• Resmed Inc. Announces Results for the Third Quarter of Fiscal Year 2025

    Source: Nasdaq GlobeNewswire / 23 Apr 2025 16:05:01   America/New_York

    • Year-over-year revenue grows 8%, operating profit up 14%, non-GAAP operating profit up 13%
    • Operating cash flow of $579 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, April 23, 2025 (GLOBE NEWSWIRE) -- Resmed Inc. (NYSE: RMD, ASX: RMD) today announced results for its quarter ended March 31, 2025.

    Third Quarter 2025 Highlights
    All comparisons are to the prior year period

    • Revenue increased by 8% to $1.3 billion; up 9% on a constant currency basis 
    • Gross margin improved 140 bps to 59.3%; non-GAAP gross margin improved 140 bps to 59.9%
    • Income from operations increased 14%; non-GAAP income from operations up 13%
    • Operating cash flow of $579 million
    • Diluted earnings per share of $2.48; non-GAAP diluted earnings per share of $2.37

    “Our positive fiscal year 2025 performance continued in the third quarter, with strong top-line revenue growth, margin expansion, and double-digit EPS growth resulting from solid customer demand for our best-in-class products and software solutions,” said Resmed’s Chairman and CEO, Mick Farrell.

    “We delivered 9% constant currency revenue growth and 140 bps improvement in non-GAAP gross margin. These results are evidence that sleep health customers recognize our products and software solutions as the gold standard for care. Our continued growth was achieved by the incredible commitment of our team that has created a clear market-leading value proposition in connected digital health. We remain laser-focused on continuing to address the over 2.3 billion people around the globe with sleep health and breathing health issues and all those who need world-class software for healthcare delivered at home. We will continue to drive increased patient flow as we accelerate education and awareness outreach to physicians, providers, patients, and beyond, ensuring a strong pipeline of people who need access to our products and solutions to improve their lives.”

    Financial Results and Operating Metrics

    Unaudited; $ in millions, except for per share amounts

     Three Months Ended
     March 31,
    2025    		 March 31,
    2024    		 % Change Constant
    Currency(A)
    Revenue$1,291.7  $1,197.0  8% 9%
    Gross margin 59.3%  57.9% 2   
    Non-GAAP gross margin(B) 59.9%  58.5% 2   
    Selling, general, and administrative expenses 245.3   229.9  7  8 
    Research and development expenses 83.9   77.1  9  11 
    Income from operations 426.3   374.6  14   
    Non-GAAP income from operations(B) 444.6   393.6  13   
    Net income 365.0   300.5  21   
    Non-GAAP net income(B) 348.5   314.4  11   
    Diluted earnings per share$2.48  $2.04  22   
    Non-GAAP diluted earnings per share(B)$2.37  $2.13  11   


     Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 % Change Constant
    Currency(A)
    Revenue$3,798.3  $3,462.1  10% 10%
    Gross margin 58.8%  56.0% 5   
    Non-GAAP gross margin(B) 59.4%  57.2% 4   
    Selling, general, and administrative expenses 725.9   674.9  8  8 
    Research and development expenses 244.8   226.7  8  9 
    Income from operations 1,230.8   938.7  31   
    Non-GAAP income from operations(B) 1,286.9   1,077.9  19   
    Net income 1,021.0   728.7  40   
    Non-GAAP net income(B) 1,032.2   833.0  24   
    Diluted earnings per share$6.93  $4.94  40   
    Non-GAAP diluted earnings per share(B)$7.00  $5.65  24   


    (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 Third Quarter Results
    All comparisons are to the prior year period unless otherwise noted

    • Revenue grew by 9 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 9 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 10 percent on a constant currency basis, reflecting continued organic growth in our Residential Care Software portfolio.
    • Gross margin increased by 140 basis points mainly due to manufacturing and logistics efficiencies as well as favorable shifts in product mix, partially offset by unfavorable foreign currency movements. Non-GAAP gross margin increased by 140 basis points due to the same factors.
    • Selling, general, and administrative expenses increased by 8 percent on a constant currency basis. The increase in SG&A expenses was mainly due to increases in employee-related costs and marketing expenses. SG&A expenses improved to 19.0 percent of revenue in the quarter, compared with 19.2 percent in the same period of the prior year.
    • Income from operations increased by 14 percent and non-GAAP income from operations increased by 13 percent.
    • Net income for the quarter was $365 million and diluted earnings per share was $2.48. Non-GAAP net income increased by 11 percent to $349 million, and non-GAAP diluted earnings per share increased by 11 percent to $2.37, predominantly attributable to strong sales growth and gross margin improvement.
    • Operating cash flow for the quarter was $579 million, compared to net income in the current quarter of $365 million and non-GAAP net income of $349 million. We received $107 million in tax refunds from the IRS during the quarter, of which $100 million had been previously recorded as a receivable. Operating cash flows excluding the impact of these tax refunds was $471 million.
    • During the quarter, we paid $78 million in dividends to shareholders and repurchased 314,000 shares for consideration of $75 million as part of our ongoing capital management.

