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Our diluted earnings per share were $1.00 on a non-GAAP basis. We're very proud of this strong top line and bottom line performance from our global ResMed team. Growth in our Brightree software-as-a-service business continues to be strong at 14% growth year-on-year, and we are pleased with the continued innovation and execution by the Brightree team.

Turning to our global therapy businesses, we continue to build our digital health leadership and we now have well over 1.5 billion nights of medical sleep and medical respiratory care data. We continue to unlock significant value for our customers from these data, creating efficiencies for providers, simplifying workflow and care delivery for physicians, and improving outcomes for patients and their caregivers and loved ones.

During the quarter, the US government passed tax reform through congress, moving to a territorial tax system. This has liberated our global cash assets to be able to be invested without artificial constraints. We will now be free to invest in three new ways: 1.) Growing upon our existing strong US manufacturing footprint, 2.) growing our existing US based research and development capability, and 3.) building upon our existing valuable US based intellectual property assets. We'll provide updates on all of these areas as we move forward.

Now, for some geographic business highlights. The US, Canada, and Latin America teams achieved solid revenue growth of 12% on a constant currency basis. These results were fueled by strong growth of devices and masks, as well as continued strong, double-digit software sales growth. Sleep apnea patient volume continues to grow steadily through our marketing efforts and those of our channel partners.

Growth in devices for the US, Canada, and Latin America was 12% for the quarter on a constant currency basis. It has been three and a half years since we launched the AirSense 10 device platform and the AirSolutions cloud-based software platform.

We continue to grow our device market share as homecare providers and physicians choose ResMed because of the sustainable value proposition of our connected health and digital health solutions. The mask and accessories category grew 12% in the US, Canada, and Latin America markets this quarter. We have seen good demand across all mask categories. In the nasal and full-face categories, the AirFit N20 and the AirFit F20 respectively are doing very well. We continue to expand production to meet the growing demand for these products.

Our newest mask technology, including memory foam capability, in the AirTouch F20, is receiving high patient comfort ratings and is creating a new market niche for patients with the high sensitivity to therapy, a previously unmet, or at least under met, market need.

Revenue across Europe, Asia, and other markets grew at 8% in the quarter on a constant currency basis. Mask sales across these markets grew at a very strong 16%, reflecting strong adoption of our F20 and N20 mask products. Device sales grew steadily at 5% this quarter across Europe, Asia, and other markets.

ResMed France has continued to drive solid device growth, catalyzed by increased reimbursement for telemonitoring of sleep devices relative to the non-cloud connected devices, a change which went into effect January 1, 2018.

We're excited to highlight France as the first country to recognize the value of connected health by establishing a reimbursement system change that drives the market to a new world of efficiency and better patient outcomes. We are working with other governments' end payers on similar initiatives. Over the coming periods, just watch this space.

I'll take a few minutes to update you on each of the three horizons in our 2020 growth strategy and then I'll hand the call over to Brett. In the first horizon of growth, which focuses on our sleep apnea business, we're making significant advances with the smallest, quietest, and most comfortable products, enhanced by digital health and connected health solutions.

We have begun to leverage the well over 1.5 billion nights of actionable medical sleep and respiratory care data in clinical studies, and to provide insights that improve patient care and healthcare delivery efficiencies. We have over six million patients monitored in our cloud-based AirView system, and over four million patients monitored with 100% cloud-connected medical devices in their homes.

We also continue to grow patient engagement. We have over 1,300 new patients who sign up for the myAir patient engagement app every day. We see myAir enrollment continuing to rise exponentially. Patient engagement is working. The bottom line is people love seeing their data, and when they do, they engage with their therapy more and more.

With continued global adoption of AirSolutions, the AirSense 10, the AirMini, the N20, and the F20, these masks provide world leading fit, seal, and comfort. We see a future of solid, ongoing revenue growth in this space across that portfolio.

This quarter, ResMed announced the integration of AirMini data with AirView, our cloud-based remote monitoring patient platform. The connectivity between AirMini and AirView enables physicians and homecare providers to see patients' nightly data, verify adherence, and spot any therapy issues that need to be addressed. This gives physicians a great opportunity to educate and engage patients to reach the best possible healthcare outcomes, even on their brand-new travel device.

We continue to show progress on the clinical importance of treating sleep apnea. The American Journal of Medicine published a ResMed sponsored study during the quarter, including over 5,000 hospitalized patients. The study showed that diagnosing and treating sleep apnea in the hospital improved these patients' long-term survival rates. Undiagnosed sleep apnea is highly prevalent among hospital patients and there is an opportunity to simply and efficiently diagnose them in the hospital and ensure that they receive life changing therapy post discharge.

Following pathways like this will not only reduce costs for the healthcare system, it will also increase survival rates and quality of life for the patient. It is great to have more proof that we are not only saving money for the healthcare system, our therapy is also saving lives.

Moving to the second horizon of the ResMed 2020 growth strategy, our cloud connected noninvasive ventilators and life support ventilators form the basis upon which we are building our connected health and digital health capability for chronic obstructive pulmonary disease, or COPD. With over 380 million COPD patients worldwide, and with COPD being the third leading cause of death and the second leading cause for rehospitalization, we know that we can provide value for payers, providers, physicians, and most importantly patients from these data.

