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For investors For media +1 858-836-5000 +1 619-510-1281 investorrelations@resmed.com news@resmed.com ResMed Inc. Announces Results for the Second Quarter of Fiscal Year 2024 Year-over-year revenue grows 12%, operating pr

Key Takeaway: ResMed Inc. reported its financial results for the second quarter of fiscal year 2024, showcasing a 12% increase in revenue year-over-year, driven by strong growth in devices and software. Despite the impressive top-line growth, net income fell by 7%, reflecting added costs in operational areas. The company highlighted successful product launches and strategic acquisitions that enhance its market position. ResMed aims to enhance brand awareness and operational excellence as it strives to improve the lives of 250 million patients by 2025.

Market Sentiment Analysis

POSITIVE FACTORS

  • Revenue increased by 12% year-over-year, reflecting strong growth.
  • Successful launch of the new AirSense 11 platform in new markets.
  • Non-GAAP net income increased by 13% despite a decrease in net income.
  • Continued expansion in key areas such as residential care software and digital health.

CONCERNS & RISKS

  • Net income decreased by 7% compared to the previous year.
  • Diluted earnings per share dropped from $1.53 to $1.42.
  • Gross margin showed a slight decline, decreasing from 56.1% to 55.6%.
  • Increased selling, general, and administrative expenses by 5%.