    Other Business and Operational Highlights

    • Announced that our home sleep apnea test, NightOwl™, is now available across the United States. NightOwl is an FDA-cleared home sleep apnea test (HSAT) designed to offer healthcare providers a simplified, accurate, and efficient way to diagnose obstructive sleep apnea from the comfort of an individual’s home.
    • Unveiled the findings of our fifth annual Global Sleep Survey. With insights from 30,026 respondents across 13 markets, the study underscored a widespread global sleep crisis, with people losing an average of nearly three nights of restorative sleep each week.
    • Announced a comprehensive brand evolution designed to unify our brand portfolio to serve more people and healthcare providers worldwide and reflect our future physician and customer education.
    • Announced the publication of a landmark meta-analysis in The Lancet Respiratory Medicine, demonstrating that CPAP therapy significantly reduces the risk of death for people with obstructive sleep apnea (OSA).
    • Awarded as one of the “Top 100 Global Innovators” from LexisNexis. This prestigious award includes a roster of companies around the world that are driving innovation in the global economy.

    Dividend program
    The Resmed board of directors today declared a quarterly cash dividend of $0.53 per share. The dividend will have a record date of May 8, 2025, payable on June 12, 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 May 7, 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 May 7, 2025, through May 8, 2025, inclusive. 

    Webcast details
    Resmed will discuss its third 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 “Q3 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 13752711. The telephone replay will be available until May 7, 2025.

    About Resmed
    At 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 statement
    Statements 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 Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 March 31,
    2025    		 March 31,
    2024
            
    Net revenue$1,291,736  $1,196,980  $3,798,334  $3,462,102 
            
    Cost of sales 517,883   496,387   1,540,684   1,483,088 
    Amortization of acquired intangibles(1) 7,444   7,812   22,748   24,976 
    Masks with magnets field safety notification expenses(1) —   —   —   6,351 
    Astral field safety notification expenses(1) —   —   —   7,911 
    Total cost of sales$525,327  $504,199  $1,563,432  $1,522,326 
    Gross profit$766,409  $692,781  $2,234,902  $1,939,776 
            
    Selling, general, and administrative 245,302   229,919   725,894   674,948 
    Research and development 83,944   77,074   244,840   226,664 
    Amortization of acquired intangibles(1) 10,895   11,204   33,345   35,259 
    Restructuring expenses(1) —   —   —   64,228 
    Total operating expenses$340,141  $318,197  $1,004,079  $1,001,099 
    Income from operations$426,268  $374,584  $1,230,823  $938,677 
            
    Other income (expenses), net:       
    Interest (expense) income, net$793  $(11,026) $(1,643) $(39,787)
    Gain (loss) attributable to equity method investments 335   440   2,375   (2,716)
    Gain (loss) on equity investments (5,647)  13,919   (7,765)  11,429 
    Other, net (4,056)  (2,496)  (4,277)  (537)
    Total other income (expenses), net (8,575)  837   (11,310)  (31,611)
    Income before income taxes$417,693  $375,421  $1,219,513  $907,066 
    Income taxes 52,652   74,929   198,495   178,351 
    Net income$365,041  $300,492  $1,021,018  $728,715 
            
    Basic earnings per share$2.49  $2.04  $6.96  $4.96 
    Diluted earnings per share$2.48  $2.04  $6.93  $4.94 
    Non-GAAP diluted earnings per share(1)$2.37  $2.13  $7.00  $5.65 
            
    Basic shares outstanding 146,719   146,959   146,797   147,056 
    Diluted shares outstanding 147,220   147,450   147,432   147,549 

    (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)

