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Item 7. Management’s Discussion and Analysis

2025-08-08 compared with 2024-08-09 · 112 added, 105 removed, 262 unchanged (45% of the section changed)

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

Management’s discussion and analysis of financial condition and results of operations, or the MD&A, is intended to help the reader understand our results of operations and financial condition.

It is provided as a supplement to, and should be read in conjunction with, the selected financial data and consolidated financial statements and notes included in this report.

We are a global leader in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing (“SDB”), chronic obstructive pulmonary disease, neuromuscular disease and other chronic diseases.

We are a global leader in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing, or SDB, chronic obstructive pulmonary disease, neuromuscular disease and other chronic diseases.

SDB includes obstructive sleep apnea and other respiratory disorders that occur during sleep.

Our products and solutions are designed to improve patient quality of life, reduce the impact of chronic disease and lower healthcare costs as global healthcare systems continue to drive a shift in care from hospitals to the home and lower cost settings.

Our cloud-based digital software health applications, along with our devices, are designed to provide connected care to improve patient outcomes and efficiencies for our customers.

Our digital cloud-based health software applications, along with our devices, are designed to provide connected care to improve patient outcomes and efficiencies for our customers.

Since the development of continuous positive airway pressure therapy, we have expanded our business by developing or acquiring a number of products and solutions for a broader range of respiratory disorders including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes and customer and provider business processes.

Our growth has been fueled by geographic expansion, our research and product development efforts, acquisitions and an increasing awareness of SDB and respiratory conditions like chronic obstructive pulmonary disease as significant health concerns.

During fiscal year 2024, we announced a new operating model to accelerate long-term growth.

The new operating model introduces dedicated leadership in Product, Revenue, and Marketing to the global executive team.

This change aims to increase the velocity of product development and sharpen our customer and brand focus.

Ultimately, the goal is to accelerate profitable growth, while driving greater value and improved care throughout the outside hospital care continuum and the patient journey.

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

During fiscal year 2025, we invested $331.3 million on research and development activities, which represents 6.4% 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 fiscal year 2024, we continued the launch of AirSense 11, which introduces 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 November 2022, our operations include out-of-hospital 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 SaaS business and along with our cloud-based remote monitoring and therapy management system, and a robust product pipeline, 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 Respiratory Care”) and the supply of business management software as a service to out-of-hospital health providers (“SaaS”).

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.

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, or Sleep and Breathing Health, and the supply of business management software as a service to residential healthcare providers, or Residential Care Software.

During fiscal year 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.

Net revenue in fiscal year 2025 increased to $5,146.3 million, an increase of 10% compared to fiscal year 2024.

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At June 30, 2025, our total assets were $8.2 billion and our stockholders’ equity was $6.0 billion.

We paid a quarterly dividend of $0.53 per share during fiscal 2025 with a total amount of $310.9 million paid to stockholders.

PART II Item 7

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

We paid a quarterly dividend of $0.48 per share during fiscal 2024 with a total amount of $282.3 million paid to stockholders.

In order to provide a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis”, which is in addition to the actual financial information presented.

To calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period.

However, constant currency measures should not be considered in isolation or as an alternative to U.S.

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

For discussion related to the results of operations and changes in financial condition for the fiscal year ended June 30, 2023 compared to fiscal year June 30, 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the Year Ended June 30, 2023, which was filed with the United States Securities and Exchange Commission on August 11, 2023.

However, constant currency measures should not be considered in isolation or as an alternative to United States, or U.S., 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, or GAAP.

For discussion related to the results of operations and changes in financial condition for the fiscal year ended June 30, 2024 compared to fiscal year June 30, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the Year Ended June 30, 2024, which was filed with the U.S.

Securities and Exchange Commission, or SEC, on August 9, 2024.

Fiscal Year Ended June 30, 2025 Compared to Fiscal Year Ended June 30, 2024

Net revenue for the year ended June 30, 2024 increased to $4,685.3 million from $4,223.0 million for the year ended June 30, 2023, an increase of $462.3 million or 11% (an 11% increase on a constant currency basis).

