ResMed Inc delivered a compelling QQ1 2025 performance, highlighted by a revenue rise of 27.15% year over year to $1.2245 billion and a solid margin profile. Gross profit reached $717.2 million with a gross margin of 58.57%, while operating income of $387.3 million produced an operating margin of 31.63%. Net income was $311.4 million, translating to EPS of $2.12 (diluted $2.11), underscoring meaningful operating leverage and favorable product mix. The company generated strong cash flow, with operating cash flow of $325.5 million and free cash flow of $305.9 million, supporting a net debt position of approximately $423.9 million on a cash balance of $426.4 million. In the balance sheet, total assets stood at about $7.22 billion, total liabilities at $2.03 billion, and total stockholders’ equity at $5.20 billion, reflecting a solid liquidity position and manageable leverage (debt to capitalization ~14.1%, interest coverage ~70x).
Segment composition remains supportive of long-duration growth: sustained demand for Sleep & Respiratory Care devices coupled with expanding Software as a Service (SaaS) platforms (Brightree, MatrixCare, HEALTHCAREfirst) that monetize care workflows and remote patient management. The qq1 results imply continued operating leverage as the company scales its high-margin SaaS offerings alongside hardware sales. Management commentary, though not disclosed in this transcript dataset, has historically emphasized ongoing R&D investment, international expansion, and cloud-based care coordination as key growth engines. Investors should monitor currency dynamics, reimbursement environments, and competitive intensity as the company scales its recurring-revenue mix.
Overall investment stance: ResMed demonstrates a resilient, margin-rich growth profile with abundant free cash flow and a prudent balance sheet. The QQ1 2025 metrics support a constructive longer-term view, driven by the combination of hardware demand in home-based therapy and expanding software-enabled care solutions.
Key Performance Indicators
Revenue
1.22B
QoQ: 0.11% | YoY:27.15%
Gross Profit
717.22M
58.57% margin
QoQ: 1.84% | YoY:19.52%
Operating Income
387.31M
QoQ: 1.60% | YoY:34.02%
Net Income
311.36M
QoQ: 6.54% | YoY:41.90%
EPS
2.12
QoQ: 6.53% | YoY:42.28%
Revenue Trend
Margin Analysis
Key Insights
Cash & Equivalents: $426,361,000; Total Debt: $850,242,000; Net Debt: $423,881,000
- Total Assets: $7,222,417,000; Total Liabilities: $2,027,391,000; Total Equity: $5,195,026,000
Liquidity & Leverage: Current Ratio 2.92; Quick Ratio 1.91; Debt to Capitalization 14.1%; Interest Coverage 70.39x
Cash Flow & Working Capital: DSO 59.62 days; Inventory 162.86 days; DIO 162.86 days; DPO 44.23 days; CCC 178.26 days
Financial Highlights
Revenue: $1,224,509,000; YoY +27.15%; QoQ +0.11%
Gross Profit: $717,219,000; Gross Margin 58.57%; YoY +19.52%; QoQ +1.84%
Operating Income: $387,312,000; Operating Margin 31.63%; YoY +34.02%; QoQ +1.60%
Net Income: $311,355,000; Net Margin 25.43%; YoY +41.90%; QoQ +6.54%
EPS (Diluted): $2.11; EPS (GAAP): $2.12; YoY +42.28%; QoQ +6.53%
Operating Cash Flow: $325,538,000; Free Cash Flow: $305,931,000; Capex: $19,607,000
Balance Sheet Health:
- Cash & Equivalents: $426,361,000; Total Debt: $850,242,000; Net Debt: $423,881,000
- Total Assets: $7,222,417,000; Total Liabilities: $2,027,391,000; Total Equity: $5,195,026,000
Liquidity & Leverage: Current Ratio 2.92; Quick Ratio 1.91; Debt to Capitalization 14.1%; Interest Coverage 70.39x
Cash Flow & Working Capital: DSO 59.62 days; Inventory 162.86 days; DIO 162.86 days; DPO 44.23 days; CCC 178.26 days
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.22B
27.15%
0.11%
Gross Profit
717.22M
19.52%
1.84%
Operating Income
387.31M
34.02%
1.60%
Net Income
311.36M
41.90%
6.54%
EPS
2.12
42.28%
6.53%
Key Financial Ratios
currentRatio
2.92
grossProfitMargin
58.6%
operatingProfitMargin
31.6%
netProfitMargin
25.4%
returnOnAssets
4.31%
returnOnEquity
5.99%
debtEquityRatio
0.16
operatingCashFlowPerShare
$2.22
freeCashFlowPerShare
$2.08
dividendPayoutRatio
25%
priceToBookRatio
6.9
priceEarningsRatio
28.79
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management themes (QQ1 2025 call context):
- Growth drivers: Continued momentum in Sleep & Respiratory Care devices alongside accelerating adoption of SaaS platforms Brightree and MatrixCare that enhance care coordination and patient outcomes.