Full Press Release Details

For investors For media
+1 858-836-5000 +1 619-510-1281
investorrelations@resmed.com news@resmed.com
ResMed Inc. Announces Results for the Second Quarter of Fiscal Year 2024
Note: A webcast of ResMed s conference call will be available at 4:30 p.m. ET today at http://investor.resmed.com
SAN DIEGO, January 24, 2024 ResMed Inc. (NYSE: RMD, ASX: RMD) today announced results for its quarter ended December 31, 2023.
Second Quarter 2024 Highlights
All comparisons are to
the prior year period
Our second-quarter fiscal year 2024 results reflect strong double-digit growth across our combined device,
masks and accessories, and residential care software businesses, as well as cost discipline to support an acceleration in profitability, said Mick Farrell, ResMed s CEO. We continue to expand the production and delivery of our
market-leading flow generator platforms, and we are successfully launching our latest generation platform, AirSense 11, into new markets and geographies around the world. The strong growth in patient flow we ve seen over the past several
quarters has supported ongoing device growth, as well as augmented and accelerated our replenishment programs for sustained mask and accessories growth. Organic growth of our residential care software business in home medical equipment, home health,
home nursing, and beyond, catalyzed by strategic acquisitions, continues to deliver and complements our core mask and accessory business growth.
we look ahead, ResMed is well-positioned to lean into leading the expansion and growth of sleep health and breathing health. We are the clear leader in a very large and growing market; I m excited about ResMed s future as we focus on
delivering for our stakeholders through product innovation, operational excellence, and increasing brand awareness as we progress towards our goal of improving 250 million lives in 2025.
Financial Results and Operating Metrics
Unaudited; $ in millions, except for per share amounts
Three Months Ended
December 31, 2023 December 31, 2022 % Change Constant Currency (A)
Revenue $ 1,162.8 $ 1,033.7 12 % 11 %
Gross margin 55.6 % 56.1 % (1 )
Non-GAAP gross margin (B) 56.9 % 56.8 %
Selling, general, and administrative expenses 222.2 211.7 5 4
Research and development expenses 73.9 69.9 6 6
Income from operations 275.1 280.2 (2 )
Non-GAAP income from operations (B) 365.5 305.5 20
Net income 208.8 224.9 (7 )
Non-GAAP net income (B) 277.3 244.4 13
Diluted earnings per share $ 1.42 $ 1.53 (7 )
Non-GAAP diluted earnings per share (B) $ 1.88 $ 1.66 13
Six Months Ended
December 31, 2023 December 31, 2022 % Change Constant Currency (A)
Revenue $ 2,265.1 $ 1,984.0 14 % 13 %
Gross margin 55.1 % 56.5 % (2 )
Non-GAAP gross margin (B) 56.4 % 57.2 % (1 )
Selling, general, and administrative expenses 445.0 404.9 10 9
Research and development expenses 149.6 133.1 12 13
Income from operations 564.1 555.9 1
Non-GAAP income from operations (B) 684.3 596.3 15
Net income 428.2 435.4 (2 )
Non-GAAP net income (B) 518.5 466.5 11
Diluted earnings per share $ 2.90 $ 2.95 (2 )
Non-GAAP diluted earnings per share (B) $ 3.51 $ 3.17 11
Discussion of Second Quarter Results
All comparisons are to the prior year period unless otherwise noted
Other Business and Operational Highlights
The ResMed board of directors
today declared a quarterly cash dividend of $0.48 per share. The dividend will have a record date of February 8, 2024, payable on March 14, 2024. The dividend will be paid in U.S. currency to holders of ResMed s common stock trading
on the New York Stock Exchange. Holders of CHESS Depositary Interests ( CDIs ) trading on the Australian Securities Exchange will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and
reflecting the 10:1 ratio between CDIs and NYSE shares. The ex-dividend date will be February 7, 2024, for common stockholders and for CDI holders. ResMed has received a waiver from the
ASX s settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from February 7, 2024, through February 8, 2024, inclusive.
ResMed will discuss its second
quarter fiscal year 2024 results on its webcast at 1:30 p.m. U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed s Investor Relations website at investor.resmed.com. Please go to this section of the website
and click on the icon for the Q2 2024 Earnings Webcast to register and listen to the live webcast. A replay of the earnings webcast will be accessible on the website and available approximately two hours after the live webcast. In
