Hi, everyone. Good afternoon, and thanks for coming. My name is Cameron DeBeer, and I'm on the Healthcare Investment Banking team here. And it is my pleasure to announce our latest speaker, Joe Kiani, CEO of Masimo. And I would also note that the breakout room will be in the Yorkshire room after the presentation.
Thank you.
Thank you very much. Thank you all for being here. Looks like either you're not informed that Bill Gates is giving a talk now or not a fan of Microsoft. I don't know, but I'm glad you're here. Let me get started. I think you know the forward-looking statements. And so our agenda today, I'm going to try to walk you through it as quickly as I can, is the Masimo story, who we are, and what we have evolved to, the execution of our initial ten-year plan, which is pretty hard to do as a public company, but I think we did it, and future outlook. How do we see our future role in innovation and delivering shareholder value? So the Masimo story is that we've now grown to a company with over $700 million in revenue. We're in over 140 countries. We have over 4,500 employees.
Over 100 million people are monitored with our technology every year. And in the non-invasive world, we're, if not one of the biggest, the biggest innovators. And we are a leader in pulse oximetry. 17 out of the top 20 hospitals in the country, rated by U.S. News & World Report, are fully using our technology. When I think about Masimo and what the real takeaways are today, after 29 years of doing this, there's this change I've seen from Masimo to getting incredible embrace from our customers and our partners. Our company is still growing. We're projecting that we'll be growing at 8%-10% over the future years ahead. We're targeting long-term operating margins, excuse me, profit margins of 30%. And these do not include products in the pipeline or new M&A opportunities that we hope to pursue.
We're a 29-year-old company with 4,500 people, but a passion of a startup company. Our technologies have provided meaningful clinical outcomes and have helped reduce cost of care dramatically. Some of those improvements have been a dramatic reduction in retinopathy of prematurity, which led to about 2,000 infants being blind every year, to reduction in blood transfusions. That's not only one of the biggest costs in the hospitals, but it's associated with increased mortality, reduction in 30-day mortality, shorter hospital stays, and a reduction in transfers to ICU and rapid response team activations. The evolution of Masimo from 1989 started with Masimo SET, which was the first measure-through-motion and low perfusion pulse oximetry that redefined what pulse oximeters were expected to do. Up until then, 70%-90% of alarms from pulse oximeters were false alarms.
And we have reduced that to less than 5% false alarm rate while improving its ability to alarm when it should. But there's been a lot of other firsts along the way. First non-invasive carbon monoxide monitor, first non-invasive methemoglobin, first non-invasive way of measuring fluid responsiveness, PVI, first non-invasive way of measuring hemoglobin, acoustically measuring respiration rate, cerebral oximetry through O3, the first non-invasive oxygen reserve index. This is like PAO2, but not exactly, but it's something that people have had to use invasive catheters to do. And now we've released second generation of hemoglobin, second generation of SedLine brain function monitoring, and most recently, Rainbow PVI, which is even more sensitive to fluid responsiveness. And in the bottom, you see this history of device evolution and, in some cases, revolution from Radical-7 to the new Rad-67.
This is a picture of some of our direct products where bulk of our revenue, actually the majority of our revenue, comes from the consumables. As we place these devices out there, which are now over a million and a half of them out there, excluding the handheld devices or the finger oximeters, they consume our stream of either single patient use or reusable sensors. But we have also a host of OEM partners, over 70, from Dräger, GE, Philips, Physio-Control, Zoll, and Welch Allyn, to a lot of other companies in Japan like Atom and Fukuda Denshi and all around the world. Over 80% of this million and a half oximeters that are out there are actually shipped by our OEMs.
