营业收入是在与客户签订合同的性能义务满足时确认的；通常，这发生在产品的风险和/或控制在某一时间点转移时。对于我们睡眠和呼吸健康业务中的产品，我们在按照合同运输条款将产品运送给客户时转移控制并确认销售。对于我们的居住护理软件业务，与云托管服务相关的营业收入在提供时被确认。当性能义务尚未满足时，我们推迟确认收到的部分代价。客户预先收到但尚未确认的收入要分类为递延收入。导致睡眠和呼吸健康业务中的递延收入的性能义务主要涉及我们设备的延长保修期和为患者监测提供数据。导致居住护理软件业务中的递延收入的性能义务主要涉及在约定期限内提供具有维护和支持的软件访问以及与未来某些SaaS合同续订时享有折扣的材料权益。通常，递延收入将在一段期间内确认。 一年 to 五年我们的合同不包含重大融资要素。
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 accounting principles generally accepted in the United States (“GAAP”).
Results of Operations
Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023
Net Revenue
Net revenue for the three months ended September 30, 2024 increased to $1,224.5 million from $1,102.3 million for the three months ended September 30, 2023, an increase of $122.2 million or 11% (an 11% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):
We believe that our current sources of liquidity will be sufficient to fund our operations, including expected capital expenditures, for the next 12 months and beyond.
Revolving Credit Agreement, Term Credit Agreement and Senior Notes
On June 29, 2022, we entered into a second amended and restated credit agreement (as amended from time to time, the “Revolving Credit Agreement”). The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $1,500.0 million, with an uncommitted option to increase the revolving credit facility by an additional amount equal to the greater of $1,000.0 million or 1.00 times the EBITDA for the trailing twelve-month measurement period. Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the Syndicated Facility Agreement (the “Term Credit Agreement”). The Term Credit Agreement, among other things, provides ResMed Pty Limited a senior unsecured term credit facility of $200.0 million. The Revolving Credit Agreement and Term Credit Agreement each terminate on June 29, 2027, when all unpaid principal and interest under the loans must be repaid. As of September 30, 2024, we had $1,500.0 million available for draw down under the revolving credit facility.
On July 10, 2019, we entered into a Note Purchase Agreement with the purchasers to that agreement, in connection with the issuance and sale of $250.0 million principal amount of our 3.24% senior notes due July 10, 2026, and $250.0 million principal amount of our 3.45% senior notes due July 10, 2029 (“Senior Notes”).
On September 30, 2024, there was a total of $680.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes and we were in compliance with our debt covenants. We expect to satisfy all of our liquidity and long-term debt requirements through a combination of cash on hand, cash generated from operations and debt facilities.
Cash Flow Summary
The following table summarizes our cash flow activity (in thousands):
Three Months Ended September 30,
2024
2023
Net cash provided by (used in) operating activities
$
325,538
$
286,283
Net cash provided by (used in) investing activities
2,146
(148,980)
Net cash provided by (used in) financing activities
(150,757)
(151,132)
Effect of exchange rate changes on cash
11,073
(4,962)
Net decrease in cash and cash equivalents
$
188,000
$
(18,791)
Operating Activities
Cash provided by operating activities was $325.5 million for the three months ended September 30, 2024, compared to cash provided of $286.3 million for the three months ended September 30, 2023. The $39.3 million increase in cash flow from operations was primarily due to increased net income partially offset by other net changes in working capital during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Investing Activities
Cash provided by investing activities was $2.1 million for the three months ended September 30, 2024, compared to cash used of $149.0 million for the three months ended September 30, 2023. The $151.1 million increase in cash flow from investing activities was primarily due to cash used to acquire Somnoware during the three months ended September 30,
Management’s Discussion and Analysis of Financial Condition and Results of Operations
2023 in addition to increased proceeds from maturity of foreign currency contracts during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Financing Activities
Cash used in financing activities was $150.8 million for the three months ended September 30, 2024, compared to cash used of $151.1 million for the three months ended September 30, 2023. We repurchased $50.0 million of treasury stock during the three months ended September 30, 2024 compared to no purchases during the three months ended September 30, 2023. Cash outflows for treasury stock repurchases were offset by lower payments on our Revolving Credit Agreement.
Dividends
During the three months ended September 30, 2024, we paid cash dividends of $0.53 per common share totaling $77.9 million. On October 24, 2024, our board of directors declared a cash dividend of $0.53 per common share, to be paid on December 12, 2024, to shareholders of record as of the close of business on November 7, 2024. Future dividends are subject to approval by our board of directors.
