Company Performance - Masimo reported quarterly earnings of $1.33 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, and up from $0.86 per share a year ago, representing an earnings surprise of +8.13% [1] - The company posted revenues of $370.9 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.59%, but down from $496.3 million year-over-year [2] - Over the last four quarters, Masimo has consistently surpassed consensus EPS estimates and revenue estimates [2] Future Outlook - The immediate price movement of Masimo's stock will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.14 on revenues of $369.36 million, and for the current fiscal year, it is $4.98 on revenues of $1.52 billion [7] - The estimate revisions trend for Masimo was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Instruments industry, to which Masimo belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges for stock performance compared to higher-ranked industries [8] - The performance of Masimo's stock may also be influenced by the overall outlook for the industry [8]

Masimo (MASI) Q2 2025 Earnings Call August 05, 2025 04:30 PM ET Company ParticipantsEli Kammerman - Vice President of Business Development & Investor RelationsKatie Szyman - CEO & DirectorMicah Young - Executive VP & CFORick Wise - Managing DirectorMatt Taylor - Managing DirectorJayson Bedford - MD - Medical TechnologyConference Call ParticipantsMarie Thibault - MD & Medical Technology and Digital Health AnalystJason Bednar - MD & Senior Research AnalystMichael Polark - Senior Equity Research AnalystVik Cho ...

Financial Data and Key Metrics Changes - For Q2 2025, the core healthcare business reported revenue of $370 million, achieving earnings per share (EPS) of $1.33, with a 600 basis points expansion in operating margin [6][22] - Non-GAAP EPS grew by 46% year-over-year, reflecting strong operational improvements and a lower tax rate due to increased profits from outside the U.S. [24][25] - The gross margin improved to 62.9%, up 40 basis points year-over-year, driven by operational improvements despite a $2 million tariff impact [24][25] Business Line Data and Key Metrics Changes - Consumable and service revenue grew by 8.4%, while capital equipment and other revenue declined by 2% due to a shift in accounting practices [22][24] - The company shipped 63,100 technology boards and monitors in Q2, aligning with expectations [23] Market Data and Key Metrics Changes - The healthcare revenue increased by 7.4% on a constant currency basis [22] - The company aims to capture more market share in adjacent markets worth between $1 billion and $2 billion, currently holding less than 20% market share in each segment [14][15] Company Strategy and Development Direction - The company is focused on three waves of growth: elevating commercial excellence, accelerating intelligent monitoring, and innovating wearable technologies [12][17] - Key leadership additions have been made to enhance commercial execution and operational excellence [10][11] - The company plans to leverage its leadership in pulse oximetry to expand into other advanced monitoring categories, targeting 10% to 20% growth in adjacent markets [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's ability to execute strategic growth priorities despite challenges such as tariffs and cybersecurity incidents [20][32] - Updated EPS guidance now exceeds original projections, with anticipated growth of 24% to 30% for the year [21][26] Other Important Information - The divestiture of Sound United is on track to close by the end of the year, with proceeds expected to prioritize share repurchases [31] - The company has implemented effective measures to mitigate tariff impacts, reducing the estimated burden significantly [29][30] Q&A Session Summary Question: Guidance update and inputs - Management noted that guidance reflects strong consumer growth and normal seasonality, with expectations for capital sales growth in the low single-digit range [33][36] Question: Salesforce alignment progress - Early feedback on the new sales structure has been positive, but quantifying growth impact will take time, with expectations for more significant effects in 2026 [37] Question: Status of relationship with Philips - The relationship with Philips remains strong, with ongoing discussions to evolve the partnership [41][44] Question: Tariff impact and mitigation - Current guidance implies a tariff impact of $17 million to $19 million, with ongoing efforts to further reduce this burden [46][48] Question: Incremental metric performance - The decline in incremental value new contracts is attributed to timing of large deals, with a strong pipeline expected for the second half [53][56] Question: Board shipments expectations - Expected board shipments remain in the range of 60,000 to 65,000 per quarter for the remainder of the year [63][64] Question: Competitive dynamics and product lines - The company has not experienced significant pressure from competitors regarding generics and reprocessing, and growth in advanced categories is tracking well [83][86]

