What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-24 compared with 2025-01-31 · 226 added, 185 removed, 1086 unchanged (27% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 932,711 $ 238,361

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

Accounts receivable, net of allowances of $ 19,825 and $ 21,132 at March 31, 2025 and June 30, 2024, respectively

907,825 837,275

33 unchanged sentences

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

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

190,125,788 issued and 146,618,775 outstanding at March 31, 2025 and 189,565,112 issued and 146,901,045 outstanding at June 30, 2024

Additional paid-in capital 1,990,137 1,896,604

Retained earnings 5,779,375 4,991,647

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

Treasury stock, at cost, 43,507,013 shares at March 31, 2025 and 42,664,067 shares at June 30, 2024

( 1,973,284 ) ( 1,773,267 )

8 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

20 unchanged sentences

Restructuring expenses (note 11)

— 64,228 — 64,228

Total operating expenses 340,141 318,197 1,004,079 1,001,099

22 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

23 unchanged sentences

Stock-based compensation costs — — 20,156 — — — — 20,156

Other comprehensive income

— — — — — — 119,374 119,374

Other comprehensive income (loss) — — — — — — 119,374 119,374

Net income — — — — — 311,355 — 311,355

8 unchanged sentences

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

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

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

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

3 unchanged sentences

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

Common stock issued on exercise of options 74 1 9,022 — — — — 9,023

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 3 ( 364 ) — — — — ( 364 )

Stock-based compensation costs — — 24,120 — — — — 24,120

Treasury stock purchases ( 314 ) ( 75,026 ) — — ( 75,026 )

Other comprehensive income (loss) — — — — — 48,034 48,034

Net income — — — — — 365,041 — 365,041

Dividends declared ($ 0.53 per common share)

— — — — — ( 77,704 ) — ( 77,704 )

Balance, March 31, 2025

190,126 $ 761 $ 1,990,137 ( 43,507 ) $ ( 1,973,284 ) $ 5,779,375 $ ( 250,856 ) $ 5,546,133

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

14 unchanged sentences

Stock-based compensation costs — — 18,510 — — — — 18,510

Other comprehensive loss — — — — — — ( 47,620 ) ( 47,620 )

Other comprehensive income (loss) — — — — — — ( 47,620 ) ( 47,620 )

Net income — — — — — 219,422 — 219,422

9 unchanged sentences

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

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

Other comprehensive income (loss) — — — — — — 111,796 111,796

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

3 unchanged sentences

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

Common stock issued on exercise of options 54 — 4,679 — — — — 4,679

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 6 — ( 314 ) — — — — ( 314 )

Common stock issued on employee stock purchase plan — — 213 — — — — 213

Treasury stock purchases

— — — ( 260 ) ( 50,000 ) — — ( 50,000 )

Stock-based compensation costs — — 20,442 — — — — 20,442

Other comprehensive income (loss) — — — — — — ( 56,954 ) ( 56,954 )

Net income — — — — — 300,492 — 300,492

Dividends declared ($ 0.48 per common share)

— — — — — ( 70,492 ) — ( 70,492 )

Balance, March 31, 2024

189,319 $ 588 $ 1,847,938 ( 42,432 ) $ ( 1,723,263 ) $ 4,769,963 $ ( 265,306 ) $ 4,629,920

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

3 unchanged sentences

(In US$ and in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

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Organization and Basis of Presentation

(referred to herein as “we”, “us”, “our” or the “Company”) is a Delaware corporation formed in March 1994 as a holding company for the ResMed Group.

(referred to herein as "Resmed", “we”, “us”, “our” or the “Company”) is a Delaware corporation formed in March 1994 as a holding company for the Resmed Group.

Through our subsidiaries, we design, manufacture and market equipment for the diagnosis and treatment of sleep-disordered breathing and other respiratory disorders, including obstructive sleep apnea.

2 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 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.

During the nine months ended March 31, 2025, 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.

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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 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.

The condensed consolidated financial statements for the three and nine months ended March 31, 2025 and March 31, 2024 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

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

70 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 $ 24.1 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.

Operating lease revenue was $ 24.2 million and $ 72.8 million for the three and nine months ended March 31, 2025 and $ 24.1 million and $ 69.8 million for the three and nine months ended March 31, 2024.

