ResMed (RMD) Q4 2024 earnings summary

Executive summary

• Q4 FY24 revenue reached $1.22 billion, up 9% year-over-year, with robust growth across devices, masks, and SaaS segments, and continued leadership in digital health leveraging 19 billion nights of medical data and 26 million cloud-connected devices sold globally.

• Non-GAAP operating income for Q4 FY24 was $400.5 million, up 30% year-over-year, and non-GAAP EPS increased to $2.08, reflecting strong bottom-line growth.

• Operating cash flow reached $440 million for the quarter and $1.4 billion for the year, supporting ongoing investments and capital returns.

• Dividend increased 10% to $0.53 per share, with continued share repurchases of ~$50 million per quarter planned for FY25.

• Significant tailwinds from increased awareness of sleep health, driven by consumer wearables and GLP-1 medications, are expected to accelerate patient funnel growth.

Financial highlights

• Q4 FY24 group revenue was $1.22 billion, up 9% headline and 10% in constant currency year-over-year, with device sales up 6% and masks/accessories up 15%.

• Software as a service revenue increased 10%, driven by MEDIFOX DAN and HME verticals.

• Gross margin expanded by 330 basis points to 59.1% in Q4, with sequential improvement of 60 basis points.

• Non-GAAP operating income and net income both increased by 30% year-over-year.

• Cash flow from operations was $440 million in Q4; ended Q4 with $238 million in cash and reduced debt by $300 million.

Outlook and guidance

• FY25 gross margin expected in the 59%-60% range, with freight costs as a headwind but offset by cost optimization and favorable product mix.

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

• Interest expense expected to decline, with potential for net interest income in the second half of FY25.

• Continued share repurchases of ~$50 million per quarter planned for FY25.

• Ongoing investment in R&D, tuck-in acquisitions, and digital health initiatives.