Second Quarter 2025 Performance - Non-GAAP revenue reached $370 million, a 7% increase on a constant currency basis[5] - Operating profit was $102 million, a 38% increase compared to the prior year[5] - Operating margin improved to 27.5%, a 600 basis points increase year-over-year[5] - Earnings per share grew to $1.33, a 46% increase compared to the prior year[5] Pro Forma Results (Excluding New Tariffs) - Operating profit was $104 million, a 41% increase versus prior year[5] - Operating margin was 28.0%, a 650 basis points improvement versus prior year[5] - Earnings per share was $1.36, a 49% increase versus prior year[5] Business Highlights - Consumable and Service revenue reached $338 million, an 8% increase on a constant currency basis[5] - Capital and Other revenue was $32 million, a 2% decrease on a constant currency basis[5] - The company shipped 63,100 technology boards and instruments[5] Full Year 2025 Guidance (Including New Tariffs) - Revenue is projected to be between $1,505 million and $1,535 million, an 8% to 11% increase on a constant currency basis[5] - Operating profit is expected to be between $406 million and $422 million, a 23% to 28% increase versus prior year[5] - Earnings per share is projected to be between $5.20 and $5.45, a 24% to 30% increase versus prior year[5]

[Second Quarter 2025 Financial Results and Outlook](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20and%20Outlook) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Masimo's CEO reported strong Q2 results driven by core healthcare growth, market share expansion, and effective tariff mitigation - Delivered strong results in Q2 2025, with core healthcare business demonstrating **strong growth and earnings**[3](index=3&type=chunk) - Focused on building a leading position in pulse oximetry, increasing market share in global markets, and driving commercial excellence[3](index=3&type=chunk) - Successfully implemented tariff mitigation measures, reducing the tariff impact by **50%** compared to original estimates[3](index=3&type=chunk) [Second Quarter 2025 Results from Continuing Operations](index=1&type=section&id=Second%20Quarter%202025%20Results%20From%20Continuing%20Operations) Masimo reported strong financial performance for Q2 2025, with GAAP revenue growing 8% and Non-GAAP EPS increasing 46% year-over-year Second Quarter 2025 Key Financial Results (Continuing Operations) | Metric | Q2 2025 Value | Q2 2024 Value | YoY Growth | Source Chunk | | :--------------------------------- | :------------ | :------------ | :--------- | :----------- | | GAAP Revenue | $371 million | $343.9 million | 8% | 6, 27 | | Non-GAAP Revenue (Constant Currency) | $370 million | $343.9 million | 7% | 6, 27 | | GAAP Net Income per Diluted Share | $0.82 | $0.46 | 78.26% | 6, 28 | | Non-GAAP Net Income per Diluted Share | $1.33 | $0.91 | 46% | 6, 28 | [2025 Outlook for Continuing Operations](index=1&type=section&id=2025%20Outlook%20For%20Continuing%20Operations) Masimo updated its full-year 2025 guidance for continuing operations, anticipating strong revenue growth and healthy profitability Full-Year 2025 Guidance for Continuing Operations (Non-GAAP) | Metric | Excluding Tariff Impact (Low) | Excluding Tariff Impact (High) | Including Tariff Impact (Low) | Including Tariff Impact (High) | Source Chunk | | :--------------------------------- | :---------------------------- | :----------------------------- | :---------------------------- | :----------------------------- | :----------- | | Revenue | $1,505 million | $1,535 million | N/A | N/A | 4, 30 | | Revenue Growth (Constant Currency) | 8% | 11% | N/A | N/A | 4, 30 | | Operating Profit | $425 million | $440 million | $406 million | $422 million | 7 | | Operating Margin | 28.3% | 28.7% | 27.0% | 27.5% | 7 | | Earnings per Diluted Share | $5.45 | $5.70 | $5.20 | $5.45 | 7 | [Non-GAAP Financial Measures Explanation](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Purpose and Limitations of Non-GAAP Measures](index=2&type=section&id=Purpose%20and%20Limitations%20of%20Non-GAAP%20Measures) Non-GAAP