What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-01-31 compared with 2024-10-25 · 342 added, 161 removed, 929 unchanged (35% of the section changed)

3 unchanged sentences

(In US$ and in thousands, except share and per share data)

September 30,

2024 June 30,

1 unchanged sentence

Cash and cash equivalents $ 521,944 $ 238,361

Accounts receivable, net of allowances of $ 23,600 and $ 21,132 at September 30, 2024 and June 30, 2024, respectively

Accounts receivable, net of allowances of $ 20,666 and $ 21,132 at December 31, 2024 and June 30, 2024, respectively

859,937 837,275

33 unchanged sentences

Common stock, $ 0.004 par value, 350,000,000 shares authorized;

189,662,212 issued and 146,776,149 outstanding at September 30, 2024 and 189,565,112 issued and 146,901,045 outstanding at June 30, 2024

190,049,242 issued and 146,856,329 outstanding at December 31, 2024 and 189,565,112 issued and 146,901,045 outstanding at June 30, 2024

Additional paid-in capital 1,957,359 1,896,604

Retained earnings 5,492,038 4,991,647

Treasury stock, at cost, 42,886,063 shares at September 30, 2024 and 42,664,067 shares at June 30, 2024

Treasury stock, at cost, 43,192,913 shares at December 31, 2024 and 42,664,067 shares at June 30, 2024

( 1,898,258 ) ( 1,773,267 )

8 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Net revenue - Sleep and Breathing Health products

9 unchanged sentences

Amortization of acquired intangible assets - Sleep and Breathing Health products

1,230 1,324 2,440 3,240

Amortization of acquired intangible assets - Residential Care Software

6,404 6,933 12,864 13,924

Amortization of acquired intangible assets 7,634 8,257 15,304 17,164

4 unchanged sentences

Amortization of acquired intangible assets 11,047 11,577 22,451 24,056

Restructuring expenses (note 11)

— 64,228 — 64,228

Total operating expenses 334,032 371,840 663,940 682,903

19 unchanged sentences

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In US$ and in thousands)

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Net income $ 344,622 $ 208,800 $ 655,977 $ 428,222

29 unchanged sentences

189,662 $ 758 $ 1,924,584 ( 42,886 ) $ ( 1,823,272 ) $ 5,225,111 $ ( 132,155 ) $ 5,195,026

Common stock issued on exercise of options 63 — 6,904 — — — — 6,904

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 215 2 ( 16,736 ) — — — — ( 16,734 )

Common stock issued on employee stock purchase plan 109 — 19,973 — — — — 19,973

Treasury stock purchases — — — ( 307 ) ( 74,986 ) — — ( 74,986 )

Stock-based compensation costs — — 22,634 — — — — 22,634

Other comprehensive income — — — — — — ( 166,735 ) ( 166,735 )

Net income — — — — — 344,622 — 344,622

Dividends declared ($ 0.53 per common share)

— — — — — ( 77,695 ) — ( 77,695 )

Balance, December 31, 2024

190,049 $ 760 $ 1,957,359 ( 43,193 ) $ ( 1,898,258 ) $ 5,492,038 $ ( 298,890 ) $ 5,253,009

See the accompanying notes to the unaudited condensed consolidated financial statements.

20 unchanged sentences

188,921 $ 588 $ 1,791,351 ( 41,836 ) $ ( 1,623,256 ) $ 4,401,841 $ ( 320,148 ) $ 4,250,376

Common stock issued on exercise of options 24 — 1,557 — — — — 1,557

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 163 1 ( 7,798 ) — — — — ( 7,797 )

Common stock issued on employee stock purchase plan 151 1 17,966 — — — — 17,967

Treasury stock purchases

— ( 2 ) 2 ( 336 ) ( 50,007 ) — — ( 50,007 )

Stock-based compensation costs — — 19,840 — — — — 19,840

Other comprehensive income — — — — — — 111,796 111,796

Net income — — — — — 208,800 — 208,800

Dividends declared ($ 0.48 per common share)

— — — — — ( 70,678 ) — ( 70,678 )

Balance, December 31, 2023

189,259 $ 588 $ 1,822,918 ( 42,172 ) $ ( 1,673,263 ) $ 4,539,963 $ ( 208,352 ) $ 4,481,854

See the accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

(In US$ and in thousands)

Three Months Ended

September 30,

Six Months Ended

Cash flows from operating activities:

6 unchanged sentences

(Gain) loss on equity investments (note 5) 2,119 2,491

Non-cash restructuring expenses (note 11)

Changes in operating assets and liabilities:

35 unchanged sentences

Goodwill on acquisition — 77,712

Deferred payments

Fair value of contingent consideration

11 unchanged sentences

We also operate a software as a service (“SaaS”) business in the United States and Germany that includes residential software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

During the three months ended September 30, 2024, we renamed our operating segments from Sleep and Respiratory Care to Sleep and Breathing Health and from Software as a Service to Residential Care Software in alignment with our 2030 strategy.

During the six months ended December 31, 2024, we renamed our operating segments from Sleep and Respiratory Care to Sleep and Breathing Health and from Software as a Service to Residential Care Software in alignment with our 2030 strategy.

There have been no changes in the preparation and disclosure of financial information by operating segment.

7 unchanged sentences

The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025.

The condensed consolidated financial statements for the three months ended September 30, 2024 and September 30, 2023 are unaudited and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K (our “Form 10-K”) for the year ended June 30, 2024.

The condensed consolidated financial statements for the three and six months ended December 31, 2024 and December 31, 2023 are unaudited and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K (our “Form 10-K”) for the year ended June 30, 2024.

Revenue Recognition

10 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

U.S., Canada and Latin America

30 unchanged sentences

The following table summarizes our contract balances (in thousands):

September 30,

2024 June 30,

37 unchanged sentences

When lease contracts also include the sale of masks and accessories, we allocate contract consideration to those items on a relative standalone price basis and recognize revenue when control transfers to the customer.

Operating lease revenue was $ 24.5 million for the three months ended September 30, 2024 and $ 22.7 million for the three months ended September 30, 2023.

Operating lease revenue was $ 24.1 million and $ 48.6 million for the three and six months ended December 31, 2024 and $ 23.1 million and $ 45.7 million for the three and six months ended December 31, 2023.

Recently Issued Accounting Standards Not Yet Adopted

4 unchanged sentences

Improvements to Reportable Segment Disclosures," which expands segment disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This ASU is applicable to our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods.

