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 technologies.

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

• Recent hires and organizational changes focus on consolidating commercial leadership, expanding in Asia-Pacific, and improving quality and regulatory processes.

• U.S. sales force realignment into 12 regions with specialty reps is expected to drive significant growth starting next year.

Partnerships, contracts, and market expansion

• Ongoing negotiations with Philips aim to shift from a transactional to an innovation-focused partnership, with a new agreement anticipated by year-end.

• Wearables integration with Philips' hospital screens is a key area of collaboration.

• Contracting performance is strong, with unrecognized contract revenue up 7% year-over-year and a contract backlog of $490 million, up 18%.

• Contracting metrics fluctuate quarterly due to timing of large contracts, but the annual pipeline remains robust.

Financial outlook and margin management

• 85–90% of revenue is recurring, driven by sensor volumes and hospital admissions; guidance assumes 1–3% growth from admissions.

• Extra week in Q4 2024 adds 1% to growth this year, creating a 1% headwind in 2025.

• Operating margin improvements stem from restructuring; R&D and SG&A spending are considered sufficient for future growth.

• Gross margin is improving due to manufacturing shifts to Malaysia, with a target of 50 basis points improvement per year, but tariffs present a 230 basis point headwind in 2025.

• Tax rate is around 24%, and share buybacks are prioritized with proceeds from the Sound United sale.