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ResMed Inc. Announces Results for the Third Quarter of Fiscal Year 2023

Note: A webcast of ResMed’s conference call will be available at 4:30 p.m. ET today at

SAN DIEGO, April 27, 2023 (GLOBE NEWSWIRE) -- ResMed Inc. (NYSE: RMD, ASX: RMD) today announced results for its quarter ended March 31, 2023.

Third Quarter 2023 Highlights
All comparisons are to the prior year period

  • Revenue increased by 29% to $1,116.9 million; up 31% on a constant currency basis 
  • Gross margin contracted 150 bps to 55.3%; non-GAAP gross margin contracted 200 bps to 56.1%
  • Income from operations increased 28%; non-GAAP operating profit up 27%
  • Operating cash flow of $282.6 million
  • Diluted earnings per share of $1.58; non-GAAP diluted earnings per share of $1.68

“During the third quarter, we significantly ramped up production and delivery of our cloud-connected flow generator devices to meet ongoing high demand from customers, resulting in strong device sales growth across our global markets,” said Mick Farrell, ResMed’s CEO. “We now have full global availability of our connected AirSense 10 platform, while we continue to ramp production and availability across more geographies of our AirSense 11 platform. The bottom line is this: We can now support global customer demand for CPAP and APAP devices to serve the entire sleep device market. This is great news for physicians, providers, and especially for patients. We also saw very strong growth in our mask and patient interfaces businesses globally, demonstrating a sustainable focus on patient adherence and resupply. Our outside-hospital software-as-a-service business achieved high-single-digit growth organically and reached well into double-digit growth with a full quarter of contribution from our MEDIFOX DAN acquisition that we closed last November. We remain laser-focused on delivering lifesaving therapy solutions and accelerating the adoption of digital health in sleep apnea, COPD, insomnia, and out-of-hospital care. During the last 12 months, we improved over 156 million lives, and we are well on our way to our goal of helping 250 million people sleep better, breathe better, and live higher-quality lives with outside-hospital care in 2025.”

Financial Results and Operating Metrics
Unaudited; $ in millions, except for per share amounts

 Three Months Ended
 March 31,
 March 31,
 % Change Constant
Currency (A)
Revenue$1,116.9  $864.5  29% 31%
Gross margin 55.3%  56.8% (3)  
Non-GAAP gross margin (B) 56.1%  58.1% (4)  
Selling, general, and administrative expenses 228.5   182.4  25  28 
Research and development expenses 76.4   66.8  14  16 
Income from operations 300.7   234.3  28   
Non-GAAP income from operations (B) 321.2   253.0  27   
Net income 232.5   179.0  30   
Non-GAAP net income (B) 247.8   193.3  28   
Diluted earnings per share$1.58  $1.22  30   
Non-GAAP diluted earnings per share (B)$1.68  $1.32  27   

 Nine Months Ended
 March 31,
 March 31,
 % Change Constant
Currency (A)
Revenue$3,100.9  $2,663.4  16% 20%
Gross margin 56.1%  56.4% (1)  
Non-GAAP gross margin (B) 56.8%  57.6% (1)  
Selling, general, and administrative expenses 633.3   544.5  16  21 
Research and development expenses 209.5   189.3  11  13 
Income from operations 856.6   744.9  15   
Non-GAAP income from operations (B) 917.5   801.3  15   
Net income 667.9   584.4  14   
Non-GAAP net income (B) 714.3   631.5  13   
Diluted earnings per share$4.53  $3.97  14   
Non-GAAP diluted earnings per share (B)$4.85  $4.30  13   

(A)In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency” basis, which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.
(B)See the reconciliation of non-GAAP financial measures in the table at the end of the press release.