Recently Issued Accounting Standards Not Yet Adopted

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

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Residential Care Software (1)

53,179 38,754 149,682 111,846

Total $ 547,975 $ 494,936 $ 1,594,174 $ 1,351,907

4 unchanged sentences

Masks with magnets field safety notification expenses (2)

— 6,351 — 6,351

Astral field safety notification expenses (3)

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Income before income taxes $ 417,693 $ 375,421 $ 1,219,513 $ 907,066

(1) During the three and nine months ended March 31, 2024, we recorded $ 2.0 million of operating lease right-of-use asset impairments within our Residential Care Software segment.

The impairments related to leases for office space and were recorded within net operating profit.

(2) 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 unchanged sentences

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

Inventories December 31,

Inventories March 31,

2025 June 30,

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Notes to the Condensed Consolidated Financial Statements

Prepaid expenses and other current assets December 31,

Prepaid expenses and other current assets March 31,

2025 June 30,

4 unchanged sentences

Total prepaid expenses and other current assets $ 505,243 $ 459,833

Property, Plant and Equipment December 31,

Property, Plant and Equipment March 31,

2025 June 30,

2 unchanged sentences

Property, plant and equipment, net $ 535,339 $ 548,025

Other Intangible Assets December 31,

Other Intangible Assets March 31,

2025 June 30,

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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.

We did not record any intangible asset impairments during the three and nine months ended March 31, 2025.

During the nine months ended March 31, 2024, 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.

1 unchanged sentence

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

Six Months Ended December 31, 2024

Nine Months Ended March 31, 2025

Sleep and Breathing Health

20 unchanged sentences

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

Measurement category December 31,

Measurement category March 31,

2025 June 30,

7 unchanged sentences

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

Six Months Ended December 31, 2024

Nine Months Ended March 31, 2025

Non-marketable securities Marketable securities Equity method investments Total

2 unchanged sentences

Proceeds from exits of investments ( 4,378 ) — — ( 4,378 )

Realized gains on marketable and non-marketable equity securities 389 — — 389

Realized gains (losses) on non-marketable equity securities 389 — — 389

Impairment of investments ( 8,259 ) — — ( 8,259 )

Unrealized gains on marketable equity securities — 2,751 — 2,751

Unrealized gains (losses) on marketable equity securities — 105 — 105

Gain attributable to equity method investments

2 unchanged sentences

Carrying value at the end of the period $ 65,378 $ 12,131 $ 68,896 $ 146,405

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Non-marketable securities Marketable securities Equity method investments Total

6 unchanged sentences

( 250 ) — — ( 250 )

Unrealized losses on marketable equity securities

Unrealized gains (losses) on marketable equity securities

— 9,114 — 9,114

1 unchanged sentence

Foreign currency translation adjustments

— — ( 660 ) ( 660 )

Carrying value at the end of the period $ 77,380 $ 21,537 $ 65,115 $ 164,032

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.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of March 31, 2025 for the three and nine months ended March 31, 2025 were $ 5.6 million and $ 8.2 million, respectively.

Net unrealized gains recognized for equity investments in non-marketable and marketable securities held as of March 31, 2024 for the three and nine months ended March 31, 2024 were $ 13.9 million and $ 11.4 million, respectively.

(6) Income Taxes

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

At March 31, 2025, the interest rate that was being charged on the outstanding principal amounts was 5.1 %.

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

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applies on the unused portion of the revolving credit facility.

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

As of March 31, 2025, 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 December 31, 2024 and June 30, 2024, which was $ 175.0 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 March 31, 2025 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 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.

As of March 31, 2025 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 $ 481.5 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 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.

At March 31, 2025, 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 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.

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings per share were 141,360 and 578,065 for the three months ended March 31, 2025 and 2024, respectively, and 163,746 and 618,664 for the nine months ended March 31, 2025 and 2024, respectively, as the effect would have been anti-dilutive.

PART I – FINANCIAL INFORMATION Item 1

3 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

9 unchanged sentences

While the results of this litigation cannot be predicted with certainty, we believe that their final outcome will not, individually or in aggregate, have a material adverse effect on our consolidated financial statements taken as a whole.

On June 2, 2021, New York University ("NYU") filed a complaint for patent infringement in the United States District Court, District of Delaware against ResMed Inc., case no.

