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ResMed Inc. Announces Results for the Second Quarter of Fiscal Year 2025

1. ResMed's Q2 revenue rose 10%, reaching $1.3 billion annually. 2. Operating profit surged 52% with a strong demand for sleep health products. 3. Gross margins improved by 300 basis points due to operational efficiencies. 4. ResMed maintains a robust cash flow of $309 million despite increased expenses. 5. A quarterly dividend of $0.53 per share has been declared.

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The strong revenue and profit growth may attract investors, boosting RMD’s price. Past earnings reports with similar growth patterns led to significant upticks in stock price.

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The article details significant financial improvements directly impacting RMD’s valuation and investor perception.

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January 30, 2025 16:05 ET  | Source: ResMed Inc. Year-over-year revenue grows 10%, operating profit up 52%, non-GAAP operating profit up 19%Operating cash flow of $309 million Note: A webcast of ResMed’s conference call will be available at 4:30 p.m. ET today at http://investor.resmed.com SAN DIEGO, Jan. 30, 2025 (GLOBE NEWSWIRE) -- ResMed Inc. (NYSE: RMD, ASX: RMD) today announced results for its quarter ended December 31, 2024. Second Quarter 2025 HighlightsAll comparisons are to the prior year period Revenue increased by 10% to $1.3 billion; up 10% on a constant currency basis Gross margin improved 300 bps to 58.6%; non-GAAP gross margin improved 230 bps to 59.2%Income from operations increased 52%; non-GAAP income from operations up 19%Operating cash flow of $309 millionDiluted earnings per share of $2.34; non-GAAP diluted earnings per share of $2.43 “Our second quarter fiscal year 2025 top-line growth, margin expansion, and double-digit EPS growth were the result of increased demand for our sleep health and breathing health products and digital health solutions that people love, as well as our laser-focus on operational excellence,” said ResMed’s Chairman and CEO, Mick Farrell. “We delivered 10% year-over-year revenue growth, 230 bps improvement in gross margin, and $309 million of operating cash flow. These results are a continuation of the incredible commitment from our team to create a clear market-leading value proposition in connected digital health. Our ecosystem is unmatched and ResMed is well-positioned to capitalize on the once-in-a-generation opportunities we have with the recent introduction and adoption of consumer wearables that track sleep health, as well as use of GLP-1 therapies. We believe these developments will drive increased patient flow as we continue to educate people on the benefits of healthy sleep and breathing, with care delivered right in their own home.” Financial Results and Operating Metrics Unaudited; $ in millions, except for per share amounts  Three Months Ended December 31,2024 December 31,2023 % Change ConstantCurrency (A)Revenue$1,282.1  $1,162.8  10% 10%Gross margin  58.6%  55.6% 5   Non-GAAP gross margin (B) 59.2%  56.9% 4   Selling, general, and administrative expenses 241.6   222.2  9  9 Research and development expenses 81.4   73.9  10  10 Income from operations 417.2   275.1  52   Non-GAAP income from operations (B) 435.9   365.5  19   Net income 344.6   208.8  65   Non-GAAP net income (B) 358.3   277.3  29   Diluted earnings per share$2.34  $1.42  65   Non-GAAP diluted earnings per share (B)$2.43  $1.88  29                  Six Months Ended December 31,2024 December 31,2023 % Change ConstantCurrency (A)Revenue$2,506.6  $2,265.1  11% 11%Gross margin  58.6%  55.1% 6   Non-GAAP gross margin (B) 59.2%  56.4% 5   Selling, general, and administrative expenses 480.6   445.0  8  8 Research and development expenses 160.9   149.6  8  7 Income from operations 804.6   564.1  43   Non-GAAP income from operations (B) 842.3   684.3  23   Net income 656.0   428.2  53   Non-GAAP net income (B) 683.7   518.5  32   Diluted earnings per share$4.45  $2.90  53   Non-GAAP diluted earnings per share (B)$4.63  $3.51  32                 (A) In order to provide a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency” basis, which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.(B)See the reconciliation of non-GAAP financial measures in the table at the end of the press release.   