Masimo Corporation (MASI) Earnings Call Transcript & Summary

All right. Good morning, everyone, and welcome to Masimo's 2025 Investor Day. I'm Matt Brinkmann. I recently joined Masimo as Senior Vice President of FP&A and Investor Relations. I've been working very closely with the management team and Eli Kammerman, our VP of Investor Relations, who many of you know very well. On behalf of the entire Masimo team, I'd like to thank you all for joining us, both here in Irvine and online. We've got an exciting program for you today. But before we get into that, I'll hit a couple of housekeeping items. So first off, I'll start by reminding everyone that certain statements could involve risks and uncertainties that may cause results to differ materially. Additionally, certain non-GAAP measures will be used throughout the presentation to help investors understand Masimo's business performance. More details on these risks and measures are noted in our recent filings and in the investor presentation today. Now moving on to the agenda. We're excited to showcase the dynamic lineup of presentations from our executive team. Today, we're going to focus on Masimo's strong foundation, our pathway for expanding Masimo's position as a leader in advanced monitoring the company's multiyear product pipeline and our financial targets for 2028. We're also joined by Dr. Dan Sessler, an academic anesthesiologist and founder of the Department of Outcomes Research at Cleveland Clinic, and the Vice President of Clinical Research at UT Health in Houston. We'll have a 15-minute break planned at 10:15 before resuming promptly at 10:30 a.m. After that, we'll wrap up the formal presentations following Q&A around noon today. There is a bathroom for those of you here. It is straight back in this room immediately to the left and then another right, just so you're all aware. And the last thing for me is, look, we've got a comprehensive product fair running by our engineering and marketing teams. We didn't have a chance to check those out earlier today or this morning. Please make sure that you do so before you leave. It's got a lot of great stuff on our existing and next-generation technologies and product pipeline. And with that, I'd like to welcome our CEO, Katie Szyman to the stage.

Thank you. Thanks, Matt, and welcome, everyone. We're so happy that you joined us here today in sunny Southern California. I'm sure it's been a nice break from some of the winter storms. We've seen all across the country. Today, I'm going to be sharing with you our long-range plan, where you will see that we are going to expand our leadership in global patient monitoring over the next 3 years. And more important than that, we are going to make a difference on over 200 million patients' lives every year. Before we get started, we wanted to start with a short video to show you the origins of Masimo technology and how we are taking that from today where we started to today to the future. [Presentation]