In San Francisco, a few weeks ago, we announced Mobi, the first ResMed branded portable oxygen concentrator. Mobi offers excellent oxygen output and battery life and a great balance of mobility, comfort, and therapy quality to the many millions of people who rely on supplemental oxygen. We expect steady growth in this POC category throughout the year and we have plans for continued enhancements for ResMeds oxygen concentrator pipeline.

Mobi forms a critical part of our spectrum of respiratory care products, along with cloud connected noninvasive ventilators like the AirCurve, high flow therapy, and our cloud connected life support ventilator called Astral.

Our third horizon of growth encompasses a portfolio of opportunities, including sleep health and wellness, chronic disease management tools, and out of hospital software business expansion opportunities.

This quarter, our Brightree team announced integration alerting to improve reporting for home health and hospice businesses. The seamless transfer of data between Brightree and the post acute care data analytics company called Strategic Healthcare Programs, allows home health agencies to immediately receive accurate reports to help improve patient care and compliance.

Out of hospital software continues to be an exciting growth area for us, with strong long-term growth potential ahead. On the consumer and wellness side, our joint venture SleepScore labs launched its latest and greatest nonwearable sleep improvement system for consumers called SleepScore Max. This product is powered by ResMeds noncontact sensor technology for best in class respiratory and sleep architecture analysis.

At the CES conference in Las Vegas, SleepScore Labs announced a partnership with Williams Sonoma to offer what they call the Robin Sleep System, which is a combination of the SleepScore Max product and a Williams Sonoma mattress set. This will be available at their online stores and select brick and mortar stores.

For ResMed, this sleep awareness partnership provides a pathway to inform the 50-70 million Americans who suffocate every night but do not yet know that they need to seek diagnosis and treatment for their sleep apnea. You will continue to hear more from us on the sleep awareness front as we move forward.

We've had two strong quarters to start our fiscal year and we are well positions to grow revenue throughout the second half of Fiscal Year 2018 and beyond. We are also well positioned to continue to grow our operating profit as we execute on our ongoing operating excellence initiatives.

We have seen success with new masks and new device products, including the AirFit N20, the AirFit F20, the AirTouch F20, and the ResMed AirMini. Most recently, we are excited about our first ResMed branded portable oxygen concentrator called Mobi. We are positioning the company for long-term top and bottom line growth for 2020 as we continue to execute on our strategy and action, implement operating excellence initiatives, and lead the med tech field to unlock value with connected health as well as digital health solutions.

We have changed well over 12 million lives over the last 12 months, and we continue to drive what we call our triple aim in the out of hospital healthcare market: 1.) improving the quality of life for patients, 2.) slowing chronic disease progression, and 3.) reducing overall healthcare system costs.

With that, I will turn the call over to Brett for his remarks, and then we'll go to Q&A. Over to you, Brett.

Brett Sandercock -- Chief Financial Officer

Alright. Thanks, Mick. In my remarks today, I'll provide an overview of our results for the second quarter of Fiscal Year 2018. As Mick noted, we had a very strong quarter. Group revenue for the December quarter was $601.3 million, an increase of 13% over the prior year quarter. Or, in constant currency terms, revenue increased by 11%.

Taking a closer look at our geographic distribution, and excluding revenue from our Brightree software-as-a-service business, our sales in the US, Canada, and Latin American countries were $329.2 million, an increase of 12% over the prior year quarter. Sales in Europe, Asia, and other markets totaled $233.4 million, an increase of 15% over the prior year quarter. In constant currency terms, sales in Europe, Asia, and other markets increased by 8% over the prior year quarter.

Breaking out revenue between product segments. US, Canada, and Latin America device sales were $173.7 million, an increase of 13% over the prior year quarter. Masks and other sales were $155.5 million, an increase of 12% over the prior year quarter. The revenue in Europe, Asia, and other markets, device sales were $163.3 million, an increase of 11% over the prior year quarter. Or, in constant currency terms, an increase of 5%.

Masks and other sales were $70.1 million, an increase of 23% over the prior year quarter. Or, in constant currency terms, a 16% increase. Globally, in constant currency terms, device sales increased by 9%, while masks and other increased by 13% over the prior year quarter. Brightree revenue for the second quarter was $38.7 million, an increase of 14% on the prior year quarter.

During the rest of my commentary today, I'll be referring to non-GAAP numbers. The non-GAAP measures adjusted for the impact of amortization of acquired intangibles and tax related charges associated with recently enacted US tax reforms. In the prior year comparable, I exclude amortization of acquired intangibles, acquisition related expenses associated with additional considerations, restructuring expenses, and litigation settlement expenses. We have provided a full reconciliation of the non-GAAP to GAAP numbers in our second quarter earnings press release.

Our gross margin for the December quarter was 58.2%, compared with 58.3% during the same quarter in the prior year. Our margin was essentially consistent with the prior year and reflects typical declines in average selling prices, largely offset by manufacturing and procurement efficiencies.

Consistent with our comments last quarter, on a sequential basis, our gross margin in Q2 was negatively impacted by unfavorable foreign currency movements. Assuming current exchange rates and likely transient pricing and geographic mix, we expect gross margin for the balance of Fiscal Year 2019 to be broadly consistent with our Q2 FY18 gross margin.

Moving on to operating expenses. Our SG&A expenses for the quarter were $151.8 million, an increase of 9% over the prior year quarter. In constant currency terms, SG&A expenses increased by 6%. SG&A expenses as a percentage of revenue improved to 25.2% compared to the 26.3% that we reported last year.