Discussion of Third Quarter Results

All comparisons are to the prior year period unless otherwise noted

  • Revenue grew by 31 percent on a constant currency basis, driven by increased demand for our sleep and respiratory care devices as well as reduced competitive supply.
    • Revenue in the U.S., Canada, and Latin America, excluding Software-as-a-Service, grew by 32 percent, primarily due to the factors discussed above.
    • Revenue in Europe, Asia, and other markets, excluding Software-as-a-Service, grew by 28 percent on a constant currency basis.
    • Software-as-a-Service revenue increased by 35 percent, reflecting incremental revenue from our acquisition of MEDIFOX DAN and continued organic growth in our SaaS portfolio.
  • Gross margin decreased by 150 basis points and non-GAAP gross margin decreased by 200 basis points, mainly due to unfavorable product mix and higher component costs, partially offset by an increase in average selling prices.
  • Selling, general, and administrative expenses increased by 28 percent on a constant currency basis. SG&A expenses improved to 20.5 percent of revenue in the quarter, compared with 21.1 percent in the same period of the prior year. These changes in SG&A expenses were mainly due to increases in employee-related expenses and increases in travel expenses.
  • Income from operations increased by 28 percent and non-GAAP income from operations increased by 27 percent.
  • Net income for the quarter was $232.5 million and diluted earnings per share was $1.58. Non-GAAP net income increased by 28% to $247.8 million, and non-GAAP diluted earnings per share increased by 27% to $1.68, predominantly attributable to strong sales, partially offset by gross margin contraction.
  • Operating cash flow for the quarter was $282.6 million, compared to net income in the current quarter of $232.5 million and non-GAAP net income of $247.8 million. During the quarter we paid $64.6 million in dividends.

Other Business and Operational Highlights

  • Announced the retirement of David Pendarvis, Chief Administrative Officer & Global General Counsel, effective June 30, 2023. An internal search for ResMed’s new Global General Counsel is underway and expected to be completed before Pendarvis retires. In parallel, announced the promotion of Amy Wakeham to Chief Communications & Investor Relations Officer, effective April 1, 2023. Wakeham joined ResMed in June 2018 and previously led IR at several other public companies.
  • Published 2023 Global Sleep Survey as part of National Sleep Awareness Week (March 12-18) and World Sleep Day (March 17). The survey, conducted in January, asked over 20,000 respondents in 12 countries what’s keeping them up at night; survey results aim to build awareness of the critical role good sleep plays in physical and mental health. Of note, 81% of respondents experience one or more symptoms indicating poor sleep quality, despite 64% saying they’re satisfied with the quantity of their sleep.

Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.44 per share. The dividend will have a record date of May 11, 2023, payable on June 15, 2023. The dividend will be paid in U.S. currency to holders of ResMed’s common stock trading on the New York Stock Exchange. Holders of CHESS Depositary Interests (“CDIs”) trading on the Australian Securities Exchange will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and reflecting the 10:1 ratio between CDIs and NYSE shares. The ex-dividend date will be May 10, 2023, for common stockholders and for CDI holders. ResMed has received a waiver from the ASX’s settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from May 10, 2023, through May 11, 2023, inclusive. 

Webcast details
ResMed will discuss its third-quarter fiscal year 2023 results on its webcast at 1:30 p.m. U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed’s Investor Relations website at Please go to this section of the website and click on the icon for the “Q3 2023 Earnings Webcast” to register and listen to the live webcast. A replay of the earnings webcast will be accessible on the website and available approximately two hours after the live webcast. In addition, a telephone replay of the conference call will be available approximately three hours after the webcast by dialing +1 877-660-6853 (U.S.) or +1 201-612-7415 (outside U.S.) and entering the passcode 13737758. The telephone replay will be available until May 11, 2023.

About ResMed
At ResMed (NYSE: RMD, ASX: RMD) we pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, we improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 140 countries. To learn more, visit and follow @ResMed.

Safe harbor statement
Statements contained in this release that are not historical facts are “forward-looking” statements as contemplated by the Private Securities Litigation Reform Act of 1995. These forward-looking statements – including statements regarding ResMed’s projections of future revenue or earnings, expenses, new product development, new product launches, new markets for its products, the integration of acquisitions, litigation, and tax outlook – are subject to risks and uncertainties, which could cause actual results to materially differ from those projected or implied in the forward-looking statements. Additional risks and uncertainties are discussed in ResMed’s periodic reports on file with the U.S. Securities & Exchange Commission. ResMed does not undertake to update its forward-looking statements.

