News Release Details

• Year-over-year revenue grows 9%, operating profit up 38%, non-GAAP operating profit up 30%
• Operating cash flow of $440 million
• Quarterly dividend increases 10% to $0.53 per share
• Company to host an Investor Day on September 30, 2024

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, August 1, 2024 – ResMed Inc. (NYSE: RMD, ASX: RMD) today announced results for its quarter ended June 30, 2024.

Fourth Quarter 2024 Highlights

All comparisons are to the prior year period

• Revenue increased by 9% to $1.2 billion; up 10% on a constant currency basis 
• Gross margin improved 350 bps to 58.5%; non-GAAP gross margin improved 330 bps to 59.1%
• Income from operations increased 38%; non-GAAP income from operations up 30%
• Operating cash flow of $440 million and debt repayments of $300 million
• Diluted earnings per share of $1.98; non-GAAP diluted earnings per share of $2.08

Full Year 2024 Highlights

All comparisons are to the prior year period

• Revenue increased by 11% to $4.7 billion; up 11% on a constant currency basis 
• Gross margin improved 90 bps to 56.7%; non-GAAP gross margin improved 120 bps to 57.7%
• Income from operations increased 17%; non-GAAP income from operations up 21%
• Operating cash flow of $1.4 billion and debt repayments of $0.8 billion
• Diluted earnings per share of $6.92; non-GAAP diluted earnings per share of $7.72

“Our fourth quarter and full-year fiscal year 2024 results demonstrate strong performance across all sectors of our business,” said Mick Farrell, Chairman & CEO of ResMed. “Ongoing patient and customer demand for our best-in-class products and software solutions is incredibly strong, driving solid growth across our devices, masks, and software businesses. The global ResMed team’s focus on operating excellence, ongoing cost discipline, and profitable growth acceleration resulted in gross margin expansion, strong operating leverage, and double-digit growth in bottom-line profitability.

“Nearly 2.5 billion suffer from major sleep health and breathing disorders. As the market leader in these significantly underpenetrated markets, we’re well-positioned as the clear leader to drive increased market penetration, demand generation, and accelerate growth for our businesses. We’re laser-focused on increasing awareness with the fast-growth population of sleep-health-interested consumers, creating virtual pathways that expand access to therapies, while offering a broad portfolio of medical device products, software solutions, and beyond, as we deliver value for all ResMed stakeholders.”

Financial Results and Operating Metrics

Unaudited; $ in millions, except for per share amounts

1. 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.

1. See the reconciliation of non-GAAP financial measures in the table at the end of the press release.

Discussion of Fourth Quarter Results

All 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 strong growth across our Software as a Service business.
• Revenue in the U.S., Canada, and Latin America, excluding Software as a Service, grew by 10 percent.
• Revenue in Europe, Asia, and other markets, excluding Software as a Service, grew by 8 percent on a constant currency basis.
• Software as a Service revenue increased by 10 percent, reflecting continued organic growth in our SaaS portfolio.
• Gross margin increased by 350 basis points mainly due to reduced freight and manufacturing cost improvements, an increase in average selling prices as well as favorable product mix. Non-GAAP gross margin increased by 330 basis points due to the same factors.
• Selling, general, and administrative expenses increased by 1 percent on a constant currency basis. SG&A expenses improved to 19.8 percent of revenue in the quarter, compared with 21.5 percent in the same period of the prior year. The modest increase in SG&A expenses reflects cost management initiatives implemented during the December quarter.
• Income from operations increased by 38 percent, and non-GAAP income from operations increased by 30 percent.
• Net income for the quarter was $292 million and diluted earnings per share was $1.98. Non-GAAP net income increased by 30 percent to $306 million, and non-GAAP diluted earnings per share increased by 30 percent to $2.08, predominantly attributable to strong sales and gross margin improvement as well as modest growth in operating expenses.
• Operating cash flow for the quarter was $440 million, compared to net income in the current quarter of $292 million and non-GAAP net income of $306 million.
• During the quarter, we paid $71 million in dividends and repurchased 232,000 shares for consideration of $50 million as part of our ongoing capital management.

Other Business and Operational Highlights

• Supported the presentation of 39 clinical research abstracts at the annual American Thoracic Society (26 abstracts) and SLEEP (13 abstracts) conferences, demonstrating the breadth and depth of ResMed’s leadership in generating and analyzing real-world evidence in support of better clinical and patient outcomes. Research focused on a variety of topics including the increasing prevalence of Obstructive Sleep Apnea (OSA), the economic benefits of treating OSA, and the relationship between OSA and depression in women.

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 August 15, 2024, payable on September 19, 2024. 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 August 14, 2024, 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 August 14, 2024, through August 15, 2024, inclusive. 

Webcast details

ResMed will discuss its fourth quarter fiscal year 2024 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 “Q4 2024 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 13747201. The telephone replay will be available until August 15, 2024.

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.

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Condensed Consolidated Statements of Operations

(Unaudited; $ in thousands, except for per share amounts)

(1) See the reconciliation of non-GAAP financial measures in the table at the end of the press release.

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Condensed Consolidated Balance Sheets

(Unaudited; $ in thousands)

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Condensed Consolidated Statements of Cash Flows

(Unaudited; $ in thousands)

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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:

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

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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:

1. ResMed adjusts for the impact of the amortization of acquired intangibles, restructuring expenses, field safety notification expenses, acquisition-related expenses, gain on insurance recoveries, 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.

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Revenue by Product and Region

(Unaudited; $ in millions, except for per share amounts)

1. Totals and subtotals may not add due to rounding.

1. 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.