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    RMD
    Earnings call· Jun 2026(Q4 FY26)

    RESMED Q4 FY26 earnings call RMD

    Aug 6, 2026 Source

    Executive summary

    ResMed Q4 FY26 — Strong Growth, Strategic Portfolio Moves, and Increased Capital Returns

    ResMed delivered strong Q4 FY26 results with robust revenue and EPS growth, driven by device and mask sales. The company is actively managing its portfolio through the acquisition of Noctrix and the divestiture of MatrixCare, while significantly increasing capital returns to shareholders. FY27 guidance reflects continued core business growth, partially offset by the strategic suspension of Astral sales.

    Highlights

    5

    • Headline revenue grew 9% (8% constant currency) in Q4 FY26.

    • Non-GAAP gross margin expanded by 90 basis points year-over-year to 62.3% in Q4 FY26.

    • Non-GAAP earnings per share increased by 16% to $2.95 in Q4 FY26.

    • Fiscal Year 2026 saw 10% headline revenue growth, 180 basis points of operating margin expansion, and $1.6 billion in free cash flow.

    • The quarterly dividend was increased by 10% to $0.66 per share, and total capital returns to shareholders are expected to exceed $1.85 billion in FY27, a 75% increase year-over-year.

    Concerns

    5

    • Life support device revenue declined by 45% in the Americas and 38% in the Rest of World in Q4 FY26 due to the Astral field safety notice.

    • A $42 million provision was taken in Q4 FY26 for expected costs associated with the Astral field safety notice.

    • The suspension of Astral sales is expected to result in a $75 million revenue headwind for fiscal year 2027.

    • The MatrixCare divestiture and Noctrix acquisition are expected to be dilutive to FY27 EPS by approximately $0.30 and $0.20, respectively.

    • Q1 FY27 is expected to see a slight year-over-year contraction in gross margin.

    Guidance & targets

    15
    CategoryTargetConfidence
    Core constant currency revenue growth
    5% to 7%
    high materiality
    High
    Total reported revenue
    $5.75 billion to $5.85 billion
    high materiality
    High
    Non-GAAP earnings per share
    $12 to $12.25
    high materiality
    High
    Core EPS growth
    12% to 14%
    high materiality
    High
    Gross margin expansion
    low double-digit expansion
    medium materiality
    High
    Operating margin percentage
    slight increase
    medium materiality
    High
    Share repurchases
    $1.5 billion
    high materiality
    High
    Capital returned to shareholders
    over $1.85 billion
    high materiality
    High
    Capital expenditures
    $160 million to $180 million
    medium materiality
    High
    Q1 FY27 Revenue seasonality
    typically down a few percentage points sequentially from the fourth quarter
    low materiality
    High
    Q1 FY27 Gross margin
    slight year-over-year contraction
    medium materiality
    High
    Q1 FY27 Operating expense dollars
    roughly flat with Q4
    low materiality
    High
    5-year outlook revenue growth
    high single-digit revenue growth
    high materiality
    High
    5-year outlook earnings growth
    earnings growth that's higher than revenue growth
    high materiality
    High
    Residential Care Software (RCS) revenue growth
    high single-digit revenue growth
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Americas Sleep Devices
    Growth in constant currency.
    		—8%——
    Americas Life Support Devices
    Decline due to Astral field safety notice.
    		—-45%——
    Americas Masks and Other
    		—10%——
    Rest of World Sleep Devices
    Growth in constant currency.
    		—13%——
    Rest of World Life Support Devices
    Decline due to Astral field safety notice.
    		—-38%——
    Rest of World Masks and Other
    		—12%——
    Residential Care Software (RCS)
    Growth from MEDIFOX DAN and Brightree, partially offset by declines in MatrixCare.
    		—2%——

    Operational metrics

    28
    Non-GAAP gross margin
    62.3%up 90 bps YoY
    Q4 FY26

    Reflects strong productivity initiatives and efficiencies, offsetting inflation.

    R&D expenses
    22%headline basis
    Q4 FY26

    Primarily driven by development of next-gen devices and masks, and increased investment in AI-driven patient workflow solutions.

    SG&A expenses
    10%headline basis
    Q4 FY26

    Primarily from VirtuOx and Noctrix acquisitions, and increased marketing and technology investments.

    Operating margin
    35.2%down 10 bps YoY
    Q4 FY26
    Net interest income
    $21 million
    Q4 FY26

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

    Effective tax rate
    20.1%vs 21.1% in prior year
    Q4 FY26
    Non-GAAP diluted earnings per share
    $2.95increased by 16%
    Q4 FY26

    Driven primarily by revenue growth, productivity, and operating leverage.

