On Thursday, ResMed Inc (NYSE:RMD) reported that second-quarter fiscal 2026 adjusted earnings of 2.81, beating the consensus of $2.72.Quarterly sales increased 11% year over year to $1.42 billion, surpassing the consensus estimate of $1.396 billion.Sales increased 9% on a constant currency basis, driven by increased demand for our portfolio of sleep devices, masks, and accessories.Residential Care Software revenue increased by 5% on a constant currency basis.In December 2025, the U.S. Food and Drug Administ ...

Q2 FY26 Earnings January 29, 2026 Presentation of financial information & forward-looking statements Historical financial and operating data in this presentation reflect the consolidated results of ResMed Inc., its subsidiaries, and its legal entities for the periods indicated. This presentation includes financial information prepared in accordance with accounting principles generally accepted in the United States, or GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financial ...

Core Insights - Resmed has received FDA clearance for its Personalized Therapy Comfort Settings (PTCS), branded as Smart Comfort, set to launch in early 2026 for new users of the myAir app paired with the AirSense 11 device [1][9] - Smart Comfort is designed to enhance the user experience in CPAP therapy by utilizing AI and real-world sleep data to provide personalized comfort settings [2][5] Company Developments - Resmed's Smart Comfort is the first FDA-cleared AI-enabled medical device that recommends personalized comfort settings for patients with obstructive sleep apnea (OSA), which affects an estimated 61 million people in the U.S. [3][9] - The company currently has a market capitalization of $37.44 billion, with a projected 13.2% increase in fiscal 2026 earnings according to the Zacks Consensus Estimate [4] Product Features - Smart Comfort addresses common therapy issues such as comfort and mask fit, promoting long-term adherence to CPAP therapy by leveraging machine-learning algorithms and over 100 million nights of de-identified sleep data [5][6] - The device settings include features that ease users into therapy, adjust pressure gradually, and reduce pressure on exhalation, developed with clinical oversight and ethical data use [6][7] Market Outlook - The global sleep apnea device market is valued at $7.11 billion in 2025, with a projected compound annual growth rate of 7% through 2034, driven by the rising prevalence of sleep apnea and advancements in medical technology [11] - Resmed's recent initiatives, such as the launch of the Sleep Institute, aim to advance the science of sleep health and support policy decisions [12] Stock Performance - Following the announcement of Smart Comfort, Resmed's shares dropped 2.5%, closing at $250.04, but the product is expected to support a rebound in stock performance [3] - Year-to-date, Resmed shares have increased by 9.3%, outperforming the industry average of 3.2% [13]

Financial Performance - Q1 FY26 - Revenue increased to $13356 million from $12245 million in Q1 FY25[34], representing an increase of approximately 9% - GAAP gross margin increased from 586% in Q1 FY25 to 615% in Q1 FY26[37] - Non-GAAP gross margin increased from 592% in Q1 FY25 to 620% in Q1 FY26[37] - GAAP operating income increased from $3873 million in Q1 FY25 to $4465 million in Q1 FY26[38] - Non-GAAP operating income increased from $4064 million in Q1 FY25 to $4821 million in Q1 FY26[38] - GAAP EPS increased from $211 in Q1 FY25 to $237 in Q1 FY26[40] - Non-GAAP EPS increased from $220 in Q1 FY25 to $255 in Q1 FY26[40] Business Segments & Regions - LTM 1Q26 - Devices accounted for 52% of revenue, Masks and Other for 36%, and RCS for 12%[8] - U S, Canada, & Latin America accounted for 58% of revenue, Europe, Asia, & Other for 30%, and RCS (U S & Germany) for 12%[10] Financial Strength - Free cash flow totaled approximately $18 billion for LTM Q1 FY26[50], up approximately 31% year-over-year[50] - The company has a net cash position of $715 million as of Q1 FY26[50]

ResMed Conference Call Summary Company Overview - **Company**: ResMed (NYSE:RMD) - **Industry**: Digital health and medical devices, focusing on sleep health, breathing health, and healthcare technology delivered at home - **Headquarters**: San Diego, California - **Founded**: 1989 - **Market Presence**: Sold 30 million cloud-connectable medical devices in 140 countries, with 23 billion nights of respiratory medical data collected [5][6] Core Strategies and Goals - **ResMed 2030 Strategy**: Aims to improve 500 million lives by 2030 through innovative products and services [6][7] - **Recent Achievements**: Changed 154 million lives in the last 12 months with devices and software [7] - **Product Development**: Focus on creating the smallest, quietest, and most comfortable devices, with a strong emphasis on cloud connectivity and intelligence [7][10] Financial Performance - **Free Cash Flow**: Generated over $1.7 billion in free cash flow in the last 12 months [9] - **Gross Margin Improvement**: Achieved 230 basis points year-on-year gross margin accretion in Q4 and 150 basis points quarter-on-quarter [9][10] - **Net Operating Profit Margins**: Currently in the range of 33-34% [10] Innovation and Product Development - **New Products**: Launched innovative products like the AirTouch N30i and AirFit F40, incorporating fabric into patient interfaces [11] - **Acquisitions**: Acquired Ectosense for its home sleep testing technology and Virtuox for home sleep apnea testing [12][57] - **Research Utilization**: Leveraging 23 billion nights of data to improve products and contribute to peer-reviewed research [13][14] Market Dynamics and Competitive Landscape - **Tariff Relief**: ResMed products benefit from tariff relief under the Nairobi Protocol, ensuring no tariffs on products made in various locations [12] - **Competitor Landscape**: Competitors have been affected by recalls, but ResMed remains confident in its market position and growth potential [47][48] - **Market Growth**: The device market is expected to grow mid-single digits, with ResMed aiming to exceed this through demand generation efforts [58] Patient Engagement and Adherence - **Adherence Rates**: Connected devices have increased adherence from 50% to 73%, and with app usage, adherence can reach 87% [14][20] - **GLP-1 Drug Impact**: Patients on GLP-1 weight loss drugs are 11% more likely to start CPAP therapy and show higher resupply rates [24][25] - **Patient Empowerment**: Focus on educating patients about access to equipment and the importance of adherence to therapy [20][23] Research and Development - **Investment in R&D**: ResMed invests 6-7% of revenues back into research and development to drive innovation [55] - **Future Growth**: Aiming for double-digit basis point improvements in gross margins annually through supply chain optimization and product innovation [63][64] Conclusion - ResMed is positioned as a leader in the digital health space, with a strong focus on innovation, patient engagement, and financial performance. The company is actively working to expand its market presence and improve patient outcomes through its 2030 strategy and ongoing product development initiatives.

