ResMed Inc.(NYSE: RMD, ASX: RMD) shares surged up over 9% in mid-day trade after the company announced 12% year-over-year growth in its revenue for the third quarter of Fiscal Year 2019. The stock is trading at $16.210, up 9.527%, as at 3 May 2019 (1:25 PM AEST).
California-based leading healthcare company, ResMed Inc today released its quarterly results for the three months ended 31 March 2019. Revenue increased by 12% to $662.2 million for Q3 FY19, taking the nine months revenue of the company to $1,901.6 million, up 11% compared to the previous corresponding period.
The biggest driver of the top line growth had been the strong sales across the company’s mask and device product portfolios. In addition, Software as a Service had been another key driving factor in the company’s favourable sales momentum.
Software as a Service revenue grew by 101% on the back of continued growth in the company’s Brightree service offerings and incremental contribution from the acquisition of MatrixCare and HEALTHCAREfirst.
ResMed’s CEO, Mick Farrell stated that it had been another strong quarter with significant top-line growth across all the segments of the company’s business including the growth in international device sales and a solid contribution from recently acquired SaaS companies.
Gross margin expanded by 100 basis points to 59.2% reportedly due to higher margin contribution from MatrixCare underpinned by favourable product mix changes and manufacturing and procurement efficiencies.
The net operating income of the company increased by 15% to $157.0 million for the quarter ended 31 March 2019, compared to Q3 FY18. To the contrary, Net Income witnessed a downtrend of 4% to $105.4 million compared to $110.1 million in the previous corresponding period, reflecting the impact of higher interest, income tax expense and cost associated to recent acquisitions.
Other Key Operational Highlights:
During the quarter, the company completed the acquisition of digital therapeutics company Propeller Health for $225.0 million. Propeller is focused on offering connected health solutions in asthma and chronic obstructive pulmonary disease (COPD).
Revenue in the U.S., Canada, and Latin America, excluding Software as a Service, grew by 10% compared to the prior year period while the revenue in combined Europe, Asia and other markets grew by 6% on a constant currency basis compared to the same period of the prior year.
ResMed also launched its first top-of-head CPAP mask, AirFit N30i, with the view to expand its mask portfolio while at the same time broadening its market for Mobi, a premier portable oxygen concentrator.
Based on its acquisition-driven growth strategy, ResMed has pitched the acquisition of HB Healthcare, a fast-growing, privately held South Korean home medical equipment provider, expanding ResMed’s leading role in Korea’s CPAP and respiratory care market.
On the back of solid fundamentals, the company declared a quarterly cash dividend of $0.37 per share, unfranked, with a record date of 9 May 2019 and payment date of 13 June 2019.
The company’s ultimate objective is to improve 250 million lives in out-of-hospital healthcare in 2025.
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