Patient Monitoring

# Executive Summary * The Patient Monitoring industry is undergoing a technology-driven transformation, with AI and predictive analytics emerging as the primary drivers of value creation and competitive differentiation. * A structural shift towards Remote Patient Monitoring (RPM) and home-based care is rapidly expanding the addressable market beyond traditional hospital settings, fueling a new wave of growth. * Evolving reimbursement policies and the regulatory landscape act as critical gatekeepers, with recent changes creating both significant tailwinds for RPM services and potential future risks. * Financial performance is bifurcating, with high-growth, specialized innovators outpacing large, diversified incumbents, driven by the adoption of novel technologies. * Profitability is highest among companies with proprietary, software-centric models, highlighting a shift from hardware sales to higher-margin, recurring data and analytics revenue. * Competition is intensifying, forcing incumbents to innovate or acquire, while focused disruptors establish deep moats in specialized, high-need clinical areas. ## Key Trends & Outlook The Patient Monitoring industry is being fundamentally reshaped by a new wave of innovation centered on the integration of Artificial Intelligence and advanced wearable sensors. This technological shift is moving the industry beyond simple data collection to predictive, proactive monitoring, with AI algorithms capable of detecting patient deterioration earlier than conventional methods. This enables providers to improve patient outcomes and operational efficiency, creating significant value and justifying premium pricing for advanced systems. Technology leaders are embedding AI across their portfolios; for example, GE HealthCare (GEHC) has secured 100 FDA authorizations for AI-enabled medical devices, while CeriBell's (CBLL) Clarity™ AI provides real-time seizure detection at the point of care. This trend is happening now and is the primary catalyst creating a clear divergence between innovators and legacy players. The expansion of care into home and ambulatory settings represents the most significant market expansion opportunity. The global Remote Patient Monitoring (RPM) market, valued at $27.72 billion in 2024, is projected to more than double to $56.94 billion by 2030, growing at a 12.7% CAGR. This growth is driven by companies like iRhythm Technologies (IRTC), whose ambulatory cardiac monitoring service revenue grew +31% year-over-year in Q3 2025, and Owlet (OWLT), which is leveraging its medical-grade infant monitors for in-home use. The convergence of AI and RPM creates a powerful opportunity for companies to develop high-margin, subscription-based services that provide continuous, predictive health insights. The primary risk stems from the regulatory and reimbursement environment. While new CPT codes for 2025 provide a tailwind for RPM services, a scheduled reduction in RPM payments beginning in January 2026 could create a significant headwind for companies dependent on this revenue stream. ## Competitive Landscape The patient monitoring market structure is characterized by a dynamic interplay between large, diversified incumbents and agile, specialized innovators competing for market share. The overall market is led by major players such as GE HealthCare and Philips, but high-growth niches are increasingly being captured by specialized firms. Some major firms, like GE HealthCare, compete by offering comprehensive, integrated solutions for large health systems. GE HealthCare's partnership with Duke Health to co-develop AI-driven hospital operations software exemplifies its strategy of providing integrated, enterprise-level solutions that extend beyond individual devices. This approach leverages a massive global footprint, strong brand recognition, and a broad portfolio of devices and software to offer end-to-end solutions. In contrast, other successful players dominate specific clinical niches through superior, proprietary technology. CeriBell, for instance, focuses on point-of-care EEG for seizure detection, protected by its Clarity™ AI algorithm and the industry-unique FedRAMP High cybersecurity certification. This strategy allows for pricing power and extremely high gross margins within their specialty. Additionally, the industry is seeing the emergence of data-centric, service-based recurring revenue models. iRhythm Technologies exemplifies this, with its Zio System functioning as a service where the biosensor patch is paired with proprietary, AI-powered cloud analytics to deliver a diagnostic report, generating recurring service revenue. The key competitive battlegrounds in this evolving landscape are in AI-driven analytics, ease of use in remote settings, and the ability to secure critical regulatory clearances and favorable reimbursement policies. ## Financial Performance Revenue growth is sharply bifurcated across the industry. This bifurcation is a direct result of the key industry trends, with growth leaders being specialized companies capitalizing on the high demand for novel AI-powered and remote monitoring solutions in underserved niches. For instance, iRhythm Technologies (IRTC) reported +31% year-over-year revenue growth in Q3 2025, fueled by the adoption of its remote cardiac monitoring service. In contrast, larger, more diversified players are posting more modest growth as they navigate mature markets and portfolio transitions, as seen with GE HealthCare (GEHC) which reported +3% year-over-year comparable group sales growth in Q3 2025. {{chart_0}} Profitability also shows a clear pattern, with gross margins being high and divergent, while operating profitability separates early-stage growth companies from established leaders. Margin leadership is dictated by proprietary technology and software-centric business models. Companies with a heavy software and AI component, which is less capital-intensive and commands premium pricing, achieve the highest gross margins. CeriBell (CBLL) achieved an 88% gross margin in Q2 2025, a direct result of its valuable Clarity™ AI algorithm and disposable headband model. However, many of these high-growth, high-margin companies are not yet profitable at the operating level due to aggressive investments in research and development and sales to capture market share. Kestra Medical Technologies (KMTS), for example, reported a net loss of -$113.8 million for FY2025 despite strong revenue growth, indicating significant investment in commercialization. {{chart_1}} Capital allocation strategies reflect the different life cycle stages of the companies. Mature, cash-generative players are focused on shareholder returns and strategic portfolio optimization. Masimo (MASI) announced a definitive agreement to sell its consumer audio business for $350 million in cash, with proceeds primarily to be used for share repurchases. Conversely, earlier-stage companies are focused on securing capital to fund R&D and commercial expansion, as seen with Owlet (OWLT) which priced an underwritten public offering of common stock in October 2025, generating gross proceeds of approximately $30.0 million to support continued commercialization and R&D. The industry's overall financial position is generally healthy and well-capitalized. This is supported by strong cash generation and access to capital markets for most players. Established companies like GE HealthCare have over $4 billion in cash, and cash-flow-positive growers like iRhythm Technologies (IRTC) reported unrestricted cash and cash equivalents of $565.2 million at Q3 2025 quarter end, having generated record free cash flow during the quarter and expecting to be free-cash-flow positive for the full year 2025 for the first time. Even pre-profitability companies like CeriBell and Kestra Medical are well-capitalized following recent IPOs or funding rounds, providing sufficient runway to reach cash flow breakeven.