So one of the things you see from this origin video is that back in those days, it was very difficult to measure pulse oximetry for infants and babies and the reason is that they move all the time. And so being able to detect their pulse oximetry through motion is the big challenge that our engineers took on in the foundation of the company. And not only that, what would happen in those days is that we learned actually last night that they would have to draw blood gases. They would have to draw blood from those babies 4 times a day to get accurate readings. Why? Because if you give too much oxygen to a baby, they can go blind. And if you give too little oxygen, they can have brain damage. So the foundation of Masimo and what we've always done is take major medical issues and actually make a difference in transform care. We actually, to this day, have the highest market share in the pediatric and neonatal intensive care environment because of our amazing ability to use algorithms to detect pulse oximetry through motion. I actually have a personal experience with this myself. When my daughter who is now 19 was actually 9 months old, we spent 4 terrifying nights and 5 days in the pediatric ICU where she had contracted near fatal pneumonia. And during that time, she was pasted on to my body and I held her, and she moved around quite a bit, to be honest. But what you have on a monitor is that if your pulse oximetry is below 90, it's when it's dangerous. And so my daughter rode -- her pulse oximetry rode somewhere between 78 and 84 for 4 days and 4 long nights. And I was holding her just praying and hoping that she would actually get above that level of 90. I was calling the nurses, calling the doctors, it's beeping. It's beeping the whole time. And then finally, by the fourth day, we got up into the 80s, high 80s, then we got above 90. And then finally, the fifth day just went 90, 96, 98, and then they let us go home. So I have a very personal connection to Masimo and what we do. And I believe that we are just getting started. There's still so many needs in monitoring where we can continue to make a difference in the future. So if you look at our mission, our mission is to have Masimo innovations, empower clinicians to transform patient care. We do that through taking patients first as our main need innovating and then with our people and our performance, we're able to deliver. So that's what's fantastic about Masimo. And we don't just talk about this mission and purpose. We actually live it every day. To give you a quick snapshot, who is Masimo and why is this such a great company. So this kind of gives it all to you on one page. So we have -- first of all, we are the global leader in patient monitoring. Second, we have over 7,000 people employed by Masimo that dedicate their time and effort to help the 200 million-plus patients in 150 countries where we make a difference every year. We have 350-plus engineers worldwide that are the drivers between -- behind all of our innovations. And we also have an amazing and resilient global supply chain in 4 different locations and they have been so resilient, especially in the impact of tariffs and then transitioning manufacturing from part of our manufacturing moving from Mexico to Malaysia without any major quality issues. But why I think we're going to continue to win is that we have the best products and technologies in our portfolio. We have 80% recurring revenue. We have a large and growing installed base of over 2.6 million units and we have very high barriers to entry, not only with IP, but also with long-term contracts where we have a 98-plus percent renewal rate. So as I reflect back on 2025 kind of my first year here as CEO. What I'm most proud of is that we have delivered on our commitments this year. A couple of big wins. One is that we divested Sound United as we committed to do. We actually did a new partnership and executed a new partnership with Philips and we see that the growth that we've seen in the Philips installed base in terms of our market share that we have equal runway available to us in the next 5 years as we've had in the last 5 years, which is a really important point. But what I like the most about the Philips partnerships is you have 2 leaders working together to innovate for patients, which is fantastic. We also published our INSPIRE results where we have a feasibility study showing in real-world environments that our product performs across all skin pigmentations, and that's super important for patients. But if you take it up a level, it's about focus. We have focused our strategy. We have -- are innovating. So we have focused innovation and execution. These 3 pillars, you'll see us continue to talk about today. On our guidance for this year, we have kept our guidance throughout the whole year in terms of the revenue growth. We have operating margin expansion. I just want to say you won't see this kind of an uplift every year going forward. But we really did a serious kind of restructuring as we moved away from consumer and decided to focus on the core health care business and markets. And one of the things that I can say coming in as a new CEO, and I knew about the restructuring, I was like wanting to check, do we have enough R&D? Do we have enough to actually continue to innovate going forward? Have we cut too much? And I can tell you, as someone coming in, I'm confident that we have restructured in a positive way. And with the pipeline I'm going to show you and with what we see we want to do in the future, we can continue with the structure that we have today. And then we have also delivered on our earnings per share. So taking all of that momentum from 2025 into 2026. So we are positioned to succeed in 2026 and beyond. Why do I think that? We have built a world-class execution-oriented leadership team, and I'll show you more details we've targeted our growth strategy on our major health care markets where we are. We have refocused our innovation in areas that will accelerate growth, not only in the short but also in the long term. and we have market-leading earnings per share and cash flow and financial metrics. So I believe that we are ready to execute to these long-range targets of 7% to 10% growth and you'll see us actually the goal is for us to be in pure double-digit land as we exit in '28 and beyond. The financial metrics are also outstanding, but I'm going to have my esteemed colleague, Micah Young, will go through those in more detail in the later part of the presentation. So just to take a few moments to share with you about our experienced leadership team. We have a great balance here between people who have been at Masimo a long time in the core bedrock of the company, combined with some new leadership that we brought in from the outside. So Ammar Al-Ali. He's actually here in the room, Ammar is employee #33. He's our Chief Engineering Innovation and Design Officer. He's been at Masimo over 33 years -- 30 years and he also has over 800 patents. In fact, his patent is the patent that was asserted against Apple recently with the recent jury verdict. We have Anand Sampath. Anand has been here almost 20 years, Anand originally did both engineering and operations. He's now 100% dedicated to making our global supply chain resilient and outstanding. So Anand has been a great bedrock for the company. We have Dr. Dan Cantillon, who -- Dr. Cantillon joined us from the Cleveland Clinic a few years ago. He's our Chief Medical Officer. He's a cardiologist by training, just an outstanding asset for an advocate for Masimo on our technologies. We also added some great commercial talent. So between Tim Benner, who you will be hearing from later today about our commercial strategy. And then Greg Meehan, our Global Commercial Officer. We also have amazing commercial talent like Matt Anacone who's here with us today, who all have actually been here stable and running for commercial excellence. We've added functional excellence as well. So we added Linnette Torres and we pulled quality and regulatory into a special team that is focused on accelerating our product approval so that we can get products cleared faster in a high-quality way. We also have a new Chief Human Resource Officer, Lisa Hellmann. She's the first time in the history of the company that we've had a Chief Human Resource Officer, really dedicated to building a culture and building engagement. And then we have Charles Dadswell, who joined us from Illumina, and Charles is actually our new Chief General Counsel. And then finally, we have Bedrock, Mr. Micah Young, who's been my business partner, all of you know Micah very well as our CFO for over the last 8 years. So just a fantastic team. It's a leadership team with a track record of execution. You can see the backgrounds, the amazing med tech companies that everybody comes from. And so I think with this team, we are ready to execute. So let me share with you our top priorities as we drive value through 2028. Again, repeating, it's back to what we did in 2025. It's about focus, it's about innovation and it's about execution. So on focus, we're going to share with you more details of our significant market opportunity that we have in our core markets. I'm going to share with you Masimo's growth algorithm. And then we're going to share with you some additional pathways to growth that we see. On innovation, on all the earnings calls, I've been talking about the 3 waves of innovation, so I'll give you some more detail and insights into that, and in particular, a highlight around our installed base refresh opportunity. And then finally, the core of what we do is always on a foundation of clinical evidence and Dr. Cantillon and Dr. Sessler will be sharing with you some of our amazing clinical evidence efforts. And then on execution, it's around commercial and operational execution. We have to continue to execute, execute, execute and that's going to deliver these key financial metrics. So here is our growth algorithm, it's quite detailed, but it's really going to show you there's 4 key areas of growth that we see. One is accelerating U.S. Pulse Ox growth; 2 is increasing our international pulse-ox market share; 3 is expanding our presence in advanced monitoring and 4 is executing new product launches. And what you'll see is that the new product launches will have more of an impact in the back half of the long-range plan. And so you can see that 7% to 10% growth, and you can see that growth accelerating as we go through the plan time period. So just a quick snapshot of the markets that we play in and why we believe we still have significant runway in these markets. So if you combine global pulse ox, it's north of a $2 billion market. And let me just say, in the U.S., we have 55% plus global market share and OUS, we have much less market share, much bigger opportunity. So in the U.S., I just want to share with you a story, people will say, well, if you have 55% market share, it's going to be hard for you to continue to increase your market share by 1 to 2 points per year. And I want to say in the 10 years that I spent at Edwards in my last role where I was in hemodynamic monitoring. When I started, we had 60% market share. And people said, you can't possibly go above that. But what we did is by the time I left, we were over 80% market share. it can be done. It's got to be done with execution and innovation and focus, these same 3 things. When it comes to the international pulse ox market, you see we have lower market share in general, and those markets are growing at a faster rate. So we see a great opportunity for us there. In fact, in Pulse Ox you see that our goal is to grow at 1.5 to 2x the market growth rate, and we have successfully been doing that for the last 5 years. On advanced monitoring, we have about 50% market share. These are large markets, and we do have an opportunity to pull through. In fact, you saw some of the sales alignment that we were doing was to say, how do we get that 15 up to a levels as we see, especially at 50% in the U.S. with our amazing commercial teams. And then the other important point to take away is that when we expand internationally, unlike some other markets or businesses, it's at the same profitability as it is in the U.S. So we don't see that trade-off. We really have an equal opportunity for profit as we look growing globally. So finally, I'd like to walk you through where I see and I have so much passion about a market expansion opportunity that we have. So this is about new patient pathways. So I'm going to tell you a couple of stories. So my dad had cardiac surgery quite a long time ago. When you come in for cardiac surgery, you go right into the operating room and you're monitored 100% of the time. Then you go into the intensive care unit for 5 days, you're monitored 100% of the time continuously. But then he has moved to the step-down unit, and he's spent 3 days in the step-down unit where it's called intermittent or spot check monitoring, where is only monitored every 4 to 8 hours. He developed atrial fibrillation in his on the step-down units in the award and they had to actually revert him back to the ICU and he spent then another 4 days in the ICU because he developed atrial fibrillation and deteriorated rapidly. I believe that if he had been monitored in the step-down units, we could have actually taken action sooner and potentially prevented him from having to go back to the ICU. And we have evidence that you'll hear later that, that can cost up to $10,000 per patient when they're reescalated to the ICU because they're not adequately monitored. The other example I want to share with you is a story of my mother. So my mom had knee surgery -- she was recovering from knee surgery, and she was taking so much ibuprofen, the high levels for pain that they asked her to take that she ripped -- tore a hole in her stomach and she went into the emergency room. She sat in the emergency room for 6 hours. Every hour, if you're septic with an infection that you sit in the emergency room, you have a 10% increase in your mortality rate while you're sitting there, unmonitored. So she sat there for 6 hours, her risk and mortality went up to 60%. And by the time a doctor saw her, they called us and said, "You need to say goodbye, she's probably going to die." And she decided to get the surgery to try to see if they could get all the infection out of her body. She ended up getting the surgery and she was in the ICU for 4 weeks. If she had been immediately monitored and put on antibiotics, none of that would have been happened. She would have had a very light surgery, it would not have taken 4 weeks in the ICU. So we believe if you look at 145 million patient encounters in the ER and 60 million in the ICU, let's say, we call it surveillance monitoring and you charge as an example, $10 for those sensors. That would create a $2 billion market opportunity. And it gets back to what Masimo does well. We solve patient problems in patient hospitals and we save patient lives. So these are the 3 waves of innovation that I've been talk ing about on the earnings call. Really, Wave 1 is about launching smart set lines with opioid-induced respiratory depression and then radius VSM. And if you're here in the building, you'll see models walking around with our Radius VSM, very nicely showing our amazing technology out there. We also have a new chip an ASIC MX-11 chip that is going to be launched into our installed base of chips and boards, which has miniaturized everything, really great technology. On Wave 2, you can see, and I just want to highlight, we have an algorithm that can detect atrial fibrillation with a very simple pulse ox sensor. We will be launching that towards the end of next year. And what you see with that technology is, for example, if my dad had that on and it had detected Afib, it would have prevented him from having to have an expensive cardiac telemetry unit on him, and it would have also very quickly been able to escalate care for him. But where I'm going to spend a little bit more time is really on our installed base refresh opportunity because you'll hear from Dr. Cantillon and from Tim Benner, much more details about our waves, but it's really elevating commercial excellence with new product launches, accelerating intelligent monitoring, getting these AI-enabled algorithms onto our monitors and our sensors and then innovating wearables where we already have the best technologies in wearables today. So on the global installed base refresh opportunity, our route monitor was launched in 2014 over 10 years ago. And what we've been -- what told by clinicians is we want new technology where we want to see the AI algorithms on your monitors, and we'd like to see Root split into 2. So 1 that's used in the OR and the ICU, what they want is more real estate. So when Root was launched, it was very innovative to have a cradle that could be popped out for patient transport. But now what they want is a bigger 1 because we have more sensors and they want to see it all in 1 screen. The second thing is on vital signs, they want a very simple, easy-to-use vital signs monitor they can roll around with them. And so based on that feedback, we have 2 new platforms coming out and we have over 100,000 route units that are out there today, many of them over 10 years old. Just a quick moment on how we rigorously defend our intellectual property at Masimo. So we had a California journey 2 weeks ago that actually delivered a verdict for us of over $600 million. So there's still many steps to go on the Apple case, and we are not going to be talking about that today. We have California trade secrets, the International Trade Commission and the Delaware trial. So needless to say, we plan to continue to rigorously defend our IP. But what's important to take away is that we have great lawyers, and we have great outside lawyers that are all on the case and that we're going to make the right decisions when it comes to making the right decisions for shareholders as we make these trade-off decisions. And what's really important is that our team is focused on executing the business results and not distracted by the Apple trial. But I have to say it was nice to have that win. So in closing, I just want to say we have the right team. We have the right focus strategy. We have the right innovation pipeline. -- and we have the right financial metrics. And we believe that we are well positioned to deliver the 7% to 10% growth that we are guiding on here today for the long-range plan. But what I also want you to take away is just we are not done yet. like there's so many more opportunities in patient monitoring, like for improving care for the babies like my daughter for people who have newborn babies. We have examples like my father and my mother. So what we are doing is we are going to ruthlessly and continuously passionately find more solutions where we can transform patient care here at Masimo, and we are just beginning. So it's now my pleasure to introduce my team colleague, Mr. Tim Benner. Tim comes to us from some of the top med tech companies out there where he has been a successful commercial and marketing officer across all of them. Tim and I knew each other at Edwards, but we actually never got a chance to work together. So it's been my pleasure to have Tim here for the last 6 months. He's just a great leader and a great friend. And he has already transformed our marketing and strategy organizations to the next level. So please welcome, Tim. Thanks, Tim.

