ResMed’s third quarter results aligned with Wall Street’s revenue expectations, while its non-GAAP earnings per share moderately outpaced consensus. Management attributed the quarter’s performance to robust demand for both devices and masks, particularly in the U.S., Canada, and Latin America, where mask resupply programs and new product launches drove growth. CEO Michael Farrell highlighted the contribution of recent acquisitions and continued investment in digital health, noting, “Our global team delivered a strong quarter with 9% reported revenue growth, with multiple areas of high performance.”
Is now the time to buy RMD? Find out in our full research report (it’s free for active Edge members).
ResMed (RMD) Q3 CY2025 Highlights:
- Revenue: $1.34 billion vs analyst estimates of $1.34 billion (9.1% year-on-year growth, in line)
- Adjusted EPS: $2.55 vs analyst estimates of $2.50 (2.1% beat)
- Adjusted EBITDA: $529.8 million vs analyst estimates of $508.6 million (39.7% margin, 4.2% beat)
- Operating Margin: 33.4%, up from 31.6% in the same quarter last year
- Constant Currency Revenue rose 8% year on year (11% in the same quarter last year)
- Market Capitalization: $35.79 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 Q3 Earnings Call
- Davinthra Thillainathan (Goldman Sachs) asked about the differentiation and strategic importance of the new full-face mask. CEO Michael Farrell emphasized the comfort benefits and high-margin potential, noting strong early success and plans for global rollout.
- Laura Sutcliffe (Citi) inquired about the scale of patient funnel leakage and potential for further acquisitions. Farrell explained ongoing efforts to minimize patient drop-off with AI tools and recent acquisitions, stating, “There is churn in the channel... our goal is to minimize the loss of people as they go through.”
- Saul Hadassin (Barrenjoey) questioned the evolution of U.S. manufacturing strategy. Farrell highlighted the company’s commitment to expanding production of devices and masks domestically to improve supply resilience and meet regulatory expectations.
- Lyanne Harrison (Bank of America) sought clarity on sustaining high single-digit device growth in the U.S. Farrell responded that demand initiatives, education programs, and partnerships with primary care physicians are expected to drive above-market growth, though not necessarily at consistently high single-digit rates.
- Brett Fishbin (KeyBanc Capital Markets) asked about the slower growth in the software segment. Farrell detailed a shift in investment focus toward higher-margin SaaS platforms, with plans to reaccelerate growth and improve profitability in the coming quarters.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the market adoption and patient adherence rates for new mask platforms and digital health tools; (2) the pace and impact of the Indianapolis distribution center expansion and broader U.S. manufacturing initiatives; and (3) progress on shifting the software portfolio toward higher-margin SaaS offerings. Results from these initiatives will be key indicators of ResMed’s ability to sustain growth and margin improvements amid evolving industry dynamics.
ResMed currently trades at $245.22, down from $252.34 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
The Best Stocks for High-Quality Investors
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