Looking forward, and subject to currency movements, we expect SG&A's percentage of revenue to be in the range of 25-26% for the balance of Fiscal Year 2018.

R&D expenses for the quarter were $40.6 million, an increase of 6% over the prior year quarter. Or, on a constant currency basis, an increase of 4%. This increase reflects incremental investments across our R&D portfolio. R&D expenses as a percentage of revenue was 6.8% compared to 7.2% in the prior year. Looking forward, and subject to currency movements, we expect R&D expenses as a percentage of revenue to be in the vicinity of 7% for the balance of Fiscal Year 2018.

Amortization of acquired intangibles was $11.3 million for the quarter, a decrease of 3% over the prior year quarter. Stock-based compensation expense for the quarter was $12 million. Non-GAAP operating profit for the quarter was $157.3 million, an increase of 20% over the prior year quarter, while non-GAAP net income for the quarter was $143.8 million, an increase of 39% over the prior year quarter.

Non-GAAP diluted earnings per share for the quarter was $1.00, an increase of 37% over the prior year quarter, while GAAP diluted earnings per share for the quarter was $0.07. The growth in non-GAAP earnings per share was partly due to a lower tax rate this quarter. Assuming a normalized tax rate of 22%, our non-GAAP earnings per share would've been $0.83, and increase of 14% over the prior year quarter.

Now, I would like to spend some time discussing tax related methods. On a GAAP basis, our effective tax rate for the December quarter was 93.3%, reflecting one-time charges associated with a recent change in US tax laws. US accounting rules require us to recognize the effect of any tax law changes during the period in which they are enacted. Accordingly, we have recorded an additional income tax expense of $126.6 million in our December quarter.

Specifically, this amount includes two items -- first, the transition tax imposed on our accumulated foreign earnings resulting in additional income tax expense of $119.9 million. Second, the writedown of the carrying value of our net deferred tax assets with lower US corporate tax rate, which resulted in additional income tax expense of $6.7 million.

On a non-GAAP basis, which excludes the one-time charges I've just discussed, our effective tax rate for the quarter was 6%. Adjusting for the impact from ASU 2016-09, which governs accounting for the tax deductions for employee stock by detainments, our non-GAAP effective tax rate for the quarter was 11%. Our non-GAAP effective tax rate was lower this quarter because our tax rate in previous quarters had forecast repatriation of cash to the US this fiscal year.

The taxes attributable to repatriation will no longer be due in the US because of the recent US tax reforms. For the same reason, we now estimate that our non-GAAP effective tax rate for the second half of Fiscal Year 2018 will be in the range of 15-16%.

Now, I'll turn to guidance on our expected Fiscal Year 2019 effective tax rate. There are two important factors to consider. First, Australian draft legislation designed to implement certain base erosion of profit shifting, or BEPS, initiatives, related to high hybrid mismatches, is likely to be enacted in calendar year 2018 and be effective for our 2019 fiscal year.

This will impact the taxation of our transactions between Australia and the rest of our global businesses, and likely result in additional fiscal income attributable to the Australian tax jurisdiction resulting in a higher effective tax rate.

Secondly, the recent US tax changes will reduce our effective tax rate, predominantly associated with a new territorial tax system, which will allow for little or no tax on future earnings repatriated to the US from our foreign subsidiaries. Taking into account the impacts from the both the Australian prospective legislative changes and the US tax legislative changes, and our estimate for the geographic attribution of our income, we estimate our Fiscal Year 2019 effective tax rate will be in the range of 21-23%.

To round out the implications of the US Tax Reform, it's important to note that the US legislative changes will be positive for ResMed from a financial and treasury management perspective. We will now have far more flexibility to repatriate cash back to the US at little or no tax cost. We will be able to more effectively utilize our strong global cash flows to invest in growth opportunities and undertake capital management activities.

Moving on from tax related matters, during the second quarter, cash flow from operations was $132.6 million, reflecting strong underlying earnings. Capital expenditure for the quarter was $16 million. Depreciation and amortization for the December quarter totaled $29.4 million.

During the quarter, we paid dividends of $49.9 million. Our Board of Directors today declared a quarterly dividend of $0.35 per share. Additionally, as we discussed during last quarter's call, we recommenced our share buyback during the second quarter and repurchased 100,000 shares for consideration of $8.5 million.

At December 31, we have $1 billion in gross debt and $160 million in net debt. Our balance sheet remains strong with modest debt levels. At December 31, total assets were $3.6 billion, and net equity was $2 billion.

And with that, I will hand the call back to Agnes.

Agnes Lee -- Vice President, Global Investor Relations and Corporate Communications

Thanks, Brett. We will now turn to Q&A, and we ask everyone to limit themselves to one question and one follow-up question only. If you have additional questions after that, please get back into the queue.

...

Christine, we are now ready for the Q&A portion of the call.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] Margaret Kaczor from William Blair is on the line with a question.

Margaret M. Kaczor -- William Blair & Co. LLC -- Analyst

Thanks for taking the question. First of all, you guys had a really nice quarter in terms of showing operating leverage and SG&A leverage, even taking all of the moving pieces out. But, maybe walk us through what's been driving the recent results in SG&A leverage, and maybe what the long-term level for that SG&A or operating margin could be. Should we assume multiple years of leverage here?