Thanks, Katie. Nice job -- thanks, Katie. Great job. Thanks for the leadership, Hi everyone, I'm Tim. As Katie said, I oversee strategy and marketing. Before I begin, though, I've got to apologize. My voice is going to be going in and out. The ELT, there's a cold that went to the ELT and one of my executive peers with the initials, Micah Young, got me sick. So I apologize if I go in and out. Let's get to it. Here's what I'm going to do. Over the next 15 minutes, I'm going to break down the growth algorithm that Katie spoke about. We're going to look at it a little bit differently. I'm going to talk about it in terms of growth pillars or pillars of growth. We're going to talk about the U.S. pulse ox business. how we envision accelerated. We're going to talk about our pulse ox business internationally. We're going to break down the portfolio, something we call advanced monitoring, and then I'm going to walk you through NPI. I know some of you are doing math and saying, why only 1%. You'll understand that once I get through it. We're going to go really deep on the math, so you'll have time to write down numbers. Before I do that though, I got to talk to you about our commercial machinery. So Katie said, I come from Edwards Abbott, Stryker/NRE. I've got commercial roles. I didn't know what I was walking into. Masimo is an R&D company. No doubt about it, always will be. But I bet you didn't know the commercial engine is a close #2. Let me go through that in a little bit more detail. The commercial team has underscored the best portfolio in the space without a doubt. And we invest in evidence like no one else. Second point, it's a strong team. and it's getting stronger. We're leaning in the marketing now like we never have before. The foundation of the business, our installed base was incredible in terms of what it drives from a recurring revenue standpoint. And I'm going to show you some metrics pretty soon. related to Matt's team and what this commercial team does from a win standpoint. I've never seen it in my career. Let's look at the portfolio. We're not going to go in detail, but here's what you need to know, We occupy the #1 or #2 market positions in every category in which we compete. And I'm going to show you in about 10 minutes how we're moving some of these #2 and #1. But the real takeaway is on the right-hand side of the slide. Our entire portfolio virtually gets upgraded between '26, '27 and '28. That doesn't happen very often. We're going to walk through that as well. Great commercial team, they own the clinical narrative and they've got new products that they're about to execute. How about the commercial engine? Well, it's a strong team, but every team can get stronger. Let me give you 3 things to think about. Look at the commercial leadership of there. Greg Meehan is in the front row. He's our CCO. For the first time, I think, in a long time or ever, Masimo has a sales leader that just focuses on growing sales. He doesn't own [clin]. He doesn't own reg. He doesn't own ops. He doesn't own R&D, wakes up and goes the bet every day thinking about sales. That's new. We're seeing the benefit of that. We've also tweaked the organization a little bit. We had a lot of silos in the field. [indiscernible] was separate from his or her pulse oxexpert. They're now on the same team, who cares. Well, we want to drive portfolio leverage. That's what this model is doing now. We're seeing the benefits. So a small iteration. So one other thing we're doing. We're getting closer to the market. We have a Strategic Advisory Board, we call it a luminary Advisory Board. They're at these facilities. They drive our investments, product development ideas, portfolio strategies. It just so happens that our LAB meeting is tomorrow. It's a heck of a week here, but we can wait to go deep with them. And key point, there's doctors and nurses on these teams. So a lot of cool changes happening. Let me tell you about our installed base. We've delivered almost 3 million units over the past 10 years. Think about that from a recurring revenue standpoint. That's our moat, a lot of switching costs there. We have over deep OEM partnerships. And the way we think about OEMs is also changing. Katie led the Philips agreement, it's textured multiyear in nature. We're going to apply that same model to our other OEMs and a go forward. Here is my third slide. Yes, we save lives, and we save time and we save money, but look at these statistics, the relationships that our field team has with their customers are, again, like nothing I've seen, we have a nearly 100% retention rate over the past 10 years. More than that, when we go head-to-head on a product basis, say we're going head-to-head in pulse ox with our friends out of Minnesota. We win 9 out of 10 times. We can take that to the bank. It's an incredible team. And as I just showed you, it's getting stronger. So that's the enabler of the growth pillars. Let's get into some of the math. I know that's why many of you are here or are watching. Let's start with the power alley. This is important to us, U.S. pulse ox growth. It drives about 40% of that 7% to 10% growth range that Katie walked you through. So what we do here sort of matters. Let's talk about the market. It's about $1.5 billion in size. We own 55% of it, as Katie said, Can we grow more? This should be at 70%, 75%. That's what we're leaning into. The drivers of this category are twofold. The market which has grown consistently between 3% and 4%, save 1 COVID hit, it was higher than that, but we grow faster. Why? We take share and we drive mix shift upgrades. When we take that growth number and apply it to how it contributes to the CAGR, it's about 3 percentage points, call it, roughly 40%. So to believe this, you've got to believe that we can take share. So how are we doing? Well, historically, we take between 1 and 1.5 points of share in the U.S. every year. Why? Because we've got an amazing clinical commercial team, they own the clinical narrative. We've simply modeled that on a go forward. If you ask me, I think it's conservative. Why? Strong commercial team getting stronger a wave of evidence of Dr. Cantillon or Dr. [ Shi ] is going to walk you through in a minute. But most importantly, the pulse ox platform is being completely innovated very soon. Look at this. In 2026 alone, we're launching 2 new algorithms, 1 focus on OIRD. A lot of patients in the hospital on opioids, their bodies stop breathing. They forget to breathe. It's a big issue. Dr. Shi is going to walk you through this. That hits in the first half of next year. So it's not 3 years from now. It's not 5 years from now. AFib. I was diagnosed with AFib in December of last year. I probably could have learned this years before how to have this sensor on my finger. We've got an AFib algorithm hitting in the second half of '26 that will detect and predict AFib. What's the risk in AFib? Stroke buybacks more likely. Sometimes stroke is worse than death. This is a big deal. And as we hit 2028, we're launching a new algorithm focused on a broader respiratory depression algorithm. Our cornerstone product has been upgraded in the near term, and that's why we think we're going to see share lift. Again, we modeled it at historic levels. We should do better. How about on the international side? In case you missed it, Our ASPs and margin outside of U.S. are almost the same as the U.S. Like I've never seen this in my medical device career. So what we do internationally matters, and we've got a plan to take share and to drive growth. Here are the market stats. $80 million market, growing twice as fast as the U.S. That gets our attention. Here's the issue, though. We have 35% share. We have massive headroom to get after this. The drivers there same in the U.S. market and we've shown consistently that we can take share internationally. When we frame this up and change the math such that it's contributing to that CAGR, it's about 2 percentage points, call it, 20% what we do her matters. Let me give you another visual. If we took our international market share to the same level as we have in the U.S., it's $150 million in incremental revenue. As you can imagine, we've been after this. So in 2025, we assessed our posture internationally. And we tailored the strategies. In Europe, it's about focus. In the Middle East, it's about expansion. We've got a great beachhead in Saudi Arabia. We want to expand that. In JPAC, it's about market development. But here's what you need to know. And it gets lost on this slide is the third bullet. Those same innovations that I talked about it in the U.S. They're hitting OUS as well. In fact, Europe should get the new pulse ox on the same time line as the U.S. That gives us some confidence. Well, we've got a lot of opportunities here. And one of the things Katie had us do this year was go deep on markets where the execution has been suboptimal. Japan is a good example. It's not a huge market. $150 million, $200 million. We own 15% of that. That's not great. We are underpenetrated and underrepresented. Here's what I mean. Where I come from Japan is usually the #2 or 3 country from a revenue standpoint. It's #10 at Masimo. So we suffocated this. One of the coolest things we did is we brought in Dr. Kaman Wang Kaman is a legend in the space. He drove TAVR. He launched TAVR Edwards throughout Asia Pacific. He brought on a new country manager, a new sales manager. We've got new quality and regular people hitting as well. We changed the makeup in terms of how we approach OEM partnerships. You'll see Japan as a growth driver and go forward. This is one example of how we've leaned into those countries and brought them up to our standard. Third growth pillar is our portfolio outside [indiscernible] expand advanced monitoring. This is a big one. This drives up 30% of that 7% to 10% growth. What is the portfolio? There's 3 categories. One is capnography. We have a great differentiated product here. We just launched and entered a product addition to Capno in Q4, #2 global position. This should be #1, and that's what we're getting after. Brain monitoring, the most complete comprehensive platform in the industry. We're #2. We've got plans to go after number one. In fact, there's a new sed line that is going to be AI-enabled launching in 2026. That's going to be a tailwind here. Our share in hemodynamics, it's low, massive headroom. We're launching continuous DO2 in 2026 as well. This will measure oxygen delivery from the heart, keep statistic, no one else can do this continuously. So all these are getting upgrades and we're driving some tailwinds. Let's look at the numbers. $2.5 billion market. Now a good portion of this is the O2, growing at 5% to 9% a healthy growth rate, look at our share with massive headroom set. I just don't think the company has ever leaned into this aggressively and we're doing that now. When we combine the growth of those 3 pillars that I just talked about, we anticipate over 10% growth on a go-forward basis. That contributes almost 3 percentage points to that 7% to 10% range. So it matters. And Greg and his team are focused on this in [indiscernible]. Let me show this to you in a different way. If we were to bring our share in these 3 categories up to our U.S. pulse ox level, there's over $200 million there in incremental go-get. It matters. As I mentioned to you just 10 minutes ago we now have field teams that are portfolio focused, unified, execute into a consistent playbook to drive cross-sell and upside. Finally, NPI. Some highlights. We're launching 10 new products over the next 3 years, but it's going to take time for them to scale, to ramp, the OEM adoption probably doesn't happen until 2027. That's why you have this kind of curve starting from '26 to '28. After '28, I were to show you '29,' 30, '31, NPI is an exponential feeder of growth. hostess LRP. In the LRP at a percentage point or 10 points of that growth because it's going to take a little time. Let me unpack this further. There's growth all over this. Katie referenced this really quickly. One of our product launches in 2027, early is the next-gen Root platform. We have an upgraded the Root in about 13 years 12 years. It's a big deal. Dr. [ Shi ] is going to walk you through this. We have 100,000 routes out there. And we're going to price this at a premium level. Think about the updraft that, that creates. One of the many growth levers we have on a go forward. So I hope I've given you some confidence as to why we are pumped about the 7% to 10% range in hitting it, a commercial team that's strong and getting stronger, a wave of evidence that you're about to hear from Dr. [ Shi ], 3 waves of NPI upgrades. That's the math. But we wake up in the morning not thinking about math, we think about patients. We touch lives of 200 patients -- 200 million patients a year. That number gets to 250, 300 by the end of the LRP that's why we're in the fight and that's why we're leaning in, and that's a great bridge for me to invite Dr. [ Siu ] up on stage. Thank you for listening.

