Core Points - Masimo has filed a lawsuit against the U.S. Customs and Border Protection (CBP), alleging that CBP unlawfully allowed Apple to reinstate a blood oxygen monitoring feature on the Apple Watch that infringes on Masimo's patents [1] - The dispute stems from a 2023 ruling by the U.S. International Trade Commission, which found Apple guilty of patent infringement, leading to a suspension of certain Apple Watch sales [1] - On August 14, Apple announced a software update to restore the blood oxygen monitoring feature by shifting the calculation process to the paired iPhone instead of the watch itself [1] - Masimo claims it was unaware of CBP's unilateral decision made two weeks prior, which overturned an earlier ruling without consulting Masimo, violating standard procedures [1] - The lawsuit cites violations of the Administrative Procedure Act and the due process clause of the Fifth Amendment [1] Legal Actions - Masimo is seeking a temporary restraining order and a preliminary injunction to prevent the enforcement of CBP's August 1 ruling [2] - The company aims to restore the January decision, which was made with participation from both Apple and Masimo, stipulating that related products could only be imported if the blood oxygen monitoring feature was disabled [2]

Core Insights - Masimo (MASI) received FDA 510(k) clearance for expanded indications of its O3 Regional Oximetry, which now includes delta hemoglobin parameters to track changes in hemoglobin levels, enhancing the ability to identify causes of tissue oxygen saturation shifts [1][6] - The O3 platform, built on Masimo's Root platform, utilizes near-infrared spectroscopy to measure continuous regional oxygen saturation (rSO2), providing deeper insights into oxygen imbalances and aiding precise clinical interventions [2][7] - The FDA approval broadens the clinical utility of O3 across all patient populations, including pediatrics and neonates, making it more valuable in critical care settings [4][8] Company Performance - Following the FDA announcement, MASI shares declined by 4.6% at market close, with a year-to-date loss of 11.2%, compared to the industry decline of 7.6% and a 9.5% gain in the S&P 500 [3] - Masimo currently has a market capitalization of $8.36 million and reported an earnings surprise of 8.13% in the last quarter [5] Industry Outlook - The FDA clearance is expected to act as a growth catalyst for Masimo by enhancing the adoption of its O3 platform and driving recurring revenue from monitoring solutions, positioning the company to capture a larger share of the high-margin brain and tissue monitoring market [4] - The global cerebral oximetry monitoring market was valued at $239.4 million in 2024 and is projected to grow at a CAGR of 6.7% from 2025 to 2034, driven by the increasing prevalence of neurological ailments and surgeries [10]

Core Viewpoint - Masimo Corporation (MASI.US) experienced a decline of over 4.3%, trading at $149.14, following Apple's announcement of a new blood oxygen measurement feature for its Apple Watch models after receiving U.S. government approval [1] Company Impact - The introduction of the blood oxygen measurement feature on Apple Watch Series 9, Series 10, and Apple Watch Ultra 2 could pose a competitive threat to Masimo, which specializes in medical monitoring technologies [1] Market Reaction - The stock price drop of Masimo reflects investor concerns regarding the potential impact of Apple's new feature on the company's market position and revenue [1]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, particularly in the financial sector, to achieve exceptional returns. However, identifying such stocks can be challenging due to inherent volatility and risks associated with growth stocks [1]. Group 1: Company Overview - Masimo (MASI) is highlighted as a recommended growth stock due to its favorable Growth Score and top Zacks Rank [2]. - The company has a historical EPS growth rate of 2.5%, but projected EPS growth for the current year is expected to be 14.6%, surpassing the industry average of 12.4% [4]. Group 2: Financial Metrics - Cash flow growth is crucial for growth-oriented companies, and Masimo currently exhibits a year-over-year cash flow growth of 13%, significantly higher than the industry average of -2.6% [5]. - Over the past 3-5 years, Masimo's annualized cash flow growth rate has been 10.7%, compared to the industry average of 6.3% [6]. Group 3: Earnings Estimates - Positive trends in earnings estimate revisions are important, and Masimo has seen a 6.9% increase in current-year earnings estimates over the past month [7]. - The combination of a Growth Score of A and a Zacks Rank of 2 positions Masimo favorably for potential outperformance in the market [8].

