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On 25 January 2019, ResMed Inc. (NYSE: RMD, ASX: RMD) announced its December quarter financial and business results. ResMed is a leading player under Australiaâs health care sector, engaged in offering innovative cloud-connected medical devices transform care for treatment of sleep apnea, COPD, respiratory diseases and other chronic ailments. The companyâs comprehensive out-of-hospital software platforms aim at improving the quality of life and cost reduction for patients and healthcare systems across the globe.
For its quarter ended 31 December 2018, the company posted 8% jump (9% on constant currency basis) in revenue to $651.1 million, as compared to $601.3 million for December 2017 quarter. For six months ended 31 December 2018, total revenue stood at A$1,239.4 million, representing 10% increase (11% on constant currency basis), as compared to A$1124.9 million in the previous yearâs corresponding period.
For its quarter ended 31 December 2018, the company noted 70bps jump in gross revenue to 58.9% as compared to 58.2% for December 2017 quarter. For six months ended 31 December 2018, the gross revenue stood at 58.6% million, as compared to 58.3% in the previous yearâs corresponding period.
Quarterly Net operating profit of $157.1 million represents an increase of 8% over $146 million in the previous yearâs corresponding period. Besides, a 15% increase in the non-GAAP operating profit of $181.1 million was declared by the company.
The company reported impressive 1298% jump in Quarterly Net income to $124.6 million from $9.5 million in the previous yearâs second quarter, driven largely by the one-time transition tax recognized in the prior-year quarter.
ResMed also reported $0.86 GAAP diluted earnings per share, representing an upside of 1129% driven largely by the one-time transition tax recognized in the prior-year quarter. Besides, stable $1.00 non-GAAP diluted earnings per share for the second quarter of 2019 was noted.
Gross margin expanded by 70 basis points, primarily due to benefits from manufacturing and procurement efficiencies, product mix variations and higher margin contribution from MatrixCare, partially offset by declines in average selling prices.
Software as a Service revenue improved by 63% owing to continued growth in Brightree service offerings and an additional contribution from MatrixCare acquisition and HEALTHCAREfirst last year. Selling, general and administrative expenses increased by 6 % (8% on a constant currency basis), including the impact of recent acquisitions. The company recorded $129.5 million operating cash inflow for the quarter.
ResMed declared a quarterly cash dividend of $0.37 per share with 7 February 2019 as record date and payable on March 14, 2019.
Region-wise performance: U.S., Canada, and Latin America (excluding Software as a Service) posted a 9% increase in revenue primarily attributable to robust sales across mask and device product portfolios. While, Europe, Asia and other markets grew by 1% on a constant currency basis driven by strong mask sales. While device sales grew elsewhere, their sales in France and Japan witnessed a drop owing to customers completing their connected device upgrade programs.
Business Highlights: ResMed acquired leading software solutions company, MatrixCare during the recent quarter for a consideration of $750.0 million. The company implemented the joint venture with Verily to benefit from ResMedâs sleep apnea specialization and Verilyâs advanced health data analytics technologies. Besides, the company announced the recently completed purchase of a digital therapeutics company, Propeller Health for $225.0 million, during the recent quarter. The company was designated as one of Americaâs top 100 corporate citizens for the third consecutive year by Forbes and JUST Capital.
Despite reporting decent performance, the RMD stock plunged by 11.79%, closing the day at A$14.51, as the market was expecting more from the company in terms of its performance. The shares of the company have posted 10.85% gains over last six months and a YTD return of 2.56% this year.
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