ResMed (RMD) 2025 10-K: Strong Growth and Margin Expansion

ResMed, a global leader in cloud-connected medical devices for treating sleep apnea, COPD, and other respiratory conditions, recently released its annual 10-K report. This document gives us a comprehensive look at the company's financial health for the fiscal year that ended on June 30, 2025. Let's dive into the numbers to see how the company performed and what it signals for its future.

You can view the full filing on the SEC's website here.

Strong Top-Line and Segment Growth

ResMed reported a strong fiscal year, with total net revenue climbing 10% to $5.15 billion from $4.69 billion in the previous year. This growth wasn't just due to favorable currency exchange; on a constant currency basis, the increase was also 10%, indicating robust underlying demand for its products and services.

The company's performance was solid across its two main business segments:

• Sleep and Breathing Health: This core segment, which includes CPAP devices like the popular AirSense line, masks, and accessories, saw revenues grow by 10% to $4.50 billion. Growth was driven by an 11% increase in sales of high-margin masks and other consumables, alongside a 9% rise in device sales.
• Residential Care Software: This Software-as-a-Service (SaaS) segment, featuring platforms like Brightree and MatrixCare for out-of-hospital care providers, also grew by 10% to $641 million.

To visualize how ResMed's revenue flows through its business to generate profit, the following chart breaks down the company's income statement for the 2025 fiscal year.

A Story of Expanding Profitability

Beyond just growing sales, ResMed significantly improved its profitability. One of the most telling metrics is the gross margin, which measures the profitability of a company's products. ResMed's GAAP gross margin expanded to 59.4% in fiscal 2025, a notable improvement from 56.7% in 2024. This suggests the company benefited from a better product mix, pricing power, or improved manufacturing efficiencies.

This efficiency carried through the rest of the income statement. While operating expenses for sales, general, and administration (SG&A) and R&D grew by 8% each, they decreased as a percentage of revenue. This operational leverage had a powerful effect on the bottom line:

• Income from operations surged 28% to $1.69 billion.
• Net income jumped 37% to $1.40 billion, or $9.51 per diluted share, up from $1.02 billion, or $6.92 per share, in fiscal 2024.

The company's cash generation was equally impressive. Net cash provided by operating activities increased to $1.75 billion, up from $1.40 billion in the prior year, strengthening its balance sheet and providing ample resources for investment, dividends, and share buybacks.

Navigating an Evolving Market

ResMed operates in a dynamic healthcare landscape. The 10-K filing highlights several risks, including competition from new technologies and shifts in the treatment of obstructive sleep apnea (OSA). One notable risk factor acknowledges the "perceived demand for our products in light of the introduction of pharmaceuticals to treat obesity and OSA." This is a direct reference to the ongoing discussions around new weight-loss drugs (like GLP-1s) and their potential to reduce the addressable market for sleep apnea therapies.

Despite these industry-wide questions, ResMed's fiscal 2025 results demonstrate continued strong demand for its solutions. The double-digit growth in its core mask and device businesses suggests that its strategy of integrating connected devices with digital health platforms like myAir™ and AirView™ continues to resonate with patients and providers.

In conclusion, ResMed's latest 10-K paints a picture of a company firing on all cylinders. It achieved impressive growth in both revenue and profit while expanding margins and generating substantial cash flow. As it moves forward, its success will hinge on its ability to continue innovating and demonstrating the value of its ecosystem in a healthcare market that is constantly evolving.