Document

Exhibit 99.1

Masimo Reports Second Quarter 2020 Financial Results

Q2 2020 Highlights



	■		Product revenue increased 31.1% to $301.0 million, or 32.0% on a constant currency basis;
	■		GAAP net income per diluted share was $0.96;
	■		Non-GAAP net income per diluted share was $0.85; and
	■		Shipments of noninvasive technology boards and instruments were a record 165,600.

Irvine, California, July 28, 2020 - Masimo (Nasdaq: MASI) today announced its financial results for the second quarter ended June 27, 2020.

Second Quarter 2020 Results:

Total revenue, including royalty and other revenue, increased 31.0% to $301.0 million, compared to $229.7 million in the second quarter of 2019. Product revenue increased 31.1% to $301.0 million, or 32.0% on a constant currency basis, compared to $229.5 million in the second quarter of 2019. Excluding handheld and fingertip pulse oximeters, shipments of noninvasive technology boards and instruments of 165,600 increased 174% in the second quarter of 2020, compared to 60,400 in the second quarter of 2019.

GAAP operating margin for the second quarter 2020 was 20.7% compared to 22.6% in the second quarter of 2019. Second quarter 2020 non-GAAP operating margin was 21.1% compared to 23.1% in the second quarter of 2019.

For the second quarter of 2020, GAAP net income was $55.8 million or $0.96 per diluted share compared to net income of $44.9 million or $0.79 per diluted share in 2019. Non-GAAP net income was $49.3 million or $0.85 per diluted share compared to net income of $43.1 million or $0.76 per diluted share in 2019. Total cash, cash equivalents and short-term investments was $681.9 million as of June 27, 2020.

Consistent with last quarter, the Company is not providing financial guidance due to the many uncertainties still surrounding COVID-19 and its impact on the Company’s normal business patterns.

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said “I am incredibly proud of our team and how we continue to advance our mission to improve patient outcomes while reducing the cost of care, especially during this pandemic. From the beginning of the COVID-19 pandemic, we have done our best to support our customers as they have bravely been on the front lines of the worldwide response. Our unique ability to meet the needs of clinicians was in full view again this quarter as we reliably monitored their patients as only we could with unmatched reliability, accuracy and versatility, and launched multiple new products.”

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Supplementary Non-GAAP Financial Information

For additional non-GAAP financial details, please visit the Investor Relations section of the Company’s website at www.masimo.com to access Supplementary Financial Information.

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 the items described below. 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 net income, (iii) non-GAAP (net income) earnings per diluted share and (iv) non-GAAP operating income/margin. 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 operating income/margin, non-GAAP net income and non-GAAP earnings per diluted share are important measures in the evaluation of the Company’s performance and uses these measures to better understand and evaluate our business.

The non-GAAP financial measures reflect adjustments for the following items, as well as the related income tax effects thereof:

Constant currency adjustments.

Some of our sales agreements with foreign customers provide for payment in currencies other than the U.S. Dollar. These foreign currency revenues, when converted into U.S. Dollars, can vary significantly from period to period depending on the average and quarter-end exchange rates during a respective period. We believe that comparing these foreign currency denominated revenues by holding the exchange rates constant with the prior year period is useful to management and investors in evaluating our product revenue growth rates on a period-to-period basis. We anticipate that fluctuations in foreign exchange rates and the related constant currency adjustments for calculation of our product revenue growth rate will continue to occur in future periods.

Royalty and other revenue, net of related costs.

We derive royalty and other revenue, net of related costs, from certain non-recurring contractual arrangements that we do not expect to continue in the future. We believe the exclusion of royalty and other revenue, net of related costs, associated with these non-recurring revenue streams is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.

Acquisition/Strategic investment-related costs, including depreciation and amortization.

In the event the Company acquires, invests in or divests certain business operations, there may be non-recurring gains, losses or expenses that will be recognized related to the assets and/or liabilities sold or acquired that are not representative of normal on-going cash flows. Furthermore, there may be depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition/strategic investment that does not reflect the normal on-going costs of operating our core business. We believe that exclusion of these gains, losses or costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods.

Litigation damages, awards and settlements.

In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds. We believe that exclusion of these gains (net of any related costs incurred in the period the award or settlement is recognized) and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or are infrequent in nature.

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Realized and unrealized gains or losses from foreign currency transactions.

We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs and other operating expenses. As the Company does not actively hedge these currency exposures, changes in the underlying currency rates relative to the U.S. Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods.

Excess tax benefits from stock-based compensation.

Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees.

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Second Quarter 2020 Actuals versus Second Quarter 2019 Actuals



RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY PRODUCT REVENUE⁽¹⁾:
				Three Months Ended
(in thousands, except percentages)				June 27, 2020			June 29, 2019
GAAP product revenue				$	300,953		$	229,510
Non-GAAP constant currency adjustments:
	Constant currency F/X adjustments			1,997			—
		Total non-GAAP constant currency adjustments		1,997			—
			Non-GAAP constant currency product revenue	$	302,950		$	229,510
Product revenue growth %
	GAAP			31.1		%
	Non-GAAP constant currency			32.0		%

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⁽¹⁾	May not foot due to rounding.



RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE⁽¹⁾:
		Three Months Ended
		June 27, 2020						June 29, 2019
(in thousands, except per share amounts)		$			Per Diluted Share			$			Per Diluted Share
GAAP net income		$	55,772		$	0.96		$	44,888		$	0.79
Non-GAAP adjustments:
	Royalty and other revenue, net of related costs	—			—			(111		)	—
	Acquisition/strategic investment-related costs	1,313			0.02			1,136			0.02
	Litigation settlement	25			—			—			—
	Net realized and unrealized gains from foreign currency transactions	(11		)	—			(7		)	—
	Tax impact of pre-tax non-GAAP adjustments above	(361		)	(0.01		)	(179		)	—
	Excess tax benefits from stock-based compensation	(7,486		)	(0.13		)	(2,608		)	(0.05		)
	Total non-GAAP adjustments	(6,519		)	(0.11		)	(1,768		)	(0.03		)
Non-GAAP net income		$	49,253		$	0.85		$	43,120		$	0.76
Weighted average shares outstanding - diluted					58,204						57,066

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⁽¹⁾	May not foot due to rounding.

