ResMed (NYSE:RMD) Reports Strong Q4 Revenue, Exceeding Expectations

Key Highlights:

* Q4 CY2024 revenue of $1.28 billion, a 10.3% year-over-year increase, surpassing analyst estimates by 1%.
* Adjusted earnings per share (EPS) of $2.43, exceeding analyst consensus by 5.2%.
* Adjusted EBITDA of $482.4 million, representing a 37.6% margin and surpassing estimates by 4.2%.
* Operating margin expanded to 32.5% from 23.7% in Q4 CY2023.
* Free cash flow margin increased to 22.5% from 21.5% in the previous year.
* Constant currency revenue rose 10% year-over-year, indicating strong underlying demand.

Company Overview:

ResMed (NYSE:RMD), founded in 1989, is a leading medical device company specializing in chronic health conditions such as sleep apnea, asthma, and neuromuscular disorders.

Industry Landscape:

Patient monitoring companies in the healthcare equipment industry benefit from recurring revenue streams from consumables and software subscriptions tied to device sales. An aging population and increasing prevalence of chronic diseases drive industry growth. However, challenges include high R&D costs and regulatory requirements.

Growth Metrics:

ResMed's annualized revenue growth of 12.1% over the past five years and 14.4% over the past two years demonstrates consistent performance and demand for its products.

Profitability:

ResMed has maintained strong profitability, with an average adjusted operating margin of 30.8% over the past five years. Its operating margin has expanded by 1.7 percentage points in that period, and reached 34% in Q4 CY2024.

Earnings Per Share:

ResMed's trailing 12-month EPS has grown at a 17.3% compound annual growth rate over the past five years. Its Q4 EPS of $2.43 beat estimates, and analysts predict 11% growth in full-year EPS for the next 12 months.

Key Takeaways:

Despite mixed results in Q4 CY2024, ResMed's strong revenue and profitability performance indicate a solid business with growth potential. For a comprehensive analysis of ResMed's valuation, business qualities, and latest earnings, refer to our full research report (link provided).