ResMed (NYSE:RMD), a medical device company focused on breathing disorders, reported its fiscal fourth-quarter and full-year 2019 results on Thursday.

Revenue grew 13% when compared to the year-ago period, which represents yet another sequential acceleration on a sequential basis. However, expenses remain elevated as the company continues to integrate a handful of recent acquisitions. The net result is very little growth on the bottom line.

ResMed's fiscal fourth-quarter results: The raw numbers


Fiscal Q4 2019

Fiscal Q4 2018



$705 million

$623.6 million


Non-GAAP net income

$137.6 million

$136.3 million


Non-GAAP earnings per share




Data source: ResMed. GAAP = generally accepted accounting principles.

What happened with ResMed this quarter?

  • On a currency-neutral basis, revenue growth would have been 15%.
  • Software-as-a-service (SaaS) sales grew 111%, due to the combination of organic sales growth and the acquisitions of MatrixCare and HEALTHCAREfirst.
  • SG&A (selling, general, and administrative) expenses jumped 9%, mostly as a result of recent acquisitions.
  • Gross margin expanded 120 basis points to 59.3%.
  • Non-GAAP operating profit rose 18% to $182 million.
  • Non-GAAP EPS was $0.95. That was a penny ahead of what Wall Street was expecting.
  • The dividend was raised by 5%. The new quarterly payout is $0.39 per share.

Zooming out to the full year, here are the key metrics from fiscal 2019:

  • Revenue grew 11% to $2.6 billion.
  • Gross margin expanded 80 basis points to 59%.
  • GAAP income from operations grew 7% to $579 million.
  • Non-GAAP operating profit up 18% $716.3 million.
  • GAAP diluted earnings per share grew 28% to $2.80.
  • Non-GAAP earnings per share grew 3% to $3.64.
A medical chart reading Diagnosis: Sleep apnea, with a stethoscope

Image source: Getty Images.

What management had to say

CEO Mick Farrell was pleased with ResMed's performance in fiscal 2019:

Recent mask launches have driven market share gains while continued adoption of our SaaS solutions is driving both revenue growth and a steady margin profile. We delivered another quarter of operating leverage, which gives us flexibility as we execute on our long-term strategy to provide innovative products, software, and solutions to improve health outcomes, create efficiencies, and reduce overall healthcare system costs.

On the conference call with investors, Farrell expounded on the macro trends driving the market forward:

Underlying patient growth remains healthy around the globe. ResMed is well-positioned to continue to benefit from strong fundamental market dynamics, including an aging population, as well as increased awareness and attention from governments, payers, providers, and physicians to better manage chronic disease.

Looking forward

ResMed's stock pushed a few percentage points higher the morning after the earnings were released, which was most likely caused by the modest bottom-line beat.

Management doesn't provide investors with guidance, but on the earnings call, Farrell stated the company aims to improve 250 million lives in 2025, which implies steady double-digit growth.

As usual, Farrell capped off his prepared remarks on the conference call by reaffirming that ResMed is set up for long-term success:

We positioned ResMed for the long term as an innovative global leader in digital health. Our triple aim is to slow chronic disease progression, to reduce overall healthcare system costs, and to improve outcomes and quality of life for the ultimate customer, the patient.

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