In This Article:
Medical device company ResMed (NYSE:RMD) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 7.9% year on year to $1.29 billion. Its non-GAAP profit of $2.37 per share was in line with analysts’ consensus estimates.
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ResMed (RMD) Q1 CY2025 Highlights:
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Revenue: $1.29 billion vs analyst estimates of $1.29 billion (7.9% year-on-year growth, in line)
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Adjusted EPS: $2.37 vs analyst estimates of $2.36 (in line)
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Adjusted EBITDA: $488.3 million vs analyst estimates of $474.1 million (37.8% margin, 3% beat)
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Operating Margin: 33%, up from 31.3% in the same quarter last year
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Free Cash Flow Margin: 43.2%, up from 31.8% in the same quarter last year
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Constant Currency Revenue rose 9% year on year (7% in the same quarter last year)
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Market Capitalization: $34.59 billion
StockStory’s Take
ResMed’s first quarter results were underpinned by broad-based revenue growth and notable gross margin expansion, with management highlighting operational efficiencies and product mix as key drivers. CEO Mick Farrell described the quarter as one where manufacturing and logistics improvements, alongside investments in research and development, positioned the company to capture increasing demand for cloud-connected sleep and respiratory devices. New product launches, such as the Nite Owl home sleep apnea test and the expanded AirSense platform, contributed to enhanced adoption across key markets.
Looking ahead, management is focused on initiatives to further expand the patient funnel and drive adherence, particularly through targeted demand generation programs and digital health investments. Farrell emphasized the company’s strategy to leverage educational outreach, brand evolution, and partnerships with healthcare providers to accelerate diagnosis and therapy adoption. The company also reiterated a disciplined approach to capital allocation, balancing increased share buybacks with ongoing R&D and potential tuck-in acquisitions.
Key Insights from Management’s Remarks
ResMed’s leadership attributed the quarter’s performance to a blend of operational execution, product innovation, and targeted demand generation. Key business updates and management commentary included:
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Manufacturing and Logistics Efficiencies: Improvements in production processes and a shift from air to sea freight reduced costs and contributed to gross margin gains. Brett Sandercock, Chief Financial Officer, indicated that these changes brought margin benefits and positioned the company for sustainable improvement.
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Product Portfolio Expansion: The commercial rollout of Nite Owl, a compact home sleep apnea test, and the launch of the AirSense 11 VPAP TX platform enabled ResMed to address diagnostic backlogs and support more personalized therapy titration for patients.
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Digital Health Ecosystem Growth: Management discussed the integration of diagnostic tools with the AirView cloud software and MyAir patient app, aiming to build a seamless pathway from screening to therapy adherence. The continued adoption of the Somnawhere platform by large U.S. healthcare systems and the Veterans Administration was highlighted as a milestone.
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Brand Evolution Strategy: The company initiated a global brand unification campaign, seeking to raise awareness in sleep health and drive measurable returns on marketing investments. Early results from consumer advertising and physician education programs were described as encouraging for new patient flow.
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Tariff Exemptions and Supply Chain Resilience: Management confirmed that U.S. tariff exemptions remain in place for its medical devices, minimizing exposure to new trade measures. Expansion of manufacturing capacity in California is expected to further strengthen supply chain resilience and support U.S. market growth.