measures supplement GAAP for period-to-period comparison by excluding non-ongoing items, but have limitations and are not substitutes for GAAP - Non-GAAP measures supplement GAAP, assisting investors in period-to-period operating result comparisons by excluding non-ongoing performance items[10](index=10&type=chunk)[12](index=12&type=chunk) - Limitations include not reflecting all GAAP-determined costs and not being a substitute for GAAP financial performance measures[11](index=11&type=chunk) [Details of Non-GAAP Adjustments](index=2&type=section&id=Details%20of%20Non-GAAP%20Adjustments) [Constant Currency Revenue Adjustments](index=2&type=section&id=Constant%20currency%20revenue%20adjustments) This adjustment removes the impact of foreign currency exchange rate fluctuations on revenue, allowing for a more consistent evaluation of underlying revenue growth rates - Adjusts for foreign currency fluctuations to provide a consistent evaluation of revenue growth rates[13](index=13&type=chunk) [Acquired Tangible Asset Amortization](index=2&type=section&id=Acquired%20tangible%20asset%20amortization) This adjustment excludes amortization expenses related to tangible assets acquired through business or asset acquisitions, including asset valuation step-ups - Excludes amortization expense from acquired tangible assets and asset valuation step-ups[14](index=14&type=chunk) [Business Transition and Related Costs](index=2&type=section&id=Business%20transition%20and%20related%20costs) This adjustment removes gains, losses, and other costs associated with business transition plans, which are not indicative of ongoing operations - Excludes gains, losses, and costs related to business transition plans (e.g., severance, relocation, asset impairment)[15](index=15&type=chunk) [Acquired Intangible Asset Amortization](index=3&type=section&id=Acquired%20intangible%20asset%20amortization) This adjustment excludes amortization expenses from acquired intangible assets, including customer relationships, intellectual property, and trade names - Excludes amortization expense from acquired intangible assets like customer relationships, intellectual property, and trade names[16](index=16&type=chunk) [Acquisitions, Integrations, Divestitures, and Related Costs](index=3&type=section&id=Acquisitions%2C%20integrations%2C%20divestitures%2C%20and%20related%20costs) This adjustment accounts for gains, losses, and other costs associated with acquisitions, integrations, investments, divestitures, and asset impairments - Excludes gains, losses, and costs related to M&A activities, investments, divestitures, and asset impairments[17](index=17&type=chunk) [Litigation Related Expenses and Settlements](index=3&type=section&id=Litigation%20related%20expenses%20and%20settlements) This adjustment excludes gains, losses, and costs from specific litigation matters, notably all Apple litigation expenses, to improve period-to-period comparability - Excludes gains, losses, and costs from certain litigation matters, including all Apple litigation expenses (federal, PTO, ITC proceedings)[18](index=18&type=chunk) - Apple litigation expenses are deemed unique and not indicative of ongoing operating performance, facilitating better period-to-period comparisons[18](index=18&type=chunk) [Other Adjustments](index=3&type=section&id=Other%20adjustments) This category includes other gains, losses, and adjustments that impact period-to-period comparability and do not represent the underlying ongoing results of the business - Excludes gains, losses, and other adjustments that impact period-to-period comparability and do not represent ongoing business results[19](index=19&type=chunk) [Realized and Unrealized Gains or Losses](index=3&type=section&id=Realized%20and%20unrealized%20gains%20or%20losses) This adjustment excludes highly variable and unpredictable gains, losses, and related costs from foreign currency denominated transactions and investments - Excludes highly variable and unpredictable realized/unrealized gains or losses from foreign currency transactions and investments[20](index=20&type=chunk) [Financing Related Adjustments](index=3&type=section&id=Financing%20related%20adjustments) This adjustment excludes certain financing-related costs not indicative of ongoing cash flow generation and reflects the anti-dilutive impact of instruments for non-GAAP EPS - Excludes financing costs not indicative of ongoing cash flow generation[21](index=21&type=chunk) - Reflects anti-dilutive impact of instruments in non-GAAP EPS for better per-share performance evaluation[21](index=21&type=chunk) [Tax