Condensed Consolidated Statements of Operations
(Unaudited; $ in thousands, except for per share amounts)

 Three Months Ended Nine Months Ended
 March 31,
 March 31,
 March 31,
 March 31,
Net revenue$1,116,898  $864,500  $3,100,936  $2,663,390 
Cost of sales 490,824   362,321   1,340,660   1,128,314 
Amortization of acquired intangibles (1) 8,322   10,982   22,001   33,271 
Total cost of sales$499,146  $373,303  $1,362,661  $1,161,585 
Gross profit$617,752  $491,197  $1,738,275  $1,501,805 
Selling, general, and administrative 228,457   182,401   633,317   544,483 
Research and development 76,436   66,801   209,498   189,258 
Amortization of acquired intangibles (1) 12,188   7,730   29,701   23,175 
Acquisition related expenses       9,157    
Total operating expenses$317,081  $256,932  $881,673  $756,916 
Income from operations$300,671  $234,265  $856,602  $744,889 
Other income (expenses), net:       
Interest income (expense), net$(14,964) $(5,462) $(32,436) $(16,770)
Loss attributable to equity method investments (183)  (2,627)  (5,037)  (5,927)
Gain (loss) on equity investments 6,418   (1,735)  11,506   (527)
Other, net (2,564)  1,878   (5,773)  729 
Total other income (expenses), net (11,293)  (7,946)  (31,740)  (22,495)
Income before income taxes$289,378  $226,319  $824,862  $722,394 
Income taxes 56,878   47,307   156,970   138,018 
Net income$232,500  $179,012  $667,892  $584,376 
Basic earnings per share$1.58  $1.22  $4.55  $4.00 
Diluted earnings per share$1.58  $1.22  $4.53  $3.97 
Non-GAAP diluted earnings per share (1)$1.68  $1.32  $4.85  $4.30 
Basic shares outstanding 146,914   146,240   146,681   145,969 
Diluted shares outstanding 147,395   146,962   147,400   147,034 

(1)See the reconciliation of non-GAAP financial measures in the table at the end of the press release.

Condensed Consolidated Balance Sheets
(Unaudited; $ in thousands)

 March 31,
 June 30,
Current assets:   
Cash and cash equivalents$227,894  $273,710 
Accounts receivable, net 686,264   575,950 
Inventories 1,011,269   743,910 
Prepayments and other current assets 412,388   337,908 
Total current assets$2,337,815  $1,931,478 
Non-current assets:   
Property, plant, and equipment, net$528,778  $498,181 
Operating lease right-of-use assets 127,508   132,314 
Goodwill and other intangibles, net 3,353,302   2,282,386 
Deferred income taxes and other non-current assets 366,476   251,494 
Total non-current assets$4,376,064  $3,164,375 
Total assets$6,713,879  $5,095,853 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$161,896  $159,245 
Accrued expenses 347,354   344,722 
Operating lease liabilities, current 23,129   21,856 
Deferred revenue 141,043   108,667 
Income taxes payable 78,368   44,893 
Short-term debt 9,901   9,916 
Total current liabilities$761,691  $689,299 
Non-current liabilities:   
Deferred revenue$108,875  $95,455 
Deferred income taxes 113,015   9,714 
Operating lease liabilities, non-current 115,090   120,453 
Other long-term liabilities 69,553   5,974 
Long-term debt 1,575,963   765,325 
Long-term income taxes payable 37,183   48,882 
Total non-current liabilities$2,019,679  $1,045,803 
Total liabilities$2,781,370  $1,735,102 
Stockholders’ equity   
Common stock$588  $586 
Additional paid-in capital 1,728,997   1,682,432 
Retained earnings 4,088,057   3,613,736 
Treasury stock (1,623,256)  (1,623,256)
Accumulated other comprehensive income (261,877)  (312,747)
Total stockholders’ equity$3,932,509  $3,360,751 
Total liabilities and stockholders’ equity$6,713,879  $5,095,853 