Common Stock
On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock. Since approval of the share repurchase program in 2014 through September 30, 2024, we have repurchased a total of 8.2 million shares under this repurchase program for an aggregate of $612.7 million. During the three months ended September 30, 2024, we repurchased 221,996 shares at a cost of $50.0 million. Shares that are repurchased are classified as treasury stock pending future use and reduce the number of shares of common stock outstanding used in calculating earnings (loss) per share. The share repurchase program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors. At September 30, 2024, 11.8 million additional shares remain available for us to repurchase under the approved share repurchase program.
Critical Accounting Principles and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, including those related to allowance for doubtful accounts, inventory reserves, warranty obligations, goodwill, potentially impaired assets, intangible assets, income taxes and contingencies.
We state these accounting policies in the notes to the financial statements and at relevant sections in this discussion and analysis. The estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions.
For a full discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Recently Issued Accounting Pronouncements
See note 1 to the unaudited condensed consolidated financial statements for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position and cash flows.
Our reporting currency is the U.S. dollar, although the financial statements of our non-U.S. subsidiaries are maintained in their respective local currencies. We transact business in various foreign currencies, including a number of major European currencies as well as the Australian and Singapore dollars. We have significant foreign currency exposure through our Australian and Singapore manufacturing activities and our international sales operations.
Net Investment and Fair Value Hedging
On November 17, 2022, we executed foreign cross-currency swaps as net investment hedges and fair value hedges in designated hedging relationships with either the foreign denominated net asset balances or the foreign denominated intercompany loan as the hedged items. All derivatives are recorded at fair value as either an asset or liability. Cash flows associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the hedged item.
The purpose of the cross-currency swaps for the fair value hedge is to mitigate foreign currency risk associated with changes in spot rates on foreign denominated intercompany debt between USD and EUR. For these hedges, we excluded certain components from the assessment of hedge effectiveness that are not related to spot rates. For fair value hedges that qualify and are designated for hedge accounting, the change in fair value of the derivative is recorded in the same line item as the hedged item, Other, net, in the condensed consolidated statement of operations. The initial fair value of hedge components excluded from the assessment of effectiveness is recognized in the statement of operations under a systematic and rational method over the life of the hedging instrument and is presented in interest (expense) income, net. Any difference between the change in the fair value of the hedge components excluded from the assessment of effectiveness and the amounts recognized in earnings is recorded as a component of other comprehensive income.
The purpose of the cross-currency swaps for the net investment hedge is to mitigate foreign currency risk associated with changes in spot rates on the net asset balances of our foreign functional subsidiaries. For net investment hedges that qualify and are designated for hedge accounting, the change in fair value of the derivative is recorded in cumulative translation adjustment within other comprehensive loss and reclassified into earnings when the hedged net investment is either sold or substantially liquidated. The initial fair value of components excluded from the assessment of hedge effectiveness will be recognized in interest (expense) income, net.
The notional value of outstanding foreign cross-currency swaps was $1,068.2 million and $1,026.2 million at September 30, 2024 and June 30, 2024, respectively. These contracts mature at various dates prior to December 31, 2029.
Non-Designated Hedges
We transact business in various foreign currencies, including a number of major European currencies as well as the Australian and Singapore dollars. We have foreign currency exposure through both our Australian and Singapore manufacturing activities, and international sales operations. We have established a foreign currency hedging program using purchased foreign currency call options, collars and forward contracts to hedge foreign-currency-denominated financial assets, liabilities and manufacturing cash flows. The terms of such foreign currency hedging contracts generally do not exceed three years. The purpose of this hedging program is to economically manage the financial impact of foreign currency exposures denominated mainly in Euros, and Australian and Singapore dollars. Under this program, increases or decreases in our foreign currency denominated financial assets, liabilities, and firm commitments are partially offset by gains and losses on the hedging instruments. We do not designate these foreign currency contracts as hedges. All movements in the fair value of the foreign currency instruments are recorded within other, net in our condensed consolidated statements of operations.
The notional value of the outstanding non-designated hedges was $1,073.9 million and $1,340.0 million at September 30, 2024 and June 30, 2024, respectively. These contracts mature at various dates prior to September 15, 2025.
Quantitative and Qualitative Disclosures About Market Risk
Fair Values of Derivative Instruments
The table below provides information (in U.S. dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of September 30, 2024 (in thousands):
Quantitative and Qualitative Disclosures About Market Risk
The table below provides information about our material foreign currency derivative financial instruments and presents the information in U.S. dollar equivalents. The table summarizes information on instruments and transactions that are sensitive to foreign currency exchange rates, including foreign currency call options, collars, forward contracts and cross-currency swaps held at September 30, 2024. The table presents the notional amounts and weighted average exchange rates by contractual maturity dates for our foreign currency derivative financial instruments, including the forward contracts used to hedge our foreign currency denominated assets and liabilities. These notional amounts generally are used to calculate payments to be exchanged under the contracts (in thousands, except exchange rates).