Michael "Mick" Farrell -- Chief Executive Officer

As we've talked about on previous calls, if you look back over five-plus years, ResMed had around 20-32% of our revenue in SG&A. In most recent quarters, we've taken that down to 27% as a percentage of revenue because we're able to grow and leverage and our world leading scale within the sleep apnea and respiratory care, and now out of hospital software, markets. We expect that to continue. As Brett said in his prepared remarks, we want to leave this fiscal year at a run rate of around 26% of our revenues at SG&A, and even beyond that, as we look to FY19.

I think there is a lot of runway left for leverage around SG&A. We're the global leader in sleep apnea and respiratory care, and we have a right to win in out of hospital software. I think we can leverage that scale to grow efficiently. There is a lot of runway ahead over multiple fiscal years here, Margaret.

Margaret M. Kaczor -- William Blair & Co. LLC -- Analyst

Good. As a follow-up on international, it seems like it continues to remain a focus for you guys in relation to telemonitoring. I know you had some weird comps with China from the year-ago period. But what inning are you guys in today in driving telemonitoring internationally, and are there any advance talks on a national/regional level outside of France to drive ongoing fleet upgrades? Thanks.

Michael "Mick" Farrell -- Chief Executive Officer

That question allows us to talk about digital health and connected health beyond just the United States. We've had excellent progress the last three and a half years in the US. Millions -- literally, north of four million -- 100% cloud-connected medical devices, and six million patients in the AirView system. That keeps growing every day. But, as we highlighted in the prepared remarks, it's fantastic to see a country like France, where the government, who pays most of the healthcare bill through Social Security healthcare, is looking at the sleep apnea space and saying there's an ROI here to invest in telemonitored sleep devices. If we have patients that have telemonitored devices, they use them more.

As the data showed that we published, and the French government knows it, if the patient uses their device more, they stay out of hospital more. They have a better quality of life, and in fact, their survival rates go up. So, the French government making that change January 1 is fantastic. We think there's a lot of runway ahead across France. And, as we look across Western Europe, and across Europe, Asia, and all of the other markets we do business in, we are in regular conversations through our market access team, with the governments and major payers in the United States and other for-profit payers, and we will get the message through that having telemonitoring, having connected health and digital health, improves outcomes, lowers costs, and saves lives. And, we do think that other countries will follow suit after France, and it's great to have them out there.

Margaret M. Kaczor -- William Blair & Co. LLC -- Analyst

Great. Thanks.

Operator

Sean Laaman from Morgan Stanley is on the line with a question.

Sean Laaman -- Morgan Stanley Australia Ltd. -- Analyst

Good morning. My first question is to Brett. Could you give us a guide on the FX impact on GM in the quarter?

Brett Sandercock -- Chief Financial Officer

Yeah, we mentioned that it was pretty meaningful this quarter. If you look at it sequentially, it's in the order of 50 basis points negative. So, it was quite a big impact on the gross margin. If you ignore that, I'm pretty pleased with where we ended up with the gross margin, because we did have quite a bit of headwind of FX.

Sean Laaman -- Morgan Stanley Australia Ltd. -- Analyst

Great. And, Mick, are you able to give us a bit of a guide on what features the Mobi has versus the Activox?

Michael "Mick" Farrell -- Chief Executive Officer

Sure. Our sales team and commercial team have spent a long time designing and getting this product ready. We're not ready yet to publicly announce the specific features and capabilities. What I said at the conference earlier this month, and I'm happy to repeat here, is that this is got really good oxygen output. It has excellent battery life and a really good blend of all of the other parameters that are needed to make out of home portable oxygen concentrators the best they can be.

By putting the ResMed brand on it, we're only going to release it when we believe the quality's at the level that deserves that brand. That's what we're working toward.

Sean Laaman -- Morgan Stanley Australia Ltd. -- Analyst

Thank you. I'll jump back in the queue. I appreciate it.

Operator

David Low from JP Morgan is on the line with a question.

David A. Low -- JPMorgan -- Analyst

Thanks for taking my questions. Perhaps we can just touch on France again, Mick. You talked about the change happening from the first of January. I was just wondering what you're seeing there. Presumably, from the results we're seeing, you saw good buying ahead of the change. Where do you think we're up to in terms of fleet replacement to take advantage of the new reimbursement structure?

Michael "Mick" Farrell -- Chief Executive Officer

As you indicated, the reimbursement change went into effect January 1, but our French colleagues, customers, and partners in the ecosystem in France have known about this for a number of months. There has been some, if you like, upgrading of the fleet, from non-cloud connected to cloud-connected devices over the last three to six months. We see more runway ahead of that for France. And importantly, we see patients getting better care, using their devices more, and therefore using more masks. But, most importantly, they're staying out of hospital and being well taken care of.

We think there is a positive domino effect here, where other countries will see this change based upon real data, including the data we published in the Peer Review Press this quarter, and say this is the right direct to go. So, we're in active discussions well beyond just one or two countries here. All 120 countries we sell our products into, we are looking to get the message out there that telemonitoring and cloud connectivity and digital health and connected care can save costs and improve lives.

But, more runway left in France and a lot more across the other 119 countries we're selling to over the coming fiscal years.

David A. Low -- JPMorgan -- Analyst

Thanks very much. Just one other. You had very strong sales growth, which is really impressive. But, can you talk to market conditions? Let's perhaps start in the US. I'm trying to get a sense of how much is this ResMed gaining share and how much is this market conditions picking up in terms of patient setups and mask replacement.

Michael "Mick" Farrell -- Chief Executive Officer

I'll hand that to Jim Hollingshead, who runs our global sleep business.