Net revenue for the year ended June 30, 2025 increased to $5,146.3 million from $4,685.3 million for the year ended June 30, 2024, an increase of $461.0 million or 10% (a 10% increase on a constant currency basis).

The following table summarizes our net revenue disaggregated by segment, product and region for the year ended June 30, 2025 compared to the year ended June 30, 2024 (in thousands):

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Masks and other 1,839,717 1,657,161 11 11

Total Sleep and Respiratory Care $ 4,101,172 $ 3,725,017 10 10

Software as a Service 584,125 497,976 17

Total Sleep and Breathing Health

$ 4,504,890 $ 4,101,172 10 10

Residential Care Software

641,437 584,125 10 10

Total $ 5,146,327 $ 4,685,297 10 10

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

Sleep and Respiratory Care

Net revenue from our Sleep and Respiratory Care business for the year ended June 30, 2024 increased to $4,101.2 million from $3,725.0 million for the year ended June 30, 2023, an increase of $376.2 million or 10%.

Sleep and Breathing Health

Net revenue from our Sleep and Breathing Health business for the year ended June 30, 2025 increased to $4,504.9 million from $4,101.2 million for the year ended June 30, 2024, an increase of $403.7 million or 10%.

Movements in international currencies against the U.S.

dollar positively impacted net revenues by approximately $4.0 million for the year ended June 30, 2025.

Excluding the impact of currency movements, total net revenue from our Sleep and Respiratory Care business for the year ended June 30, 2024 increased by 10% compared to the year ended June 30, 2023.

Excluding the impact of currency movements, total net revenue from our Sleep and Breathing Health business for the year ended June 30, 2025 increased by 10% compared to the year ended June 30, 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 year ended June 30, 2025 increased to $2,997.5 million from $2,722.6 million for the year ended June 30, 2024, an increase of $275.0

PART II Item 7

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

Net revenue from our Sleep and Respiratory Care business in the United States, Canada and Latin America for the year ended June 30, 2024 increased to $2,722.6 million from $2,483.4 million for the year ended June 30, 2023, an increase of $239.2 million or 10%.

million or 10%.

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 Respiratory Care business in combined Europe, Asia and other markets increased for the year ended June 30, 2024 to $1,378.6 million from $1,241.6 million for the year ended June 30, 2023, an increase of $137.0 million or 11% (a 10% increase on a constant currency basis).

Net revenue from our Sleep and Breathing Health business in combined Europe, Asia and other markets increased for the year ended June 30, 2025 to $1,507.4 million from $1,378.6 million for the year ended June 30, 2024, an increase of $128.8 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 was primarily attributable to increased demand and unit sales.

Net revenue from devices for the year ended June 30, 2024 increased to $2,444.0 million from $2,270.7 million for the year ended June 30, 2023, an increase of $173.3 million or 8%, including an increase of 5% in the United States, Canada and Latin America and an increase of 11% in combined Europe, Asia and other markets (a 10% increase on a constant currency basis).

Net revenue from devices for the year ended June 30, 2025 increased to $2,665.2 million from $2,444.0 million for the year ended June 30, 2024, an increase of $221.2 million or 9%, including an increase of 9% 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 year ended June 30, 2025 increased by 9%.

Net revenue from masks and other for the year ended June 30, 2024 increased to $1,657.2 million from $1,454.3 million for the year ended June 30, 2023, an increase of 14%, including an increase of 15% in the United States, Canada and Latin America and an increase of 10% in combined Europe, Asia and other markets (a 8% increase on a constant currency basis).

Net revenue from masks and other for the year ended June 30, 2025 increased to $1,839.7 million from $1,657.2 million for the year ended June 30, 2024, an increase of 11%, 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 (an 8% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 11%, compared to the year ended June 30, 2024.