Financial Performance - ResMed's FY2025 revenue reached $5.1 billion[7] - The company's GAAP operating margin for FY2025 was 33%, while the non-GAAP operating margin was 34%[7] - Free cash flow for fiscal year 2025 totaled approximately $1.7 billion, a 28% year-over-year increase, resulting in a free cash flow yield exceeding 4%[34] - ResMed's balance sheet shows a net cash position of $541 million at the end of fiscal year 2025[34] - Q4 FY25 revenue was $1.348 billion, compared to $1.2232 billion in Q4 FY24[36] - Q4 FY25 non-GAAP operating income was $476.4 million, compared to $400.5 million in Q4 FY24[36] - Q4 FY25 non-GAAP EPS was $2.55, compared to $2.08 in Q4 FY24[36] Business Segments and Regions - Devices accounted for 52% of revenue, masks and other 36%, and RCS 12% in Q4 FY25[36] - In Q4 FY25, the U S, Canada, and Latin America region contributed 58% of revenue, while Europe, Asia, and Other accounted for 30%, and RCS (U S & Germany) 12%[36] Strategy and Focus - ResMed aims to empower 500 million lives by 2030 through better sleep and breathing health, with care delivered at home[15, 27] - The company focuses on delivering a market-leading patient experience through innovative solutions for sleep apnea and improving the lives of patients with COPD and other respiratory diseases[10] - ResMed is the global leader in connected and digital health, with over 23 billion nights of respiratory medical data[7, 21]

Core Insights - ResMed Inc. (RMD) experienced growth in Q3 of fiscal 2025, primarily driven by strong performance in its Mask business and advancements in digital health technology, despite facing challenges from a tough macroeconomic environment and intense competition [1][8]. Financial Performance - ResMed has a market capitalization of $36.00 billion and an earnings yield of 3.9%, significantly higher than the industry's 0.5% [2]. - The company has consistently exceeded earnings estimates over the past four quarters, achieving an average surprise of 4.23% [2]. - The Zacks Consensus Estimate for fiscal 2025 earnings has increased by 0.3% to $9.48 per share, with revenue estimates at $5.12 billion, reflecting a 9.3% year-over-year increase [10]. Business Segments - **Mask Sales**: The demand for ResMed's mask portfolio remains strong, benefiting from a competitor's recall. The company has introduced a comprehensive range of masks, including AirFit and AirTouch, to enhance patient adherence through advanced software solutions like AirView [3][5]. - **Product Launches**: The AirFit F40 mask is performing well in the U.S. market, with plans for global expansion. The recent launch of the AirTouch N30i has received positive early feedback [4]. Growth Drivers - ResMed is advancing its digital health technology initiatives, focusing on cloud-based software products like AirView and myAir, which enhance the connected healthcare ecosystem [6]. - The company is investing in AI-driven capabilities to improve patient therapy adherence and outcomes, with positive early testing feedback for its AI products [7]. Challenges - **Macroeconomic Factors**: Global economic conditions, including issues stemming from the Middle East conflict, currency fluctuations, and inflationary pressures, pose risks to ResMed's growth and profitability. SG&A expenses rose by 6.7% year-over-year, while R&D expenses increased by 8.9% [8]. - **Competitive Landscape**: The market for sleep-disordered breathing products is highly competitive, with challenges arising from consolidation in the healthcare industry and competition from affiliates of ResMed's customers [9].

Financial Performance - ResMed's LTM 3Q25 revenue reached $5.0 billion[7] - The company's LTM 3Q25 GAAP operating margin was 32%, while the non-GAAP operating margin was 34%[7] - Q3 FY25 revenue increased to $1.2917 billion from $1.1970 billion in Q3 FY24[36] - Q3 FY25 GAAP EPS was $2.48, compared to $2.04 in Q3 FY24[36] - Q3 FY25 non-GAAP EPS was $2.37, compared to $2.13 in Q3 FY24[36] Business Segments & Regions - Devices accounted for 52% of LTM 3Q25 revenue[8] - Masks and other products contributed 36% to LTM 3Q25 revenue[8] - Out-of-Hospital Residential Care Software (OOH RCS) represented 12% of LTM 3Q25 revenue[8] - The U S, Canada, and Latin America region accounted for 59% of LTM 3Q25 revenue[11] - Europe, Asia, and Other regions contributed 29% to LTM 3Q25 revenue[11] - OOH RCS (U S & Germany) accounted for 12% of LTM 3Q25 revenue[11] Strategy & Impact - ResMed aims to empower 500 million lives by 2030[15, 27] - The company's digital health products and cloud-based software solutions have empowered nearly 151 million lives in the last 12 months[30]