ResMed Inc. posted a robust second quarter for fiscal year 2025, with revenue climbing 10% to $1.3 billion and operating profit soaring 52%, driven by strong demand for sleep and breathing health products and operational efficiencies.
- 10% year-over-year revenue growth to $1.3 billion
- 52% increase in GAAP operating profit; 19% rise in non-GAAP operating profit
- Gross margin improved by 300 basis points to 58.6%
- Operating cash flow reached $309 million
- Launch of Kontor Head Strap accessory and expansion of Singapore operations
Strong Financial Performance
ResMed Inc. (NYSE: RMD, ASX: RMD) reported a solid second quarter for fiscal year 2025, ending December 31, 2024, with revenue increasing 10% year-over-year to $1.3 billion. This growth was consistent on a constant currency basis, underscoring resilient demand across its portfolio of sleep and breathing health products and digital health solutions.
Operating profit surged 52% to $417 million on a GAAP basis, while non-GAAP operating profit rose 19%, reflecting both top-line strength and improved operational efficiency. Gross margin expanded by 300 basis points to 58.6%, driven by manufacturing and logistics efficiencies and lower component costs. Non-GAAP gross margin also improved by 230 basis points to 59.2%, highlighting the company’s focus on cost management.
Diluted earnings per share reached $2.34, with non-GAAP diluted EPS at $2.43, marking a 29% increase from the prior year. Operating cash flow was robust at $309 million, supporting ongoing capital management initiatives including $78 million in dividends and $75 million in share repurchases.
Geographic and Product Segment Growth
Revenue growth was broad-based geographically. The Americas region (U.S., Canada, and Latin America) excluding Residential Care Software saw a 12% increase, while Europe, Asia, and other markets grew 8% on a constant currency basis. Residential Care Software revenue rose 8%, reflecting continued organic expansion in this segment.
Devices and masks both contributed to growth, with devices revenue reaching $669 million and masks and other products totaling $456 million for the quarter. The company’s Residential Care Software segment also showed steady gains, reinforcing its strategic shift towards integrated digital health platforms.
Strategic Initiatives and Innovation
Beyond financial results, ResMed announced the launch of the Kontor Head Strap, a premium accessory designed for Apple Vision Pro users. Crafted with proprietary ultra-premium materials, the strap enhances comfort and wearability, reflecting ResMed’s commitment to blending healthcare innovation with consumer technology.
Additionally, ResMed reaffirmed its investment in Singapore, partnering with the Singapore Economic Development Board to expand its manufacturing and innovation hub in the Asia-Pacific region by 2029. This move aims to strengthen the company’s global supply chain and accelerate product development.
Recognition of ResMed’s corporate culture and operational excellence came through its inclusion in Forbes’ Most Trusted Companies in America list and the Wall Street Journal’s Management Top 250 ranking, underscoring strong employee and customer engagement alongside financial strength.
Outlook and Market Position
CEO Mick Farrell highlighted the company’s positioning to capitalize on emerging trends such as consumer wearables tracking sleep health and the growing use of GLP-1 therapies. These developments are expected to drive increased patient flow and demand for home-based care solutions, areas where ResMed’s connected digital health ecosystem is uniquely positioned.
With a clear market-leading value proposition and ongoing operational discipline, ResMed appears well-placed to sustain growth momentum amid evolving healthcare dynamics.
Bottom Line?
ResMed’s strong Q2 results and strategic investments set the stage for continued leadership in digital sleep and respiratory health.
Questions in the middle?
- How will ResMed leverage consumer wearables and GLP-1 therapy trends to expand market share?
- What impact will the Singapore expansion have on ResMed’s global manufacturing and innovation capabilities?
- How sustainable are the recent gross margin improvements amid potential supply chain pressures?