ResMed Q3 FY2025 presentation: Revenue hits $1.29B as digital health strategy advances

Introduction & Market Context

ResMed Inc . (NYSE:RMD) presented its Q3 FY2025 earnings results on April 23, 2025, showcasing continued strong performance across key financial metrics. The global leader in sleep and respiratory care solutions reported significant growth in revenue and earnings while advancing its connected health strategy.

The company’s presentation comes amid ongoing market interest in how GLP-1 weight loss drugs might impact the sleep apnea market, a concern that has periodically affected ResMed’s stock performance despite its consistent financial results. ResMed’s stock closed at $214.08 on the day of the presentation, up 0.17% from the previous close.

ResMed continues to strengthen its position as a connected health leader, with operations in over 140 countries and approximately 10,000 employees worldwide. The company’s three main business segments – Sleep Health, Breathing Health, and Residential Care Software (ETR:SOWGn) – all contributed to its growth.

Quarterly Performance Highlights

ResMed reported Q3 FY2025 revenue of $1.29 billion, an 8% increase from $1.20 billion in the same quarter last year. The company’s GAAP operating income rose to $426.3 million, up 14% year-over-year, while non-GAAP operating income increased 13% to $444.6 million.

GAAP earnings per share reached $2.48, representing a substantial 22% increase from $2.04 in Q3 FY2024. Non-GAAP EPS grew 11% to $2.37 compared to $2.13 in the prior year period.

The company’s revenue mix remained relatively stable, with devices accounting for 52% of revenue, masks and other products contributing 35%, and out-of-hospital respiratory care software (OOH RCS) representing 13%. Geographically, the U.S., Canada, and Latin America generated 58% of revenue, while Europe, Asia, and other regions contributed 29%, with OOH RCS (primarily in the U.S. and Germany) accounting for the remaining 13%.

Financial Analysis and Balance Sheet Strength

ResMed’s balance sheet remains exceptionally strong, with the company reporting a net cash position of $260 million as of Q3 FY2025. This consists of $933 million in cash and cash equivalents against $673 million in total debt. The company also maintains $1.5 billion in unused borrowing capacity, providing significant financial flexibility for future investments and acquisitions.

Free cash flow for the last twelve months ending Q3 FY2025 reached an impressive $1.57 billion, a 44% increase from $1.09 billion in the comparable prior period. This robust cash generation reflects the company’s operational efficiency and strong business model.

ResMed has demonstrated consistent long-term financial performance, with a 12% compound annual growth rate (CAGR) in revenue from $2.9 billion in LTM 3Q20 to $5.0 billion in LTM 3Q25. GAAP operating income grew at an 18% CAGR over the same period, while GAAP EPS increased at a 20% CAGR, reaching $8.91 for LTM 3Q25.

Strategic Initiatives and 2030 Vision

ResMed’s presentation outlined its 2030 strategy, focusing on three key areas: Sleep Health, Breathing Health, and Health Tech at Home. The company aims to empower 500 million lives worldwide by 2030 through its connected and digital health technologies, up from the nearly 151 million lives it currently impacts.

The company’s digital health leadership is evidenced by its extensive connected ecosystem, which includes monitoring over 22 billion nights of respiratory medical data, approximately 32 million patients in its AirView platform, and more than 29 million cloud-connectable devices worldwide.

ResMed’s capital allocation strategy reflects its balanced approach to growth and shareholder returns. Over the past three years, the company has deployed $3.2 billion of capital, with 26% reinvested in R&D, 11% allocated to M&A, 28% returned to shareholders through dividends, and 35% used for share repurchases. Moving forward, ResMed plans to maintain its R&D investment at 6-7% of revenue while continuing its quarterly share repurchase program at $75 million per quarter.

GLP-1 Impact on Sleep Apnea Market

Addressing market concerns about the potential impact of GLP-1 weight loss medications on the sleep apnea market, ResMed presented compelling real-world data showing a positive correlation between GLP-1 use and PAP (Positive Airway Pressure) therapy adoption.

According to the company’s analysis of 1,359,000 patients, individuals with an OSA (Obstructive Sleep Apnea) diagnosis who were prescribed a GLP-1 drug were 10.8% more likely to initiate PAP therapy compared to non-GLP-1 users. Furthermore, these patients demonstrated higher PAP resupply rates at both one year (3.1 percentage points higher) and two years (5.2 percentage points higher) post-setup.

This data suggests that rather than reducing the need for sleep apnea treatment, GLP-1 medications may actually increase awareness and treatment of sleep disorders, potentially expanding ResMed’s addressable market.

Forward-Looking Statements

ResMed’s presentation highlighted the significant long-term growth opportunity in the global OSA (Obstructive Sleep Apnea) market. The company estimates the total addressable market at over 2.3 billion lives globally, with various scenarios accounting for potential GLP-1 impact still showing substantial growth trajectories through 2050.

The company remains well-positioned to capitalize on several macro trends, including underpenetrated markets in sleep and COPD, increasing healthcare costs driving demand for value-based technology solutions, and growing focus on improving patient outcomes. ResMed’s strong track record of innovation, with over 10,000 patents and designs, supports its continued leadership in the space.

Looking ahead, ResMed’s focus on product-led initiatives to increase product velocity, customer-centric efforts to drive profitable growth, and brand-enhanced strategies to improve awareness should continue to support its long-term growth objectives. The company’s financial strength, operational excellence program, and disciplined capital deployment provide a solid foundation for sustained shareholder value creation.

As healthcare systems worldwide increasingly prioritize digital health solutions and value-based care, ResMed appears well-positioned to maintain its growth trajectory while advancing toward its goal of empowering 500 million lives by 2030.

Full presentation:

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