James Hollingshead -- Chief Strategy Officer, President, Ventures & Initiatives Strategic Business Unit

Thanks, David. I think patient growth continues to be strong. Globally, as you know, sleep apnea is underdiagnosed and we're continuing to see increasing awareness in the markets and increasing patient setup. There's a little bit of cyclicality in the mask business, especially in the US, because of the way deductibles end at the end of the calendar year. We always get a little bit of pickup in mask with some cyclicality. But, the underlying growth in the market, I think, is driven by patient awareness and the economy's been a little bit stronger. So, overall, positive in both directions.

David A. Low -- JPMorgan -- Analyst

Great. Thanks very much.

Operator

Joanne Wuensch from BMO Capital Markets is on the line with a question.

Joanne Wuensch -- BMO Capital Markets -- Analyst

Good afternoon. Very nice quarter. Can we spend a moment talking about your Mobi portable oxygen concentrator? How is that going to be sold into the home? Will you combine that with your current home CPAP sales forth or are you going to build out something separate?

Michael "Mick" Farrell -- Chief Executive Officer

I'm going to hand that to Rob Douglas, our Chief Operating Officer.

Robert Douglas -- Chief Operating Officer

Thanks, Mick. Joanne, we're currently selling the Activox through our existing sales field force, and doing that very successfully. The relationship and discussions with the customers around the world are very relevant and portable oxygen represents a very good business opportunity for many of our customers around the world.

Mobi, as a ResMed brand, will just be an extension of that and a stronger player. It'll be part of our existing sales teams' armory. We're really looking forward to it coming out. We're really excited about it. It's going to have very strong performance.

Joanne Wuensch -- BMO Capital Markets -- Analyst

As a follow-up, was there anything specific in the quarter -- extra selling days, stocking -- anything particularly of note, that we should be able to factor in as we think about this quarter, but also project onto next year?

Michael "Mick" Farrell -- Chief Executive Officer

No, nothing out of the ordinary in this Q2 in terms of the channel. I think what we're seeing is -- we had three and a half years of the AirSolutions and AirSense portfolio that's incredibly valuable for customers. They continue to buy those sleep devices and respiratory care devices that fit on the AirView platform. We're seeing really good traction of the N20 nasal mask and the F20 full-face mask. These are the smallest, quietest, and most comfortable in their category.

The plastic that sits on the bridge of the nose on an F20 and N20 is the thinnest and most comfortable plastic you can have of any mask on the market. So, I think that's what's leading to the share guidance that we got this quarter. I think there is some sustainability to those share gains as we look forward.

Joanne Wuensch -- BMO Capital Markets -- Analyst

Very helpful. I'll get back in queue. Thank you.

Operator

Steve Wheen from Evans & Partners is on the line with a question.

Steve Wheen -- Evans & Partners -- Analyst

Good morning. Just a question around gross margin for Brett. You've obviously got, in this quarter, a particularly large headwind from currency, and therefore the offset through manufacturing efficiencies was obviously pretty compelling. What's the runway like on those manufacturing efficiencies for the back half of the year? I expected actually much improved mainly because the currency now has probably got an even bigger headwind to come, given the strength of the Aussie Dollar recently. Can you talk through how that might look and what are the moving parts going into the back half of the year?

Brett Sandercock -- Chief Financial Officer

Sure. We have a program around initiatives in both manufacturing procurement logistics and so on, to really work on a number of initiatives. We keep that pipeline pretty full. Then, it's a matter of executing and the timing of when they drop. Not to get overly granular, but we're working on that all the time and we expect to drop -- if you like initiatives or take costs out over a period of time -- there will be some of that that will manifest in the second half.

But, it's a long-term program and you just have to continue to execute on the initiative you identify and then keep that pipeline full. That's certainly what the team does. So, I guess it's more progressive, Steve, rather than having a big jolt to it. We just got to keep executing on those initiatives and that'll continue to drive all that COGS area.

Steve Wheen -- Evans & Partners -- Analyst

So, even with the Aussie dollar at $0.80, you've still got the ability to maintain that gross margin at current levels with the procurement side and the manufacturing efficiencies?

Brett Sandercock -- Chief Financial Officer

Yeah. I'm guiding to be broadly consistent. We will have some headwind with the Aussie at $0.80. Clearly, if that keeps tracking up, that's a different ballgame. But, at the moment -- there's a quarter lag, too. In the Q3, it won't be so bad. If you're looking to Q4, then clearly there is a bit of a headwind there. But, we've managed currencies on the job all the way from $0.47 to $1.03. So, I think we just have to live with currencies moving around and make sure that we've got initiatives in place, I guess, to counteract that.

But also, we're much broader on our manufacturing nowadays, compared to what we were a decade ago. We have manufacturing in Singapore, for example, that's pretty big. We have some in the US now that we're undertaking. So, I guess that portfolio's a little more balanced. Clearly, as you know, as of many years, on the materials side, we really look to source those in essentially US dollars to try and mitigate some of that.

That certainly has an impact, but I guess there are some things we do to try and mitigate that. We've just got to live with the currency, whichever way it goes.

Steve Wheen -- Evans & Partners -- Analyst

Okay. With the tax changes, one of the problems, as you've identified, is some of the repatriation historically. And now that those barriers have been somewhat removed, is this the opportunity that you're talking to of all capital management initiatives? Is that sort of the first cab off the rank with regards to what you'll be able to do now that you can shift that cash around a little bit more freely?