They all put the Masimo Inside label on their products so that hospitals know they have our technology, which has the best sensitivity and specificity of any other technology. These companies who've incorporated Rainbow get the ability to not just measure oxygen, but all of the other non-invasive measurements that we have invented. We're now really the entire continuum of care. Our technologies are being used from home to hospitals, critical care to intermediate care, and the general ward. Going beyond SET, you see in black the SET parameters. This is a signal extraction technology, pulse oximetry parameters. Normally, all you get is SpO2 and pulse rate, but with our SET oximeters, we also have perfusion index, PVI, which is a measure of fluid responsiveness, and respiration rate that's derived from the photoplethysmograph. In Rainbow, you see the red measurements: hemoglobin, ORI, and so forth.
In total, with one sensor on the finger, we can measure 12 parameters, and with an acoustic sensor on the neck, the 13th parameter. These have been validated in many clinical studies. There's international adoption from the Middle East to Latin America. With Philips now integrating Rainbow and marketing it with us, we expect to see, hopefully, a new wave of interest from clinicians around the world. We acquired a company called Masimo Semiconductor that has enabled us now to dramatically reduce our cost and improve the light-emitting diodes and photodiodes we need for the Rainbow technology.
When a customer buys our technology, the Rainbow SET platform, whether it's in this device called a Radical-7 or on the Philips monitor, like their IntelliVue systems, if they can just either have the SET sensors, which gives them these five parameters, or with the newly introduced sensors called Rainbow Lite, which we just announced in early January, they can get also oxygen reserve index and Rainbow PVI. Or with the Rainbow sensors, they can get all 13 measurements non-invasively. Beyond SET and Rainbow, we've also introduced three new measurements: SedLine brain function monitoring, O3 regional oximetry or organ oximetry, the first organ being the brain, and Nomoline airway gas monitoring, capnography being the main product line of this technology. These products are now available through us, directly to the customers.
Philips is also integrating these technologies into their products, and many other OEMs are doing that as well. We expect that these will become a significant portion of our revenues going forward. We've also built our technology into a wearable device we call Radius-7. This allows untethered monitoring. Mobility has been shown to help improve patient outcomes in the hospitals. Now the same measurements you get with our Rainbow SET platform, whether it's in the Philips system or the Radical-7, you can get on this wearable platform. Where we use Radius-7 mainly has been in the general floor, although we expect it to gain traction in other places. There are estimated about 50,000 patients that die every year from opioid overdose in the general floor that gets unnoticed. We have enabled reliable monitoring of these patients on the general floor.
There's been seminal studies by Dartmouth-Hitchcock that have shown not only in the past 10 years, they have not had one more person die from opioid overdose. However, they've also shown a dramatic reduction in cost. They're showing a $7 million savings annually because they don't have the rapid response team activation as often, and they don't have to transfer the patients to the ICU as often. We expect eventually every post-surgical ward to be a continuous monitoring bed, and for those of you who don't know this, the general floor beds are about three to four times the size of the critical care beds, which is our current business, so if the general floor beds eventually become continuous monitoring, you can imagine the growth that we expect to see for the entire oximetry business.
Also, with Root, besides the Radius 7 technology, we have built in a system that helps hospitals automate. The same way you can automate your office or home with Crestron or Savant system, with Root now you can automate the hospital. Every disparate device, from monitors to infusion pumps, anesthesia machine, ventilators, can get connected to Root, and the information can be displayed wherever and how they like in a manner that is intuitive so they're not getting overloaded by all the disparate devices around the room. And we believe this will help not only improve care but reduce cognitive overload of the clinicians. Through the hospital automation technology, there are unique features like MyView. So whenever a clinician approaches our devices, it shows them what they want to see, and that way, it again customizes the product to their needs.
We also help connect everything to the Electronic Medical Record. Hospitals have made a huge investment on EMRs, but if the devices don't connect to it, they're not getting the full value of it. So Root can connect everything. Legacy devices without Wi-Fi or Bluetooth can connect through other ports like USB and serial ports, and we send the information to the EMR for them. We just announced today a new product called the Rad-97 that has received clearance for home monitoring. We hope this will help facilitate telehealth for patients. We've been working with hospital systems, significant ones, in helping them transfer their patients earlier to home with this product, and this product not only helps them measure everything we have, but it also helps them where this device becomes the hub of getting all the other information at home, from Bluetooth scales to glucometers to thermometers.