Discussion of Second Quarter ResultsAll comparisons are to the prior year period unless otherwise noted Revenue grew by 10 percent on a constant currency basis, driven by increased demand for our sleep devices and masks portfolio, as well as solid growth across our Residential Care Software business. Revenue in the U.S., Canada, and Latin America, excluding Residential Care Software, grew by 12 percent.Revenue in Europe, Asia, and other markets, excluding Residential Care Software, grew by 8 percent on a constant currency basis.Residential Care Software revenue increased by 8 percent on a constant currency basis, reflecting continued organic growth in our Residential Care Software portfolio. Gross margin increased by 300 basis points mainly due to manufacturing and logistics efficiencies and component cost improvements. Non-GAAP gross margin increased by 230 basis points due to the same factors.Selling, general, and administrative expenses increased by 9 percent on a constant currency basis. The increase in SG&A expenses was mainly due to increases in employee-related expenses. SG&A expenses improved to 18.8 percent of revenue in the quarter, compared with 19.1 percent in the same period of the prior year.Income from operations increased by 52 percent as the prior year included $64.2 million of restructuring related charges. Non-GAAP income from operations increased by 19 percent.Net income for the quarter was $345 million and diluted earnings per share was $2.34. Non-GAAP net income increased by 29 percent to $358 million, and non-GAAP diluted earnings per share increased by 29 percent to $2.43, predominantly attributable to strong sales growth and gross margin improvement.Operating cash flow for the quarter was $309 million, compared to net income in the current quarter of $345 million and non-GAAP net income of $358 million.During the quarter, we paid $78 million in dividends to shareholders and repurchased 307,000 shares for consideration of $75 million as part of our ongoing capital management. Other Business and Operational Highlights Announced the launch of the Kontor Head Strap, a premium accessory for Apple Vision Pro, that delivers a superb balance of softness and support for extended wear-time. The Kontor Head Strap is crafted with a blend of ResMed-exclusive ultra-premium materials designed to be gentle on the skin and allow for further customization of Apple Vision Pro with the option to utilize six included modular counterweights. The Kontor Head Strap enables extended wear-time benefits for Vision Pro users. ResMed’s products are engineered to deliver exceptional comfort and performance, enhancing users' experiences across healthcare and technology.Reaffirmed our commitment to expanding our Singapore operations in partnership with the Singapore Economic Development Board (EDB). We will make new investments in Singapore by 2029, strengthening our global manufacturing network and positioning our Singapore presence as a key innovation hub across the Asia-Pacific.Named to Forbes' first-ever Most Trusted Companies in America list based on employee trust, customer trust, investor trust and media sentiment. Named for the fifth consecutive year to Wall Street Journal’s Management Top 250 ranking based on customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. Dividend programThe ResMed board of directors today declared a quarterly cash dividend of $0.53 per share. The dividend will have a record date of February 13, 2025, payable on March 20, 2025. The dividend will be paid in U.S. currency to holders of ResMed’s common stock trading on the New York Stock Exchange. Holders of CHESS Depositary Interests (“CDIs”) trading on the Australian Securities Exchange will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and reflecting the 10:1 ratio between CDIs and NYSE shares. The ex-dividend date will be February 12, 2025, for common stockholders and for CDI holders. ResMed has received a waiver from the ASX’s settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from February 12, 2025, through February 13, 2025, inclusive.  