Thank you so much. Good morning, everyone. Thank you for being here. My name is Dan Cantillon. I'm the Chief Medical Officer here at Masimo. Been with the company about 3 years now. Prior to Masimo, I was at Cleveland Clinic, as Katie mentioned, for 16 years, where I held both departmental and enterprise leadership roles with respect to patient monitoring. And my entire career has been devoted to innovation in medical devices, both on the implantable side and also on the wearable side. And despite having some first-in-human milestones to my credit when it comes to things like leadless cardiac pacemakers. I like to say that I voted with my feet in the principle that the future is right here. The future is in noninvasive monitoring. It's in wearable sensors, and it's an AI-enabled disease detection and ultimately, disease prediction algorithms. And so in the next 20 minutes, I'm going to walk you through the clinical aspects of what Katie and Tim were describing in our waves of innovation. But we began on the foundation of a differentiated and meaningful body of clinical evidence that I'll walk you through, including some very important publications that hit this year, confirming our skin tone accuracy on critically ill adult patients. and also demonstrating for the first time, tangible cost savings for continuously monitoring all patients using our sensors so that it costs hospitals less, not more to monitor all of their patients continuously. And then going through the transformative novations that have been inspired by clinicians, all of the above and taken together position us to lead, drive and change the standard of care by elevating it. We're not new when it comes to publishing clinical research and having a foundation of clinical studies. And over the last 3 years that I've been here, we've invested and we focused in this. We have 30 active studies in our current portfolio. We've got more than 50 planned over the next 2 years across 9 regions globally, including 5 randomized control trials one of which just published in the JAMA Pediatrics a very prestigious journal, that was done out of Japan actually and demonstrated that our SedLine, our continuous brain monitoring solution when compared with usual care demonstrated a reduction of pediatric emergent tellurium, a shortened length of stay and an improvement in the cost of care of those patients. But that's just the beginning. We're going to walk you through some of the other high-profile publications that we've had this year in Journal of Patient Safety and in chest Critical Care. But overall, what characterizes our research doctrine is that you don't have to take our word for it when it comes to the performance of our sensors, we'll prove it to you with our clinical evidence. And if that's not compelling enough, take us to your sickest patients. Let's go stop by side against our competitors and see who can perform better. That statistic that Tim alluded to with our commercial teams, I think Greg and Matt and others will attest to this. We know that if we can get into the NICU, we know that if we can get into the ICU, we can get them to agree to do an evaluation against our competitor, we win. And the statistics don't line, 9 out of 10 times, we win. Okay? So that's the foundation. Don't take our word for it, let us prove it to you if that's not convincing enough, take us to your sickest patient. On the top, we show sort of our core business, which is our optical sensors, our pulse oximetry and the studies forecasted over the LRP. And the bottom is everything else, including our advanced monitoring, our NPI as was described. The things that are happening here. We are validating novel capabilities in our sensors that nobody else has. -- we are demonstrating superior outcomes with our technology that nobody else can replicate. And we are demonstrating for the first time cost of care reductions to demonstrate that the things that Katie was talking about in her opening remarks are father -- going back to the ICU, her mother needing to spend an extended period of time in the ICU. The cost of care for that level of acuity is dwarfed by the cost of these wearable sensors and software solutions and the algorithms. And so when you monitor all patients, you intercept those complications and you can prevent those things. And in the case of coronary bypass grafting, hospitals get paid on a bundled basis, okay? So they get one lump sum for that entire length of stay, whether they have a 5-day stay a 7-day stay or 2-week stay. And as we'll talk about [indiscernible] study in just a moment, that is demonstrable that those things go directly to the hospital's bottom line. The INSPIRE study was very important for us because during the pandemic, there were concerns that were raised about the accuracy of pulse oximeters among patients with darker skin tones. And something that is referred to as a called hypoxemia where a patient with darker skin tone will have a value on their SPO2, which is overestimate of their true blood oxygen levels, and that can result in dangerous clinical deterioration that is concealed to the clinician. We knew that we didn't have that issue with our superior technology. But again, Don't take our word for it, let us prove it to you. And so that's what we did in the INSPIRE study. We went to the Medical University of South Carolina and enrolled patients prospectively in 2 of their ICUs, sickest of the sick, 40% of those patients with oil perfusion, almost 2/3 of them on continuous vasopressors medications that artificially raise the blood pressure because they're fighting for their lives. And in that context, with more than half of the patients in the study African-American, we demonstrated spot on accuracy with the performance of our sensor where the overall bias was minus 0.6%, and for both individuals with dark and light skin tones and that we were actually more accurate numerically for patients with darker skin tones than with like. And to put that number in context that's not even one whole number on the pulse oximeter, okay? So think about that minus 0.6 million as a fraction of the difference between 90% and 91%. But even more importantly, the event rate of a called hypoxemia in this extremely challenging patient population was 0. Now if you looked at some of those studies that were published, raising this concern during the pandemic, the suggestion based on those studies, but those event rates could be -- have been as high as 15%, 20%. In the sickest of sick patients, our event rate was 0. We're very proud of that performance. This was a feasibility study, as Katie mentioned, we are going to complete this study by Q1 of 2026. And when this study is completed, it will be the largest ever prospective study to demonstrate skin tone accuracy in critically adult patients, and this is just the beginning. I'll show more of what we've invested in real-world clinical evidence, the Black study. This is part of a long arc with Hitchcock Medical Center, which is a story that began over a decade ago, long before I got here, and Dartmouth-Hitchcock decided to continuously monitor all their patients. I'm going to show you a short video at the end of my presentation so they can tell that story in their own work why and how they decided to do that. But among the many benefits that they published over that 10-year period was a very impressive 0 preventable deaths due to opioid-induced respiratory depression by continuously monitoring all their patients on MedSurg during that time period. But our commercial teams always hear the objection, right? -- where -- who's going to pay for this? Where is the money going to come from to bring in all of the sophisticated monitoring equipment? And so what they did in this study, which just published is they looked at over 32,000 real-world patients over a 3.5-year period, and they did an elegant cost of care analysis, and they demonstrated using actual claims data from their accounting database using their actual payer mix that there was a cost savings of $5,000 per patient rescue and over $10,000 per patient rescue and transfer care that was avoided. So continuously monitoring these patients cost them less, not more. And we believe that this is generalizable to other systems for the reasons that we mentioned in terms of how they were using actual payer data. Now walking through the different waves that Katie and Tim mentioned, I'm going to talk about the salient clinical features in each. Beginning, of course, with pulse oximetry where our innovation has been tenacious and will continue as such. The parameters that you see on the screen towards the left that are shaded in darker red are parameters that only Masimo technology has with the optical sensors. And I want to highlight the oxygen reserve index in just a moment. I'm going to come back and talk a little bit about ORI in detail. But I want to also refer to what's on the right side of the screen. I wasn't kidding when I said that we are heavily invested in real-world studies to demonstrate our skin tone accuracy across that entire continuum of care from neonates to pediatric patients and through critical adults, as you can see the INSPIRE study at MUSC referenced up here. And of all these studies, there's only one study that is Masimo sponsored, and that's the INSPIRE study. The remaining studies are either sponsored by the hospital systems themselves that have a stake and understanding this is a very, very important question or the FDA, which is what has sponsored the Stanford study. All of these studies have either been published or will be published by the end of 2026. And what we believe we have a high confidence that the performance of our sensors is going to be in line with the expectations and the data that I shared with you previously. And speaking of the FDA, we as a company, I wish I could take credit for this. I just have the privilege of continuing it. We, as a company, since our foundation have always enrolled equal numbers of individuals with dark and light skin tone in our validation studies. Historically, that's at 49% from our foundation to present day. That is head and shoulders above what the FDA guidance requires which is a mega Why? Because it's putting patients first. It's the right thing to do for patients. And so we're very proud to continue this track record of demonstrating our accuracy through motion, low-perfusion and across a plurality of skin tones. Coming briefly to Oxygen Reserve Index. This is a novel capability to interrogate the hemoglobin molecule to measure blood oxygen index above full saturation. So what? In a randomized clinical study that was published out of Tekia earlier this year, they showed that when you monitor the brain continuously in both the case group and the control group and then you add OI to the case group, there's a 70% reduction in postoperative delirium. Why? Because oxygen is like a drug, Katie said it. If you give too much to neonates, they go blind. If you don't give them enough, they have brain injury. It turns out the same is true for adults. You want to get the oxygen levels just right. You don't want to over oxygenate them because that interferes with their recovery. So we believe that these novel parameters on our optical sensors can deliver real value into health care with both clinical outcomes and cost of care. What is smart set Smart Set is a shift. It's a migration from the world of dumalarms into insight oriented alerts, heart rate high, heart rate low, SPO2 low our nurses. Our doctors are drowning in a symphony of failure with these high frequent inactionable alarms that can seal the signal of the patient requiring their attention. SmartSet is about delivering the capability to tell clinicians for the first time or patient is showing signs of opioid-induced respiratory depression. Your patient is showing signs of atrial fibrillation based on the finger pulse oximeter. Your patient is showing signs of early sepsis. Your patient is showing signs of seizure activity in the brain monitoring. That's what SmartSet is meant to deliver to our customers is insight, not noise. To go into a little bit of detail that the 2 that Tim and Katie mentioned, opioid-induced respiratory depression. This was a de novo clearance that is on the FDA website as an AI algorithm. Why? Because it combines the parameters, not just SpO2, but multiple parameters to detect the pattern of a patient that is experiencing opioid-induced respiratory depression, which affects up to 46% of patients postoperatively and can account for up to 20% of the deaths due to opioids are in the context of prescribed use case. We believe that the clinical market or the clinical use case is those patients receiving continuous opiate infusions with PCA pumps, because those patients have undergone complex spinal procedures, major abdominal surgeries, major vascular procedures. The opioid medications are necessary for those patients, but we have the ability to keep them safe with our AID algorithm so that the nurses and the doctors can respond quickly. As a cardiologist, of course, I love this, AFib based PPG detection. It's driven me crazy that consumer accessible devices, things like Fitbits and other things that you can buy online can pick up PPG from a consumer wrist wearable, but we're the industry leader in pulse oximetry, and we can't do it on the finger, not any longer. And Boss, I'm very pleased to report to you that as of this morning, we enrolled our last patient in the validation study for the AFib PPG. So Linnette, we will be on target to submit that for 510(k) in Q1 of 2026. We're very, very excited about that capability. Why is that so important? Because as Katie's personal story illustrated, it affects 20 -- sorry, some of it's as high as 40% -- pardon me, some studies of patients post cardiac surgery go into atrial fibrillation. And that leads to increased all-cause mortality at 30 days and increased ICU length of stay and basically strokes where the brain injury can become permanent as a result of the consequences of atrial fibrillation. Atrial fibrillation affects more than 1 in 10 patients over the age of 65, and that's growing as our population ages. This is a very important capability for us to introduce into the hospital environment. Moving on into Radius VSM. For those of you that haven't had a chance to do so, please get out there and check it out for yourself. This is the first acuity adaptable, truly modular wearable sensor where can start with just the continuous SpO2 and the finger and then you can scale it up or down as needed as the patient acuity requires by adding an ECG patch configuration with 3 points of skin fixation that can give up to 6 leads, give 6 leads of continuous ECG monitoring, you can add NIBP, you can add an acoustic sensor, so you can scale it up or down as the patient's condition requires. This is currently an LMR in 3 U.S. sites, including university hospitals, which is 400 beds into a journey to equip their 1,500 beds by August of next year. That's going really well. the stories that are coming in of big saves of patients that -- who would have had a serious clinical deterioration that went undetected because of spot check or intermittent monitoring, but was picked up because of the continuous vital science monitoring with Radius VSM, those are starting to come in. And as Katie mentioned, the emergency department, one of our LMR sites, and again, I wish I could take credit for this, this wasn't my idea. This was their idea. So you want to talk about customers innovating in health care delivery. It was their idea to put Radius VSM on to their patients at the point of triage in the emergency department. So when they send them into the waiting room and then they send them into the hallway, they're continuously monitored with our patient safety net. There's a tragic phenomenon in emergency medicine as these hospitals ERs, I think what has been into an ER recently, these ERs are bottlenecked. There's all kinds of patients in the waiting area and in the hallways. And the tragic term is called dead before being seen. And this is a solution to that. And so we're seeing things that you'd expect in terms of clinical outcomes with that use case, but also some pleasant things that we didn't anticipate that are very favorable for such as the patient satisfaction scores, which are standardized and required for hospitals to report in the emergency department, those actually went up for the LMR site because the patients when they're being monitored in the waiting room and they're sitting and waiting for their turn to be called or they're in the hallways, they feel safe. And they're less likely to leave without being seen. And that's something that at our LMR side, they're at their historical nadir, their low point in terms of patients leaving without being seen. So we didn't anticipate any of that, but we're really excited about that. As we go to full market release, I think we're very interested in seeing how other emergency departments are going to adopt this technology. Tim alluded to our next-generation Root monitor. This is not just a sleeker monitor with the pension pole touchscreen display and the absence of a fan that makes it quieter, No, there's real clinical benefit to this. This was designed by clinicians for clinicians with some of the key features and benefits, including what we call NFC pairing where the nurses can take our wearable sensors, tap it to the screen and go and so it's going to save them time that's going to improve their workflow. It's going to mitigate registration errors, which unfortunately, I can tell you from personal experience, those things do happen in the hospital in terms of miss identification. All of those things are fully automated. -- alongside the vital signs themselves, which can be seamlessly pushed into the EMR. This is going to be the home for these advanced algorithms that we're talking about in terms of detection and disease prediction, and this is anticipated to launch in 2027 from a large installed base. The current Root monitor is sort of like a Swiss army knife for us at Cleveland Clinic. We've got them mounted at bed size. We've got them in the ORs and my old outpatient practice, we had them on rolestands, where the nurses would push them into the room. This is the next-generation route vital sign system, which is meant to be more portable for that use case that I just mentioned. It can do both spot check and continuous vital science, but it automates it. So it saves them time. It's a sleek little guy that can go into those exam rooms, and we're really excited to see this get into the market. Last but not least, I want to talk about centralized patient monitoring and patient safety net. I'm curious if any of you want to venture a guess, what do you think, according to the American Heart Association survival statistics that are published every year, what is the likelihood of surviving in a U.S. hospital in the event of a cardiac arrest? Anybody want to throw a number? It's 25%. It's about 1 in 4. For some context in the community, in this auditorium out on the street, it's 10%. People should be safer in the hospital than that. With our current generation of patient safety net, which right now serves 850 hospitals covering 48,000 beds, we have demonstrated in a study that our current generation of patient safety that gets that return of spontaneous circulation outcome up to 60%. In King Saud Medical City, a 1,200-bed hospital system in Riyad, they compared the outcomes for 8 months prior to the deployment of Masimo SET plus patient safety net to the 8 months after. And they found that every single outcome that matters went in the right direction. Total mortality, all-cause mortality went down. The number of CPR event rates went down. The length of stay went down. The CPR success rate went up to 60%, and this is just the beginning. You see 93% up there with next-generation patient safety net. Where did that come from? It came from my humble contribution to the patient monitoring literature. This is the paper that I published in JAMA back in 2016 and where we at the Cleveland Clinic, develop a system of command center monitoring for the main campus in our regional hospitals, where we developed our own proprietary algorithms to allow the technicians to provide advanced and discretionary notification directly to those emergency response teams to deploy them to the bedside in advance of the cardiac arrest and the outcomes that we saw were 93% return of spontaneous circulation. So this is the announcement of the partnership between Cleveland Clinic and Masimo, where the technology, those algorithms will become assimilated into our next generation of patient safety net. And I think this may be the first tech transfer in history where the human went with the technology. to the company. I don't know, maybe you guys know of another example of that. But we're really excited about that capability. So to summarize, a differentiated and meaningful body of clinical evidence, confirming our skin tone accuracy through motion low perfusion, saving hospital systems money with continuous monitoring, costing them less, not more. transformative innovations in our next 3 waves that position us to lead, drive, change and elevate the standard of care. And I want to leave you with the ultimate case study, Dartmouth-Hitchcock Medical Center and the work that they have done. So I'm going to stop speaking. I'll thank you for your attention [indiscernible]. [Presentation]