Impact of Non-GAAP Adjustments](index=3&type=section&id=Tax%20impact%20of%20non-GAAP%20adjustments) This adjustment modifies non-GAAP earnings to reflect the approximate tax effect of all other non-GAAP adjustments, ensuring a comprehensive view of adjusted financial performance - Adjusts non-GAAP earnings by the approximate tax impact of all other non-GAAP adjustments[22](index=22&type=chunk) [Excess Tax Benefits from Stock-Based Compensation Expense](index=3&type=section&id=Excess%20tax%20benefits%20from%20stock-based%20compensation%20expense) This adjustment excludes highly variable excess tax benefits recognized from stock-based compensation expense to improve comparability between periods and with peers - Excludes highly variable excess tax benefits from stock-based compensation expense to enhance comparability[23](index=23&type=chunk) [Forward-Looking Non-GAAP Financial Measures](index=4&type=section&id=Forward-Looking%20Non-GAAP%20Financial%20Measures) Quantitative reconciliations for forward-looking non-GAAP measures are not provided due to unreasonable efforts and to avoid implying misleading precision - Quantitative reconciliations for forward-looking non-GAAP measures are not provided due to unreasonable efforts[24](index=24&type=chunk) - Excluded items (e.g., acquisition charges, litigation expenses) are difficult to predict, and providing reconciliations could imply misleading precision[24](index=24&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [GAAP to Non-GAAP Financial Measures Reconciliation](index=4&type=section&id=GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) This section details GAAP to Non-GAAP reconciliations for Q2 2025 and 2024 revenue and net income, plus full-year 2025 revenue guidance Q2 2025 Revenue Reconciliation (in millions) | Metric | June 28, 2025 | June 29, 2024 | Source Chunk | | :--------------------------------- | :------------ | :------------ | :----------- | | GAAP revenue | $370.9 | $343.9 | 27 | | Business transition and related costs | (0.6) | N/A | 27 | | Non-GAAP revenue | $370.3 | $343.9 | 27 | | Constant currency revenue adjustments | (0.8) | N/A | 27 | | Non-GAAP constant currency revenue | $369.4 | $343.9 | 27 | | GAAP revenue growth percentage | 7.9% | N/A | 27 | | Non-GAAP constant currency revenue growth percentage | 7.4% | N/A | 27 | Q2 2025 Net Income Reconciliation (in millions, except per diluted share) | Metric | June 28, 2025 (Total) | June 28, 2025 (Per Diluted Share) | June 29, 2024 (Total) | June 29, 2024 (Per Diluted Share) | Source Chunk | | :--------------------------------- | :-------------------- | :-------------------------------- | :-------------------- | :-------------------------------- | :----------- | | GAAP net income from continuing operations | $44.9 | $0.82 | $24.8 | $0.46 | 28 | | Acquired intangible asset amortization | 0.8 | 0.02 | 1.1 | 0.02 | 28 | | Acquisitions, integrations, divestitures, and related costs | 7.2 | 0.13 | 6.1 | 0.11 | 28 | | Business transition and related costs | 0.8 | 0.01 | 7.2 | 0.13 | 28 | | Litigation related expenses, settlements and awards | 24.1 | 0.44 | 17.2 | 0.32 | 28 | | Other adjustments | 4.5 | 0.08 | 0.3 | 0.01 | 28 | | Realized and unrealized gains or losses | 1.6 | 0.03 | 1.7 | 0.03 | 28 | | Financing related adjustments | 0.5 | 0.01 | 0.5 | 0.01 | 28 | | Tax impact of non-GAAP adjustments | (9.7) | (0.18) | (7.6) | (0.14) | 28 | | Excess tax benefits from stock-based compensation | (1.6) | (0.03) | (2.0) | (0.04) | 28 | | Total non-GAAP adjustments | 28.1 | 0.51 | 24.4 | 0.45 | 28 | | Non-GAAP net income from continuing operations | $73.1 | $1.33 | $49.2 | $0.91 | 28 | Full-Year 2025 Revenue Guidance Reconciliation (in millions) | Metric | Low Guidance | High Guidance | Full-Year 2024 Actual | Source Chunk | | :--------------------------------- | :----------- | :------------ | :-------------------- | :----------- | | GAAP revenue | $1,507 | $1,537 | $1,395 | 30 | | Business transition and related costs | (2) | (2) | — | 30 | | Non-GAAP revenue | $1,505 | $1,535 | $1,395 | 30 | | Constant currency revenue adjustments | 8 | 8 | N/A | 30 | | Non-GAAP constant currency revenue | $1,513 | $1,543 | $1,395 | 30 | | GAAP revenue growth percentage | 8% | 10% | N/A | 30 | | Non-GAAP constant currency revenue growth percentage | 8% | 11% | N/A | 30 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Masimo's condensed consolidated balance sheet shows a decrease in total assets and liabilities, with relatively stable stockholders' equity, from December 2024 to June 2025 Key