On June 2, 2021, New York University ("NYU") filed a complaint for patent infringement in the United States District Court, District of Delaware against Resmed, case no.

1:21-cv-00813 (JPM).

9 unchanged sentences

On January 31, 2024, NYU appealed the PTAB’s rulings to the Court of Appeals for the Federal Circuit.

The appeals are not expected to be resolved before March 2025.

The appeals are not expected to be resolved before June 2025.

On January 27, 2021, the International Trade Commission ("ITC") instituted In Re Certain UMTS and LTE Cellular Communications Modules and Products Containing the Same, Investigation No.

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On June 16, 2022, Cleveland Medical Devices Inc.

("Cleveland Medical") filed suit for patent infringement against ResMed Inc.

in the United States District Court for the District of Delaware, case no.

("Cleveland Medical") filed suit for patent infringement against Resmed in the United States District Court for the District of Delaware, case no.

1:22-cv-00794.

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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.

On March 7, 2025, the District Court of the Northern District of Ohio granted ResMed Corp.'s motion to stay the case pending the conclusion of all Patent Office proceedings related to the asserted patents.

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

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

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.

During the nine months ended March 31, 2025 and March 31, 2024, receivables sold with limited recourse were $ 155.9 million and $ 148.3 million, respectively.

As of March 31, 2025, the maximum exposure on outstanding receivables sold with recourse and the associated contingent provision were $ 35.5 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.

15 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 $ 992.2 million and $ 1,026.2 million at December 31, 2024 and June 30, 2024, respectively.

The notional value of outstanding foreign cross-currency swaps was $ 1,034.8 million and $ 1,026.2 million at March 31, 2025 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 $ 1,128.1 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.

The notional value of the outstanding non-designated hedges was $ 1,463.4 million and $ 1,340.0 million at March 31, 2025 and June 30, 2024, respectively.

These contracts mature at various dates prior to March 16, 2026.

Fair Values of Derivative Instruments

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

6 unchanged sentences

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

6 unchanged sentences

(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.

We did not record any restructuring expenses during the three and nine months ended March 31, 2025.

During the nine months ended March 31, 2024, 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.

Restructuring charges for the nine months ended March 31, 2024 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.

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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 and six months ended December 31, 2024.

The following is an overview of our results of operations for the three and nine months ended March 31, 2025.

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 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.

During the three months ended March 31, 2025, we invested $83.9 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.

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.

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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 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.

Net revenue for the three months ended March 31, 2025 was $1.3 billion, an increase of 8% compared to the three months ended March 31, 2024.

Gross margin was 59.3% for the three months ended March 31, 2025 compared to 57.9% for the three months ended March 31, 2024.

Diluted earnings per share was $2.48 for the three months ended March 31, 2025, compared to diluted earnings per share of $2.04 for the three months ended March 31, 2024.

At March 31, 2025, our cash and cash equivalents totaled $932.7 million, our total assets were $7.6 billion and our stockholders’ equity was $5.5 billion.

PART I – FINANCIAL INFORMATION Item 2

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dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”).

Recent Developments

As disclosed in the risk factors of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, our business is subject to risks related to, among other factors, third-party coverage and reimbursement, as well as disruptions at the FDA and other government agencies.

There is uncertainty surrounding potential changes to the healthcare regulatory environment in the United States, and it is not possible to predict how these changes may be implemented, and the ultimate effects of such changes on our business.

In addition, the U.S.

federal government and other governments may reduce funding for health care or other programs or make changes that affect the number of persons eligible for certain programs, and the services provided to enrollees in such programs .

The levels of U.S.

federal government spending are difficult to predict and are subject to significant risk.

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.

For example, on January 20, 2025, President Trump established by executive order the U.S.

Department Of Government Efficiency Service Temporary Organization ("DOGE") to reform federal government processes and reduce expenditures, and on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS, announced that it is collaborating with DOGE to determine where there may be opportunities for more effective and efficient use of resources.

Additionally, the Trump administration took several Executive Actions, including the issuance of a number of Executive Orders, that imposed significant burdens on, or otherwise materially delayed, the FDA’s ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.

It is difficult to predict whether or how these orders will be rescinded and replaced under the current or future administrations and the consequential impact on our business.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Results of Operations

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).