Early adoption is permitted and the amendments

While the ASU implements further segment disclosure requirements, it does not change how an entity identifies its operating or reportable segments and it will have no impact on

PART I – FINANCIAL INFORMATION Item 1

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

must be applied retrospectively to all prior periods presented.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

our consolidated financial condition, results of operations or cash flows.

This ASU is applicable to our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods.

Early adoption is permitted and the amendments must be applied retrospectively to all prior periods presented.

ASU 2023-09 Income Taxes (Topic 740):

5 unchanged sentences

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses," which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity's definition of selling expenses.

This ASU is applicable to our Annual Report on Form 10-K for the fiscal year ended June 30, 2028, and subsequent interim periods.

Early adoption is permitted and the amendments may be either applied prospectively to financial statements issued for reporting periods after the effective date of the amendment or retrospectively to all prior periods presented.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

(2) Segment Information

14 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Net revenue by segment

15 unchanged sentences

Amortization of acquired intangible assets 18,681 19,834 37,755 41,220

Restructuring expenses — 64,228 — 64,228

Masks with magnets field safety notification expenses (1)

— 6,351 — 6,351

Astral field safety notification expenses (2)

3 unchanged sentences

Loss on equity investments

1,439 1,888 2,119 2,491

Other, net ( 2,216 ) 686 219 ( 1,963 )

Income before income taxes $ 418,322 $ 259,454 $ 801,820 $ 531,645

(1) The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that incorporate magnets.

(2) The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

1 unchanged sentence

Components of selected captions in the condensed consolidated balance sheets consisted of the following (in thousands):

Inventories September 30,

Inventories December 31,

2024 June 30,

3 unchanged sentences

Total inventories $ 882,103 $ 822,250

Prepaid expenses and other current assets September 30,

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Prepaid expenses and other current assets December 31,

2024 June 30,

Prepaid taxes $ 171,592 $ 107,623

Income taxes receivable 99,816 —

Prepaid inventories 104,232 172,198

1 unchanged sentence

Total prepaid expenses and other current assets $ 572,193 $ 459,833

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Property, Plant and Equipment September 30,

Property, Plant and Equipment December 31,

2024 June 30,

2 unchanged sentences

Property, plant and equipment, net $ 520,162 $ 548,025

Other Intangible Assets September 30,

Other Intangible Assets December 31,

2024 June 30,

11 unchanged sentences

There are no expected residual values related to these intangible assets.

We did not record any intangible asset impairments during the three and six months ended December 31, 2024.

During the three and six months ended December 31, 2023, we impaired $ 18.6 million of developed/core product technology intangible assets, $ 14.5 million of customer relationship intangible assets, and $ 0.1 million of other intangibles associated with restructuring activities.

These non-cash charges were recorded within restructuring expenses in the condensed consolidated statements of operations.

Refer to Note 11, Restructuring Expenses, for the facts and circumstances leading to the impairments.

A reconciliation of changes in our goodwill by reportable segment is as follows (in thousands):

Three Months Ended September 30, 2024

Six Months Ended December 31, 2024

Sleep and Breathing Health

8 unchanged sentences

The following discusses our investments in marketable equity securities, non-marketable equity securities, and investments accounted for under the equity method.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Our marketable equity securities are publicly traded stocks measured at fair value and classified within Level 1 in the fair value hierarchy because we use quoted prices for identical assets in active markets.

4 unchanged sentences

All gains and losses on marketable and non-marketable equity securities, realized and unrealized, are recognized in gain (loss) on equity investments as a component of other income (loss), net on the condensed consolidated statements of operations.

Under this method, we record our share

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

of gains or losses attributable to equity method investments as a component of other income (loss), net on the condensed consolidated statements of operations.

Equity investments whereby we have significant influence, but not control over the investee and are not the primary beneficiary of the investee’s activities, are accounted for under the equity method and are recorded in prepaid taxes and other non-current assets on the condensed consolidated balance sheets.

Under this method, we record our share of gains or losses attributable to equity method investments as a component of other income (loss), net on the condensed consolidated statements of operations.

Equity investments by measurement category were as follows (in thousands):

Measurement category September 30,

Measurement category December 31,

2024 June 30,

3 unchanged sentences

Total $ 146,969 $ 151,227

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The following tables show a reconciliation of the changes in our equity investments (in thousands):

Three Months Ended September 30, 2024

Six Months Ended December 31, 2024

Non-marketable securities Marketable securities Equity method investments Total

6 unchanged sentences

Gain attributable to equity method investments

— — 2,040 2,040

Foreign currency translation adjustments ( 36 ) — ( 2,115 ) ( 2,151 )

Carrying value at the end of the period $ 66,455 $ 14,777 $ 65,737 $ 146,969

Three Months Ended September 30, 2023

Six Months Ended December 31, 2023

Non-marketable securities Marketable securities Equity method investments Total

2 unchanged sentences

4,180 — 3,125 7,305

Observable price adjustments on non-marketable equity securities

2,315 — — 2,315

Proceeds from exits of investments

4 unchanged sentences

Foreign currency translation adjustments

— — ( 1,810 ) ( 1,810 )

Carrying value at the end of the period $ 74,993 $ 7,617 $ 66,088 $ 148,698

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of September 30, 2024 for the three months ended September 30, 2024 were $ 1.1 million.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of September 30, 2023 for the three months ended September 30, 2023 were $ 0.6 million.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of December 31, 2024 for the three and six months ended December 31, 2024 were $ 1.4 million and $ 2.5 million.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of December 31, 2023 for the three and six months ended December 31, 2023 were $ 1.9 million and $ 2.5 million.

(6) Income Taxes

In accordance with ASC Topic 740, "Income Taxes" ("ASC 740"), each interim reporting period is considered integral to the annual period, and tax expense is measured using an estimated annual effective tax rate.

An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

Our income tax returns are based on calculations and assumptions subject to audit by various tax authorities.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws.

We regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.

We are currently under audit by the Australian Taxation Office for the 2018 tax year.

If any ongoing tax audits are resolved in a manner not consistent with management’s expectations, the result could be a material adjustment to our provision for income taxes in a future period.

PART I – FINANCIAL INFORMATION Item 1

2 unchanged sentences

Debt consisted of the following (in thousands):

September 30,

2024 June 30,

21 unchanged sentences

The outstanding principal amounts will bear interest at a rate equal to the Adjusted Term SOFR (as defined in the Revolving Credit Agreement) plus 0.75 % to 1.50 % (depending on the then-applicable leverage ratio) or the Base Rate (as defined in the Revolving Credit Agreement and the Term Credit Agreement, as applicable) plus 0.0 % to 0.50 % (depending on the then-applicable leverage ratio).

At September 30, 2024, the interest rate that was being charged on the outstanding principal amounts was 5.5 %.