Webcast detailsResMed will discuss its second quarter fiscal year 2025 results on its webcast at 1:30 p.m. U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed’s Investor Relations website at investor.resmed.com. Please go to this section of the website and click on the icon for the “Q2 2025 Earnings Webcast” to register and listen to the live webcast. A replay of the earnings webcast will be accessible on the website and available approximately two hours after the live webcast. In addition, a telephone replay of the conference call will be available approximately three hours after the webcast by dialing +1 877-660-6853 (U.S.) or +1 201-612-7415 (outside U.S.) and entering the passcode 13750689. The telephone replay will be available until February 13, 2025. About ResMedAt ResMed (NYSE: RMD, ASX: RMD) we pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, we improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 140 countries. To learn more, visit ResMed.com and follow @ResMed. Safe harbor statementStatements contained in this release that are not historical facts are “forward-looking” statements as contemplated by the Private Securities Litigation Reform Act of 1995. These forward-looking statements – including statements regarding ResMed’s projections of future revenue or earnings, expenses, new product development, new product launches, new markets for its products, the integration of acquisitions, our supply chain, domestic and international regulatory developments, litigation, tax outlook, and the expected impact of macroeconomic conditions of our business – are subject to risks and uncertainties, which could cause actual results to materially differ from those projected or implied in the forward-looking statements. Additional risks and uncertainties are discussed in ResMed’s periodic reports on file with the U.S. Securities & Exchange Commission. ResMed does not undertake to update its forward-looking statements. Condensed Consolidated Statements of Operations(Unaudited; $ in thousands, except for per share amounts)  Three Months Ended Six Months Ended December 31,2024 December 31,2023 December 31,2024 December 31,2023        Net revenue$1,282,089  $1,162,801  $2,506,598  $2,265,122         Cost of sales 523,180   501,259   1,022,800   986,702 Amortization of acquired intangibles(1) 7,634   8,257   15,304   17,164 Masks with magnets field safety notification expenses(1) —   6,351   —   6,351 Astral field safety notification expenses(1) —   —   —   7,911 Total cost of sales$530,814  $515,867  $1,038,104  $1,018,128 Gross profit$751,275  $646,934  $1,468,494  $1,246,994         Selling, general, and administrative 241,613   222,155   480,592   445,029 Research and development 81,372   73,880   160,897   149,590 Amortization of acquired intangibles(1) 11,047   11,577   22,451   24,056 Restructuring expenses(1) —   64,228   —   64,228 Total operating expenses$334,032  $371,840  $663,940  $682,903 Income from operations$417,243  $275,094  $804,554  $564,091         Other income (expenses), net:       Interest (expense) income, net$(775) $(13,805) $(2,436) $(28,762)Gain (loss) attributable to equity method investments 1,077   739   2,040   (3,156)Gain (loss) on equity investments(1) (1,439)  (1,888)  (2,119)  (2,491)Other, net 2,216   (686)  (219)  1,963 Total other income (expenses), net 1,079   (15,640)  (2,734)  (32,446)Income before income taxes$418,322  $259,454  $801,820  $531,645 Income taxes 73,700   50,654   145,843   103,423 Net income$344,622  $208,800  $655,977  $428,222         Basic earnings per share$2.35  $1.42  $4.47  $2.91 Diluted earnings per share$2.34  $1.42  $4.45  $2.90 Non-GAAP diluted earnings per share(1)$2.43  $1.88  $4.63  $3.51         Basic shares outstanding 146,810   147,132   146,835   147,104 Diluted shares outstanding 147,481   147,545   147,520   147,572  (1) See the reconciliation of non-GAAP financial measures in the table at the end of the press release. Condensed Consolidated Balance Sheets(Unaudited; $ in thousands)  December 31,2024 June 30,2024Assets   Current assets:   Cash and cash equivalents$521,944  $238,361 Accounts receivable, net 859,937   837,275 Inventories 882,103   822,250 Prepayments and other current assets 572,193   459,833 Total current assets$2,836,177  $2,357,719 Non-current assets:   Property, plant, and equipment, net$520,162  $548,025 Operating lease right-of-use assets 151,012   151,121 Goodwill and other intangibles, net 3,243,356   3,327,959 Deferred income taxes and other non-current assets 390,627   487,570 Total non-current assets$4,305,157  $4,514,675 Total assets$7,141,334  $6,872,394 Liabilities and Stockholders’ Equity   Current liabilities:   Accounts payable$220,313  $237,728 Accrued expenses 352,541   377,678 Operating lease liabilities, current 27,812   25,278 Deferred revenue 156,508   152,554 Income taxes payable 84,880   107,517 Short-term debt 9,906   9,900 Total current liabilities$851,960  $910,655 Non-current liabilities:   Deferred revenue$146,512  $137,343 Deferred income taxes 77,004   79,339 Operating lease liabilities, non-current 139,159   141,444 Other long-term liabilities 10,831   