September 26, 2022

Dear Fellow Stockholders:

I would like to invite you to Masimo’s Investor Day on December 13, 2022.  I hope you will take the time from your busy schedules to attend, because I want to further explain our vision. We will detail how we intend to continue to grow Masimo’s revenue and earnings by using our core competencies to build upon our proven history of creating market leading, lifesaving technologies as we expand not only in the professional healthcare market, but also in the consumer health market.

As many of you know, I started Masimo in my condominium back in 1989 with an idea for solving the noise artifact problems plaguing pulse oximetry.  In 1996, we introduced Masimo SET pulse oximetry, the first and only technology to monitor patients reliably and accurately even during motion and a weak pulse.  At the time, we were a small startup company trying to take on a large competitor with 90% market share.  Many potential investors were skeptical about our chances.  Today, we are the leading pulse oximetry company in hospitals, monitoring more than 200 million patients a year.

I am reminded now that despite the many challenges on Masimo’s path to become the market leader, we got here by focusing on our guiding principles, which include “Do what is best for patient care.”  For example, in 1994, we had an opportunity to sell our technology to our much larger competitor.  At the time, it seemed like more money than anyone believed our little company could hope to make.  We strongly considered taking the offer, selling our unique technology and skillset to the dominant company that supposedly knew better how to serve the healthcare industry.  After all, we were just engineers who grew our technology out of a garage.  What did we know about selling a product to hospitals, especially when our competitor had created seemingly insurmountable barriers that no one thought we could overcome?

Obviously, we chose not to take the offer.   Why?  Because we knew we had a life-saving technology that far surpassed anything on the market, and this company refused to commit to delivering it to hospitals in a timely manner.  They were not focused on the importance of the people who would be affected by what we had created.

By staying focused on how our technology could serve patients, we improved patient’ lives.   We helped eliminate neonatal blindness due to retinopathy of prematurity, helped prevent families from experiencing the horror of their newborn dying at home from an undiagnosed critical congenital heart defect, helped save patients’ lives from opioid overdose in the post-surgical wards, and saved COVID patients by remotely monitoring them and so they could get the right care when they needed it.

Through all of these efforts, Masimo has built a strong and growing business in hospitals and clinics.  In addition, by passionately focusing on creating innovative technologies and delivering them to patients, Masimo has rewarded its shareholders, with some increasing the value of their investments more than 1000-fold.  Since our initial public offering in August of 2007, Masimo’s stock price has significantly outperformed the S&P 500 index, the Nasdaq Composite index, and the U.S. Medical Devices ETF over the same period.  Our hospital customers now consistently encourage us to bring our core technologies to telehealth and telemonitoring.  As we consider our future, we believe this customer demand, combined with our innovative technologies, naturally lead to a large additional opportunity for Masimo in consumer health.  While the consumer health market is just emerging, evidence shows patients do better at home if they have access to the right technologies that help them get the right care when they need it. 

The consumer health market today is primarily defined by smart watches that purport to monitor various physiological parameters. The makers of these devices are mostly consumer technology companies, not medical technology companies.  They do not have the perspective or technology to address the real needs of the people wearing their devices.   We do.

As such, we believe Masimo is perfectly positioned to impact this growing market segment and to provide the necessary technology, just as we are doing in the hospital market.   We believe we can grow even faster by empowering everyday people through our core technology to live healthier and better lives, both in the hospital and in the home.

I view the launch of the W1 and other soon to be announced products much like I did the launch of Masimo SET pulse oximetry back in 1996.  At the time, our main competitor was orders of magnitude larger and had an even greater market share than the main competitor we face in consumer health today.   

As we look to the future, I have the same excitement as when I started Masimo.  While I am sure there will be many hurdles, we are as committed as ever, and our track record suggests we will succeed. 

I look forward to seeing you on December 13.

Sincerely, 

Joe Kiani

Chairman and CEO

Special Note Regarding Forward-Looking Information

This letter contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or are proven to be incorrect, could cause our results to differ materially and adversely from those expressed or implied by such forward-looking statements. These statements are often identified by the use of words such as “believe”, “continue”, “could”, “estimate”, “opportunity”, “potential” “will” or “would”, and similar expressions and variations or negatives of these words and include, among others, statements regarding the consumer health and home healthcare markets and prospects, our opportunities in these markets, the ability of Sound United to accelerate our expansion into new areas and our vision and strategy. These forward-looking statements are based on the expectations, estimates, projections, beliefs and assumptions of our management based on information currently available to management, all of which is subject to change. Such forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and could cause our actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” sections of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Furthermore, such forward-looking statements speak only as of the date of this letter. We make no representation as to the accuracy or completeness of the forward-looking statements and undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of this letter for any reason, except as required by law.