- Margin trajectory: Leverage from higher-margin software and services is contributing to robust operating margins; evidence in QQ1 with OPM ~31.6% and MPM expansion potential as SaaS mix grows.
- Cash flow and capital allocation: Strong cash flow generation supports prudent capital deployment, including share repurchases and dividends while maintaining a modest net debt position.
- International and product pipeline: Management communications historically point to international expansion opportunities and ongoing R&D investments to broaden the product portfolio and digital solutions ecosystem.
- Risk and outlook: The key risk vectors include currency exposure, reimbursement dynamics, supply chain resilience, and competitive pressures in a rapidly evolving medtech landscape.
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Forward Guidance
No explicit full-year revenue or margin targets were disclosed in the QQ1 data provided. However, the QQ1 2025 performance reinforces a constructive trajectory driven by: 1) sustained demand for Sleep & Respiratory Care devices in both home and clinical settings, 2) continued expansion of recurring SaaS revenue from Brightree, MatrixCare, and HEALTHCAREfirst, and 3) meaningful operating leverage as scale increases. In our view, achievability hinges on: (a) continued integration and cross-sell opportunities across devices and software platforms, (b) favorable mix with higher SaaS contribution, and (c) stable reimbursement and currency conditions. Key factors investors should monitor include: the pace of SaaS annuity bookings, customer retention rates for SaaS solutions, any incremental capital expenditure required to support product launches, foreign exchange headwinds, and the competitive intensity within the medtech software space.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
RSMDF Focus
58.57%
31.60%
5.99%
28.79%
ICUI
34.70%
2.13%
-0.78%
-55.04%
MMSI
48.40%
11.50%
2.11%
51.63%
COO
68.40%
18.90%
1.28%
46.56%
ANGO
50.60%
-12.90%
-6.51%
-5.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Positive near-term and medium-term outlook supported by strong QQ1 2025 results, healthy gross and operating margins, and robust free cash flow generation. The mix shift toward high-margin SaaS offerings acts as a key margin expansion and revenue visibility driver. Valuation discipline, selective capital allocation (e.g., R&D and potential buybacks), and continued execution on international growth are critical catalysts. Key risks to monitor include currency headwinds, reimbursement changes, and competitive dynamics in both hardware and software offerings. Overall, the risk-adjusted outlook remains favorable for long-term investors given ResMed’s integrated hardware-software model and scalable healthcare IT ecosystem.
Key Investment Factors
Growth Potential
SaaS-driven recurring revenue expansion from Brightree and MatrixCare, with cloud-based care coordination enhancing patient outcomes. International expansion and cross-sell opportunities across hardware and software platforms present a durable growth path. Robust cash flow generation enables funding of R&D investments and shareholder-friendly capital allocation.
Profitability Risk
Currency fluctuations (USD exposure to other currencies), reimbursement and pricing pressures in various markets, regulatory environment shifts, cybersecurity threats to cloud-based platforms, dependence on CPAP and other device categories facing competitive pressure, and potential supply-chain disruptions impacting hardware sales.
Financial Position
Solid liquidity with $426.4M in cash and a manageable net debt position (~$423.9M). Strong operating cash flow ($325.5M) supports a healthy free cash flow ($305.9M) and a prudent balance sheet with a current ratio of 2.92 and debt-to-capitalization of 14.1%. High gross margin (~58.6%) and operating margin (~31.6%) indicate favorable leverage in a software-plus-hardware model.
SWOT Analysis
Strengths
Leading market position in sleep therapy devices with strong brand recognition
Diversified business model combining hardware (Sleep & Respiratory Care) and high-margin SaaS platforms (Brightree, MatrixCare, HEALTHCAREfirst)
Significant profitability and operating leverage with QQ1 2025 OPM ~31.6%
Robust cash flow generation and a solid balance sheet (net debt ~$423.9M, cash ~$426.4M)
Weaknesses
High working capital intensity indicated by long inventory days (DIO ~162.9) and sizable receivables
Cyclicality in hardware demand and exposure to reimbursement dynamics
Intense competition in both hardware and software segments could pressure pricing and mix
Opportunities
Acceleration of SaaS penetration across provider networks and home healthcare players
International expansion to diversify geographic mix and reduce reliance on mature markets
Cross-sell opportunities leveraging software-enabled care management to optimize patient outcomes and adherence
Threats
Regulatory and reimbursement risks across global markets
Foreign exchange volatility impacting international revenue streams
Supply chain disruptions and component costs impacting device availability and margins