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    RMD
    Earnings call· Mar 2026(Q3 FY26)

    RESMED Q3 FY26 earnings call RMD

    Apr 30, 2026 Source

    Executive summary

    ResMed Inc. Q3 FY26 — Strong Revenue Growth, Margin Expansion, and Noctrix Acquisition

    ResMed delivered a strong quarter, driven by robust device and mask sales, particularly its innovative fabric-based masks, and operational efficiencies leading to margin expansion. The company is strategically expanding its sleep health ecosystem with the acquisition of Noctrix Health, targeting the significant Restless Leg Syndrome market, while also leveraging GLP-1 tailwinds to drive demand. Management remains confident in its long-term growth outlook and capital return strategy.

    Highlights

    5

    • Headline revenue grew 11%, or 8% on a constant currency basis, to $1.43 billion.

    • Non-GAAP earnings per share increased 21%.

    • Gross margin expanded by 290 basis points year-over-year to 62.8%.

    • Returned $262 million to shareholders through dividends and $175 million in share repurchases.

    • Acquired Noctrix Health, a company with higher revenue growth and gross margins than ResMed, for $340 million.

    Concerns

    4

    • Unrealized losses of $10 million from minority investment portfolio reduced Q3 FY26 EPS by $0.07.

    • SG&A expenses as a percentage of revenue increased to 19.5% from 19% in the prior year period.

    • R&D expenses as a percentage of revenue increased to 6.6% from 6.5% in the prior year period.

    • Residential Care Software revenue grew only 4% constant currency, impacted by challenges in senior living and long-term care.

    Guidance & targets

    12
    CategoryTargetConfidence
    Gross margin
    62% to 63%
    high materiality
    High
    SG&A expenses as a percentage of revenue
    19% to 20%
    medium materiality
    High
    R&D expenses as a percentage of revenue
    6% to 7%
    medium materiality
    High
    Effective tax rate
    21% to 23%
    medium materiality
    High
    Net interest income
    $15 million
    low materiality
    High
    Noctrix Health non-GAAP EPS impact
    reduce non-GAAP EPS by approximately $0.02
    medium materiality
    High
    Share repurchases
    at least $175 million
    high materiality
    High
    Residential Care Software revenue growth
    sustainable high single-digit growth
    medium materiality
    Medium
    Residential Care Software operating profit growth
    double-digit operating profit growth
    medium materiality
    Medium
    5-year revenue growth outlook
    high single-digit revenue growth
    high materiality
    High
    5-year earnings growth outlook
    earnings growth higher than revenue growth
    high materiality
    High
    Gross margin accretion
    double-digit basis points improvements each year
    high materiality
    Medium

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    U.S., Canada and Latin America (excluding Residential Care Software)
    Sales increased by 9%.
    		—9%——
    Europe, Asia and other regions (excluding Residential Care Software)
    Sales increased by 7% on a constant currency basis.
    		—7%——
    Global Devices
    Device sales increased by 6% on a constant currency basis.
    		—6%——
    Global Masks and other
    Masks and other sales increased by 12% on a constant currency basis.
    		—12%——
    U.S., Canada and Latin America Devices
    Device sales in the U.S., Canada and Latin America increased by 6%.
    		—6%——
    U.S., Canada and Latin America Masks and other
    Masks and other sales increased by 14%, reflecting continued growth in mask portfolio and resupply, and incremental revenue from VirtuOx.
    Growth excluding VirtuOx: double-digit percentage
    		—14%——
    Europe, Asia and other regions Devices
    Device sales increased by 6% on a constant currency basis.
    		—6%——
    Europe, Asia and other regions Masks and other
    Masks and other sales increased by 10% on a constant currency basis.
    		—10%——
    Residential Care Software
    Revenue increased by 4% on a constant currency basis, underpinned by MEDIFOX DAN, partially offset by challenges in senior living and long-term care.
    		—4%——

    Operational metrics

    22
    Non-GAAP Operating Income Growth
    18%YoY
    Q3 FY26

    Underpinned by revenue growth and gross margin expansion.