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Net revenue for the three months ended March 31, 2025 increased to $1,291.7 million from $1,197.0 million for the three months ended March 31, 2024, an increase of $94.8 million or 8% (a 9% increase on a constant currency basis).

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

Three Months Ended

December 31, % Change Constant Currency*

March 31, % Change Constant Currency*

U.S., Canada and Latin America

16 unchanged sentences

Sleep and Breathing Health

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.

Net revenue from our Sleep and Breathing Health business for the three months ended March 31, 2025 was $1,130.6 million, an increase of 8% compared to net revenue for the three months ended March 31, 2024.

Movements in international currencies against the U.S.

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.

dollar negatively impacted net revenue by approximately $12.9 million for the three months ended March 31, 2025.

Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended March 31, 2025 increased by 9% compared to the three months ended March 31, 2024.

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 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%.

Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the three months ended March 31, 2025 increased to $749.3 million from $687.5 million for the three months ended March 31, 2024, an increase of $61.8 million or 9%.

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 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

Net revenue in combined Europe, Asia and other markets increased for the three months ended March 31, 2025 to $381.3 million from $361.6 million for the three months ended March 31, 2024, an increase of $19.7 million or 5% (an 8% increase on a constant currency basis).

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 March 31, 2025 increased to $676.2 million from $638.2 million for the three months ended March 31, 2024, an increase of $38.0 million or 6%, including an increase of 6% in the U.S., Canada and Latin America and an increase of 6% 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 March 31, 2025 increased by 7%.

PART I – FINANCIAL INFORMATION Item 2

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

8% increase on a constant currency basis).

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 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%.

Net revenue from masks and other for the three months ended March 31, 2025 increased to $454.4 million from $410.8 million for the three months ended March 31, 2024, an increase of $43.5 million or 11%, including an increase of 13% in the U.S., Canada and Latin America and an increase of 4% 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 March 31, 2025 increased by 12%.

Residential Care Software

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).

Net revenue from our Residential Care Software business for the three months ended March 31, 2025 increased to $161.2 million from $148.0 million for the three months ended March 31, 2024, an increase of $13.2 million or 9% (a 10% 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).

Nine Months Ended March 31, 2025 Compared to the Nine Months Ended March 31, 2024

Net revenue for the nine months ended March 31, 2025 increased to $3,798.3 million from $3,462.1 million for the nine months ended March 31, 2024, an increase of $336.2 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):

Six Months Ended

December 31, % Change Constant Currency*

Nine Months Ended

March 31, % Change Constant Currency*

U.S., Canada and Latin America

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Total $ 3,798,334 $ 3,462,102 10 10

* Constant currency numbers exclude the impact of movements in international currencies.

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.

Net revenue from our Sleep and Breathing Health business for the nine months ended March 31, 2025 was $3,323.9 million, an increase of 10% compared to net revenue for the nine months ended March 31, 2024.

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,

dollar negatively impacted net revenue by approximately $11.1 million for the nine months ended March 31, 2025.

Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the nine months ended March 31, 2025 increased by 10% compared to the nine months ended March 31, 2024.

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 nine months ended March 31, 2025 increased to $2,205.6 million from $1,995.2 million for the nine months ended March 31, 2024, an increase of $210.4 million or 11%.

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

PART I – FINANCIAL INFORMATION Item 2

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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).

Net revenue in combined Europe, Asia and other markets increased for the nine months ended March 31, 2025 to $1,118.3 million from $1,034.8 million for the nine months ended March 31, 2024, an increase of $83.6 million or 8% (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.

Net revenue from devices for the nine months ended March 31, 2025 increased to $1,971.3 million from $1,808.9 million for the nine months ended March 31, 2024, an increase of $162.4 million or 9%, including an increase of 9% in the U.S., Canada and Latin America and an increase of 8% 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 nine months ended March 31, 2025 increased by 9%.

Net revenue from masks and other for the nine months ended March 31, 2025 increased to $1,352.6 million from $1,221.0 million for the nine months ended March 31, 2024, an increase of $131.6 million or 11%, including an increase of 12% in the U.S., Canada and Latin America and an increase of 8% 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 nine months ended March 31, 2024.

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).