[Break] Thanks, Dr. Cantillon. All right, everybody. We are now going to hit our break. We are a little bit ahead of schedule. So we'll ask everybody to reconvene in this room around 10:25. That's a little shy of a 20-minute break, and we'll kick things back off with Dr. Sessler. Thank you.

We're going to go ahead and get started again here. I'll have Dr. Cantillion join us on the stage for a quick word.

Okay. Good morning once again, and thank you. Welcome back. As you guys get your seats and get settled, it's an honor for me to introduce our next speaker, our external physician speaker, somebody I've known for some time, a former colleague of mine at the Cleveland Clinic before he left and before I left, Dr. Dan Sessler is the current Vice President for Clinical Research at the University of Texas Health in Houston. He has, to his credit, more than 1,000 full papers, including 3 dozen publications in the New England Journal of Medicine, Lancet and the Journal of the American Medical Association, or JAMA. His papers have been cited 117,000 times in peer-reviewed articles, making him the world's most published and cited perioperative investigator. He is among the top 0.01% of cited scientists in any field. Dr. Sessler founded and directed the Outcomes Research Consortium. The consortium is the world's largest anesthesia research group. It publishes a full paper every other day for a total of more than 2,400 papers. It's a privilege for me to welcome Dr. Sessler to the stage, and please give him a warm round of applause. Welcome.