Balance Sheet Data (in millions) | Metric | June 28, 2025 | December 28, 2024 | Change | Source Chunk | | :-------------------------- | :------------ | :---------------- | :----- | :----------- | | Total assets | $2,402.6 | $2,625.7 | $(223.1) | 32 | | Total liabilities | $1,359.8 | $1,573.8 | $(214.0) | 32 | | Total stockholders' equity | $1,042.8 | $1,051.9 | $(9.1) | 32 | | Cash and cash equivalents | $149.6 | $123.6 | $26.0 | 32 | | Inventories | $318.5 | $294.8 | $23.7 | 32 | | Long-term debt | $598.7 | $714.3 | $(115.6) | 32 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, Masimo reported increased total revenue, gross profit, operating income, net income, and diluted EPS compared to the prior year Key Income Statement Data (in millions, except per share amounts) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | Source Chunk | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Total revenue | $370.9 | $343.9 | $742.9 | $683.5 | 34 | | Cost of goods sold | $137.6 | $136.6 | $275.6 | $269.6 | 34 | | Gross profit | $233.3 | $207.3 | $467.3 | $413.9 | 34 | | Operating income | $64.5 | $41.9 | $142.5 | $95.1 | 34 | | Net income from continuing operations, net of tax | $44.9 | $24.8 | $92.1 | $56.9 | 34 | | Diluted income per share - continuing operations | $0.82 | $0.46 | $1.68 | $1.05 | 34 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 28, 2025, Masimo generated $100.5 million in operating cash flow, with improved investing activities and a net cash outflow from financing Key Cash Flow Data (in millions) | Metric | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | Source Chunk | | :--------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Net cash provided by (used in) operating activities | $100.5 | $120.3 | 36 | | Net cash provided by (used in) investing activities | $1.5 | $(21.2) | 36 | | Net cash provided by (used in) financing activities | $(87.7) | $(117.5) | 38 | | Net increase in cash, cash equivalents and restricted cash | $15.7 | $(32.6) | 38 | | Cash, cash equivalents and restricted cash at end of period | $197.1 | $135.6 | 38 | [Additional Company Information](index=2&type=section&id=Additional%20Company%20Information) [About Masimo](index=10&type=section&id=About%20Masimo) Masimo is a global medical technology company dedicated to improving patient outcomes and reducing care costs through innovative monitoring technologies - Masimo is a global medical technology company focused on developing industry-leading monitoring technologies[40](index=40&type=chunk) - Mission: improve life, patient outcomes, reduce cost of care, and expand noninvasive monitoring applications[40](index=40&type=chunk) - Masimo SET® pulse oximetry is a leading technology, used on over **200 million patients annually** and in all top 10 U.S. hospitals[40](index=40&type=chunk) [Conference Call and Website Information](index=2&type=section&id=Conference%20Call%20and%20Website%20Information) Masimo held its Q2 2025 investor conference call on August 5, 2025, with webcast replay and investor presentation available online - Q2 2025 investor conference call held on **August 5, 2025**[8](index=8&type=chunk) - Webcast replay and investor presentation available on Masimo's Investor Relations website (https://investor.masimo.com)[8](index=8&type=chunk)[9](index=9&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements are based on current expectations, subject to uncertainties and risks that may cause actual results to differ materially - All statements about future activities, events, or developments are forward-looking and based on management's current expectations and beliefs[25](index=25&type=chunk) - Subject to uncertainties and factors (e.g., intellectual property, competition, regulatory approval, tariffs, litigation) that could cause actual results to differ materially[25](index=25&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the company does not undertake to update them[25](index=25&type=chunk) [Investor and Media Contacts](index=10&type=section&id=Investor%20and%20Media%20Contacts) Contact information is provided for investor relations and media inquiries, including specific contacts for Masimo and an external media relations partner - Investor Contact: Eli Kammerman (ekammerman@masimo.com, 949-297-7077)[41](index=41&type=chunk) - Media Contact: Evan Lamb (elamb@masimo.com, 949-396-3376) and Longacre Square Partners (masimo@longacresquare.com)[41](index=41&type=chunk)

