ResMed(RMD) - 2025 Q4 - Annual Results

Executive Summary & Highlights Fourth Quarter 2025 Highlights Resmed reported strong Q4 FY2025 results with significant year-over-year growth in revenue, operating profit, and non-GAAP EPS Fourth Quarter 2025 Key Financial Highlights: | Metric | Value | | :-------------------------- | :------------------- | | Revenue | $1.3 billion (up 10%) | | Operating Profit | Up 19% (GAAP & non-GAAP) | | Non-GAAP Gross Margin | 61.4% (improved 230 bps) | | Operating Cash Flow | $539 million | | Diluted EPS (non-GAAP) | $2.55 (up 23%) | | Quarterly Dividend Increase | 13% to $0.60 per share | Full Year 2025 Highlights Resmed achieved substantial full-year FY2025 growth, with 10% revenue increase, improved gross margin, and strong non-GAAP EPS Full Year 2025 Key Financial Highlights: | Metric | Value | | :-------------------------- | :------------------- | | Revenue | $5.1 billion (up 10%) | | Non-GAAP Gross Margin | 60.0% (improved 230 bps) | | Operating Profit (non-GAAP) | Up 19% | | Operating Cash Flow | $1.8 billion | | Diluted EPS (non-GAAP) | $9.55 (up 24%) | CEO Commentary CEO Mick Farrell highlighted strong FY2025 results from global demand and digital health, with FY2026 focused on innovation and care expansion - Strong finish to fiscal year 2025 driven by robust global demand for market-leading sleep and breathing health devices and an expanding digital health ecosystem[3] - Connected care platform sets the standard for digital health innovation, empowering millions with hardware, software, and healthcare solutions at home[4] - Plans for fiscal year 2026 include continued investment in innovation, scaling digital health capabilities, and partnering to expand access to care globally[6] Financial Performance Overview Fourth Quarter Financial Results Resmed reported strong Q4 FY2025 results, with significant year-over-year increases in revenue, gross profit, operating income, and net income Revenue Performance (Q4) Q4 revenue increased 10% year-over-year to $1,348.0 million (9% constant currency), demonstrating consistent growth | Metric | Q4 2025 (USD millions) | Q4 2024 (USD millions) | % Change | Constant Currency % Change | | :----------------------- | :--------------------- | :--------------------- | :------- | :------------------------- | | Revenue | $1,348.0 | $1,223.2 | 10% | 9% | Profitability and Margins (Q4) Q4 2025 gross margin improved by 230 bps to 60.8% (GAAP) and 61.4% (non-GAAP), with operating income up 19% | Metric | Q4 2025 | Q4 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | | Gross margin (GAAP) | 60.8% | 58.5% | +230 bps | | Non-GAAP gross margin | 61.4% | 59.1% | +230 bps | | Income from operations (GAAP) | $454.5M | $381.2M | 19% | | Non-GAAP income from operations | $476.4M | $400.5M | 19% | Earnings Per Share (Q4) Q4 2025 diluted EPS increased significantly, with GAAP EPS up 30% to $2.58 and non-GAAP EPS up 23% to $2.55 | Metric | Q4 2025 | Q4 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | | Diluted EPS (GAAP) | $2.58 | $1.98 | 30% | | Non-GAAP Diluted EPS | $2.55 | $2.08 | 23% | Full Year Financial Results Resmed demonstrated robust FY2025 financial performance, with double-digit revenue growth, substantial gross margin expansion, and strong operating income increases Revenue Performance (FY) Full year FY2025 revenue reached $5,146.3 million, a 10% year-over-year increase, consistent with constant currency growth | Metric | FY 2025 (USD millions) | FY 2024 (USD millions) | % Change | Constant Currency % Change | | :----------------------- | :--------------------- | :--------------------- | :------- | :------------------------- | | Revenue | $5,146.3 | $4,685.3 | 10% | 10% | Profitability and Margins (FY) Full year gross margin improved by 270 bps (GAAP) and 230 bps (non-GAAP), with operating income increasing 28% (GAAP) and 19% (non-GAAP) | Metric | FY 2025 | FY 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | | Gross margin (GAAP) | 59.4% | 56.7% | +270 bps | | Non-GAAP gross margin | 60.0% | 57.7% | +230 bps | | Income from