ResMed Q4 FY2025 slides reveal 10% revenue growth, shift to net cash position

Introduction & Market Context

ResMed Inc . (NYSE:RMD) released its Q4 FY2025 earnings presentation on July 31, 2025, showcasing strong financial performance and strategic positioning in the connected health technology market. The medical device company, which specializes in solutions for sleep apnea, respiratory care, and software solutions, reported significant growth across key metrics while highlighting its transition to a net cash position.

The presentation comes as ResMed continues to benefit from growing awareness of sleep health issues and increasing adoption of digital health technologies. The company’s stock closed at $277.44 before the earnings release, near its 52-week high of $278.86, reflecting strong investor confidence in its business model and growth trajectory.

Quarterly Performance Highlights

ResMed reported Q4 FY2025 revenue of $1.35 billion, representing a 10% increase compared to $1.22 billion in Q4 FY2024. This performance exceeded the previous quarter’s revenue of $1.3 billion reported in the Q3 earnings call.

The company’s revenue mix remains well-diversified, with devices accounting for 52% of sales, masks and other products contributing 36%, and Residential Care Software (ETR:SOWGn) (RCS) representing 12%. Geographically, the U.S., Canada, and Latin America generated 58% of revenue, while Europe, Asia, and other regions accounted for 30%, with RCS operations in the U.S. and Germany contributing the remaining 12%.

As shown in the following chart of quarterly financial results:

GAAP operating income increased by 19% year-over-year to $454.5 million, while GAAP earnings per share rose 30% to $2.58. On a non-GAAP basis, operating income grew 19% to $476.4 million, with non-GAAP EPS increasing 23% to $2.55.

Detailed Financial Analysis

ResMed’s financial position strengthened considerably during FY2025, with free cash flow totaling approximately $1.7 billion, up 28% year-over-year. This robust cash generation has enabled the company to transition to a net cash position of $541 million as of the fiscal year-end, providing significant financial flexibility.

The following chart illustrates ResMed’s impressive cash flow trajectory:

Operating cash flow reached $1.75 billion in FY2025, compared to $1.40 billion in FY2024 and $693.3 million in FY2023. Capital expenditures continued to decline, from $119.7 million in FY2023 to $89.9 million in FY2025, further enhancing free cash flow generation.

The company’s long-term financial performance demonstrates consistent growth, with revenue increasing at a 12% CAGR from FY2020 to FY2025, reaching $5.15 billion. GAAP EPS grew at an even faster rate of 17% CAGR during this period, as shown in the following chart:

ResMed’s gross margins continued to improve through manufacturing and operational excellence efforts, with additional benefits from favorable foreign exchange translation in Q4 FY2025. The company maintains a strong balance sheet with total debt of $668 million, offset by $1.21 billion in cash and cash equivalents, resulting in the net cash position of $541 million. Additionally, ResMed has $1.5 billion in unused borrowing capacity.

Strategic Initiatives

ResMed positions itself as a global leader in connected and digital health, with a comprehensive ecosystem of products and services centered around patient needs. The company’s strategy focuses on three key areas: Sleep Health, Breathing Health, and Residential Care Software.

As illustrated in the following company overview:

With headquarters in San Diego, California, ResMed has grown significantly since its founding in 1989. The company now serves over 140 countries with more than 10,000 employees and achieved an operating margin of 33-34% in FY2025.

ResMed’s capital allocation strategy balances investments in growth with returns to shareholders. Over the past three years, the company deployed $3.5 billion of capital, with 37% going to R&D, 26% to M&A, 24% to share repurchases, and 13% to dividends. Looking forward, ResMed announced a 13% increase in its quarterly dividend to $0.60 per share and increased its share repurchase program to $150 million per quarter for FY2026.

The following chart details the company’s capital allocation framework:

An interesting development highlighted in the presentation is the potential positive impact of GLP-1 medications on ResMed’s business. Real-world data analysis suggests that patients with sleep apnea who are prescribed GLP-1 drugs are 11% more likely to initiate PAP therapy and demonstrate higher resupply rates:

This finding could have significant implications for ResMed’s growth trajectory, as GLP-1 medications continue to gain popularity for weight management and diabetes treatment.

Forward-Looking Statements

ResMed outlined its vision to empower 500 million lives globally by 2030, up from the 154 million lives currently reached through its digital health products and cloud-based software solutions. The company emphasized the large and underpenetrated market opportunity, with a global total addressable market exceeding 2.3 billion lives.

The company’s long-term growth strategy leverages several key factors, including continued innovation (with 6-7% of revenue invested in R&D), market expansion, and operational excellence. ResMed highlighted that it holds over 10,000 patents and designs, demonstrating its commitment to technological advancement.

As shown in the following chart, the global prevalence of obstructive sleep apnea (OSA) represents a significant growth opportunity:

Even accounting for potential impacts from pharmaceutical interventions like GLP-1 medications, the addressable market remains substantial and growing.

ResMed’s management expressed confidence in the company’s ability to drive long-term shareholder value through sustained revenue and profit growth, continued operational excellence, and disciplined capital deployment. With its strong financial position, established market leadership, and strategic focus on digital health innovation, ResMed appears well-positioned to capitalize on growing global awareness of sleep and breathing health issues.

Full presentation:

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