Net revenue from our Residential Care Software business for the nine months ended March 31, 2025 increased to $474.4 million from $432.2 million for the nine months ended March 31, 2024, an increase of $42.2 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 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.

Gross profit increased for the three months ended March 31, 2025 to $766.4 million from $692.8 million for the three months ended March 31, 2024, an increase of $73.6 million or 11%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended March 31, 2025 was 59.3% compared to 57.9% for the three months ended March 31, 2024.

The increase in gross margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was due primarily to manufacturing and logistics efficiencies, component cost improvements and favorable product mix, partially offset by unfavorable foreign currency movements.

Gross profit increased for the nine months ended March 31, 2025 to $2,234.9 million from $1,939.8 million for the nine months ended March 31, 2024, an increase of $295.1 million or 15%.

Gross margin for the nine months ended March 31, 2025 was 58.8% compared to 56.0% for the nine months ended March 31, 2024.

The increase in gross margin for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024 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 nine months ended March 31, 2024 and manufacturing and logistics efficiencies, component cost improvements as well as a reduction in the amortization of acquired intangible assets during the nine months ended March 31, 2025.

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

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.

PART I – FINANCIAL INFORMATION Item 2

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

incorporate magnets.

Operating Expenses

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Three Months Ended

December 31, Change % Change Constant Currency

March 31, Change % Change Constant Currency

Selling, general, and administrative $ 245,302 $ 229,919 $ 15,383 7 % 8 %

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Amortization of acquired intangible assets $ 10,895 $ 11,204 $ (309) (3) % (1) %

Six Months Ended

December 31, Change % Change Constant Currency

Nine Months Ended

March 31, Change % Change Constant Currency

Selling, general, and administrative $ 725,894 $ 674,948 $ 50,946 8 % 8 %

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Selling, General, and Administrative Expenses

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 increased for the three months ended March 31, 2025 to $245.3 million from $229.9 million for the three months ended March 31, 2024, an increase of $15.4 million or 7%.

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 $4.1 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 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.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended March 31, 2025 increased by 8% compared to the three months ended March 31, 2024.

As a percentage of net revenue, selling, general, and administrative expenses were 19.0% for the three months ended March 31, 2025, compared to 19.2% for the three months ended March 31, 2024.

The constant currency increase in selling, general, and administrative expenses during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to increases in employee-related costs and marketing expenses.

Selling, general, and administrative expenses increased for the nine months ended March 31, 2025 to $725.9 million from $674.9 million for the nine months ended March 31, 2024, an increase of $50.9 million or 8%.

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 $3.7 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the nine months ended March 31, 2025 increased by 8% compared to the nine months ended March 31, 2024.

As a percentage of net revenue, selling, general, and administrative expenses were 19.1% for the nine months ended March 31, 2025, compared to 19.5% for the nine months ended March 31, 2024.

The constant currency increase in selling, general, and administrative expenses during the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024 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 increased for the three months ended March 31, 2025 to $83.9 million from $77.1 million for the three months ended March 31, 2024, an increase of $6.9 million, or 9%.

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

dollar, which decreased our expenses by approximately $1.7 million, as reported in U.S.

Excluding the impact of foreign currency

Excluding the impact of foreign currency movements, research and development expenses for the three months ended March 31, 2025 increased by 11% compared

PART I – FINANCIAL INFORMATION Item 2

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

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 $0.4 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.

to the three months ended March 31, 2024.

As a percentage of net revenue, research and development expenses were 6.5% for the three months ended March 31, 2025 compared to 6.4% for the three months ended March 31, 2024.

The constant currency increase in research and development expenses during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to increases in employee-related costs.

Research and development expenses increased for the nine months ended March 31, 2025 to $244.8 million from $226.7 million for the nine months ended March 31, 2024, an increase of $18.2 million, or 8%.

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

dollar, which decreased our expenses by approximately $1.3 million for the nine months ended March 31, 2025, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 9% compared to the nine months ended March 31, 2024.

As a percentage of net revenue, research and development expenses were 6.4% for the nine months ended March 31, 2025, compared to 6.5% for the nine months ended March 31, 2024.

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 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.

Amortization of acquired intangible assets for the three months ended March 31, 2025 totaled $10.9 million compared to $11.2 million for the three months ended March 31, 2024.

