01—Abstract
Summary
Summary of the 10-K filed August 9, 2024. Cited figures are marked; the original filing is the authoritative source.
ResMed Inc. reported fiscal year 2024 (ended June 30, 2024) net revenue of $4,685.3 milliona, up 11% from $4,223.0 million in fiscal 2023.
Gross profit rose to $2,655.3 millionb, with GAAP gross margin of 56.7% versus 55.8% a year earlier. Net income was $1,021.0 million, or $6.92 per diluted share, compared with $897.6 million, or $6.09 per diluted share, in fiscal 2023. The company operates two segments: Sleep and Respiratory Care, which generated $4,101.2 million of revenue, and Software as a Service (SaaS), which generated $584.1 million, up 17% primarily due to the MEDIFOX DAN acquisition.
Profitability was affected by restructuring expenses of $64.2 millionc, comprising $28.6 million of employee severance and $33.2 million of intangible asset impairments tied to winding down certain business activities. Field safety notification expenses of $14.3 million related to masks with magnets and Astral ventilation devices also weighed on results. Operating cash flow improved sharply to $1,401.3 million from $693.3 million, mainly due to lower inventory purchases.
The company repurchased $150.0 milliond of stock and paid dividends of $1.92 per share totaling $282.3 million. Total debt was $710.0 million at June 30, 2024, down from the prior year after repayment of the revolving credit facility, and $1,470.0 million remained available under that facility.
The filing highlights ongoing patent litigation with NYU and Cleveland Medical, where the company says it is unable to estimate potential losses for matters still open. It also discusses risks from competition, including Philips' ongoing product recall, and from reimbursement changes and the expiration of the company's Corporate Integrity Agreement, which is expected to close out by the end of fiscal 2025.
02—Key points
Key Highlights
- Net revenue rose 11% to $4,685.3 million in fiscal 2024, with Sleep and Respiratory Care at $4,101.2 million and SaaS at $584.1 million.
- Diluted EPS was $6.92 versus $6.09 in fiscal 2023; net income was $1,021.0 million versus $897.6 million.
- GAAP gross margin improved to 56.7% from 55.8%, supported by reduced freight and manufacturing costs, a favorable SaaS impact, and higher average selling prices.
- Restructuring expenses of $64.2 million, including $33.2 million of intangible asset impairments, were recorded in fiscal 2024.
- Operating cash flow was $1,401.3 million, up from $693.3 million, primarily due to lower cash outflows on inventory purchases.
- Total debt declined to $710.0 million at June 30, 2024, and $1,470.0 million was available under the revolving credit facility.
- The company repurchased $150.0 million of common stock and paid dividends of $1.92 per share, totaling $282.3 million; a $0.53 quarterly dividend was declared on August 1, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, ResMed kept $0.22.
- Revenue$4.69B100.0%
- Cost of revenue−$2.03B43.3%
- Gross profit$2.66B56.7%
- Operating costs−$1.34B28.5%
- Operating income$1.32B28.2%
- Interest, other & tax−$298.9M6.4%
- Net income$1.02B21.8%
Where FY2024 revenue went
$4.69B- Cost of revenue: $2.03B, 43% of revenue
- Net income: $1.02B, 22% of revenue
- SG&A: $917.1M, 20% of revenue
- R&D: $307.5M, 6.6% of revenue
- Other operating costs: $110.7M, 2.4% of revenue
- Interest, other & tax: $298.9M, 6.4% of revenue
Kept 22% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed August 9, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $4.69B$4.22B | +10.9% |
| Cost of Revenue | $2.03B$1.87B | +8.7% |
| Gross Profit | $2.66B$2.36B | +12.7% |
| R&D Expenses | $307.52M$287.64M | +6.9% |
| SG&A Expenses | $917.14M$874.00M | +4.9% |
| Operating Expenses | $1.34B$1.22B | +9.1% |
| Operating Income | $1.32B$1.13B | +16.6% |
| Net Income | $1.02B$898.00M | +13.7% |
| EPS (Basic) | $6.94$6.12 | +13.4% |
| EPS (Diluted) | $6.92$6.09 | +13.6% |
| Shares Outstanding (Basic) | 147.02M146.76M | +0.2% |
| Shares Outstanding (Diluted) | 147.55M147.46M | +0.1% |
05—Questions
Frequently Asked Questions
What drove ResMed's revenue growth in fiscal 2024?
Net revenue increased $462.3 million, or 11%, to $4,685.3 million. Sleep and Respiratory Care revenue grew 10% on increased demand and unit sales for devices and masks, and SaaS revenue grew 17%, predominantly due to the MEDIFOX DAN acquisition. Excluding MEDIFOX DAN, SaaS revenue increased 9%.
What one-time or unusual charges affected fiscal 2024 results?
The company recorded $64.2 million of restructuring expenses, including $28.6 million of employee severance and $33.2 million of intangible asset impairments linked to winding down certain business activities. It also incurred $14.3 million of combined field safety notification expenses for masks with magnets and Astral devices, which the company reports separately in its non-GAAP reconciliation.
How did ResMed's cash position and debt change?
Operating cash flow rose to $1,401.3 million from $693.3 million. Cash and cash equivalents were $238.4 million at June 30, 2024. Total outstanding borrowings under the revolving credit, term credit agreements and Senior Notes were $710.0 million, and the company stated its current liquidity sources are sufficient for the next 12 months and beyond.
What legal and competitive risks does the filing highlight?
The filing describes patent litigation with New York University and Cleveland Medical Devices, and states the company cannot reasonably estimate losses for matters still open. It also notes competitor Philips' ongoing product recall, which could affect demand, and says GLP-1 weight-loss drugs could potentially reduce OSA severity or demand for devices.
06—Continue