RMD earnings analysis
What we found in RMD's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
ResMed delivered strong FY2026 execution: revenue grew 10% to $5.653 billion, gross margin expanded to 61.1%, diluted EPS reached $10.43, and operating cash flow increased to $1.806 billion. Growth was led by Sleep and Breathing Health, particularly masks and international markets, while Residential Care Software grew more slowly and is being reshaped through the planned MatrixCare divestiture. The Noctrix acquisition broadens the sleep-health roadmap but introduces meaningful reimbursement, regulatory, and compliance risks; no quantitative FY2027 guidance was provided in the 10-K.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Connected-care strategy backed by R&D
- ResMed describes itself as a global leader in digital health and cloud-connected medical devices, with AI-powered solutions, connected devices, and intelligent software. It invested $378 million in R&D in FY2026, or 6.7% of revenue, supporting product enhancements, connected care, and its product pipeline.
- Three-year growth with margin expansion
- Revenue rose from $4.685 billion in FY2024 to $5.146 billion in FY2025 and $5.653 billion in FY2026. FY2026 revenue increased 10%, or 8% on a constant-currency basis, while gross margin expanded to 61.1% from 59.4%.
- EPS reached $10.43
- Diluted EPS increased from $6.92 in FY2024 to $9.51 in FY2025 and $10.43 in FY2026. FY2026 net income was $1.523 billion versus $1.401 billion in FY2025, despite a higher 20.6% effective tax rate driven partly by Pillar Two.
- Sleep portfolio drives segment growth
- Sleep and Breathing Health remained the primary growth engine at $4.978 billion of FY2026 revenue, up 10%. Masks and other revenue grew 13% to $2.085 billion, while Rest of World revenue increased 13% reported and 7% constant currency.
- Strong cash generation and shareholder returns
- Operating cash flow increased to $1.806 billion from $1.752 billion in FY2025 and $1.401 billion in FY2024. ResMed returned capital through $700 million of share repurchases and $350 million of dividends in FY2026, compared with $300 million and $311 million, respectively, in FY2025.
- Portfolio reshaping toward core growth
- The $335 million Noctrix acquisition expands ResMed into an adjacent sleep-health indication with an FDA De Novo-classified restless-legs-syndrome device. Separately, the planned $490 million all-cash MatrixCare sale is intended to sharpen portfolio focus and is expected to close in the first quarter of FY2027.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Noctrix reimbursement and compliance risk
- Noctrix was acquired for $335 million, but its restless-legs-syndrome device has not yet received a national or local Medicare coverage determination. The filing states that restrictive coverage or noncoverage could reduce Noctrix revenue, while Noctrix and VirtuOx create new direct Medicare, Medicaid, HIPAA, Stark Law, and False Claims Act compliance obligations.
- MatrixCare separation and earnings loss
- The MatrixCare business represented approximately $220 million of FY2026 revenue and $28 million of operating profit, and $327 million of Residential Care Software goodwill was allocated to the disposal group. Execution risk remains around the expected first-quarter FY2027 closing, transition services, closing adjustments, and the loss of those earnings contributions.
- New FDA quality-system requirements
- The FDA implemented its Quality Management System Regulation in February 2026, incorporating ISO 13485 into U.S. law and expanding visibility into internal audits, supplier oversight, and management reviews. ResMed states that compliance may require process, system, and training updates, with failure potentially causing recalls, approval delays, or manufacturing disruption.
- Technology and alternative-therapy disruption
- ResMed faces intensifying technology competition, including pharmaceuticals and AI-enabled software. The filing specifically notes that GLP-1 treatments may reduce the severity or existence of obstructive sleep apnea and that AI advances may fundamentally change healthcare workflows, requiring significant investment in R&D, data infrastructure, cybersecurity, regulatory compliance, and AI governance.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $10.43
- Gross margin
- 61.1%
- Operating margin
- 33.4%
- Segment
- Sleep and Breathing Health: $4.978 billion revenue in FY2026, up 10% from $4.505 billion; devices $2.892 billion and masks/other $2.085 billion
- Segment
- Residential Care Software: $675.8 million revenue, up 5% from $641.4 million; growth in MEDIFOX DAN, Home and Hospice, and HME was partly offset by weaker Senior Living and Long-Term Care performance
- Segment
- Geography: Americas Sleep and Breathing Health revenue $3.281 billion, up 9%; Rest of World $1.697 billion, up 13% reported and 7% constant currency
What they said about what is next.
The 10-K does not provide quantitative annual revenue or EPS guidance; outlook was deferred to the earnings press release or call.
The filing reads better than the one before it.
What came before.
- 10-Q · April 30, 2026
- ResMed reported Q3 FY2026 revenue of $1.43 billion, marking an 11% increase from the same quarter last year, aided by strong sales in both the Sleep and Breathing Health segment and the Residential Care Software…
- 10-Q · April 24, 2025
- ResMed’s 10-Q for the quarter ended March 31, 2025 reports revenue of $1,292,000,000 and diluted EPS of $2.37 (filed April 23, 2025). The filing shows continued capital return activity (314,100 shares repurchased in…
- 10-Q · January 31, 2025
- ResMed reported quarter revenue of $1,282,000,000 and diluted EPS of $2.43, both modestly above consensus, with gross margin roughly stable and operating margin up versus the prior quarter. The company continued active…
- 10-Q · October 25, 2024
- ResMed reported quarter revenue of $1,225,000,000 and diluted EPS of $2.20, both beating consensus (revenue beat $45.0M, EPS beat $0.16). Gross margin and operating margin both ticked up versus the prior quarter, free…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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