    FX impact on EPS
    $0.05negative impact
    Q4 FY26
    Noctrix impact on EPS
    $0.02reduced
    Q4 FY26
    Cash balance
    $1.5 billion
    Q4 FY26
    Shares repurchased
    972,000
    Q4 FY26
    Capital returned to shareholders
    $287 million
    Q4 FY26

    Includes share repurchases and dividends.

    Full year revenue growth
    10%headline basis
    FY26
    Full year Non-GAAP EPS growth
    17%
    FY26
    Full year capital returned to shareholders
    over $1 billionup 72% YoY
    FY26

    Through buybacks and dividends.

    MatrixCare revenue
    $220 million
    FY26

    Revenue for the divested MatrixCare business.

    MatrixCare non-GAAP operating profit
    $58 million
    FY26

    Non-GAAP operating profit for the divested MatrixCare business.

    Quarterly dividend
    $0.66increased by 10%
    quarterly
    GLP-1 impact on PAP initiation
    11%more likely
    ongoing

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

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

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

    GLP-1 impact on PAP resupply (3 years)
    6%more likely
    3 years

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

    PAP initiation vs GLP-1 (90 days post-diagnosis)
    >40%vs <3% for GLP-1
    90 days post-diagnosis

    Proportion of newly diagnosed OSA patients starting PAP therapy compared to GLP-1s.

    CME courses completed
    >95,000
    to date

    Sleep apnea educational courses completed by clinicians.

    Unique clinicians trained
    >55,000
    to date

    Unique clinicians who have completed sleep apnea educational courses.

    myAir GenAI sleep coach inquiries
    >1.5 million
    to date

    Inquiries to the new GenAI-powered digital sleep coach in the myAir app, reducing customer service inquiries.

    OURA partnership users from app to resmed.com
    ~13,000
    early performance

    Users who came to resmed.com from the OURA app.

    OURA partnership assessed previously undiagnosed
    ~75%
    early performance

    Percentage of assessed users from OURA partnership who identified as previously undiagnosed.

    AirTouch N30i 90-day compliance
    6%higher
    90 days

    AirTouch N30i drives higher 90-day compliance than its silicone equivalent.

    Industry KPIs

    6
    MetricValueDetails
    Tariff impacttariff relief remains in place
    Pricing realized pricevery modest price increases
    FCF conversion leverage guidance—
    Segment franchise organic growth8%%
    Consumables recurring revenue mix10%%
    Indicated addressable patient population17 millionpeople

    Product announcements

    4
    ProductTypeDetails
    AirCurve 11 ST and AirCurve 11 ST-A platformslaunch
    AirCurve 11 platformexpansion
    AirTouch N30i, AirTouch F30i, AirFit F40 maskslaunch
    GenAI-powered digital sleep coachlaunch

    Deals & partnerships

    3
    NoctrixAcquisition of a medical device company with lead product Nidra, an FDA De Novo classified device treating Restless Legs Syndrome (RLS).

    Closed on June 1. Nidra treats RLS, the world's third most prevalent sleep disorder. Prescriptions are predominantly by sleep physicians, and it flows through the same HME/DME delivery channel as ResMed's other sleep health products.

    MatrixCareDivestiture of the MatrixCare business to sharpen focus on core growth areas: sleep health, breathing health, and connected digital home-based health care.

    Announced on July 7, expected to close around September 1, 2026, subject to regulatory approvals. Enables ResMed to accelerate growth and profitability profile across its core residential care software (RCS) business.

    OURAPartnership with a wearable ring-based technology company to expand access to sleep health education and pathways to care.

    Early performance has exceeded expectations, with approximately 13,000 users coming to resmed.com from the OURA app, and thousands taking the ResMed sleep assessment, with ~75% identifying as previously undiagnosed.

    Risks & headwinds

    6
    Astral field safety corrective action costsQ4 FY26

    $42 million provision

    Mitigation: Taken a conservative, patient-first, quality-driven approach; prioritizing PCBA and electronic components for corrective activities and service support for existing patients based on clinical need.

    Astral sales suspension revenue headwindFY27

    $75 million

    Mitigation: Decision to suspend new sales of Astral devices for the entire fiscal year 2027 to focus on the field safety notice.

    FX headwind on reported revenueFY27

    ~50 basis points

    Mitigation: Based on rates as of fiscal year-end, factored into FY27 total reported revenue guidance.

    Inflation across electronic components and freightFY27

    ongoing

    Mitigation: Partially offset by continued productivity efficiencies and very modest strategic price increases, but still impacting gross margin.