Brett Sandercock -- Chief Financial Officer

We certainly have the flexibility now. I guess we're still reviewing that, so I wouldn't want us to pre-empt anything just yet. But, it does give us that flexibility around being able to utilize that cash essentially anywhere in the world. And that could mean growth opportunities, acquisitions, investments -- wherever we might want to undertake. We have far more flexibility to do that. Additionally -- it's not necessarily either/or -- but we'd have the ability to do some more capital management as well.

There are a few things in the tax reform. You've got some limits or caps on interest deducted billing and things like that, so you have to navigate a few things. But, for us, it's a great benefit because the flexibility is much greater than we had before. We've kicked off the buyback, for example, in Q2. We'll continue with that. At the moment, I expect it to be relatively modest, or just offset, the equity share grants to employees, for example. It's that 1-1.5 mean annually. But, we certainly have more flexibility around that. But, we don't have anything completely planned out at this stage. I think we're just assessing through on our options and so on.

Steve Wheen -- Evans & Partners -- Analyst

Fantastic. Thanks very much.

Operator

Thank you. Please remember to limit yourself to one question and one follow-up question. If there are additional questions, please return to the queue. Your next question comes from the line of David Stanton from CLAS (sic).

David Stanton -- CLSA -- Analyst

Good morning. Could you explain how Brightree and ResMed are going about increasing mass replenishment, in particularly the US market? Thank you.

Michael "Mick" Farrell -- Chief Executive Officer

I'll start off and maybe Jim can add into that. We have some excellent programs with Brightree Connect and ResMed ReSupply, some platforms that we've enhanced and put together to provide and end-to-end service for our HME customers who want to get involved in resupply programs. We have automatic email, text, and interactive voice response that we can provide for our customers to go directly to their patients. We have drop ship programs where we can drop ship directly to the patients if the home care companies require or want that.

So, we have many offerings in that. Every day we are looking at ways to upgrade our resupply programs, including engaging patients with the myAir applications. We think that there is an underutilization of patients saying they want to get a clean mask when they need a clean mask. They don't know it's available and the option's there for them. They don't know their copay. They don't know the timing. So, we want to turn that ignorance into education and educate the patients. But, when their mask link does start to go up and/or their mask starts to get dirty, they can get a new one. And this is a piece of plastic that touches your face for seven hours a night every night. It needs to be replaced on a regular basis. We think there's an under met need to drive that.

Any further detail on that, Jim?

James Hollingshead -- Chief Strategy Officer, President, Ventures & Initiatives Strategic Business Unit

The only thing I'd add to that is the reason why there are two platforms is because Brightree Connect is designed for our HME customers who are using Brightree as their billing platform. There are many thousands of those. There are also thousands of HMEs who don't use Brightree as their billing platform, so the ResMed ReSupply platform is really designed to be agnostic a billing system and be usable by HMEs who weren't on the Brightree billing platform. In that way, the two offers effectively cover the entire market.

David Stanton -- CLSA -- Analyst

Thank you. My follow-up is, given your strong numbers in the US in particular, would you give us your updated thoughts on US market growth rates and perhaps European market growth rates as you see them going in 2018? Thank you.

Michael "Mick" Farrell -- Chief Executive Officer

We look at the global sleep apnea respiratory care market that we play in, growing in that mid to high single digits, with devices growing at the mid-single digits, and mask systems growing at the high single digits. Clearly, this quarter, we took share in both of those categories. AirSolutions, AirView, and the AirSense 10 and AirCurve 10 systems themselves, helped us gain share in the device side. These new masks -- well, three or four quarters after launch -- are still growing well in the nasal and full-face categories, with the N20 and the F20.

I've got to tell you, the AirTouch F20, that foam mask, has formed a nice little niche for those patients who are very sensitive to plastic on their face. They now have a far more comfortable foam they can have there. I think the market is in that mid to high single digits. I think we took share in this last quarter, and we have the capability of taking share over further quarters. But, we're also putting 6-7% of our revenues into research and development, to make sure we have a regular cadence of innovation to bring on the mask front, as well as on the software front, which we upgrade on a four- to six-week basis with the cloud upgrades.

Operator

David Bailey from Mack Quarry is on the line with a question.

David Bailey -- Macquarie -- Analyst

Good morning. I had a question on the average selling price decline you've highlighted this quarter. It's been an impact over the past few years. Would you be willing to characterize the decline you saw in second quarter relative to history?

Michael "Mick" Farrell -- Chief Executive Officer

Yeah, we haven't for four years given out ASPs.

David Bailey -- Macquarie -- Analyst

That's fine. Thank you very much. In relation to currency, you've historically provided an impact on a per share basis in previous quarters. Are you able to provide us with the overall impact of currency on a per share basis for the second quarter?

Michael "Mick" Farrell -- Chief Executive Officer

Brett, do you want to take that question?

Brett Sandercock -- Chief Financial Officer

Yeah. This quarter was $0.02, which is really the reflection of the stronger Euro. So, it was $0.02.

David Bailey -- Macquarie -- Analyst

That's great. Thank you.

Operator

Matt Taylor from Barclays is on the line with a question.

Matthew Taylor -- Barclays Capital, Inc. -- Analyst

Hi. The first question I have is around your device growth. It was pretty strong this quarter on a tough comp. Can you give us any color on some of the components? I know you mentioned that the AirSolutions and AirSense platform continues to grow well. Can you talk about the different sub businesses within devices and how each of those are doing?

