Masimo : Q1 2021 Supplemental Presentation to Earnings Press Release

First Quarter 2021

Improving Patient Outcomes
Reducing the Cost of Care®	Earnings Presentation | April 26, 2021

FORWARD-LOOKING STATEMENTS

These presentations contain forward-looking statements within the meaning of federal securities laws, including, among others, statements about our expectations, plans, strategies or prospects. We generally use the words "may," "will," "expect," "believe," "anticipate," "plan," "estimate," "project," "assume," "guide," "target," "forecast," "see," "seek," "can," "should," "could," "would," "intend" "predict," "potential," "strategy," "is confident that," "future," "opportunity," "work toward," and similar expressions to identify forward-looking statements. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements speak only as of the date they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of these presentations are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in these presentations. The risks and uncertainties that may cause actual results to differ materially from Masimo's current expectations are more fully described in Masimo's reports filed with the U.S. Securities and Exchange Commission (SEC), including our most recent Form 10-K and Form 10-Q. Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, www.masimo.com or upon request.

NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measures presented exclude certain items that are more fully described in the Appendix. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results. Furthermore, management also believes that these items are not indicative of the Company's on-going core operating performance. These non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Company's business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies. The Company has presented the following non-GAAP measures to assist investors in understanding the Company's core net operating results on an on-going basis: (i) constant currency product revenue growth %, (ii) non-GAAP gross profit/margin %, (iii) non-GAAP SG&A expense, (iv) non-GAAP R&D expense, (v) non- GAAP litigation settlement, award and/or defense costs, (vi) non-GAAP operating expense %, (vii) non-GAAP operating income/margin %, (viii) non-GAAP earnings per diluted share and (ix) adjusted free cash flow. These non-GAAP financial measures may also assist investors in making comparisons of the company's core operating results with those of other companies. Management believes constant currency product revenue growth, non-GAAP gross profit/margin, non-GAAP SG&A expense %, non-GAAP R&D expense %, non-GAAP litigation settlement, award and/or defense costs, non-GAAP operating expense %, non-GAAP operating income/margin, non-GAAP net income, non-GAAP net income per diluted share, and adjusted free cash flow are important measures in the evaluation of the Company's performance and uses these measures to better understand and evaluate our business. For additional financial details, including GAAP to non-GAAP reconciliations, please visit the Investor Relations section of the Company's website at www.masimo.com to access Supplementary Financial Information.

First Quarter 2021 Highlights

Revenue	 Product revenue increased 10.9% to $299.0 million, or 9.5% on a constant currency basis(1)
Shipments	 Shipments of noninvasive technology boards and monitors were 66,000
Profitability	 GAAP operating margin was 22.0%
 Non-GAAP operating margin(1) was 22.9%
EPS	 GAAP EPS was $0.92 per diluted share
 Non-GAAP EPS(1) was $0.90 per diluted share
	 Operating cash flow was $59.3 million
Cash	 Adjusted free cash flow(1) was $50.4 million
	 Cash and cash equivalents balance was $552.0 million

1. Non-GAAPmeasures shown have been adjusted for certain items that are fully described in the Appendix. Please visit the Investor Relations section of the Company's website at www.masimo.comto access additional information related to our Non-GAAP adjustments and Supplementary Financial Information.

First Quarter 2021 Results - GAAP(1)

(in millions; except % and EPS)		Q1 2021		Q1 2020		vs. Prior Year
Revenue		$299.0	$269.6	10.9%
Gross Margin		65.8%	68.8%		(300 bps)
SG&A Expense		32.3%	33.1%		(80 bps)
R&D Expense		11.5%	10.1%		140 bps
Operating Expenses		43.9%	43.3%		60 bps
Operating Margin		22.0%	25.6%		(360 bps)
Tax Rate		17.8%	10.9%		690 bps
GAAP EPS		$0.92	$1.12	(17.9%)

Comments

Tough YoY comparison to Q1 2020 growth rate of ~17%

2-year compound annual growth rate (CAGR) of ~14% vs. Q1 2019

Gross margin decreased due to a higher-than-usual proportion of revenue last year coming from our adhesive sensors related to stocking for COVID preparedness, with sensors having higher margins than our other products. Also, we are still incurring COVID-related expenses that weren't fully present a year ago.

Higher operating expenses as a percentage of revenue driven by continued investments in R&D, increased legal costs, and incremental expenses related to the LiDCO business, partially offset by increased operational efficiencies

GAAP tax rate includes excess tax benefits from stock-based compensation, which were

$4.3M in Q1 2021 compared to $9.6M in Q1 2020

1. May not foot due to rounding.