Thank you. In 1954, the year I was born, Dylan Thomas wrote, Time held me green and dying, but I sung in my chains like the sea, thereby perfectly expressing his distain for aging, infformity, illness and eventual mortality. How differently the great poet must have felt shortly after his father's death when he penned his most famous lines. Do not go gentle into that good night. Old age should burn and rave at close of day, rage, rage against the dime of the light. Think of a young mother with cancer. Think of a child with a lethal congenital condition. RG is the only reasonable response to the dime of the light. But let's face it, none of us wants to go into that good night any earlier than strictly necessary and preferably not before a long unfulfilled life. A reasonable question then is how well we're doing? How well are we serving our patients because they don't want to go into that good night any earlier than strictly necessary. The answer to that question depends critically on what period we look at. So let me start with the intraoperative period. Anesthesia was invented on Etherday, that's October 16, 1846. And in those days, anesthesia was pretty lethal. In fact, it took years of training to get a healthy patient through a small operation some of the time. Over the next century, anesthesia mortality decreased by a factor of 100. This didn't happen randomly. It happened because of a concerted effort by anesthesiologists to figure out what was killing patients and to fix them. Since my residency, anesthesia mortality has decreased by another order of magnitude. Anesthesia mortality thus has decreased by a factor of 1,000. This is remarkable if you think about it. There's no other specialty that remotely has reduced mortality by a factor of 1,000. So intraoperatively, we have done very well and anesthesiologists are deservedly proud of our intraoperative efforts because we've saved a lot of lives. On the other hand, if you look at the postoperative period, we're not doing well. Postoperative mortality is high, and it remains high. Let me put this in perspective for you. If the 30 days after surgery were considered a disease, it would be the third leading cause of death in the entire world. Let me give you a different perspective. 5,000 postoperative patients die every hour, 24/7. This is both a tragedy and an opportunity. It's an opportunity because if we could reduce postoperative mortality just by 1%, that would correspond to tens of thousands of lives saved each year just in the United States. We have an enormous opportunity here. Now a reasonable question is what's killing people? And the answer is that there are 3 big causes. So one is surgical bleeding. A second is cardiovascular complications and a third is sepsis. Sepsis is considerably less common than the other 2, but it's much more deadly. Consequently, the attributable risk, that is the fraction of death that you can attribute back to a cause is about 15% for each of these. So these 3 complications account for about half of postoperative mortality. Respiratory complications are considerably less common. So respiratory deaths are way less common than cardiovascular deaths. But -- they are completely preventable. There should never be a respiratory death in a hospital. We can treat respiratory failure. Nobody should be dying of this, but 45,000 people a year have respiratory arrests in U.S. hospitals. Almost half of those events are lethal. These should be never events. They are, in fact, technically defined as never events, but they're happening all the time. So what can we do about it? One of the things we can do is improve our monitoring. And I'm going to give you an example -- I'll start with an example of blood pressure. And the reason blood pressure is interesting is that it's strongly associated -- that is hypotension, strongly associated with myocardial injury, renal injury, cardiovascular death, overall death after surgery. So hypotension is a bad actor. To evaluate this, we did a study with continuous blinded ward blood pressure monitoring. So these were patients who had surgery, they were in the hospital, and we put on continuous blood pressure monitors, but we didn't let the nurses and clinicians see the results. So this is blinded monitoring. It's going in the background. The patients are getting monitored with intermittent vital signs every 4 hours per routine. The results were somewhat disconcerting. What we found was that almost 1/4 of the patients had 30 continuous minutes of mean arterial pressure less than 70 millimeters of mercury. That's low for a postoperative patient, and it gets worse. because almost 20% of the patients had 15 continuous minutes with a mean arterial pressure less than 65 millimeters of mercury. This is dangerously low, and yet it's common. Disconcertingly, the nurses detected only half of these episodes. Now let me be clear. I am not criticizing the nurses here. This study was done at the Cleveland Clinic. Our nurses are meticulous. They did their vital signs every 4 hours. The problem is that these events occurred between their checks. So this is not a nursing failure. This is a system failure. I want to focus on respiratory complications, though, because these are never events. Nobody in the hospital should ever die from respiratory failure. There are many causes of respiratory failure in postoperative patients. So you have obstruction, you have respiratory muscle weakness, which can be consequent to the neuromuscular blockers we give during anesthesia. You can have reduced ventilation sometimes from pain. People's pain can be so severe that they don't breathe well. You can have impaired respiratory control, a central problem. But the real big one opioids. Now I am not, let me be clear, saying that we need to get rid of opioids. Opioids are our best analgesics. People who have surgery have pain afterwards. The pain can be very severe and opioids are absolutely critical part of the treatment. So the solution is not to get rid of opioids because we don't have a good alternative in most cases. Nonetheless, opioids cause a lot of problems. So in this study, Frank Overdk looked at respiratory arrest, cardiopulmonary arrests and evaluated how patients were treated before the arrest. So if you look at the second line, patients who got opioids were about twice as likely to have a cardiopulmonary arrest as patients who didn't. If you look at the third line, patients who got sedative drugs, non-opioid sedatives were also about twice as likely to have a respiratory arrest. And that's because many non-opioid sedatives also impair ventilation. And when you combine the 2, that's the top line there, about 3.5x as many patients had cardiopulmonary arrest. So opioids are a bad actor. -- sedatives are also bad actors. And when you combine the 2, it's really bad news. Previously, I presented a study where we did blinded continuous blood pressure monitoring. So this is the analogy for blinded continuous saturation monitor. So this represents 1,500 patients, 1,250 of those being at the Cleveland Clinic, arguably a good institution. So we just continuously monitored saturation in the background, again, blinded to clinicians who just had their every 4-hour spot checks. By the second day, more than 10% of all the measurements we took had a saturation less than 90% Okay. saturation less than 90% is not lethal. It doesn't exactly kill patients, but it's also a marker of fragility, okay? These are patients who have very little reserve. If something interferes with their breathing, their saturation is going to drop almost to nothing really quickly. It's a very nonlinear decrease in saturation. The nurses missed 90% of the patients who had a continuous full hour of saturation less than 90%. So 90% of these events were just missed by the nurses. And once again, I'm not blaming the nurses. The nurses at the clinic are meticulous. This is a system problem. And the solution is going to be continuous monitoring. Opioid-induced respiratory depression is something we have to take seriously because it kills a lot of patients unnecessarily. This is an analysis of the closed claims database. So this is something anesthesiologists and malpractice insurance companies put together, and it's now about 3 decades old. So it -- the registry has every closed malpractice claim. So in this analysis, they went back and they looked at respiratory suits. So these are basically malpractice suits based on a respiratory outcome. So 77% of these episodes resulted in death or brain injury, almost 90% occurred within 24 hours after anesthesia. 97% of these events were deemed preventable. And this was done by an independent panel that did not know the results, that is whether the patient lived or died or did well. So it's just a pure objective analysis of whether the care was optimal. Almost 100% were deemed preventable with better monitoring and care. There were many causes. It's mostly opioid related and multiple prescribers was one of them. So many different physicians take care of postoperative patients. And what happens is one doc comes by and prescribes an opioid for pain, another doc comes by and prescribes a sedative because the patient is agitated. Okay, each of those decisions was reasonable, but I already showed you the data. When you combine sedatives and opioids, that's bad news. We need better monitoring. Vital signs monitoring every 4 to 6 hours is just not sufficient. It's the way we did it a half century ago. But think about it, folks. A half century ago, patients came into the hospital 2 days before surgery. They stayed for 2 weeks after surgery. We didn't operate on anybody over 60 years of age. We didn't operate on people with major comorbidities, and we didn't do really big operations. Consequently, the acuity in hospitals a half century ago was about what you'd find at a church picnic, okay? Well, it's not that way anymore, okay? Patients come in the morning of surgery, 80% of them go home on the day of surgery. Anybody who stays in the hospital after surgery is really sick and had a really big operation. So we take these patients that a few decades ago would all have gone to the ICU, and now we stick them on surgical wards. The consequences are obvious. They're essentially ICU patients, but they're not being monitored. And of course, we miss lots and lots of things, and that's what results in these respiratory events, cardiovascular events, sepsis. We're stuck in a failure to rescue mode. Failure to rescue is a concept that was developed by Fritz Sieber now 3 decades ago. And what he did was a study where he evaluated complications in hospitals and deaths. And what he found was that all hospitals have approximately the same incidence of serious complications. What differed among the hospitals was how they dealt with it. So the good hospitals recognized complications and intervened effectively and prevented deaths. So the concept was that complications are essentially constant, but good hospitals jump in and fix patients. But it hasn't worked, okay? This concept has been hanging around for 3 decades and postoperative mortality has been flat during this whole time, okay? That concept is not serving us well. We need to get beyond failure to rescue and move into preventing complications. Instead of waiting for people to have a critical event to have a crisis, to have a near death experience on a surgical ward, we need to identify patients who are getting into trouble, intervene early and prevent complications. That's where we need to go. Continuous ward monitoring is going to be the solution to this. And this is evidence of why it's important. So this was an analysis of cardiopulmonary arrest and sort of what happened before the arrest. Patients who had arrests had abnormal vital signs for hours before the arrest. And the more vital signs they had, the more likely they were to have an arrest. And the more severely abnormal the vital signs were, the more likely they were to have an arrest. Another example is the Dartmouth study, which Dr. Cantillion already explained. So this was an observational prospective step wedge design study. So when they started, nobody had continuous monitoring and they progressively introduced continuous monitoring by the end, everybody had continuous monitoring. And what they did was they compare the results with continuous monitoring to patients who were enrolled before continuous monitoring started. And the results were absolutely stunning. So they went from almost 20 respiratory deaths per 100,000 patients to 0. Basically, continuous monitoring eliminated these events. And it's perfectly understandable because we can intervene for respiratory events. We have lots of tools for dealing with respiratory problems. We can give drugs to reverse opioids. We can, if necessary, put a tube in, ventilate patients. So there are lots of things we can do if we know about the events. And continuous monitoring tells us about these events before you have a dead and bed event. There were similar results from Saudi Arabia. Again, this was a before-after study. continuous monitoring reduced the number of patients who needed CPR. It improved the success of CPR, suggesting that CPR was started earlier in those patients. Length of stay went down and overall mortality went down. Cost of care. Again, Dr. Cantalon referred to this earlier, but understandably, if you can prevent a respiratory event, you save a lot of money because these events are very expensive. You have to call a big team, you do a lot of stuff. And especially if patients get transferred to the ICU, that turns out to be about $10,000 per patient. So continuous war monitoring actually saves money. Let me now tell you about a trial we're about to start at UT Health. It's the CONSTANT trial. We will enroll 500 patients, and they will be randomized to conventional care, which is intermittent monitoring or to continuous monitoring. Actually, all the patients will have continuous monitoring, but it will be blinded in half the patients. So all patients will have intermittent monitoring by the nurses. Half the patients will have continuous monitoring, which will be evaluated 24/7 with calls to the relevant nurse if something is going wrong. We'll use the Radius PPG system and safety net for the trial. And our primary hypothesis is that deviations in vital signs beyond set preset limits will be greater in patients without continuous monitoring. And the limits we selected were not random. They're based on a 350-patient pilot trial. So these are thresholds that we know are clinically meaningful and don't generate an excessive number of alarms. So our primary outcome is that simply patients will have fewer and less severe vital sign abnormalities. Our secondary hypothesis is that continuous monitoring will increase interventions for abnormal vital signs. And the theory here is that with continuous monitoring, the nurses will detect abnormalities and do something about it. And again, we have pilot data for this in about 250 patients. So this is a hypothesis I'm quite sure is correct, but we want to do an adequately powered trial and confirm the results. So let me summarize here. Postoperative mortality remains common, 5,000 patients per hour. So a lot of patients and a lot of opportunity. The major causes are bleeding, cardiovascular events and sepsis, but respiratory events are common, 45,000 a year just in the United States, almost 50% of them being lethal. So we have a lot of opportunity here on all of these types of outcomes. Continuous ward monitoring will identify abnormalities in real time. They will allow nurses and other clinicians to intervene effectively and prevent crises. This is a triple win. It's a win for the patients, for the hospitals and for the payers. But we need to make it happen. We need to make continuous monitoring happen. And I have some personal experience there. I was hospitalized for 2 weeks after a bone marrow transplant. And one of the things -- actually, one of the worst things about the entire experience was being awakened every 4 hours for vital signs. So at the end of 2 weeks, my bone marrow was doing just fine, thank you. And I was absolutely exhausted because I had never slept more than 4 hours for 2 weeks. Okay. This is not just a matter of patient comfort. sleep is a critical part of recovery. Postoperative patients need a lot of sleep and the sleep is part of the recovery process. They need to sleep. And if you disturb sleep, a good fraction of patients get delirious and delirium is associated with prolonged hospitalization and increased cost. So sleep matters. Patients prefer continuous monitoring because then they can sleep through the night. So we need to do this. We need to implement continuous monitoring because we can save tens of thousands of lives by doing this. But it's not going to happen by magic folks. It's going to happen because we have good technology and Masimo is in the lead here with superb technology for continuous monitoring. We have to get patients to accept it. We have to get clinicians to use it. This is a change to the health care system. This is not trivial. Let me assure you, this is not at all trivial. This is going to be a major process change. But with studies like CONSTANT and other studies we need, it has to become the standard of care. We need to make continuous monitoring standard of care, the future as I see it and not decades from now, by the way, 5 to 10 years. Patients will check into a hospital. Every patient will have some sort of continuous monitor strapped on to them. And throughout their hospitalization, we will know their vital signs, their position, where they are in the hospital, patients get lost in the hospitals. So these are all critical things. And this will just be the standard of care. But as I said, it's not magic. It's going to happen because of a concerted effort. But this is something we need to do. A lot of lives are on the state. We need to do it. We need to do it now. [indiscernible] sees the day. Thank you.

