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 significant improvements in gross and operating margins.

• Operating profit increased by 52% year-over-year; non-GAAP operating profit up 19%.

• Strategic focus on innovation, digital health leadership, and leveraging megatrends in consumer wearables and GLP-1 pharmaceuticals.

• Cash and cash equivalents rose to $522 million, with strong liquidity and disciplined investments in R&D and SG&A.

Financial highlights

• Gross margin improved by 300 basis points to 58.6%; non-GAAP gross margin up 230 bps to 59.2%.

• 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 six months, $634.2 million.

• Dividend of $0.53 per share declared; $75 million in share buybacks executed during the quarter.

• SG&A as a percentage of revenue improved to 18.8% from 19.1% year-over-year.

Outlook and guidance

• Gross margin expected to remain in the 59%-60% range for the second half of FY25.

• SG&A expenses projected at 18%-20% and R&D at 6%-7% of revenue for the second half of FY25.

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

• Management expects continued growth driven by product innovation, global expansion, and increased awareness of respiratory conditions.

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