addition, a telephone replay of the conference call will be available approximately three hours after the webcast by dialing +1 877-660-6853 (U.S.) or +1 201-612-7415 (outside U.S.) and entering the passcode 13743530. The telephone replay will be available until February 7, 2024.
At ResMed (NYSE: RMD, ASX: RMD) we
pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea,
COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in
the home or care setting of their choice. By enabling better care, we improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 140 countries. To learn more,
visit ResMed.com and follow @ResMed.
Safe harbor statement
Statements contained in this release that are not historical facts are forward-looking statements as contemplated by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements including statements regarding ResMed s projections of future revenue or earnings, expenses, new product development, new product launches, new markets for its products, the
integration of acquisitions, our supply chain, domestic and international regulatory developments, litigation, tax outlook, and macroeconomic conditions of our business are subject to risks and uncertainties, which could cause actual results
to materially differ from those projected or implied in the forward-looking statements. Additional risks and uncertainties are discussed in ResMed s periodic reports on file with the U.S. Securities & Exchange Commission. ResMed does
not undertake to update its forward-looking statements.
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited; $ in thousands, except for per share amounts)
Three Months Ended Six Months Ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Net revenue $ 1,162,801 $ 1,033,744 $ 2,265,122 $ 1,984,038
Cost of sales 501,259 446,724 986,702 849,834
Amortization of acquired intangibles (1) 8,257 7,305 17,164 13,680
Masks with magnets field safety notification expenses (1) 6,351 6,351
Astral field safety notification expenses (1) 7,911
Total cost of sales $ 515,867 $ 454,029 $ 1,018,128 $ 863,514
Gross profit $ 646,934 $ 579,715 $ 1,246,994 $ 1,120,524
Selling, general, and administrative 222,155 211,672 445,029 404,860
Research and development 73,880 69,874 149,590 133,062
Amortization of acquired intangibles (1) 11,577 9,563 24,056 17,513
Restructuring expenses (1) 64,228 64,228
Acquisition related expenses (1) 8,412 9,157
Total operating expenses $ 371,840 $ 299,521 $ 682,903 $ 564,592
Income from operations $ 275,094 $ 280,194 $ 564,091 $ 555,932
Other income (expenses), net:
Interest income (expense), net $ (13,805 ) $ (10,338 ) $ (28,762 ) $ (17,472 )
Gain (loss) attributable to equity method investments 739 (2,826 ) (3,156 ) (4,853 )
Gain (loss) on equity investments (1) (1,888 ) 8,368 (2,491 ) 5,088
Other, net (686 ) (1,707 ) 1,963 (3,211 )
Total other income (expenses), net (15,640 ) (6,503 ) (32,446 ) (20,448 )
Income before income taxes $ 259,454 $ 273,691 $ 531,645 $ 535,484
Income taxes 50,654 48,777 103,423 100,092
Net income $ 208,800 $ 224,914 $ 428,222 $ 435,392
Basic earnings per share $ 1.42 $ 1.53 $ 2.91 $ 2.97
Diluted earnings per share $ 1.42 $ 1.53 $ 2.90 $ 2.95
Non-GAAP diluted earnings per share (1) $ 1.88 $ 1.66 $ 3.51 $ 3.17
Basic shares outstanding 147,132 146,704 147,104 146,568
Diluted shares outstanding 147,545 147,405 147,572 147,367
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
December 31, 2023 June 30, 2023
Assets
Current assets:
Cash and cash equivalents $ 210,247 $ 227,891
Accounts receivable, net 729,740 704,909
Inventories 933,214 998,012
Prepayments and other current assets 504,876 437,018
Total current assets $ 2,378,077 $ 2,367,830
Non-current assets:
Property, plant, and equipment, net $ 551,734 $ 537,856
Operating lease right-of-use assets 153,473 127,955
Goodwill and other intangibles, net 3,390,032 3,322,640
Deferred income taxes and other non-current assets 431,772 395,427
Total non-current assets $ 4,527,011 $ 4,383,878
Total assets $ 6,905,088 $ 6,751,708
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable $ 202,395 $ 150,756
Accrued expenses 332,136 365,660
Operating lease liabilities, current 24,057 21,919
Deferred revenue 148,897 138,072
Income taxes payable 46,690 72,224
Short-term debt 9,898 9,902
Total current liabilities $ 764,073 $ 758,533
Non-current liabilities:
Deferred revenue $ 127,410 $ 119,186
Deferred income taxes 89,282 90,650