Michael "Mick" Farrell -- Chief Executive Officer

Yeah. We don't break out the detail between the sleep devices and the respiratory care devices. But, I can break out by geography. Devices grew globally at 9% on a constant currency basis. In Europe, Asia, and our other markets around the world, it was round 5% growth of the devices. And, in the US, Canada, and Latin America groups combined, we grew at 12%.

A way to think about why there's that relative growth by geography is the penetration rate of AirSolutions and the digital health and connected health platforms. The more that we're able to show that data to our customers, of managing a fleet of products -- so managing a fleet of patients within the digital health platform, enables them to see the value, and reduce their labor costs. When they use a ResMed device through that ecosystem, their labor costs for setting up sleep apnea therapy go down by up to 59%. So, that's a big compelling value proposition that you want to buy ResMed.

We have had some success in France of getting differential reimbursement for that, and I'd say that's the first geography outside the US that will have now an S-curve of growth, if you like, of the digital side that will allow us to bring some of that faster device growth there. But, look out. Our French team is doing an amazing job -- firstly, in market access and talking to the government, but also in execution of driving that. We'd like to see that continue there in France, but also across Western Europe and other markets we participate in.

Matthew Taylor -- Barclays Capital, Inc. -- Analyst

Thanks for that. I just had one follow-up for Brett. There are a lot of things moving around on the tax line. Can you give us some sense for, when you're developing these ranges for the second half of fiscal '18 and for '19, how much of that is still kind of moving around? What are the factors we should think about that could move those ranges up or down, or move you within the ranges?

Brett Sandercock -- Chief Financial Officer

Sure, Matt. This is all very recent and there has been a lot of activity, so these are best estimates going forward, given what we know about the Australian legislation and the US tax reforms. We put that guidance out there, which we're reasonable confident on, but they are estimates. Looking forward, it would just be around geographic mix of income and operations. So, as operations evolve in different geographies, that can impact your tax rights over time. That would be longer term impacts you might see.

But, on shorter term, I think that's our best estimates with what we know on the legislation, which is very hot off the press. Clearly, we'll tune and refine that as we go through the quarters, if we need to.

Matthew Taylor -- Barclays Capital, Inc. -- Analyst

Thanks, guys.

Operator

Vic Windeyer from Citi is on the line with a question.

Victor Windeyer -- Citi Investment Research -- Analyst

Hi. I wanted to the understand the lower tax that brings the non-GAAP back from $1.00 to $0.93. Can you just talk about that?

Brett Sandercock -- Chief Financial Officer

Yeah. Essentially, it boils down to we were forecasting some repatriation, which would typically have US tax attributed to it. Under the new tax reforms, any repatriation we make is no longer taxed in the US. That does, in fact, impact us favorably for FY18, and that has lowered our tax rate on a non-GAAP basis -- not having to pay that tax in the US.

Victor Windeyer -- Citi Investment Research -- Analyst

Okay. Great. As a follow-up, in the respiratory care business, when do we expect that mark through an inflection point and then we get a high rate of growth out of that business, given the large opportunity that presents? Can you outline how you see that coming through and the timing on that?

Michael "Mick" Farrell -- Chief Executive Officer

Vic, there are the 380 million COPD patients out there. We think somewhere around 10% of them will, and should, have some type of therapy, where it's noninvasive ventilation, portable oxygen concentrator, and/or life support ventilation. So, it's a huge long-term opportunity, but it's no overnight and it takes a long time.

I think a really important factor about that second horizon of growth for us is that the money that can be saved for the healthcare system is huge. These 380 million patients are incredibly expensive for the healthcare system. They come back and back and back again to the emergency room and they get rehospitalized within 90 days on a very high frequency. When they use our products, and we show this in the HOT-HMV study -- when they use our noninvasive ventilator and our oxygen concentrator together, we can reduce hospitalizations by 51%.

Like we did with the French government, and working with them on telemonitoring and showing the return on investment, we are going country by country, payer by payer in the for-profit country insurance markets, and showing these data. So, it's not an overnight S-curve. It's market by market, but we see a lot of runway ahead. And, when we launch the Mobi, we'll have another part of the portfolio in there. Another ResMed branded part of the portfolio to add in there. As you look forward, the next couple of fiscal years, you'll start to see some good growth out of our respiratory care business.

Victor Windeyer -- Citi Investment Research -- Analyst

Great. On the tax follow-up, what would the tax be in prior inaudible doesn't go through? What's the impact of that particular component there?

Brett Sandercock -- Chief Financial Officer

In the unlikely event it didn't go through, then that would likely pull it back to closer to the kind of rates we're seeing in the second half. More like that 15-17% area, if it didn't go through or it happened to be delayed or something like that. But, I think that's a very good likelihood. I think that's going to parliament in February and I expect that to be passed.

Victor Windeyer -- Citi Investment Research -- Analyst

Thanks very much.

Operator

Suraj Kalia from Northland Securities is on the line with a question.

Suraj Kalia -- Northland Securities -- Analyst

Good afternoon. Brett, you mentioned 50 BPs negative FX impacts. Can you split out the impact because the US dollar has depreciated quite a bit against the Euro, whether you want to look at it from the beginning of '17 or even from the beginning of 2018. The Aussie Dollar obviously has trended, so I understand they're working against each other. But is 50 BPs the net impact? Could you give us what happened -- from a revenue perspective, what was the FX impact on the top line?