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RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN⁽¹⁾:
			Three Months Ended
			June 27, 2020			June 29, 2019
(in thousands, except percentages)			$			$
GAAP operating income/margin			$	62,220		$	52,004
Non-GAAP adjustments:
	Royalty and other revenue, net of related costs		—			(111		)
	Acquisition/strategic investment-related costs		1,313			1,136
	Litigation settlement		25			—
		Total non-GAAP adjustments	1,338			1,025
Non-GAAP operating income/margin			$	63,558		$	53,030
		GAAP operating income/margin %	20.7		%	22.6		%
		Non-GAAP operating income/margin %	21.1		%	23.1		%

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⁽¹⁾	May not foot due to rounding.

Conference Call

Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results. A live webcast of the call will be available online from the investor relations page of the Company’s website at www.masimo.com. The dial-in numbers are (833) 714-0911 for domestic callers and +1 (778) 560-2686 for international callers. The reservation code for both dial-in numbers is 2476277. After the live webcast, the call will be available on Masimo’s website through August 25, 2020. In addition, a telephonic replay of the call will be available through August 11, 2020. The replay dial-in numbers are (800) 585-8367 for domestic callers and +1 (416) 621-4642 for international callers. Please use reservation code 2476277.

About Masimo

Masimo (Nasdaq: MASI) is a global medical technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, patient monitors, and automation and connectivity solutions. Our mission is to improve patient outcomes and reduce the cost of care. Masimo SET^®Measure-through Motion and Low Perfusion^™pulse oximetry, introduced in 1995, has been shown in over 100 independent and objective studies to outperform other pulse oximetry technologies. Masimo SET^®has also been shown to help clinicians reduce severe retinopathy of prematurity in neonates, improve CCHD screening in newborns, and, when used for continuous monitoring with Masimo Patient SafetyNet^™in post-surgical wards, reduce rapid response team activations, ICU transfers, and costs. Masimo SET^®is estimated to be used on more than 200 million patients in leading hospitals and other healthcare settings around the world, and is the primary pulse oximetry at 9 of the top 10 hospitals listed in the 2019-20 U.S. News and World Report Best Hospitals Honor Roll.Masimo continues to refine SET^®and in 2018, announced that SpO₂ accuracy on RD SET^®sensors during conditions of motion has been significantly improved, providing clinicians with even greater confidence that the SpO₂ values they rely on accurately reflect a patient’s physiological status. In 2005, Masimo introduced rainbow^®Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively, including total hemoglobin (SpHb^®), oxygen content (SpOC^™), carboxyhemoglobin (SpCO^®), methemoglobin (SpMet^®), Pleth Variability Index (PVi^®), RPVi^™(rainbow^®PVi), and Oxygen Reserve Index (ORi^™). In 2013, Masimo introduced the Root^®Patient Monitoring and Connectivity Platform, built from the ground up to be as flexible and expandable as possible to facilitate the addition of other Masimo and third-party monitoring technologies; key Masimo additions include Next Generation SedLine^®Brain Function Monitoring, O3^®Regional Oximetry, and ISA^™Capnography with NomoLine^®sampling lines. Masimo’s family of continuous and spot-check monitoring Pulse CO-Oximeters^®includes devices designed for use in a variety of clinical and non-clinical scenarios, including tetherless, wearable technology, such as Radius-7^®and Radius PPG^™, portable devices like Rad-67^™, fingertip pulse oximeters like MightySat^®Rx, and devices available for use both in the hospital and at home, such as Rad-97^™. Masimo hospital automation and connectivity solutions are centered around the Iris^®platform, and include Iris Gateway^™, Patient SafetyNet, Replica^™, Halo ION^™, UniView^™, and Masimo SafetyNet^™. Additional information about Masimo and its products may be found at www.masimo.com. Published clinical studies on Masimo products can be found at www.masimo.com/evidence/featured-studies/feature/.

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Forward-Looking Statements

All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expectations for our long-term outlook; demand for our products; anticipated revenue and earnings growth; our financial condition, results of operations and business generally; expectations regarding our ability to design and deliver innovative new noninvasive technologies and reduce the cost of care; and demand for our technologies. These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to: our dependence on Masimo SET^® and Masimo rainbow SET^™ products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors’ assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; the impact of the COVID-19 pandemic; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

# # #



Investor Contact: Eli Kammerman		Media Contact: Evan Lamb
(949) 297-7077		(949) 396-3376
ekammerman@masimo.com		elamb@masimo.com

Masimo, SET, Signal Extraction Technology, Improving Patient Outcome and Reducing Cost of Care... by Taking Noninvasive Monitoring to New Sites and Applications, rainbow, SpHb, SpOC, SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of Masimo Corporation.