Operating lease liabilities, non-current 140,649 116,853
Other long-term liabilities 72,894 68,166
Long-term debt 1,216,769 1,431,234
Long-term income taxes payable 12,157 37,183
Total non-current liabilities $ 1,659,161 $ 1,863,272
Total liabilities $ 2,423,234 $ 2,621,805
Stockholders equity
Common stock $ 588 $ 588
Additional paid-in capital 1,822,918 1,772,083
Retained earnings 4,539,963 4,253,016
Treasury stock (1,673,263 ) (1,623,256 )
Accumulated other comprehensive income (208,352 ) (272,528 )
Total stockholders equity $ 4,481,854 $ 4,129,903
Total liabilities and stockholders equity $ 6,905,088 $ 6,751,708
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited; $ in thousands)
Three Months Ended Six Months Ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Cash flows from operating activities:
Net income $ 208,800 $ 224,914 $ 428,222 $ 435,392
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization 44,784 37,767 89,718 74,040
Amortization of right-of-use assets 8,586 7,772 17,094 15,533
Stock-based compensation costs 19,840 16,464 38,350 33,383
(Gain) loss attributable to equity method investments, net of dividends received (739 ) 2,826 3,156 4,853
(Gain) loss on equity investments 1,888 (8,368 ) 2,491 (5,088 )
Non-cash restructuring expenses 33,239 33,239
Changes in operating assets and liabilities:
Accounts receivable, net (26,802 ) (19,585 ) (20,269 ) (75,823 )
Inventories, net 50,184 (86,020 ) 77,095 (233,116 )
Prepaid expenses, net deferred income taxes and other current assets (32,575 ) (29,862 ) (74,590 ) (66,646 )
Accounts payable, accrued expenses, income taxes payable and other (34,373 ) (17,271 ) (35,391 ) (9,230 )
Net cash provided by operating activities $ 272,832 $ 128,637 $ 559,115 $ 173,298
Cash flows from investing activities:
Purchases of property, plant, and equipment (23,353 ) (27,350 ) (53,388 ) (56,406 )
Patent registration and acquisition costs (1,205 ) (4,320 ) (12,036 ) (7,636 )
Business acquisitions, net of cash acquired (7,504 ) (992,125 ) (110,688 ) (1,011,225 )
Purchases of investments (3,625 ) (12,841 ) (7,305 ) (17,132 )
Proceeds from exits of investments 250
(Payments) / proceeds on maturity of foreign currency contracts (5,456 ) 10,223 (6,956 ) 7,181
Net cash used in investing activities $ (41,143 ) $ (1,026,413 ) $ (190,123 ) $ (1,085,218 )
Cash flows from financing activities:
Proceeds from issuance of common stock, net 19,524 22,056 20,507 24,666
Purchases of treasury stock (50,007 ) (50,007 )
Taxes paid related to net share settlement of equity awards (7,797 ) (29,654 ) (8,022 ) (29,713 )
Payments of business combination contingent consideration (1,293 )
Proceeds from borrowings, net of borrowing costs 1,020,000 105,000 1,070,000
Repayment of borrowings (130,000 ) (15,000 ) (315,000 ) (45,000 )
Dividends paid (70,678 ) (64,500 ) (141,275 ) (128,931 )
Net cash (used in) / provided by financing activities $ (238,958 ) $ 932,902 $ (390,090 ) $ 891,022
Effect of exchange rate changes on cash $ 8,416 $ 10,910 $ 3,454 $ 387
Net increase / (decrease) in cash and cash equivalents 1,147 46,036 (17,644 ) (20,511 )
Cash and cash equivalents at beginning of period 209,100 207,163 227,891 273,710
Cash and cash equivalents at end of period $ 210,247 $ 253,199 $ 210,247 $ 253,199
RESMED INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited; $ in thousands, except for per share amounts)
The measures non-GAAP gross profit
and non-GAAP gross margin exclude amortization expense from acquired intangibles and restructuring expense related to cost of sales and are reconciled below:
Three Months Ended Six Months Ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Revenue $ 1,162,801 $ 1,033,744 $ 2,265,122 $ 1,984,038
GAAP cost of sales $ 515,867 $ 454,029 $ 1,018,128 $ 863,514
Less: Amortization of acquired intangibles (A) (8,257 ) (7,305 ) (17,164 ) (13,680 )
Less : Masks with magnets field safety notification expenses (A) (6,351 ) (6,351 )
Less : Astral field safety notification expenses (A) (7,911 )
Non-GAAP cost of sales $ 501,259 $ 446,724 $ 986,702 $ 849,834
GAAP gross profit $ 646,934 $ 579,715 $ 1,246,994 $ 1,120,524
GAAP gross margin 55.6 % 56.1 % 55.1 % 56.5 %
Non-GAAP gross profit $ 661,542 $ 587,020 $ 1,278,420 $ 1,134,204
Non-GAAP gross margin 56.9 % 56.8 % 56.4 % 57.2 %
The measure non-GAAP income from operations is reconciled with
GAAP income from operations below:
Three Months Ended Six Months Ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP income from operations $ 275,094 $ 280,194 $ 564,091 $ 555,932