Fair Value Assets / (Liabilities)
Total
September 30, 2024
June 30, 2024
AUD/USD
Contract amount
315,000
10,746
730
Ave. contractual exchange rate
AUD 1 = USD 0.6712
AUD/EUR
Contract amount
245,144
(1,747)
(1,610)
Ave. contractual exchange rate
AUD 1 = EUR 0.6253
SGD/EUR
Contract amount
200,572
1,760
825
Ave. contractual exchange rate
SGD 1 = EUR 0.6884
SGD/USD
Contract amount
255,000
11,569
(2,054)
Ave. contractual exchange rate
SGD 1 = USD 0.7469
AUD/CNY
Contract amount
28,498
398
(112)
Ave. contractual exchange rate
AUD 1 = CNY 4.7828
USD/EUR
Contract amount
1,068,155
(72,673)
(31,743)
Ave. contractual exchange rate
USD 1 = EUR 0.9610
USD/CAD
Contract amount
29,595
(500)
(143)
Ave. contractual exchange rate
CAD 1 = USD 0.7274
Interest Rate Risk
We are exposed to risk associated with changes in interest rates affecting the return on our cash and cash equivalents and debt. At September 30, 2024, we held cash and cash equivalents of $426.4 million, principally comprised of bank term deposits and at-call accounts, and are invested at both short-term fixed interest rates and variable interest rates. At September 30, 2024, there was $180.0 million outstanding under the Revolving Credit Agreement and Term Credit Agreement, which are subject to variable interest rates. A hypothetical 10% change in interest rates during the three months ended September 30, 2024, would not have had a material impact on pretax income. We have no interest rate hedging agreements.
Inflation
Inflationary factors such as increases in the cost of our products, freight, overhead costs or wage rates may adversely affect our operating results. Sustained inflationary pressures in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of net revenue if we are unable to offset such higher costs through price increases.
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports made pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2024.
There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We are involved in various legal proceedings, claims, investigations and litigation that arise in the ordinary course of our business. We investigate these matters as they arise, and accrue estimates for resolution of legal and other contingencies in accordance with Accounting Standard Codification Topic 450, “Contingencies”. See note 8 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Litigation is inherently uncertain. Accordingly, we cannot predict with certainty the outcome of these matters. But we do not expect the outcome of these matters to have a material adverse effect on our consolidated financial statements when taken as a whole.
Item 1A Risk Factors
The discussion of our business and operations should be read together with the risk factors contained in our annual report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC and describe various material risks and uncertainties to which we are or may become subject. As of September 30, 2024, there have been no further material changes to such risk factors.
Item 2 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Purchases of equity securities. The following table summarizes our purchases of common stock for the three months ended September 30, 2024:
Period
Total Number of Shares Purchased
Average Price Paid per Share (USD)
Cumulative Number of Shares Purchased as Part of Publicly Announced Programs
Maximum Number of Shares that May Yet Be Purchased Under the Program
July 1 - 31, 2024
—
—
42,664,067
12,051,946
August 1 - 31, 2024
221,996
225.23
42,886,063
11,829,950
September 1 - 30, 2024
—
—
42,886,063
11,829,950
Total
221,996
$
225.23
42,886,063
11,829,950
On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock. The program allows us to repurchase shares of our common stock from time to time for cash in the open market, or in negotiated or block transactions, as market and business conditions warrant and subject to applicable legal requirements. The share repurchase program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors. All share repurchases after February 21, 2014 have been executed under this program. Since approval of the share repurchase program in 2014 through September 30, 2024, we have repurchased a total of 8.2 million shares under this repurchase program for an aggregate of $612.7 million.
Item 3 Defaults Upon Senior Securities
None
Item 4 Mine Safety Disclosures
None
Item 5 Other Information
Rule 10b5-1 Trading Plans of Directors and Executive Officers
Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act and in compliance with guidelines specified by our insider trading policy. In accordance with Rule 10b5-1 and our insider trading
policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our stock, including shares acquired pursuant to our equity incentive plans. Under a Rule 10b5-1 trading plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The use of these trading plans permits asset diversification as well as personal financial and tax planning. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with SEC rules, the terms of our insider trading policy and certain minimum holding requirements.
During the quarterly period ended September 30, 2024, none of our directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
The following financial statements from ResMed Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed on October 24, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, (v) the Notes to the Condensed Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.