Thank you so much, Dr. Sessler. I've known Dr. Sessler for the last 10 years, and he's been on this quest to really try to get standards changed. And what's going to be required is single center studies like we've seen at Dartmouth and like we see he's starting. But then it's going to require multicenter studies. It's going to require guidelines from the American Society of Anesthesiology, then it's going to require laws to be changed. And so we're on that journey with you together. Thank you so much, Dr. Sessler. It's now my pleasure to introduce Micah Young, our CFO, who is going to walk us through the financials and has just been a great partner and a great leader at Masimo over the last 8 years. Thanks, Micah.

All right. Thank you all for joining us today. I'm glad the weather is better than last time. I think the last time you guys came out, we had a day full of rains. So I'm excited to be here with this incredible team and leadership. And I'm really -- I really feel good about the path we're on right now and the direction. We're operating from a position of real strength. We're a market leader in pulse oximetry. We have a global footprint that provides tremendous scale. Tim talked about earlier how we're trying to expand that leadership position, both in the U.S. and internationally. And we have a great opportunity to bring our advanced monitoring technologies up to a similar level of share. If you look at our operating model, it's a great business model that is highly leverageable. We can generate strong earnings, free cash flow, and we're not just improving Masimo. We're positioning Masimo to be a high flyer MedTech for many years to come. I love this slide. If you look at our track record of performance, and there's not a lot of companies in med tech that are delivering this kind of profile over a similar time horizon. If you look at it from 2017 when I joined the company and where we've come along the way, it hasn't been all rainbows and butterflies. It's been dealing with COVID distortions and challenges over the years and distractions, some distractions. But we've delivered tremendous growth, over 9% growth over the last 8 years. Our margin story is even more powerful. We've delivered over 870 basis points of operating margin expansion despite tariff headwinds. And you can see there, that's about 110 basis points of headwinds in 2025. If you exclude tariffs, we've delivered nearly 1,000 basis points of improvement. And -- this is the highest Masimo's margins has been in the history of the company. We've also delivered exceptional earnings per share growth, over 15% on average per year over the same time horizon. What I'm most excited about is that Masimo is returning to its roots. We're getting back to being laser-focused on our core medical technology business. If you look at kind of where we started and how we're leveraging our SET platform, we started in the NICU where babies are moving and our technology is the best-in-class. We can measure through motion and low perfusion. And we can also land and expand into other care areas of the hospital. It also gives us ability to pull through those other advanced monitoring technologies and bring those up to a similar share. We've been a durable high single-digit grower, and we have a good pathway right now to double-digit growth. And Tim talked about all the products that we're launching. We have a very powerful innovation cycle that we'll be going through over the course of the next few years, and we expect to accelerate growth. We also have multiple initiatives to drive further margin expansion. We aren't stopping at 27.5%. This is a highly leverageable model that's going to continue to generate strong operating margin. We're also going to be very disciplined with our capital allocation strategy. We want to double down on getting Masimo back to what investors grew to love. And that's a very durable growth, highly efficient operating model that's built for long-term performance. Looking at 2025. Katie mentioned earlier the performance we've had this past year. We've executed on nearly every aspect of the P&L. It's been a great year. We strategically realigned the business last year. We discontinued noncore product lines. Anand and his team of operations have done a tremendous job of driving manufacturing and operational excellence. We've shifted some of our facilities, a lot of our high-volume manufacturing over into Malaysia. And that's given us a more broad global footprint in terms of manufacturing that we can optimize over time. If you look at our gross margin work is paying off. We've improved that 80 basis points versus last year. Operating expenses. That's a lot of operating expense improvement, 410 basis points. And that's done through eliminating some of the consumer health marketing and product development spend. We've also restructured some of the back office spend and consolidated facilities. But it wasn't all cost cuts. We also strategically reinvested back into the business, expanding sales reps in key geographies to drive growth. Some of those we talked about earlier with the Asia Pac region, driving growth there and some other key regions as well. And we've expanded the marketing team. We are going to be much better at launch excellence. And I am -- Tim has been a great addition to this team. Katie has brought on tremendous talent across this leadership team, and I'm excited about where we're heading. If you combine that, it's 490 basis points of margin improvement year-over-year. And we are on pace to exceed our original guidance of 26.5% coming into the year. Now keep in mind, we did not know about tariffs and where they were heading. So that excluded tariffs. If you strip out tariffs, we're going to exceed our original guidance by over 210 basis points. Katie talked about our revenue growth plan, operating margin goal and our target and also our EPS target and how we're going to generate very strong cash flow. So if you look at it, starting with revenue, 7% to 10% growth over the long-range plan. Keep in mind, and I've hit on this all year, we do have an extra selling week in 2025. I've mentioned that, that's roughly 1 point of revenue this year. So if you adjust for that as a jumping off point, we plan to grow 7% to 10% through the long-range plan. We also see that growth accelerating within that range over the course of the long-range plan as we launch new products, as our commercial initiatives start to mature. And that's going to lead to strong performance on the top line and help us -- enable us to get to that 30% operating margin. The operating margin goal is clear. We have measurable levers, and it's achievable. And I'll show you that here in a minute. Earnings of $8 a share. That's coming from the margin leverage, the growth on the top line, but also we've been generating stronger cash flow. We've been converting cash at a higher rate. That enables us to also deploy capital in a way that's going to drive returns for shareholders. And last but not least, we plan to generate $1 billion of operating cash flow of operating cash flow over the next 3 years of cumulative operating cash flow. So I'm going to hit on a few of these. We have a clear road map to drive this plan. What we are great at is margin expansion, driving manufacturing operational excellence, pricing discipline. We're going to continue to drive that even further. We've got a great team that's been there. They've executed on those kind of plans in the past, and we're going to do it together moving forward. We also have a team of engineers and manufacturing professionals that know how to take cost out of products. They've done it with our sensors. They've done it with our technology boards and monitors. And we're going to do it continue to do that. That's year in, year out. They focus on taking cost out of products. So that's going to drive margins. And while delivering those high margins, it gives us the ability to reinvest in growth initiatives within the company. in our commercial excellence, making sure that we can scale with data and better systems. Free cash flow is another strength of this business. We are structurally efficient capital-light business, and we're driving towards 70% to 80% cash flow conversion through this long-range plan. Disciplined capital allocation is another area of focus. We're focused on generating high returns for shareholders. That may come in the form of reinvesting the fuel growth but also returning capital in the form of share buybacks when the math is compelling. And that's why we've been leaning into more recently. And we also want to take an opportunistic approach to tuck-in M&A. If we find technologies that can lay right into our commercial footprint, that's the most efficient way of doing it and also tightly align with our core med tech business. That's where we're focused. If you look at the next slide, you can see this -- we have a very clear and measurable path to driving the 30% operating margin. A lot of these things are already in the works, and we're moving on them now, and we plan to execute like we have in the past and deliver strong performance. We start out with 27.5% operating margins. That includes 110 basis points of tariff headwinds this year. as we've talked a lot about, those tariff headwinds annualized, and that adds about -- that adds another 110 basis points of headwind next year. But that puts us at about 210 basis points total of tariff impact. So we have a lot of initiatives in place to really drive tariff mitigation efforts, adjusting our supply chain, adjusting our manufacturing. We plan to mitigate half of those tariffs over the course of this long-range plan. Then if you look at our underlying gross margin improvement, that's a total of 250 basis points, 190 basis points is coming from gross margin improvement. We have we set out goals for ourselves to get back to the gross margins we saw prior to COVID, and we're trying to get raises up, and that's going to drive 190 basis points of improvement. And we're going to do that through our playbook that we've executed for the past decade. So if you look at operating margin leverage. We plan to get there through natural leverage in the P&L, but also driving productivity across our sales force, G&A efficiency, driving up revenue per rep as we have made investments in more mature markets that are going to continue to leverage and be more productive. And then we're strategically reinvesting back into the business to fuel growth. And that comes from projects that are higher impact R&D projects. Again, we're adding sales power in different regions that are key territories for us. And we're going to continue to scale and drive infrastructure improvements over time that's going to scale -- allow us to scale that growth. If you look at our earnings per share, Top line growth, 7% to 10%, strong operating margin expansion and leveraging our capital deployment. With our strong cash flow, we're going to be able to deploy capital to drive earnings -- and that's going to get us to $8 per share is what our target is for 2028. As I mentioned before, we're a very highly efficient business model. We generate strong cash flow. We expect to generate $1 billion of operating cash flow, cumulative operating cash flow over the next 3 years and take our cash flow conversion up to 70% to 80%. And that's going to give us ample firepower to strengthen the balance sheet, be able to reinvest for growth or deploy that capital in terms of returns to shareholders. So there's a few key takeaways. Number one, we have a strong foundation. We have a large and growing installed base that Katie talked about earlier, for highly predictable, high recurring revenue stream. And that gives us the ability to drive growth. It's resilient growth. And if you look at our operating model, -- our operating model drives very strong margin expansion is highly leverageable. It can power earnings growth and also generate strong cash flow. And what I'm most excited about is we have an incredible team. I'm excited about all the things we plan to do to deliver and execute on this plan. The next steps are simple. We know what to do. We know how to do it. Now it's time to execute and win. Thank you all for coming, and I think we're going to take a quick break and come right back for Q&A. [Break]

All right. Now we're going to start the Q&A session. Before we begin, I just want to hit on a couple of ground rules. We're going to ask everybody to limit themselves to one primary question and 1 follow-up, just to keep things efficient and make sure that everyone gets their questions in. We will also have microphones passed around, and we ask that you please state your name and firm when we point on you for each individual questions. With that, we will now begin Q&A.