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MASIMO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)

	June 27, 2020			December 28, 2019
ASSETS
Current assets
Cash and cash equivalents	$	631,881		$	567,687
Short-term investments	50,000			120,000
Accounts receivable, net of allowance for doubtful accounts	178,879			132,433
Inventories	155,145			115,871
Other current assets	76,708			60,071
Total current assets	1,092,613			996,062
Lease receivable, noncurrent	52,118			49,936
Deferred costs and other contract assets	18,694			16,214
Property and equipment, net	262,953			219,552
Intangible assets, net	57,352			27,251
Goodwill	78,774			22,350
Deferred tax assets	36,159			35,972
Other non-current assets	36,971			28,791
Total assets	$	1,635,634		$	1,396,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	89,550		$	54,548
Accrued compensation	52,864			54,705
Deferred revenue and other contract liabilities, current	41,459			25,939
Other current liabilities	43,683			37,027
Total current liabilities	227,556			172,219
Other non-current liabilities	63,533			56,035
Total liabilities	291,089			228,254
Commitments and contingencies
Stockholders’ equity
Common stock	55			54
Treasury stock	(527,171		)	(526,580		)
Additional paid-in capital	658,367			600,624
Accumulated other comprehensive loss	(7,867		)	(6,718		)
Retained earnings	1,221,161			1,100,494
Total stockholders’ equity	1,344,545			1,167,874
Total liabilities and stockholders’ equity	$	1,635,634		$	1,396,128

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MASIMO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020			June 29, 2019
Revenue:
Product	$	300,953	$	229,510	$	570,578		$	460,058
Royalty and other revenue	—		142		—			1,258
Total revenue	300,953		229,652		570,578			461,316
Cost of goods sold	109,369		75,313		193,365			155,335
Gross profit	191,584		154,339		377,213			305,981
Operating expenses:
Selling, general and administrative	98,461		78,160		188,338			152,364
Research and development	30,878		24,175		58,119			45,590
Litigation settlements (awards)	25		—		(474		)	—
Total operating expenses	129,364		102,335		245,983			197,954
Operating income	62,220		52,004		131,230			108,027
Non-operating income	1,405		3,529		4,751			7,415
Income before provision for income taxes	63,625		55,533		135,981			115,442
Provision for income taxes	7,853		10,645		15,753			21,232
Net income	$	55,772	$	44,888	$	120,228		$	94,210

Net income per share:
Basic	$	1.02	$	0.84	$	2.21		$	1.77
Diluted	$	0.96	$	0.79	$	2.08		$	1.65

Weighted-average shares used in per share calculations:
Basic	54,764		53,356		54,316			53,283
Diluted	58,204		57,066		57,913			56,940

The following table presents details of the stock-based compensation expense that is included in each functional line item in the condensed consolidated statements of operations (in thousands):



	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Cost of goods sold	$	183	$	132	$	314	$	229
Selling, general and administrative	10,048		8,888		18,778		14,613
Research and development	2,957		2,453		5,368		3,948
Total	$	13,188	$	11,473	$	24,460	$	18,790

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MASIMO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)

	Six Months Ended
	June 27, 2020			June 29, 2019
Cash flows from operating activities:
Net income	$	120,228		$	94,210
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,587			11,641
Stock-based compensation	24,460			18,790
Loss on disposal of property, equipment and intangibles	196			93
(Benefit) provision for doubtful accounts	(170		)	622
Benefit for deferred income taxes	77			21
Changes in operating assets and liabilities:
Increase in accounts receivable	(41,295		)	(11,705		)
Increase in inventories	(37,548		)	(4,159		)
Increase in other current assets	(12,004		)	(7,147		)
Increase in lease receivable, net	(2,183		)	(6,238		)
(Increase) decrease in deferred costs and other contract assets	(2,105		)	8,723
Increase in other non-current assets	(442		)	(177		)
Increase (decrease) in accounts payable	32,798			(2,841		)
Decrease in accrued compensation	(2,025		)	(6,997		)
Increase (decrease) in accrued liabilities	5,876			(2,966		)
Increase in income tax payable	248			2,109
Increase in deferred revenue and other contract-related liabilities	6,920			5,566
(Decrease) increase in other non-current liabilities	(558		)	1,234
Net cash provided by operating activities	106,060			100,779
Cash flows from investing activities:
Maturities (purchases) of short-term investments, net	70,000			(180,000		)
Purchases of property and equipment, net	(51,263		)	(47,323		)
Increase in intangible assets	(4,322		)	(2,019		)
Business combinations, net of cash acquired	(78,310		)	—
Purchases of strategic investments, net	(6,750		)	—
Net cash used in investing activities	(70,645		)	(229,342		)
Cash flows from financing activities:
Proceeds from issuance of common stock	34,629			12,870
Payroll tax withholdings on behalf of employees for vested equity awards	(1,424		)	(123		)
Repurchases of common stock	(591		)	(27,854		)
Net cash provided by (used in) financing activities	32,614			(15,107		)
Effect of foreign currency exchange rates on cash	(847		)	(32		)
Net increase (decrease) in cash, cash equivalents and restricted cash	67,182			(143,702		)
Cash, cash equivalents and restricted cash at beginning of period	568,075			552,641
Cash, cash equivalents and restricted cash at end of period	$	635,257		$	408,939

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Second Quarter 2020 Improving Patient Outcomes Earnings Presentation | July 28, 2020 Reducing the Cost of Care®

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 operating expense %, (vi) non-GAAP operating income/margin %, (vii) non-GAAP earnings per diluted share and (viii) 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 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.

Second Quarter 2020 Highlights  Total revenue, including royalty and other revenue, increased 31.0% to $301.0 million Revenue  Product revenue increased 31.1% to $301.0 million, or 32.0% on a constant currency basis(1) Shipments  Shipments of noninvasive technology boards and instruments were 165,600  GAAP operating margin was 20.7% Profitability  Non-GAAP operating margin(1) was 21.1%  GAAP EPS was $0.96 per diluted share EPS  Non-GAAP EPS(1) was $0.85 per diluted share  Operating cash flow was $63.7 million Cash  Adjusted free cash flow(1) was $49.4 million  Cash and investments balance was $681.9 million (1) Non-GAAP measures 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.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information.

