Year-over-year revenue grows 14%, operating profit up 8%, non-GAAP operating profit up 7%

Quarterly dividend increases 8% to $0.42 per share

Company to host a virtual Investor Day on September 8, 2021, at 1:30 p.m. PT

Revenue increased by 14% to $876.1 million; up 10% on a constant currency basis

Gross margin of 56.0%; non-GAAP gross margin contracted 260 bps to 57.3%

Income from operations increased 8%; non-GAAP operating profit up 7%

Diluted earnings per share of $1.33; non-GAAP diluted earnings per share of $1.35

Quarterly dividend increased by 8% to $0.42 per share

Revenue increased 8% to $3.2 billion; up 6% on a constant currency basis

Gross margin of 57.5%; non-GAAP gross margin contracted 70 bps to 59.1%

Income from operations increased 12%; non-GAAP operating profit up 12%

Diluted earnings per share of $3.24; non-GAAP diluted earnings per share of $5.33

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

Revenue

Gross margin ^(B)

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)

Revenue

Gross margin ^(B)

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.

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

During the June quarter, we derived incremental respiratory care revenue from COVID-19 related demand of approximately $20.0 million whereas our prior year quarter included incremental revenue of approximately $125.0 million. Excluding the impact of the incremental respiratory care revenue associated with COVID-19, revenue increased by 29 percent on a constant currency basis.

Revenue in the U.S., Canada, and Latin America, excluding Software as a Service, grew by 18 percent, driven by increased demand for our sleep devices and masks, including recovery of core sleep patient flow that was previously impacted by COVID-19 and increased demand following a recent product recall by one of our competitors, partially offset by decreased COVID-19 related demand for our ventilators.

Revenue in Europe, Asia, and other markets grew by 2 percent on a constant currency basis, primarily driven by strong sales across our mask product portfolio, partially offset by lower device sales due to the incremental COVID-19 respiratory care revenue generated in the prior year quarter. Excluding the impact of the incremental respiratory care revenue associated with COVID-19, revenue increased by 35 percent on a constant currency basis.

Software as a Service revenue increased by 5 percent, due to continued growth in resupply service offerings and stabilizing patient flow in out-of-hospital care settings.

Gross margin decreased by 230 basis points and non-GAAP gross margin decreased by 260 basis points, mainly due to an unfavorable product mix, specifically a proportional increase in lower-margin Sleep devices, lower average selling prices, and unfavorable foreign currency movements.

Selling, general, and administrative expenses increased by 4 percent on a constant currency basis. SG&A expenses improved to 20.7 percent of revenue in the quarter, compared with 21.5 percent in the same period of the prior year. These changes in SG&A expenses were mainly due to increases in employee-related expenses, partially offset by a reduction in doubtful debt expenses.

Income from operations increased by 8 percent and non-GAAP income from operations increased by 7 percent.

Net income grew by 10 percent and diluted earnings per share grew by 9 percent. Non-GAAP net income grew by 3 percent and non-GAAP diluted earnings per share grew by 2 percent, predominantly attributable to strong sales.

Cash flow from operations for the quarter was $226.5 million, compared to net income in the current quarter of $195.1 million and non-GAAP net income of $198.4 million. During the quarter we paid $56.8 million in dividends.

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

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⁾

Litigation settlement expenses ⁽¹⁾

Total operating expenses

Income from operations

Other income (expenses), net:

Interest income (expense), net

Loss attributable to equity method 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.

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

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

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

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 fair value of business combination contingent consideration

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 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

Purchases of 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

Taxes paid related to net share settlement of equity awards

Payment of business combination contingent consideration

Proceeds from borrowings, net of borrowing costs

Repayment of borrowings

Dividends paid

Net cash used in 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

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

Revenue

Add back: Deferred revenue fair value adjustment ^(A)

Non-GAAP Revenue

GAAP Cost of sales

Less: Amortization of acquired intangibles ^(A)

Less: Restructuring - cost of sales ^(A)

Non-GAAP cost of sales

GAAP gross profit

GAAP gross margin

Non-GAAP gross profit

Non-GAAP gross margin

GAAP income from operations

Amortization of acquired intangibles - cost of sales ^(A)

Amortization of acquired intangibles - operating expenses ^(A)

Restructuring - cost of sales ^(A)

Restructuring - operating expenses ^(A)

Deferred revenue fair value adjustment ^(A)

Litigation settlement expenses ^(A)

Non-GAAP income from operations

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

GAAP net income

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

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

Fair value impairment of investment ^(A)

Deferred revenue fair value adjustment, net of tax ^(A)

Litigation settlement expenses, net of tax ^(A)

Non-GAAP net income ^(A)

GAAP 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, reserve for disputed tax positions, restructuring expenses, the (gain) loss on equity investments, the fair value impairment of investment, deferred revenue fair value adjustment and litigation settlement expenses 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.

RMD Fourth Quarter 2021 Earnings Press Release – August 5, 2021

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.