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Resmed Inc.’s RMD adjusted earnings per share (EPS) in the fourth quarter of fiscal 2025 were $2.55, up 22.6% year over year. The metric beat the Zacks Consensus Estimate by 3.66%.
The adjustments include certain non-recurring expenses/benefits like the amortization of acquired intangibles, along with the income tax effect on those adjustments.
GAAP EPS in the reported quarter was $2.58, up 30.3% from the year-ago level.
For the full year, adjusted EPS of $9.55 topped the Zacks Consensus Estimate by 0.5%. The metric increased 23.7% from the fiscal 2024 adjusted figure.
On a reported basis, revenues increased 10.2% year over year (up 9% at the constant exchange rate or CER) to $1.35 billion. The figure beat the Zacks Consensus Estimate by 1.87%.
Full-year revenues were $5.15 billion, a 9.8% improvement on a reported basis from fiscal 2024 (up 10% at CER). The metric surpassed the Zacks Consensus Estimate by 0.6%.
Following the announcement, shares of RMD rose 2.6% in the after-market trading yesterday.
ResMed operated through two reporting units — Sleep and Breathing Health (formerly Sleep and Respiratory Care) and Residential Care Software (formerly Software as a Service).
Total revenues improved 10.2% (up 9% at CER) from the prior-year period’s level to $1.18 billion. The figure topped our model’s projection of $1.15 billion.
Within this business, net revenues from Devices were $693.9 million, up 9.3% (8% at CER). This includes an increase of 7% in the United States, Canada and Latin America and an increase of 14% in combined Europe, Asia and other markets. Our model forecasted Devices revenue to be $683.6 million.
ResMed Inc. price-consensus-eps-surprise-chart | ResMed Inc. Quote
Net revenues from masks and other were $487.1 million, up 11.7% (11% at CER). This encompasses an increase of 12% in the United States, Canada and Latin America and an increase of 11% in combined Europe, Asia and other markets. Our model projected masks and other revenues to be $463.1 million.
Revenues in this segment grew 9.9% year over year (up 9% at CER) to $167 million, which was consistent with our model’s projection.
In the fiscal fourth quarter, the company’s adjusted cost of sales (excluding amortization of acquired intangible, masks with magnet field safety notification expenses and Astral field safety notification expenses) totaled $520.1 million, up 4.1% year over year.
Despite that, the adjusted gross profit rose 14.4% to $827.9 million. The adjusted gross margin for the fiscal fourth quarter was 61.4%, reflecting an expansion of 227 basis points (bps).
Selling, general and administration expenses rose 9.5% year over year to $265.1 million. Research and development expenses increased 6.9% to $86.4 million.
The adjusted operating income was $476.4 million in the quarter, up 19% from the year-ago quarter’s level. The adjusted operating margin expanded 260 bps year over year to 35.3%.
Resmed exited the fourth quarter of fiscal 2025 with cash and cash equivalents of $1.21 billion, significantly up from $238.4 million at the end of fiscal 2024.
Total debt (short and long-term) amounted to $668.3 million compared with $707.2 million at the end of fiscal 2024.
The cumulative net cash provided by operating activities at the end of the fiscal fourth quarter was $1.75 billion compared with $1.40 billion in the year-ago period.
Additionally, the company paid out $78 million in dividends in the fiscal fourth quarter and also repurchased 419,000 shares for consideration of $100 million as part of its ongoing capital management.
Resmed delivered an earnings and revenue beat in the fourth quarter of fiscal 2025. The performance reflected robust global demand for its sleep and breathing health devices, as well as an expanding digital health ecosystem. Mask and other sales in the United States, Canada and Latin America reflected continued growth in ReSupply, new patient setups and incremental revenues from 2 months of owning VirtuOx.
The addition of VirtuOx’s at-home diagnostic services bolsters Resmed’s ability to support patients earlier in their journey and help healthcare providers and homecare companies deliver more streamlined, connected care. Meanwhile, growth in Residential care software revenues was driven by robust performances from the MEDIFOX DAN and HME verticals.
Gross margin improvement in the quarter was led by procurement, manufacturing and logistics efficiencies as well as favorable foreign currency movements. Resmed made meaningful progress on its gross margin expansion objectives and continues to advance its gross margin initiative pipeline.
Resmed currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, GeneDx Holdings WGS and Boston Scientific BSX.
Medpace Holdings, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2025 EPS of $3.1, which beat the Zacks Consensus Estimate by 3.33%. Revenues of $603.3 million topped the consensus mark by 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.
MEDP has a historical five-year earnings growth rate of 30.9% compared with the S&P 500 composite’s 10.1% growth. The company surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.87%.
GeneDx Holdings, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2025 adjusted EPS of 50 cents, exceeding the Zacks Consensus Estimate by a remarkable 400%. Revenues of $102.7 million surpassed the Zacks Consensus Estimate by 21.24%.
WGS has an estimated earnings growth rate of 79.6% for 2026 compared with the industry’s 18.6% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 231.40%.
Boston Scientific, currently carrying a Zacks Rank #2, reported a second-quarter 2025 adjusted EPS of 75 cents, which topped the Zacks Consensus Estimate by 4.2%.
BSX has a historical five-year earnings growth rate of 13.3% compared with the industry’s 2.7% growth. The company’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 8.11%.
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This article originally published on Zacks Investment Research (zacks.com).
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