ResMed (RMD) Q1 2025 earnings summary

Executive summary

• Revenue grew 11% year-over-year to $1.22 billion, driven by strong demand across all business segments and geographies, including Sleep and Breathing Health and Residential Care Software.

• Operating profit increased by 27% (non-GAAP) and 34% (GAAP), with non-GAAP diluted EPS rising 34% to $2.20 and GAAP diluted EPS up 42% to $2.11.

• Continued market leadership with AirSense 10/11 platforms, strong momentum in masks and accessories, and the launch of AirTouch N30i.

• Strategic focus on digital health, AI integration, and expanding the digital ecosystem, serving over 144 million lives in the last 12 months.

• Celebrated 35 years of innovation and launched the 2030 strategy to empower over 500 million lives.

Financial highlights

• Q1 revenue was $1.22 billion, up 11% year-over-year, with gross margin at 58.6% (GAAP) and 59.2% (non-GAAP).

• Net income increased by 42% to $311 million (GAAP), and non-GAAP net income rose 35% to $325 million.

• Operating cash flow reached $326 million for the quarter, with free cash flow for LTM 1Q25 at $1.35 billion.

• Ended the quarter with $426 million in cash and $251 million in net debt, and $1.5 billion available under the revolver facility.

• Declared a quarterly dividend of $0.53 per share and repurchased $50 million in shares.

Outlook and guidance

• Gross margin expected to remain in the 59%-60% range for fiscal year 2025, with SG&A at 18%-20% and R&D at 6%-7% of revenue.

• Effective tax rate anticipated between 18.8%-21% for fiscal year 2025.

• Five-year revenue and earnings growth outlook reaffirmed, with a strategic focus on product innovation, digital health, and empowering 500 million lives by 2030.

• Plans to purchase ~$75 million in shares per quarter through the remainder of fiscal year 2025.

• No material impact expected from new global minimum tax rules in FY2025.