Masimo (MASI) 2024 Wells Fargo Healthcare Conference summary

Macro and business environment

• Healthcare trends remain stable with strong census growth and improved ability to install equipment, driving revenue in H1 2024.

• Consumables and service revenue grew 14% in H1, while capital sales declined 15%, a trend expected to continue through year-end.

• Consumer segment faces challenges from inflation and a sluggish housing market, but guidance remains unchanged.

• Investments in headphones and hearables are performing well, but core audio systems lag due to weak consumer demand.

• Monitoring of macroeconomic risks and recession concerns continues, with a focus on maintaining guidance.

Strategic initiatives and separation process

• Exclusivity with JV partner expired in August 2024; discussions continue with both the JV and new interested parties for the consumer audio business.

• Morgan Stanley re-engaged to assist with the process, broadening outreach to potential buyers.

• No formal timeline for a decision; board is evaluating all options to maximize shareholder value, including JV, sale, or separation.

• Any material developments will be communicated, but no commitment to a timeline before the AGM.

Financial guidance and growth outlook

• Healthcare sales guidance raised post-Q2, driven by strong inpatient and outpatient census and robust contracting.

• Admissions growth for 2024 expected between 2.5%-4%, with strong net new contract wins pacing well for future growth.

• Long-term plan targets 7%-10% annual growth and aims to double earnings within five years.

• Capital environment remains a headwind, but normalization is expected as inventory and supply chain issues resolve.

• Driver shipments exceeded expectations in Q2 and are projected above 60,000 per quarter in H2, supporting top-line growth.