Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ResMed Inc (RMD, Financial) reported a strong quarter with an 11% revenue growth, driven by demand for sleep health and breathing health medical devices.
- The company achieved a 27% growth in operating profit and a 34% increase in earnings per share, showcasing strong financial performance.
- ResMed Inc (RMD) is expanding the availability of its AirSense 11 platform worldwide, which is expected to drive ongoing momentum.
- The masks and accessories segment saw an 11% year-over-year growth, supported by new patient activations and ReSupply programs.
- The company is leveraging macro trends such as consumer wearables and GLP-1 medications, which are expected to provide significant tailwinds for the business.
Negative Points
- ResMed Inc (RMD) faces potential headwinds from the Middle East conflict and congestion in Asian ports, which could impact freight costs.
- The company is experiencing increased air and sea freight costs, which are expected to continue affecting gross margins throughout fiscal year 2025.
- There is a risk of a more price-sensitive environment if competitors like Philips return to the market, potentially impacting market share.
- ResMed Inc (RMD) is dealing with inventory build-up as it balances freight costs, which could affect cash flow in the short term.
- The company is navigating a complex competitive landscape in Europe and Asia, requiring continuous innovation and strategic positioning.
Q & A Highlights
Q: Do you have any sense of preorders for your new mask?
A: Michael Farrell, CEO: It's de minimis at this point and not material to the global financials. However, there is incredible excitement from our commercial teams and customers where it's launching next week. The product has been over a decade in development, and we believe it's a game changer.
Q: Can you explain the growth drivers for Rest of World devices, particularly regarding AirSense 11 sales?
A: Michael Farrell, CEO: The 9% growth in Rest of World devices is driven by strong market performance and competition. The AirSense 11, with its higher price and lower COGS, contributes to this growth, but the majority is due to volume and demand generation.
Q: What are the drivers behind the double-digit growth in mask sales, particularly in North America?
A: Michael Farrell, CEO: Growth is driven by new patient flow, resupply programs, and increased masks per patient. We are expanding Brightree resupply and Snap technologies, even to non-Brightree customers, which enhances our market presence.
Q: How is ResMed positioned to handle a potentially more price-sensitive environment if Philips returns to the market?
A: Michael Farrell, CEO: We have been competing effectively in Europe and Asia, where Philips is present. Our focus is on maintaining our competitive advantage through digital health ecosystems and superior product offerings, ensuring we continue to lead in the market.
Q: Can you comment on the production of AirSense 11 and its mix with AirSense 10 in the US?
A: Michael Farrell, CEO: AirSense 11 production is strong, with the majority of US sales being AirSense 11. There may be some backlog for AirSense 11, but we are focused on ensuring availability and meeting demand efficiently.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