     March 31,
    2025    		 June 30,
    2024
    Assets   
    Current assets:   
    Cash and cash equivalents$932,711  $238,361 
    Accounts receivable, net 907,825   837,275 
    Inventories 862,641   822,250 
    Prepayments and other current assets 505,243   459,833 
    Total current assets$3,208,420  $2,357,719 
    Non-current assets:   
    Property, plant, and equipment, net$535,339  $548,025 
    Operating lease right-of-use assets 152,603   151,121 
    Goodwill and other intangibles, net 3,279,030   3,327,959 
    Deferred income taxes and other non-current assets 391,430   487,570 
    Total non-current assets$4,358,402  $4,514,675 
    Total assets$7,566,822  $6,872,394 
    Liabilities and Stockholders’ Equity   
    Current liabilities:   
    Accounts payable$222,561  $237,728 
    Accrued expenses 386,325   377,678 
    Operating lease liabilities, current 28,749   25,278 
    Deferred revenue 160,445   152,554 
    Income taxes payable 132,530   107,517 
    Short-term debt 9,906   9,900 
    Total current liabilities$940,516  $910,655 
    Non-current liabilities:   
    Deferred revenue$151,090  $137,343 
    Deferred income taxes 78,983   79,339 
    Operating lease liabilities, non-current 137,991   141,444 
    Other long-term liabilities 48,983   42,257 
    Long-term debt 663,126   697,313 
    Total non-current liabilities$1,080,173  $1,097,696 
    Total liabilities$2,020,689  $2,008,351 
    Stockholders’ equity   
    Common stock$761  $588 
    Additional paid-in capital 1,990,137   1,896,604 
    Retained earnings 5,779,375   4,991,647 
    Treasury stock (1,973,284)  (1,773,267)
    Accumulated other comprehensive income (250,856)  (251,529)
    Total stockholders’ equity$5,546,133  $4,864,043 
    Total liabilities and stockholders’ equity$7,566,822  $6,872,394 


    Condensed Consolidated Statements of Cash Flows
    (Unaudited; $ in thousands)

     Three Months Ended Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 March 31,
    2025    		 March 31,
    2024
    Cash flows from operating activities:       
    Net income$365,041  $300,492  $1,021,018  $728,715 
    Adjustment to reconcile net income to cash provided by operating activities:       
    Depreciation and amortization 43,675   43,474   134,845   133,192 
    Amortization of right-of-use assets 8,235   11,168   26,678   28,262 
    Stock-based compensation costs 24,120   20,442   66,910   58,792 
    (Gain) loss attributable to equity method investments, net of dividends received (335)  (440)  (2,375)  2,716 
    (Gain) loss on equity investments 5,647   (13,919)  7,765   (11,429)
    Non-cash restructuring expenses —   —   —   33,239 
    Changes in operating assets and liabilities:       
    Accounts receivable, net (40,033)  (56,486)  (71,469)  (76,755)
    Inventories, net 29,864   86,199   (48,032)  163,294 
    Prepaid expenses, net deferred income taxes and other current assets 79,357   (24,386)  35,612   (98,976)
    Accounts payable, accrued expenses, income taxes payable and other 63,091   35,488   41,870   96 
    Net cash provided by (used in) operating activities$578,662  $402,032  $1,212,822  $961,146 
    Cash flows from investing activities:       
    Purchases of property, plant, and equipment (20,796)  (21,191)  (59,280)  (74,579)
    Patent registration and acquisition costs (2,992)  (1,918)  (7,584)  (13,954)
    Business acquisitions, net of cash acquired —   (3,080)  (670)  (113,767)
    Purchases of investments (2,053)  (2,387)  (4,403)  (9,692)
    Proceeds from exits of investments —   —   4,378   250 
    Proceeds (payments) on maturity of foreign currency contracts (5,945)  (4,577)  1,227   (11,533)
    Net cash provided by (used in) investing activities$(31,786) $(33,153) $(66,332) $(223,275)
    Cash flows from financing activities:       
    Proceeds from issuance of common stock, net 9,022   4,892   44,283   25,399 
    Purchases of treasury stock (75,026)  (50,000)  (200,017)  (100,007)
    Taxes paid related to net share settlement of equity awards (364)  (314)  (17,487)  (8,336)
    Payments of business combination contingent consideration —   —   (855)  (1,293)
    Proceeds from borrowings, net of borrowing costs —   —   —   105,000 
    Repayment of borrowings —   (220,000)  (35,000)  (535,000)
    Dividends paid (77,704)  (70,492)  (233,290)  (211,767)
    Net cash provided by (used in) financing activities$(144,072) $(335,914) $(442,366) $(726,004)
    Effect of exchange rate changes on cash$7,963  $(5,302) $(9,774) $(1,848)
    Net increase (decrease) in cash and cash equivalents 410,767   27,663   694,350   10,019 
    Cash and cash equivalents at beginning of period 521,944   210,247   238,361   227,891 
    Cash and cash equivalents at end of period$932,711  $237,910  $932,711  $237,910 


    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 are reconciled below:

     Three Months Ended Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 March 31,
    2025    		 March 31,
    2024
            