Core Insights - The article highlights the significant increase in CEO compensation within the global medical technology sector, with the top ten MedTech CEOs earning nearly $680 million in total, reflecting an average year-on-year increase of 46% [1]. Group 1: CEO Compensation Overview - DaVita's CEO, Javier Rodriguez, saw his total income rise to $164.07 million, a staggering increase of 317.29%, primarily due to the cashing out of a high-value stock option granted in 2019 [4]. - Thermo Fisher Scientific's CEO, Marc Casper, earned a total of $116.32 million, up 43.85%, following a strategic acquisition of Olink for $3.1 billion [7]. - Stryker's CEO, Kevin Lobo, reported a total income of $78.94 million, a 32.46% increase, driven by significant acquisitions and internal growth strategies [10]. - Boston Scientific's CEO, Michael Mahoney, achieved a total income of $63.31 million, marking a 64.88% increase, largely due to the success of the Farapulse system and multiple acquisitions [13]. - Intuitive's former CEO, Gary Guthart, earned $54.99 million, a 31.50% increase, as he oversaw major upgrades to the da Vinci platform [16]. - Solventum's CEO, Bryan Hanson, reported a total income of $44.40 million, an 85.80% increase, following the company's successful IPO and strategic divestitures [19]. - Abbott's CEO, Robert Ford, earned $41.15 million, a 36.30% increase, as the company returned to growth post-COVID [22]. - Johnson & Johnson MedTech's CEO, Joaquin Duato, experienced a decline in total income to $40.12 million, down 18.63%, despite the company's revenue growth [25]. - Masimo's former CEO, Joe Kiani, earned $38.11 million, a 54.73% increase, despite being ousted from the company [28]. - Danaher's CEO, Rainer Blair, reported a total income of $38.10 million, a 17.16% increase, as the company shifted focus from acquisitions to internal innovation [30]. Group 2: Trends in Executive Compensation - The article notes that stock option cash-outs significantly influenced the income spikes for CEOs at companies like DaVita and Intuitive, with some executives earning over $100 million in a single year [31]. - There is a trend towards increasing performance-based incentives, as seen in companies like Thermo Fisher and Abbott, which are moving away from time-based RSUs to align more closely with shareholder interests [31]. - Organizational changes and leadership transitions at companies like Sonova and Masimo are closely linked to executive compensation, indicating a strategic alignment between pay and company direction [31].

Group 1 - Johnson Fistel, PLLP is investigating potential breaches of fiduciary duties by current and former directors and officers of Masimo Corporation, focusing on their responsibilities to shareholders and corporate governance obligations [1] - The investigation follows a court ruling from November 5, 2024, which allowed certain claims in a shareholder class action lawsuit to proceed, alleging that Masimo misrepresented the financial performance of Sound United and misled investors about the integration process [2] - Current or long-term shareholders of Masimo Corporation may have legal claims that could be pursued against its leadership to protect and recover shareholder value [3] Group 2 - Johnson Fistel, PLLP is a nationally recognized shareholder rights and securities litigation firm, representing both individual and institutional investors across multiple states [4]

Summary of Massimo's Conference Call Company Overview - **Company**: Massimo - **Industry**: Medical Supplies and Devices - **Key Personnel**: Katie Seisman (CEO), Micah Young (CFO), Matt Taylor (Analyst) Core Company Evolution - Massimo has transitioned from a parameters company focused on pulse oximetry to a solutions company with a broader portfolio [2][3] - The company has been a market leader in pulse oximetry with approximately 55% market share in the US and 50% globally [5][9] - Recent acquisitions include capnography, brain monitoring, hemodynamics, and automation technologies [4][5] Market Dynamics and Growth Potential - The pulse oximetry market is expected to grow in the low single digits, with Massimo gaining 1-2 percentage points of market share annually [9][10] - The introduction of AI-based algorithms for detecting conditions like atrial fibrillation is anticipated to enhance value for hospitals and drive market share growth [10] - Current monitoring penetration in general hospital floors is estimated at 20-30%, with expectations for growth as hospitals seek to monitor more patients [12][13] Financial Performance - Q1 revenue growth was reported at 10.5%, with consumables growing by 8% and capital revenue by 32% [18][19] - The company expects