42,257 Long-term debt 662,859   697,313 Total non-current liabilities$1,036,365  $1,097,696 Total liabilities$1,888,325  $2,008,351 Stockholders’ equity   Common stock$760  $588 Additional paid-in capital 1,957,359   1,896,604 Retained earnings 5,492,038   4,991,647 Treasury stock (1,898,258)  (1,773,267)Accumulated other comprehensive income (298,890)  (251,529)Total stockholders’ equity$5,253,009  $4,864,043 Total liabilities and stockholders’ equity$7,141,334  $6,872,394          Condensed Consolidated Statements of Cash Flows(Unaudited; $ in thousands)  Three Months Ended Six Months Ended December 31,2024 December 31,2023 December 31,2024 December 31,2023Cash flows from operating activities:       Net income$344,622  $208,800  $655,977  $428,222 Adjustment to reconcile net income to cash provided by operating activities:       Depreciation and amortization 46,439   44,784   91,169   89,718 Amortization of right-of-use assets 9,463   8,586   18,443   17,094 Stock-based compensation costs 22,634   19,840   42,790   38,350 (Gain) loss attributable to equity method investments, net of dividends received (1,077)  (739)  (2,040)  3,156 (Gain) loss on equity investments 1,439   1,888   2,119   2,491 Non-cash restructuring expenses —   33,239   —   33,239 Changes in operating assets and liabilities:       Accounts receivable, net (67,853)  (26,802)  (31,436)  (20,269)Inventories, net (7,641)  50,184   (77,895)  77,095 Prepaid expenses, net deferred income taxes and other current assets (43,623)  (32,575)  (43,746)  (74,590)Accounts payable, accrued expenses, income taxes payable and other 4,219   (34,373)  (21,220)  (35,391)Net cash provided by (used in) operating activities$308,622  $272,832  $634,161  $559,115 Cash flows from investing activities:       Purchases of property, plant, and equipment (20,644)  (23,353)  (38,484)  (53,388)Patent registration and acquisition costs (2,825)  (1,205)  (4,592)  (12,036)Business acquisitions, net of cash acquired (670)  (7,504)  (670)  (110,688)Purchases of investments (1,000)  (3,625)  (2,350)  (7,305)Proceeds from exits of investments 250   —   4,378   250 Proceeds (payments) on maturity of foreign currency contracts (11,803)  (5,456)  7,172   (6,956)Net cash provided by (used in) investing activities$(36,692) $(41,143) $(34,546) $(190,123)Cash flows from financing activities:       Proceeds from issuance of common stock, net 26,877   19,524   35,260   20,507 Purchases of treasury stock (74,986)  (50,007)  (124,991)  (50,007)Taxes paid related to net share settlement of equity awards (16,734)  (7,797)  (17,123)  (8,022)Payments of business combination contingent consideration —   —   (855)  (1,293)Proceeds from borrowings, net of borrowing costs —   —   —   105,000 Repayment of borrowings (5,000)  (130,000)  (35,000)  (315,000)Dividends paid (77,695)  (70,678)  (155,586)  (141,275)Net cash provided by (used in) financing activities$(147,538) $(238,958) $(298,295) $(390,090)Effect of exchange rate changes on cash$(28,809) $8,416  $(17,737) $3,454 Net increase (decrease) in cash and cash equivalents 95,583   1,147   283,583   (17,644)Cash and cash equivalents at beginning of period 426,361   209,100   238,361   227,891 Cash and cash equivalents at end of period$521,944  $210,247  $521,944  $210,247                  Reconciliation of Non-GAAP Financial Measures(Unaudited; $ in thousands, except for per share amounts) The measures “non-GAAP gross profit” and “non-GAAP gross margin” exclude amortization expense from acquired intangibles and restructuring expense related to cost of sales and are reconciled below:  Three Months Ended Six Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023        Revenue$1,282,089  $1,162,801  $2,506,598  $2,265,122         GAAP cost of sales$530,814  $515,867  $1,038,104  $1,018,128 Less:Amortization of acquired intangibles(A) (7,634)  (8,257)  (15,304)  (17,164)Less: Masks with magnets field safety notification expenses(A) —   (6,351)  —   (6,351)Less: Astral field safety notification expenses(A) —   —   —   (7,911)Non-GAAP cost of sales$523,180  $501,259  $1,022,800  $986,702         GAAP gross profit$751,275  $646,934  $1,468,494  $1,246,994 GAAP gross margin 58.6%  55.6%  58.6%  55.1%Non-GAAP gross profit$758,909  $661,542  $1,483,798  $1,278,420 Non-GAAP gross margin 59.2%  56.9%  59.2%  56.4%                 The measure “non-GAAP income from operations” is reconciled with GAAP income from operations below:  Three Months Ended Six Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023        GAAP income from