At December 31, 2024, the interest rate that was being charged on the outstanding principal amounts was 5.2 %.

An applicable commitment fee of 0.075 % to 0.150 % (depending on the then-applicable leverage ratio)

3 unchanged sentences

applies on the unused portion of the revolving credit facility.

As of September 30, 2024, we had $ 1,500.0 million available for draw down under the revolving credit facility.

As of December 31, 2024, we had $ 1,500.0 million available for draw down under the revolving credit facility.

We are required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets.

As the Revolving Credit and Term Credit Agreements’ interest rate is calculated as Adjusted Term SOFR plus the spreads described above, its carrying amount is equivalent to its fair value as at September 30, 2024 and June 30, 2024, which was $ 180.0 million and $ 210.0 million, respectively.

As the Revolving Credit and Term Credit Agreements’ interest rate is calculated as Adjusted Term SOFR plus the spreads described above, its carrying amount is equivalent to its fair value as at December 31, 2024 and June 30, 2024, which was $ 175.0 million and $ 210.0 million, respectively.

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 (collectively referred to as the “Senior Notes”).

6 unchanged sentences

As of September 30, 2024 and June 30, 2024, the Senior Notes had a carrying amount of $ 500.0 million, excluding deferred borrowing costs, and an estimated fair value of $ 481.0 million and $ 463.0 million, respectively.

As of December 31, 2024 and June 30, 2024, the Senior Notes had a carrying amount of $ 500.0 million, excluding deferred borrowing costs, and an estimated fair value of $ 468.1 million and $ 463.0 million, respectively.

Quoted market prices in active markets for similar liabilities based inputs (Level 2) were used to estimate fair value.

At September 30, 2024, we were in compliance with our debt covenants and there was $ 680.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

At December 31, 2024, we were in compliance with our debt covenants and there was $ 675.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

(8) Earnings Per Share

1 unchanged sentence

For purposes of calculating diluted earnings per share, the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options and restricted stock units.

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings per share were 159,055 and 417,364 for the three months ended September 30, 2024 and 2023, respectively, as the effect would have been anti-dilutive.

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings per share were 175,118 and 663,485 for the three months ended December 31, 2024 and 2023, respectively, and 289,854 and 643,466 for the six months ended December 31, 2024 and 2023, respectively, as the effect would have been anti-dilutive.

PART I – FINANCIAL INFORMATION Item 1

3 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Net income $ 344,622 $ 208,800 $ 655,977 $ 428,222

28 unchanged sentences

(collectively “respondents”).

In the ITC investigation, Philips seeks an order excluding communications modules, and products that contain them, from importation into the United States based on alleged infringement of 3G and 4G standard essential patents held by Philips.

In the ITC investigation, Philips sought an order excluding communications modules, and products that contain them, from importation into the United States based on alleged infringement of 3G and 4G standard essential patents held by Philips.

On October 6-14, 2021, the administrative law judge held a hearing on the merits.

The administrative law judge issued an initial determination on April 1, 2022, finding no violation of any of the Philips' patents asserted in the ITC.

Philips sought review by the full ITC.

On July 6, 2022, the Commission affirmed the administrative law judge’s determination that there was no violation of asserted Philips' patents.

The Commission terminated the ITC proceedings.

Philips sought review by the full ITC, however, the ITC affirmed the administrative law judge’s determination that there was no violation of asserted Philips' patents and thereafter terminated the ITC proceedings.

Philips did not appeal the ITC’s decision.

On December 17, 2020, Philips filed companion cases for patent infringement against the same defendants in the United States District Court for the District of Delaware, case nos.

1:20-cv-01707, 01708, 01709, 01710, 01711, and 01713 (CFC) seeking damages, an injunction, and a declaration from the court on the amount of a fair reasonable and non-discriminatory license rate for the standard essential patents it is asserting against the communications module defendants.

The district court cases were stayed pending the resolution of the ITC proceedings.

The parties have returned to the district

1:20-cv-01707, 01708, 01709, 01710, 01711, and 01713 (CFC) seeking damages, an injunction, and a declaration from the court on the amount of a fair reasonable and non-discriminatory license rate for the standard essential patents it asserted against the communications module defendants.

The district court cases were stayed pending the resolution of the ITC proceedings but recommenced following the ITC termination.

PART I – FINANCIAL INFORMATION Item 1

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

court for further proceedings.

We were not a party to the ITC investigation, and we are not a party to the district court cases, but we sell products that incorporate communications modules at issue in the district court case.

were not a party to the ITC investigation, nor were we a party to the district court cases, but we sell products that incorporate communications modules at issue in the district court case.

The first trial in the cases by Philips against the communications module defendants was originally set for August 12, 2024.

28 unchanged sentences

On October 17, 2024, the PTAB denied ResMed Corp.’s request for rehearing of its decision to deny the petition for post-grant review of U.S.

On October 11, 2024, ResMed Corp.

filed a request for ex parte reexamination of U.S.

11,375,921, and on November 15, 2024, the United States Patent and Trademark Office (the "Patent Office") ordered reexamination of the patent.

On October 17, 2024, ResMed Corp.

filed a request for ex parte reexamination of U.S.

11,786,680, and on December 3, 2024, the Patent Office ordered reexamination of the patent.

Between November 15, 2024, and January 10, 2025, ResMed Corp.

filed petitions with the PTAB seeking Inter Partes Review of the validity of all six patents asserted by Cleveland Medical in the District Court of the Northern District of Ohio proceedings.

It is expected that the PTAB will determine whether to examine the validity of the patents by the summer of 2025.

Based on currently available information, we are unable to make a reasonable estimate of loss or range of losses, if any, arising from matters that remain open.

5 unchanged sentences

This is applied to receivables sold with recourse and is recorded in accrued expenses.

During the three months ended September 30, 2024 and September 30, 2023, receivables sold with limited recourse were $ 51.5 million and $ 47.7 million, respectively.

As of September 30, 2024, the maximum exposure on outstanding receivables sold with recourse and the associated contingent provision were $ 26.4 million and $ 0.8 million, respectively.

During the six months ended December 31, 2024 and December 31, 2023, receivables sold with limited recourse were $ 104.8 million and $ 97.5 million, respectively.

As of December 31, 2024, the maximum exposure on outstanding receivables sold with recourse and the associated contingent provision were $ 28.5 million and $ 0.7 million, respectively.

As of June 30, 2024, the maximum exposure on outstanding receivables sold with recourse and contingent provision were $ 35.8 million and $ 0.8 million, respectively.