Condensed Consolidated Statements of Cash Flows
(Unaudited; $ in thousands)

 Three Months Ended Nine Months Ended
 March 31,
 March 31,
 March 31,
 March 31,
Cash flows from operating activities:       
Net income$232,500  $179,012  $667,892  $584,376 
Adjustment to reconcile net income to cash provided by operating activities:       
Depreciation and amortization 44,356   42,306   118,396   122,198 
Amortization of right-of-use assets 8,434   9,302   23,967   26,636 
Stock-based compensation costs 17,832   15,860   51,215   49,265 
Loss attributable to equity method investments 183   2,627   5,037   5,927 
(Gain) loss on equity investment (6,418)  1,735   (11,506)  527 
Changes in operating assets and liabilities:       
Accounts receivable, net (12,629)  15,689   (88,452)  98,158 
Inventories, net (21,974)  (70,227)  (255,091)  (209,476)
Prepaid expenses, net deferred income taxes and other current assets (19,961)  (106,588)  (86,607)  (127,977)
Accounts payable, accrued expenses, income taxes payable and other 40,240   27,722   31,012   (277,973)
Net cash provided by operating activities$282,563  $117,438  $455,863  $271,661 
Cash flows from investing activities:       
Purchases of property, plant, and equipment (28,817)  (48,445)  (85,223)  (106,192)
Patent registration and acquisition costs (2,406)  (3,712)  (10,043)  (17,449)
Business acquisitions, net of cash acquired       (1,011,225)  (35,915)
Purchases of investments (12,597)  (4,250)  (29,729)  (16,614)
Proceeds from exits of investments 3,937   6,802   3,937   6,802 
(Payments) / proceeds on maturity of foreign currency contracts 11,780   110   18,961   (5,309)
Net cash used in investing activities$(28,103) $(49,495) $(1,113,322) $(174,677)
Cash flows from financing activities:       
Proceeds from issuance of common stock, net 983   2,814   25,649   26,269 
Taxes paid related to net share settlement of equity awards (584)  (2,253)  (30,297)  (52,278)
Payments of business combination contingent consideration (316)     (316)   
Proceeds from borrowings, net of borrowing costs       1,070,000   160,000 
Repayment of borrowings (215,000)     (260,000)  (136,000)
Dividends paid (64,640)  (61,418)  (193,571)  (183,853)
Net cash (used in) / provided by financing activities$(279,557) $(60,857) $611,465  $(185,862)
Effect of exchange rate changes on cash$(208) $207  $178  $(4,631)
Net increase / (decrease) in cash and cash equivalents (25,305)  7,293   (45,816)  (93,509)
Cash and cash equivalents at beginning of period 253,199   194,476   273,710   295,278 
Cash and cash equivalents at end of period$227,894  $201,769  $227,894  $201,769 

Reconciliation of Non-GAAP Financial Measures
(Unaudited; $ in thousands, except for per share amounts)

The measures “non-GAAP gross profit” and “non-GAAP gross margin” exclude amortization expense from acquired intangibles related to cost of sales and are reconciled below:

 Three Months Ended Nine Months Ended
 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Revenue$1,116,898  $864,500  $3,100,936  $2,663,390 
GAAP cost of sales$499,146  $373,303  $1,362,661  $1,161,585 
Less: Amortization of acquired intangibles (A) (8,322)  (10,982)  (22,001)  (33,271)
Non-GAAP cost of sales$490,824  $362,321  $1,340,660  $1,128,314 
GAAP gross profit$617,752  $491,197  $1,738,275  $1,501,805 
GAAP gross margin 55.3%  56.8%  56.1%  56.4%
Non-GAAP gross profit$626,074  $502,179  $1,760,276  $1,535,076 
Non-GAAP gross margin 56.1%  58.1%  56.8%  57.6%

The measure “non-GAAP income from operations” is reconciled with GAAP income from operations below:

