ResMed (RMD) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue grew 8% year-over-year to $1.29 billion, with gross margin expanding to 59.3%-59.9% and strong free cash flow, reflecting robust demand, disciplined execution, and global leadership in digital health for sleep and breathing disorders.

• Diluted EPS rose to $2.48 (up 22%), net income increased 21% to $365 million, and operating profit grew 13%-14% year-over-year.

• Strategic investments continued in R&D, digital health, and manufacturing, including a new facility in Calabasas, California, to expand US production capacity.

• Launched new products such as NightOwl and VPAP Tx, expanded digital health ecosystem, and enhanced brand awareness initiatives.

• Maintained tariff exemptions for US imports, ensuring minimal impact from new US tariffs.

Financial highlights

• Q3 revenue was $1.29 billion, up 8% headline and 9% in constant currency; gross margin increased by 140 basis points to 59.3%-59.9%.

• Operating profit rose 13%-14%, net income increased 21%, and non-GAAP diluted EPS grew 11% to $2.37; adjusted EPS (excluding $6M write-downs) was $2.41, up 13%.

• Cash flow from operations was $579 million (including $107 million IRS refund); cash and equivalents at quarter-end: $933 million.

• For the nine months ended March 31, 2025, revenue grew 10% to $3.8 billion; net income rose 40% to $1.02 billion.

• Dividend of $0.53 per share declared, payable June 12, 2025.

Outlook and guidance

• Q4 FY2025 gross margin expected to be broadly consistent with Q3, with potential upside from FX.

• SG&A expenses as a percentage of revenue expected at 18%-20%, and R&D at 6%-7% for the remainder of FY2025.

• Effective tax rate for FY2025 estimated at 19%-21%; no material impact expected from global minimum tax changes.

• Ongoing share buyback program to increase to $100 million per quarter starting Q4 FY2025.

• Strategic goal to empower 500 million lives by 2030, leveraging digital and connected health solutions.