Masimo Corporation

and was Vice President of Business Development and Investor Relations. Please go ahead.

Hello, everyone. Joining me today are CEO Katie Diamond and CFO Micah Young. Before we begin, I'd like to inform you that this call will contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our periodic filings with the SEC. Also, this call will include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP or adjusted financial measures. In addition to GAAP results, these non-GAAP financial measures are intended to provide additional information to enable investors to assess the company's operating results in the same way management assesses such results. It is important to note that the Sound United business is now being classified as held for sale and reported in discontinued operations. As a result, our non-GAAP financial measures have been updated to reflect the continuing operations of Massimo's healthcare business for both current and historical reporting periods. Therefore, the financial measures we will be covering today will be primarily on a non-GAAP basis unless noted otherwise. Reconciliation of these measures to the most directly comparable GAAP financial measures are included within the earnings release, earnings presentation, and supplementary financial information on our website. Investors should consider all of our statements today, together with our reports filed with the SEC, including our most recent form, 10-K and 10-Q, in order to make informed investment decisions. I'll now pass the call to Katie Simon.

Thank you, Eli, and good afternoon, everyone. Since joining Massimo as CEO nearly three months ago, I've been focused on immersing myself in our business. I visited customers at 10 hospitals in five cities, that was more than two-thirds of our employees across the US and Europe, toured numerous manufacturing and R&D sites, evaluated our innovation pipeline, and attended national meetings with our sales team. I have three key takeaways from these trips. One, our technology advantage is real. Not only are our existing products market leaders for a reason, but there's also excitement and a strong commitment to innovation throughout the organization that will be essential to our future growth. Second, we have a stellar team that is enthusiastic about the path forward at Massimo. Our people believe in our mission and are focused on delivering for our patients. Our team sees the momentum we have and they want to build on it. Third, we have an opportunity to do better. This shouldn't come as a surprise to anybody. Improvement is always possible. But there are areas of our business where I believe by pulling the right levers, we can be more effective. Specifically, we can bring a new level of commercial excellence to the organization and how we go to market. Further, as we refocus our innovation, we can also put the right processes and plans in place to ensure we consistently have successful product launches that deliver meaningful results. Now let me turn to the quarterly results. The headline is that this is another strong quarter, and our performance clearly demonstrates the earnings power of our core healthcare business. We delivered double-digit revenue growth and EPS growth of more than 50%. For the first quarter, our healthcare revenue was $371 million, grew 10% on a constant currency basis. This was paired with meaningful operating margin expansion of 750 basis points. Michael will go through the results more fully, but I did want to make sure to highlight that I am excited to be joining Massimo at a moment where we can build and improve from a position of meaningful strength, as clearly demonstrated by this quarter's results. Next, I want to highlight some significant milestones from the quarter beyond the financials. First is the announcement we made today that we have reached an agreement to divest our consumer audio business, also known as Sound United. This represents important progress as we continue to refocus on our professional healthcare business. With this failed process concluded, we are well positioned to dedicate our time and resources to meeting patient needs while investing in innovation. Our consumer audio business and its talented team will be well positioned for growth and success under Harmon's leadership. Michael will speak in a bit more detail to the thoroughness of the process that we went through in reaching this agreement and why we believe this was the right transaction for our shareholders and our Sound United team. Second, I'm pleased to announce that Lisa Hellman has joined our team as our new Chief Human Resources Officer. One of the many benefits of building off such a strong base is the exceptional talent we were able to attract to join the Massimo team to help us on our next chapter of growth. Lisa is an outstanding addition to our team and is focused on building our culture, fostering strong engagement, and developing our amazing talent. Third, I also want to touch briefly on an incident that has impacted our website and several of our systems beginning last week. The investigation is ongoing, but as of right now, we do not expect that this will have an impact on our guidance. We voluntarily filed a Form 8K with the SEC around the situation, and you can refer to that for further details. Given the nature of these things, we appreciate your understanding that we will not be commenting more on this event during our earnings call today. Finally, I would like to take a moment to comment on our strategic and financial goals and what we are doing to achieve them. We are seeking to invest in our core healthcare business in order to accelerate revenue growth over time beyond our longstanding revenue growth target of 7% to 10%. Currently, we see a number of ways we're going to accomplish this. First, we plan to upgrade our existing sensors and create next-generation monitors enabled with our AI-based advanced algorithms. We will utilize the advanced algorithms that our team has already developed over the years to enable every patient to be continuously monitored in the acute and post-acute care environment. Second, we will continue to leverage our leadership position in pulse oximetry to strengthen our patient impact across our advanced monitoring categories, including capnography, hemodynamics, and brain monitoring. Lastly, we will focus on growth and commercial excellence in our global markets by shifting the structure of our sales forces from being centralized by product categories to regionally focused groups responsible for selling our broad portfolio. We look forward to sharing more about these efforts at our Investor Day, which we anticipate scheduling in the fourth quarter of 2025. So please stay tuned. Before I wrap up, I'd like to spend a moment on tariffs. Our first priority is to ensure supply of products to our customers globally. We've been dedicating time and resources to assessing and planning for potential tariffs under various scenarios, given the very fluid situation. Our operations and finance teams have quantified the potential impact and are working diligently through the situation, including scenario planning and developing mitigation plans. We will adjust our supply chain strategy and implement specific mitigation plans once we believe there is sufficient clarity to commit to a mitigation path. Michael will cover this in more detail. I do want to call out, however, how impressed I am by the Maximo team and their ability to move efficiently and promptly as new events arise. While tariffs may represent a curveball, the Maximo team has proven itself adept at handling and executing through any variety of situations over these last few years. Additionally, as this quarter only further demonstrates, the high recurring revenue and durable growth profile of our business positions us particularly well to navigate whatever broader macro uncertainties may come our way. I'd really like to thank our entire team for delivering another excellent quarter. Our products and technologies continue to impact millions of patients around the world. I feel honored to be a part of this team. With that, I'll pass it back to Micah.