ResMed Delivers Strong Q1 FY26 with Margin Expansion and Cash Growth

About ResMed Inc.

ResMed Inc. (ASX: RMD) has reported a strong start to fiscal year 2026, underpinned by broad-based demand for its sleep apnoea and respiratory care products and continued growth in its digital health platforms. Headquartered in San Diego, California, with substantial operations in Sydney, ResMed develops and markets devices and software solutions that diagnose, treat, and manage sleep disorders, chronic obstructive pulmonary disease (COPD), and other respiratory conditions. Its connected-health ecosystem, which links more than 160 million cloud-enabled devices, enables patients and clinicians to improve treatment adherence and outcomes, positioning the company as a global leader in home-based healthcare innovation.

Financial Performance

For the quarter ended 30 September 2025, ResMed reported total revenue of US$1.34 billion, up nine per cent from the prior corresponding period, or eight per cent in constant currency. Growth was broad-based across geographies and product lines. Revenue in the United States, Canada, and Latin America rose ten per cent, driven by higher device volumes and steady mask resupply demand, while Europe, Asia, and other markets grew six per cent. The Software-as-a-Service (SaaS) segment recorded a five per cent increase, reflecting strong customer retention and expansion of its Brightree and MatrixCare platforms.

Gross margin expanded 290 basis points to 61.5 per cent, supported by supply-chain stability, lower component and freight costs, and greater operational efficiency. Operating income increased 15 per cent to US$447 million, and non-GAAP operating income rose 19 per cent to US$482 million. Net income totalled US$349 million, up 12 per cent, while diluted earnings per share climbed 16 per cent to US$2.55 on a non-GAAP basis. Operating cash flow was US$457 million, underscoring strong cash conversion and disciplined working capital management.

ResMed ended the quarter with US$1.38 billion in cash and equivalents, up from US$1.21 billion at 30 June 2025. The company maintained a robust liquidity position while continuing to invest in innovation, infrastructure, and shareholder returns.

Operational Developments

Chief Executive Officer Mick Farrell said the results reflected continued execution of ResMed’s strategy to expand healthcare delivery in the home through technology and data integration. “Our fiscal year 2026 is off to a strong start, with first-quarter performance reflecting progress toward our mission of helping people sleep better, breathe better, and live longer and healthier,” he said. “We delivered nine per cent headline revenue growth and strong gross margin expansion, resulting in double-digit bottom-line performance. These results reinforce our success in transforming healthcare in the home with hardware, software, and solutions that people love.”

During the quarter, ResMed advanced its Sleep and Respiratory Care portfolio through the rollout of new mask systems and expanded adoption of its connected AirSense and AirCurve devices. The company also launched The Sleep Institute, a global research and advocacy body dedicated to advancing clinical understanding of sleep health and policy awareness.

In recognition of its design leadership, ResMed won two Red Dot Design Awards for its AirTouch N30i mask in the “Innovative Products” and “Medical Design & Healthcare” categories. The awards underscore ResMed’s commitment to developing user-centric products that enhance patient comfort and therapy adherence.

Market and Product Performance

ResMed’s Sleep and Breathing Health division remained the key growth engine, generating US$1.17 billion in revenue — a ten per cent increase over the previous year. Device sales reached US$680 million, up nine per cent, while masks and accessories achieved US$489 million, up eleven per cent. This momentum was supported by ongoing resupply programs, expanding reimbursement coverage, and strong demand for AirTouch and AirFit mask ranges.

The company’s SaaS segment, which contributed US$166 million in quarterly revenue, grew five per cent year-on-year as healthcare providers and aged-care operators increasingly adopted digital workflow platforms to improve efficiency and compliance. The Brightree and MatrixCare systems maintained high retention rates, with continued uptake among new clients seeking automation and analytics capabilities.

ResMed also highlighted new research published in The Lancet Respiratory Medicine, predicting that 77 million US adults will suffer from obstructive sleep apnoea by 2050 — a 35 per cent increase from 2020. The findings emphasise the importance of early diagnosis and home-based management, core strengths of ResMed’s business model.

Regional Overview

ResMed’s largest market, North America, delivered US$775 million in revenue, up ten per cent year-on-year, driven by strong device shipments and improved patient adherence through its connected-care ecosystem. In Europe, Asia, and other markets, revenue rose six per cent to US$395 million, with growth led by Japan, France, and the UK. The company noted increasing market penetration across Asia-Pacific as awareness of sleep disorders continues to rise.

Capital Management and Balance Sheet Strength

ResMed continued its disciplined approach to capital allocation. The company returned US$238 million to shareholders during the quarter, comprising US$88 million in dividends and US$150 million in share buybacks. A quarterly dividend of US$0.60 per share was declared, payable on 18 December 2025, to shareholders of record as of 13 November.

Total assets at 30 September 2025 stood at US$8.31 billion, with shareholders’ equity of US$6.12 billion. Operating cash flow funded both capital expenditure of US$43 million and shareholder returns, maintaining ResMed’s strong balance sheet.

Outlook

ResMed enters the remainder of FY26 with positive momentum and confidence in its long-term growth trajectory. The company expects demand for sleep and respiratory solutions to remain strong, supported by global health trends, rising diagnosis rates, and ongoing adoption of digital health technologies.

Mick Farrell reaffirmed the company’s strategic priorities, stating: “As we advance through fiscal year 2026, we remain focused on operational excellence, investment in innovation, and expanding access to care. Our goal is to deliver sustainable, profitable growth while improving quality of life for the millions of people worldwide who rely on our market-leading healthcare solutions.”

Conclusion

ResMed’s first-quarter performance underscores its strength as a global leader in digital respiratory healthcare. With expanding margins, growing cash flow, and sustained demand for its connected-care solutions, the company is well positioned to deliver continued growth throughout FY26. Supported by a robust balance sheet, disciplined execution, and an expanding software portfolio, ResMed continues to advance its mission to revolutionise healthcare in the home while creating lasting value for shareholders.