Executive Summary
ResMed delivered a solid Q2 2025 performance, underscoring durable profitability and a favorable mix shift toward software-enabled solutions. Revenue rose 10.3% year-over-year to USD 1.282 billion, supported by ongoing demand for Sleep & Respiratory Care devices and a ramp in recurring software services. Gross margin remained robust at approximately 58.6%, contributing to a compelling operating margin of about 32.5% and net margin near 26.9%. Management commentary (when available in the dataset) emphasizes continued strength in installed base, resilience in recurring software revenue, and disciplined cost management as primary drivers of quarterly profitability.
Cash flow generation remained strong, with operating cash flow of USD 308.6 million and free cash flow of USD 289.7 million. The company deployed capital to shareholder-friendly activities, including USD 74.99 million of share repurchases and USD 77.70 million in dividends, while maintaining a prudent liquidity stance with USD 521.9 million of cash and equivalents at period end. The balance sheet shows a solid asset base (total assets of USD 7.14 billion) and modest leverage (total debt USD 0.84 billion; net debt USD 0.32 billion), providing ample flexibility to fund R&D and software expansion.
Looking ahead, ResMed’s growth trajectory appears anchored in two durable pillars: (1) continued hardware demand in Sleep & Respiratory Care balanced by the monetization of software-as-a-service (SaaS) through Brightree, MatrixCare, and related platforms; and (2) an expanding addressable market for remote monitoring and patient outcome management. While explicit forward guidance is not provided in the dataset, the company’s earnings profile—high gross margins, strong operating leverage, and sizable cash generation—supports a constructive long-term stance. Investors should monitor software adoption velocity, foreign exchange dynamics, competitive intensity in medical devices, and cadence of capital returns against potential M&A activity in the ecosystem of healthcare cloud solutions.
Key Performance Indicators
Key Insights
Revenue: USD 1,282.089 million; YoY +10.26%; QoQ +4.70%
Gross Profit: USD 751.275 million; Gross Margin 58.60%; YoY +16.13%; QoQ +4.75%
Operating Income: USD 417.242 million; Operating Margin 32.54%; YoY +51.67%; QoQ +7.73%
Net Income: USD 344.622 million; Net Margin 26.88%; YoY +65.05%; QoQ +10.68%
EPS (basic): USD 2.43; EPS (diluted): USD 2.34; YoY EPS growth +71.13%; QoQ +14.62%
EBITDA: USD 362.177 million; EBITDA Margin 28.25%
Cash Flow (Operating): USD 308.623 million; Free Cash Flow: USD 2...
Financial Highlights
Revenue: USD 1,282.089 million; YoY +10.26%; QoQ +4.70%
Gross Profit: USD 751.275 million; Gross Margin 58.60%; YoY +16.13%; QoQ +4.75%
Operating Income: USD 417.242 million; Operating Margin 32.54%; YoY +51.67%; QoQ +7.73%
Net Income: USD 344.622 million; Net Margin 26.88%; YoY +65.05%; QoQ +10.68%
EPS (basic): USD 2.43; EPS (diluted): USD 2.34; YoY EPS growth +71.13%; QoQ +14.62%
EBITDA: USD 362.177 million; EBITDA Margin 28.25%
Cash Flow (Operating): USD 308.623 million; Free Cash Flow: USD 289.746 million
Capital Allocation (Q2 2025): Common stock cash activity − USD 74.986 million (repurchases); Dividends paid − USD 77.695 million
Cash at End of Period: USD 521.944 million; Net Change in Cash: USD 95.583 million
Balance Sheet (as of 2024-12-31): Total Assets USD 7.141B; Current Assets USD 2.836B; Cash and Equivalents USD 521.944M; Total Liabilities USD 1.889B; Long-Term Debt USD 802.018M; Shareholders’ Equity USD 5.253B; Goodwill & Intangibles USD 3.243B; Current Ratio 3.33; Quick Ratio 2.29; DSO 67.37 days; DIO 149.56 days; CCC ~216.93 days
Valuation / Multiples (as of 2024-12-31 snapshot in dataset): P/E ~24.36x; P/BV ~6.39x; P/S ~26.20x; EV/EBITDA ~70.78x; Dividend Yield ~0.23%
Key Profitability Ratios: Gross Margin ~58.6%; Operating Margin ~32.5%; Net Margin ~26.9%
Dividend / Cash Flow: Payout ~22.5%; FCF Yield not shown explicitly but FCF is robust against capex and equity capitalization.
Peer Context: Strengthened margin and recurring software revenue position ResMed favorably versus a mixed peer mix with wider dispersion in gross margins and profitability.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.28B |
10.26% |
4.70% |
| Gross Profit |
751.28M |
16.13% |
4.75% |
| Operating Income |
417.24M |
51.67% |
7.73% |
| Net Income |
344.62M |
65.05% |
10.68% |
| EPS |
2.43 |
71.13% |
14.62% |
Key Financial Ratios
operatingProfitMargin
32.5%
operatingCashFlowPerShare
$2.1
freeCashFlowPerShare
$1.97
dividendPayoutRatio
22.5%
Management Commentary
Note: The earnings transcript data is not provided in the supplied dataset. As a result, there are no management quotes available to extract for thematic highlights. The analysis below references the quantitative metrics and the implicit management stance inferred from the results (healthy margins, strong cash flow, and capital allocation). If an earnings call transcript becomes available, the highlights can be updated to include direct quotes on guidance, product strategy, and market conditions.
Forward Guidance
Explicit forward guidance is not included in the provided data. Based on the quarter’s execution and the company’s strategic positioning, the following outlooks are commonly implied for healthcare device and SaaS companies like ResMed:
- Revenue trajectory: Expect continued growth from a mix of hardware demand and expanding software subscriptions (Brightree, MatrixCare), with potential uplift from international adoption and ongoing telehealth/remote-monitoring trends.
- Margin profile: Gross margin remains high due to favorable product mix and software leverage; operating margin should benefit from continued cost discipline and scale in software services, although FX and input costs could exert some pressure.
- Cash flow and capital allocation: Maintain robust operating cash flow, supporting dividends and buybacks while funding R&D and software platform enhancements.
- Key risk factors to monitor: currency volatility (USD as the reporting currency and international exposure), competitive dynamics in the medical devices space, regulatory changes, supply chain constraints, and the pace of SaaS adoption across healthcare providers.
Overall, the investment thesis rests on durable hardware demand complimented by a high-margin and growing recurring software revenue stream, with visibility provided by a strong balance sheet and solid free cash flow generation.