operations (GAAP) | $1,685.4M | $1,319.9M | 28% | | Non-GAAP income from operations | $1,763.3M | $1,478.4M | 19% | Earnings Per Share (FY) Full year diluted EPS saw substantial growth, with GAAP EPS up 37% to $9.51 and non-GAAP EPS up 24% to $9.55 | Metric | FY 2025 | FY 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | | Diluted EPS (GAAP) | $9.51 | $6.92 | 37% | | Non-GAAP Diluted EPS | $9.55 | $7.72 | 24% | Discussion of Fourth Quarter Results & Operational Highlights Revenue Drivers & Regional Performance Q4 revenue grew 9% constant currency, driven by strong demand for sleep devices, masks, and Residential Care Software across all major regions - Revenue grew by 9% on a constant currency basis, driven by increased demand for sleep devices and masks portfolio, and solid growth across Residential Care Software business[9] - Revenue in the U.S., Canada, and Latin America (excluding Residential Care Software) grew by 9%[9] - Revenue in Europe, Asia, and other markets (excluding Residential Care Software) grew by 9% on a constant currency basis[9] Cost & Expense Management Gross margin improved by 230 bps due to efficiencies and currency, while SG&A expenses increased 8% (constant currency) but improved to 19.7% of revenue - Gross margin increased by 230 basis points mainly due to procurement, manufacturing and logistics efficiencies as well as favorable foreign currency movements[9] - Selling, general, and administrative expenses increased by 8% on a constant currency basis, mainly due to increases in employee-related costs and marketing expenses[9] - SG&A expenses improved to 19.7% of revenue in the quarter, compared with 19.8% in the same period of the prior year[9] Net Income & Operating Cash Flow Q4 net income was $380 million (non-GAAP up 22% to $375 million), diluted EPS was $2.58 (non-GAAP up 23% to $2.55), and operating cash flow reached $539 million Q4 2025 Net Income & EPS: | Metric | Value | | :-------------------------- | :---------- | | Net income | $380 million | | Non-GAAP net income | $375 million (up 22%) | | Diluted earnings per share | $2.58 | | Non-GAAP diluted EPS | $2.55 (up 23%) | - Operating cash flow for the quarter was $539 million[9] Capital Management Activities Resmed paid $78 million in dividends and repurchased 419,000 shares for $100 million as part of its capital management strategy - Paid $78 million in dividends to shareholders[9] - Repurchased 419,000 shares for consideration of $100 million as part of ongoing capital management[9] Strategic Initiatives & Innovation Resmed acquired VirtuOx to enhance diagnostics, partnered with Qatar Airways for a sleep health campaign, and presented research at SLEEP 2025 on therapy and AI - Acquired VirtuOx, a leading independent diagnostic testing facility (IDTF) for sleep, respiratory, and cardiac conditions, to support patients earlier in their journey and help healthcare providers deliver care[9] - Named Official Sleep Partner of the Qatar Airways British and Irish Lions Tour to Australia and launched 'Tackle Your Sleep' digital and content focused campaign[9] - Showcased research at the SLEEP 2025 conference, reinforcing leadership in sleep science and innovation, with focus areas including PAP therapy adherence, gender disparities in OSA diagnosis, patient-reported outcomes, and AI use in therapy engagement[9] Dividend Program Quarterly Cash Dividend Resmed declared a quarterly cash dividend of $0.60 per share, payable September 18, 2025, to shareholders of record August 14, 2025 - Quarterly cash dividend declared: $0.60 per share[10] - Record date: August 14, 2025; Payable date: September 18, 2025; Ex-dividend date: August 13, 2025[10] - Dividend paid in U.S. currency to NYSE common stock holders and equivalent Australian currency to ASX CDI holders (based on 10:1 ratio)[10] Company Information About Resmed Resmed is a global leader in innovative out-of-hospital solutions for sleep apnea and chronic diseases, leveraging digital health to improve care in over 140 countries - Pioneers innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives[12] - Utilizes digital health technologies and cloud-connected medical devices to transform care for sleep apnea, COPD, and other chronic diseases[12] - Comprehensive out-of-hospital software platforms support professionals and caregivers, improving quality of life and reducing costs in over 140 countries[12] Webcast Details Resmed will host a webcast on July 31, 2025, at 1:30 p.m. U.S. Pacific Time to discuss Q4 FY2025 results, with live and replay access available - Live webcast of Q4 FY2025 results on July 31, 2025, at 1:30 p.m. U.S. Pacific Time, accessible at investor.resmed.com[11] - Replay of the webcast will be available approximately two hours after the live event on the website[11] - Telephone replay available approximately three hours after the webcast until August 14, 2025, using provided dial-in numbers and passcode[11] Safe Harbor Statement This release contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially from projections - Statements in the release that are not historical facts are 'forward-looking' statements under the Private Securities Litigation Reform Act of 1995[13] - These statements are subject to risks and uncertainties which could cause actual results to materially differ from those projected or implied[13] - Additional risks and uncertainties are discussed in Resmed's periodic reports on file with the U.S. Securities & Exchange Commission, and Resmed does not undertake to update its forward-looking statements[13] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations This section presents unaudited condensed consolidated statements of operations for Q4 and FY2025/2024, detailing revenue, gross profit, operating income, net income, and EPS Condensed Consolidated Statements of Operations (USD thousands): | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :--------------------- | :------ | :------ | :------ | :------ | | Net revenue | $1,347,993 | $1,223,195 | $5,146,327 | $4,685,297 | | Gross profit | $820,070 | $715,527 | $3,054,970 | $2,655,303 | | Income from operations | $454,543 | $381,217 | $1,685,363 | $1,319,893 | | Net income | $379,705 | $292,237 | $1,400,723 | $1,020,951 | | Diluted earnings per share | $2.58 | $1.98 | $9.51 | $6.92 | Condensed Consolidated Balance Sheets This section provides unaudited condensed consolidated balance sheets as of June 30, 2025, and 2024, outlining assets, liabilities, and equity Condensed Consolidated Balance Sheets (USD thousands): | Metric | June 30, 2025 | June 30, 2024 | | :--------------------- | :------------ | :------------ | | Total assets | $8,174,391 | $6,872,394 | | Total liabilities | $2,206,532 | $2,008,351 | | Total stockholders' equity | $5,967,859 | $4,864,043 | | Cash and cash equivalents | $1,209,450 | $238,361 | Condensed Consolidated Statements of Cash Flows This section presents unaudited condensed consolidated statements of cash flows for Q4 and FY2025/2024, detailing operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (USD thousands): | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :---------------------------------------- | :-------- | :-------- | :---------- | :---------- | | Net cash provided by operating activities | $538,766 | $440,113 | $1,751,588 | $1,401,260 | | Net cash used in investing activities | $(133,713) | $(46,510) | $(200,045) | $(269,784) | | Net cash used in financing activities | $(163,887) | $(393,282) | $(606,253) | $(1,119,287) | | Cash and cash equivalents at end of period | $1,209,450 | $238,361 | $1,209,450 | $238,361 | Reconciliation of Non-GAAP Financial Measures Non-GAAP Gross Profit and Margin Reconciliation This section reconciles GAAP to non-GAAP gross profit and margin, excluding amortization of acquired intangibles and field safety notification expenses Non-GAAP Gross Profit and Margin Reconciliation (USD thousands): | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :------------------ | :------ | :------ | :------ | :------ | | GAAP gross profit | $820,070 | $715,527 | $3,054,970 | $2,655,303 | | Non-GAAP gross profit | $827,925 | $723,514 | $3,085,574 | $2,702,528 | | GAAP gross margin | 60.8% | 58.5% | 59.4% | 56.7% | | Non-GAAP gross margin | 61.4% | 59.1% | 60.0% | 57.7% | Non-GAAP Income from Operations Reconciliation This section reconciles GAAP to non-GAAP income from operations, adjusting for amortization, restructuring, field safety, and acquisition expenses Non-GAAP Income from Operations Reconciliation (USD thousands): | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | GAAP income from operations | $454,543 | $381,217 | $1,685,363 | $1,319,893 | | Non-GAAP income from operations | $476,357 | $400,466 | $1,763,300 | $1,478,400 | Non-GAAP Net Income and Diluted EPS Reconciliation This section reconciles GAAP to non-GAAP net income and diluted EPS, adjusting for non-recurring items and associated tax effects Non-GAAP Net Income and Diluted EPS Reconciliation (USD thousands): | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | GAAP net income | $379,705 | $292,237 | $1,400,723 | $1,020,951 | | Non-GAAP net income | $374,545 | $306,341 | $1,406,777 | $1,139,294 | | GAAP diluted EPS | $2.58 | $1.98 | $9.51 | $6.92 | | Non-GAAP diluted EPS | $2.55 | $2.08 | $9.55 | $7.72 | Management's Rationale for Non-GAAP Measures Resmed uses non-GAAP measures for better insight into core operations and consistent reporting, excluding non-recurring items for meaningful performance evaluation - Non-GAAP information is used internally for planning, forecasting, and evaluating operational results, and to compare current to past periods[22] - Believes non-GAAP information provides investors better insight into Resmed's performance from core operations and ensures consistent financial reporting[22] - Adjustments are made for items like amortization of acquired intangibles, restructuring expenses, field safety notification expenses, acquisition-related expenses, and associated tax effects to facilitate a more meaningful evaluation of ongoing operations[21][22] Revenue Breakdown by Product and Region Fourth Quarter Revenue Breakdown Q4 2025 global revenue increased 10% (9% constant currency), with strong growth in Sleep and Breathing Health, Residential Care Software, Devices, and Masks Q4 2025 Revenue by Product and Region (USD millions): | Category | Q4 2025 | Q4 2024 | % Change | Constant Currency % Change | | :-------------------------------- | :------ | :------ | :------- | :------------------------- | | Global Revenue | $1,348.0 | $1,223.2 | 10% | 9% | | Total Devices | $693.9 | $635.1 | 9% | 8% | | Total Masks and other | $487.1 | $436.2 | 12% | 11% | | Total Sleep and Breathing Health | $1,181.0 | $1,071.3 | 10% | 9% | | Residential Care Software | $167.0 | $151.9 | 10% | 9% | | U.S., Canada, and Latin America | $791.9 | $727.4 | 9% | | | Devices | $432.8 | $406.2 | 7% | | | Masks and other | $359.2 | $321.2 | 12% | | | Combined Europe, Asia, and other markets | $389.0 | $343.9 | 13% | 9% | | Devices | $261.1 | $228.8 | 14% | 10% | | Masks and other | $127.9 | $115.0 | 11% | 7% | Full Year Revenue Breakdown FY2025 global revenue increased 10% (constant currency) to $5,146.3 million, driven by strong growth across Sleep and Breathing Health, Residential Care Software, Devices, and Masks Full Year 2025 Revenue by Product and Region (USD millions): | Category | FY 2025 | FY 2024 | % Change | Constant Currency % Change | | :-------------------------------- | :------ | :------ | :------- | :------------------------- | | Global Revenue | $5,146.3 | $4,685.3 | 10% | 10% | | Total Devices | $2,665.2 | $2,444.0 | 9% | 9% | | Total Masks and other | $1,839.7 | $1,657.2 | 11% | 11% | | Total Sleep and Breathing Health | $4,504.9 | $4,101.2 | 10% | 10% | | Residential Care Software | $641.4 | $584.1 | 10% | 10% | | U.S., Canada, and Latin America | $2,997.5 | $2,722.6 | 10% | | | Devices | $1,654.4 | $1,522.8 | 9% | | | Masks and other | $1,343.1 | $1,199.8 | 12% | | | Combined Europe, Asia, and other markets | $1,507.4 | $1,378.6 | 9% | 9% | | Devices | $1,010.8 | $921.3 | 10% | 9% | | Masks and other | $496.6 | $457.4 | 9% | 8% |