Mick Farrell: It’s a good question, but it’s a complicated answer, because there’s so many moving pieces between that baseline you took there for that CAGR number ’19 and ’20 with the COVID shutdowns, our spin-up on ventilators with 150,000 vents at the start 2020 and then the slowdown and the restart-up of the sleep apnea funnel and the shift that happened through 2020, 2021. And then, of course, the perturbation that made it a perfect storm of a competitor with a recall of 5.5 million devices and ’21 through ’23 and ongoing. So with all that, I’ll just talk to the market growth rate that we saw stable pre-2019, right, of that mid single digit growth of devices and high single digit growth in masks. We think that where we’re at now taking our baseline of now we can meet and beat that growth rate, right?
And so that definitely doesn’t mean going backwards. You can take what we’ve got now, which is, I believe, a very strong share of the US market and in the 140 countries we’re in competition, but it’s a good place for us to be. We are looking at from where we are achieving mid single digit plus growth in our devices and high single-digit growth on our masks. And no, we don’t intend to go backwards at all. In fact, we intend to not only go forward but go forward strongly. And I think what was shown up in the numbers this quarter is our incredibly strong growth. I talked earlier that our incredibly strong growth in devices of 20% in Europe, Asia and rest of world. We had 15% growth in masks in Europe, Asia and around the other countries. And so I think what it’s shown is that ResMed is going to go head-to-head with full competition out there and be able to meet and beat the competition, because we’ve got the smallest, quietest, most comfortable, most connected and the most intelligent health systems, and it’s that whole combination of not just the product, but the solution, the service and how it’s embedded in the healthcare system to the patient to the physician that allows us to achieve that.
So we’re not going backwards, we’re going forward, Saul, and we’re going to grow at or ahead of market. And in many countries, we’re going to drive demand gen to increase the whole aggregate market growth rate and pull more patients into the funnel, because now we’ve got a greater incentive than ever to do that. Thanks for the question.
Operator: The next question is coming from Matthew Chevrier from Citi.
Matthew Chevrier: One on SaaS, please. So what will drive the SaaS revenue to now grow double digits from high single digit previously?
Mick Farrell: Thanks for the question, Matthew, and welcome to covering ResMed. Yes. So look, what’s going to happen is with our organic SaaS business, as you saw in the quarter, we had good high single-digit growth at 7%. And we’ve sort of been in that sort of 7% to 8% in our organic growth across our US franchise really MatrixCare plus Brightree. And with the MEDIFOX DAN group, we haven’t sort of been breaking out organic growth within that. But it is going to be incremental to that group. But in addition to that, there’s a great product pipeline at both Brightree and MatrixCare that I feel confident and some portfolio focuses on the high growth parts of their portfolio and moving out or backing up with some of the low growth areas in that portfolio of MatrixCare that gives me great confidence as I look forward over the fiscal year and beyond that we’re going to turn organic growth from sort of where it is now in the high single digits to double double digit growth on a stable organic basis across that SaaS business.
So Matthew, it’s a combination of MEDIFOX DAN increase in the group but also some great product pipelines in the current business to be able to get us there. And the final punchline I’ll put there is, in addition to that, driving that better top line growth, we’re working — we restructured as well on SG&A and some R&D in our SaaS business this week, this quarter. And that will allow us to get good leverage on the net operating profit bottom line. And I see that moving closer and closer to the ResMed group and even being a strong contributor, an even stronger contributor for us as we look to maximize our long term EPS and return on invested capital across our group. So great question, Matthew, but we’re very confident we can achieve that as we go through fiscal year ’24, ’25 and beyond in our SaaS business.
Operator: We reached the end of our question-and-answer session. I’d like to turn the floor back over to Mick for any further or closing comments.
Mick Farrell: Well, thanks, everybody, for attending this call and for the great detailed questions. And thanks, Kevin. Yes. Look, I’ll close with this. ResMed is well positioned for ongoing future success and accelerated profitable growth. We’re taking actions to prioritize on the right initiatives and we’re optimizing costs to fuel our long term growth. The opportunity in front of us is huge and largely untapped and it’s an incredible runway. We see more and more people coming into the healthcare system every quarter and we’ll benefit and help them sleep better, breathe better and live better lives in 140 countries. And we’ll keep proving it to you every quarter as we go forward. Thanks to all the 10,000 ResMed-ians, many of whom are also shareholders, for all that you do today and every day. And with that, I’ll hand the call back to you, Amy, to close us out.
Amy Wakeham: Great. Thank you, Mick. Thanks, everyone. We appreciate your interest and your time. As always, if you have any additional questions, please don’t hesitate to reach out to us directly. This does conclude ResMed’s first quarter 2024 conference call. Kevin, you can now end the call.
Operator: Thank you. You may now disconnect your lines, and have a wonderful day. We thank you for your participation today.
