Company Interview / ResMed breathes life into margins and dividends

Key Points:

Fiscal 2025 delivers double-digit US revenue and operating profit gains for ResMed (ASX:RMD) Shifts in the sleep apnea market prompted by GLP-1 drugs from Eli Lilly ($LLY) and Novo Nordisk ($NVO) Acquisitions of Virtue Ox and software providers drive global expansion in home diagnostics Significant improvements in gross margins stem from supply chain innovation and efficiency measures

ResMed (ASX:RMD) posts a robust performance, with Mick Farrell highlighting a 10% increase in year-on-year US revenue and a 19% rise in operating profit. Shareholders benefit from a 13% lift in the quarterly dividend, now at 60 US cents per share. Farrell emphasises the significant progress across fiscal 2025, crediting heightened brand awareness efforts and targeted marketing on sleep suffocation as key drivers funneling more patients towards diagnosis and treatment. He points to above-trend growth in devices, masks, and residential care software, with ongoing campaigns to further raise global awareness.

Farrell indicates the rise of GLP-1 pharmaceuticals as a growing influence on sleep health, referencing Novo Nordisk and Eli Lilly products. He notes that ResMed has educated over 20,000 primary care professionals globally, stressing CPAP therapy as the gold standard. Recent investments include the acquisition of Virtue Ox in the US, expanding ResMed’s footprint in home sleep apnea testing, and ongoing developments in software for sleep and pulmonary clinicians.

Operationally, ResMed posts a year-on-year gross margin improvement of more than 200 basis points, attributed to supply chain innovation and efficiencies like the adoption of sea freight and component optimisation. Farrell maintains that margin expansion remains a priority, with SG&A investment strictly managed to drive brand reach and patient access on a global scale.