RSMDF Resmed Inc CDI (PK)

Year-over-year revenue grows 10%, operating profit up 52%, non-GAAP operating profit up 19%

Operating cash flow of $309 million

Revenue increased by 10% to $1.3 billion; up 10% on a constant currency basis

Gross margin improved 300 bps to 58.6%; non-GAAP gross margin improved 230 bps to 59.2%

Income from operations increased 52%; non-GAAP income from operations up 19%

Operating cash flow of $309 million

Diluted earnings per share of $2.34; non-GAAP diluted earnings per share of $2.43

Revenue

Gross margin

Non-GAAP gross margin ^(B)

Selling, general, and administrative expenses

Research and development expenses

Income from operations

Non-GAAP income from operations ^(B)

Net income

Non-GAAP net income ^(B)

Diluted earnings per share

Non-GAAP diluted earnings per share ^(B)

Revenue

Gross margin

Non-GAAP gross margin ^(B)

Selling, general, and administrative expenses

Research and development expenses

Income from operations

Non-GAAP income from operations ^(B)

Net income

Non-GAAP net income ^(B)

Diluted earnings per share

Non-GAAP diluted earnings per share ^(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.

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

Revenue grew by 10 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 12 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 8 percent on a constant currency basis, reflecting continued organic growth in our Residential Care Software portfolio.

Gross margin increased by 300 basis points mainly due to manufacturing and logistics efficiencies and component cost improvements. Non-GAAP gross margin increased by 230 basis points due to the same factors.

Selling, general, and administrative expenses increased by 9 percent on a constant currency basis. The increase in SG&A expenses was mainly due to increases in employee-related expenses. SG&A expenses improved to 18.8 percent of revenue in the quarter, compared with 19.1 percent in the same period of the prior year.

Income from operations increased by 52 percent as the prior year included $64.2 million of restructuring related charges. Non-GAAP income from operations increased by 19 percent.

Net income for the quarter was $345 million and diluted earnings per share was $2.34. Non-GAAP net income increased by 29 percent to $358 million, and non-GAAP diluted earnings per share increased by 29 percent to $2.43, predominantly attributable to strong sales growth and gross margin improvement.

Operating cash flow for the quarter was $309 million, compared to net income in the current quarter of $345 million and non-GAAP net income of $358 million.

During the quarter, we paid $78 million in dividends to shareholders and repurchased 307,000 shares for consideration of $75 million as part of our ongoing capital management.

Announced the launch of the Kontor Head Strap, a premium accessory for Apple Vision Pro, that delivers a superb balance of softness and support for extended wear-time. The Kontor Head Strap is crafted with a blend of ResMed-exclusive ultra-premium materials designed to be gentle on the skin and allow for further customization of Apple Vision Pro with the option to utilize six included modular counterweights. The Kontor Head Strap enables extended wear-time benefits for Vision Pro users. ResMed’s products are engineered to deliver exceptional comfort and performance, enhancing users’ experiences across healthcare and technology.

Reaffirmed our commitment to expanding our Singapore operations in partnership with the Singapore Economic Development Board (EDB). We will make new investments in Singapore by 2029, strengthening our global manufacturing network and positioning our Singapore presence as a key innovation hub across the Asia-Pacific.

Named to Forbes’ first-ever Most Trusted Companies in America list based on employee trust, customer trust, investor trust and media sentiment. Named for the fifth consecutive year to Wall Street Journal’s Management Top 250 ranking based on customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.

