ResMed Inc. (ASX: RMD) is standing out from the market selloff this Friday, with its share price showing resilience amid broader market declines. At the time of writing, ResMed shares have edged slightly higher to $32.41, contrasting sharply with the S&P/ASX 200 Index, which has fallen by nearly 1.5%.
Strong Fourth Quarter Performance ResMed's positive performance is attributed to its fourth-quarter financial update, covering the three months ending June 30. The ASX healthcare stock reported a 9% increase in revenue, reaching USD 1.2 billion. This growth was driven by heightened demand for sleep devices and masks, along with robust expansion in its Software as a Service (SaaS) sector.
Geographical revenue breakdown reveals a 10% increase in the U.S., Canada, and Latin America, while Europe, Asia, and other markets saw an 8% rise on a constant currency basis. The SaaS revenue grew by 10%, reflecting ongoing organic growth in this segment.
The company also reported a 350-basis point increase in its gross margin, reaching 58.5% on a GAAP basis, or 59.1% on a non-GAAP basis. This improvement was primarily due to reduced freight and manufacturing costs, higher average selling prices, and a favorable product mix. Quarterly earnings per share came in at USD 1.98, or USD 2.08 on a non-GAAP basis.
In response to this strong performance, ResMed's board decided to increase its quarterly dividend by 10% to USD 0.53 per share. For ASX-listed CHESS Depositary Interests (CDIs), this translates to a quarterly dividend of 5.3 US cents.
Full-Year Growth and Comparisons For the fiscal year 2024, ResMed posted an 11% revenue increase, totaling USD 4.7 billion, with a gross margin of 56.7% (57.7% on a non-GAAP basis). Earnings per share for the year were USD 6.92, or USD 7.72 on a non-GAAP basis.
Despite slightly falling short of the consensus estimate for earnings per share, which was USD 2.09, ResMed exceeded expectations in terms of gross margin, which was anticipated to be 58.3%.
Future Outlook ResMed's CEO, Mick Farrell, expressed optimism about the company's future prospects. He emphasized the significant market potential, noting that nearly 2.5 billion people suffer from major sleep health and breathing disorders. Farrell highlighted ResMed’s position as a market leader in these underpenetrated sectors and outlined the company’s strategy to drive increased market penetration, generate demand, and accelerate growth.
The company's focus will be on raising awareness among a growing population interested in sleep health, expanding access to therapies through virtual channels, and continuing to offer a comprehensive range of medical device products and software solutions.
ResMed’s solid performance and positive outlook underscore its resilience amid market fluctuations, making it a notable performer in today's challenging economic environment.