Brett Sandercock -- Chief Financial Officer

Yeah, the top line was that growth from 11-13%, so that couple of percent benefit are likely stronger year-on-year. The 50 basis points I mentioned were sequential, so it's coming through from Q1 to Q2. If you look at the Euro sequentially, it was relatively flat. But, the Aussie has been picking up, and then we have the impact of a one-quarter lag. So, we've seen the Aussie appreciate over that time. That has driven that sequential impact for us.

Suraj Kalia -- Northland Securities -- Analyst

Got it. Mick, one question for you. In terms of Brightree, can you give us the broad contours of your international strategy? Congrats on a nice quarter.

Michael "Mick" Farrell -- Chief Executive Officer

Thanks, Suraj. Brightree really is a US designed and operated software. However, we do have software programmers who are in the UK and in other parts of the world, so it is a globally supplied business. We operate in 120 countries. The amazing efficiencies that we've brought to our US homecare customers with Brightree, I wouldn't want to limit to just that country. Having said that, I don't want to distract the team from the really strong teens level double-digit growth. So, they will be focused on that.

Suraj, it's a question we're looking at and we're looking at other geographies, including ones that were heavily invested to think can we start some pilot trials and experiments -- some courageous experiments, if you like -- on taking the Brightree technology to some of the other markets that we do business in. I guess that's part of that Horizon Three strategy, that out of hospital software expansion. You'll see us talk more about that as we go forward.

Suraj Kalia -- Northland Securities -- Analyst

Thank you.

Operator

Tom Godfrey from UBS is on the line with a question.

Tom Godfrey -- UBS -- Analyst

Good morning, guys. With regards to your new AirTouch memory foam cushion setup, have you heard from any of your customers? It has the 30-day replenishment schedule. Anything from your customers around pushback from funders, just given that increased replacement run rate? Or, are you managing to show enough uplift in compliance or comfort levels so that funders are happy to pay the increased replacement? Thanks a lot.

Michael "Mick" Farrell -- Chief Executive Officer

It'll hand that to Jim Hollingshead from our global business perspective.

James Hollingshead -- Chief Strategy Officer, President, Ventures & Initiatives Strategic Business Unit

Thanks, Tom. I think the most remarkable thing about the mask is the patient feedback we receive on it. It's an incredibly comfortable mask and the patient feedback is almost overwhelmingly positive on it. From a funding perspective, as we take it out to our channel partners, we're working with them for them to fully understand the replenishment cycle and what impact that might have, depending on what insurance the patient has or what the funding situation is patient by patient.

So, we haven't heard any real negative feedback from the market broadly about the mask, but it's being put on patients for whom it's appropriate given their particular health insurance situation or their payment out of pocket or whatever.

Michael "Mick" Farrell -- Chief Executive Officer

I'd add on to that that it's such a comfortable mask that it can be a second line of defense. If a patient doesn't tolerate LSI or plastic touching their face, people who object to that and it interferes with their sleep, foam is incredibly comfortable. It's what mattresses are made out of. It feels more like the bed covers. It's a great niche that I think goes after those customers who need it. As Jim said, it all depends on insurance and their reimbursement schedule, but it also depends on that individual patient selection.

If you're able to get a patient compliant versus not compliant, the differences we show in the published data are huge for the healthcare system. So, they're self-evident, but obviously we're collecting health economics and market access data while we launch a product like this into all of our markets.

Tom Godfrey -- UBS -- Analyst

Great. Thanks a lot.

Operator

We are now at the one-hour mark, so I'll turn the call over to Mick Farrell.

Michael "Mick" Farrell -- Chief Executive Officer

Thanks, Christine. In closing, I want to thank the 6,000-strong ResMed team for their execution on our product launches and their commitment to our operating excellence initiatives. This quarter, that work translated into continued market share gains, strong revenue growth, and excellent operating leverage. Our team remains focused on our future pipeline of products and software solutions that change patients' lives and benefit our customers -- patients, physicians, payers, and providers. Thank you for your time. We'll talk to you again in 90 days.

Agnes Lee -- Vice President, Global Investor Relations and Corporate Communications

Thank you again for joining us today. If there are any additional questions, please feel free to contact me. The webcast replay will be available on our website at investor.resmed.com.

Christine, you may now close the call.

...

Operator

This concludes ResMed's second quarter of Fiscal Year 2018 earnings live webcast. You may now disconnect.

Duration: 61 minutes

Call participants:

Agnes Lee -- Vice President, Global Investor Relations and Corporate Communications

Michael "Mick" Farrell -- Chief Executive Officer

Brett Sandercock -- Chief Financial Officer

James Hollingshead -- Chief Strategy Officer, President, Ventures & Initiatives Strategic Business Unit

Robert Douglas -- Chief Operating Officer

Joanne Wuensch -- BMO Capital Markets -- Analyst

David Stanton -- CLSA -- Analyst

Steve Wheen -- Evans & Partners -- Analyst

David A. Low -- JPMorgan -- Analyst

Margaret M. Kaczor -- William Blair & Co. LLC -- Analyst

Sean Laaman -- Morgan Stanley Australia Ltd. -- Analyst

Matthew Taylor -- Barclays Capital, Inc. -- Analyst

Victor Windeyer -- Citi Investment Research -- Analyst

Suraj Kalia -- Northland Securities -- Analyst

Tom Godfrey -- UBS -- Analyst

David Bailey -- Macquarie -- Analyst

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