Second Quarter 2020 Results – GAAP(1) (in millions; except % and EPS) Q2 2020 Q2 2019 vs. Prior Year Comments Revenue $301.0 $229.7 31.0% Increased demand driven by higher volumes of technology boards and instruments. Gross margin decrease due to a higher than usual proportion of revenue coming from our Gross Margin 63.7% 67.2% (350) bps technology boards and instruments, which have a lower margin profile than sensors, partially offset by manufacturing cost improvements. SG&A Expense 32.7% 34.0% (130) bps R&D Expense 10.3% 10.5% (20) bps Lower SG&A and R&D spend as a % of revenue driven by strong sales growth, which Operating Expenses 43.0% 44.6% (160) bps enabled operating leverage across the global organization. Operating Margin 20.7% 22.6% (190) bps GAAP tax rate includes excess tax benefits from stock based compensation, which were Tax Rate 12.3% 19.2% (690 bps) $7.5M in Q2 2020 compared to $2.6M in Q2 2019. GAAP EPS $0.96 $0.79 21.5% (1) May not foot due to rounding.

Second Quarter 2020 Results – Non-GAAP(1) vs. Prior Year Constant (in millions; except % and EPS) Q2 2020 Q2 2019 Reported Comments Currency Increased demand driven by higher volumes of technology Revenue $301.0 $229.5 31.1% 32.0% boards and instruments. Gross margin decrease due to a higher than usual proportion of revenue coming from our technology boards and instruments, Gross Margin 63.9% 67.2% (330) bps which have a lower margin profile than sensors, partially offset by manufacturing cost improvements. SG&A Expense 32.5% 33.6% (110) bps R&D Expense 10.3% 10.5% (20) bps Lower SG&A and R&D spend as a % of revenue driven by strong sales growth, which enabled operating leverage across the global Operating Expenses 42.7% 44.1% (140) bps organization. Operating Margin 21.1% 23.1% (200) bps Tax Rate 24.2% 23.8% 40 bps Non-GAAP EPS $0.85 $0.76 11.8% (1) Non-GAAP measures 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.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. May not foot due to rounding.

Second Quarter 2020 Results – Non-GAAP(1) Non-GAAP(1) Non-GAAP(1) Product Revenue Operating Margin EPS $301M 23.1% $0.85 $230M 21.1% $0.76 Constant Currency +32.0%Growth(1) (200) bps +11.8% Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 (1) Non-GAAP measures 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.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information.

Context for 2020 Outlook • Given the uncertainties around the COVID-19 pandemic and its potential impacts on our business, the Company is not providing guidance for 2020. • The potential positive impacts include increased demand for our products from both direct and OEM customers. • The potential negative impacts include potential interruptions in our manufacturing operations and our suppliers’ manufacturing operations, and potential reductions in future demand if there has been overbuying of our products due to the pandemic.

APPENDICES Improving Patient Outcomes GAAP to Non-GAAP Reducing the Cost of Care® Adjustments and Reconciliations

Description of Non-GAAP Adjustments The non-GAAP financial measures reflect adjustments for the following items, as well as the related income tax effects thereof: Constant currency adjustments Some of our sales agreements with foreign customers provide for payment in currencies other than the U.S. Dollar. These foreign currency revenues, when converted into U.S. Dollars, can vary significantly from period to period depending on the average and quarter-end exchange rates during a respective period. We believe that comparing these foreign currency denominated revenues by holding the exchange rates constant with the prior year period is useful to management and investors in evaluating our product revenue growth rates on a period-to-period basis. We anticipate that fluctuations in foreign exchange rates and the related constant currency adjustments for calculation of our product revenue growth rate will continue to occur in future periods. Royalty and other revenue, net of related costs We derive royalty and other revenue, net of related costs, associated with certain non-recurring contractual arrangements that we do not expect to continue in the future. We believe the exclusion of royalty and other revenue, net of related costs, associated with these certain non-recurring revenue streams is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Acquisition/strategic investment-related costs, including depreciation and amortization Depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition/strategic investment rather than ongoing costs of operating our core business. As a result, we believe that exclusion of these costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods. In the event the Company acquires, invests in or divests certain business operations, there may be non-recurring gains, losses or expenses that will be recognized related to the assets and/or liabilities sold or acquired that are not representative of normal on-going cash flows. These gains, losses or expenses are excluded from non-GAAP earnings. Litigation damages, awards and settlements In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds. We believe that exclusion of these gains (netofanyrelatedcosts incurred in the period the award or settlement is recognized) and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or infrequent in nature.

Description of Non-GAAP Adjustments Realized and unrealized gains or losses from foreign currency transactions: We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs and other operating expenses. As the Company does not actively hedge these currency exposures, changes in the underlying currency rates relative to the U.S. Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods. Excess tax benefits from stock-based compensation Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees. Tax impacts that may not be representative of the ongoing results of our core operations The Tax Cuts and Jobs Act of 2017 (2017 Tax Act) was signed into law in December 2017, and became effective January 1, 2018. The 2017 Tax Act included a number of changes to existing U.S. federal tax law impacting businesses including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21%, a one-time transition tax on the “deemed repatriation” of cumulative undistributed foreign earnings as of December 31, 2017 and changes in the prospectivetaxationofthe foreign operations of U.S. multinational companies. From time to time, we may also record tax benefits relating to the de-recognition of uncertain tax positions due to the expiration of the statutes of limitations. During the twelve months ended December 29, 2018, we recorded a significant tax benefit due to the expiration of the applicable statutes of limitations related to certain non-recurring transactions. We believe that exclusion of the tax charges related to the 2017 Tax Act and the tax benefit resulting from the expiration of certain statutes of limitations related to non- recurring transactions is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these tax items are unrelated to our core business and non-recurring in nature. Adjusted Free Cash Flow Represents free cash flow (cash flow from operations less cash used for the purchase of property, plant and equipment) adjusted for the impact of cash receipts or payments relating to certain previously described non-GAAP adjustments, which may impact period over period comparability.

