ResMed reported a solid QQ3 2025 performance, with revenue of $1.29 billion, up 8% year over year (9% in constant currency), and a gross margin of 59.3% (59.9% reported in commentary). Operating income reached $426.3 million, yielding a 33.0% operating margin, and net income of $365.0 million for a 28.3% net margin. Diluted EPS was $2.48-$2.49, supported by strong gross margin expansion and disciplined cost management. Free cash flow was $554.9 million, underpinning a robust balance sheet (net cash position of approximately $-93.9 million; cash at end of period ~$933 million) and ample liquidity ($1.5 billion revolver availability).
Strategically, management emphasized a broad digital-health ecosystem and product pipeline that includes Night Owl (home sleep apnea testing), AirView and Somnawhere (cloud-based analytics and clinician tools), and the VPAP TX platform for sleep labs. These investments are coupled with a renewed brand strategy and demand-generation initiatives (CME physician education and consumer messaging) intended to improve diagnostic-to-therapy funnel conversion and patient adherence, in line with the Lancet Respiratory Medicine meta-analysis showing CPAP benefits on mortality and cardiovascular outcomes. The company reaffirmed its commitment to a disciplined capital allocation framework, including increased quarterly share buybacks (target ~$100 million per quarter starting in Q4 FY2025), ongoing R&D investment (6-7% of revenue), and selective tuck-in acquisitions.
Management maintained a cautious but constructive near-term outlook: gross margins in Q4 FY2025 were expected to be broadly flat versus Q3, SG&A to be 18-20% of revenue, and R&D to be 6-7% of revenue, with currency movements as a key risk. Tariff exposure was described as non-material due to established exemptions under the Nairobi protocol, and the company plans to expand US manufacturing capacity (Calabasas facility opening in June 2025) to improve supply resilience and mass resupply capabilities. Overall, the QQ3 results support an affirmative longer-term investment thesis around ResMed’s leadership in sleep and breathing health, software-enabled care delivery, and an expanding home-based care ecosystem.