 Three Months Ended Nine Months Ended
 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
GAAP income from operations$300,671 $234,265 $856,602 $744,889
Amortization of acquired intangibles—cost of sales (A) 8,322  10,982  22,001  33,271
Amortization of acquired intangibles—operating expenses (A) 12,188  7,730  29,701  23,175
Acquisition-related expenses (A)     9,157  
Non-GAAP income from operations$321,181 $252,977 $917,461 $801,335

Reconciliation of Non-GAAP Financial Measures
(Unaudited; $ in thousands, except for per share amounts)

The measures “non-GAAP net income” and “non-GAAP diluted earnings per share” are reconciled with GAAP net income and GAAP diluted earnings per share in the table below:

 Three Months Ended Nine Months Ended
 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
GAAP net income$232,500 $179,012 $667,892 $584,376
Amortization of acquired intangibles—cost of sales, net of tax (A) 6,207  8,374  16,531  25,373
Amortization of acquired intangibles—operating expenses, net of tax (A) 9,090  5,894  22,317  17,673
Acquisition related expenses, net of tax (A)     7,527  
Reserve for disputed tax position (A)       4,111
Non-GAAP net income (A)$247,797 $193,280 $714,267 $631,533
GAAP diluted shares outstanding 147,395  146,962  147,400  147,034
GAAP diluted earnings per share$1.58 $1.22 $4.53 $3.97
Non-GAAP diluted earnings per share (A)$1.68 $1.32 $4.85 $4.30

(A)ResMed adjusts for the impact of the amortization of acquired intangibles, acquisition related expenses and the reserve for disputed tax positions from their evaluation of ongoing operations, and believes that investors benefit from adjusting these items to facilitate a more meaningful evaluation of current operating performance.

ResMed believes that non-GAAP diluted earnings per share is an additional measure of performance that investors can use to compare operating results between reporting periods. ResMed uses non-GAAP information internally in planning, forecasting, and evaluating the results of operations in the current period and in comparing it to past periods. ResMed believes this information provides investors better insight when evaluating ResMed’s performance from core operations and provides consistent financial reporting. The use of non-GAAP measures is intended to supplement, and not to replace, the presentation of net income and other GAAP measures. Like all non-GAAP measures, non-GAAP earnings are subject to inherent limitations because they do not include all the expenses that must be included under GAAP.

Revenue by Product and Region
(Unaudited; $ in millions, except for per share amounts)

 Three Months Ended
 March 31,
(A)March 31,
(A)% Change Constant
Currency (B)
U.S., Canada, and Latin America       
Devices$372.1 $250.8 48%  
Masks and other 257.1  224.7 14   
Total U.S., Canada and Latin America$629.1 $475.4 32   
Combined Europe, Asia, and other markets       
Devices$235.8 $182.3 29% 36%
Masks and other 115.2  105.6 9  15 
Total Combined Europe, Asia and other markets$351.0 $287.9 22  28 
Global revenue       
Total Devices$607.9 $433.1 40% 43%
Total Masks and other 372.2  330.3 13  15 
Total Sleep and Respiratory Care$980.1 $763.4 28  31 
Software-as-a-Service 136.8  101.1 35   
Total$1,116.9 $864.5 29  31 

 Nine Months Ended
 March 31,
(A)March 31,
Currency (B)
U.S., Canada, and Latin America       
Devices$1,057.1 $771.5 37%  
Masks and other 765.4  681.8 12   
Total U.S., Canada and Latin America$1,822.5 $1,453.3 25   
Combined Europe, Asia, and other markets       
Devices$611.1 $608.3 Nil% 9%
Masks and other 307.9  304.2 1  12 
Total Combined Europe, Asia and other markets$919.0 $912.4 1  10 
Global revenue       
Total Devices$1,668.3 $1,379.7 21% 25%
Total Masks and other 1,073.3  986.0 9  12 
Total Sleep and Respiratory Care$2,741.5 $2,365.7 16  20 
Software-as-a-Service 359.4  297.7 21   
Total$3,100.9 $2,663.4 16  20 

(A)Totals and subtotals may not add due to rounding.
(B)In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis,” which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.

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