Constant Currency Product Revenue(1),(2) RECONCILIATION OF GAAP PRODUCT REVENUE GROWTH TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH (in thousands, except percentages) Q2 2019 Q2 2020 GAAP product revenue $ 229,510 $ 300,953 Constant currency F/X adjustments 1,997 Constant currency (non-GAAP) product revenue $ 229,510 $302,950 GAAP product revenue growth 31.1% Constant currency (non-GAAP) product revenue growth 32.0% (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding.

Non-GAAP Gross Margin %(1),(2) RECONCILIATION OF GAAP GROSS PROFIT/MARGIN TO NON-GAAP GROSS PROFIT/MARGIN: (in thousands, except percentages) Q2 2019 Q2 2020 GAAP gross profit/margin$ 154,339 $ 191,584 Non-GAAP adjustments: Royalty and other revenue, net of related costs (111) - Acquisition & investment related costs 114 578 Total non-GAAP gross profit/margin adjustments 3 578 Non-GAAP gross profit/margin$ 154,343 $ 192,163 Non-GAAP gross margin % (3) 67.2% 63.9% (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding. (3) Calculated as a percentage of product revenue.

Non-GAAP Operating Expense %(1),(2) RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES: (in thousands, except percentages) Q2 2019 Q2 2020 GAAP selling, general and administrative operating expenses$ 78,160 $ 98,461 Non-GAAP adjustments: Acquisition & investment related costs (1,022) (711) Non-GAAP selling, general and administrative operating expenses $ 77,138 $ 97,750 Non-GAAP selling, general and administrative operating expenses % (3) 33.6% 32.5% GAAP research and development operating expenses$ 24,175 $ 30,878 Non-GAAP adjustments: Acquisition & investment related costs - (24) Non-GAAP research and development operating expenses$ 24,175 $ 30,854 Non-GAAP research and development operating expenses % (3) 10.5% 10.3% GAAP litigation settlement, award and/or defense costs$ - $ 25 Non-GAAP adjustments: Litigation damages, awards and settlements - (25) Non-GAAP litigation settlement, award and/or defense costs$ - $ - GAAP operating expenses$ 102,335 $ 129,364 Non-GAAP adjustments: Acquisition & investment related costs (1,022) (735) Litigation damages, awards and settlements - $ (25) Total non-GAAP operating expense adjustments (1,022) (760) Non-GAAP operating expenses$ 101,312 $ 128,604 Non-GAAP operating expenses % (3) 44.1% 42.7% (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding. (3) Calculated as a percentage of product revenue.

Non-GAAP Operating Margin %(1),(2) RECONCILIATION OF GAAP OPERATING INCOME/MARGIN TO NON-GAAP OPERATING INCOME/MARGIN: (in thousands, except percentages) Q2 2019 Q2 2020 GAAP operating income/margin$ 52,004 $ 62,220 Non-GAAP adjustments: Royalty and other revenue, net of related costs (111) - Acquisition & investment related costs 1,136 1,313 Litigation damages, awards and settlements - 25 Total non-GAAP operating income/margin adjustments 1,025 1,338 Non-GAAP operating income/margin$ 53,030 $ 63,558 Non-GAAP operating income % (3) 23.1% 21.1% (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding. (3) Calculated as a percentage of product revenue.

Non-GAAP Net Income and Diluted EPS(1),(2) RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME: (in thousands, except percentages) Q2 2019 Q2 2020 GAAP net income $ 44,888 $ 55,772 Non-GAAP adjustments: Royalty and other revenue, net of related costs (111) - Acquisition & investment related costs: Cost of goods sold 114 578 Operating expenses 1,022 735 Subtotal - Acquisition & investment related costs 1,136 1,313 Litigation damages, awards and settlements Operating expenses - 25 Non-operating other (income) expense: Realized and unrealized foreign currency gains or losses (7) (11) # Tax impact of non-GAAP net income adjustments (179) (361) 980Excess tax benefits from stock-based compensation (2,608) (7,486) Total non-GAAP net income adjustments (1,768) (6,519) Non-GAAP net income$ 43,120 $ 49,253 Weighted average shares outstanding - diluted 57,066 58,204 Non-GAAP net income per diluted share$ 0.76 $ 0.85 (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding.

Adjusted Free Cash Flow(1),(2) RECONCILIATION OF FREE CASH FLOW TO ADJUSTED FREE CASH FLOW (in thousands, except percentages) Q2 2019 Q2 2020 Net cash provided by operating activities Net cash provided by operating activities$ 58,311 $ 63,712 Purchases of property and equipment, net (40,360) (14,266) Free cash flow 17,951 49,446 Litigation damages, awards and settlements - - Tax payments related to litigation awards and damages - - Adjusted free cash flow $ 17,951 $ 49,446 (1) Please visit the Investor Relations section of the Company’s website at www.masimo.com to access additional information related to our Non-GAAP adjustments and Supplementary Financial Information. (2) Reported amounts may vary from amounts previously reported due to rounding conventions; Note items may not foot due to rounding.