Amortization of acquired intangibles cost of sales (A) 8,257 7,305 17,164 13,680
Amortization of acquired intangibles operating expenses (A ) 11,577 9,563 24,056 17,513
Restructuring (A) 64,228 64,228
Masks with magnets field safety notification expenses (A) 6,351 6,351
Astral field safety notification expenses (A) 7,911
Acquisition-related expenses (A) 8,412 483 9,157
Non-GAAP income from operations $ 365,507 $ 305,474 $ 684,284 $ 596,282
RESMED INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited; $ in thousands, except for per share amounts)
The measures non-GAAP net income
and non-GAAP diluted earnings per share are reconciled with GAAP net income and GAAP diluted earnings per share in the table below:
Three Months Ended Six Months Ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
GAAP net income $ 208,800 $ 224,914 $ 428,222 $ 435,392
Amortization of acquired intangibles cost of sales (A) 8,257 7,305 17,164 13,680
Amortization of acquired intangibles operating expenses (A) 11,577 9,563 24,056 17,513
Restructuring expenses (A) 64,228 64,228
Masks with magnets field safety notification expenses (A) 6,351 6,351
Astral field safety notification expenses (A) 7,911
Acquisition-related expenses (A) 8,412 483 9,157
Income tax effect on non-GAAP adjustments (A) (21,868 ) (5,812 ) (29,886 ) (9,272 )
Non-GAAP net income (A) $ 277,345 $ 244,382 $ 518,529 $ 466,470
GAAP diluted shares outstanding 147,545 147,405 147,572 147,367
GAAP diluted earnings per share $ 1.42 $ 1.53 $ 2.90 $ 2.95
Non-GAAP diluted earnings per share (A) $ 1.88 $ 1.66 $ 3.51 $ 3.17
ResMed believes that non-GAAP diluted earnings
per share is an additional measure of performance that investors can use to compare operating results between reporting periods. ResMed uses non-GAAP information internally in planning, forecasting,
and evaluating the results of operations in the current period and in comparing it to past periods. ResMed believes this information provides investors better insight when evaluating ResMed s performance from core operations and provides
consistent financial reporting. The use of non-GAAP measures is intended to supplement, and not to replace, the presentation of net income and other GAAP measures. Like
all non-GAAP measures, non-GAAP earnings are subject to inherent limitations because they do not include all the expenses that must be included under
RESMED INC. AND SUBSIDIARIES
Revenue by Product and Region
millions, except for per share amounts)
Three Months Ended
December 31, 2023 (A) December 31, 2022 (A) % Change Constant Currency (B)
U.S., Canada, and Latin America
Devices $ 371.3 $ 345.5 7 %
Masks and other 298.0 269.7 10
Total U.S., Canada and Latin America $ 669.3 $ 615.3 9
Combined Europe, Asia, and other markets
Devices $ 234.7 $ 197.3 19 % 16 %
Masks and other 113.9 104.4 9 4
Total Combined Europe, Asia and other markets $ 348.5 $ 301.7 16 12
Global revenue
Total Devices $ 606.0 $ 542.8 12 % 11 %
Total Masks and other 411.9 374.2 10 9
Total Sleep and Respiratory Care $ 1,017.9 $ 917.0 11 10
Software-as-a-Service 144.9 116.8 24
Total $ 1,162.8 $ 1,033.7 12 11
Six Months Ended
December 31, 2023 (A) December 31, 2022 (A) % Change Constant Currency (B)
U.S., Canada, and Latin America
Devices $ 717.2 $ 685.1 5 %
Masks and other 590.5 508.3 16
Total U.S., Canada and Latin America $ 1,307.7 $ 1,193.4 10
Combined Europe, Asia, and other markets
Devices $ 453.5 $ 375.3 21 % 18 %
Masks and other 219.7 192.8 14 9
Total Combined Europe, Asia and other markets $ 673.2 $ 568.1 19 15
Global revenue
Total Devices $ 1,170.7 $ 1,060.4 10 % 9 %
Total Masks and other 810.2 701.0 16 14
Total Sleep and Respiratory Care $ 1,980.9 $ 1,761.4 12 11
Software-as-a-Service 284.2 222.6 28
Total $ 2,265.1 $ 1,984.0 14 13

Frequently Asked Questions

What were ResMed's quarter two earnings for FY 2024?

ResMed reported revenue of $1,162.8 million, a 12% increase from the prior year.

When will ResMed's quarterly cash dividend be paid?

The dividend of $0.48 per share will be paid on March 14, 2024.

How has ResMed's net income changed in Q2 2024?

Net income decreased by 7% to $208.8 million compared to Q2 2023.

What is the main focus of ResMed's business growth?

ResMed focuses on sleep and breathing health through product innovation.

What is the purpose of ResMed's webcast?

The webcast discusses ResMed's financial results and future outlook.

Last updated: Jan 24, 2024