The patient can live through the camera system that we have communicate with the clinicians centrally and remotely so that hopefully the same level of care, maybe even better, can be given at home without the cost and the dangers that you have in hospitals. That's where we've come to. As far as the execution of our initial ten-year plan, we went from a $200 million company in 2007, when we went public, to, as projected in our last guidance, to $736 million in product revenue. The clinical success of SET and Rainbow had been shown in multiple studies, from what it can do on a general ward to the value of non-invasive carbon monoxide, value of PVI, which is a non-invasive way of doing fluid responsiveness, and non-invasive continuous hemoglobin. We've also expanded our technology to Nomoline, SedLine, O3, Root.
We're ushering in a new era that we've never seen before, which is this hospital automation, and we have protected our innovation with significant patent wins. We have satisfied customers. Our renewal rate with customers is over 98%. And we have realized the promise of the financial leverage. Not only have we increased our installed base, have we shown reduction in ROP, detection of CCHD in general ward monitoring, but we now outship all others in new pulse oximeters, which continue to secure new hospitals at a steady rate. Last year, we announced UPMC, Stanford, Walter Reed, and more to come. We've announced our renewal with Kaiser Permanente and a new long-term relationship. And if you ask them why they're doing it, it's product innovation. And it continues with not only new things, but even on our core SET platform with new sensors and enhancements.
As our revenue has increased from 200 to 736, our core operating profit margin has grown from 5% to 20%, excluding the royalties and the NREs. As we look to the future, what do we see? First of all, as I said at the beginning, we see revenue growth in the range of 8%-10%. We see our operating margin growing to 30%. We see the new tax rate improvement, which will help us optimize our tax structure beyond just the domestic tax reform. But as you know, we had not set up our company internationally, and our tax rate was over 30% overall, and we expect it to come down dramatically. And we expect our EPS growth to be double-digit for the foreseeable future.
And the free cash flow that comes will hopefully allow us to do more things for shareholders from either share buyback or healthy acquisitions. Some of the product revenue growth opportunities we see is the expansion with SET. We have a large share of the pulse oximetry market, but there's a big chunk of it that's still available to us, as well as the general floor expansion, which could help triple the entire oximetry business. The Rainbow expansion opportunities are going to be helped dramatically with some of the new studies, as well as our partnership with Philips and the second-generation Rainbow technology we've introduced. Root with hospital automation through Iris, Kite, and UniView, we believe, will become a big portion of our business. And expanding markets like Nomoline, SedLine, and O3 will undoubtedly help.
We have others yet to be introduced technologies and products in the pipeline that we hope will actually help us do better than the growth rate that I have estimated here. So overall, we think by 2025, we'll go from a $3 billion addressable market to over $6 billion addressable market. Here are some of the cases we see for SET, for Rainbow, and Root. SET is in red. You can see the baseline, solid line, and the low end and the high end as we're projecting it in the future. Our long-term gross product margin goal of 70%, we believe, is realizable through very healthy value engineering we've done. We've seen the value of that already in the past few years. We've had about a $40 million savings in cost of goods.
We expect more to come as we move forward with the RD line of sensors, which is great for everyone. It has a better performance. It has better comfort for patients and better margins for us. As far as operating margin goals of 30%, we expect to go from 20%-30% through both the product gross margin improvement, the salesforce efficiencies we're going to get from this razor-blade business model, the international scalability that we're in the middle of, and leveraging our infrastructure. In summary, our customers and partners are embracing us. We expect an 8%-10% product revenue growth. We expect double-digit earnings growth. We expect operating margins of 30%. These targets do not include products that are in the pipeline today, as well as M&A opportunities we're pursuing.
We are a 29-year-old company with a passion of a startup, and our technologies provide meaningful clinical and cost efficiencies for our customers. So thank you so much for coming today. We'll be happy to answer your questions at our breakout sessions. Thank you.