Revenue increased by 4% to $914.7 million; up 8% on a constant currency basis

Gross margin grew 110 bps to 57.1%; non-GAAP gross margin grew 50 bps to 57.8%

Income from operations increased 6%; non-GAAP operating profit up 4%

Diluted earnings per share of $1.33; non-GAAP diluted earnings per share of $1.49

Revenue increased by 12% to $3.6 billion; up 13% on a constant currency basis

Gross margin contracted 90 bps to 56.6%; non-GAAP gross margin contracted 140 bps to 57.7%

Income from operations increased 11%; non-GAAP operating profit up 8%

Diluted earnings per share of $5.30; non-GAAP diluted earnings per share of $5.79

Revenue

Gross margin

Non-GAAP gross margin ^(B)

Selling, general, and administrative expenses

Research and development expenses

Income from operations

Non-GAAP income from operations ^(B)

Net income

Non-GAAP net income ^(B)

Diluted earnings (loss) per share

Non-GAAP diluted earnings per share ^(B)

Revenue

Gross margin

Non-GAAP gross margin ^(B)

Selling, general, and administrative expenses

Research and development expenses

Income from operations

Non-GAAP income from operations ^(B)

Net income

Non-GAAP net income ^(B)

Diluted earnings per share

Non-GAAP diluted earnings per share ^(B)

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.

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

Revenue grew by 8 percent on a constant currency basis, driven by increased demand for our sleep and respiratory care devices and reduced competitive supply.

Revenue in the U.S., Canada, and Latin America, excluding Software-as-a-Service, grew by 12 percent, primarily due to the factors discussed above and recovery of core sleep patient flow that was previously impacted by COVID-19.

Revenue in Europe, Asia, and other markets grew by 1 percent on a constant currency basis. Excluding the impact of COVID-related sales in the prior year quarter, revenue grew by 8% on a constant currency basis, primarily due to the factors discussed above.

Software-as-a-Service revenue increased by 8 percent, due to continued growth in our Durable Medical Equipment category and stabilizing patient flow in out-of-hospital care settings.

Gross margin increased by 110 basis points and non-GAAP gross margin increased by 50 basis points, mainly due to an increase in average selling prices and favorable product mix changes, partially offset by higher freight and manufacturing costs, and unfavorable geographic mix changes.

Selling, general, and administrative expenses increased by 12 percent on a constant currency basis. SG&A expenses increased to 21.3 percent of revenue in the quarter, compared with 20.7 percent in the same period of the prior year. These changes in SG&A expenses were mainly due to increases in employee-related expenses, increases in professional service fees, including acquisition-related expenses, and increases in travel expenses.

Income from operations increased by 6 percent and non-GAAP income from operations increased by 4 percent.

Net income for the quarter was $195.1 million and diluted earnings per share was $1.33. Non-GAAP net income increased by 10 percent to $219.2 million and non-GAAP diluted earnings per share increased by 10 percent to $1.49, predominantly attributable to strong sales, partially offset by higher operating expenses.

Operating cash flow for the quarter was $79.5 million, reflecting the impact of increases in working capital.

During the quarter we paid $61.5 million in dividends.

Announced a definitive agreement to acquire privately held MEDIFOX DAN, a German leader in out-of-hospital software solutions for providers in major settings across the care continuum, from Hg, a leading software and services investor. Under the agreement terms, ResMed will acquire MEDIFOX DAN for approximately US$1.0 billion (€950 million), which ResMed expects to fund with its existing credit facilities. The transaction is expected to close by the end of the second quarter of ResMed’s fiscal year 2023 (December 31, 2022), subject to regulatory clearances.

Announced the promotion of Lucile Blaise to President of Sleep & Respiratory Care, effective July 1, 2022. Ms. Blaise was previously ResMed’s Vice President of Sleep & Respiratory Care for Western Europe. Over her 16 years at ResMed and over 25 years in the medtech industry, Blaise has been a key player in improving chronic disease treatment for millions of people as well as supporting physicians, providers, and healthcare systems across Europe and beyond through evidence-based decision-making.

