, revenue we Thanks getting a it in lot just revenue public you'd just out curious, of of kind You need And of start of kind we more as -- thinking relative relatedly, to think that disclosure a what put for margin to what some but business. get stream? level be should profiles of that kind benchmark

Joe Kiani

space related revenues and salesforce. products we're the not are to that customers same doctors the the Well, from and sure Yeah. makes sense nurses it our and with into break

think more is think So businesses think these you'll not revenue should as I I'm level sure think we that we thinking question we when more as of do segments seeing should a and far and get part There'll it's in think wrestling about business. are of the And concern, is started it's future of into be our different way. our businesses. But separated we're I still do them. and a to new things with. really that whole should, see we're hospital be But the in they new that going separated. I actually we be

Operator

Your Marie of comes line from BTIG. question the next from Thibault

line Your open. is

Marie Thibault

the to the going taking for questions. basic track question. forward going remind I XXXX or sensor that to forward? do XX,XXX cadence year high note of of pulled start recall for believe of stocking a think for here how can first ago about your the second well us in just you result, Thank quarter, on thinking feeling I comp? be shipped a quarter, know into but the the I And level and reminder related a QX year-end I the would comp? on you you sort evening. wanted good anything I'm of that's quarter. that was the sort And gauge you there, should kind we Hi, a about puts love on boards quarter

Joe Kiani

XX,XXX Well, just boards, XX. go I'm to not want I I going to let answer, but Micah ahead. right sure heard make But

Marie Thibault

Yeah. XX. know I Yeah. Yeah.

Joe Kiani

XX. No,

Micah Young

XX,XXX Yeah. for quarter. first the

Marie Thibault

Yeah. XX,XXX. am I saying

Joe Kiani

… through It's hard to hear the

Micah Young

the quarter So, answer per or Marie, boards to the just XX,XXX quarter rest drivers ship We year. to Yeah. your at least of for per still question. expect

at breaking per of the continuing last year, gain We at in seen into as equipment, so or prior quarter. last us equipment forecast at about the if winning the more on competence, that is a had look confidence providing at record that end information into to XX,XXX call quarter believe more -- the especially new year, the remember of first we're see you don't this at you -- confidence as all. think the forward a the year, utilization gives -- we've we at any drivers look capital -- that you terms year, us be that, excess we in to installed that the to pull if year, gives that And If those looking or least we're we replacement it of drivers year going from customers.

Marie Thibault

great That’s hear. the the And to on in year comp ago. a sensors the QX follow-up then

Micah Young

Yeah.

a down second ago in year, year our we're X% last sensors quarter. So, the to

fall and an the QX. when So year. sensors steadily comp through we that's of easier end of the kind recover we then And in off have to back saw the started they

Marie Thibault

SafetyNet. hopefully I ask of my follow-up. on up us And more handset, Okay. in then this. Thank follow-up ask Great. Opioid Great. Wanted clearly. so to my I'm my to Wanted you coming for reminding picked

your Just any go of not FDA, COVID read kind change of been asking if of to just for extra any the the from is of back so like I'm correctly, related from tone anything They're wanted data in delays understanding It or sort hasn't it. sort there to agency. that. really

Joe Kiani

with That's impact opioid correct. could They're unchange. that Since looks potentially definitely the last but is there's very the They're us. that XXX the a Remember, technology, breakthrough products even one us. couple engaged epidemic. this quarters, only product chose of over very from of as interested beginning, not they in out eight helping of

has the and the of FDA -- it management this well. as has still I So, think attention

that's -- very just changed. COVID they've It's been incredibly nothing's busy things. no, them thin. just So, think I And spread related with

Marie Thibault

to we taking Okay. the forward do for in what can Understood. seeing questions. you Europe. look Well, Thanks

Joe Kiani

Thank you.

Operator

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

is line Your open.

Michael Matson

my taking for Thanks Hi. questions.

of some Just with OX of over SedLine, the sense us to Philips their Can the for agreement. since where installed base deal wanted you then turned update you an on ask NomoLine, maybe give their that's portion on stand think And do the started? platform?

Joe Kiani

around besides the I And one at this Masimo patient ventilators. customers strong. seeing, the from last one business going Well, great -- But their the resilient along beginning. doing of is the in year a kind are capital believe year, we for they're discussed our of level. users for that everything for really relationship patient I as XXXX, Philips They're well. well monitors those as world, with demand probably of XXXX They're kind no end was

and both linked business we game a changer OX. bigger we're in increasing still interested -- and Philips. we're parameters We partners not predictive which as shipments and in, power as is like the part new algorithms, a And becoming believe NomoLine well Masimo's so in only are that is their together of for rainbow, pulse oximetry SedLine, but

within footprint are -- great. our We're continue Philips. increase things yeah, we to So, going

Michael Matson

your from your just Okay. -- two looking years ago, Day was Thanks. in And slides then back at guess. I Investor I I XXXX, want about to

pipeline there you projects two disclosed of So, were kind that there.

I measurement involving a think oxygen. one one was pressure partial detection of new and malaria was of

if could So, -- and you the updates give us things those earlier you I were was that in wondering of are any the some hinting those kind on at call? just of things the

Joe Kiani

and very everything large this at product. the we're when project planning will they scale since get countries that well by do if be in we times commercializing has project well there, And peak goes effected discussed clinical progressed malaria to Malaria affected their trials year. Certainly. we

of front use effective dealing However, there apparently a might efficacy. was vaccine very there on some really good -- the had malaria XX% malaria be about to that with

So change we demand for wouldn't potentially this really upset that be about. great. be That product, could the would which

and this many of die up around adults So children more project a anything. the we've means malaria picked world. as And to help than

its -- trials On picking got and the because end unfortunately receiving partial for of whether be up COVID pressure successfully or efficacy the suspended that clinical now that But that will information the towards And do of oxygen, be is the we're this about we'll to the able not technology COVID. launch to we're or that hopefully, pause probably and going it of trials have year. some countries again.

Michael Matson

Great. you. Thank Okay.

Joe Kiani

Tuesday change a Thanks Monday confidence I'm all tomorrow I'm to small you from much earnings for so call. for going getting joining procedure myself. to last thank with in us. get Well, the our procedures hospitals. minute for

So, with next Thank I forward us, I call. our to you earnings appreciate getting you. and look guys

Operator

for Thank conference today's concludes call. This participating. you

You may now disconnect.

Masimo (MASI) 27 Apr 212021 Q1 Earnings call transcript