ResMed’s second quarter results were met with a positive market reaction, following revenue and non-GAAP profit figures that surpassed Wall Street expectations. Management attributed this performance to robust international demand for sleep and respiratory devices, ongoing operational efficiency initiatives, and strength in its ReSupply and software portfolios. CEO Michael J. Farrell emphasized the success of new product rollouts and the company’s disciplined investment in research and development, stating that strategic marketing campaigns and supply chain improvements have contributed to higher gross margins. The quarter also benefited from continued momentum in expanding software solutions and targeted acquisitions.
Is now the time to buy RMD? Find out in our full research report (it’s free).
ResMed (RMD) Q2 CY2025 Highlights:
- Revenue: $1.35 billion vs analyst estimates of $1.33 billion (10.2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $2.55 vs analyst estimates of $2.48 (3% beat)
- Adjusted EBITDA: $540 million vs analyst estimates of $494.7 million (40.1% margin, 9.2% beat)
- Operating Margin: 33.7%, up from 31.2% in the same quarter last year
- Constant Currency Revenue rose 9% year on year (10% in the same quarter last year)
- Market Capitalization: $41.48 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ResMed’s Q2 Earnings Call
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Craig Wong-Pan (RBC) asked about the factors driving Rest of World device growth. CEO Michael J. Farrell explained that while some regions saw tender-driven fluctuations, overall growth was mostly due to market expansion and early demand generation efforts, with mid-single-digit growth expected going forward.
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Dan Hurren (MST Marquee) inquired about the drivers behind gross margin guidance. CFO Brett Sandercock pointed to procurement, manufacturing, and logistics efficiencies, with favorable product mix and currency movements also contributing, but emphasized sustainable improvements over one-time gains.
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Davinthra Thillainathan (Goldman Sachs) questioned the integration and investment roadmap for the VirtuOx acquisition. CEO Farrell described VirtuOx as part of a broader diagnostic portfolio, with efforts focused on scaling home sleep testing and improving patient flow through the care funnel.
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Saul Hadassin (Barrenjoey) asked if U.S. mask growth reflected market share gains. Farrell responded that innovation in mask design and improvements in ReSupply and digital engagement likely contributed to outperformance, though the market remains competitive.
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Anthony Charles Petrone (Mizuho Group) queried the impact of upcoming competitive bidding rules and ResMed’s diversification across therapy modalities. Farrell noted that past experience suggests limited direct impact, and stressed the company’s multi-modality strategy, including dental devices and ongoing relationships with patients across therapy types.
Catalysts in Upcoming Quarters
In coming quarters, our analysts will monitor (1) the pace and impact of new product rollouts—including AI-driven digital tools and next-generation masks, (2) the execution of cost optimization measures and their effect on margins, and (3) the integration and performance of recent acquisitions such as VirtuOx within the diagnostic ecosystem. Expansion in emerging markets and responses to regulatory changes will also serve as key indicators of sustained growth.
ResMed currently trades at $282.48, up from $271.97 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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