    Cash balance
    $1.7 billion
    Q3 FY26

    At the end of the third quarter.

    Gross debt
    $664 million
    Q3 FY26

    At March 31.

    Net cash
    $996 million
    Q3 FY26

    At March 31.

    Capital returned to shareholders
    $262 million
    Q3 FY26

    Through a combination of dividends and share repurchases.

    Share repurchases
    $175 million
    Q3 FY26

    Under previously authorized share buyback program.

    Quarterly dividend per share
    $0.60
    Q3 FY26

    Declared by the Board of Directors.

    Unrealized losses from minority investment portfolio
    $10 million
    Q3 FY26

    Reduced Q3 FY26 earnings per share by $0.07.

    Acquisition and portfolio review-related expenses
    $6 million
    Q3 FY26

    Treated as a non-GAAP adjustment.

    Net interest income
    $12 million
    Q3 FY26

    Includes additional net interest income from a 10-year Singapore dollar to U.S. dollar net investment hedge.

    FX impact on revenue
    $39 millionpositive impact
    Q3 FY26

    Year-over-year movements in foreign currencies positively impacted revenue.

    FX impact on EPS
    $0.05positive impact
    Q3 FY26

    Movements in foreign exchange rates had a positive impact on earnings per share.

    GLP-1 + PAP adherence (2-year resupply)
    5.1%higher
    2-year

    For PAP patients who subsequently start GLP-1 therapy vs. PAP alone.

    GLP-1 + PAP adherence (3-year resupply)
    6.2%higher
    3-year

    For PAP patients who subsequently start GLP-1 therapy vs. PAP alone.

    GLP-1 + PAP start rate
    11%more likely
    ongoing

    Patients with scripts for both PAP and GLP-1 are more likely to start PAP therapy than patients with PAP alone.

    GLP-1 + PAP resupply (1-year)
    3%more likely
    1-year

    Patients with scripts for both PAP and GLP-1 are more likely to have a resupply event.

    GLP-1 + PAP resupply (3-year)
    6%more likely
    3-year

    Patients with scripts for both PAP and GLP-1 are more likely to have a resupply event.

    Sleep apnea educational courses completed
    80,000
    ongoing

    Number of times ResMed's CME programs have been completed.

    Unique clinicians completing courses
    45,000
    ongoing

    Number of unique clinicians who have completed ResMed's CME programs.

    Clinicians intending to change practice
    78%
    ongoing

    Percentage of providers intending to change clinical practices based on CME program learning.

    PAP adherence threshold for reimbursement
    70%
    90-day period

    Requirement for 70% of trailing 30 days in the first 90-day period to qualify for continued reimbursement.

    PAP non-adherence rate
    13%
    90-day period

    Percentage of patients who do not achieve 87% adherence at day 90.

    Industry KPIs

    12
    MetricValueDetails
    System utilization6%%
    Pricing realized price—
    Market growth outgrowth—
    New product launch ramp—
    Procedure volume growth6%%
    FCF conversion leverage guidanceAbove 100%%
    Installed base system placements—
    Segment franchise organic growth8%%
    Consumables recurring revenue mix12%%
    Sales force commercial capacity build—
    Indicated addressable patient population7%%
    Pivotal trial clinical evidence milestones—

    Deals & partnerships

    1
    Noctrix Healthacquisition$340 million

    Acquisition of Noctrix Health, a company with an FDA de novo classified medical device (Nidra) that treats Restless Leg Syndrome. Nidra is noninvasive, clinically proven, and drug-free, with prescriptions written by sleep physicians and delivered through HME/DME channels.

    Risks & headwinds

    3
    Geopolitical uncertainty and component cost pressuresOngoing

    Potential cost inflation on components and impacts on fuel costs.

