Highlights

• Net Revenue rose 10% to US$5,653 million for fiscal year 2026, with Sleep and Breathing Health the primary growth driver.

• Net Income increased to US$1,523 million (US$10.43 per diluted share), up from US$1,401 million (US$9.51) in FY25.

• Gross Margin expanded to 61.1% from 59.4%, driven by procurement, manufacturing, and logistics efficiencies.

• Operating Cash Flow reached US$1.8 billion; a US$0.60 quarterly Dividend ($350 million total) was paid, with a share buyback program also active.

ResMed Inc. (ASX:RMD) (NYSE:RMD) is a global leader in digital health and cloud-connected medical devices, focused on sleep and breathing health. Founded in 1989 and headquartered in San Diego, California, ResMed pioneered continuous positive airway pressure (CPAP) therapy for obstructive sleep apnea (OSA) and has since expanded into masks, diagnostics, accessories, and residential care software platforms serving more than 180 million individual patient accounts globally. ResMed operates two segments: Sleep and Breathing Health (devices and masks) and Residential Care Software (Brightree, MEDIFOX DAN).

Recent Development

For fiscal year 2026 (year ended 30 June 2026), ResMed reported net revenue of US$5,653 million — up 10% from US$5,146 million in FY25 — and net income of US$1,523 million (US$10.43 per diluted share), up from US$1,401 million in FY25. Gross Profit grew 13% to US$3,452 million, with gross margin expanding 170 basis points to 61.1%, driven by procurement, manufacturing, and logistics efficiencies. Operating cash flow for the year was US$1.8 billion, with cash and equivalents of US$1.5 billion at 30 June 2026.

The Sleep and Breathing Health segment drove growth, with Americas revenue rising 9% to US$3,281 million and Rest of World up 13% to US$1,697 million. Device revenue grew 9% to US$2,892 million, and mask and accessories revenue grew strongly on continued AirSense 11 adoption and AirFit mask range performance. Research and Development Investment was US$378 million (6.7% of net revenue). A quarterly dividend of US$0.60 per share (US$350 million total) was paid. As of 30 June 2026, ResMed entered a definitive agreement to sell its MatrixCare Business (approximately US$220 million in FY26 revenue), reflecting a portfolio simplification toward its core sleep and breathing mission. ResMed also acquired Noctrix during the period. The company has repurchased approximately 12.1 million shares for US$1.6 billion cumulatively under its buyback program.

Sector Context

Obstructive sleep apnea is estimated to affect over one billion people globally, with the vast majority undiagnosed — making the addressable market for ResMed's devices and diagnostic solutions structurally large and underpenetrated. The proliferation of AirSense 11 and connected care apps (myAir) is deepening patient engagement and improving therapy adherence, which in turn drives mask and accessory replacement cycles. AI-powered algorithms embedded in devices — personalising therapy initiation, comfort, and monitoring — are differentiating ResMed from lower-cost competitors and supporting premium pricing. The sell-down of MatrixCare and focus on the Sleep and Breathing Health core is expected to improve Capital allocation efficiency and return on invested capital over time.

Risks and Uncertainties

Tariffs and global trade policy represent a growing headwind for ResMed's globally distributed Supply chain, with the company flagging reciprocal tariffs as a key macroeconomic risk. The Astral device field safety notification — relating to a component replacement in certain life support devices — has generated costs in FY26 and could affect reputation in the life support segment. The pending MatrixCare sale will reduce reported revenue by approximately US$220 million and operating profit by approximately US$28 million on a full-year pro forma basis, temporarily impacting near-term headline metrics. Currency movements remain a material risk given approximately 48% of revenue is generated outside the Americas.

Catalysts to Watch

The completion of the MatrixCare sale and deployment of proceeds — whether for buybacks, acquisitions, or Debt reduction — is the most immediate corporate action to monitor. Progress in scaling the Noctrix Acquisition (a neurostimulation therapy for upper airway stimulation) could open a new clinical pathway in the sleep health ecosystem. Continued gross margin expansion above 61% — as procurement and Manufacturing efficiencies compound — would be a powerful Earnings growth lever. Any incremental GLP-1 weight-loss drug tailwind for OSA diagnosis and treatment uptake represents a secular potential catalyst that investors are increasingly focused on, given the weight-OSA connection.

Final Thoughts

ResMed (ASX:RMD) continues to execute with impressive consistency, growing revenue 10%, expanding gross margins, and generating nearly US$1.8 billion in operating cash flow in FY26. The portfolio simplification toward its sleep and breathing core, combined with AI-powered device innovation, positions the company well for continued outperformance in a structurally growing global health market.