Masimo Resolves Cyber Incident, Appoints New Executives, and Adjusts Tariff Impact

Masimo, a leading patient monitoring company, has announced several significant developments in its latest earnings report, including the resolution of a cybersecurity incident, the appointment of new senior executives, and adjustments to its tariff burden. The company also provided updates on its relationship with Philips and the planned divestiture of Sound United.

Cybersecurity Resolution and Financial Performance

Masimo reported a successful recovery from a cybersecurity incident that occurred in the spring, incurring net expenses of approximately $4.5 million to fortify its systems. The company's CFO, Micah Young, confirmed that Masimo is now fully operational following the attack, which had previously disrupted its website and several computer systems.

Despite these challenges, Masimo's financial performance remained strong. The company reported second-quarter revenue of $370.9 million, a 7.9% increase year over year. Net income from continuing operations rose significantly to $44.9 million, an 81% increase compared to the previous year. Adjusted earnings per share grew by 46% year over year, attributed to ongoing cost structure actions under new CEO Katie Szyman.

Executive Appointments and Strategic Shifts

In a move to strengthen its leadership team, Masimo announced several key executive appointments:

• Greg Meehan as Chief Commercial Officer
• Huimin Wang as President of Japan and Asia Pacific
• Tim Benner as Chief Marketing and Strategy Officer
• Linnette Torres as Executive Vice President of Quality and Regulatory
• Giri Chodavarapu as Chief Information Officer
• Omar Ahmed, promoted to Chief Technology and Innovation Officer

These appointments come as part of Masimo's strategic reorganization following the departure of founder Joe Kiani earlier this year.

Tariff Impact and Financial Outlook

Masimo has made significant progress in reducing its tariff burden, implementing measures that have cut the impact by more than half. The company now projects a $17 million to $19 million increase in cost of sales from tariffs, with a 25-cent impact on earnings per share. This is a substantial improvement from the previously forecasted range of 45 to 50 cents.

As a result of these adjustments and strong performance, Masimo has increased its full-year earnings forecast. The company now projects adjusted earnings in the range of $5.20 to $5.45 per share, up from the previous estimate of $4.80 to $5.15.

Ongoing Partnerships and Divestiture Plans

Analysts have raised questions about Masimo's relationship with longtime customer Philips, particularly in light of Medtronic's recent multiyear agreement with the equipment manufacturer. CEO Katie Szyman assured investors that Masimo's agreement with Philips remains in place, describing the relationship as "very strong" and noting ongoing discussions to continue the partnership "well into the future."

Meanwhile, the previously announced divestiture of Sound United to Samsung Electronics' Harman International unit for $350 million remains on track. CFO Micah Young confirmed that the sale is expected to close by the end of the year, allowing Masimo to focus on its core professional healthcare business.