    Mitigation: Strong pipeline of supply chain optimization initiatives, platform standardization, scale benefits, vendor management, longer-term contracts, manufacturing efficiencies, logistics optimization.

    Challenges in Residential Care Software's senior living and long-term care verticalOngoing

    Partially offset robust performance from MEDIFOX DAN, contributing to 4% constant currency growth for RCS.

    Mitigation: Disciplined portfolio management approach, investing more in high-growth areas and finding solutions for lower-growth areas, aiming for sustainable high single-digit revenue growth and double-digit operating profit growth in FY27.

    Unrealized losses from minority investment portfolioQ3 FY26

    $10 million in unrealized losses, reducing Q3 FY26 EPS by $0.07.

    Q&A highlights

    7

    Inquired about current trends in component costs and freight, and supply chain changes post-COVID.

    Management acknowledged potential cost inflation but stated that a strong pipeline of productivity initiatives, including platform standardization, vendor management, and logistics efficiencies, is expected to offset these, maintaining the long-term gross margin accretion target.

    “there's many things that we can do that we think we can certainly offset that. And still our long-term objective is to increase that gross margin over time.”

    asked by David Bailey · answered by Brett Sandercock

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence & Supply Chain Resilience

    ResMed demonstrated operational excellence with strong gross margin expansion, driven by component cost improvements and manufacturing/logistics efficiencies. The company's robust supply chain, refined through past disruptions like COVID and semiconductor shortages, positions it well to navigate current geopolitical uncertainties and potential cost pressures. Management maintains a long-term goal of achieving double-digit basis points gross margin accretion each year through 2030, leveraging a pipeline of productivity initiatives.

    02

    Innovation in Mask Technology

    The global rollout of ResMed's novel fabric-based masks, including the AirTouch N30i and the recently launched F30i Comfort and F30i Clear, is transforming mask technology. These masks are designed for elevated patient comfort and are changing the basis of competition. Real-world data shows the AirTouch N30i drives 6% higher 90-day compliance compared to its silicone equivalent, significantly enhancing patient adherence and lifetime value for all stakeholders.

    03

    GLP-1 Impact and Demand Generation

    ResMed views GLP-1s as a 'megatrend' and a 'once-in-a-generation demand gen opportunity.' Analysis of 2.1 million de-identified patient records indicates that patients with both PAP and GLP-1 prescriptions are 11% more likely to initiate PAP therapy. Furthermore, these patients are 3% more likely to have a resupply event at one year and 6% more likely at three years, demonstrating sustained adherence. The company is making meaningful investments to capture and channel this increased consumer awareness.

    04

    Strategic Entry into Restless Leg Syndrome Market

    The acquisition of Noctrix Health for $340 million, expected to close by June 1, 2026, marks ResMed's strategic expansion into the Restless Leg Syndrome (RLS) market. Noctrix's FDA de novo classified device, Nidra, offers a noninvasive, drug-free treatment for RLS, which affects 7% of adults globally and 17 million people in the U.S. This market has significant overlap with obstructive sleep apnea, utilizing similar sleep physician prescription and HME/DME delivery channels.

    05

    Clinical Evidence and Physician Education

    ResMed continues to invest in clinical research, highlighting the growing body of evidence linking sleep apnea to increased risks of Alzheimer's and dementia. Notably, CPAP-treated OSA patients did not show an elevated risk of dementia compared to matched controls. The company's CME programs have been completed over 80,000 times by more than 45,000 unique clinicians, with 78% intending to modify their clinical practices to improve sleep health.

    06

    Residential Care Software Portfolio Management

    ResMed is actively managing its Residential Care Software (RCS) portfolio, strategically investing in high-growth areas while seeking solutions for lower-growth segments. The company aims to accelerate RCS revenue back to sustainable high single-digit growth with double-digit operating profit growth in fiscal year 2027. This disciplined approach is intended to optimize the business's overall performance.

    AI-generated summary of the company’s earnings call. Not investment advice.