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Shareholders backing Australian-founded, California-based sleep medical equipment company ResMed (ASX: RMD, NYSE: RMD) will be resting well tonight after the company posted a net income of US$300 million for the third quarter of FY24, reflecting a 29 per cent year-on-year increase.
The result was driven by an uplift in the company's gross margin, which improved 260 basis points to 57.9 per cent on a GAAP basis due to reduced freight and manufacturing cost improvements.
Off the back of the news, shares jumped as high as 10 per cent to $31.08 this morning.
“ResMed’s strong third-quarter fiscal year 2024 results reflect robust patient and customer demand for our products and software solutions, leading to double-digit mask and accessories revenue growth along with ongoing operational efficiencies to drive margin improvement and increased profitability, resulting in double-digit growth in both operating profit and earnings per share,” said ResMed CEO and Chairman Mick Farrell.
“Over 2 billion people worldwide can benefit from a ResMed solution to help them sleep better, breathe better, and receive best-in-class healthcare right where they live.”
ResMed was founded in 1989 by Sydney-born Peter Farrell and offers medical equipment and cloud-connected medical devices for people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. When the COVID-19 pandemic struck, the company also produced hundreds of thousands of ventilators and bi-level devices to help treat patients with respiratory symptoms. To date, the company operates in more than 140 countries.
In the update to investors, ResMed reported revenue grew by seven per cent to reach US$1.2 billion, which was driven by increased demand for sleep devices, as well as growth across the company’s mask product portfolio.
In the US, Canada and Latin America division, revenue grew by nine per cent year-on-year to hit US$687.5 million. Meanwhile in Europe, Asia and other markets, revenue saw a three per cent uptick to reach US$361.6 million. ResMed’s Software-as-a-Service segment, which operates nursing facility software MatrixCare, also rose by eight per cent to generate US$148 million.
Operating cash flow for the quarter came in at US$402 million.
The company also noted highlights for the quarter, which included the introduction of the AirCurveTM 11 series – new devices that provide bi-level and enhanced ventilation therapy options, particularly for patients who struggle with single positive airway pressure (PAP) therapy. ResMed also launched AirFit F40 in the US, which is an ultra-compact full-face mask that features a silicone cushion designed to maintain a facial seal, even when moving around during sleep.
In conjunction with World Sleep Day on March 15, ResMed published the results of its 4th annual Global Sleep Survey of 36,000 people across 17 markets.
The research found 50 per cent of respondents report feeling excessive daytime sleepiness and 40 per cent report getting no more than three nights of good sleep per week.
More than one-third of respondents are now actively tracking their sleep patterns, either through a smartphone app (44 per cent) or wearable device (31 per cent).
“We remain laser-focused on bringing market-leading innovation to customers, including our latest AirCurve11 range of non-invasive ventilators and our recently launched AirFit F40 mask system, combined with our entire portfolio of products, software, and solutions, allowing us to continue to deliver value for all our stakeholders,” Farrell said.
A quarterly dividend of US$0.48 per share was declared.
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