Software as a Service

Net revenue from our SaaS business for the year ended June 30, 2024 was $584.1 million, compared to $498.0 million for the year ended June 30, 2023, an increase of $86.1 million or 17%.

The increase was predominantly due to our acquisition of MEDIFOX DAN, which was acquired on November 21, 2022.

Excluding the MEDIFOX DAN acquisition, SaaS revenue increased 9% and was driven by continued growth in the HME vertical within our SaaS business.

Residential Care Software

Net revenue from our Residential Care Software business for the year ended June 30, 2025 was $641.4 million, compared to $584.1 million for the year ended June 30, 2024, an increase of $57.3 million or 10%.

The increase was driven by continued growth in the Home Medical Equipment, or HME, and MEDIFOX DAN verticals within our Residential Care Software business.

Gross Profit and Gross Margin.

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Gross margin, which is gross profit as a percentage of net revenue, was 59.4% for the year ended June 30, 2025, compared with the 56.7% for the year ended June 30, 2024.

The increase in gross margin was due primarily to reduced freight and manufacturing cost improvements, a favorable impact from our SaaS business, an increase in average selling prices and a favorable product mix, which were partially offset by $14.3 million of combined expenses associated with the field safety notifications for masks with magnets and Astral devices, and an increase in the amortization of acquired intangible assets.

The increase in gross margin was due primarily to procurement, manufacturing and logistics efficiencies, $14.3 million of combined expenses associated with the field safety notifications for masks with magnets and Astral devices recognized during the year ended June 30, 2024, as well as a reduction in the amortization of acquired intangibles during the year ended June 30, 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.

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Selling, general and administrative expenses increased for the year ended June 30, 2025 to $991.0 million from $917.1 million for the year ended June 30, 2024, an increase of $73.9 million or 8%.

Selling, general and administrative expenses,

Selling, general and administrative expenses, as reported in U.S.

dollars, were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $0.2 million.

Excluding the impact of foreign currency movements, selling, general and administrative expenses for the year ended June 30, 2025 increased by 8% compared to the year ended

PART II Item 7

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

as reported in U.S.

dollars, were unfavorably impacted by the movement of international currencies against the U.S.

dollar, which increased our expenses by approximately $1.8 million.

Excluding the impact of foreign currency movements, selling, general and administrative expenses for the year ended June 30, 2024 increased by 5% compared to the year ended June 30, 2023.

June 30, 2024.

As a percentage of net revenue, selling, general and administrative expenses for the year ended June 30, 2025 improved to 19.3% compared to 19.6% for the year ended June 30, 2024.

The constant currency increase in selling, general and administrative expenses for the year ended June 30, 2024 compared to the year ended June 30, 2023 was primarily due to increases in employee-related costs and additional expenses associated with the consolidation of recent acquisitions.

The constant currency increase in selling, general and administrative expenses for the year ended June 30, 2025 compared to the year ended June 30, 2024 was primarily due to increases in employee-related costs and marketing expenses.

Research and Development Expenses

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As a percentage of net revenue, research and development expenses were 6.4% for the year ended June 30, 2025 compared to 6.6% for the year ended June 30, 2024.

The constant currency increase in research and development expenses was primarily due to increased investment in our digital health technologies and SaaS solutions as well as additional expenses associated with the consolidation of recent acquisitions.

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

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets for the year ended June 30, 2025 was $45.3 million compared to $46.5 million for the year ended the year ended June 30, 2024.

The increase in amortization expense was primarily attributable to our acquisition of MEDIFOX DAN.

The decrease in amortization of acquired intangibles is due to certain acquired intangible assets reaching the end of their useful lives and becoming fully amortized, partially offset by increases from amortization of acquired intangibles associated with new acquisitions.

Restructuring Expenses

We did not incur material restructuring expenses during the year ended June 30, 2025.

During the year ended June 30, 2024, we incurred restructuring expenses of $64.2 million associated with an evaluation of our existing operations to increase operational efficiency, decrease costs and increase profitability.