MASIMO CORPORATION SUPPLEMENTAL NON-GAAP INFORMATION (unaudited in thousands, except per share amounts)(1) (2) All statements other than statements of historical facts included in this Supplemental Non-GAAP information that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expectations for full fiscal year GAAP and non-GAAP 2020 total revenue, product revenue, royalty and other revenues, gross profit/margin, selling, general and administrative operating expenses, research and development operating expenses, litigation settlement, award and/or defense costs, operating expenses, operating income/margin, net income, diluted earnings per share, non-operating income, provision for income taxes, adjusted free cash flow; our long-term outlook; demand for our products; anticipated revenue and earnings growth; our financial condition, results of operations and business generally; expectations regarding our ability to design and deliver innovative new noninvasive technologies and reduce the cost of care; and demand for our technologies. These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to: our dependence on Masimo SET ® and Masimo rainbow SET™ products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors’ assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. For additional information related to the definitions of our Non-GAAP measures, please visit the Investor Relations section of the Company's website at www.masimo.com. Page 1

MASIMO CORPORATION SUPPLEMENTAL NON-GAAP INFORMATION (unaudited in thousands, except per share amounts)(1) (2) GAAP TOTAL REVENUE FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP revenue Product revenue$ 738,242 $ 204,389 $ 202,004 $ 202,068 $ 221,413 $ 829,874 $ 230,548 $ 229,510 $ 228,916 $ 247,434 $ 936,408 $ 269,625 $ 300,953 Royalty and other revenue 52,006 8,564 9,617 8,515 1,719 28,415 1,116 142 95 76 1,429 - - GAAP total revenue $ 790,248 $ 212,953 $ 211,621 $ 210,583 $ 223,132 $ 858,289 $ 231,664 $ 229,652 $ 229,011 $ 247,510 $ 937,837 $ 269,625 $ 300,953 RECONCILIATION OF GAAP GROSS PROFIT/MARGIN TO NON-GAAP GROSS PROFIT/MARGIN: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP gross profit/margin$ 522,032 $ 143,661 $ 142,147 $ 140,753 $ 148,331 $ 574,892 $ 151,642 $ 154,339 $ 156,268 $ 166,923 $ 629,172 $ 185,629 $ 191,584 Non-GAAP adjustments: Royalty and other revenue, net of related costs (48,384) (8,390) (9,415) (8,364) (1,535) (27,704) (1,048) (111) (57) (45) (1,262) - - Acquisition & investment related costs 500 114 114 114 114 458 114 114 114 167 511 373 578 Total non-GAAP gross profit/margin adjustments (47,884) (8,275) (9,300) (8,250) (1,421) (27,246) (934) 3 57 122 (751) 373 578 Non-GAAP gross profit/margin $ 474,147 $ 135,386 $ 132,847 $ 132,503 $ 146,910 2 $ 547,645 $ 150,708 $ 154,343 $ 156,325 $ 167,046 $ 628,421 $ 186,001 $ 192,163 Non-GAAP gross margin % (3) 64.2% 66.2% 65.8% 65.6% 66.4% 66.0% 65.4% 67.2% 68.3% 67.5% 67.1% 69.0% 63.9% RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP selling, general and administrative operating expenses$ 273,011 $ 70,217 $ 70,450 $ 71,037 $ 73,713 $ 285,417 $ 74,204 $ 78,160 $ 80,354 $ 81,943 $ 314,661 $ 89,877 $ 98,461 Non-GAAP adjustments: Acquisition & investment related costs (1,097) (246) (246) (246) (246) (984) (246) (1,022) (983) (1,968) (4,218) (2,049) (711) Non-GAAP selling, general and administrative operating expenses$ 271,915 $ 69,971 $ 70,203 $ 70,791 $ 73,467 $ 284,433 $ 73,958 $ 77,138 $ 79,371 $ 79,976 $ 310,443 $ 87,828 $ 97,750 Non-GAAP selling, general, and administrative operating expenses % (3) 36.8% 34.2% 34.8% 35.0% 33.2% 34.3% 32.1% 33.6% 34.7% 32.3% 33.2% 32.6% 32.5% GAAP research and development operating expenses$ 65,234 $ 19,559 $ 20,085 $ 20,575 $ 20,788 $ 81,006 $ 21,415 $ 24,175 $ 24,282 $ 23,423 $ 93,295 $ 27,241 $ 30,878 Non-GAAP adjustments: Acquisition & investment related costs - - - - - - - - - - - (25) (24) Non-GAAP research and development operating expenses$ 65,233 $ 19,559 $ 20,085 $ 20,575 $ 20,788 $ 81,006 $ 21,415 $ 24,175 $ 24,282 $ 23,423 $ 93,295 $ 27,215 $ 30,854 Non-GAAP research and development operating expenses % (3) 8.8% 9.6% 9.9% 10.2% 9.4% 9.8% 9.3% 10.5% 10.6% 9.5% 10.0% 10.1% 10.3% GAAP litigation settlement, award and/or defense costs$ - $ - $ - $ 500 $ (75) $ 425 $ - $ - $ - $ - $ - $ (499) $ 25 Non-GAAP adjustments: Litigation damages, awards and settlements - - - (500) 75 (425) - - - - - 499 (25) Non-GAAP litigation settlement, award and/or defense costs$ - $ - $ - $ - $ - $ - 4 $ - $ - $ - $ - $ - 4 $ - $ - GAAP operating expenses $ 338,245 $ 89,776 $ 90,535 $ 92,112 $ 94,425 $ 366,848 $ 95,619 $ 102,335 $ 104,636 - $ 105,366 - $ 407,956 $ 116,619 $ 129,364 Non-GAAP adjustments: Acquisition & investment related costs (1,097) (246) (246) (246) (246) (984) (246) (1,022) (983) (1,968) (4,218) (2,075) (735) Litigation damages, awards and settlements - - - (500) 75 (425) - - - - - 499 (25) Total non-GAAP operating expense adjustments (1,097) (246) (246) (746) (171) (1,409) (246) (1,022) (983) (1,968) (4,218) (1,576) (760) Non-GAAP operating expenses$ 337,149 $ 89,530 $ 90,288 $ 91,366 $ 94,255 $ 365,439 $ 95,374 $ 101,312 $ 103,653 $ 103,398 $ 403,738 $ 115,043 $ 128,604 Non-GAAP operating expenses % (3) 45.7% 43.8% 44.7% 45.2% 42.6% 44.0% 41.4% 44.1% 45.3% 41.8% 43.1% 42.7% 42.7% Page 2