higher consumable orders in the upcoming quarters, despite a lighter order in Q1 due to timing [21][22] - Guidance for overall growth is set at 8-11%, with consumables expected to grow in the double-digit range [24][25] Adjacent Markets - Massimo's adjacent markets (capnography, brain monitoring, hemodynamics, and automation) are valued between $1.5 billion to $2 billion and are growing in the high single digits [14][15] - The company aims to achieve similar market share in these segments as it has in pulse oximetry [15] Cybersecurity Incident - A recent cybersecurity incident impacted operations but was resolved quickly, with no expected long-term effects on demand or guidance [40][44] Tariff Impacts - Tariffs have had a financial impact, with a potential recovery of costs due to recent changes in tariff rates from China [46][47] - The company is exploring vertical integration and qualification for US-based content to mitigate tariff exposure [49][50] Future Outlook - Massimo plans to leverage its significant installed base and introduce next-generation monitors with AI capabilities to drive growth [54][56] - The company is open to partnerships or settlements regarding ongoing litigation with Apple, focusing on protecting its intellectual property [59][63] - Future capital allocation will focus on tuck-in technology deals, wearable solutions, and AI algorithms to enhance growth [66][67] Conclusion - Massimo is positioned for continued growth in the medical supplies and devices industry, with a strong focus on innovation, market share expansion, and strategic capital allocation. The leadership team expresses confidence in the company's future trajectory and operational resilience.

Core Viewpoint - Johnson Fistel, PLLP is investigating potential breaches of fiduciary duties by certain directors and officers of Masimo Corporation in relation to their obligations to shareholders [1] Group 1: Legal Investigation - The investigation is focused on claims that Masimo's Chief Financial Officer and other executives may have inflated Sound United's financial performance and misled investors regarding its integration [3] - A court ruling on November 5, 2024, partially granted and partially denied Masimo's motion to dismiss a shareholder class action lawsuit, allowing claims against the CFO to proceed while dismissing claims against other executive defendants [3] Group 2: Shareholder Rights - Current shareholders of Masimo Corporation may have legal claims that can be brought on behalf of the company against its directors and officers [2] - Shareholders who have continuously owned MASI shares are encouraged to join the investigation through a provided link [3]

Core Viewpoint - Masimo's financial performance in Q1 2025 showed a significant loss despite revenue growth, leading to a strategic decision to divest its consumer audio business to focus on its core medical technology operations [5][12][14]. Financial Performance - For Q1 2025, Masimo reported a loss of $170.7 million (approximately 1.23 billion RMB), equating to a loss of $3.12 per share, with sales of $372 million, reflecting a 9.5% increase year-over-year [3][4]. - The company's GAAP revenue increased by 10% from Q1 2024, with a gross profit of $234 million and a gross margin of 62.9%, up from 60.8% [4]. - Non-GAAP earnings per share were $1.36, exceeding Wall Street expectations by $0.15, with revenue surpassing the forecast of $367.8 million [5][6]. Future Guidance - For the full year 2025, Masimo expects non-GAAP revenue to be between $1.5 billion and $1.53 billion, representing an 8% to 11% growth at constant currency [6]. - The updated guidance, which includes the impact of new tariffs, projects non-GAAP operating profit between $383 million and $403 million, a 16% to 22% increase year-over-year [8]. Strategic Decisions - Masimo plans to sell its Sound United consumer audio business for approximately $350 million to Harman International, a move aimed at refocusing on its medical technology core [16][18]. - The acquisition of Sound United in 2022 for $1.025 billion did not yield the expected growth, leading to a strategic reevaluation and subsequent divestiture [9][12][14]. Market Context - Sound United, acquired for $1.025 billion, had revenues of approximately $900 million at the time of acquisition, but its revenue declined to $773 million in 2023 [13]. - Analysts suggest that the medical business's gross and operating margins are significantly higher than those of the consumer audio segment, indicating a potential for improved cash flow post-divestiture [14].