Masimo (MASI) investor relations material

Strategic vision and growth initiatives

• Aims to become the world leader in patient monitoring by expanding continuous monitoring from hospital entry to discharge, leveraging wearables and AI.

• Three waves of growth: elevate commercial excellence, accelerate intelligent monitoring, and innovate wearables, with major impacts expected from 2026 to 2028.

• Recent hires and commercial realignment are designed to drive growth, especially in underpenetrated regions and categories.

• U.S. sales force realignment has led to early wins and is expected to deliver significant results in the coming year.

• Strategic partnership discussions with Philips focus on innovation, with a new agreement anticipated by year-end.

Financial performance and outlook

• Strong Q2 results with top-line growth and robust earnings; contract backlog up 7% year over year.

• Recurring revenue comprises 85–90% of business, with guidance tracking well and an extra week in Q4 contributing about 1% growth.

• Margin expansion driven by restructuring; R&D and SG&A spending considered sufficient for future growth.

• Gross margins improving due to manufacturing shift to Malaysia, with ongoing efforts to mitigate tariff impacts.

• Tariffs present a 230 basis point headwind for next year, but mitigation strategies are underway, including supply chain optimization and vertical integration.

Capital allocation and M&A strategy

• Proceeds from Sound United sale will be used for share buybacks and debt paydown, with a renewed focus on tuck-in acquisitions in core hospital technologies.

• Acquisition targets include hemodynamic monitoring, advanced algorithms, AI capabilities, and wearable form factors.

• Strategic fit and immediate accretion to the sales organization are key M&A criteria; no plans to pursue consumer-focused deals.