Masimo (MASI) Goldman Sachs 45th Annual Global Healthcare Conference summary

Core healthcare business performance

• Market share has grown significantly, with true incremental contracts rising from $130–$150 million annually pre-COVID to $400 million in recent years, and Q1 2024 at $100 million.

• Advanced sensor technology and unique product offerings, such as Rainbow and tetherless sensors, have driven differentiation and adoption.

• Hospital census and patient volumes have rebounded post-COVID, with Q1 2024 showing a 3% census increase at some hospitals.

• Operating margin target set at 30% within five years, with new product launches expected before year-end.

Inventory and customer trends

• Inventory destocking post-COVID is complete, with ordering patterns stabilizing to pre-pandemic levels.

• OEM inventory trough occurred in Q1, with volumes expected to normalize in subsequent quarters.

• Installed base has grown nearly 50% since 2019, but revenue per driver remains steady, indicating strong utilization.

• Customer order patterns are now consistent and predictable across the base.

Consumer business and separation plans

• Progress in consumer health and wearables, with a potential spin-off or JV under consideration.

• Attractive JV offer could eliminate most debt and add $0.60 per share to earnings; decision expected by end of June.

• Shareholders will be consulted on whether to pursue a JV or spin-off, with execution likely by August (JV) or next year (spin-off).