6 unchanged sentences

All derivatives are recorded at fair value as either an asset or liability.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the hedged item.

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.

6 unchanged sentences

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.

The notional value of outstanding foreign cross-currency swaps was $ 992.2 million and $ 1,026.2 million at December 31, 2024 and June 30, 2024, respectively.

These contracts mature at various dates prior to December 31, 2029.

8 unchanged sentences

All movements in the fair value of the foreign currency instruments are recorded within other, net in our condensed consolidated statements of income.

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.

The notional value of the outstanding non-designated hedges was $ 1,128.1 million and $ 1,340.0 million at December 31, 2024 and June 30, 2024, respectively.

These contracts mature at various dates prior to September 15, 2025.

4 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

September 30,

2024 June 30,

1 unchanged sentence

Derivative Assets

Designated as Hedging Instruments

Foreign cross-currency swaps – Fair Value Hedge $ 1,555 $ — Prepaid taxes and other non-current assets

Foreign cross-currency swaps – Net Investment Hedge 5,043 — Prepaid taxes and other non-current assets

Not Designated as Hedging Instruments

Foreign currency hedging instruments $ 24,664 $ 2,343 Prepaid expenses and other current assets

Foreign currency hedging instruments 5,958 2,343 Prepaid taxes and other non-current assets

Foreign currency hedging instruments — 89 Prepaid taxes and other non-current assets

Total derivative assets $ 12,556 $ 2,432

10 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Gain (loss) recognized in other comprehensive income (loss) $ 1,657 $ 2,002 $ 2,086 $ 2,590

5 unchanged sentences

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Gain (loss) recognized in cumulative translation adjustment within other comprehensive income (loss) $ 55,049 $ ( 27,828 ) $ 26,313 $ ( 4,393 )

2 unchanged sentences

We recognized the following gains (losses) in the condensed consolidated statement of operations on derivatives not designated as hedging instruments (in thousands):

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

Gain (loss) recognized on foreign currency hedging instruments in other, net $ ( 46,228 ) $ 30,654 $ ( 3,445 ) $ 15,581

4 unchanged sentences

We minimize counterparty credit risk by entering into derivative transactions with major financial institutions.

(11) Restructuring Expenses

We did not record any restructuring expenses during the three and six months ended December 31, 2024.

During the three and six months ended December 31, 2023, we recorded $ 64.2 million of restructuring related charges associated with an evaluation of our existing operations to increase operational efficiency, decrease costs and increase profitability.

Although the costs associated with the restructuring plan have not been allocated to our business segments' results in Note 2 - Segment Information, the restructuring plan impacted both our Sleep and Breathing Health and Residential Care Software segments.

Restructuring charges for the three and six months ended December 31, 2023 are comprised of $ 28.6 million of employee severance and other one-time termination benefits, $ 33.2 million of intangible asset impairments associated with the wind down of certain business activities, and $ 2.4 million of other miscellaneous asset impairments.

These costs are separately presented as restructuring expenses within our condensed consolidated statement of operations.

PART I – FINANCIAL INFORMATION Item 2

21 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is an overview of our results of operations for the three months ended September 30, 2024.

The following is an overview of our results of operations for the three and six months ended December 31, 2024.

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition.

11 unchanged sentences

We are committed to ongoing investment in research and development and product enhancements.

During the three months ended September 30, 2024, we invested $79.5 million on research and development activities, which represents 6.5% of net revenues, with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs.

During the three months ended December 31, 2024, we invested $81.4 million on research and development activities, which represents 6.3% of net revenues, with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs.

For example, our newest device, AirSense 11, introduced new features such as a touch screen, algorithms for patients new to therapy, digital enhancements, and over-the-air update capabilities.

Through our acquisitions of Brightree in 2016, HEALTHCAREfirst and MatrixCare in 2018, and MEDIFOX DAN in 2022, our operations include residential software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

Through our acquisitions of Brightree in 2016, HEALTHCAREfirst and MatrixCare in 2018, and MEDIFOX DAN in 2022, our operations include residential care software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

These platforms comprise our Residential Care Software business and, along with our cloud-based remote monitoring and therapy management system, and a robust product pipeline, these products should continue to provide us with a strong platform for future growth.

We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry (“Sleep and Breathing Health”) and the supply of business management software as a service to out-of-hospital health providers (“Residential Care Software”).

There have been no changes in the preparation and disclosure of financial information by operating segment.

Net revenue for the three months ended September 30, 2024 was $1.2 billion, an increase of 11% compared to the three months ended September 30, 2023.

Gross margin was 58.6% for the three months ended September 30, 2024 compared to 54.4% for the three months ended September 30, 2023.

Diluted earnings per share was $2.11 for the three months ended September 30, 2024, compared to diluted earnings per share of $1.49 for the three months ended September 30, 2023.

At September 30, 2024, our cash and cash equivalents totaled $426.4 million, our total assets were $7.2 billion and our stockholders’ equity was $5.2 billion.

Net revenue for the three months ended December 31, 2024 was $1.3 billion, an increase of 10% compared to the three months ended December 31, 2023.

Gross margin was 58.6% for the three months ended December 31, 2024 compared to 55.6% for the three months ended December 31, 2023.

Diluted earnings per share was $2.34 for the three months ended December 31, 2024, compared to diluted earnings per share of $1.42 for the three months ended December 31, 2023.

At December 31, 2024, our cash and cash equivalents totaled $521.9 million, our total assets were $7.1 billion and our stockholders’ equity was $5.3 billion.

PART I – FINANCIAL INFORMATION Item 2

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Results of Operations

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

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).

Three Months Ended December 31, 2024 Compared to the Three Months Ended December 31, 2023

Net revenue for the three months ended December 31, 2024 increased to $1,282.1 million from $1,162.8 million for the three months ended December 31, 2023, an increase of $119.3 million or 10% (a 10% increase on a constant currency basis).

The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):

Three Months Ended

September 30, % Change Constant Currency*

December 31, % Change Constant Currency*

U.S., Canada and Latin America

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Sleep and Breathing Health

Net revenue from our Sleep and Breathing Health business for the three months ended September 30, 2024 was $1,067.7 million, an increase of 11% compared to net revenue for the three months ended September 30, 2023.

Net revenue from our Sleep and Breathing Health business for the three months ended December 31, 2024 was $1,125.6 million, an increase of 11% compared to net revenue for the three months ended December 31, 2023.

Movements in international currencies against the U.S.

dollar positively impacted net revenue by approximately $3.9 million for the three months ended September 30, 2024.

Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended September 30, 2024 increased by 11% compared to the three months ended September 30, 2023.

dollar negatively impacted net revenue by approximately $2.1 million for the three months ended December 31, 2024.

Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended December 31, 2024 increased by 11% compared to the three months ended December 31, 2023.

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the three months ended September 30, 2024 increased to $707.3 million from $638.4 million for the three months ended September 30, 2023, an increase of $68.9 million or 11%.

Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the three months ended December 31, 2024 increased to $748.9 million from $669.3 million for the three months ended December 31, 2023, an increase of $79.6 million or 12%.

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenue in combined Europe, Asia and other markets increased for the three months ended September 30, 2024 to $360.4 million from $324.7 million for the three months ended September 30, 2023, an increase of $35.8 million or 11% (a

Net revenue in combined Europe, Asia and other markets increased for the three months ended December 31, 2024 to $376.6 million from $348.5 million for the three months ended December 31, 2023, an increase of $28.1 million or 8% (an

PART I – FINANCIAL INFORMATION Item 2

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The constant currency increase in device and mask sales in combined Europe, Asia and other was primarily attributable to increased demand and unit sales.

Net revenue from devices for the three months ended September 30, 2024 increased to $625.8 million from $564.7 million for the three months ended September 30, 2023, an increase of $61.1 million or 11%, including an increase of 11% in the U.S., Canada and Latin America and an increase of 10% in combined Europe, Asia and other markets (a 9% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended September 30, 2024 increased by 10%.

Net revenue from masks and other for the three months ended September 30, 2024 increased to $442.0 million from $398.3 million for the three months ended September 30, 2023, an increase of $43.6 million or 11%, including an increase of 10% in the U.S., Canada and Latin America and an increase of 13% in combined Europe, Asia and other markets (a 11% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales for the three months ended September 30, 2024 increased by 11%.

Net revenue from devices for the three months ended December 31, 2024 increased to $669.3 million from $606.0 million for the three months ended December 31, 2023, an increase of $63.3 million or 10%, including an increase of 12% in the U.S., Canada and Latin America and an increase of 9% in combined Europe, Asia and other markets (a 9% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended December 31, 2024 increased by 11%.

Net revenue from masks and other for the three months ended December 31, 2024 increased to $456.3 million from $411.9 million for the three months ended December 31, 2023, an increase of $44.4 million or 11%, including an increase of 12% in the U.S., Canada and Latin America and an increase of 7% in combined Europe, Asia and other markets (a 7% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales for the three months ended December 31, 2024 increased by 11%.

Residential Care Software

Net revenue from our Residential Care Software business for the three months ended September 30, 2024 increased to $156.8 million from $139.3 million for the three months ended September 30, 2023, an increase of $17.5 million or 13% (a 12% increase on a constant currency basis).

Net revenue from our Residential Care Software business for the three months ended December 31, 2024 increased to $156.5 million from $144.9 million for the three months ended December 31, 2023, an increase of $11.6 million or 8% (an 8% increase on a constant currency basis).

The increase was predominantly due to continued growth in the Home Medical Equipment ("HME") and MEDIFOX DAN verticals within our Residential Care Software business.

Six Months Ended December 31, 2024 Compared to the Six Months Ended December 31, 2023

Net revenue for the six months ended December 31, 2024 increased to $2,506.6 million from $2,265.1 million for the six months ended December 31, 2023, an increase of $241.5 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):

Six Months Ended

December 31, % Change Constant Currency*

U.S., Canada and Latin America

Devices $ 798,983 $ 717,233 11 %

Masks and other 657,271 590,455 11

Total U.S., Canada and Latin America

$ 1,456,254 $ 1,307,688 11

Combined Europe, Asia and other markets

Devices $ 496,104 $ 453,492 9 % 9 %

Masks and other 240,972 219,712 10 9

Total Combined Europe, Asia and other markets

$ 737,076 $ 673,204 9 9

Global revenue

Total Devices $ 1,295,087 $ 1,170,725 11 % 10 %

Total Masks and other 898,243 810,167 11 11

Total Sleep and Breathing Health

$ 2,193,330 $ 1,980,892 11 11

Residential Care Software

313,268 284,230 10 10

Total $ 2,506,598 $ 2,265,122 11 11

Sleep and Breathing Health

Net revenue from our Sleep and Breathing Health business for the six months ended December 31, 2024 was $2,193.3 million, an increase of 11% compared to net revenue for the six months ended December 31, 2023.

Movements in international currencies against the U.S.

dollar positively impacted net revenue by approximately $1.8 million for the six months ended December 31, 2024.

Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the six months ended December 31, 2024 increased by 11% compared to the six months ended December 31,

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the six months ended December 31, 2024 increased to $1,456.3 million from $1,307.7 million for the six months ended December 31, 2023, an increase of $148.6 million or 11%.

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales .

Net revenue in combined Europe, Asia and other markets increased for the six months ended December 31, 2024 to $737.1 million from $673.2 million for the six months ended December 31, 2023, an increase of $63.9 million or 9% (a 9% increase on a constant currency basis).

The constant currency increase in device and mask sales in combined Europe, Asia and other markets was primarily attributable to increased demand and unit sales.

Net revenue from devices for the six months ended December 31, 2024 increased to $1,295.1 million from $1,170.7 million for the six months ended December 31, 2023, an increase of $124.4 million or 11%, including an increase of 11% in the U.S., Canada and Latin America and an increase of 9% in combined Europe, Asia and other markets (a 9% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the six months ended December 31, 2024 increased by 10%.

Net revenue from masks and other for the six months ended December 31, 2024 increased to $898.2 million from $810.2 million for the six months ended December 31, 2023, an increase of $88.1 million or 11%, including an increase of 11% in the U.S., Canada and Latin America and an increase of 10% in combined Europe, Asia and other markets (a 9% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 11%, compared to the six months ended December 31, 2023.

Residential Care Software

Net revenue from our Residential Care Software business for the six months ended December 31, 2024 increased to $313.3 million from $284.2 million for the six months ended December 31, 2023, an increase of $29.0 million or 10% (a 10% increase on a constant currency basis).

The increase was predominantly due to continued growth in the HME and MEDIFOX DAN verticals within our Residential Care Software business.

Gross Profit and Gross Margin

Gross profit increased for the three months ended September 30, 2024 to $717.2 million from $600.1 million for the three months ended September 30, 2023, an increase of $117.2 million or 20%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended September 30, 2024 was 58.6% compared to 54.4% for the three months ended September 30, 2023.

The increase in gross margin for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was due primarily to manufacturing efficiencies and component cost improvements, an increase in average selling prices and reduction in amortization of acquired intangibles relating to cost of goods sold as assets have become fully amortized.