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2025 2024 Change

Interest expense, net $ (45,708) $ (47,379) $ 1,671

Loss attributable to equity method investments (1,848) (7,265) 5,417

(Loss) gain on equity investments (4,045) 9,922 (13,967)

Gain on insurance recoveries — 20,227 (20,227)

Interest income (expense), net $ 4,114 $ (45,708) $ 49,822

Gain (loss) attributable to equity method investments 3,644 (1,848) 5,492

Gain (loss) on equity investments (10,299) (4,045) (6,254)

Other, net (5,256) (3,494) (1,762)

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Total other income (loss), net for the year ended June 30, 2025 was a loss of $7.8 million, compared to a loss of $55.1 million for the year ended June 30, 2024.

During the year ended June 30, 2023, we recognized recoveries from business interruption insurance for $20.2 million.

Losses associated with our investments in marketable and non-marketable equity securities were $4.0 million for the year ended June 30, 2024 compared to a gain of $9.9 million or the year ended June 30, 2023.

Losses associated with our investments in marketable and non-marketable equity securities were partially offset by lower losses attributable to equity method investments for the year ended June 30, 2024 of $1.8 million compared to $7.3

We recorded interest income, net, of $4.1 million for the year ended June 30, 2025 compared to interest expense, net of $45.7 million for the year ended June 30, 2024 due to lower debt levels following the repayment of our revolving credit facility and interest earned on cash balances.

Losses associated with our investments in marketable and non-marketable equity securities were $10.3 million for the year ended June 30, 2025 compared to a loss of $4.0 million or the year ended June 30, 2024.

Losses associated with our investments in marketable and non-marketable equity securities were partially offset by a gain attributable to equity method investments for the year ended June 30, 2025 of $3.6 million, compared to a loss of $1.8 million for the year ended June 30, 2024.

PART II Item 7

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

million for the year ended June 30, 2023.

In addition, interest expense, net, decreased to $45.7 million for the year ended June 30, 2024 compared to $47.4 million for the year ended June 30, 2023 due to lower debt levels following the repayment of our revolving credit facility.

Our effective income tax rate increased to 19.3% for the year ended June 30, 2024 from 18.5% for the year ended June 30, 2023.

Our effective rate of 19.3% for the year ended June 30, 2024 differs from the statutory rate of 21.0% primarily due to research credits and foreign operations.

The increase in our effective tax rate for the year ended June 30, 2024 was primarily due to a shift in our geographic mix of earnings and lower tax deductions in the current year associated with the vesting or settlement of employee share-based awards.

Our effective income tax rate decreased to 16.5% for the year ended June 30, 2025 from 19.3% for the year ended June 30, 2024.

Our effective rate of 16.5% for the year ended June 30, 2025 differs from the statutory rate of 21.0% primarily due to interest and penalties refunded by the IRS in relation to certain amended returns, tax benefits realized from the cessation of certain business activities, along with research credits and foreign operations.

The decrease in our effective tax rate for the year ended June 30, 2025 was primarily due to the IRS refund of interest and penalties and tax benefits realized from the cessation of certain business activities.

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.

As a result of the U.S.

Tax Cuts and Jobs Act of 2017 ("TCJA"), we treated all non-U.S.

As a result of the TCJA, we treated all non-U.S.

historical earnings as taxable during the year ended June 30, 2018.

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federal tax, if repatriated, except as discussed in Note 12 – Income Taxes of the Notes to the Consolidated Financial Statements (Part II, Item 8).

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.

Effective in our fiscal year beginning July 1, 2024, various jurisdictions in which we operate began implementing the global minimum tax prescribed under Pillar Two.

These changes in legislation did not have a material impact on our income tax expense and cash flows for the fiscal year ending June 30, 2025.

On June 28, 2025, the G7 issued a joint statement in which its members agreed that Pillar Two will operate alongside the U.S.

system of tax and proposed that U.S.-parented multinational groups would not be subject to the income inclusion rules and undertaxed profits rules of Pillar Two.

