Resmed/RMD

Strong beat from Resmed, ahead of consensus across the board.

The key bits, strong revenue growth (+7%) and a material recovery in gross margin (+240 bps), with a variety of factors contributing (everything from reduced freight costs, manufacturing improvements, favourable product mix and higher prices).

A key worry/fear/concern from the market has been GLP-1, weight loss drugs; our contention has been that these are complements, at least in the short to medium run. On RMD’s numbers, those on GLP-1 have a 10.5% higher propensity to start PAP therapy.

Debt came down by $220M in the quarter, and will likely keep coming down given the material cashflow generation. ND/EBITDA is <1x in any case, which is very low.

Overall, strong result.

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