01—Abstract
Summary
Summary of the 10-Q filed January 31, 2025. Cited figures are marked; the original filing is the authoritative source.
ResMed Inc. reported results for the three and six months ended December 31, 2024.
Net revenue for the quarter was $1.3 billiona ($1,282.1 million), up 10% from $1,162.8 million, and up 10% on a constant currency basis. Sleep and Breathing Health revenue rose 11% to $1,125.6 million, and Residential Care Software revenue rose 8% to $156.5 million. Gross margin improved to 58.6% from 55.6%, helped by lower non-recurring field safety notification expenses in the prior year, manufacturing efficiencies, and lower amortization of acquired intangibles.
Income from operations was $417.2 millionb, compared with $275.1 million a year earlier, and net income was $344.6 million, up 65%. Diluted earnings per share were $2.34, compared with $1.42. Non-GAAP diluted earnings per share were $2.43, compared with $1.88.
For the six months, net revenue was $2.51 billionc, up 11%, and net income was $656.0 million, up 53%. Net cash from operating activities was $634.2 million, versus $559.1 million a year earlier. Cash and cash equivalents rose to $521.9 million from $238.4 million at June 30, 2024.
Total debt was $672.8 milliond, and $1,500.0 million remained available under the revolving credit facility. The company repurchased $125.0 million of treasury stock during the six months and declared a quarterly dividend of $0.53 per share on January 30, 2025. Restructuring expenses of $64.2 million were recorded in the prior-year quarter and none in the current period.
The filing discloses ongoing patent litigation, including suits brought by New York University and Cleveland Medical Devices, for which the company states it cannot make a reasonable estimate of loss or range of losses. Management states that the outcome of litigation is not expected to have a material adverse effect on the consolidated financial statements, and that current liquidity sources will be sufficient for the next 12 months and beyond.
02—Key points
Key Highlights
- Net revenue for the quarter ended December 31, 2024 was $1,282.1 million, up 10% (10% on a constant currency basis) from $1,162.8 million.
- Gross margin was 58.6% for the quarter, compared with 55.6% a year earlier; for the six months it was 58.6%, compared with 55.1%.
- Diluted earnings per share were $2.34 for the quarter versus $1.42, and net income rose 65% to $344.6 million.
- Income from operations was $417.2 million for the quarter, up from $275.1 million, which included $64.2 million of restructuring expenses in the prior-year period.
- Cash and cash equivalents increased to $521.9 million at December 31, 2024, from $238.4 million at June 30, 2024, and operating cash flow for the six months was $634.2 million.
- Total debt was $672.8 million, with $1,500.0 million available under the revolving credit facility and the company in compliance with its debt covenants.
- The company repurchased $125.0 million of treasury stock in the six months and declared a $0.53 per share dividend, with 11.5 million shares remaining under its repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, ResMed kept $0.27.
- Revenue$1.28B100.0%
- Cost of revenue−$530.8M41.4%
- Gross profit$751.3M58.6%
- Operating costs−$334.0M26.1%
- Operating income$417.2M32.5%
- Interest, other & tax−$72.6M5.7%
- Net income$344.6M26.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed January 31, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $1.28B$1.16B | +10.3% |
| Cost of Revenue | $530.81M$515.87M | +2.9% |
| Gross Profit | $751.27M$646.93M | +16.1% |
| R&D Expenses | $81.37M$73.88M | +10.1% |
| SG&A Expenses | $241.61M$222.16M | +8.8% |
| Operating Expenses | $334.03M$371.84M | −10.2% |
| Operating Income | $417.24M$275.09M | +51.7% |
| Net Income | $344.62M$208.80M | +65.0% |
| EPS (Basic) | $2.35$1.42 | +65.5% |
| EPS (Diluted) | $2.34$1.42 | +64.8% |
| Shares Outstanding (Basic) | 146.81M147.13M | −0.2% |
| Shares Outstanding (Diluted) | 147.48M147.54M | 0.0% |
05—Questions
Frequently Asked Questions
How did ResMed's revenue perform in the quarter ended December 31, 2024?
Net revenue was $1,282.1 million, up 10% from $1,162.8 million, or 10% on a constant currency basis. Sleep and Breathing Health revenue grew 11% to $1,125.6 million, driven by increased demand and unit sales of devices and masks, and Residential Care Software revenue grew 8% to $156.5 million.
What drove the improvement in gross margin?
Gross margin rose to 58.6% from 55.6%. The filing attributes this mainly to the absence of $6.4 million of non-recurring field safety notification expenses for masks with magnets recorded in the prior-year quarter, plus manufacturing efficiencies, component cost improvements, and a reduction in amortization of acquired intangibles relating to cost of goods sold.
How did earnings change for the period?
Net income for the quarter was $344.6 million, compared with $208.800 million a year earlier, an increase of 65%. Diluted earnings per share were $2.34, compared with $1.42. For the six months, net income was $656.0 million, up 53%, and diluted earnings per share were $4.45, compared with $2.90.
What is ResMed's liquidity and capital position?
At December 31, 2024, cash and cash equivalents were $521.9 million and total debt was $672.8 million. The company had $1,500.0 million available under its revolving credit facility, for combined cash and available liquidity of $2,021.9 million. Management believes current liquidity sources will be sufficient to fund operations for the next 12 months and beyond.
What legal matters could affect investors?
The company is involved in patent infringement litigation, including cases brought by New York University and Cleveland Medical Devices, and it reports that it is unable to make a reasonable estimate of loss or range of losses from matters that remain open. Management does not expect the outcome of these matters to have a material adverse effect on the consolidated financial statements taken as a whole.
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