ResMed (RMD) Morgan Stanley 24th Annual Global Healthcare Conference summary

Growth and market trends

• Provided first-time guidance of 5%-7% revenue growth, with organic growth potentially reaching 6.3%-8.3% after adjusting for Astral.

• Total addressable market estimated at 2.7 billion people globally, spanning sleep apnea, insomnia, restless legs syndrome, and COPD.

• Device growth in the Americas is in the mid-single digits, while masks and accessories are growing in the high single digits.

• Mega trends such as Big Pharma's GLP-1s and consumer tech (wearables) are driving increased patient funneling and diagnosis.

• Strategic alliances and acquisitions (e.g., Oura, Ectosense, Somnoware, VirtuOx) are enhancing patient conversion and therapy adherence.

Patient pathway and engagement

• Acquisitions like Ectosense (NightOwl), Somnoware, and VirtuOx streamline home sleep testing and therapy initiation.

• Over 95,000 CME episodes with 55,000 unique clinicians have been conducted to educate primary care physicians.

• Automated resupply technologies (Brightree, Snap, Snap Light) and the myAir app (10M+ users) drive ongoing patient engagement.

• Generative AI (Project Dawn) integrated into myAir provides personalized sleep health tips and support, with 1.5M inquiries to date.

• Peer-reviewed evidence shows that patient engagement, including resupply outreach, increases therapy adherence.

Financial performance and margin outlook

• Majority of revenue growth is volume-driven, with price increases playing a minor role, especially during inflationary periods.

• Inflationary pressures are mainly from freight/logistics and electromechanical components, particularly for older devices.

• Supply chain productivity initiatives and modest price increases are expected to deliver low double-digit basis point improvements in gross margin annually through 2030.

• Margin improvement will build progressively through the year as productivity and pricing measures take effect.