The remaining OECD countries are likely to consider changes to existing and proposed tax laws to align with the recommendations and guidelines proposed by G7.

We are continuing to evaluate the potential impacts of the Inclusive Framework for future periods.

Net Income and Earnings per Share

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Masks with magnets field safety notification expenses

1,512 (6,351)

Astral field safety notification expenses

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

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, gain on insurance recoveries, 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, in addition to tax benefits from business cessation, and the tax effect of interest and penalties on tax refunds.

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

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Acquisition-related expenses 2,031 483

Gain on insurance recoveries — (20,227)

Tax benefit from business cessation (21,430) —

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

Income tax effect on non-GAAP adjustments (20,448) (40,114)

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Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from operations and access to our revolving credit facility.

Our primary uses of cash have been for research and development activities, selling and marketing activities, capital expenditures, strategic acquisitions and investments, dividend payments and repayment of debt obligations.

Our primary uses of cash have been for research and development activities, selling and marketing activities, capital expenditures, strategic acquisitions and investments, share repurchases, dividend payments and repayment of debt obligations.

We expect that cash provided by operating activities may fluctuate in future periods as a result of several factors, including fluctuations in our operating results, which include supply chain disruptions, working capital requirements and capital deployment decisions.

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As of June 30, 2025 and June 30, 2024, we had cash and cash equivalents of $1,209.5 million and $238.4 million, respectively.

Our cash and cash equivalents held within the United States at June 30, 2024 and June 30, 2023 were $51.2 million and $49.3 million, respectively.

Our cash and cash equivalents held within the U.S.

at June 30, 2025 and June 30, 2024 were $555.0 million and $51.2 million, respectively.

Our remaining cash and cash equivalent balances at June 30, 2025 and June 30, 2024, were $654.5 million and $187.2 million, respectively.

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

As of June 30, 2024, we had $1,470.0 million available for draw down under the revolving credit facility and a combined total of $1,708.4 million in cash and available liquidity under the revolving credit facility.

We repatriated $800.0 million and $445.0 million to the United States during the years ended June 30, 2024 and 2023, respectively, from earnings generated in each of those years.

The amount of the current year foreign earnings that we have repatriated to the United States in the past has been determined, and the amount that we expect to repatriate during fiscal year 2025 will be determined, based on a variety of factors, including current year earnings of our foreign subsidiaries, foreign investment needs and the cash flow needs we have in the United States, such as for the repayment of debt, dividend distributions, and other domestic obligations.

As of June 30, 2025, we had up to $1,500.0 million available for draw down under the revolving credit facility and a combined total of $2,709.5 million in cash and available liquidity under the revolving credit facility.

We repatriated $1,050.0 million and $800.0 million to the U.S.

during the years ended June 30, 2025 and 2024, respectively, from earnings generated in each of those years.

The amount of the current year foreign earnings that we have repatriated to the U.S.

in the past has been determined, and the amount that we expect to repatriate during fiscal year 2025 will be determined, based on a variety of factors, including current year earnings of our foreign subsidiaries, foreign

PART II Item 7

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

investment needs and the cash flow needs we have in the U.S., such as for the repayment of debt, dividend distributions, and other domestic obligations.

As a result of the TCJA, we treated all non-U.S.

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Revolving Credit Agreement, Term Credit Agreement and Senior Notes

On June 29, 2022, we entered into a second amended and restated credit agreement (as amended from time to time, the “Revolving Credit Agreement”).

On June 29, 2022, we entered into a second amended and restated credit agreement, or as amended from time to time, the Revolving Credit Agreement.

The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $1,500.0 million, with an uncommitted option to increase the revolving credit facility by an additional amount equal to the greater of $1,000.0 million or 1.0 times the EBITDA for the trailing twelve-month measurement period.

Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the Syndicated Facility Agreement (the “Term Credit Agreement”).

The Term Credit Agreement, among other things, provides ResMed Limited a senior unsecured term credit facility of $200.0 million.

Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the Syndicated Facility Agreement, or the Term Credit Agreement.

The Term Credit Agreement, among other things, provides ResMed Pty Limited a senior unsecured term credit facility of $200.0 million.

The Revolving Credit Agreement and Term Credit Agreement each terminate on Jun 29, 2027, when all unpaid principal and interest under the loans must be repaid.

As of June 30, 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 June 30, 2025, there was a total of $670.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

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Net cash used in investing activities (200,045) (269,784)

Net cash (used in) provided by financing activities (1,119,287) 422,874

Net cash used in financing activities (606,253) (1,119,287)

Effect of exchange rate changes on cash 25,799 (1,719)

Net increase (decrease) in cash and cash equivalents $ 10,470 $ (45,819)

Net increase in cash and cash equivalents $ 971,089 $ 10,470

Operating Activities

Cash provided by operating activities was $1,751.6 million for the year ended June 30, 2025, compared to cash provided of $1,401.3 million for the year ended June 30, 2024.

The $708.0 million increase in cash flow from operations was primarily due to lower cash outflows on inventory purchases during the year ended June 30, 2024 compared to the year ended June 30, 2023 and an increase in operating profit for the year ended June 30, 2024.

The $350.3 million increase in cash flow from operations was primarily due to increased net income, partially offset by higher working capital during the year ended June 30, 2025 compared to the year ended June 30, 2024.

During the year ended June 30, 2025, our operating cash flows included $124.4 million of income tax refunds and associated interest and penalties.

Investing Activities

Cash used in investing activities was $200.0 million for the year ended June 30, 2025, compared to cash used of $269.8 million for the year ended June 30, 2024.

The $890.1 million decrease in cash flow used in investing activities was primarily due to the cash used to acquire MEDIFOX DAN during the year ended June 30, 2023, partially offset by the cash used to acquire Somnoware during the year ended June 30, 2024.

The $69.7 million decrease in cash flow used in investing activities was primarily due to net proceeds from maturity of foreign currency contracts during the year ended June 30, 2025 compared to net

PART II Item 7

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

payments from maturity of foreign currency contracts and decreased purchases of property, plant and equipment during the year ended June 30, 2025.

Financing Activities

Cash used in financing activities was $1,119.3 million for the year ended June 30, 2024, compared to cash provided of $422.9 million for the year ended June 30, 2023.

The $1,542.2 million increase in cash flow used in financing activities was primarily due to borrowing activity under our Revolving Credit Agreement in order to finance our acquisition of MEDIFOX DAN during the year ended June 30, 2023 and subsequent repayments during the year ended June 30, 2024.

In addition, we repurchased $150.0 million of treasury stock during the year ended June 30, 2024.

We did not purchase any shares under our share repurchase program during the year ended June 30, 2023.

Cash used in financing activities was $606.3 million for the year ended June 30, 2025, compared to cash used of $1,119.3 million for the year ended June 30, 2024.

We repurchased $300.0 million of treasury stock during the year ended June 30, 2025 compared to repurchases of $150.0 million during the year ended June 30, 2024.

Cash outflows for treasury stock repurchases were offset by lower net repayments under our Revolving Credit Agreement of $40.0 million for the year ended June 30, 2025 compared to net repayments of $730.0 million for the year ended June 30, 2024.

During the year ended June 30, 2025, we paid cash dividends of $2.12 per common share totaling $310.9 million.

On August 1, 2024, our board of directors declared a cash dividend of $0.53 per common share, to be paid on September 19, 2024, to shareholders of record as of the close of business on August 15, 2024.

On July 31, 2025, our board of directors declared a cash dividend of $0.60 per common share, to be paid on September 18, 2025, to shareholders of record as of the close of business on August 14, 2025.

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

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Segment Information

We have determined that we have two operating segments, which are the Sleep and Respiratory Care segment and the SaaS segment.

We have determined that we have two operating segments, which are the Sleep and Breathing Health segment and the Residential Care Software segment.