Net revenue

Cost of sales

Amortization of acquired intangibles ⁽¹⁾

Masks with magnets field safety notification expenses ⁽¹⁾

Astral field safety notification expenses ⁽¹⁾

Total cost of sales

Gross profit

Selling, general, and administrative

Research and development

Amortization of acquired intangibles ⁽¹⁾

Restructuring expenses ⁽¹⁾

Total operating expenses

Income from operations

Other income (expenses), net:

Interest (expense) income, net

Gain (loss) attributable to equity method investments

Gain (loss) on equity investments ⁽¹⁾

Other, net

Total other income (expenses), net

Income before income taxes

Income taxes

Net income

Basic earnings per share

Diluted earnings per share

Non-GAAP diluted earnings per share ⁽¹⁾

Basic shares outstanding

Diluted shares outstanding

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

Assets

Current assets:

Cash and cash equivalents

Accounts receivable, net

Inventories

Prepayments and other current assets

Total current assets

Non-current assets:

Property, plant, and equipment, net

Operating lease right-of-use assets

Goodwill and other intangibles, net

Deferred income taxes and other non-current assets

Total non-current assets

Total assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

Accrued expenses

Operating lease liabilities, current

Deferred revenue

Income taxes payable

Short-term debt

Total current liabilities

Non-current liabilities:

Deferred revenue

Deferred income taxes

Operating lease liabilities, non-current

Other long-term liabilities

Long-term debt

Total non-current liabilities

Total liabilities

Stockholders’ equity

Common stock

Additional paid-in capital

Retained earnings

Treasury stock

Accumulated other comprehensive income

Total stockholders’ equity

Total liabilities and stockholders’ equity

Cash flows from operating activities:

Net income

Adjustment to reconcile net income to cash provided by operating activities:

Depreciation and amortization

Amortization of right-of-use assets

Stock-based compensation costs

(Gain) loss attributable to equity method investments, net of dividends received

(Gain) loss on equity investments

Non-cash restructuring expenses

Changes in operating assets and liabilities:

Accounts receivable, net

Inventories, net

Prepaid expenses, net deferred income taxes and other current assets

Accounts payable, accrued expenses, income taxes payable and other

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchases of property, plant, and equipment

Patent registration and acquisition costs

Business acquisitions, net of cash acquired

Purchases of investments

Proceeds from exits of investments

Proceeds (payments) on maturity of foreign currency contracts

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock, net

Purchases of treasury stock

Taxes paid related to net share settlement of equity awards

Payments of business combination contingent consideration

Proceeds from borrowings, net of borrowing costs

Repayment of borrowings

Dividends paid

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Revenue

GAAP cost of sales

Less: Amortization of acquired intangibles ^(A)

Less: Masks with magnets field safety notification expenses ^(A)

Less: Astral field safety notification expenses ^(A)

Non-GAAP cost of sales

GAAP gross profit

GAAP gross margin

Non-GAAP gross profit

Non-GAAP gross margin

GAAP income from operations

Amortization of acquired intangibles—cost of sales ^(A)

Amortization of acquired intangibles—operating expenses ^(A)

Restructuring ^(A)

Masks with magnets field safety notification expenses ^(A)

Astral field safety notification expenses ^(A)

Acquisition-related expenses ^(A)

Non-GAAP income from operations

GAAP net income

Amortization of acquired intangibles—cost of sales ^(A)

Amortization of acquired intangibles—operating expenses ^(A)

Restructuring expenses ^(A)

Masks with magnets field safety notification expenses ^(A)

Astral field safety notification expenses ^(A)

Acquisition-related expenses ^(A)

Income tax effect on non-GAAP adjustments ^(A)

Non-GAAP net income ^(A)

GAAP diluted shares outstanding

GAAP diluted earnings per share

Non-GAAP diluted earnings per share ^(A)

ResMed adjusts for the impact of the amortization of acquired intangibles, 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.

U.S., Canada, and Latin America

Devices

Masks and other

Total U.S., Canada and Latin America

Combined Europe, Asia, and other markets

Devices

Masks and other

Total Combined Europe, Asia and other markets

Global revenue

Total Devices

Total Masks and other

Total Sleep and Breathing Health

Residential Care Software

Total

U.S., Canada, and Latin America

Devices

Masks and other

Total U.S., Canada and Latin America

Combined Europe, Asia, and other markets

Devices

Masks and other

Total Combined Europe, Asia and other markets

Global revenue

Total Devices

Total Masks and other

Total Sleep and Breathing Health

Residential Care Software

Total

Totals and subtotals may not add due to rounding.

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.