ResMed Inc.
RMD · NYSE
Next quarter
Reports Oct 29, 2026.
Consensus is $2.73 EPS for Sep 2026 across 5 estimates, ranging $2.67 to $2.87.
RMD Jun 2026
- 1.72%
- -5.06%
- $2.90
- $2.95
- —
- —
Highlights
- Revenue: Fiscal Q4 revenue rose 9% year over year to a record $1.464 billion, or 8% in constant currency, up from $1.43 billion in Q3.
- Adjusted earnings: Non-GAAP diluted EPS was $2.95, 16% above $2.55 a year ago and 1.72% above the $2.90 consensus expectation.
- Sleep and breathing health: Revenue increased 9% to $1.292 billion, led by 13% reported growth in Rest of World and 8% growth in the Americas.
- Margin quality: Non-GAAP gross margin expanded 90 basis points year over year to 62.3%, while GAAP gross margin fell 200 basis points to 58.8% because of $41.9 million in Astral field safety notification expenses.
- Operating leverage: Non-GAAP operating income increased 8% to $515 million, although GAAP operating income declined 1% to $449 million as reported expenses included the Astral charge.
- Cash generation: Quarterly operating cash flow was $455 million and free cash flow was $404 million, down 16% and 21% year over year, respectively; full-year free cash flow was $1.650 billion.
- Capital returns: ResMed returned $287 million through dividends and buybacks in Q4 and more than $1.0 billion during FY2026, while guiding to more than $1.85 billion of FY2027 returns.
- Portfolio actions: ResMed agreed to sell MatrixCare, expected to close in fiscal Q1 2027, and completed its acquisition of Noctrix Health, a wearable-therapeutics company focused on Restless Leg Syndrome.
Analysis
ResMed closed FY2026 with a modest upside quarter: non-GAAP EPS of $2.95 exceeded the $2.90 consensus by 1.72%, while revenue reached a record $1.464 billion. Revenue grew 9% year over year, or 8% in constant currency, and increased roughly 2% sequentially from $1.43 billion in Q3. Non-GAAP EPS rose 16% from $2.55 a year ago, but GAAP EPS of $2.64 was only 2% above $2.58 and declined from $2.74 in Q3.
The print was principally about sustained demand across ResMed’s core sleep and breathing portfolio and better underlying profitability. Sleep and breathing health revenue rose 9% to $1.292 billion, with Rest of World growth of 13% reported, versus 8% in the Americas; residential care software was softer at 3% growth to $172 million. The reported margin picture was distorted by $41.9 million of Astral field safety notification costs: GAAP gross margin fell to 58.8%, while adjusted gross margin improved 90 basis points to 62.3%. Full-year results showed the broader earnings trend, with revenue up 10% to $5.653 billion, adjusted EPS up 17% to $11.17 and free cash flow of $1.650 billion. ResMed paired that cash performance with a MatrixCare divestiture, the Noctrix acquisition and a 10% dividend increase.
Core revenue growth
- Global demand: Sleep and breathing health revenue grew 9% to $1.292 billion, with devices up 8% to $750 million and masks and other products up 11% to $542 million.
- Regional mix: Americas revenue increased 8% to $853 million. Rest of World revenue rose 13% to $439 million, or 10% in constant currency, making it the faster-growing region.
- Software: Residential Care Software revenue increased 3% to $172 million, or 2% in constant currency, well below the core portfolio’s growth rate.
- Product expansion: ResMed launched AirSense 11 in Taiwan, AirCurve 11 ST/ST-A in the U.S. and AirTouch F30i Comfort in Brazil and Chile, extending its newer-product footprint across major markets.
Underlying profitability
- Adjusted margin: Non-GAAP gross margin improved to 62.3% from 61.4%, which management attributed predominantly to productivity-pipeline execution.
- Reported distortion: GAAP gross margin fell to 58.8% from 60.8% because Q4 included $41.9 million of Astral field safety notification expenses. That charge was the main reason GAAP operating income slipped 1% to $449 million despite 9% revenue growth.
- Earnings conversion: Non-GAAP operating income rose 8% to $515 million and non-GAAP net income increased 14% to $428 million. Lower diluted shares, 145.0 million versus 147.0 million a year ago, also supported adjusted EPS growth to $2.95.
- Full-year progress: FY2026 non-GAAP gross margin expanded 240 basis points to 62.4% and non-GAAP operating margin increased 180 basis points to 36.1%, helping adjusted EPS rise 17% to $11.17.
Cash and capital returns
- Quarterly cash: Operating cash flow fell to $455 million from $539 million a year ago, while free cash flow declined to $404 million from $508 million. The quarter included $51 million of capital expenditures and $325 million of business acquisitions.
- Annual cash generation: FY2026 operating cash flow was $1.806 billion and free cash flow was $1.650 billion, broadly stable versus $1.662 billion in FY2025 despite higher investment and acquisition spending.
- Shareholder distributions: ResMed returned $287 million in Q4 through $87 million of dividends and $200 million of share repurchases. Full-year returns exceeded $1.0 billion, up more than 70% year over year.
- FY2027 framework: The board raised the quarterly dividend 10% to $0.66 per share, and ResMed guided to more than $1.85 billion of capital returned through dividends and repurchases in FY2027.
Portfolio reshaping
- MatrixCare exit: ResMed announced an agreement to sell its MatrixCare business, with closing expected in fiscal Q1 2027. The business was carried as $457 million of assets held for sale and $41 million of liabilities held for sale at June 30.
- Noctrix acquisition: ResMed completed its acquisition of Noctrix Health, which sells FDA De Novo classified wearable therapeutics for Restless Leg Syndrome, adding a new therapy category adjacent to its sleep-health platform.
- Digital and care pathways: The company partnered with ŌURA to expand sleep-health education and pathways to care, consistent with its stated strategy to use global scale and digital capabilities to broaden patient and provider engagement.
