Q3 2024 Resmed Inc Earnings Call

Operator: Hello and welcome to the ResMed Q3 fiscal year 2024 earnings conference call. My name is Kevin, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session. Please note that this conference call is being recorded. I'll now turn the call over to Amy Wakeham, Chief Investor Relations Officer. Amy, you may begin.

Hello, and welcome to the Q3 fiscal year 'twenty 'twenty four RESNET earnings Conference call. My name is Kevin and I'll be your operator for today's call.

At this time all participants are in a listen only mode.

Later, we'll conduct a question and answer session. Please note. This conference call is being recorded I'll now turn the call over to Amy Wakeham, Chief Investor Relations Officer, Amy you may begin.

Amy Wakeham: Great. Thank you, Kevin. Hello, everyone.

Amy Wakeham: Great. Thank you, Kevin and Hello, everyone welcome to resume the third quarter fiscal year 2024 earnings call. We are live webcasting this call and the replay will be available on the Investor Relations section of our corporate website later today.

Amy Wakeham: Welcome to ResMed's third quarter fiscal year 2024 earnings call. We are live webcasting this call, and the replay will be available on the investor relations section of our corporate website later today. Our earnings press release and presentation are both available online now. During today's call, we will discuss several non-GAAP measures that we believe provide useful information for investors. This information is not intended to be considered in isolation or as a substitute for GAAP financial information.

Speaker Change: Our earnings press release and presentation are both available online now.

Speaker Change: During today's call we will discuss several non-GAAP measures that we believe provide useful information for investors. This information is not intended to be considered in isolation or as a substitute for the GAAP financial information.

Amy Wakeham: We encourage you to review the supporting schedules in today's earnings press release to reconcile the non-GAAP measures with the GAAP-reported numbers. In addition, our discussion today will include forward-looking statements, including but not limited to, expectations about our future financial and operating performance. We make these statements based on reasonable assumptions; however, our actual results could differ. Please review our SEC filings for a complete discussion of the risk factors that could cause our actual results to differ materially from any forward-looking statements made today. I'd like to now turn the call over to ResMed's Chairman and CEO, Mick Farrell. Thanks, Amy.

We encourage you to review the supporting schedules in today's earnings press release to reconcile the non-GAAP measures with the GAAP reported numbers in.

Speaker Change: In addition, our discussion today will include forward looking statements, including but not limited to expectations about our future financial and operating performance. We make these statements are based on reasonable assumptions. However, our actual results could differ please review our SEC filings for a complete discussion of the risk factors.

Speaker Change: That could cause our actual results to differ materially from any forward looking statements made today I'd like to now turn the call over to resume the chairman and CEO Mick Farrell.

Michael J. Farrell: Thanks, Amy and thank you to all of our shareholders for joining us today.

Michael J. Farrell: Thanks Amy and thank you to all of our shareholders for joining us today. Our third quarter fiscal year 2024 results reflect another strong period of execution across our entire business, resulting in solid top-line growth and strong double-digit bottom line growth. Our results were driven by ongoing new patient demand for our devices across global markets, high single-digit growth in our software as a service, and double-digit global growth in our masks and accessories business. This is an exceptional performance given that we are annualizing a very strong quarter of growth in the prize.

Michael J. Farrell: Our third quarter fiscal year 2024 results reflect another strong period of execution across our entire business, resulting in solid top line growth and strong double digit bottom line growth.

Michael J. Farrell: Our results were driven by ongoing new patient demand for our devices across global markets high single digit growth in our software as a service business and double digit global growth, you know masks and accessories business.

Michael J. Farrell: This is exceptional performance given that we are annualizing, a very strong quarter of growth in the prior year.

Michael J. Farrell: The recent launch of our ResMed 2030 operating model and our steady focus on driving increased operating leverage are delivering excellent bottom-line results and keeping us on a clear trajectory of ongoing profitable growth. Over 2 billion people worldwide suffer from sleep apnea, or what I call sleep suffocation, which is insomnia or respiratory insufficiency due to chronic obstructive pulmonary disease or neuromuscular disease.

Michael J. Farrell: The recent launch of our resume 2030 operating model and our steady focus on driving increased operating leverage delivering excellent bottom line results and keeping us on a clear trajectory of ongoing profitable growth.

Michael J. Farrell: Over 2 billion people worldwide suffer from sleep apnea, what I call sleep, suffocation, insomnia, or respiratory insufficiency, Judah chronic obstructive pulmonary disease or neuromuscular disease.

Michael J. Farrell: These chronic conditions form a healthcare epidemic that ResMed is uniquely positioned to address. We believe that healthcare should be delivered at the lowest cost, lowest acuity, and highest comfort level possible. In the optimal case, that's in a person's own home.

Michael J. Farrell: These chronic conditions from a health care epidemic that resonate is uniquely positioned to address we believe that health care should be delivered at the lowest cost lowest acuity and highest comfort location possible and the optimal case, that's in a person's arent we.

Michael J. Farrell: We are the global strategic leader in providing therapies for this epidemic, as well as market-leading enterprise software for residential care, including home medical equipment, home nursing, and beyond. ResMed is the global leader in digital health solutions with over 18 billion nights of medical data in the cloud and over 24.5 million 100% cloud-connected medical devices that have been sold in over 140 countries worldwide. We are the clear leader in sleep apnea, a market of over 1 billion people globally. However, our end markets remain significantly underpenetrated.

Michael J. Farrell: We are the global strategic leader in providing therapies for this epidemic as well as market, leading enterprise software for residential care, including home medical equipment.

Michael J. Farrell: And beyond <unk>.

Michael J. Farrell: <unk> is the global leader in digital Health solutions with over 18 billion nights of medical data in the cloud and over $24 5 million, 100% cloud connected medical devices that have been sold into over 140 countries worldwide.

Michael J. Farrell: We are a clear leader in the sleep apnea market of over 1 billion people globally.

Michael J. Farrell: Our end market remains significantly underpenetrated.

Michael J. Farrell: We believe the latest advances in big consumer tech and big pharma can potentially bring incredible numbers of new patients into healthcare, where ResMed is uniquely positioned to provide ongoing care at home. We have a myriad of opportunities to add value, to reduce friction, to improve interoperability, to lower costs, and to improve patient outcomes. We're a global strategic leader with software supporting hundreds of millions of people as they take control of their healthcare journey and navigate the complex healthcare world beyond the hospital.

Michael J. Farrell: We believe the latest advances in big consumer Tech and big pharma can potentially bring incredible numbers of new patients into the health care system, where resumes is uniquely positioned to provide ongoing care at home.

Michael J. Farrell: We have a myriad of opportunities to add value to reduce friction to improve interoperability to lower costs and to improve patient outcomes.

Michael J. Farrell: With a global strategic leader with software supporting hundreds of millions of people as they take control of their health care journey and navigate the complex health care World beyond the hospital system.

Michael J. Farrell: Many more people can benefit from our products and solutions, and we're laser focused on growing the market to help people get on the therapy they need and on a pathway to better sleep, better health, and better long-term care. Sales of our devices, including the category-leading AirSense platforms, grew 5% year-over-year globally. Excluding the one-time COVID-related ventilator sales in the third quarter of last year, global devices grew about 300 basis points higher than that, so right around 8% global device growth. We are maintaining supply of two of the two market-leading 100% cloud-connectable platforms, the AirSense 10 and the AirSense 11.

Michael J. Farrell: Many more people can benefit from our products and solutions and we're laser focused on growing the market to help people get on the therapy dying need and on a pathway to better sleep better health and better long term care.

Michael J. Farrell: Sales of our devices, including the category, leading essence platforms grew 5% year over year globally, excluding the onetime COVID-19 related ventilate a sales in the third quarter of last year Global devices grew about 300 basis points higher than that so right around 8% global device.

Michael J. Farrell: This growth.

Michael J. Farrell: We are maintaining supply of two of the two market, leading 100% cloud connected platforms. The <unk> 10, and the <unk> 11.

Michael J. Farrell: We're working to increase the global availability of the AirSense 11 platform by securing market-by-market regulatory clearance. We are following a similar path with our recently launched Aircurve 11 bi-level and non-invasive ventilator platform as we continue its launch in the U.S. and beyond in the period ahead. Our commercial teams are successfully demonstrating the clinical and economic benefits of the ResMed mask portfolio. Our masks and accessories business achieved 10% growth year over year, expanding at or above the market in a competitive category globally.

Michael J. Farrell: We are working to increase the global availability of essence 11 platform by securing market by market regulatory clearances.

Michael J. Farrell: We are following a similar path with our recently launched it cuz 11 by level and noninvasive ventilator platform as we continue its launch in the U S and beyond in the period ahead.

Michael J. Farrell: Our commercial teams are successfully demonstrating the clinical and economic benefits of the resumes mask portfolio.

Michael J. Farrell: Mosques and accessories business achieved 10% growth year over year, expanding at or above the market in a competitive category globally. During the quarter, we introduced our lightest mask innovation into the U S market called the F 15 F 40.

Michael J. Farrell: During the quarter, we introduced our latest mask innovation to the U.S. market called the AirFit F14. The F40 features a proprietary new technology that we call AdaptySeal. It is a silicone cushion designed to create and maintain a better facial seal even when the person is moving frequently during sleep. It leverages fully flexible frame technology to cope with such frequent nocturnal movements. Physicians, respiratory therapists, and patients love the F40 for its comfort, its fit, and its ease of use. It is the smallest full face mask on the market from ResMed.

Michael J. Farrell: The F. <unk> features a proprietary new technology that we call adaptive seal.

Michael J. Farrell: It is the silicon cushion designed to create and maintain a better facial seal even when the person is moving frequently during sleep.

Michael J. Farrell: It leverages, our fully flexible frame technology to cope with such frequent nocturnal movement.

Michael J. Farrell: Physicians respiratory therapists and patients love the F 44, it's comfort its fit and its ease of use it as the smallest full face mask on the market from regimen.

Michael J. Farrell: Patients are voting with their wallets, and respiratory therapists and physicians are voting with their recommendations and their prescriptions. We look forward to ongoing success in the U.S. and to swiftly bringing the F40 to other global markets very soon. Mask and Accessory Resupply Programs are an important element of our office, as we serve the ongoing therapy needs of patients globally. ResMed's clinical and commercial teams continue to partner with physicians and providers to drive resupply programs directly for their patients. In our cash-pay markets, we've established a number of subscription programs that have been adopted by consumers.

Michael J. Farrell: Patients are voting with their wallets and respiratory therapists and physicians are voting with their recommendations and their prescriptions.

Michael J. Farrell: We look forward to ongoing success in the U S and to swiftly bring the F 42, other global markets very soon.

Michael J. Farrell: Mask and accessory resupply programs are an important element of our offering.

Michael J. Farrell: As we serve the ongoing therapy needs of patients globally.

Michael J. Farrell: Resume its clinical and commercial teams continue to partner with physicians and providers to drive resupply programs directly for their patients.

Michael J. Farrell: Our cash pay markets, we've established a number of subscription programs that have been adopted by consumers.

Michael J. Farrell: Research shows that resupply programs lead to better patient adherence and better long-term clinical outcomes for the patient and their caregivers. In the U.S., our resupply programs are powered by our digital health ecosystem, including AirView for physicians, MyAir for patients, and Brightree for home medical equipment providers. We will continue to develop, launch, and scale these technologies, as well as direct subscription programs, to help people take control of their own health, regularly refreshing ongoing therapy needs including masks, tubing, humidifiers, and other accessories. Now, I'll turn to a discussion of our top three global strategic priorities here at ResMed.

Michael J. Farrell: Research shows that resupply programs lead to better patient adherence and better long term clinical outcomes for the patients and their caregivers.

Michael J. Farrell: In the U S. Our resupply programs are powered by our digital health ecosystem, including <unk> for physicians my error for patience and brought tree for home medical equipment providers. We will continue to develop launch and scale. These technologies as well as direct subscription programs to help.

Michael J. Farrell: People take control of their own health.

Michael J. Farrell: Regularly refreshing ongoing therapy needs, including mosques tubing humidifiers and other accessories.

Michael J. Farrell: Let's now turn to a discussion of our top three global strategic priorities here at resume number one is to grow and differentiate our core sleep health and breathing health business.

Michael J. Farrell: Number one is to grow and differentiate our core sleep health and breathing health business. Number two is to design, develop, and deliver market-leading medtech and digital health solutions that can be scaled in 140-plus countries worldwide. Number three is to create and leverage the world's best software solutions for residential care.

Michael J. Farrell: Two is to design develop and deliver market, leading med tech and digital health solutions that can be scaled and 140 plus countries worldwide number three is to create and leverage the world's best software solutions for residential care.

Michael J. Farrell: As the global market leader in these significantly under-penetrated markets, our most significant opportunity is actually to expand and grow the market itself through awareness, diagnosis, and pathways to treat. We aspire to be the digital health concierge for each person as they pursue their personal journey to better sleep, better breathing, and better care where they live. We are ramping up our demand generation initiatives to do just that.

Michael J. Farrell: As the global market leader in these significantly Underpenetrated markets. Our most significant opportunity is actually to expand and grow the market itself through awareness diagnosis and pathways to treatment.

Michael J. Farrell: We aspire to be the digital health concierge for each person as they pursue their personal journey to better sleep, better breathing and better care, where they live.

Michael J. Farrell: We are ramping up our demand generation initiatives to do just that.

Michael J. Farrell: The ResMed 2030 operating model changes that we made recently position us for success as a product-led, customer-centric, brand-enhanced leader in health care. We're raising awareness and creating pathways for patients to find access to care for their sleep health and their breathing health across the globe. We are leveraging traditional market channels and investing in cost-effective, social media-driven, demand generation campaigns.

Michael J. Farrell: The resume 2030 operating model changes that we made recently position us for success as a product led customer centric brand enhanced leader in health Tech.

Michael J. Farrell: We are raising awareness and creating pathways for patients to find access to care for their sleep health and their breathing health across the globe.

Michael J. Farrell: We are leveraging traditional market channels and investing in cost effective social media driven demand generation campaigns. The goal is to help consumers concerned about their sleep and breathing find their way into appropriate screening diagnostic treatment and management pathways.

Michael J. Farrell: The goal is to help consumers concerned about their sleep and breathing find their way into appropriate screening, diagnostic, treatment, and management pathways. As we continue on our journey to create this digital health concierge for individuals, we are tracking progress with hard metrics. We are looking at new patient starts in our physician and provider-based ecosystem, including Airview, which now contains more than 27 million patient records. We're also tracking new starts in MyAir, our consumer patient engagement app, where people choose to participate in their personalized healthcare journey to better sleep and better breathing. MyAIR now includes a population of 7.8 million users.

Michael J. Farrell: As we continue on our journey to create this digital health concierge for individuals we are tracking progress with hard metrics. We're looking at new patient starts and a physician and provider based ecosystem, including <unk>, which now contains more than 27 million patient records. We also track.

Michael J. Farrell: <unk>, new stops in Maya or consumer patient engagement app with people choose to participate in their personalized health care journey to better sleep and better breathing.

Michael J. Farrell: <unk> now includes a population of $7 8 million users.

Michael J. Farrell: We will drive more and more of the over 1 billion people worldwide who need our help for their sleep suffocation into the healthcare system. We believe two global megatrends will further support our ongoing growth. Awareness is driven by consumer tech, specifically sleep tracking wearables like the Samsung Galaxy Watch, which has DeNovo FDA clearance to screen for sleep apnea. We expect similar capabilities from other wearables from big tech, including the Apple Watch and Google's Fitbit.

Michael J. Farrell: We will drive more and more of the over 1 billion people worldwide, who need our help for their sleep suffocation into the health care system.

Michael J. Farrell: We believe two global Megatrends will further support our ongoing growth.

Michael J. Farrell: Awareness driven by consumer Tech, specifically sleep tracking wearables like the Samsung Galaxy watch, which has a de novo FDA clearance to screen for sleep apnea, we expect similar capabilities from other wearables from Big Tech, including the Apple watch and Google's Fitbit.

Michael J. Farrell: In addition, we believe that the population of patients, the other megatrend, the population of patients coming from big pharma as they focus on obesity and related impacts on health, including sleep health, will bring an incredible volume of patients into the healthcare system, and these patients will have clinically significant sleep apnea that is best addressed by our therapies after these other therapies. We love this attention from big consumer tech on the field of sleep wellness tracking, and we believe that many of these wearable technologies will help consumers find out if they have issues with breathing during sleep or maintaining high quality sleep.

Michael J. Farrell: In addition, we believe that the population of patients the other mega trend in the population of patients coming from big pharma as they focus on obesity and related impacts on health, including sleep health will bring an incredible volume of patients into the health care system and the patients will have clinically.

Michael J. Farrell: <unk> sleep apnea.

Michael J. Farrell: That is best addressed by out therapies post these other therapies.

Michael J. Farrell: We love this attention from big consumer Tech on the field of sleep wellness tracking and we believe that many of these wearable technologies will help consumers find out if they have issues with breathing during sleep, while maintaining high quality sleep.

Michael J. Farrell: This could be one of the biggest waves of people taking control of their own pathway to discovering they have sleep issues like sleep apnea or insomnia, or both, a new disease state that has been called by physicians co-mesia.

Michael J. Farrell: This could be one of the biggest waves of people taking control of their own pathway for discovering they have sleep issues like sleep apnea or insomnia.

Michael J. Farrell: Our new disease state that has been caused by the physicians co Mesa.

Michael J. Farrell: Ultimately, we believe that this will lead to increased patient awareness and sustainable long-term growth for residents. Our goal is to educate people as they move from sleep wellness tracking with these wearables to what I call sleep health tracking, and from Consumer Awareness to a true healthcare pathway for screening, diagnosis, treatment, and ultimately ongoing management of their sleep and breathing health. We believe that here at ResMed, we are uniquely positioned to help. Big Pharma is squarely focused on GLP-1 medications right now. For many people dealing with their obesity, their healthcare goals are focused on losing weight while improving their diet, exercise, and their sleep routine.

Michael J. Farrell: Ultimately, we believe that this will lead to increased patient awareness and sustainable long term growth for Red Smith.

Michael J. Farrell: Our goal is to educate people as they move from sleep wellness tracking with these wearables to what I call sleep health tracking.

Michael J. Farrell: And from consumer awareness to a true health care pathway for screening diagnosis treatment and ultimately ongoing management of their sleep health and breathing health.

Michael J. Farrell: We believe that here at <unk>, we are uniquely positioned to help.

Michael J. Farrell: Big Pharma is squarely focused on GOP, one medications right now for many people dealing with their obesity, they're health care goals are focused on losing weight, while improving their diet exercise and sleep routines, we believe that increased utilization of <unk>.

Michael J. Farrell: We believe that increased utilization of GLP-1s to treat obesity will bring many new people into the healthcare funnel, causing them to see their primary care physicians as they strive for weight loss and other medical health. We believe this will open these patients up to knowledge of their other chronic diseases from their primary care physicians, including awareness of chronic diseases such as sleep apnea. Ultimately driving new patients into diagnosis and treatment pathways that may not have previously been considered or being treated for those patients.

Michael J. Farrell: Treat obesity will bring many new people people into the healthcare funnel activating them to see their primary care physicians as they strive for weight loss and other medical help.

Michael J. Farrell: We believe this will open these patients up to knowledge of their other chronic diseases from their primary care physicians, including awareness of chronic diseases, such as sleep apnea.

Michael J. Farrell: Ultimately driving new patients into diagnosis and treatment pathways that may not have previously been considered.

Michael J. Farrell: All being traded full for those patients.

Michael J. Farrell: So we believe this will drive not just more patients into our channel but also more motivated patients into our channel. ResMed has been tracking the impact of GLP-1s through a de-identified patient analysis using an overlap of our data and third-party claims data. With another quarter of data analyzed, we are now up to an incredible number of N = 660,000 subjects in our analysis.

Michael J. Farrell: So we believe this will drive not just more patients into our channel, but also more motivated patients into our channel.

Michael J. Farrell: <unk> has been tracking the impact of GOP ones through idea identified patient analysis, using an overlap of our data and third party claims data.

Michael J. Farrell: With another quarter of data analyzed we are now off to an incredible and equaled 660000 subjects in our analysis.

Michael J. Farrell: The bottom line is that the data show that GLP-1s are having a positive impact on patients seeking and adhering to positive airway pressure therapy. The latest numbers are an improvement from what we presented previously. For patients prescribed a GLP-1 medication, the latest data show a 10.5% higher propensity to start positive airway pressure therapy over those not taking the drug. As we follow these patients longitudinally, the resupply rate at T equals 12 months is 310 basis points higher. That's 3.1 absolute basis percentage points higher for patients who have a GLP-1 prescription. And then at T equals 24 months, the resupply rate is 500 base...

Michael J. Farrell: The bottom line is that the data show that <unk> ones are having a positive impact on patient seeking and adhering to positive airway pressure therapy the.

Michael J. Farrell: The latest numbers are an improvement from what we presented previously.

Michael J. Farrell: For patients prescribed a GOP one medication the lightest data show at 10, 5% higher propensity to start positive airway pressure therapy other does not taking the drug.

Michael J. Farrell: As we follow these patients longitudinally the resupply right at T. Equals 12 months is 310 basis points higher that three one absolute absolute basis.

Michael J. Farrell: <unk> points higher for patients who have a GOP one prescription and then it T equals 24 months. The resupply right is 500 basis points to 5.0 absolute percentage points higher for patients who have a GOP one prescription.

Michael J. Farrell: So 5.0 absolute percentage points higher for patients who have a GLP-1 prescription. These data show clearly that this new GLP-1 pharmaceutical class is actually a tailwind for our ResMed business, bringing more patients and more motivated patients into the healthcare system. We've included the full analysis of these data in our investor deck, and I encourage you to review the data there. It's very positive information and very thorough and detailed work by our healthcare economics and outcomes research as well as our digital health analytics teams here at ResMed. Existing clinical studies show many factors impact sleep epidemiology, including craniofacial anatomy, age of the subject, gender, and weight.

Michael J. Farrell: These data showed clearly that these new GOP, one pharmaceutical cloth is actually a tailwind for our resume business, bringing more patients and more motivated patients into the health care system.

Michael J. Farrell: We've included the full analysis of these data in our investor deck and I encourage you to review the data there, it's very positive information and very thorough and detailed work by our healthcare economics and outcomes research as well as our digital health analytics teams here at resume.

Michael J. Farrell: Existing clinical studies show, many factors impacts sleep apnea epidemiology, including craniofacial anatomy IAG have the subject gender and white.

Michael J. Farrell: With over 1 billion people on the planet with sleep apnea right now, 80 percent of them are undiagnosed in our biggest market, the United States, and over 90 percent of patients are undiagnosed globally. There remains an incredible opportunity to help people sleep and breathe better through positive airway pressure therapy, the universally recognized gold standard for treating sleep apnea. We look forward to more patients entering the healthcare system for care and more motivated patients who can get on our therapy faster and stay on it longer.

Michael J. Farrell: With over 1 billion people on the planet with sleep apnea and right now 80 plus percent of them are undiagnosed in our biggest market the United States and over 90% of patients are undiagnosed globally.

Michael J. Farrell: There remains an incredible opportunity to help people sleep and breathe better through positive airway pressure therapy. The universally recognized gold standard for trading sleep apnea, we look forward to more patients entering the healthcare system for care and more motivated patients who can get on our therapy faster and stay on it longer.

Michael J. Farrell: In terms of best-in-class treatments for sleep apnea, achieving that goal of good sleep and good breathing, we have peer-reviewed and published evidence demonstrating that we can achieve over 87% of patients adherent to our positive airway pressure technology by combining our market-leading device platforms, our market-leading masks, and our digital health solution. Even with this best-in-class global technology, just over 10% of patients still need alternative therapies, and we have a very high volume of patients coming through these days.

Michael J. Farrell: In terms of best in class treatments for sleep apnea, achieving that goal of good sleep and good breathing. We have peer reviewed published evidence demonstrating that we can achieve 87% of patients adherent to our positive airway pressure technology by combining our market leading device platforms, our market, leading mosques without digital health.

Michael J. Farrell: <unk>.

Michael J. Farrell: Even with this best in class Global Tech just over 10% of patients still need alternative therapies, and we have a very high volume of patients coming through these times.

Michael J. Farrell: We're investing in alternative therapies, and we're working to help patients who just can't adhere to positive airway pressure therapy, despite the latest technology, to find their path to second-line therapies, such as dental devices, where ResMed has the market-leading 3D-printed dental device on the planet for sleep apnea in Western Europe and Northern America. It's called Nalval. In addition, we have investments in third-line We're an investor in ApneMed, and we're also an investor in hyperglossal nerve stimulation technology through our investment in a company called Nixola.

Michael J. Farrell: We're investing in alternative therapies, and we're working to help patients who just content heat a positive airway pressure therapy. Despite the latest technology to find their path to second line therapies, such as dental devices, where resume has the market leading three D printed dental device on the planet for sleep apnea in Western Europe, and Northern Europe.

Michael J. Farrell: That's called Navajo. In addition, we have investments in third line therapies, including pharmaceutical options, we're an investor in <unk> and.

Michael J. Farrell: And we're also an investor in hypoglossal nerve stimulation technology through our investment in a company called <unk>.

Michael J. Farrell: ResMed is about sleep health, it's about breathing health, and it's about delivering the best care right where you live. We make sure the person finds the path to the highest efficacy, lowest cost, and most comfortable therapy that's best for them.

Michael J. Farrell: Resume is about sleep health, it's about breathing health and it's about delivering the best care right, where you live we make sure the person funds the path to the highest efficacy lowest cost most comfortable therapy, that's best for them.

Michael J. Farrell: Let's pivot now to talk about our digital health technology investments, leveraging our 18 billion nights of de-identified medical data in the cloud and our 24.5 100% cloud-connected devices that are out there in our ecosystem across 140 countries. We are investing in a portfolio of AI-driven capabilities, as well as customer-facing AI products in our ecosystem. We continue to roll out these products in our Airview ecosystem, such as Compliance Coach, which I talked about last quarter. That's rolling out in the United States.

Michael J. Farrell: Let's pivot now to talk about our digital health technology investments leveraging our 18 billion nights of Dr identified medical data in the cloud and our 24 five 100% cloud connected devices that are out there in our ecosystem across 140 countries.

Michael J. Farrell: We are investing in a portfolio of artificial intelligence driven capabilities as well as customer facing II products in our ecosystem.

Michael J. Farrell: We continue to rollout these products in our.

Michael J. Farrell: Ecosystem, such as compliance coach that I talked about last quarter that is rolling out in the United States. We're also progressing well without generative capabilities to help patients along the journey really people before their patients and then they become.

Michael J. Farrell: We're also progressing well with our generative AI capabilities to help patients along their journey, really people before they're patients, and then they become people seeking sleep health and breathing health solutions, and then on their journey, they become patients. And we're rolling out that generative AI capability in the Asia-Pacific region for now, and we'll look to scale that as we move forward. We'll continue to share progress on this front as this revolutionary tech is developed and scaled across our business, and many MedTech and HealthTech peers are doing the same, and our ecosystem will move forward.

Michael J. Farrell: People seeking a sleep health and <unk> health solutions, and then on their journey they become patients and we're rolling out that Gen II capability in the Asia Pac region for now and we'll look to scale that as we move forward.

Michael J. Farrell: We will continue to share progress on this front as this revolutionary Tech has developed and scaled across our business and many of Med Tech and health Tech peers are doing the science and our ecosystem will move forward.

Michael J. Farrell: Our respiratory health business continues to be supported by sustained activity across our non-invasive ventilator platforms and our life support ventilator platforms. We continue to invest in clinical and economic trials for high flow therapy, which we call HFT, to treat chronic obstructive pulmonary disease at home at a cost-effective rate. This is a long-term opportunity focused on generating evidence, developing pathways, and driving new reimbursement options. We are focused on driving adoption of these technologies for treatment at home. The prevalence of respiratory insufficiency due to COPD as well as neuromuscular diseases continues to increase, and we have low-cost, high-efficacy, and high-tech treatments in HFT and beyond to address this healthcare epidemic.

Michael J. Farrell: Our respiratory health business continues to be supported by sustained activity across our noninvasive ventilator platforms and our life support ventilator platforms, we continue to invest in clinical and economic trials for high flow therapy that we call <unk> ft to treat chronic obstructive pulmonary disease at home at cost at a cost effective <unk>.

Michael J. Farrell: This is a long term opportunity focused on generating evidence developing pathways and driving you reimbursement options.

Michael J. Farrell: We are focused on driving adoption of these technologies for treatment at home the.

Michael J. Farrell: The prevalence of respiratory insufficiency, Judah COPD as well as neuromuscular diseases continues to increase and we have low cost high efficacy and high tech treatments in <unk> and beyond to address this healthcare epidemic.

Michael J. Farrell: Turning to our software as a service business in the field of residential care, we had another strong quarter with year-over-year growth of 8%. We plan to maintain high single-digit growth for the remainder of fiscal year 2024, and we plan to accelerate to double-digit growth for our residential care software-as-a-service business on an organic basis throughout fiscal year 2025. We are seeing ongoing customer-facing synergies between our Bright Tree offering in the U.S. and our core home medical equipment channel and its resupply capabilities.

Michael J. Farrell: Turning to our software as a service business in the field of residential care, we had another strong quarter with year over year growth of 8%, we plan to maintain high single digit growth in the remainder of fiscal year 2024, and we plan to accelerate to double digit growth for our residential care software as a <unk>.

Michael J. Farrell: Service business on an organic basis throughout fiscal year 2025.

Michael J. Farrell: We are seeing ongoing customer facing synergies between our <unk> offering in the U S and our core home medical equipment channel and it's resupply capabilities we.

Michael J. Farrell: We are driving good growth across both our residential care SaaS business and our core sleep health and breathing health businesses while serving many hundreds of thousands of patients. Our residential care SaaS business is integral to ResMed's growth portfolio, and we're excited to have created a global business that will achieve double-digit growth on an organic basis throughout fiscal year 2025. We continue to drive OPEX leverage by managing our capabilities for cloud compute, cybersecurity, interoperability, privacy, and R&D across our go-to-market brands that include Brightree, MatrixCare, and Medifox Darn.

Michael J. Farrell: We are driving good growth across both our residential care SaaS and our core sleep health and breathing health businesses, while serving many hundreds of thousands of patients.

Michael J. Farrell: Our residential care SaaS business is integral to resume growth portfolio and we're excited to have created a global business that will achieve double digit growth on an organic basis throughout fiscal year 2025.

Michael J. Farrell: We continue to drive Opex leverage by managing our capabilities for cloud compute cyber security interoperability privacy and R&D across our go to market brands that include bright tree matrix care and many Fox done.

Michael J. Farrell: And those synergies go not just across the SAS businesses but also directly into our core sleep health and breathing health business. And beyond this infrastructure leverage, our residential care SaaS business drives platform development synergies and customer engagement facilities and capabilities that are synergies as well. And these highly complement the market-leading medtech and software solutions capability that's already right in our core sleep health and breathing health business ecosystem, including products like AirView and MyAir and beyond.

Michael J. Farrell: And those synergies go not just across the SaaS businesses, but also directly into our core sleep health and breathing health health business.

Michael J. Farrell: And beyond this infrastructure leverage our residential care SaaS business drives.

Michael J. Farrell: Form development synergies and customer engagement facilities and capabilities that our synergies as well and these highly complement the market, leading med tech and software solutions capability that stand right in our core sleep health and breathing health business ecosystem, including products like <unk> and Maya and beyond.

Michael J. Farrell: We are transforming respiratory medicine and residential care at scale. We are leading the industry in developing, applying, and adopting digital health technology across our markets. We continue to scale and drive efficiencies in our operations. We're focused on driving top-line revenue growth, focused cost discipline, and increased efficiencies to accelerate profitability all the way to the bottom line. And we made very good progress on that this quarter. The team delivered non-GAAP operating income up 23% and non-GAAP net income up 27%.

Michael J. Farrell: We are transforming respiratory medicine and residential care at scale, we are leading the industry in developing applying in adopting digital health technology across our markets. We continue to scale and drive efficiencies in our operations. We're focused on driving topline revenue growth focused cost discipline and increased efficiencies too.

Michael J. Farrell: Accelerate profitability all the way to the bottom line and we made very good progress on that this quarter. The team delivered non-GAAP operating income up 23% and non-GAAP net income up 27%.

Michael J. Farrell: We have created differentiated products and solutions for customers worldwide, driving long-term sustainable value for our shareholders. We lead the industry in digital health technology with the smallest, quietest, most comfortable, most connected, and most intelligent medtech solutions. During the last 12 months, we have improved over 174 million lives by delivering a medical device directly to a patient, a complete mask system to a patient, or a digital health software solution that provides personalized care for a patient right where they live.

Michael J. Farrell: We have created differentiated products and solutions for customers worldwide driving long term sustainable value for our shareholders. We lead the industry in digital health technology with the smallest quietest most comfortable most connected and most intelligent med Tech solutions.

Michael J. Farrell: During the last 12 months, we have improved about 174 million lives by delivering a medical device directly to a patient the complete mask system to a patient or a digital health software solution that provides personal care for a patient right where they live.

Michael J. Farrell: We've helped each person sleep better, breathe better, and live higher quality lives with best-in-class health. In closing, I want to express my sincere gratitude to the more than 10,000 ResMedians for their perseverance, hard work, and dedication today and every day. Thank you. With that, I'll hand over the call to Brett in Sydney for his remarks, and then we'll open up to Q&A with the entire team between Sydney and San Diego. It's over to you, Brett.

Michael J. Farrell: We've helped each person sleep better breathe better and live higher quality lives with best in class healthcare.

Speaker Change: In closing I want to express my sincere gratitude to the more than 10000 residents for their perseverance hard work and dedication today and every day.

Michael J. Farrell: With that I'll hand over the call to Brett in Sydney for his remarks, and then we'll open up to Q&A with the entire team between Sydney and San Diego over to you Brett.

Brett: In my remarks today, I will provide an overview of our results for the third quarter of fiscal year 2024, and let's note that all comparisons are to the prior year quarter and in constant currency terms where applicable. We had a strong financial performance in Q3. Group revenue for the March quarter was $1.2 billion, a 7% headline increase and a 7% increase in constant currency terms. Revenue growth reflects positive and consistent contributions across our product and resupply portfolio. Year-over-year movements in foreign currency had a negligible impact on revenue during the March quarter.

Brett: Alright, Thanks Mick.

Brett: My remarks today I'll provide an overview of our results for the third quarter of fiscal year 2024, unless noted all comparisons out of the prior year quarter and in constant currency terms where applicable.

Brett: We had strong financial performance in Q3 revenue for the March quarter was $1 2, billion% to 7% headline increase and a 7% increase in constant currency terms.

Brett: Revenue growth reflects positive and consistent contributions across our product and re supply portfolio.

Brett: Year over year movements in foreign currency had a negligible impact on revenue during the March quarter.

Brett: Looking at our geographic revenue distribution and excluding revenue from our software as a service business, sales in the US, Canada, and Latin America increased by 9%; sales in Europe, Asia, and other markets increased by 3%. Globally, device sales increased by 5% while masks and other sales increased by 10%. Breaking it down by regional areas, device sales in the US, Canada, and Latin America increased by 7%, supported by solid ongoing new patient diagnosis, while masks and other sales increased by 12%, reflecting growth in both resupply and new patient set-up. In Europe, Asia, and other markets, device sales increased by 1% on a constant currency basis.

Brett: Looking at our geographic revenue distribution and excluding revenue from our software as a service business.

Brett: In U S, Canada, and Latin America increased by 9% sales in Europe Asia, and other markets increased by 3%.

Brett: I believe the lifestyles increased by 5%, while masks and other sales increased by 10%.

Brett: Breaking it down by regional areas device sales in the U S, Canada, and Latin America increased by 7%.

Brett: <unk> by solid ongoing new patient diagnosis, while masks and other sales increased by 12% reflecting growth in both re supply and new patient setups.

Brett: Sure.

Michael J. Farrell: In Europe Asia, and other markets device sales increased by 1% on a constant currency basis.

Brett: Year over year growth moderated due to incremental revenue in the prior year quarter of approximately $15 million from COVID related demands. However, excluding the COVID related sales, device revenue increased by 8% on a constant currency basis. Masks and other sales increased by 6% on a constant currency basis. Software as a service revenue increased by 8% in the March quarter, underpinned by growth from Medifox Dan and continued strong performance from our HME Vertical. During the rest of my commentary today, I will be referring to non-GAP numbers.

Michael J. Farrell: Year over year growth moderated due to incremental revenue in the prior year quarter of approximately $15 million from Covid related demand.

Michael J. Farrell: Excluding the Covid related styles device revenue increased by 8% on a constant currency basis.

Michael J. Farrell: Masks and other sales increased by 6% on a constant currency basis.

Michael J. Farrell: Software as a service revenue increased by 8% in the March quarter underpinned by growth for many folks Dan and continued strong performance from our <unk> vertical.

Michael J. Farrell: During the rest of my commentary today, I will be referring to non-GAAP numbers. We have provided a full reconciliation of the non-GAAP to GAAP numbers.

Brett: We have provided a full reconciliation of the non-GAP to GAP numbers in our third quarter earnings press release. Gross margin increased by 240 basis points to 58.5% in the March quarter. The increase was driven by reductions in freight expense, manufacturing cost improvements, a favorable product mix, and an increase in device average selling price. Sequential gross margin improved by 160 basis points. We continue to monitor potential headwinds that could arise from the Middle East conflict.

Michael J. Farrell: Third quarter earnings press release.

Michael J. Farrell: Gross margin increased by 240 basis points to 58, 5% in the March quarter.

Michael J. Farrell: The increase was driven by reductions in freight expense manufacturing cost improvements favorable product mix at an increasing device average selling prices.

Michael J. Farrell: Sequential gross margin improved by 160 basis points.

Michael J. Farrell: We continue to monitor potential headwinds that could arise from the middle East conflict.

Brett: Disruptions in the Red Sea have increased freight costs and shipping lead times. We estimate this will negatively impact our Q4 gross margin by around 30 to 50 basis points. Moving on to operating expenses, SG&A expenses for the third quarter increased by 1%. SG&A expenses as a percentage of revenue improved to 19.2% compared to 20.5% in the prior year period and reflect savings and ongoing cost discipline following restructuring actions undertaken early in the December quarter.

Michael J. Farrell: Options in the Red Sea have increased freight cost and shipping late times. We estimate this will negatively impact our Q4 gross margin by around 30 to 50 basis points.

Michael J. Farrell: Moving onto operating expenses SG&A expenses for the third quarter increased by 1%.

Michael J. Farrell: G&A expenses as a percentage of revenue improved to 19, 2% compared to 25% in the prior year period.

Michael J. Farrell: And reflects savings and ongoing cost discipline following restructuring actions undertaken early in the December quarter.

Brett: Looking forward and subject to currency movements, we expect SG&A expenses as a percentage of revenue to be in the range of 18-20% for the balance of fiscal year 2024. R&D expenses for the quarter increased by 2% on a constant currency basis. R&D expenses as a percentage of revenue were 6.4%, compared to 6.8% in the prior year period. Looking forward, and subject to currency movements, we expect R&D expenses as a percentage of revenue to be in the range of 6-7% for the balance of fiscal year 2024.

Michael J. Farrell: Looking forward and subject to currency movements, we expect SG&A expenses as a percentage of revenue to be in the range of 18% to 20% for the balance of fiscal year 2024.

Michael J. Farrell: R&D expenses for the quarter increased by 2% on a constant currency basis.

Michael J. Farrell: R&D expenses as a percentage of revenue was six 4% compared to the six 8% in the prior year period.

Michael J. Farrell: Looking forward and subject to currency movements, we expect R&D expenses as a percentage of revenue to be in the range of 6% to 7% for the balance of fiscal year 2024.

Brett: Operating profit for the quarter increased by 23%, underpinned by revenue growth, gross margin expansion, and modest growth in our operating expenses. Our net interest expense for the quarter was $11 million. Given our lower debt levels, we expect interest expense to be in the range of $7 to $9 million in the final quarter of fiscal year 2024. Our effective tax rate for the March quarter was 20.3%, broadly consistent with the prior year quarter. We continue to estimate that our effective tax rate for fiscal year 2024 will be in the range of 19 to 21%.

Michael J. Farrell: Operating profit for the quarter increased by 23% underpinned by revenue growth gross margin expansion and modest growth in our operating expenses.

Michael J. Farrell: Net interest expense for the quarter was $11 million.

Michael J. Farrell: Given our low debt levels, we expect interest expense to be in the range of $7 million to $9 million in the final quarter of fiscal year 2024.

Michael J. Farrell: Our effective tax rate for the March quarter was 23%.

Michael J. Farrell: Totally consistent with the prior year quarter, we continue to estimate our effective tax rate for fiscal year 2024 will be in the range of 19% to 21%.

Brett: Our net income for the March quarter increased by 27%, and non-GAAP diluted earnings per share also increased by 27%. Cash flow from operations for the quarter was $402 million, reflecting solid underlying earnings and improvement in our working capital position. Capital expenditure for the quarter was $21 million, and depreciation and amortization for the quarter totaled $43 million. We ended the third quarter with a cash balance of $238 million. On March 31, we had $1 billion in gross debt and $769 million in net debt.

Michael J. Farrell: Net income for the March quarter increased by 27% and.

Michael J. Farrell: And non-GAAP diluted earnings per share also increased by 27%.

Michael J. Farrell: Cash flow from operations for the quarter was $402 million, reflecting solid underlying earnings and improvement in our working capital position.

Michael J. Farrell: Capital expenditure for the quarter was $21 million depreciation and amortization for the quarter totaled $43 million.

Michael J. Farrell: We ended the third quarter with a cash balance of 238 million on March 31, We had 1 billion in gross debt and 677, sorry 769 million in net debt.

Brett: During the quarter, we reduced our debt by $220 million. On March 31, we had approximately $1.2 billion available for drawdown under our revolver facility, and we continue to maintain a solid liquidity position. Today, our Board of Directors declared a quarterly dividend of $0.48 per share. Additionally, during the quarter, we purchased 261,000 shares under our previously authorized share buyback program for consideration of $50 million. We plan to continue to purchase shares for the value of approximately $50 million per quarter for the balance of fiscal year 2024.

Michael J. Farrell: During the quarter, we reduced our debt by $220 million.

Michael J. Farrell: On March 31, we had approximately $1 2 billion available for drawdown under our revolver facility and we continue to maintain a solid liquidity position.

Michael J. Farrell: Today, our board of directors declared a quarterly dividend of <unk> 48 per share.

Michael J. Farrell: During the quarter, we purchased 261000 shares under our previously authorized share buyback program for consideration of $50 million.

Michael J. Farrell: We plan to continue to purchase shares to the value of approximately 50 million per quarter for the balance of fiscal year 2024.

Brett: This will more than offset any dilution from the vesting of equity to employees during the year. Going forward, we plan to continue to reinvest in growth through R&D, pay down outstanding debt, and deploy further capital for Tuck through acquisitions. And with that, I will hand the call back to Amy.

Michael J. Farrell: This will more than offset any dilution from the vesting of equity to employees during the year.

Michael J. Farrell: Going forward, we plan to continue to invest in growth through R&D pay down the outstanding debt and deploy further capital for tuck in acquisitions.

Michael J. Farrell: And with that I'll hand, the call back to Amy.

Amy Wakeham: Great. Thank you, Brett. Thank you, Mick. Kevin, let's go ahead and turn the call back over to you to provide the instructions and then run the Q&A portion of the call. If you would like to be placed into the question queue, please press star 1 on your telephone keypad.

Amy Wakeham: Great. Thank you Bret Thanks, Nick Kevin Let's go ahead and turn the call back over to you to provide the instructions and then ran the Q&A portion of the call.

Amy Wakeham: Certainly when I will be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad.

Operator: You may press star two if you'd like to remove your question. As a reminder, please limit yourselves to one question. If you have another question, you're welcome to hop back in. Once again, that's star 1 to get into queue, and star 2... Our first question today is from Dan Hurren from MST Marquis. Your line is now live. Thanks very much and good morning. I just wanted to ask about that gross margin predictably.

Speaker Change: You May press Star two if you like true move your question from the queue.

Speaker Change: As a reminder, please limit yourselves to one question.

Speaker Change: We have another question Youre welcome to hop back into queue. Once again, Thats star one to get into queue and start to tweak.

Speaker Change: Our first question today is coming from Dan Hermann for them is T mobile marquee. Your line is now live.

Dan Hurren: Thanks, very much and good morning, I just wanted to ask about the gross margin predictably.

Operator: That recovery is pretty sharp, whereas I think you had perhaps talked about a more modest gross margin recovery in the second half. So I just wanted to ask how sustainable that recovery is into the fourth quarter and into 25.

Dan Hurren: Recovery is pretty sharp, whereas our thank you.

Dan Hurren: Talk to a more modest gross margin recovery in the second half. So just wanted to ask how sustainable that recoveries into fourth quarter and into 'twenty five.

Michael J. Farrell: Yeah, thanks, Dan. It's a good question.

Speaker Change: Yeah. Thanks, Dan It's a good question and obviously.

Michael J. Farrell: And obviously, you know, as we talked about on the call a quarter ago and two quarters ago, we've got long-term programs and short-term programs that are moving, you know, very carefully to move our gross margin up. Some, you know, very, very long term as we walk through the launch of our SN11 platform, which is at a better cost point, a better price point, and the launch of our new masks, the F40 last quarter, and these have effects that go on for the long term.

Speaker Change: As we talked about on the call a quarter ago, and two quarters ago. We've got long term programs and short term programs that are moving very carefully to move that gross margin up some.

Amy Wakeham: Very long terms.

Speaker Change: Through the launch of areas since 11 platform, which is at a better cost point, a better price point.

Amy Wakeham: Launch of our new masks, they have 40 last quarter.

Amy Wakeham: These have effects the governor long term some of the faster impacts we were able to do is working through the inventory that will high freight costs from the semiconductor process and the supply chain crosses from.

Michael J. Farrell: Some of the faster impacts we're able to do is working through the inventory that had high freight costs from the semiconductor crisis and the supply chain crisis from, you know, six, nine, 12, 18 months ago that are flowing through our system. So look, I'm not upset when the team overperforms my expectations, as they did here. As Brett said, in Q4, we'll see some moderation of that due to Red Sea impacts of a couple of tens of basis points, sort of 30, 40 basis points. Brett can give more detail on that. But look, Dan, I'm very excited about what I'm excited about.

Amy Wakeham: <unk> 912, 18 months ago that are flowing through our system. So look I'm not upset when the team over performs my expectations as they did here as Bret said in Q4, we'll see some moderation of that due to the red sea impacts of a couple of tens of basis points.

Amy Wakeham: 30, 40 basis points, Brett can give more detail on that but look Dan I'm very what I'm excited about.

Operator: Please stand by. We appear to be having technical difficulties. Please stand by. Please proceed.

Amy Wakeham: Okay.

Amy Wakeham: Okay.

Amy Wakeham: Please standby we appear to be having technical difficulties. Please standby.

Amy Wakeham: Okay.

Amy Wakeham: It cannot.

Amy Wakeham: Yeah.

Speaker Change: Brett so that he can Harris. Please proceed okay. Please proceed.

Operator: Can you hear me now, Kevin? We can now; please proceed. We did lose your audio briefly, we do apologize.

Speaker Change: Can you hear me now Kevin we can now. Please proceed with you lose your audio previously we do apologize. Please proceed.

Michael J. Farrell: Okay, great. Well, I'll hand over to Brett to answer the question on gross margin, and then I'll follow up. I don't know where I got cut off there. Brett, you do. Over to you. Yes, thanks Nick. I'm not sure we're there.

Amy Wakeham: Okay, great well I'll hand over to Brett to answer the question on gross margin and then I'll follow up I don't know where I got cutoff date, Brett you did.

Brett: Over to you.

Brett: Yes, hi, thanks for taking not sure where that where that line a bit.

Brett: Yeah, thanks Nick, I'm not sure where that landed, but yeah, I... In terms of gross margin, it is hard to predict given the movements in we have product mix, geographic mix, timing of cost improvements, FX, and freight costs. So it's all into the mix that, you know, we had pretty strong improvement in freight expense, manufacturing efficiencies, and so on coming through, and that helped a lot. Stable component costs also mean that's no longer a headwind there.

Brett: Yeah.

Brett: In terms of gross margin it is hard to predict given the movements in April we have product mix geographic mix timing of cost improvements.

Brett: Freight costs so.

Brett: No.

Brett: It's all into the mix that we had pretty strong improvement through fright expense through manufacturing.

Brett: Efficiencies and so on coming through and that helped a lot stable component costs also had maintenance that's no longer a headwind.

Brett: So I think that's all reflected in the gross margin improvement. And as Mick said, in the short term, there are some Red Sea freight cost impacts that will come through in Q4. But our goal remains to improve gross margin over the course of FY25. Thank you. Our next question is coming from Laura Sutcliffe from UBS. Your line is now live.

Brett: So.

Brett: I think that's all reflected in the gross margin improvement.

Laura Sutcliffe: It makes sense.

Laura Sutcliffe: The short term there is some red say flight cost impacts that will come through in Q4.

Brett: But our goal remains to improve gross margin over the course of FY 'twenty five.

Brett: Okay.

Brett: Thank you. Our next question is coming from Laura Sutcliffe from UBS. Your line is now live.

Brett: Brett, you couldn't answer that.

Laura Sutcliffe: Hello, Thanks for taking my question.

Brett: Sure, yeah, thanks, Mick. Yeah, I mean, of that year-on-year, the 240 basis points, the biggest contributors were the freight cost reduction, and also the manufacturing cost improvements were the biggest drivers there. We saw some benefit or some favorable product mix playing out there, and a little bit in terms of ASP increases, but by far the most significant two, which were significant contributors in their own right, were the freight expense reduction and the manufacturing cost improvements.

Laura Sutcliffe: Just sticking with gross margin could you, possibly give us an indication of how much of that 240 basis point improvement in core gross margin was fray Cheng and how much is manufacturing.

Laura Sutcliffe: Brett you can enter that sure yes, thanks, Mike, Yes, I mean.

Brett: Of that year on year to 240 basis points, the biggest contributors for the fright fright cost reduction.

Brett: The manufacturing cost improvements.

Brett: Are you able to tell us sort of how it falls between phrasing and... I wouldn't get drawn into the specifics of each of the components, but I would say both of those are material in their own right, contributing to that 240 boasts.

Brett: Biggest drivers there you saw some benefit of some favorable product mix playing out there.

Brett: And a little bit in terms of ISP increases, but by far the most significant.

Operator: Thank you. Our next question is coming from Craig Wong Tan from RBC. Your line is now, Thank you.

Brett: Two which were significant contributors in the non REIT with a slight expense reduction and manufacturing cost improvements.

Operator: Thank you. Our next question is coming from Craig Wong Tan from RBC. Your line is now live.

Brett: Are you able to tell us sort of how it falls between pricing and manufacturing cost improvements.

Michael J. Farrell: Yeah, thanks for the question, Craig. And, you know, we really didn't see it. I mean, look, we've got many competitors out there in Europe, Asia, the rest of the world, including the one you mentioned, and it's a full playing field. It has been the whole time under masks, so there's no change to anyone coming back or leaving on the mask side. On the device side, no huge impacts. We were comping a very large number of device numbers, Europe, Asia, the rest of the world.

Speaker Change: When we get through all the specifics of each of the components, but I would say both of those are materially narrowed rot contributing to that 240 basis points.

Speaker Change: Thank you. Our next question is coming from Craig Wong Pan from RBC. Your line is now live.

Speaker Change: Thank you.

Speaker Change: Wanted to touch on the rest of world markets to say, whether youre seeing much impact from there.

Michael J. Farrell: This quarter, last year, we had 36% growth that we're comping against. And so we had good growth there on a 36 comp, but plus 1%. And if you take out from last year, a large ventilation provision in China, this time a year ago, China had a big COVID impact and ventilator purchase. If you take that out, the year on year growth would have been 8% in Europe, Asia, and the rest

Speaker Change: And if any benefit coming through from the backlog of.

Speaker Change: Activity with homecare companies.

Speaker Change: Yes, thanks for the question Craig.

Michael J. Farrell: No we really Didnt see I mean look we've got many competitors are out there.

Speaker Change: Europe Asia and rest of world, including the one you mentioned and it's a full playing field that has been the whole time on masks. So there is no change to anyone coming back we're leaving on the mask side on the device side.

Michael J. Farrell: So up 700 basis points. So look, the way I look at it is, you know, we're maintaining a growing share in all of our markets on the device side, with a market leader with the Essence 11 platform. And we've got the second best platform in the world with the Essence 10 platform against all competitors, and so really strong there.

Michael J. Farrell: No huge impacts we were comping, a very large device number Europe Asia rest of world. This quarter last year, we had a 36% growth that we're comping and so we had we had.

Speaker Change: Good growth there on a 36 competent plus 1% and if you take out from last year.

Michael J. Farrell: So, no major impacts from restocking and no major impacts from competitive activity. And I think we had a very, very strong performance from the team in terms of their ability to ramp up the supply over the last period and get it all out there. And we're not, you know; no customer is not being able to fulfill an order. If they have an order for devices, we fill it up as much as we can with Essence 11.

Michael J. Farrell: Large ventilation provision in China. This time, a year ago, China ahead of Big Covet impacted <unk> purchase if you take that out the year on year growth would have been 8% in Europe Asia and rest of world devices. So up 700 basis points. So look the way I look at it is we're maintaining.

Speaker Change: We're growing share in all of our markets on the device side, we're the market leader with the essence 11 platform and we've got the second best platform in the world with the <unk> 10 platform against all competitors and so really strongly and so no major impacts from restocking and no major impacts from competitive activity and I think we had a very very strong performance.

Michael J. Farrell: And then we fill up the remainder with Essence 10s, and we're able to take care of those customer needs. And so, really, a really good quarter of execution by our supply chain teams, as well as our delivery teams and our commercial teams out there. Your next question is coming from David Bailey from Macquarie. Your line is out of line. Thanks, morning Vic and Brett. I just want to touch on new patient starts.

Speaker Change: From the team in terms of their ability to ramp up the supply over the last period and get it all out there and we're not no customer is not being able to fulfill an order if they have an order for devices, we fill it up as much as we can with essence, 11th and then we fill up the remainder with essence tens and we're able to take care of those customer needs and so really good quarter of execution.

Speaker Change: <unk>.

Speaker Change: Supply chain teams as well as our delivery times and our commercial teams out there.

Michael J. Farrell: ...

Operator: Thank you. The next question is coming from David Bailey from Macquarie; your line is out live.

Speaker Change: Thank you next question is coming from David Bailey from Macquarie. Your line is now live.

Michael J. Farrell: Yeah, two great components to the same question there, David. In terms of new patient starts, as you saw in the US, Canada, Latin America, we achieved pretty strong growth of 7% of devices in the quarter, and that was on a comp this time last year of 49%. So what I'd say, and this is what we say, is that the market is sort of, if ResMed doesn't do enough around demand generation, the market will grow at mid-single digits on devices and high single digits on masks. Obviously, we beat that this quarter with our device growth in the US, Canada, and Latin America at 7%. So new patient starts are strong. There is some resistance there, but it's a minority.

David Bailey: Yeah. Thanks, good morning, Megan Britt.

David Bailey: I just wanted to touch on new patient starts maybe focusing on the U S. If we can.

David Bailey: Obviously, we had the impact of causing sleep labs, and then followed on by some supply constraints around devices could you just give us a bit of a sense as to how you're seeing new patient starts at the moment versus.

David Bailey: Perhaps and then also just.

David Bailey: On trends around home sleep testing versus PSC, and how that might be impacting people coming to the system.

David Bailey: Yes.

Speaker Change: Two grade components of the same question there David in terms of new patient starts as you saw in U S. Canada Latin America, we achieved strong growth of 7% of devices in the quarter and that was on a comp. This time last year of 14, 9%. So what I'd say is and this is what we size that the market is sort of resume.

Michael J. Farrell: And I can tell you that new patient flow into our channel has been steady, and we said this last quarter that we're starting to get back to that steady flow of patients. We've sort of gone through the perturbations of the COVID dip, the COVID rebound, the supply chain dip, the supply chain rebound, and now we're at a steady state. So we're seeing a really good flow of patients into the US. As I said in my prepared remarks, we are seeing, you know, these patients who come in on the GLP-1s, and it's only N equals 660,000 patients that we're looking at, so quite a big cohort.

David Bailey: Do enough around demand Gen and the market will grow at mid single digits on devices and high single digits on mosques, obviously, we beat that this quarter without without device growth in the U S, Canada, and Latin America, 7% New patient starts is strong there is some recap there.

David Bailey: It's a minority and I can tell you that new patient flow into our channel has been steady.

David Bailey: And I said this last quarter that was starting to get back to that steady flow of patients we've sort of gone through the <unk> of the carbon the carbon rebound the supply chain dip the supply chain rebound and now we're at steady state. So we're seeing really good flow of patients into the U S. As I said on the prepared remarks.

Michael J. Farrell: And as we look at those patients, their propensity to start being 10.5% above people without a prescription for that drug, I actually think we're seeing a really good flow that I think will be a long-term, I think there's a long period of time, the S-curve of penetration of these GLP-1s, and I think that's gonna be a long cohort of patients coming into the channel. So really good for And in terms of resupply, yeah, look, we've got really good capabilities in the US, particularly with Brightree and SNAP technologies and Brightree resupply, and our subscription models in our cash-pay markets around the world, but there's a lot more runway left.

David Bailey: We are seeing these.

David Bailey: These patients who are coming on the GOP ones in Italy, and equaled 660000 patients that we're looking at but that's quite a big cohort and as we look at those patients their propensity to start being 10, 5% above people without a prescription for that drug I actually think we're seeing a really good flow that I think will be a long term I think there's a long peer.

David Bailey: A time the S curve of penetration of these GOP ones and I think that's going to be a long cohort of patients coming into the channel. So really good on new patient starts and in terms of re supply. Yes look we've got really good capabilities in the U S, particularly with broad tree and snap technologies, <unk> resupply and our subscription model.

Michael J. Farrell: There are many patients who aren't yet on a subscription program in cash pay markets, and there are many patients who aren't yet on appropriate resupply in our large and developed markets. So I would say new patient flow is very solid. Resupply, whether it's Repap or reestablishing masks and accessories, is good, but there is a lot of runway left in terms of demand generation and resupply. Thank you. The next question is coming from Anthony Petrone from the ZOO Group. Your line is now live. Thanks everyone and congrats on a strong quarter here.

David Bailey: And our cash pay markets around the world, but there is a lot more runway left.

Anthony Charles Petrone: Many patients who aren't yet on a subscription program and cash pay markets and there's many patients who aren't yet on appropriate resupply in an hour.

David Bailey: Lodge in developed markets. So I would say new patient flow in is very solid resupply, whether it's <unk> or re establishing masks and accessories is good but a lot of runway left a lot of runway left on bus in terms of demand Gen and re supply.

Operator: Maybe make just staying on the GOP one topic. Maybe

Operator: Thank you. The next question is coming from Anthony Petrone from the ZOO Group. Your line is now live.

Michael J. Farrell: Yeah, thanks for the question, Anthony. And certainly, we saw the headline results from that Surmount OSA trial. And look, since they had, just to be really clear, you know, their study had that at least seven-day washout period at the end in the study that had patients who had been using CPAP. So with that seven- to nine-day washout period at the end, this was really a trial laser-focused on comparing their drug to placebo.

David Bailey: Thank you. Your next question is coming from Anthony Petrone from Mizuho Group. Your line is now live.

Anthony Charles Petrone: Alright, thanks, everyone and congrats on the strong quarter here, maybe make just staying on the GOP one topic maybe.

Anthony Charles Petrone: Just the house views on on the surmount OSA headline read out and as we look to the Ada meeting in June there anything that you are really paying attention to and honing in on when we get the final data readout are there specific secondary endpoints or sub analyses that we should be focused.

Michael J. Farrell: And what it showed was somewhere in that sort of 59% to 63% reduction of AHI. And if you do the math on it, and you look at the sort of average AHI coming in at around 50, the average AHI coming out is sort of in the low 20s.

Michael J. Farrell: So patients were, at the end of the study, on average, were suffocating every three minutes of sleep after treatment for this drug, right? And so an AHI of 20 or more, you know, moderate plus sleep apnea. These patients would be treated by any sleep physician on the planet and really require positive airway pressure treatment. So I think that's the most important thing to say right up front.

Anthony Charles Petrone: Thanks.

Speaker Change: Yes, Thanks for the question Anthony and yes, certainly we saw the headline.

Speaker Change: <unk> from that.

Speaker Change: Mt OSI trial and look.

Speaker Change: Since they had I'd just to be really clear. This study had that at least seven day wash out at the end of the study that had patients that had been using CPAP, so with that 7% to nine day washout period at the end. This was really a trial laser focused on comparing their drug to placebo and what it should.

Michael J. Farrell: And so as we look at the readout that will come in June when they release the full analysis here and the primary investigators get up, and we see all the sub-analysis data, what will be interesting is to look at because the combination therapy of CPAP plus these GLP-1s had slightly higher efficacy, if you like. It had a higher reduction in AHI. I'd be interested to look at the secondary outcomes. Were there more blood pressure reductions and other cardiovascular improvements? You know, heart remodeling and things like that happen over time, and the washout period might have diluted that a little bit. It will depend on where they took them.

Michael J. Farrell: <unk> is somewhere in that sort of 59% to 63% reduction of IHI and if you do the math on it and you look at the sort of average IHI coming in of around 50. The average IHI coming out is sort of in the low twenties. So patients were at the end of the study on average was suffocating every three minutes of sleep after treatment with this drug.

Anthony Charles Petrone: Right and so IHI of 20 or more.

Anthony Charles Petrone: Moderate plus sleep apnea. These patients would be treated by any sleep physician on the planet and really require positive airway pressure trading. So I think that's the most important thing to say right upfront.

Anthony Charles Petrone: So as we look at the readout that will come in June when they release the full analysis here and the primary investigators get up we sold the sub analysis data what will be interesting is to look at because the combination therapy of <unk> plus <unk> plus these GOP ones had a slightly higher.

Michael J. Farrell: But those would be the things that I'd be interested in in this study. As we see it, we're seeing new patients come in on this and not just anecdotally from the letters I get from patients saying, I've been using a GLP-1, and now I'm using a PAP. This combination therapy is great. I'm taking care of my diet, my exercise, and my sleep.

Anthony Charles Petrone: Efficacy if you like it had a higher reduction in IHI I'll be interested to look on the secondary outcomes were the more blood pressure reductions and other cardiovascular improvements.

Anthony Charles Petrone: Heart remodeling and things like that happen.

Michael J. Farrell: And over time in the washout period might have diluted that a little bit will depend on where they took them, but those would be the things that I'd be interested in this study.

Michael J. Farrell: But we're seeing real-world evidence, real-world data that we're presenting. N equals 660,000 patients, and these patients start CPAP more often. They adhere more.

Michael J. Farrell: As we see it we're seeing new patients coming on this and not just anecdotally from the led as I get from patients, saying I have been using a GOP want them now using a <unk> combination therapy is great I'm, taking care of my diet exercise and my slate, but we're seeing real world evidence real world data that were presenting an equal 660000 patients in these patients stopped CPAP more.

Michael J. Farrell: I mean, the fact that at 12-month resupply goes up 3.1%, 310 basis points. The fact that resupply at 24 months goes up 500 basis points. Five absolute percentage points higher means that this is not only more patients into the funnel from this drug, but not just this particular drug from this particular company, but this class of drugs. We included tezapatite and semaglutide in our analysis, and others. All new gen, the vast majority new gen tech.

Anthony Charles Petrone: They adhere more I mean, the fact that at 12 months re supply goes up three 1% 310 basis points. The fact that resupply at 24 months goes up 500 basis points five absolute percentage points higher means that these are not only more patients into the funnel from this from these drug and not just this particular drug from this particular company, but this <unk>.

Michael J. Farrell: <unk> of drugs, we included to his appetite and similar to our in our analysis and others.

Anthony Charles Petrone: All new Gen.

Anthony Charles Petrone: Boston driving new Gen Tech and I can tell you.

Michael J. Farrell: And I can tell you that we are going to do our own social media driven demand generation, but the fact that big tech with the Samsung Watch, the Apple Watch, and Google's Fitbit is going to be bringing patients in, and Big Pharma, and this is trillions of dollars of capital between these companies, is going to be doing advertising to drive patients into the funnel. We think this is a net tailwind for our business. We've started to see it somewhat now, in the very early stages, and we think it'll be there in the future. So that's what we'll be looking for in this study.

Anthony Charles Petrone: We are going to do our own social media driven demand Gen, but the fact that big tech with the Samsung watched the Apple watch and Google's fitbit are going to be bringing patients in and big pharma and this is trillions of dollars of capital between these company is going to be doing advertising to drive patients into the funnel. We think this is a net tailwind for our business we started to see.

Anthony Charles Petrone: It's somewhat now the very early stages, and we think it'll be there in the future. So that's what we'll be looking for from this study Anthony.

Operator: Thank you. The next question today is coming from Suraj Kalia from Oppenheimer. Your line is now live.

Michael J. Farrell: Thank you. Your next question today is coming from Suraj Kalia from Oppenheimer. Your line is now live.

Operator: Can you hear me all right?

Michael J. Farrell: Yes, I can, Suraj. Hopefully, your phone and our phone are good throughout this question and answer.

Suraj Kalia: Can you hear me all right.

Suraj Kalia: Yes, I can suraj, hopefully youll phone and alpha in a good throughout this question and answer.

Operator: So forgive me if there is any background noise. First and foremost, congratulations on this quarter. Specifically, and forgive me for belaboring this, cross-margin. You know, a nice uptick in the quarter. I think, if I recall correctly, a couple of quarters ago, Gross Martins was sawed. One of the reasons cited was a higher US contribution, which intrinsically has lower margins than OUS. This quarter also, the U.S. has ticked up nicely, and contribution has picked up. Can you, maybe I'm missing a key aspect here? Can you help us reconcile those two? Thank you for taking my question.

Suraj Kalia: So forgive me if there's any background noise make first of all most congratulations on this quarter.

Operator: Mix specifically.

Suraj Kalia: Forgive me for Belaboring this gross margins.

Suraj Kalia: A nice uptick in the quarter.

Speaker Change: Thank you.

Suraj Kalia: Correctly, a couple of quarters ago gross margins were soft and one of the reasons cited was a higher U S contribution.

Operator: Intrinsically has lower margins than O U S.

Operator: This quarter Rolls. So U S has picked up nicely contribution has picked up can you maybe I'm missing a key aspect here can you help us reconcile those two thank you for taking my questions.

Michael J. Farrell: Yeah, thanks for the question, Suraj. I'll have a go first and I'll hand over to Brett for detail, but as I look at it from my perspective, there are a number of factors that were positives to have such a great gross margin number this quarter. The first one was that we had excellent work by our global supply chain teams to work on getting our cost of goods sold down. Not just direct COGS but OCOGS as well, and so we worked through some of that high-cost inventory stock moved through the system, and some of the reengineering work and revalidation and verification work we've done has been able to bring new products to market.

Speaker Change: Yes. Thanks for the question Suraj I'll have a go first and then I'll hand over to Brett for detail, but as I look at it from my perspective, there were a number of factors that were positives to have such a great gross margin number this quarter the.

Michael J. Farrell: The first one was that we had excellent.

Brett: Work by our global supply chain teams to work on getting our cost of goods sold down not just direct cogs, but oh cogs as well and so we worked through some of that high inventory.

Michael J. Farrell: High cost inventory stock moves through the system and some of the reengineering work and re validation verification work. We've done has been able to bring new product to market. We have a good flow between the <unk> 10 in essence 11 platforms, but look if you look at the growth from like 12 months ago and some of the issues we had.

Michael J. Farrell: We have a good flow between the Essence 10 and Essence 11 platforms, but look, if you look at the growth from like 12 months ago and some of the issues, I mean, we had, you know, as I said earlier, we had 49% growth in our US, Canada, and Latin America flow generators a year ago. That has a very, you know, big impact on margin as it's, you know, a lower margin than our masks business and other businesses, certainly in our ventilation and software around the world.

Michael J. Farrell: As I said earlier, we had 49% growth in our U S, Canada Latin America flow generators.

Michael J. Farrell: A year ago that has a very.

Michael J. Farrell: Big impact on margin as it is.

Michael J. Farrell: Lower margins in the <unk> business and in other businesses certainly in our ventilation and software around the world.

Michael J. Farrell: This quarter, you know, we're sort of back to a steady state where ResMed's growing well. We're growing at, you know, mid to high single digits in parts of our business and double digits in the masks and accessory side. And I think we're just back to our core execution, something that ResMed has done in our 35-year history is have operating excellence and operational excellence as a core competency. We were able to, after all those perturbations of COVID, supply chain, cost of inventory, we were able to get back to what we do really well. So those are what I'd say are the main factors for us achieving such a great gross margin in the quarter. Brett, do you want to provide any further detail? Yeah, thanks.

Brett: This quarter was sort of back to a steady state where resumes is growing well we're growing at mid to high single digits in parts of our business and double digits in the masks and accessories side and I think we just back to our core execution something that <unk> done in our 35 year history is have operating excellence and operational excellence is a core competency we were able to offer.

Brett: Let's put a <unk> supply chain cost of inventory.

Michael J. Farrell: To get back to what we do really well. So that's what I'd say are the main factors for us achieving such great gross margin in the quarter, Brett do you want to provide any further detail.

Brett: Yeah. Thanks, Mig I mean, the only thing I would add is the geographic mix impact tends to be pretty modest.

Brett: Yeah, thanks Mick. I mean, the only thing I would add is the geographic mix impacts tend to be pretty modest. You do see that, but, for example, product mixes usually have much more impact than geographic mix. So it's less of an impact on our margin either way from geographic mix. It's there, but it's not substantial.

Brett: But.

Brett: For example product mixes is usually has much more impact on geographic mix. So it's less of an impact on our margin.

Brett: While some geographic mix, it's fair, but not substantial.

Brett: Thank you. The next question is coming from Margaret Cusar Andrew, from William Blair. Your line is now live.

Speaker Change: Thank you. Your next question is coming from Margaret Cousar, Andrew from William Blair. Your line is now live.

Operator: Hey, good afternoon. Good morning, guys.

Speaker Change: Hey, good afternoon. Good morning, guys. Thanks for taking my question.

Operator: Thanks for taking the questions. I wanted to maybe touch on the market demand drivers and DemandGen that you referenced earlier in the call. You know, my recollection can tell me if I'm wrong, but I think you guys have sporadically maybe invested in understanding market growth drivers, and the Verily partnership is the one that kind of comes to mind on that. But, you know, as you think of DemandGen, can you give us any data from those programs that might help inform the DemandGen that you're trying to create?

Speaker Change: I wanted to maybe touch on the market demand drivers demand Jamie referenced earlier on the call.

Operator: My recollection.

Operator: Tell me, if I'm wrong, but I think you guys have sporadically and navy invested in understanding market growth drivers in our verily partnership is the one that kind of come to mind on that but.

Operator: As you think of demand Gen can you give us any data from those programs that might help inform the demand churn that you're trying to create.

Operator: You know, over what time period can these efforts make that impact on market growth? And, you know, again, key sources, you know, is it the local level, podcast, newsletters, global level, celebrity, partnerships, just, again, any details would be helpful. Thanks, guys.

Operator: Over what time period can these efforts make that impact on market growth.

Operator: And you know again key sources at local level of podcasts letter at global level celebrity partnerships again any details would be helpful. Thanks, guys.

Michael J. Farrell: Well yeah, thanks Margaret, it's a great question about how we're going to learn from our many years of experience of getting patients in the funnel and taking it to the next level and scaling globally. As you know, we've had sort of direct-to-consumer campaigns in our cash-paid countries, Australia, New Zealand, Singapore, and others around the world. One of the big changes we made in our 2030 operating model was to establish a global chief product officer, a global chief revenue officer, and also a global chief marketing officer.

Speaker Change: Well, yes. Thanks, Thanks, Margaret it's a great question on how we're going to learn from.

Speaker Change: Our many years of experience of getting patients into the funnel and taking it to the next level and scaling globally. As you know we've had sort of direct to consumer campaigns in our cash by countries, Australia, New Zealand, Singapore and others around the world one of the Big changes we made in our 2030 operating model was to establish a global.

Michael J. Farrell: <unk> product officer Global Chief revenue Officer, but also a global Chief marketing officer, and I think bringing that marketing function to be across the whole of the sleep health and breathing health business and really across our whole resume business is going to allow us to bring yes. As you said, we did experiments and that joint venture whereby the way we owned.

Michael J. Farrell: And I think bringing that marketing function across the whole of the sleep health and breathing health business and really across our whole ResMed business is going to allow us to bring, yeah, as you said, we did experiments in that joint venture, where, by the way, we own, you know, all the intellectual property and capability of that joint venture, the assets and capability that we learned over those last many years in that JV. We've now taken that on board, and we said, okay, let's not just do that in one metropolitan statistical area in the United States or within one country like Australia or another country like Singapore or Korea.

Michael J. Farrell: All the intellectual property and capability of that joint venture assets and capability that we learned otherwise lost many years in that JV. We've now taken that on board and we said, okay. Let's not just do that in one metropolitan statistical area in the United States or within one country like Australia or another country like Singapore Korea, let's look at.

Michael J. Farrell: Let's look at ways we can scale that globally. So, without signaling directly and exactly how, where, and when we're going to do it, I can tell you we've got a global team looking at this, Margaret. And as we go throughout fiscal year 2025, we're going to talk about, as they go public, this is the campaign. One thing that is different from what we did before is that every, you know, I believe in what gets measured gets done. And every single campaign we're going to do is going to have hardcore metrics of sponsorship here, driven here, and influence it there, this social media impact there.

Speaker Change: <unk> wise, we can scale that globally, so without signaling directly and exactly how where and when were going to do it I can tell you. We've got a global team looking at this Margaret and as we go throughout fiscal year 2025, we're going to talk about as they go public. This is the campaign one thing that is different from what we did before is that I believe.

Michael J. Farrell: And what gets measured gets done and every single campaign, we're going to do is going to have hard core metrics of sponsorship here driven here and influences. There. This social media impact there we look at the ROI and before it scales, we're going to analyze that portfolio of primarily social media, but other media driven demand Gen and.

Michael J. Farrell: We'll look at the ROI, and before it scales, we're going to analyze that portfolio of primarily social media, but other media-driven demand gen. And yes, it will be local, but it'll also be national, and there will be global. The platforms will be global, the cultural impacts will be national, and then the impact will be local, and we'll be measuring that direct ROI of that marketing spend. As you saw in the quarter, we were very efficient on SG&A this quarter.

Michael J. Farrell: Yes, it will be local but will also be national and there'll be global the platforms will be global the cultural impacts will be national and then the impact will be local and we'll be measuring that direct ROI of that of that marketing spend as you saw in the quarter. We have a very efficient on SG&A. This quarter. We will go back to a steady state on that are not growing at revenue well.

Michael J. Farrell: We will go back to our steady state on that, not growing at revenue, well below, but getting up to better growth. And those investments will go into areas like demand generation on SG&A. And of course, our core R&D growth will go back into AI and generative AI. I can tell you some of our work on generative AI in Asia Pacific. Helping a patient in that digital health concierge through the channel will be a big part of our demand generation as well. So it is a combination between R&D and SG&A there.

Michael J. Farrell: Below but getting up to a better growth and those investments will go in areas like this and demand Gen on SG&A and of course, our core R&D growth will go back into <unk> II in January of AI I can tell you some of that work on generative II and Asia Pacific, helping a patient in that digital.

Michael J. Farrell: Health <unk> through the channel and will be big part of our demand Gen as well so combination between R&D and SG&A, there, but great question Margaret and we'll update you as we move through fiscal year 2025, and beyond on our demand Gen initiatives.

Michael J. Farrell: Thank you. Our next question is coming from Gretel <unk> from E&P. Your line is now live.

Speaker Change: Thanks, Good morning.

Speaker Change: Just wanted to go back to the gross margin and more just thinking about the gross margin trajectory in FY 'twenty five so how should we think about the quantum of improvement likely to be achieved.

Operator: But a great question, Margaret, and we'll update you as we move through fiscal year 2025 and beyond on our demand gen initiatives. Thank you. Next question is coming from Gretel Janu. Transcript by Rev.com Page of Thanks. Good morning. I just want to go back to the grocery store.

Gretel Janu: FY 'twenty five in ways that additional desktops going to come from now that you've kind of normalized a lot of the headwinds.

Gretel Janu: In the last 12 months.

Gretel Janu: Yes, thanks for the question Brett.

Gretel Janu: With this great performance from you'll finance the now global supply chain team, you're getting all the questions.

Operator: Quarter, so over to you on projections for the gross margin for FY 'twenty five to answer <unk> question.

Speaker Change: Yeah, Thanks, Nick Yeah, Yeah.

Operator: Thank you. Our next question is coming from Gretel Janu from EMP. Your line is now live.

Operator: Yes.

Gretel Janu: Quite quite a good increase year on year on year in manufacturing.

Brett: Thanks for the question Gretel, Brett. You know, with this great performance from your finance and our global supply chain team, you're getting all the questions this quarter, so over to you on projections for gross margin for FY25 to answer Gretel's question.

Gretel Janu: Manufacturing efficiencies cost improvements say, obviously quite a big pop.

Brett: We're also not so much facing the headwinds of those component cost increases that we would have still we saw sort of six to 12 months ago as well.

Brett: Yeah, thanks, Nick. Yeah Gretel, I mean there's quite a good increase year-on-year, and freight and some manufacturing efficiencies, cost improvements there, obviously play a big part. We're also not so much facing the headwinds of these component cost increases that we saw sort of 6 to 12 months ago as well. But if you look forward, and it's always hard to predict, as I mentioned earlier, there's a lot that plays out on the gross margin product, on Unknown Attendee, David Bailey, Gretel Janu, Lyanne Harrison, Craig Wong, Andrew Paine, and I probably need to do that on a number of fronts, which is more around a continuous improvement or gradual improvement program now, I think, because it works for FY

Speaker Change: But if you go forward.

Brett: And it's always hard to predict as I mentioned earlier Theres a lot of it plays out on the gross margin product mix.

Brett: The timing of the cost improvements all the continuous improvement programs that we're now running and we had an opportunity to do that we're really really focused on supply and getting the velocity of the market.

Brett: So now as that stabilizes then that gives us an opportunity to work on cost improvement programs.

Brett: Focusing them on that.

Brett: So the goal without.

Brett: Sitting on targets, but certainly you have to always to improve gross margin over the course of FY 'twenty five.

Brett: And we've got.

Brett: Probably need to do that on a number of fronts, which is more around a continuous improvement more gradual improvement programme now I think I think that's where FY 'twenty for us.

Brett: Thank you. Your next question is coming from Brett <unk> from Keybanc. Your line is now live.

Operator: Thank you. The next question is coming from Brett Fishman from Key Bank. Your line is now live.

Brett Fishman: Hey, guys. Thanks, so much for taking my questions.

Michael J. Farrell: I really appreciate some of the updates that you guys have provided on the data front. And I think what stood out to me a lot with the last couple of updates was the 10% plus type of increase that you're seeing in PAP initiation rates for GLP users. And then, especially considering this isn't really even reflecting some of the likely marketing activity from pharma. Curious, you know, some of the factors that you think might be driving this correlation. And then maybe looking ahead where this number could potentially go once we're actually seeing patients that are prescribed with, you know, under an OSA indication and diagnosed with OSA.

Brett Fishman: Appreciate some of the updates that you guys provided on the data front.

Michael J. Farrell: What stood out to me a lot with the last couple of updates was the 10% plus type of increase that youre seeing in Pap initiation rates for the GOP users and then, especially considering this isn't really even reflecting some of the likely marketing activity from pharma. So curious some of the factors that you think might be driving this correlation.

Michael J. Farrell: And maybe looking ahead, where this number could potentially go once we're actually seeing patients that are prescribed with under in OSA indication and diagnosed with OSA.

Michael J. Farrell: Yeah, Brett, it's a really good question; it's quite a complex one, and I think it'll play out over time. You know, we've obviously got very strong quantitative data with the 660,000 subjects that we're following in that analysis, but we get a lot of anecdotal information from folks, you know, all the way from folks who are involved in the clinical research to frontline physicians through our network, and we do this across 140 countries.

Speaker Change: Yeah, Brent it's a really good question is quite a complex one and I think it will play out over time.

Michael J. Farrell: We've obviously got very strong quantitative data with the 660000 subjects that were following in that in that analysis.

Michael J. Farrell: But we get a lot of anecdotal information from from folks all the way from folks who are involved in the clinical research to frontline physicians through it through our network and we position this across 140 countries.

Michael J. Farrell: These new medications are primarily focused on the U.S. and Western Europe right now, but as we watch, you know, our hypothesis is that this new therapy is bringing people into the healthcare system who weren't previously there, they weren't choosing to go as frequently to their GP or their primary care physician, but they are now seeing that PCP, that GP, and now they are getting treated for not only their obesity but other chronic diseases, and we' There are not many other factors recently in terms of innovations from biotech and pharma that we've seen that could drive this level, and so it is early days as those drugs are penetrated in the U.S., Western Europe, and beyond, but we're watching it very closely.

Michael J. Farrell: These new medications are primarily focused on the U S and in Western Europe, right now, but as we watch.

Michael J. Farrell: Our hypothesis is that this this new therapy is bringing people into the healthcare system, who werent previously there they weren't choosing to go is frequently to the GP or the primary care physician.

Michael J. Farrell: Now, saying that PCP that GP and now they are getting treated for not only their obesity, but now other chronic diseases and we've seen this in other in other disease states from some of our peers here in med Tech, but yes, it's quite extraordinary to have 10, 5% higher propensity to start positive airway pressure therapy. There are not many other.

Michael J. Farrell: Factors recently in terms of innovations from biotech.

Michael J. Farrell: And in pharma that we've seen that could drive this level and so it is early days as those those drugs are penetrated in the U S Western Europe and beyond but we're watching it very closely I do think that these trillions of dollars worth of <unk>.

Michael J. Farrell: I do think that these trillions of dollars worth of capital will bring lots of advertising and will bring lots of patients into the funnel and then our job will be to help those patients to find the best path to the best therapy and the best therapy is positive airway pressure therapy and we're seeing that in these early days and yeah, I think as we move forward, we'll learn more and we'll keep updating as we go every quarter on our flow of patients that come into the funnel, how we're seeing them and how we're taking care of them through our own demand gen, through the demand gen that will be driven by this big pharma and one that we didn't get a question on, but I talked about on my prepared remarks there on Big Tech. I think the fact that there'll be wearables on tens of millions, maybe hundreds of millions of people's wrists, looking at oximetry, looking at nocturnal sleep, looking at nocturnal breathing and helping patients find out if they're not sleeping well, they're not breathing well. I think that might actually be a higher tidal wave than the big pharma tidal wave, but we'll watch that as we move forward, Darren.

Michael J. Farrell: Capital will bring lots of advertising will bring lots of patients into the funnel and then our job will be to help those patients to find the best path to the best therapy. The best therapy is positive airway pressure therapy, and we're seeing that in these early days.

Michael J. Farrell: I think as we move forward, we will learn more and we will keep updating as we go every quarter on our flow of patients that come into the funnel, how we're seeing them and how we're taking care of them through our own demand gen through the demand Gen that'll be driven by this big pharma and one that we didn't get a question on what I talked about on my prepared remarks, there on Big Tech I think the fact.

Michael J. Farrell: There'll be wearables on tens of millions, maybe hundreds of millions of People's risks looking at oximetry looking at nocturnal sleep looking at Mcdonnell breathing and helping patients find out if they are not sleeping well then operating well I think that might actually be a higher title life than the big pharma title wide, but we'll watch that as we move forward. Thanks.

Operator: Thanks for the question. Thank you. The next question is coming from Mike Matson from Neiman & Company. Your line is now live. Yeah, so with the news

Speaker Change: For the question Brett.

Operator: Thank you. Your next question is coming from Mike Matson from Needham <unk> Company. Your line is now live.

Operator: Yeah.

Operator: Yes.

Operator: Thank you. The next question is coming from Mike Matson from Neiman & Company. Your line is now live.

Michael Stephen Matson: The news that Philips is.

Michael Stephen Matson: Exiting one invasive ventilation market is there an opportunity for redwood to pick up some share in this category.

Michael J. Farrell: Yeah, thanks for the question, Mike. And the competitor you mentioned is leaving the U.S. market for life support ventilation. But they will still, at this point, I think, claim to be coming back with CPAP, APAP, and bi-level. So bi-levels are non-invasive ventilation. They reach an area of non-invasive ventilation. So we expect them back in that market.

Michael J. Farrell: And if so can you maybe talk about how big you think that that market is.

Michael J. Farrell: Okay.

Speaker Change: Yes, thanks for the question Mike.

Michael J. Farrell: The competitor you mentioned is leaving the U S market for life support ventilation. They will still at this point I think claimed to be coming back with CPAP bipap and bi level, so that by levels of noninvasive ventilation and day rates.

Michael J. Farrell: Look, I think there are opportunities in ventilation. Obviously, we saw through the COVID crisis that there was a very large volume of ventilators sold into the world in 2020, 2021, 2022. We talked about even just, you know, in 23, we're lapping a quarter where there were large sales a year ago into China of ventilators.

Michael J. Farrell: Area of noninvasive ventilation, so we expect them back back in that market.

Michael J. Farrell: Look I think there are opportunities in ventilation, obviously, we sold through the Covid crisis. There was a very large volume of ventilate is sold into the world. In 2000, 22021, 2022, we talked about even just in 'twenty three we're lapping a quarter, where there were large sales a year ago into China.

Michael J. Farrell: <unk> and so I think the if you like the supply of <unk> into the market is quite high so theres no huge sort of immediate opportunity by our competitor, leaving life support ventilation in the U S. But we are there to take care of our customers wherever they are whatever country, they're in and whatever needs. They have for us the more material growth.

Michael J. Farrell: And so I think the, if you like, supply of ventilators into the market is quite high. So there's no huge sort of immediate opportunity for our competitor to leave life support ventilation in the U.S. But we, you know, we are there to take care of our customers wherever they are, whatever country they're in and whatever needs they have. For us, the more material growth is really around driving our CPAP, our APAP, and our bi-levels with AirSense 11 and AirCurve 11.

Michael J. Farrell: <unk> is really around driving a CPAP or iPad, but now by levels with essence, 11, and a curve of 11 and the <unk> in terms of your question Noninvasive ventilation has echoed S. <unk> S T and <unk> STI and at the highest level. It has an air curve ISP, which is the highest level of adaptive set of <unk>.

Michael J. Farrell: And the AirCurve 11, in terms of your question, non-invasive ventilation has AirCurve S, AirCurve ST, and AirCurve STA. And at the highest level, it has an AirCurve ASV, which is the highest level of adaptive server ventilation. All these together form types of non-invasive ventilation to treat patients with COPD or neuromuscular disease that leads to respiratory insufficiency.

Michael J. Farrell: <unk> all of these together form types of noninvasive ventilation to treat patients with COPD on euro neuromuscular disease that leads to respiratory insufficiency and <unk> has the best platform on the planet to treat them, we think it's a huge opportunity.

Michael J. Farrell: And ResMed has the best platform on the planet to treat them. We think it's a huge opportunity. You know, many hundreds of millions of patients worldwide have COPD, neuromuscular disease, and respiratory insufficiency.

Michael J. Farrell: Many hundreds of millions of patients worldwide have COPD neuromuscular disease, and respiratory insufficiency and residents there for them now and will be for them. There in the future. It's a long term growth opportunity. It's not a short term pop it's a long term growth opportunity for us to take care of these patients and help them sleep better breathe better and our <unk> platform is going to be fantastic to do that.

Operator: And ResMed is there for them now and will be there for them in the future. It's a long-term growth opportunity. It's not a short-term gain. It's a long-term growth opportunity for us to take care of these patients and help them sleep better and breathe better. And our AirCurve platform is going to be fantastic to do that. Thank you. Your next question is coming from Lyanne Harrison from Bank of America. Your line is out of order. Good morning all. I might come back to the real world later. Supply Improvements Fair 300, But is it?

Operator: Okay.

Operator: Thank you. Your next question is coming from Lyanne Harrison from Bank of America. Your line is now live.

Lyanne Harrison: Good morning, all Amit.

Lyanne Harrison: Come back to that.

Operator: Your next question is coming from Lyanne Harrison from Bank of America. Your line is now live.

Operator: Nick.

Lyanne Harrison: Obviously, some good resupply improvement stands 300 basis points 500 basis points, but is there anything you can share on the data.

Michael J. Farrell: Yeah, so it's a good question, Lyanne, and there are sort of multiple parts to it. I'll address it at a high level, which is to say, yeah, look, the real-world data is excellent. It's the largest data set out there, with 660,000 patients that have been prescribed GLP-1 and are on positive airway pressure therapy, and we're really laser-focused on tracking that cohort very carefully. We can and will look to, in the future, slice and dice it by AHI, you know, 5 to 15, 15 to 30, 30-plus. We'll look to slice and dice it by age, by gender, by geography, and others.

Michael J. Farrell: The trend for Louis severity OSA patient set of the mild to moderate categories and then also secondly on the data.

Michael J. Farrell: What should we do this with separate datasets what trend do you see the percentage of patients who have ceased CPAP therapy as a result of weight loss drugs.

Speaker Change: Yes, so it's a good question liana.

Michael J. Farrell: Multiple parts to it I'll address it at a high level, which is to say, yes look the real world data is excellent the largest data set out there with 660000 patients have been prescribed the GOP one and are on positive airway pressure therapy, and we're really laser focused on tracking that cohort very carefully.

Michael J. Farrell: A lot of that will be for our internal work, so that we can best drive social media marketing and know which patients to go after. For instance, public information out there is that women are using GLP-1s more than men, and they're more adherent to them than men are. The rate that people quit GLP-1 therapy is a lot higher in men than women, and so we're tracking a lot of that information publicly, and we will, over time, release it. But we haven't, you know, seen at all a correlation or information around people quitting pap therapy because of GLP-1. It just doesn't compute in the data we've got. It's the other way around.

Michael J. Farrell: We can and we will look to in the future slice and dice. It by IHI five to 15 15 to 30 30, plus we will have to slice and dice. It by age by agenda by geography, and others a lot of that will be for our internal work. So that we can best drive social media marketing and know which patients.

Michael J. Farrell: Go after for instance, the public information out there is that women are using GOP ones more than men and then more adherent to the GOP ones than men.

Michael J. Farrell: Right that people quit the GOP one therapy is a lot higher in men and women and so we're tracking a lot of that information publicly and we will over time release it.

Michael J. Farrell: We haven't.

Michael J. Farrell: Seen at all.

Michael J. Farrell: Correlation or information around people quitting pap therapy because of the GOP wanted just doesn't.

Michael J. Farrell: It's a huge tailwind for people coming in. Look, when we see, you know, as we say, we get 87% adherence, we're very proud of that. For the 13% that don't get there, we look at all the reasons why. Is it claustrophobia? Is it insomnia, where they have a psychological condition where they can't fall asleep, and then they blame it on the CPAP mask when it's really a fact of needing treatment for their insomnia, as well as, or in parallel to, or even before their OSA?

Michael J. Farrell: Compute in the data we've got it's the other way.

Michael J. Farrell: A huge tailwind for people coming in.

Michael J. Farrell: Look when we see.

Michael J. Farrell: As we say, we've got 87% adherence, we're very proud of that for the 13% that don't get there. We look at all of the reasons why is it claustrophobia is it our insomnia, where they have a psychological condition, where they can't fall asleep and they blame it on the CPAP mask when it's really effect of all the need to have treatment over there in sanya.

Michael J. Farrell: As well as or in parallel to or even before their OSI. So we're looking at all types of reasons.

Michael J. Farrell: So we're looking at all types of reasons for that, but look, we'll continue to update you and the rest of the world as we slice and dice by HI, by age, by gender to find the best way to help patients find the best path to therapy. But right now, we're seeing a huge trend of more patients coming in, more motivated patients, and our challenge is to keep up with that and make sure that we can scale and help them get on that great digital health journey. Thank you. The next question is coming from Steve Wheen from Jordan. Your line is now. Thanks very much. I just had a question about the AirSense 11.

Steven David Wheen: For that but we'll continue to update you and the rest of the world as we do this loss in dogs by IHI by age by gender to find the best way to help patients find the best path to therapy, but right now we're seeing a huge trend of more patients coming in more motivated patients and our challenge is to keep up with that and make sure that we can scale and help them get on that that great digital health journey.

Michael J. Farrell: <unk>.

Michael J. Farrell: Thank you. Your next question is coming from Steve Wheen from Jordan Your line is that right.

Steven David Wheen: Yes, thanks very much I.

Steven David Wheen: I just had a question around <unk> to live in.

Operator: Thank you. The next question is coming from Steve Wheen from Jordan. Your line is now live.

Steven David Wheen: And its availability and the pathway to it being kind of.

Michael J. Farrell: Yeah, thanks for the question, Steve. I'll start out with the fact that we're still selling the S9 product in China right now. And so, you know, getting rid of it, getting rid of it completely, right, the SN10 will take a while because there are great markets around the world where technology is useful for a long period of time. But I think what you're talking about is the materiality of the SN11 becoming the primary in global markets. I can tell you this, the SN11 is already the primary platform in our biggest market, the US. It's already well into the majority and growing quickly.

Steven David Wheen: The platform that you are 100% rely upon if you could just give us an update as to how that looks for.

Michael J. Farrell: The remainder of this year and perhaps into 'twenty for us.

Speaker Change: Yes. Thanks for the question, Steve I'll start out with this fact that were still selling the <unk> product in China, right now and so getting rid of getting rid of it completely right. The Sn 10, we'll take a while because there's great markets around the world where technology.

Michael J. Farrell: Is is useful for a long period of time, but I think what youre talking to is the materiality of essence 11, becoming the primary.

Michael J. Farrell: In global markets I can tell you. This the essence 11 is already the primary platform in our biggest market in the U S. It's already well into the majority and growing quickly and no customer who wants to order from resume.

Michael J. Farrell: And no customer who wants to order from ResMed can't get SN11s as well as SN10s. We do limit the SN11s sometimes because there are so many customers from small, large regionals to statewide groups to nationals, and we've got to balance the flow to make sure every person has a fair chance to get an SN11. And then we cover the difference with the awesome SN10s.

Michael J. Farrell: Get essence, elevens as well as essence tens, we do limit sometimes the essence elevens because there's so many customers from small large regionals to to statewide groups to nationals and we've got to balance the flow to make sure every person has a fair chance to get in essence 11, and then we covered the difference with the awesome essence tens.

Michael J. Farrell: So, you know, we're already over the majority in the US. As we look at other big markets around the world, you know, Germany, Japan, France, the UK, and beyond, the SN11s are ramping up, SN11s are ramping very quickly, and they'll quickly get to the majority across those areas. As we look to more of the countries, you know, hundreds more countries around the world than those top 20, our job is, as I said in the prep remarks, to get regulatory clearances.

Michael J. Farrell: So we're already over the majority in the U S.

Michael J. Farrell: As we look at all the big markets around the World, Germany, Japan, France, U K and beyond the essence elevens are ramping the essence elevens are ramping very quickly and they will quickly get to the majority across those areas as we look to more of the countries in one hundreds more countries around the world in those top 20.

Michael J. Farrell: Our job is as I said in the prep remarks to get the regulatory clearances. Some of these countries require all separate paperwork in time and effort and so we have to analyze how quickly. We can do that and we are also working with authorities to see if we can get clearances that can be used across multiple regions and so Steve we're working very hard to get essence.

Michael J. Farrell: Some of these countries require all separate paperwork, time, and effort. And so we have to analyze how quickly we can do that. And we are also working with authorities to see if we can get clearances that can be used across multiple regions. And so, Steve, we're working very hard to get SN11 in all countries and to the majority in all countries. I hope that answers your question.

Michael J. Farrell: Even in all countries and to the majority in all countries.

Michael J. Farrell: That answers your question.

Operator: Thank you. The next question is coming from Saul Hadassin from Baron Joey Capital. Your line is now live.

Saul Hadassin: Thank you next question is coming from saw Dawson from Barrick Joey Capital. Your line is now live.

Operator: Thanks everyone. Just another quick one for Brett.

Saul Hadassin: Hi, Thanks. Good morning, just another quick one for Brian just looking at the inventory balance came down quite significantly into the into the third.

Brett: Brett, just looking at the inventory balance, it came down quite significantly at the end of the third quarter. It's the lowest inventory has been, I think, since 2022. Just wondering where you think inventory goes from here. Do you think you need to start to rebuild as it relates to product demand, or do you think you can drive that dollar value down further? Yeah, hi, Saul.

Brett: Quarter, it's the lowest inventories Blayne I think since 2022.

Speaker Change: Just wondering where you think inventory guys from here do you think you need to start to rebuild as it relates to sort of product demand or you think you can drive that solar valley down further thanks.

Brett: Yeah, hi, Saul. I think, yeah, we've had, I mean, it seems to be working hard on that for a while now, so you're starting to see results there in the balance sheet and in the inventory, which is great. We're getting pretty close to our targets on the inventory, so I'd say there could be modest reductions or there could be modest gains there. It's more around making sure, you know, like balancing supply and demand now. So I'd say it's pretty, pretty close to targets on kind of where we're at now.

Saul: Yes, I saw I think yes, we had been working hard on that four wall mounts are you starting to see the results there in the balance sheet and an inventory.

Brett: Inventory, which is great.

Brett: We're getting pretty close to our targets on the inventory side site.

Brett: Yes.

Brett: Modest reductions it could be modest guidance there.

Brett: It's more around making sure.

Brett: Balancing supply and demand now so I'm, sorry, it's pretty pretty close the targets on kind of where we're at now for the inventory.

Operator: Thank you. Our final question today is coming from Matthew Taylor from Jeffries. Your line is now live. Hiya guys, it's Mike2Meg.

Operator: Thanks.

Operator: Thank you. Our final question today is coming from Matthew Taylor from Jefferies. Your line is now live.

Matthew Charles Taylor: Hi, guys. Its Mike so he may covenants on that title. Thanks, taking my questions had been here.

Operator: Thank you. Our final question today is coming from Matthew Taylor from Jeffries. Your line is now live.

Matthew Charles Taylor: Coming back to I know, you said, you're maintaining or growing share in the markets, where theyre. Returning books are you seeing any significant pricing pressure or pricing discounts from them.

Michael J. Farrell: Yeah, thanks for the question, Mike, and no, look, you know, what we're seeing in the markets where that competitor's returned is that they're pricing, you know, for value, and they're trying to compete on value. And primarily, you know, as they come back from sort of 0% share when they're with new patients as they start in the market, they're competing with the sort of tier two and tier three So a local player in Europe or a local player in Asia, and they're not touching our share as the global market leader and the global technology leader in this space.

Michael J. Farrell: And any thoughts on when they might read signs in the U S market based on the consent decree.

Michael J. Farrell: Thanks.

Speaker Change: Yes, thanks for the question Mike and.

Michael J. Farrell: No.

Michael J. Farrell: What we're seeing in the markets where that competitors returned is that their pricing.

Michael J. Farrell: For value and they're trying to compete on value and primarily.

Michael J. Farrell: <unk> come back from sort of zero percent share win with new patients as they start in the market competing with the sort of tier two and tier three players. So a local player in Europe or a local player in Asia, and they're not touching our share as the global market leader in global technology leader in this space.

Michael J. Farrell: And the work that we've been able to do over the years that they were out of each market is to really entrench ourselves because we've got the lowest cost, the highest efficacy, the best technology, and physicians love our digital data, patients love the engagement with MyAir, and the whole ecosystem creates that value.

Michael J. Farrell: The work that we've been able to do these number of years.

Michael J. Farrell: We're out of each market is to really entrench ourselves because we've got the lowest cost the highest efficacy the best technology.

Michael J. Farrell: Physicians love, our digital data patient cloud engagement with <unk> and the whole ecosystem creates that creates that value. So we.

Michael J. Farrell: So we really have seen, you know, as they come in, they're pricing for value and competing with tier two, tier three players in those markets. As to when they'll re-enter from 0% new patient share into the US market, I don't know. You can do your own analysis on it, consent decrees. This one's a very severe one, it has a lot of inspectors, sort of five times the normal number of inspectors, I think five versus one, and a lot of constraints on that.

Michael J. Farrell: We really have seen as they come in they pricing for value and competing with tier two tier three players in those markets as to win.

Michael J. Farrell: They will reenter from zero percent, new patient share into the U S market I don't know you can do your own analysis on a consent decrees. This one is a very severe one has a lot of.

Michael J. Farrell: Inspectors are five times the normal number of inspectors I think <unk> is one and a lot of constraints on that.

Michael J. Farrell: I look forward to great competition. We've got good competition from the players there now. When they come back, they'll have to compete with them first and us after that. But no, look, we were winning and taking share from that competitor in 2019, all the way from 2010 to 2019. We'll continue to do that and beat them whenever they come back into the market.

Michael J. Farrell: I look forward to great competition, we've got good competition from the players they know when they come back we will have to compete with them first and also after that but no look we were winning and taking share from that competitor in 2019, all the way from 2010 to 2019.

Michael J. Farrell: We'll continue to do that and date them whenever they come back to market.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mick for any further closing comments.

Speaker Change: Thanks for the question.

Michael J. Farrell: Thank you we reached end of our question and answer session I would like to turn the floor back over to Mick for any further closing comments.

Michael J. Farrell: Great, well, thanks Kevin and thanks to all of our stakeholders for joining this call, especially our shareholders. The opportunity in front of ResMed is huge and largely untapped. It's an incredible runway.

Mick: Great well, thanks, Kevin and thanks to all of our stakeholders for joining this call, especially our shareholders the opportunity in front of resume is huge and largely untapped. It's an incredible runway, we see more and more people coming into the health care system. This will benefit us as we help to help them sleep, better breathe better and to live better and healthier and happier lives and over one.

Amy Wakeham: We see more and more people coming into the healthcare system. This will benefit us as we help them sleep better, breathe better, and live better and healthier and happier lives in over 140 countries. Thank you to 10,000 ResMedians, many of whom listened to this call and are also shareholders, for all that you do today and every day. With that, I'll hand the call back to Amy, and we can close it out.

Amy Wakeham: Third 40 countries. Thank you to 10000, <unk> <unk>, many of whom listen to this call and are also shareholders for all that you do today and every day with that I'll hand, the call back to Amy and we can close it out great. Thank you, Mike and thanks, everyone for listening we do appreciate your interest and your time. If you have any additional questions. Please don't hesitate to reach out directly this concludes <unk>.

Amy Wakeham: Great, thank you Mick and thanks everyone for listening. We do appreciate your interest and your time. If you have any additional questions, please don't hesitate to reach out directly. This concludes ResMed's third quarter 2024 conference call. Kevin, I'll turn it back to you to officially close us out.

Amy Wakeham: <unk> third quarter 2024 conference call, Kevin I'll turn it back to you to officially close us out.

Operator: Thank you. This concludes ResMed's third quarter fiscal year 2024 earnings live webcast. You may now disconnect.

Kevin: Thank you. This concludes <unk> third quarter fiscal year 2024 earnings live webcast you may now disconnect.

Operator: Yeah.