See Note 13 – Segment Information of the Notes to the Consolidated Financial Statements (Part II, Item 8) for financial information regarding segment reporting.

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The preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.

On an ongoing basis we evaluate our estimates, including those related to allowance for doubtful accounts, inventory reserves, warranty obligations, goodwill, potentially impaired assets, intangible assets, income taxes and contingencies.

GAAP requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and

PART II Item 7

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

We state these accounting policies in the notes to the financial statements and at relevant sections in this discussion and analysis.

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(2) Income Tax.

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 recognize liabilities for uncertain tax positions based on a two-step process.

The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.

Based on our regular assessment, we may adjust the income tax provision and deferred taxes in the period in which the facts that give rise to a revision become known.

On September 19, 2021, we concluded the settlement agreement with the Australian Taxation Office (“ATO”) in relation to the previously disclosed transfer pricing dispute for the tax years 2009 through 2018 (“ATO settlement”).

The ATO settlement fully resolved the dispute for all prior years, with no admission of liability and provides clarity in relation to certain future taxation principles.

Management judgment is required in determining our income tax provision, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets in accordance with GAAP.

These estimates and judgments occur in the calculation of tax credits, benefits, and deductions and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions.

Significant changes to these estimates may result in an increase or decrease in our income tax provision in the current period or subsequent periods.

We maintain valuation allowances if it is more likely than not that all or a portion of the deferred tax asset will not be realized.

In determining whether a valuation allowance is warranted, we evaluate factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset.

The realizability assessments made at a given balance sheet date are subject to change in the future, particularly if earnings of a subsidiary are significantly higher or lower than expected, or if we take operational or tax planning actions that could impact the future taxable earnings of a subsidiary.

PART II Item 7

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

The final net impact of the ATO settlement was recorded during the years ended June 30, 2021 and 2022 in the amount of $238.7 million, which represents a gross amount of $381.7 million, including interest and penalties of $48.1 million, and adjustments for credits and deductions of $143.0 million.

As a result of the ATO settlement and due to movements in foreign currencies, we recorded a benefit of $14.1 million within other comprehensive income, and a $4.1 million reduction of tax credits, which was recorded to income tax expense.

As a result of the ATO settlement, we reversed our previously recorded uncertain tax position.

On September 28, 2021, we remitted final payment to the ATO of $284.8 million, consisting of the agreed settlement amount of $381.7 million less prior remittances made to the ATO of $96.9 million.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and our income tax returns are based on calculations and assumptions subject to audit by various tax authorities.

We recognize liabilities for uncertain tax positions based on a two-step process.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

While we believe we have appropriate support for the positions taken on our tax returns, we assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes on a quarterly basis.

Based on our assessment, we may adjust the income tax provision, deferred taxes and valuation allowances in the period in which the facts that give rise to a revision become known.

Tax years 2018 to 2024 remain subject to examination by the major tax jurisdictions in which we are subject to tax.

(3) Revenue Recognition.

For products in our Sleep and Respiratory Care business, we transfer control and recognize a sale when products are shipped to the customer in accordance with the contractual shipping terms.

For our SaaS business, revenue associated with cloud-hosted services are recognized as they are provided.

We have determined that we have two operating segments, which are Sleep and Breathing Health and Residential Care Software.

For products in our Sleep and Breathing Health business, we transfer control and recognize a sale when products are shipped to the customer in accordance with the contractual shipping terms.

For our Residential Care Software business, revenue associated with cloud-hosted services are recognized as they are provided.

Unbilled receivables arise when revenue is recognized for goods or services transferred but the customer has not yet been invoiced, typically due to billing terms or timing differences.

We defer the recognition of a portion of the consideration received when performance obligations are not yet satisfied.

Consideration received from customers in advance of revenue recognition is classified as deferred revenue.

Performance obligations resulting in deferred revenue in our Sleep and Respiratory Care business relate primarily to extended warranties on our devices and the provision of data for patient monitoring.