Amortization of acquired intangible assets for the nine months ended March 31, 2025 totaled $33.3 million compared to $35.3 million for the nine months ended March 31, 2024.

The decrease in amortization of acquired intangible assets for the three and nine months ended March 31, 2025 compared to the three and nine months ended March 31, 2024 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.

We did not record any restructuring expenses during the three and nine months ended March 31, 2025.

During the nine months ended March 31, 2024, 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 nine months ended March 31, 2024 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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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Six Months Ended

Nine Months Ended

2025 2024 Change

6 unchanged sentences

Total other income (loss), net $ (11,310) $ (31,611) $ 20,301

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.

Total other income (loss), net for the three months ended March 31, 2025 was a loss of $8.6 million compared to income of $0.8 million for the three months ended March 31, 2024.

We recorded a loss associated with our equity investments of $5.6 million for the three months ended March 31, 2025 compared to a gain of $13.9 million for the three months ended March 31, 2024.

Losses attributable to equity investments were partially offset by interest income, net of $0.8 million for the three months ended March 31, 2025 compared to interest expense, net of $11.0 million for the three months ended March 31, 2024 due to lower debt levels following repayments on our revolving credit facility.

Total other income (loss), net for the nine months ended March 31, 2025 was a loss of $11.3 million compared to a loss of $31.6 million for the nine months ended March 31, 2024.

Interest expense, net, decreased to $1.6 million for the nine months ended March 31, 2025 compared to $39.8 million for the nine months ended March 31, 2024 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 $2.4 million for the nine months ended March 31, 2025 compared to a loss of $2.7 million for the nine months ended March 31, 2024.

Decreases in interest expense, net, and gains attributable to equity method investments were partially offset by a loss associated with our equity investments of $7.8 million for the nine months ended March 31, 2025 compared to a gain of 11.4 million for the nine months ended March 31, 2024.

Our effective income tax rate for the three and nine months ended March 31, 2025 was 12.6% and 16.3%, respectively, as compared to 20.0% and 19.7% for the three and nine months ended March 31, 2024, respectively.

Our effective rate of 12.6% for the three months ended March 31, 2025 differs from the statutory rate of 21.0% primarily due to interest and penalties refunded from the IRS due to amended returns, foreign operations, and research credits.

The decrease in our effective tax rate for the three and nine months ended March 31, 2025 was primarily due to interest and penalties refunded from the IRS due to amended returns, overall 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 March 31, 2025, we had an income tax receivable of $31.7 million, which was recognized in prepaid expenses and other current assets.

It is expected to be received by March 31, 2026.

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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Net Income and Earnings per Share

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%.

As a result of the factors above, our net income for the three months ended March 31, 2025 was $365.0 million compared to $300.5 million for the three months ended March 31, 2024, an increase of $64.5 million, or 21%.

Our net income for the

PART I – FINANCIAL INFORMATION Item 2

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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%.

nine months ended March 31, 2025 was $1,021.0 million compared to $728.7 million for the nine months ended March 31, 2024, an increase of $292.3 million, or 40%.

Our diluted earnings per share for the three months ended March 31, 2025 was $2.48 per diluted share compared to $2.04 for the three months ended March 31, 2024, an increase of $0.44, or 22%.

Our diluted earnings per share for the nine months ended March 31, 2025 was $6.93 compared to $4.94 for the nine months ended March 31, 2024, an increase of $1.99, or 40%.

Summary of Non-GAAP Financial Measures

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

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Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

7 unchanged sentences

Non-GAAP income from operations $ 444,607 $ 393,600 $ 1,286,916 $ 1,077,885

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.

1 unchanged sentence

Three Months Ended

December 31, Six Months Ended

March 31, Nine Months Ended

2025 2024 2025 2024

6 unchanged sentences

Acquisition related expenses — — — 483

Income tax effect of interest and penalties on income tax refunds (29,976) — (29,976) —

Income tax effect on non-GAAP adjustments (4,871) (5,083) (14,904) (34,969)

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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.

As of March 31, 2025 and June 30, 2024, we had cash and cash equivalents of $932.7 million and $238.4 million, respectively.

Our cash and cash equivalents held within the United States at March 31, 2025 and June 30, 2024 were $409.3 million and $51.2 million, respectively.

