ResMed’s operational excellence comes to its rescue in challenging market conditions
ResMed Inc (ASX: RMD)
The company has highlighted its continuing patient and customer demand for its best-in-class products. Along with this, the strong demand for its software solutions is driving solid growth across its devices, masks, and software businesses
ResMed maintains focus on its constant cost discipline, and Profitable Growth Acceleration, which has resulted in gross margin expansion, and double-digit growth in bottom-line profitability.
ResMed Inc while releasing its quarterly financial results for the fourth quarter of FY24 reported witnessing a revenue increase of 10 percent on a constant currency basis, primarily fuelled by heightened demand for its sleep devices and masks, alongside robust growth in its Software as a Service segment.
The gross margin saw an enhancement of 350 basis points, largely attributed to reductions in freight and manufacturing costs, an uptick in average selling prices, and a favourable product mix. The non-GAAP gross margin also rose by 330 basis points, reflecting similar contributing factors.
The net income for the quarter reached $292 million, with diluted earnings per share standing at $1.98. Non-GAAP net income surged by 30 percent to $306 million, while non-GAAP diluted earnings per share increased by 30 percent to $2.08, primarily due to strong sales performance, improved gross margins, and a modest rise in operating expenses.
Additionally, during this quarter, the company distributed $71 million in dividends and repurchased 232,000 shares at a cost of $50 million as part of its ongoing Capital Management Strategy.
The company is observing ongoing positive performance in its operating segments, with a particular emphasis on the continuous growth in demand for its medical devices, masks, and software services. This growth is underpinned by a Strong Market Opportunity, as a substantial portion of the population is affected by sleep and breathing disorders, thereby supporting a resilient sales platform.
The company has demonstrated impressive double-digit revenue growth rates in both the recent quarter and the previous year, displaying a strong track record of financial expansion. Earnings have shown a notable increase from $927 million in 2019 to $1.33 billion in 2023. This growth trajectory is supported by the company's solid market position and resilient market fundamentals, indicating that the current robust growth rates are likely to be sustained.
Source: Company’s Report
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