operations$417,243 $275,094 $804,554 $564,091Amortization of acquired intangibles—cost of sales (A) 7,634  8,257  15,304  17,164Amortization of acquired intangibles—operating expenses (A) 11,047  11,577  22,451  24,056Restructuring (A) —  64,228  —  64,228Masks with magnets field safety notification expenses (A) —  6,351  —  6,351Astral field safety notification expenses (A) —  —  —  7,911Acquisition-related expenses (A) —  —  —  483Non-GAAP income from operations$435,924 $365,507 $842,309 $684,284             Reconciliation of Non-GAAP Financial Measures(Unaudited; $ in thousands, except for per share amounts) The measures “non-GAAP net income” and “non-GAAP diluted earnings per share” are reconciled with GAAP net income and GAAP diluted earnings per share in the table below:  Three Months Ended Six Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023        GAAP net income$344,622  $208,800  $655,977  $428,222 Amortization of acquired intangibles—cost of sales(A) 7,634   8,257   15,304   17,164 Amortization of acquired intangibles—operating expenses(A) 11,047   11,577   22,451   24,056 Restructuring expenses(A) —   64,228   —   64,228 Masks with magnets field safety notification expenses(A) —   6,351   —   6,351 Astral field safety notification expenses(A) —   —   —   7,911 Acquisition-related expenses(A) —   —   —   483 Income tax effect on non-GAAP adjustments(A) (4,962)  (21,868)  (10,033)  (29,886)Non-GAAP net income(A)$358,341  $277,345  $683,699  $518,529         GAAP diluted shares outstanding 147,481   147,545   147,520   147,572 GAAP diluted earnings per share$2.34  $1.42  $4.45  $2.90 Non-GAAP diluted earnings per share(A)$2.43  $1.88  $4.63  $3.51                  (A)ResMed adjusts for the impact of the amortization of acquired intangibles, restructuring expenses, field safety notification expenses, acquisition related expenses and associated tax effects from their evaluation of ongoing operations, and believes that investors benefit from adjusting these items to facilitate a more meaningful evaluation of current operating performance.   ResMed believes that non-GAAP diluted earnings per share is an additional measure of performance that investors can use to compare operating results between reporting periods. ResMed uses non-GAAP information internally in planning, forecasting, and evaluating the results of operations in the current period and in comparing it to past periods. ResMed believes this information provides investors better insight when evaluating ResMed’s performance from core operations and provides consistent financial reporting. The use of non-GAAP measures is intended to supplement, and not to replace, the presentation of net income and other GAAP measures. Like all non-GAAP measures, non-GAAP earnings are subject to inherent limitations because they do not include all the expenses that must be included under GAAP.   Revenue by Product and Region(Unaudited; $ in millions, except for per share amounts)  Three Months Ended December 31,2024(A)December 31,2023(A)% Change ConstantCurrency (B)U.S., Canada, and Latin America       Devices$414.5 $371.3 12%  Masks and other 334.5  298.0 12   Total U.S., Canada and Latin America$748.9 $669.3 12           Combined Europe, Asia, and other markets       Devices$254.8 $234.7 9% 9%Masks and other 121.8  113.9 7  7 Total Combined Europe, Asia and other markets$376.6 $348.5 8  8         Global revenue       Total Devices$669.3 $606.0 10% 11%Total Masks and other 456.3  411.9 11  11 Total Sleep and Breathing Health$1,125.6 $1,017.9 11  11         Residential Care Software 156.5  144.9 8  8 Total$1,282.1 $1,162.8 10  10           Six Months Ended December 31,2024(A)December 31,2023(A)%Change ConstantCurrency (B)U.S., Canada, and Latin America       Devices$799.0 $717.2 11%  Masks and other 657.3  590.5 11   Total U.S., Canada and Latin America$1,456.3 $1,307.7 11           Combined Europe, Asia, and other markets       Devices$496.1 $453.5 9% 9%Masks and other 241.0  219.7 10  9 Total Combined Europe, Asia and other markets$737.1 $673.2 9  9         Global revenue       Total Devices$1,295.1 $1,170.7 11% 10%Total Masks and other 898.2  810.2 11  11 Total Sleep and Breathing Health$2,193.3 $1,980.9 11  11         Residential Care Software 313.3  284.2 10  10 Total$2,506.6 $2,265.1 11  11              (A)Totals and subtotals may not add due to rounding.  (B)In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis,” which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.

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