ResMed (RMD) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue reached $1.28 billion, up 10% year-over-year, driven by strong demand for sleep and breathing health products, digital health solutions, and robust device and mask sales.

• Diluted EPS rose 65% to $2.34; non-GAAP diluted EPS up 29% to $2.43, with GAAP net income at $344.6 million and non-GAAP net income at $358.3 million.

• Operating profit increased 52% year-over-year, with non-GAAP operating profit up 19%.

• ResMed leads in digital health, serving over 30.5 million patients in AirView and 155 million+ accounts in its Residential Care Software network.

• Strategic focus on innovation, global expansion, and empowering 500 million lives by 2030, with continued investments in R&D, digital health, and AI/ML technologies.

Financial highlights

• Gross margin improved by 300 basis points to 58.6%; non-GAAP gross margin up 230 bps to 59.2% year-over-year, driven by manufacturing and logistics efficiencies.

• Net income for the quarter was $344.6 million, up 65% year-over-year; non-GAAP net income was $358.3 million, up 29%.

• Operating cash flow for the quarter was $309 million; for the six months, $634.2 million.

• Ended the quarter with $522 million in cash and $151 million in net debt; $1.5 billion available under revolving credit facility.

• Dividend of $0.53 per share declared and paid; $75–$125 million spent on share repurchases during the quarter.

Outlook and guidance

• Expect gross margin to remain in the 59%-60% range for the second half of FY25; SG&A projected at 18%-20% and R&D at 6%-7% of revenue.

• Effective tax rate for FY25 estimated at 19%-21%; no material impact anticipated from new global minimum tax rules.

• Strategic roadmap targets industry-leading growth and profitability, aiming to empower 500 million lives by 2030.

• Plan to continue $75 million per quarter in share buybacks and reinvest in R&D and tuck-in acquisitions.

• Current liquidity sources expected to be sufficient for operational and capital needs for the next 12 months and beyond.