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ResMed Annual Report, Year Ended Jun 30, 2023

Filing Date
Filed August 11, 2023
Period End
June 30, 2023
Securities
RMDRSMDF
One revenue dollarkept$0.21
In the record · 2016–202610-K1410-Q338-K85

RMD filed 14 annual reports (10-K), 33 quarterly reports (10-Q) and 85 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jan ’17Jan ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Jul ’22Jul ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 10-K filed August 11, 2023. Cited figures are marked; the original filing is the authoritative source.

ResMed Inc. (NYSE: RMD) reported fiscal year 2023 (year ended June 30, 2023) net revenue of $4.22 billiona, up 18% from $3.58 billion, with net income of $897.6 million, or $6.09 per diluted share, compared with $779.4 million, or $5.30 per diluted share, in fiscal 2022.

Growth was led by the Sleep and Respiratory Care segment, where net revenue rose to $3.73 billionb, and by the Software as a Service (SaaS) segment, which rose to $498.0 million, driven largely by the MEDIFOX DAN acquisition completed on November 21, 2022 for $997.5 million. Gross margin declined slightly to 55.8% from 56.6%, reflecting unfavorable product mix, higher component and manufacturing costs, and foreign currency movements. Balance sheet and cash flow changed materially.

Total assets rose to $6.75 billionc and total debt reached $1.44 billion, up from $775.2 million, as the company borrowed under its revolving credit facility to fund the MEDIFOX DAN purchase. Operating cash flow was $693.3 million, compared with $351.1 million in fiscal 2022, which had included the $284.8 million final payment to the Australian Taxation Office. Cash and cash equivalents were $227.9 million at year end, and $745.0 million remained available under the revolving credit facility.

The company paid dividends of $1.76d per share totaling $258.3 million and did not repurchase shares during the year. The filing also flags ongoing risks, including supply constraints on semiconductors and other components, competitor Philips' product recall, reimbursement pressure in the United States, healthcare fraud and privacy regulation, and pending patent litigation with New York University and Cleveland Medical Devices. Management states that it does not expect the outcome of these matters to have a material adverse effect on the consolidated financial statements taken as a whole.

02—Key points

Key Highlights

  1. Net revenue rose 18% to $4.22 billion in fiscal 2023, with devices up 22% to $2.27 billion and SaaS up 24% to $498.0 million.
  2. Net income increased to $897.6 million, or $6.09 per diluted share, from $779.4 million, or $5.30 per diluted share, in fiscal 2022.
  3. Gross margin was 55.8% versus 56.6% a year earlier, pressured by unfavorable product mix, higher component and manufacturing costs, and foreign currency movements.
  4. The MEDIFOX DAN acquisition for $997.5 million, funded by the revolving credit facility, lifted total debt to $1.44 billion from $775.2 million and added $767.7 million of goodwill in the SaaS segment.
  5. Operating cash flow was $693.3 million, up from $351.1 million, which had been reduced by the $284.8 million ATO tax settlement payment in fiscal 2022.
  6. Cash and cash equivalents ended the year at $227.9 million, with $745.0 million available under the revolving credit facility.
  7. The quarterly dividend was $0.44 per share in fiscal 2023, totaling $1.76 per share and $258.3 million, and a dividend of $0.48 per share was declared on August 3, 2023.

03—One dollar

Follow one dollar

Of each $1.00 of revenue in FY2023, ResMed kept $0.21.

  1. Revenue$4.22B100.0%
  2. Cost of revenue−$1.87B44.2%
  3. Gross profit$2.36B55.8%
  4. Operating costs−$1.22B29.0%
  5. Operating income$1.13B26.8%
  6. Interest, other & tax−$233.9M5.5%
  7. Net income$898.0M21.3%
Computed from 10-KFY2023filed August 11, 2023Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

Where FY2023 revenue went

$4.22B
  • Cost of revenue: $1.87B, 44% of revenue
  • Net income: $898.0M, 21% of revenue
  • SG&A: $874.0M, 21% of revenue
  • R&D: $287.6M, 6.8% of revenue
  • Other operating costs: $62.1M, 1.5% of revenue
  • Interest, other & tax: $233.9M, 5.5% of revenue

Kept 21% as net incomeOther operating costs $62.1M · 1.5%

Full revenue history →

04—Financials

Financial Highlights

Figures from 10-KFY2023filed August 11, 2023
Revenue$4.22B55.8% Gross MarginNet Income$898.00M21.3% Net MarginEPS (Diluted)$6.09Total Assets$6.75BCash & Equivalents$227.89MFree Cash Flow$573.63M

Financial Statements

FY2023 against FY2022

Line itemFY2023FY2022Change
Revenue$4.22B$3.58B+18.0%
Cost of Revenue$1.87B$1.55B+20.2%
Gross Profit$2.36B$2.02B+16.4%
R&D Expenses$287.64M$253.57M+13.4%
SG&A Expenses$874.00M$737.51M+18.5%
Operating Expenses$1.22B$1.02B+19.5%
Operating Income$1.13B$1.00B+13.2%
Net Income$898.00M$779.00M+15.3%
EPS (Basic)$6.12$5.34+14.6%
EPS (Diluted)$6.09$5.30+14.9%
Shares Outstanding (Basic)146.76M146.07M+0.5%
Shares Outstanding (Diluted)147.46M147.04M+0.3%

05—Questions

Frequently Asked Questions

  1. How did ResMed's revenue and profitability change in fiscal 2023?

    Net revenue increased 18% to $4,222,993 thousand ($4.22 billion) from $3,578,127 thousand, and net income rose to $897.6 million, or $6.09 per diluted share, from $779.4 million, or $5.30 per diluted share. Income from operations rose to $1.13 billion from $1.00 billion.

  2. What drove the growth in the Sleep and Respiratory Care segment?

    The filing attributes device revenue growth to increased demand, reduced competitive supply, higher average selling prices and incremental sales of Card-to-Cloud devices. Device revenue rose 22% to $2.27 billion, and mask and other revenue rose 11% to $1.45 billion.

  3. How much debt does ResMed carry, and how was the MEDIFOX DAN acquisition financed?

    Total debt was $1,441.1 million at June 30, 2023, up from $775.2 million. The MEDIFOX DAN acquisition, completed November 21, 2022 for $997.5 million, was paid for with funds drawn under the Revolving Credit Agreement, which had $745.0 million of availability at year end. Both the revolving and term credit agreements mature June 29, 2027.

  4. What are the main risks highlighted in the filing?

    Key risks include component supply constraints, particularly semiconductors, which may raise costs or limit production; competition, including the potential return of Philips products after its recall; reimbursement pressure from Medicare competitive bidding and other payers; compliance with fraud, abuse and privacy laws; and pending patent litigation with New York University and Cleveland Medical Devices. Management does not expect these matters to have a material adverse effect on the consolidated financial statements taken as a whole.

06—Continue

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