Asked for clarification on Noctrix's higher margins (gross vs. operating), impact on SG&A/R&D, and reimbursement opportunities.

Noctrix has higher gross margins and growth than ResMed. ResMed plans to invest in SG&A and R&D for Noctrix. Management expects to leverage ResMed's market access team and knowledge to further drive reimbursement and scale the product faster, noting the current team has already secured payer reimbursement. “this isn't just about one product coming into the sleep health portfolio for ResMed. We're the best owner of this asset. We can scale it faster than anyone.”

Asked about concerns regarding new funding models like Synapse and their challenge to DME customers.

Management views this as an evolution, not a major threat, comparing it to past utilization management efforts. They believe payers will ultimately prioritize patient care and ROI, where CPAP offers low-cost, high-return benefits. ResMed works closely with HMEs to navigate these changes. “I don't think this is a huge threat. I think it's just like CareCentrix was a decade ago. It might be something they work on for a while.”

Questioned if the price point of fabric masks makes them unprofitable for traditional HMEs for setup or resupply.

Management stated that profitability varies by state and payer, but for many, the 6% increase in adherence from fabric masks makes them profitable. ResMed works to ensure economics align for the vast majority of HMEs within the reimbursed environment. “for people who have margin, and there are many parts of the country where there are margin at the current price points of an N30i, that 6% increase in adherence and they can run the spreadsheet themselves, there is a for-profit reason to put that mask on.”

RMD

ResMed (RMD) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Health Care· Apr 30, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Gross margin	62% to 63% high materiality	FY26	High
SG&A expenses as a percentage of revenue	19% to 20% medium materiality	FY26	High
R&D expenses as a percentage of revenue	6% to 7% medium materiality	FY26	High
Effective tax rate	21% to 23% medium materiality	FY26	High
Net interest income	$15 million low materiality	Q4 · FY26	High
Noctrix Health non-GAAP EPS impact	reduce non-GAAP EPS by approximately $0.02 medium materiality	Q4 · FY26	High
Share repurchases	at least $175 million high materiality	Q4 · FY26	High
Residential Care Software revenue growth	sustainable high single-digit growth medium materiality	FY27	Medium
Residential Care Software operating profit growth	double-digit operating profit growth medium materiality	FY27	Medium
5-year revenue growth outlook	high single-digit revenue growth high materiality	5-year	High
5-year earnings growth outlook	earnings growth higher than revenue growth high materiality	5-year	High
Gross margin accretion	double-digit basis points improvements each year high materiality	Annual to 2030	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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%	—	—

RMD operating KPIs by quarter

RMD operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q2 FY25	Mar 2025 Q3 FY25	This call Mar 2026 Q3 FY26	Jun 2026 Q4 FY26	Change vs prior quarter
Employees	10K Thank you to all the 10,000 ResMedians for your hard work and dedication to make our mission possible. Source: earnings call transcript	10K+ Thanks to the over 10,000 ResMedians who make that happen by delivering products and services to serve patients in over 140 countries worldwide. Source: earnings call transcript	10K+ On behalf of our ResMed Board and over 10,000 ResMedians in 140 countries, I'd like to thank Brett, who I've had the privilege to partner with for 26 years, including the last 55 quarters as a CEO and CFO team. Source: earnings call transcript	11K+ I am so impressed by the talent of the more than 11,000 ResMedians around the world and their commitment to serving patients. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Noctrix Health acquisition $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

Geopolitical uncertainty and component cost pressures Ongoing

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 vertical Ongoing

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 portfolio Q3 FY26

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

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.