MASIMO CORPORATION SUPPLEMENTAL NON-GAAP INFORMATION (unaudited in thousands, except per share amounts)(1) (2) RECONCILIATION OF GAAP OPERATING INCOME/MARGIN TO NON-GAAP OPERATING INCOME/MARGIN: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP operating income/margin$ 183,787 $ 53,885 $ 51,612 $ 48,641 $ 53,906 $ 208,044 $ 56,023 $ 52,004 $ 51,632 $ 61,557 $ 221,216 $ 69,010 $ 62,220 Non-GAAP adjustments: Royalty and other revenue, net of related costs (48,384) (8,390) (9,415) (8,364) (1,535) (27,704) (1,048) (111) (57) (45) (1,262) - - Acquisition & investment related costs 1,597 361 361 361 361 1,442 361 1,136 1,098 2,135 4,729 2,447 1,313 Litigation damages, awards and settlements - - - 500 (75) 425 - - - - - (499) 25 Total non-GAAP operating income/margin adjustments (46,787) (8,029) (9,054) (7,504) (1,250) (25,837) (688) 1,025 1,040 2,090 3,467 1,948 1,338 Non-GAAP operating income/margin $ 136,999 $ 45,856 $ 42,559 $ 41,136 $ 52,655 $ 182,206 $ 55,334 $ 53,030 $ 52,671 $ 63,647 $ 224,683 $ 70,958 $ 63,558 Non-GAAP operating income % (3) 18.6% 22.4% 21.1% 20.4% 23.8% 22.0% 24.0% 23.1% 23.0% 25.7% 24.0% 26.3% 21.1% RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP net income$ 124,789 $ 45,630 $ 43,853 $ 57,126 $ 46,934 $ 193,543 $ 49,322 $ 44,888 $ 49,085 $ 52,921 $ 196,216 $ 64,456 $ 55,772 Non-GAAP adjustments: Royalty and other revenue, net of related costs (48,384) (8,390) (9,415) (8,364) (1,535) (27,704) (1,048) (111) (57) (45) (1,262) - - Acquisition & investment related costs: Cost of goods sold 500 114 114 114 114 458 114 114 114 167 511 373 578 Operating expenses 1,097 246 246 246 246 984 246 1,022 983 1,968 4,218 2,075 735 Subtotal - Acquisition & investment related costs 1,597 361 361 361 361 1,442 361 1,136 1,098 2,135 4,729 2,447 1,313 Litigation damages, awards and settlements Operating expenses - - - 500 (75) 425 - - - - - (499) 25 Non-operating other (income) expense: Realized and unrealized foreign currency gains or losses 270 (1,113) 566 1,311 1,263 2,027 (534) (7) 856 312 627 (588) (11) ## Tax impact of non-GAAP net income adjustments 16,100 2,101 2,344 1,599 (513) 5,532 359 (179) (303) (566) (689) (318) (361) Expiration of certain statues of limitation related to unique and non-recurring tax positions - - - (4,169) - (4,169) - - - - - - - 9800Excess tax benefits from stock-based compensation (39,242) (3,148) (3,947) (14,647) (294) (22,036) (3,432) (2,608) (7,020) (2,631) (15,692) (9,609) (7,486) 2017 U.S. Tax Reform 41,392 16 - (16) (675) (675) - - - - - - - Total non-GAAP net income adjustments (28,267) (10,173) (10,091) (23,425) (1,468) (45,157) (4,294) (1,768) (5,427) (796) (12,286) (8,568) (6,519) Non-GAAP net income $ 96,520 $ 35,457 $ 33,763 $ 33,701 $ 45,465 $ 148,385 $ 45,027 $ 43,120 $ 43,657 $ 52,126 $ 183,930 $ 55,889 $ 49,253 Page 3

