ResMed Shares Surge on Q2 Earnings Report, Revenue Jumps 10%

January 31, 2025 11:11 AM AEDT | By Team Kalkine Media

ResMed Shares Surge on Q2 Earnings Report, Revenue Jumps 10% — Image source: Shutterstock

Strong Q2 Performance Exceeds Expectations

For the quarter ended December 31, 2024, ResMed delivered a 10% year-over-year increase in revenue, reaching $1.3 billion. This surpassed the $1.265 billion forecast by Goldman Sachs, driven by higher demand for sleep therapy devices, masks, and solid growth in its Residential Care Software segment.

Regionally, Americas revenue (excluding Residential Care Software) rose by 12%, while Europe, Asia, and other markets grew by 8% in constant currency. Additionally, Residential Care Software revenue itself expanded by 8% in constant currency.

The company also reported an increase in gross margin by 300 basis points, primarily due to efficiency improvements in manufacturing, logistics, and reduced component costs. On a non-GAAP basis, the gross margin improved by 230 basis points.

Profitability and Financial Strength

ResMed’s robust sales performance led to a 52% surge in income from operations, which totaled $417.2 million. Non-GAAP net income also jumped 29% to $358.3 million, surpassing Goldman Sachs' estimate of $349 million. These strong financial results further solidify the company’s leadership position in the sleep health and digital healthcare sectors.

CEO's Perspective on Growth and Future Prospects

ResMed Chairman and CEO Mick Farrell expressed confidence in the company's trajectory, crediting the strong performance to rising demand for sleep and respiratory health products and an unwavering focus on operational efficiency.

He also highlighted the company’s unique market position, particularly as consumer wearables, such as smartwatches, are increasingly being used to diagnose sleep apnea. This shift could drive greater awareness of sleep disorders, potentially expanding ResMed’s customer base.

Looking Ahead

With continued advancements in digital health and growing awareness of sleep-related disorders, ResMed remains optimistic about future growth. The company plans to further strengthen its position in the market by leveraging cutting-edge technologies and expanding its range of healthcare solutions.

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