Core Insights - Masimo Corporation (MASI) reported adjusted earnings per share (EPS) of $1.33 for Q2 2025, reflecting a 46.2% year-over-year increase and surpassing the Zacks Consensus Estimate by 8.1% [1] - The company's revenues reached $370.9 million in Q2 2025, marking a 7.9% year-over-year growth and exceeding the Zacks Consensus Estimate by 0.6% [2] - Masimo's gross profit increased by 12.5% year-over-year to $233.3 million, with a gross margin expansion of 262 basis points to 62.9% [6] Revenue Breakdown - Revenue excluding related party revenues was $345.1 million, up 8.2% year-over-year, while related party revenues were $25.8 million, up 2.8% year-over-year [4] - Healthcare revenues totaled $370.3 million, reflecting a 7.7% increase on a reported basis and 7.4% at constant exchange rates [5] - Consumable and service revenues within the Healthcare segment grew by 8.4%, while capital equipment and other revenues declined by 2% year-over-year [5] Margin and Expense Analysis - Adjusted operating profit for Q2 was $64.5 million, a 53.9% increase from the previous year, with an adjusted operating margin expansion of 521 basis points to 17.4% [8] - Selling, general, and administrative expenses rose by 9.9% year-over-year to $138.9 million, while research and development expenses decreased by 23.5% to $29.9 million [8] Financial Position - At the end of Q2 2025, Masimo had cash and cash equivalents of $149.6 million, up from $130.8 million at the end of Q1 2025, and long-term debt decreased to $598.7 million from $636 million [9] - Cumulative net cash provided by operating activities from continuing operations was $99.5 million, compared to $106 million a year ago [9] Guidance and Outlook - Masimo has raised its revenue outlook for 2025 to a range of $1,505 million to $1,535 million, reflecting an 8-11% increase at constant exchange rates from 2024 [10] - Adjusted EPS for 2025 is now projected to be between $5.45 and $5.70, indicating a growth of 30-36% from 2024 figures [11] Overall Assessment - The company demonstrated strong performance in Q2 2025 with better-than-expected results, particularly in Healthcare revenues and margin expansion [12] - However, lower capital equipment and other revenues were noted as a downside [13]

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]

Financial Data and Key Metrics Changes - For the second quarter, the company's healthcare revenue was $370 million, achieving earnings per share of $1.33, with a 600 basis points operating margin expansion [6][22][24] - Non-GAAP earnings per share grew by 46% year-over-year [24] - The gross margin improved to 62.9%, up 40 basis points year-over-year, while the operating margin reached 27.5%, reflecting a 600 basis points improvement [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% [22][24] - The company shipped 63,100 technology boards and monitors during the quarter, aligning with expectations [23] Market Data and Key Metrics Changes - The healthcare business is projected to reach full-year revenue guidance of $1.505 billion to $1.535 billion, reflecting 8% to 11% growth on a constant currency basis [25][27] - The company anticipates growth in adjacent markets of 10% to 20% [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][15][18] - Key leadership additions have been made to enhance commercial execution and operational excellence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 24% to 30% EPS growth for the year despite tariff impacts [21] - The company has successfully mitigated tariff impacts by over 50% compared to original estimates [20][29] Other Important Information - The cybersecurity incident incurred net expenses of approximately $4.5 million, which are excluded from non-GAAP results [30] - The divestiture of Sound United is on track to close by the end of the year, with proceeds expected to prioritize share repurchases [31] Q&A Session Summary Question: Guidance update and inputs - Management indicated that guidance reflects strong consumer growth and capital sales growth in the low single-digit range [34][36] Question: Salesforce alignment and early feedback - Positive feedback was received regarding dedicated specialty sales representatives, but quantifying growth impact is premature [38] Question: Status of relationship with Philips - The relationship with Philips remains strong, with ongoing discussions for future partnership [44][46] Question: Tariff impact and mitigation - Current guidance implies a tariff impact of $17 million to $19 million, with ongoing efforts to further mitigate this [49][50] Question: Incremental metric performance - Incremental value from new contracts is on track, with a strong pipeline for the second half of the year [56][58] Question: Board shipments expectations - Expected board shipments remain in the range of 60,000 to 65,000 per quarter [67] Question: Competitive dynamics and product lines - The company has not experienced significant pressure from generics or reprocessing, and growth in advanced categories is in line with long-range targets [86][88] Question: Tax rate assumptions - The assumed tax rate for the year is around 23.8% at the midpoint of the EPS guidance range [115]

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)