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Amy Wakeham

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Jayme Rubenstein

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news@resmed.com

Revenue increased 12% to $588.3 million; up 13% on a constant currency basis

Net income increased by 23%; non-GAAP net income up 23%

GAAP diluted earnings per share of $0.73; non-GAAP diluted earnings per share of $0.81

Revenue

Gross margin

Selling, general and administrative expenses

Research and development expenses

Income from operations

Net income

Non-GAAP net income

Diluted earnings per share

Non-GAAP diluted earnings per share

In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis”, which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.

Revenue in U.S., Canada, and Latin America, excluding Software as a Service, grew by 10 percent compared to the prior year period, driven by strong sales across our mask and device product portfolios. Revenue in combined Europe, Asia and other markets grew by 16 percent on a constant currency basis compared to the same period of the prior year, primarily driven by strong device sales. Software as a Service revenue increased 25 percent, compared to the prior year period due to continued growth in our Brightree service offerings and incremental contribution from the acquisition of HEALTHCAREfirst, which closed early in the first quarter.

Gross margin was slightly lower than the prior year quarter mainly due to declines in average selling prices, which were partially offset by manufacturing and procurement efficiencies.

Selling, general and administrative expenses increased by 2 percent compared to the prior year period, or by 4 percent on a constant currency basis, due to continued improvements in operating leverage. SG&A expenses improved to 25.0 percent of revenue in the quarter, compared with 27.5 percent in the same period of the prior year.

Income from operations increased by 28 percent and non-GAAP income from operations increased by 26 percent compared to the prior year period.

Net income increased by 23 percent and non-GAAP net income increased by 23 percent compared to the prior year period. Non-GAAP measures adjust for amortization of acquired intangibles and impact of U.S. tax reform on income tax expense.

GAAP diluted earnings per share increased by 22 percent and non-GAAP diluted earnings per share were 23 percent higher compared with the same period of the prior year.

Cash flow from operations for the quarter was $48.1 million, compared to net income in the current quarter of $105.7 million. Cash flow from operations included tax payments of $125.0 million compared with $30.2 million in the same period of the prior year. During the quarter we paid $52.8 million in dividends.

Completed the acquisition of HEALTHCAREfirst, a provider of software solutions and services for home health and hospice agencies, for consideration of $126.3 million.

Announced a joint venture with Verily, combining ResMed’s expertise in sleep apnea and Verily’s advanced health data analytics technologies, to study the health and financial impacts of undiagnosed and untreated sleep apnea, and to develop software solutions that enable healthcare providers to more efficiently identify, diagnose, treat and manage individuals with sleep apnea and other breathing-related sleep disorders.

Introduced key upgrades to the Astral life support ventilator, including AutoEPAP functionality along with customizable program names and easily changeable interfaces.

Introduced AirFit F30, ResMed’s first minimal-contact full face CPAP mask, expanding the mask product portfolio to meet the needs of a select group of PAP users who need a full face mask but are looking for the flexibility to wear glasses in bed or to reduce facial contact with a full face mask.

Net revenue

Cost of sales

Gross profit

Operating expenses:

Selling, general and administrative

Research and development

Amortization of acquired intangible assets ⁽¹⁾

Total operating expenses

Income from operations ⁽¹⁾

Other income (expenses), net:

Interest income (expense), net

Other, net

Total other income (expenses), net

Income before income taxes

Income taxes

Net income ⁽¹⁾

Basic earnings per share

Diluted earnings per share

Non-GAAP diluted earnings per share ⁽¹⁾

Basic shares outstanding

Diluted shares outstanding

See the reconciliation of non-GAAP financial measures in the table at the end of the press release.

Cash flows from operating activities:

Net income

Adjustment to reconcile net income to cash provided by operating activities:

Depreciation and amortization

Stock-based compensation costs

Impairment of equity investments

Changes in fair value of business combination contingent consideration

Changes in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable, net

Inventories, net

Prepaid expenses, net deferred income taxes and other current assets

Accounts payable, accrued expenses and other

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property, plant and equipment

Patent registration costs

Business acquisitions, net of cash acquired

Investments in equity investments

Proceeds / (Payments) on maturity of foreign currency contracts

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock, net

Purchases of treasury stock

Payment of business combination contingent consideration

Proceeds from borrowings, net of borrowing costs

Repayment of borrowings

Dividends paid

Net cash (used in) / provided by financing activities

Effect of exchange rate changes on cash

Net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

GAAP income from operations

Amortization of acquired intangible assets ^(A)

Non-GAAP income from operations

GAAP net income

Amortization of acquired intangible assets, net of tax ^(A)

U.S. tax reform transition impact ^(A)

Non-GAAP net income ^(A)

Diluted shares outstanding

GAAP diluted earnings per share

Non-GAAP diluted earnings per share ^(A)

ResMed adjusts for the impact of the amortization of acquired intangibles and impact of U.S. tax reform on income tax expense from their evaluation of ongoing operations and believes that investors benefit from adjusting these items to facilitate a more meaningful evaluation of current operating performance.

U.S., Canada and Latin America

Devices

Masks

Total devices and masks

Software as a Service

Total

Combined Europe, Asia and other markets

Devices

Masks

Total

Global revenue

Devices

Masks

Total devices and masks

Software as a Service

Total

In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis”, which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.