Performance obligations resulting in deferred revenue in our SaaS business relate primarily to the provision of software access with maintenance and support over an agreed term and material rights associated with future discounts upon renewal of some SaaS contracts.

Performance obligations resulting in deferred revenue in our Sleep and Breathing Health business relate primarily to extended warranties on our devices and the provision of data for patient monitoring.

Performance obligations resulting in deferred revenue in our Residential Care Software business relate primarily to the provision of software access with maintenance and support over an agreed term and material rights associated with future discounts upon renewal of some Residential Care Software contracts.

Generally, deferred revenue will be recognized over a period of one to five years.

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Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

In our Sleep and Respiratory Care segment, the amount of consideration received and revenue recognized varies with changes in marketing incentives (e.g.

In our Sleep and Breathing Health segment, the amount of consideration received and revenue recognized varies with changes in marketing incentives (e.g.

rebates, discounts, free goods) and returns by our customers and their customers.

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We adjust the estimate of revenue at the earlier of when the most likely amount of consideration can be estimated, the amount expected to be received changes, or when the consideration becomes fixed.

We offer our Sleep and Respiratory Care customers cash or product rebates based on volume or sales targets measured over quarterly or annual periods.

We offer our Sleep and Breathing Health customers cash or product rebates based on volume or sales targets measured over quarterly or annual periods.

We estimate rebates based on each customer’s expected achievement of its targets.

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For rebates measured over annual periods, we update our estimates each quarter based on actual sales results and updated forecasts for the remaining rebate periods.

We participate in programs where we issue credits to our Sleep and Respiratory Care distributors when they are required to sell our products below negotiated list prices if we have preexisting contracts with the distributors' customers.

We participate in programs where we issue credits to our Sleep and Breathing Health distributors when they are required to sell our products below negotiated list prices if we have preexisting contracts with the distributors' customers.

We reduce revenue for future credits at the time of sale to the distributor, which we estimate based on historical experience using the expected value method.

We also offer discounts to both our Sleep and Respiratory Care as well as our SaaS customers as part of normal business practice and these are deducted from revenue when the sale occurs.

When Sleep and Respiratory Care or SaaS contracts have multiple performance obligations, we generally use an observable price to determine the stand-alone selling price by reference to pricing and discounting practices for the specific product or service when sold separately to similar customers.

We also offer discounts to both our Sleep and Breathing Health as well as our Residential Care Software customers as part of normal business practice and these are deducted from revenue when the sale occurs.

When Sleep and Breathing Health or Residential Care Software contracts have multiple performance obligations, we generally use an observable price to determine the stand-alone selling price by reference to pricing and discounting practices for the specific product or service when sold separately to similar customers.

Revenue is then allocated proportionately, based on the determined stand-alone selling price, to each performance obligation.

An allocation is not required for many of our Sleep and Respiratory Care contracts that have a single performance obligation, which is the shipment of our therapy-based equipment.

An allocation is not

PART II Item 7

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

(4) Business Combinations.

Using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, we allocate the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

This allocation process involves the use of estimates and assumptions made in connection with determining the fair value of assets acquired and liabilities assumed including cash flows expected to be derived from the use of the asset, the timing of such cash flows, the remaining useful life of assets and applicable discount rates.

If actual results vary from the estimates or assumptions used in the valuation or allocation process, we may be required to record an impairment charge or an increase in depreciation or amortization in future periods, or both.

Refer to Note 17 – Business Combinations of the Notes to the Consolidated Financial Statements (Part II, Item 8) for additional information about accounting for the MEDIFOX DAN acquisition.

required for many of our Sleep and Breathing Health contracts that have a single performance obligation, which is the shipment of our therapy-based equipment.

Off-Balance Sheet Arrangements

As of June 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 June 30, 2025, we are not involved in any significant off-balance sheet arrangements, as described in Instruction 8 to Item 303(b) of Regulation S-K promulgated by the SEC.

PART II Item 7A

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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-K

Item 7. Management’s Discussion and Analysis