Gross profit increased for the three months ended December 31, 2024 to $751.3 million from $646.9 million for the three months ended December 31, 2023, an increase of $104.3 million or 16%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended December 31, 2024 was 58.6% compared to 55.6% for the three months ended December 31, 2023.

The increase in gross margin for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was due primarily to $6.4 million of non-recurring expenses associated with the field safety notifications for masks with magnets recognized during the three months ended December 31, 2023 and manufacturing efficiencies and component cost improvements as well as a reduction in amortization of acquired intangibles relating to cost of goods sold as assets have become fully amortized.

The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that incorporate magnets.

Gross profit increased for the six months ended December 31, 2024 to $1,468.5 million from $1,247.0 million for the six months ended December 31, 2023, an increase of $221.5 million or 18%.

Gross margin for the six months ended December 31, 2024 was 58.6% compared to 55.1% for the six months ended December 31, 2023.

The increase in gross margin for the six months ended December 31, 2024 compared to the six months ended December 31, 2023 was due primarily to $14.3 million of non-recurring expenses associated with the field safety notifications for masks with magnets and Astral devices recognized during the six months ended December 31, 2023 and manufacturing efficiencies and component cost improvements as well as a reduction in the amortization of acquired intangible assets during the six months ended December 31, 2024.

The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

incorporate magnets.

The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

Operating Expenses

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Three Months Ended

September 30, Change % Change Constant Currency

December 31, Change % Change Constant Currency

Selling, general, and administrative $ 241,613 $ 222,155 $ 19,458 9 % 9 %

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Amortization of acquired intangible assets $ 11,047 $ 11,577 $ (530) (5) % (4) %

Six Months Ended

December 31, Change % Change Constant Currency

Selling, general, and administrative $ 480,592 $ 445,029 $ 35,563 8 % 8 %

as a % of net revenue 19.2 % 19.6 %

Research and development $ 160,897 $ 149,590 $ 11,307 8 % 7 %

as a % of net revenue 6.4 % 6.6 %

Amortization of acquired intangible assets $ 22,451 $ 24,056 $ (1,605) (7) % (7) %

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased for the three months ended September 30, 2024 to $239.0 million from $222.9 million for the three months ended September 30, 2023, an increase of $16.1 million or 7%.

Selling, general, and administrative expenses increased for the three months ended December 31, 2024 to $241.6 million from $222.2 million for the three months ended December 31, 2023, an increase of $19.5 million or 9%.

Selling, general, and administrative expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $1.0 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended December 31, 2024 increased by 9% compared to the three months ended December 31, 2023.

As a percentage of net revenue, selling, general, and administrative expenses were 18.8% for the three months ended December 31, 2024, compared to 19.1% for the three months ended December 31, 2023.

The constant currency increase in selling, general, and administrative expenses during the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was primarily due to increases in employee-related costs.

Selling, general, and administrative expenses increased for the six months ended December 31, 2024 to $480.6 million from $445.0 million for the six months ended December 31, 2023, an increase of $35.6 million or 8%.

Selling, general, and administrative expenses were unfavorably impacted by the movement of international currencies against the U.S.

dollar, which increased our expenses by approximately $0.4 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended September 30, 2024 increased by 7% compared to the three months ended September 30, 2023.

As a percentage of net revenue, selling, general, and administrative expenses were 19.5% for the three months ended September 30, 2024, compared to 20.2% for the three months ended September 30, 2023.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the six months ended December 31, 2024 increased by 8% compared to the six months ended December 31, 2023.

As a percentage of net revenue, selling, general, and administrative expenses were 19.2% for the six months ended December 31, 2024, compared to 19.6% for the six months ended December 31, 2023.

The constant currency increase in selling, general, and administrative expenses during the six months ended December 31, 2024 compared to the six months ended December 31, 2023 was primarily due to increases in employee-related costs.

Research and Development Expenses

Research and development expenses increased for the three months ended December 31, 2024 to $81.4 million from $73.9 million for the three months ended December 31, 2023, an increase of $7.5 million, or 10%.

Research and development expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $0.2 million, as reported in U.S.

Excluding the impact of foreign currency

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

The constant currency increase in selling, general, and administrative expenses during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to increases in employee-related costs.

Research and Development Expenses

Research and development expenses increased for the three months ended September 30, 2024 to $79.5 million from $75.7 million for the three months ended September 30, 2023, an increase of $3.8 million, or 5%.

movements, research and development expenses for the three months ended December 31, 2024 increased by 10% compared to the three months ended December 31, 2023.

As a percentage of net revenue, research and development expenses were 6.3% for the three months ended December 31, 2024 compared to 6.4% for the three months ended December 31, 2023.

The constant currency increase in research and development expenses during the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was primarily due to increases in employee-related costs.

Research and development expenses increased for the six months ended December 31, 2024 to $160.9 million from $149.6 million for the six months ended December 31, 2023, an increase of $11.3 million, or 8%.

Research and development expenses were unfavorably impacted by the movement of international currencies against the U.S.

dollar, which increased our expenses by approximately $0.6 million, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses for the three months ended September 30, 2024 increased by 4% compared to the three months ended September 30, 2023.

As a percentage of net revenue, research and development expenses were 6.5% for the three months ended September 30, 2024 compared to 6.9% for the three months ended September 30, 2023.

The constant currency increase in research and development expenses during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to increases in employee-related costs.

dollar, which increased our expenses by approximately $0.4 million for the six months ended December 31, 2024, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 7% compared to the six months ended December 31, 2023.

As a percentage of net revenue, research and development expenses were 6.4% for the six months ended December 31, 2024, compared to 6.6% for the six months ended December 31, 2023.

The increase in research and development expenses in constant currency terms was primarily due to increases in employee-related costs.

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets for the three months ended September 30, 2024 totaled $11.4 million compared to $12.5 million for the three months ended September 30, 2023.

Amortization of acquired intangible assets for the three months ended December 31, 2024 totaled $11.0 million compared to $11.6 million for the three months ended December 31, 2023.

Amortization of acquired intangible assets for the six months ended December 31, 2024 totaled $22.5 million compared to $24.1 million for the six months ended December 31, 2023.

The decrease in amortization of acquired intangible assets for the three and six months ended December 31, 2024 compared to the three and six months ended December 31, 2023 is due to certain acquired intangible assets reaching the end of their useful lives and becoming fully amortized.

Restructuring Expenses

We did not record any restructuring expenses during the three and six months ended December 31, 2024.

During the three and six months ended December 31, 2023, we recorded $64.2 million of restructuring related charges associated with an evaluation of our existing operations to increase operational efficiency, decrease costs and increase profitability.