Our remaining cash and cash equivalent balances at March 31, 2025 and June 30, 2024, were $523.4 million and $187.2 million, respectively.

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

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 of March 31, 2025, we had $1,500.0 million available for draw down under the revolving credit facility and a combined total of $2,432.7 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 December 31, 2024, we had $1,500.0 million available for draw down under the revolving credit facility.

As of March 31, 2025, 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 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.

On March 31, 2025, 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):

Six Months Ended

Nine Months Ended

Net cash provided by (used in) operating activities

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Effect of exchange rate changes on cash (9,774) (1,848)

Net decrease in cash and cash equivalents $ 283,583 $ (17,644)

Net increase (decrease) in cash and cash equivalents

$ 694,350 $ 10,019

Operating Activities

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

Cash provided by operating activities was $1,212.8 million for the nine months ended March 31, 2025, compared to cash provided of $961.1 million for the nine months ended March 31, 2024.

The $251.7 million increase in cash flow from operations was primarily due to increased net income, partially offset by higher working capital during the nine months

PART I – FINANCIAL INFORMATION Item 2

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

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.

ended March 31, 2025 compared to the nine months ended March 31, 2024.

During the three and nine months ended March 31, 2025, our operating cash flows included $107.0 million of income tax refunds and associated interest and penalties.

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.

Cash used in investing activities was $66.3 million for the nine months ended March 31, 2025, compared to cash used of $223.3 million for the nine months ended March 31, 2024.

The $156.9 million decrease in cash flow used in investing activities was primarily due to cash used to acquire Somnow are during the nine months ended March 31, 2024 in addition to net proceeds from maturity of foreign currency contracts during the nine months ended March 31, 2025 compared to net payments from maturity of foreign currency contracts during the nine months ended March 31, 2024.

Financing Activities

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.

Cash used in financing activities was $442.4 million for the nine months ended March 31, 2025, compared to cash used of $726.0 million for the nine months ended March 31, 2024.

We repurchased $200.0 million of treasury stock during the nine months ended March 31, 2025 compared to repurchases of $100.0 million during the nine months ended March 31, 2024.

Cash outflows for treasury stock repurchases were offset by lower net repayments under our Revolving Credit Agreement of $35.0 million for the nine months ended March 31, 2025 compared to net repayments of $430.0 million for the nine months ended March 31, 2024.

During the three months ended March 31, 2025, we paid cash dividends of $0.53 per common share totaling $77.7 million.

On April 23, 2025, our board of directors declared a cash dividend of $0.53 per common share, to be paid on June 12, 2025, to shareholders of record as of the close of business on May 8, 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 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.

Since approval of the share repurchase program in 2014 through March 31, 2025, we have repurchased a total of 8.8 million shares under this repurchase program for an aggregate of $762.7 million.

During the nine months ended March 31, 2025, we repurchased 842,946 shares at a cost of $200.0 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 December 31, 2024, 11.5 million additional shares remain available for us to repurchase under the approved share repurchase program.

At March 31, 2025, 11.2 million additional shares remain available for us to repurchase under the approved share repurchase program.

Critical Accounting Principles and Estimates

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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,

Details of our purchase obligations as of March 31, 2025 were as follows (in thousands):

Payments Due by March 31,

Total 2026 2027 2028 2029 2030 Thereafter

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Off-Balance Sheet Arrangements

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.

As of March 31, 2025, 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 $992.2 million and $1,026.2 million at December 31, 2024 and June 30, 2024, respectively.

The notional value of outstanding foreign cross-currency swaps was $1,034.8 million and $1,026.2 million at March 31, 2025 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 $1,128.1 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.

The notional value of the outstanding non-designated hedges was $1,463.4 million and $1,340.0 million at March 31, 2025 and June 30, 2024, respectively.

These contracts mature at various dates prior to March 16, 2026.

PART I – FINANCIAL INFORMATION Item 3

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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 December 31, 2024 (in thousands):

dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of March 31, 2025 (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 December 31, 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.

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Fair Value Assets / (Liabilities)

Total December 31,

Total March 31,

2025 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 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.

At March 31, 2025, we held cash and cash equivalents of $932.7 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 March 31, 2025, 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 March 31, 2025, would not have had a material impact on pretax income.

We have no interest rate hedging agreements.

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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