MASIMO CORPORATION SUPPLEMENTAL NON-GAAP INFORMATION (unaudited in thousands, except per share amounts)(1) (2) RECONCILIATION OF GAAP NET INCOME PER DILUTED SHARE TO NON-GAAP NET INCOME PER DILUTED SHARE: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP net income per diluted share $ 2.23 $ 0.82 $ 0.79 $ 1.02 $ 0.83 $ 3.45 $ 0.87 $ 0.79 $ 0.86 $ 0.92 $ 3.44 $ 1.12 $ 0.96 Non-GAAP adjustments: Royalty and other revenue, net of related costs (0.87) (0.15) (0.17) (0.15) (0.03) (0.49) (0.02) (0.00) (0.00) (0.00) (0.02) - - Acquisition & investment related costs 0.03 0.01 0.01 0.01 0.01 0.03 0.01 0.02 0.02 0.04 0.08 0.04 0.02 Litigation damages, awards and settlements - - - 0.01 (0.00) 0.01 - - - - - (0.01) 0.00 Realized and unrealized foreign currency gains or losses 0.00 (0.02) 0.01 0.02 0.02 0.04 (0.01) (0.00) 0.01 0.01 0.01 (0.01) (0.00) Tax impact of non-GAAP net income adjustments 0.29 0.04 0.04 0.03 (0.01) 0.10 0.01 (0.00) (0.01) (0.01) (0.01) (0.01) (0.01) Expiration of certain statues of limitation related to unique and non-recurring tax positions - - - (0.07) - (0.07) - - - - - - - 9800Excess tax benefits from stock-based compensation (0.70) (0.06) (0.07) (0.26) (0.01) (0.39) (0.06) (0.05) (0.12) (0.05) (0.27) (0.17) (0.13) 2017 U.S. Tax Reform 0.74 0.00 - (0.00) (0.01) (0.01) - - - - - - - Total non-GAAP net income per diluted share adjustments (0.51) (0.18) (0.18) (0.42) (0.03) (0.81) (0.08) (0.03) (0.09) (0.01) (0.22) (0.15) (0.11) Non-GAAP net income per diluted share$ 1.73 $ 0.64 $ 0.61 $ 0.60 $ 0.81 $ 2.65 $ 0.79 $ 0.76 $ 0.76 $ 0.91 $ 3.22 $ 0.97 $ 0.85 Weighted average shares outstanding - diluted 55,874 55,495 55,742 56,237 56,449 56,039 56,799 57,066 57,262 57,267 57,100 57,585 58,204 RECONCILIATION OF GAAP NON-OPERATING INCOME (EXPENSE) TO NON-GAAP NON-OPERATING INCOME (EXPENSE): FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP Non-operating income (expense)$ 2,013 $ 1,647 $ 1,405 $ 1,028 $ 1,652 $ 5,732 $ 3,886 $ 3,529 $ 2,723 $ 2,812 $ 12,950 $ 3,346 $ 1,405 Non-GAAP adjustments: Realized and unrealized foreign currency gains or losses 270 (1,113) 566 1,311 1,263 2,027 (534) (7) 856 312 627 (588) (11) Non-GAAP non-operating income (expense) $ 2,283 $ 535 $ 1,970 $ 2,340 $ 2,915 $ 7,760 $ 3,351 $ 3,522 $ 3,579 $ 3,124 $ 13,577 $ 2,758 $ 1,394 RECONCILIATION OF GAAP PROVISION FOR INCOME TAXES TO NON-GAAP PROVISION FOR INCOME TAXES: FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 GAAP provision for income taxes$ 61,011 $ 9,902 $ 9,164 $ (7,457) $ 8,624 $ 20,233 $ 10,587 $ 10,645 $ 5,270 $ 11,448 $ 37,950 $ 7,900 $ 7,853 Non-GAAP adjustments: Excess tax benefits from stock-based compensation 39,242 3,148 3,947 14,647 294 22,036 3,432 2,608 7,020 2,631 15,692 9,609 7,486 Tax impact of pre-tax non-GAAP adjustments (16,100) (2,101) (2,344) (1,599) 513 (5,532) (359) 179 303 566 689 318 361 Expiration of certain statues of limitation related to unique and non-recurring tax positions - - - 4,169 - 4,169 - - - - - - - 2017 U.S. Tax Reform (41,392) (16) - 16 675 675 - - - - - - - Total non-GAAP provision for income tax adjustments (18,250) 1,031 1,602 17,233 1,482 21,348 3,072 2,787 7,324 3,198 16,381 9,928 7,846 Non-GAAP provision for income taxes $ 42,761 $ 10,934 $ 10,766 $ 9,775 $ 10,105 $ 41,580 $ 13,659 $ 13,433 $ 12,593 $ 14,646 $ 54,331 $ 17,828 $ 15,699 Page 4

MASIMO CORPORATION SUPPLEMENTAL NON-GAAP INFORMATION (unaudited in thousands, except per share amounts)(1) (2) RECONCILIATION OF FREE CASH FLOW TO ADJUSTED FREE CASH FLOW FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Net cash provided by operating activities Net cash provided by operating activities$ 56,062 $ 71,995 $ 55,904 $ 48,406 $ 63,222 $ 239,527 $ 42,468 $ 58,311 $ 50,637 $ 70,224 $ 221,640 $ 42,355 $ 63,712 Purchases of property and equipment, net (43,684) (3,788) (5,642) (2,869) (4,827) (17,126) (6,963) (40,360) (8,741) (12,311) (68,375) (37,004) (14,266) Free cash flow 12,378 68,207 50,262 45,537 58,395 222,401 35,505 17,951 41,896 57,913 153,265 5,351 49,446 Litigation damages, awards and settlements - - - - - - - - - - - (499) - Tax payments related to litigation awards and damages 74,201 - - - - - - - - - - - - Adjusted free cash flow $ 86,579 $ 68,207 $ 50,262 $ 45,537 $ 58,395 $ 222,401 $ 35,505 $ 17,951 $ 41,896 $ 57,913 $ 153,265 $ 4,852 $ 49,446 (1) Totals may not foot due to rounding (2) Quarterly reported amounts may vary from amounts previously reported due to rounding conventions. (3) Calculated as a percentage of Product Revenue Page 5



DE				001-33642		33-0368882
(State or other jurisdiction of incorporation)				(Commission File Number)		(IRS Employer Identification No.)
52 Discovery	Irvine	,	CA			92618
(Address of Principal Executive Offices)						(Zip Code)
				(949)	297-7000
Registrant’s telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Securities Registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	MASI	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company			☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐



Exhibit No.	Description
99.1	Press Release, Dated July 28, 2020, Reporting Second Quarter 2020 Financial Results
99.2	Masimo Second Quarter 2020 Supplemental Presentation to Earnings Press Release
99.3	Masimo Supplemental Non-GAAP Financial Information
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)



	MASIMO CORPORATION

Date: July 28, 2020	By:	/s/ MICAH YOUNG
		Micah Young
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

Document and Entity Information Document	Jul. 28, 2020
Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Jul. 28, 2020
Entity Registrant Name	MASIMO CORP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-33642
Entity Tax Identification Number	33-0368882
Entity Address, Address Line One	52 Discovery
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92618
City Area Code	(949)
Local Phone Number	297-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	MASI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000937556
Amendment Flag	false



Item 2.02.	Results of Operations and Financial Condition.



Item 7.01.	Regulation FD Disclosure.



Item 9.01.	Financial Statements and Exhibits.