Rick Wise, Stifel. I'm going to ask Katie the first question and my follow-up for Micah. Katie, it sounds a little naive to say, hey, you're 11 months in, what have you like so far. Okay. You're going to love all the people. They're great. But seriously, people, systems, R&D, is it -- what's better than you might have imagined. But the real meat of my question is what still needs to change? You must have a much clearer, deeper, more nuanced understanding of what you'd like to see happen and change from here. If you could just address that.

So thank you. So I'd say, first of all, that what has surprised me in a positive way at Masimo has been just the culture and that dedication to innovation and people with the Masimo will do anything to meet a goal or to meet a patient need. I mean it's really, really amazing. I'll give you an example, like you drive out of the parking lot at 6:30 at night, and there's -- it's full. And I'm always like, "Wow, people are just always dedicated to getting -- meeting goals and targets here, and that's amazing. And you don't see that in a lot of companies. And also, we're all 100% here. We're not virtual. There's not like work 3 days a week and 2 days from home. I mean we have been here since right after the pandemic, we have been here practically the next day. And so that's amazing. I really love that part about Masimo. I think probably the challenge for us going forward is investing in and continuing to build the infrastructure and the data. So foundational infrastructure and data because we've moved so fast and grown so fast as a company, we've still got some work to do there. And I think that's probably the 1 area that I would say that is I think we can fund the investment in infrastructure within the guidelines that we put out here. But I think if you would ask me one thing I wish we had more of, it would be kind of data and foundational infrastructure and systems. And I think that's something we're working on to build over time.

Sure. And Micah, just as my follow-up, you gave us a very clear 3-year perspective and sort of amazing '28 EPS. I like that, well above my number anyway. But you didn't say that much about 2026. Can you help us think through 2016? Obviously, you do have the extra week, consensus is sort of just very roughly speaking, like 6.5% to 7% kind of band for a fixed revenue growth, are we thinking about the right way? Can you help us think through the year and just the flow? What do we -- help us think through '26 so that we can get to '28?

Thanks, Rick. So first of all, I mean, going forward, we plan to provide guidance when we issue our full year and Q4 results. Can you guys hear me? Turn up a little bit. Yes. So going forward, we plan to issue formal guidance when we publish our full year and fourth quarter results. We've talked a lot about on the last earnings call, I mentioned some of the things to think about, and it seems like -- the Street has absorbed that information. But we have an extra week this year. That's one point of our revenue. Tariffs will annualize next year. We've laid out the math there in our -- and some of the information we put out there in terms of our earnings deck. When I look at where the Street is right now, there -- for 2026, they're in the range. So -- but we'll provide more of an update and more details as we issue our fourth quarter results Yes.

[ Chris Pasquale Nephron ]. Question for Dr. Cantillion is related to questions for Micah. I was struck by the amount of science you talked about up there, the number of studies going on. I also start by the fact that many of those -- most of those are not Masimo sponsored. And it seems like you guys are on a quest here to try and establish standard of care that often requires really robust evidence given the improvements in profitability the company is making, should some of that be reinvested in taking a more active role sponsoring very large-scale clinical studies to try and move the ball faster down the field? And Micah just on a related note, maybe you can talk about that strategic investments line, 210 basis points kind of coming back, what's in there? What's going into that bucket?

Yes. Thank you for the question. That's a very astute observation. Really, what we're trying to do with our clinical evidence is to weave it into the fabric of clinical practice guidelines. And ultimately, we hope policy decisions pertaining to continuous patient monitoring as the BOSS likes to say go-to-curb, we're making the case for continuous patient monitoring. And that journey, as you called out, is something that is going to require very significant investments in randomized clinical trials. We showed you 1 that we had published this year. Dr. Sessler talked about is constant study, which is a major elevation, a little of evidence for continuous patient monitoring. And we believe that we'll continue to invest in multicenter sponsored studies to support that case across that continuum of care in the hospital.

Is that you've got to have -- we need a significant multicenter study to show because we've got a lot of single centers that are publishing like continuous monitoring helps and helps, right? But if we can get a multicenter study done, the one thing as you think about the size and scale of an investment in a study in our space, because it's done kind of while you're in the hospital, the expense is very different. For example, if you're doing a valve trial that might take 5 to 10 years, $50 million. These trials can be pretty quick because it's while the patients are in the hospital. -- and then you can accumulate that data. So the studies will get done faster and they're generally a little bit less expensive because of the speed of the trials, and you don't need a lot of long downstream follow-up. So we always say, like, you can get an anesthesia study done, call it, in a 1- to 2-year window. So what we plan to do as we go through this next year is work on developing a study protocol for a multicenter study and then start to execute that study the following year, say, in '27 and then trying to see the results, as you would think, towards mid-;28, So we're thinking -- and we think the price tag of those trials is within the guidance that we have.

And to answer your second question, Chris, in terms of the investments. So when you look at the strategic investments that we put -- that I put in that slide, really, I can kind of walk you through some of the key elements. So commercial investment, we are investing in adding key sales additions in key territories to drive growth. And we talked about those opportunities that are outside the U.S. to really bring up and expand our share with Pulseox. We're also making key investments in the marketing team to build out our launch excellence. We don't want to dribble out products and just push them out and see them fell. We want to make sure that we're putting as much force behind those launches as possible. And we've got a great team that we're building on. So that's some of the investment as well, building out that team. The other investments are clinical studies. We have set aside investment for that. important for us. We believe that it's got to be clinically data-driven. We want to see real-world studies. -- and that's important to us. And that's going to be important as we launch these new products and provide evidence of how strong they are and how successful they are. And then, of course, infrastructure. We're continuously trying to improve our data infrastructure, get the right tools in our sales operations team's hands so they can really get after and drive commercial excellence across the globe. So those are some of the key investments there.

The only thing I was going to add to that 1 is also kind of we see R&D staying at that stable rate over time. So it will grow with revenue. And we're also seeing that we'll be investing in certain categories like AI, data, AI capabilities within the R&D organization. So we'll still be continuously investing on a proportion basis there, too. .

Matt Taylor from Jefferies. I have a couple of questions. Mike, if you could tell us exactly where in the range consensus is, that would be a good start for '26, but...

We'll tell you that in February.

My real questions are 2 things. One is I wanted to ask about the $28 goal to $8, and -- the Street's at around 70 -- where do you see the biggest disconnects between the street bottle and what you're thinking? Is it the revenue growth at just over 7% for consensus or gross margins? And what's the biggest delta between the $730 and the $8 you're projecting?

Got it. Yes, I think from what I see is I think it's really focus around it as far as the revenue growth through the plan. With the new products we're launching, I think that's going to accelerate growth as we exit 2026 and start to see some of these initiatives mature. -- that I mentioned before. I think it's the operating margin improvement. I think we expect to get to 30% operating margins. It seems like the Street consensus numbers are a little below that. And I think, too, the benefits from capital deployment, I mean, we're driving hard to generate cash flow and become more -- even more efficient. And I think those benefits are going to pay dividends to shareholders because I shouldn't say dividends. We're not going to give dividends. We are trying to drive growth. So I think it's going to drive high returns, and that's going to benefit and help amplify earnings as well.

I just ask 1 follow-up. You talked about a lot of new parameters, new products. Is there 1 or 2 that you would highlight that you're most excited about? And can you talk about the potential to get pricing with some of these upgrades?

I can do that okay with you, Mike. Yes that strategic Advisory Board, I referenced earlier, we had an SAB meeting, it's a data point, but it's an important one in not too long ago in Texas. And we had them -- we laid out the portfolio for them. And we had the vote with monopoly money. So they had $100 each, they can put it all in one or spread it out across the portfolio. And the AFib algorithm was by far the strongest driver of interest as it relates to the totality of the products we put from probably a bit influenced by Dr. [ C's ] presentation of it. So you have to mitigate the math a little, but there's a tremendous amount of interest given the patient burden.

I was going to say you could summarize it that if you get these new sensors, which the competition is not developing disease-based sensor algorithms, so ORD or Afib. So it's really strong against the competition. So I think we think that's a big advantage. And second, just that there's a big clinical need. So these new sensors are going to matter as they roll out and they get on each of the OEM devices over time. And then the second thing is the installed base refresh is also a really great opportunity for us. It would probably be those 2 just broad categories.

Thanks for hosting the Analyst Day today. Travis Steed, Bank of America. First of all, I want to kind of push on the revenue like you've been doing $120 million, $130 million of growth per year. And basically assuming you get to $160 million, $170 million, accelerating revenue dollar growth kind of $40 million, $50 million I want to kind of push on that a little bit, try to get us confidence in some of that acceleration in the LRP. And I also understand your guidance philosophy, is this kind of a base case? Or is it setting up for a beat-and-raise story going forward? [This call length has exceeded streaming capabilities - Please refer to the preliminary transcript that will be posted shortly.]