    MatrixCare divestiture EPS dilutionFY27

    approximately $0.30

    Mitigation: Transition service agreements (TSAs) are expected to largely offset any stranded costs in year 1, with efforts to mitigate remaining stranded costs over time.

    Noctrix acquisition EPS dilutionFY27

    approximately $0.20

    Mitigation: Integration of the business has begun, leveraging ResMed's commercial infrastructure to accelerate growth.

    What to watch in Q1 FY27

    5

    Q1 FY27 Gross Margin

    Q1 FY27
    Current62.3% (Q4 FY26 Non-GAAP)
    TargetSlight year-over-year contraction

    Why it matters

    Gross margin trend indicates the effectiveness of productivity initiatives and pricing strategies against inflation.

    We expect slight year-over-year contraction in gross margin in Q1 and anticipate operating expense dollars to be roughly flat with Q4.

    Q&A highlights

    8

    What caused the sequential decline in gross margin, and what is the impact of price increases on the customer base?

    The sequential gross margin decline was primarily due to increased inflation in electronic components and freight costs, along with a 20 bps FX headwind. Management stated they are implementing very modest price increases to offset inflation, but their primary focus remains on driving volume growth.

    “But just given the inflation, we can no longer offset inflation with productivity alone. And as part of actively managing our portfolio, are taking, again, very modest price increases that's going to build as we progress throughout fiscal year 2027.”

    asked by Steven Wheen · answered by Aaron Bloomer

    3 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities & Portfolio Management

    ResMed is focused on three key priorities for FY27: continued operational and innovation excellence, active portfolio management, and leveraging strong free cash flow for reinvestment and shareholder returns. The company completed the acquisition of Noctrix, a medical device company treating Restless Legs Syndrome, and announced the divestiture of its MatrixCare business, expected to close around September 1. These actions aim to sharpen focus on core growth areas like sleep health, breathing health, and connected digital home-based healthcare, aligning with its 2030 strategy.

    02

    Sleep Health Awareness & Digital Ecosystem

    ResMed is capitalizing on increasing sleep health awareness, driven by consumer wearables and GLP-1 medications. A partnership with OURA has seen approximately 13,000 users come to resmed.com, with 75% of assessed individuals identifying as previously undiagnosed. Data from claims databases show patients on both PAP and GLP-1s are 11% more likely to start PAP therapy and have higher adherence rates at 1 and 3 years. The company also noted that PAP therapy initiation significantly outpaces GLP-1s (over 40% vs. less than 3% at 90 days post-OSA diagnosis).

    03

    Product Innovation & Patient Experience

    The global rollout of the AirSense 11 platform continues, with strong penetration in China and ongoing growth in the U.S. and Europe. ResMed also introduced the AirCurve 11 ST and ST-A platforms in the U.S. and expanded the AirCurve 11 to Hong Kong, Singapore, Australia, and New Zealand. Novel fabric technology masks, including AirTouch N30i, AirTouch F30i, and AirFit F40, are driving improved patient comfort and compliance, with the AirTouch N30i showing 6% higher 90-day compliance than its silicone equivalent. A new GenAI-powered digital sleep coach in the myAir app has handled over 1.5 million inquiries, reducing customer service calls.

    04

    Astral Field Safety Corrective Action

    ResMed reaffirmed its commitment to patient safety regarding the ongoing Astral field safety corrective action. A $42 million provision was taken in Q4 FY26 to cover the estimated total costs for this global field action. The company has decided to suspend new sales of Astral devices for FY27, which is expected to result in a $75 million revenue headwind for the fiscal year. All available electronic components are being prioritized for corrective activities and service support for existing patients based on clinical need.

    05

    Capital Allocation & Shareholder Returns

    The company plans to significantly accelerate share repurchase activity in FY27, targeting $1.5 billion, including a $450 million accelerated share repurchase program funded by MatrixCare divestiture proceeds. ResMed's Board of Directors increased the quarterly dividend by 10% to $0.66 per share. Total capital returns to shareholders are projected to exceed $1.85 billion in FY27, representing a 75% increase year-over-year, while also increasing capital expenditures to $160-$180 million to expand manufacturing capacity.

    06

    Market Opportunity & Long-Term Outlook

    ResMed operates in largely underpenetrated core markets, including 1 billion people with sleep apnea, 800 million with insomnia, 480 million with COPD, and 400 million with restless leg syndrome. The company remains confident in its 5-year outlook, targeting high single-digit revenue growth and earnings growth that outpaces revenue growth. Increased transparency is planned, including providing annual revenue and EPS guidance.

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