Restructuring charges for the three and six months ended December 31, 2023 were comprised of $28.6 million of employee severance and other one-time termination benefits, $33.2 million of intangible asset impairments associated with the wind down of certain business activities, and $2.4 million of other miscellaneous asset impairments.

Total Other Income (Loss), Net

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Three Months Ended

September 30,

2024 2023 Change

4 unchanged sentences

Total other income (loss), net $ 1,079 $ (15,640) $ 16,719

Total other income (loss), net for the three months ended September 30, 2024 was a loss of $3.8 million compared to a loss of $16.8 million for the three months ended September 30, 2023.

Interest expense, net, decreased to $1.7 million for the three months ended September 30, 2024 compared to $15.0 million for the three months ended September 30, 2023 due to lower debt levels following repayments on our revolving credit facility.

In addition, we recorded gains attributable to equity method investments for the three months ended September 30, 2024 of $1.0 million compared to losses of $3.9 million for the three months ended September 30, 2023.

Decreases in interest expense, net, and losses attributable to equity method investments were partially offset by foreign exchange net losses for the three months ended September 30, 2024 of $2.4 million compared to foreign exchange net gains of $2.6 million for the three months ended September 30, 2023.

Our effective income tax rate for the three months ended September 30, 2024 was 18.8%, as compared to 19.4% for the three months ended September 30, 2023.

Our effective rate of 18.8% for the three months ended September 30, 2024 differs from the statutory rate of 21.0% primarily due to research credits and foreign operations.

The decrease in our effective tax rate for the three months ended September 30, 2024 was primarily due to a shift in our global mix of earnings.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Six Months Ended

2024 2023 Change

Interest (expense) income, net $ (2,436) $ (28,762) $ 26,326

Gain (loss) attributable to equity method investments

2,040 (3,156) 5,196

Gain (loss) on equity investments

(2,119) (2,491) 372

Other, net (219) 1,963 (2,182)

Total other income (loss), net $ (2,734) $ (32,446) $ 29,712

Total other income (loss), net for the three months ended December 31, 2024 was income of $1.1 million compared to a loss of $15.6 million for the three months ended December 31, 2023.

Interest expense, net, decreased to $0.8 million for the three months ended December 31, 2024 compared to $13.8 million for the three months ended December 31, 2023 due to lower debt levels following repayments on our revolving credit facility.

In addition to decreases in interest expense, net, we recorded foreign exchange net gains for the three months ended December 31, 2024 of $0.4 million compared to foreign exchange net losses of $0.8 million for the three months ended December 31, 2023.

Total other income (loss), net for the six months ended December 31, 2024 was a loss of $2.7 million compared to a loss of $32.4 million for the six months ended December 31, 2023.

Interest expense, net, decreased to $2.4 million for the six months ended December 31, 2024 compared to $28.8 million for the six months ended December 31, 2023 due to lower debt levels following repayments on our revolving credit facility.

In addition, we recorded a gain associated with our equity method investments of $2.0 million for the six months ended December 31, 2024 compared to a loss of $3.2 million for the six months ended December 31, 2023.

Decreases in interest expense, net, and gains attributable to equity method investments were partially offset by foreign exchange net losses for the six months ended December 31, 2024 of $2.0 million compared to foreign exchange net gains of $1.8 million for the six months ended December 31, 2023, which are presented in other, net.

Our effective income tax rate for the three and six months ended December 31, 2024 was 17.6% and 18.2%, respectively, as compared to 19.5% for both the three and six months ended December 31, 2023.

Our effective rate of 17.6% for the three months ended December 31, 2024 differs from the statutory rate of 21.0% primarily due to foreign operations and research credits.

The decrease in our effective tax rate for the three and six months ended December 31, 2024 was primarily due to windfall tax benefits related to the vesting or settlement of employee share-based awards and a shift in our global mix of earnings.

As of December 31, 2024, we had an income tax receivable of $99.8 million, which was recognized in prepaid expenses and other current assets and is expected to be received during the three months ended March 31, 2024.

Our Singapore operations operate under certain tax holidays and tax incentive programs that will expire in whole or in part at various dates through June 30, 2030.

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federal tax, if repatriated.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Organization of Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the Inclusive Framework) has put forth two proposals—Pillar One and Pillar Two—that (i) revise the existing profit allocation and nexus rules and (ii) ensure a minimal level of taxation, respectively.

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Net Income and Earnings per Share

As a result of the factors above, our net income for the three months ended September 30, 2024 was $311.4 million compared to $219.4 million for the three months ended September 30, 2023, an increase of $91.9 million, or 42%.

Our diluted earnings per share for the three months ended September 30, 2024 was $2.11 per diluted share compared to $1.49 for the three months ended September 30, 2023, an increase of 42%.

As a result of the factors above, our net income for the three months ended December 31, 2024 was $344.6 million compared to $208.8 million for the three months ended December 31, 2023, an increase of $135.8 million, or 65%.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

income for the six months ended December 31, 2024 was $656.0 million compared to $428.2 million for the six months ended December 31, 2023, an increase of $227.8 million, or 53%.

Our diluted earnings per share for the three months ended December 31, 2024 was $2.34 per diluted share compared to $1.42 for the three months ended December 31, 2023, an increase of $0.92, or 65%.

Our diluted earnings per share for the six months ended December 31, 2024 was $4.45 compared to $2.90 for the six months ended December 31, 2023, an increase of $1.55, or 53%.

Summary of Non-GAAP Financial Measures

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The measure “non-GAAP cost of sales” is equal to GAAP cost of sales less amortization of acquired intangible assets relating to cost of sales and field safety notification expenses.

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Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

GAAP Net revenue $ 1,282,089 $ 1,162,801 $ 2,506,598 $ 2,265,122

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(7,634) (8,257) (15,304) (17,164)

Masks with magnets field safety notification expenses

— (6,351) — (6,351)

Astral field safety notification expenses

— — — (7,911)

Non-GAAP cost of sales $ 523,180 $ 501,259 $ 1,022,800 $ 986,702

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

The measure “non-GAAP income from operations” is equal to GAAP income from operations once adjusted for amortization of acquired intangibles, field safety notification expenses, and acquisition-related expenses.

The measure “non-GAAP income from operations” is equal to GAAP income from operations once adjusted for amortization of acquired intangibles, restructuring expenses, field safety notification expenses, and acquisition-related expenses.