Supported or presented 23 clinical study abstracts at the annual American Thoracic Society (18) and SLEEP (5) conferences, demonstrating the breadth and depth of ResMed’s real-world evidence to support the industry’s knowledge of chronic disease patient management, links between diseases, and prevalence, among others.

Net revenue

Cost of sales

Amortization of acquired intangibles ⁽¹⁾

Restructuring—cost of sales ⁽¹⁾

Total cost of sales

Gross profit

Selling, general, and administrative

Research and development

Amortization of acquired intangibles ⁽¹⁾

Restructuring—operating expenses ⁽¹⁾

Total operating expenses

Income from operations

Other income (expenses), net:

Interest income (expense), net

Loss attributable to equity method investments

Gain (loss) on equity investments

Other, net

Total other income (expenses), net

Income before income taxes

Income taxes

Net income

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.

ASSETS

Current assets:

Cash and cash equivalents

Accounts receivable, net

Inventories

Prepayments and other current assets

Total current assets

Non-current assets:

Property, plant, and equipment, net

Operating lease right-of-use assets

Goodwill and other intangibles, net

Deferred income taxes and other non-current assets

Total non-current assets

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:

Accounts payable

Accrued expenses

Operating lease liabilities, current

Deferred revenue

Income taxes payable

Short-term debt

Total current liabilities

Non-current liabilities:

Deferred revenue

Deferred income taxes

Operating lease liabilities, non-current

Other long-term liabilities

Long-term debt

Long-term income taxes payable

Total non-current liabilities

Total liabilities

STOCKHOLDERS’ EQUITY:

Common stock

Additional paid-in capital

Retained earnings

Treasury stock

Accumulated other comprehensive income

Total stockholders’ equity

Total liabilities and stockholders’ equity

Cash flows from operating activities:

Net income

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

Depreciation and amortization

Amortization of right-of-use assets

Stock-based compensation costs

Loss attributable to equity method investments

(Gain) loss on equity investment

Restructuring expenses

Changes in operating assets and liabilities:

Accounts receivable, net

Inventories, net

Prepaid expenses, net deferred income taxes and other current assets

Accounts payable, accrued expenses, income taxes payable and other

Net cash (used in) / provided by operating activities

Cash flows from investing activities:

Purchases of property, plant, and equipment

Patent registration and acquisition costs

Business acquisitions, net of cash acquired

Purchases of investments

Proceeds from sale of investment

(Payments) / proceeds on maturity of foreign currency contracts

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock, net

Taxes paid related to net share settlement of equity awards

Payments 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

Non-GAAP gross margin

Non-GAAP income from operations

GAAP net income

Amortization of acquired intangibles—cost of sales, net of tax ^(A)

Amortization of acquired intangibles—operating expenses, net of tax ^(A)

Acquisition-related expenses ^(A)

Reserve for disputed tax position ^(A)

Restructuring—cost of sales, net of tax ^(A)

Restructuring—operating expenses, net of tax ^(A)

(Gain) loss on equity investments ^(A)

Non-GAAP net income ^(A)

GAAP diluted shares outstanding

GAAP diluted earnings (loss) per share

Non-GAAP diluted earnings per share ^(A)

ResMed adjusts for the impact of the amortization of acquired intangibles, acquisition-related expenses, reserve for disputed tax positions, restructuring expenses and the (gain) loss on equity investments 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 and other

Total Sleep and Respiratory Care

Software-as-a-Service

Total

Combined Europe, Asia, and other markets

Devices

Masks and other

Total Sleep and Respiratory Care

Global revenue

Devices

Masks and other

Total Sleep and Respiratory Care

Software-as-a-Service

Total

U.S., Canada, and Latin America

Devices

Masks and other

Total Sleep and Respiratory Care

Software-as-a-Service

Total

Combined Europe, Asia, and other markets

Devices

Masks and other

Total Sleep and Respiratory Care

Global revenue

Devices

Masks and other

Total Sleep and Respiratory Care

Software-as-a-Service

Total

Totals and subtotals may not add due to rounding.

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.