Executive Summary
ResMed reported a solid Q3 2025 with revenue of $1.2917 billion, up 7.9% year over year and 0.8% quarter over quarter, underscoring resilient demand for both hardware and software solutions in the company’s Sleep and Respiratory Care and Software as a Service (SaaS) segments. Gross margin held at a robust 59.3%, supported by a favorable product mix and cost discipline, while operating margin approached 33.0% as the company leveraged operating leverage and ongoing software monetization. Net income of $365.0 million translated to diluted EPS of $2.48-$2.49, reflecting disciplined expense management and a stable tax rate.
Cash flow generation remained the key driver of financial health. Operating cash flow reached $578.7 million and free cash flow was $554.9 million, resulting in a healthy cash balance of $932.7 million at period end. The company maintained a conservative balance sheet with total debt of $839.8 million and net debt of approximately -$92.9 million, signaling strong liquidity and ample capacity for capital allocation. Dividend activity totaled $77.7 million and share repurchases around $75.0 million, illustrating prudent capital deployment.
Strategically, ResMed continues to push software-led growth via Brightree, MatrixCare and related SaaS offerings, expanding recurring revenue and improving visibility across its global installed base. This software mix supports margin resilience and long-term revenue stability as hardware cycles may be lumpy. Management commentary (where available) emphasized ongoing demand for sleep apnea therapies and cloud-based patient management, with a focus on execution in international markets and accelerated software monetization. Key risks include the sizable goodwill/intangible asset base, potential reimbursement and regulatory headwinds, and currency and geopolitical risks inherent in a global business.
Key Performance Indicators
Key Insights
Revenue: $1,291.736 million; YoY growth 7.92%; QoQ growth 0.75%.
Gross Profit: $766.408 million; gross margin 59.33%; YoY gross profit increase 12.45%; QoQ 2.01%.
Operating Income: $426.268 million; operating margin 33.00%; YoY operating income growth 13.80%; QoQ 2.16%.
Net Income: $365.041 million; net margin 28.26%; YoY net income growth 21.48%; QoQ 5.93%.
EPS (diluted): $2.48; YoY EPS growth 22.06%; QoQ growth 2.47%.
Cash Flow: Net cash provided by operating activities $578.661 million; free ...
Financial Highlights
Revenue: $1,291.736 million; YoY growth 7.92%; QoQ growth 0.75%.
Gross Profit: $766.408 million; gross margin 59.33%; YoY gross profit increase 12.45%; QoQ 2.01%.
Operating Income: $426.268 million; operating margin 33.00%; YoY operating income growth 13.80%; QoQ 2.16%.
Net Income: $365.041 million; net margin 28.26%; YoY net income growth 21.48%; QoQ 5.93%.
EPS (diluted): $2.48; YoY EPS growth 22.06%; QoQ growth 2.47%.
Cash Flow: Net cash provided by operating activities $578.661 million; free cash flow $554.873 million.
Capital Allocation: Dividends paid $77.704 million; share repurchases $75.026 million; net cash used in financing $(144.071) million; cash at end $932.711 million.
Balance Sheet: Total assets $7.5668 billion; cash $0.9327 billion; goodwill $2.8489 billion; intangible assets $430.109 million; total current assets $3.2084 billion; total current liabilities $0.9405 billion; long-term debt $0.6631 billion; total debt $0.8398 billion; total equity $5.5461 billion.
Liquidity and Leverage: Current ratio 3.41; debt ratio 0.111; debt-to-equity 0.151; ROE 6.58%; ROA 4.82%; FCF yield and cash conversion cycles indicate strong operating efficiency.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.29B |
7.92% |
0.75% |
| Gross Profit |
766.41M |
12.45% |
2.01% |
| Operating Income |
426.27M |
13.80% |
2.16% |
| Net Income |
365.04M |
21.48% |
5.93% |
| EPS |
2.49 |
22.06% |
2.47% |
Key Financial Ratios
operatingProfitMargin
33%
operatingCashFlowPerShare
$3.94
freeCashFlowPerShare
$3.78
dividendPayoutRatio
21.3%
Management Commentary
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Forward Guidance
No explicit forward-looking guidance was provided in the data. Qualitative signals suggest continued demand for ResMed’s Sleep and Respiratory Care devices along with expanding SaaS adoption (Brightree, MatrixCare) that could sustain growing recurring revenue and margin stability. Investors should monitor: (1) the pace of SaaS mix expansion and its impact on gross and operating margins, (2) reimbursement/regulatory developments affecting device sales, (3) currency headwinds given the global footprint, and (4) balance sheet health as goodwill/intangible assets remain sizable. A watchlist of factor-level assumptions includes gross margin trajectory in a high-cost environment, potential supply chain disruptions, and the allocation of free cash flow to dividends and buybacks.