ResMed Q2 Earnings Call Highlights

Core Insights - ResMed reported strong revenue growth of 11% in the December quarter, with a GAAP EPS increase of 16% on revenue of $1.42 billion, driven by device and mask sales growth across various regions [2][3][6] Revenue Growth - In Canada and Latin America, constant-currency device sales increased by 8% and masks and other sales rose by 16%, attributed to resupply growth and new patient setups, along with revenue from the VirtuOx acquisition [1] - Excluding the Residential Care Software (RCS) business, sales in the U.S., Canada, and Latin America rose by 11% (6% on a constant currency basis) [2] - Globally, device sales increased by 7% and masks and other sales grew by 14% on a constant currency basis [2] Margin Expansion - The company achieved a gross margin improvement of 110 basis points year-over-year, with an operating margin increase to 36.3% [6][11] - Management expects fiscal 2026 gross margin to be between 62% and 63%, influenced by currency movements [8] Capital Returns - ResMed declared a quarterly dividend of $0.60 per share and repurchased approximately $175 million worth of shares, increasing planned buybacks to over $600 million for fiscal 2026 [5][19][20] Product Development and Innovation - The company is advancing new products, including the FDA-cleared AI recommender Comfort Match and the F30i fabric mask line, with positive feedback from early users [5][12][13] - Management highlighted the importance of GLP-1 medications as a demand tailwind, noting that patients on both GLP-1 and CPAP are 10-11% more likely to start therapy [6][15][16] Operating Expenses - Operating expenses rose, with SG&A increasing by 15% on a headline basis, driven by employee-related expenses and marketing investments [9] - R&D expenses increased by 12% on a headline basis, with expectations to maintain R&D at 6% to 7% of revenue for fiscal 2026 [10] Cash Flow and Financial Position - Cash flow from operations was reported at $340 million, with capital expenditures of $29 million, leaving the company with $1.4 billion in cash and $753 million in net cash [18]