    Revenue$1,291,736  $1,196,980  $3,798,334  $3,462,102 
            
    GAAP cost of sales$525,327  $504,199  $1,563,432  $1,522,326 
    Less: Amortization of acquired intangibles(A) (7,444)  (7,812)  (22,748)  (24,976)
    Less: Masks with magnets field safety notification expenses(A) —   —   —   (6,351)
    Less: Astral field safety notification expenses(A) —   —   —   (7,911)
    Non-GAAP cost of sales$517,883  $496,387  $1,540,684  $1,483,088 
            
    GAAP gross profit$766,409  $692,781  $2,234,902  $1,939,776 
    GAAP gross margin 59.3%  57.9%  58.8%  56.0%
    Non-GAAP gross profit$773,853  $700,593  $2,257,650  $1,979,014 
    Non-GAAP gross margin 59.9%  58.5%  59.4%  57.2%


    The measure “non-GAAP income from operations” is reconciled with GAAP income from operations below:

     Three Months Ended Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 March 31,
    2025    		 March 31,
    2024
            
    GAAP income from operations$426,268 $374,584 $1,230,823 $938,677
    Amortization of acquired intangibles—cost of sales(A) 7,444  7,812  22,748  24,976
    Amortization of acquired intangibles—operating expenses(A) 10,895  11,204  33,345  35,259
    Restructuring(A) —  —  —  64,228
    Masks with magnets field safety notification expenses(A) —  —  —  6,351
    Astral field safety notification expenses(A) —  —  —  7,911
    Acquisition-related expenses(A) —  —  —  483
    Non-GAAP income from operations$444,607 $393,600 $1,286,916 $1,077,885


    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 Nine Months Ended
     March 31,
    2025    		 March 31,
    2024    		 March 31,
    2025    		 March 31,
    2024
            
    GAAP net income$365,041  $300,492  $1,021,018  $728,715 
    Amortization of acquired intangibles—cost of sales(A) 7,444   7,812   22,748   24,976 
    Amortization of acquired intangibles—operating expenses(A) 10,895   11,204   33,345   35,259 
    Restructuring expenses(A) —   —   —   64,228 
    Masks with magnets field safety notification expenses(A) —   —   —   6,351 
    Astral field safety notification expenses(A) —   —   —   7,911 
    Acquisition-related expenses(A) —   —   —   483 
    Income tax effect of interest and penalties on income tax refunds(A) (29,976)  —   (29,976)  — 
    Income tax effect on non-GAAP adjustments(A) (4,871)  (5,083)  (14,904)  (34,969)
    Non-GAAP net income(A)$348,533  $314,425  $1,032,231  $832,954 
            
    GAAP diluted shares outstanding 147,220   147,450   147,432   147,549 
    GAAP diluted earnings per share$2.48  $2.04  $6.93  $4.94 
    Non-GAAP diluted earnings per share(A)$2.37  $2.13  $7.00  $5.65 


    (A)Resmed adjusts for the impact of the amortization of acquired intangibles, interest and penalties on income tax refunds, 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
     March 31,
    2025    		(A)March 31,
    2024    		(A)% Change Constant
    Currency(B)
    U.S., Canada, and Latin America       
    Devices$422.7 $399.3 6%  
    Masks and other 326.7  288.2 13   
    Total U.S., Canada and Latin America$749.3 $687.5 9   
            
    Combined Europe, Asia, and other markets       
    Devices$253.5 $238.9 6% 9%
    Masks and other 127.7  122.6 4  7 
    Total Combined Europe, Asia and other markets$381.3 $361.6 5  8 
            
    Global revenue       
    Total Devices$676.2 $638.2 6% 7%
    Total Masks and other 454.4  410.8 11  12 
    TotalSleep and Breathing Health$1,130.6 $1,049.0 8  9 
            
    Residential Care Software 161.2  148.0 9  10 
    Total$1,291.7 $1,197.0 8  9 
            


     Nine Months Ended
     March 31,
    2025    		(A)March 31,
    2024    		(A)%
    Change    		 Constant
    Currency(B)
    U.S., Canada, and Latin America       
    Devices$1,221.6 $1,116.5 9%  
    Masks and other 983.9  878.6 12   
    Total U.S., Canada and Latin America$2,205.6 $1,995.2 11   
            
    Combined Europe, Asia, and other markets       
    Devices$749.6 $692.4 8% 9%
    Masks and other 368.7  342.3 8  9 
    Total Combined Europe, Asia and other markets$1,118.3 $1,034.8 8  9 
            
    Global revenue       
    Total Devices$1,971.3 $1,808.9 9% 9%
    Total Masks and other 1,352.6  1,221.0 11  11 
    Total Sleep and Breathing Health$3,323.9 $3,029.9 10  10 
            
    Residential Care Software 474.4  432.2 10  10 
    Total$3,798.3 $3,462.1 10  10 


    (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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