Non-GAAP income from operations is reconciled with GAAP income from operations below (in thousands):

Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

GAAP income from operations $ 417,243 $ 275,094 $ 804,554 $ 564,091

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Amortization of acquired intangibles - operating expenses 11,047 11,577 22,451 24,056

Restructuring expenses — 64,228 — 64,228

Masks with magnets field safety notification expenses — 6,351 — 6,351

Astral field safety notification expenses — — — 7,911

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Non-GAAP income from operations $ 435,924 $ 365,507 $ 842,309 $ 684,284

The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles, field safety notification expenses, acquisition related expenses, and associated tax effects.

The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles, restructuring expenses, field safety notification expenses, acquisition related expenses, and associated tax effects.

The measure “non-GAAP diluted earnings per share” is the ratio of non-GAAP net income to diluted shares outstanding.

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Three Months Ended

September 30,

December 31, Six Months Ended

2024 2023 2024 2023

GAAP net income $ 344,622 $ 208,800 $ 655,977 $ 428,222

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Amortization of acquired intangibles - operating expenses 11,047 11,577 22,451 24,056

Restructuring expenses — 64,228 — 64,228

Masks with magnets field safety notification expenses — 6,351 — 6,351

Astral field safety notification expenses — — — 7,911

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If we are required to access the debt market, we believe that we will be able to secure reasonable borrowing rates.

As part of our liquidity strategy, we will continue to monitor our current level of earnings and cash flow generation as well as our ability to access the market considering those earning levels.

As of September 30, 2024 and June 30, 2024, we had cash and cash equivalents of $426.4 million and $238.4 million, respectively.

Our cash and cash equivalents held within the United States at September 30, 2024 and June 30, 2024 were $136.4 million and $51.2 million, respectively.

Our remaining cash and cash equivalent balances at September 30, 2024

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

and June 30, 2024, were $290.0 million and $187.2 million, respectively.

our liquidity strategy, we will continue to monitor our current level of earnings and cash flow generation as well as our ability to access the market considering those earning levels.

As of December 31, 2024 and June 30, 2024, we had cash and cash equivalents of $521.9 million and $238.4 million, respectively.

Our cash and cash equivalents held within the United States at December 31, 2024 and June 30, 2024 were $205.9 million and $51.2 million, respectively.

Our remaining cash and cash equivalent balances at December 31, 2024 and June 30, 2024, were $316.0 million and $187.2 million, respectively.

Our cash and cash equivalent balances are held at highly rated financial institutions .

As of September 30, 2024, we had $1,500.0 million available for draw down under the revolving credit facility and a combined total of $1,926.4 million in cash and available liquidity under the revolving credit facility.

As of December 31, 2024, we had $1,500.0 million available for draw down under the revolving credit facility and a combined total of $2,021.9 million in cash and available liquidity under the revolving credit facility.

As a result of the U.S.

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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.

As of December 31, 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.

On December 31, 2024, there was a total of $675.0 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.

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The following table summarizes our cash flow activity (in thousands):

Three Months Ended

September 30,

Six Months Ended

Net cash provided by (used in) operating activities

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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 Somnow are during the three months ended September 30,

Cash provided by operating activities was $634.2 million for the six months ended December 31, 2024, compared to cash provided of $559.1 million for the six months ended December 31, 2023.

The $75.0 million increase in cash flow from

PART I – FINANCIAL INFORMATION Item 2

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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.

operations was primarily due to increased net income partially offset by greater cash outflows on inventory purchases during the six months ended December 31, 2024 compared to the six months ended December 31, 2023.

Investing Activities

Cash used in investing activities was $34.5 million for the six months ended December 31, 2024, compared to cash used of $190.1 million for the six months ended December 31, 2023.

The $155.6 million decrease in cash flow used in investing activities was primarily due to cash used to acquire Somnow are during the six months ended December 31, 2023 in addition to lower purchases of property, plant and equipment and greater proceeds from maturity of foreign currency contracts during the six months ended December 31, 2024 compared to the six months ended December 31, 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.

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.

Cash used in financing activities was $298.3 million for the six months ended December 31, 2024, compared to cash used of $390.1 million for the six months ended December 31, 2023.

We repurchased $125.0 million of treasury stock during the six months ended December 31, 2024 compared to repurchases of $50.0 million during the six months ended December 31, 2023.

Cash outflows for treasury stock repurchases were offset by lower net repayments under our Revolving Credit Agreement of $35.0 million for the six months ended December 31, 2024 compared to net repayments of $210.0 million for the six months ended December 31, 2023.

During the three months ended December 31, 2024, we paid cash dividends of $0.53 per common share totaling $77.7 million.

On January 30, 2025, our board of directors declared a cash dividend of $0.53 per common share, to be paid on March 20, 2025, to shareholders of record as of the close of business on February 13, 2025.

Future dividends are subject to approval by our board of directors.

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.

Since approval of the share repurchase program in 2014 through December 31, 2024, we have repurchased a total of 8.5 million shares under this repurchase program for an aggregate of $687.7 million.

During the six months ended December 31, 2024, we repurchased 528,846 shares at a cost of $125.0 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.

At December 31, 2024, 11.5 million additional shares remain available for us to repurchase under the approved share repurchase program.

Critical Accounting Principles and Estimates

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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.

Contractual Obligations and Commitments

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Details of our purchase obligations as of September 30, 2024 were as follows:

Payments Due by September 30,

Contractual Obligations and Commitments

Other than for purchase obligations, there have been no material changes outside the ordinary course of business in our outstanding contractual obligations from those disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Details of our purchase obligations as of December 31, 2024 were as follows (in thousands):

Payments Due by December 31,

Total 2025 2026 2027 2028 2029 Thereafter

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Off-Balance Sheet Arrangements

As of September 30, 2024, we are not involved in any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC.

As of December 31, 2024, we are not involved in any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC.

PART I – FINANCIAL INFORMATION Item 3

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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.

The notional value of outstanding foreign cross-currency swaps was $992.2 million and $1,026.2 million at December 31, 2024 and June 30, 2024, respectively.

These contracts mature at various dates prior to December 31, 2029.

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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.

The notional value of the outstanding non-designated hedges was $1,128.1 million and $1,340.0 million at December 31, 2024 and June 30, 2024, respectively.

These contracts mature at various dates prior to September 15, 2025.

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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):

dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of December 31, 2024 (in thousands):

(EUR) Canadian

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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.

1 unchanged sentence

Fair Value Assets / (Liabilities)

Total September 30,

Total December 31,

2024 June 30,

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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.

At December 31, 2024, we held cash and cash equivalents of $521.9 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 December 31, 2024, there was $175.0 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 December 31, 2024, would not have had a material impact on pretax income.

We have no interest rate hedging agreements.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements