BTN Red Flag Note- ResMed (RMD) Update Q2’25

Sometimes it’s what you don’t see that should concern you

It’s always a red flag when a company stops sharing certain data with investors. While this can sometimes be justified—such as when a business model shifts or a division shrinks to the point that the information is no longer material to overall results—our experience tells us this is rarely the case. As a result, tracking disappearing data is part of how we evaluate a company’s earnings quality.

In our recent review of ResMed’s (RMD) latest quarterly report, we noticed the company has stopped disclosing details about its warranty accruals. Although we didn’t find any signs of manipulation in the data before this disclosure ended, we believe the reduced transparency is a negative mark against earnings quality. Beyond this, we identified several other unusual factors that appear to have contributed significantly to the company’s earnings beat for the quarter, which we’ll explore further below.

In case you missed it, here is a link to Wednesday’s piece Hidden Liabilities – A Short Selling Safeguard which has the paywall down for free subscribers to enjoy as well.

Now let’s get behind RMD’s numbers…

Please note that this report is not a comprehensive earnings quality assessment of the company. We may conduct further analysis and publish a more detailed report at a later date.

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