Resmed Inc. kicked off fiscal 2026 with robust 9% revenue growth and a notable 290 basis points gross margin expansion, signaling strong momentum in home healthcare innovation. The company also declared a $0.60 dividend and executed a $150 million share buyback, underscoring confidence in its strategic direction.
- 9% revenue increase to $1.3 billion, 8% on constant currency basis
- Gross margin expanded by 290 basis points to 61.5%
- Non-GAAP diluted EPS rose 16% to $2.55
- Operating cash flow reached $457 million
- Declared $0.60 quarterly dividend and repurchased $150 million in shares
Strong Start to Fiscal Year 2026
Resmed Inc. (NYSE – RMD, ASX – RMD) reported a solid performance for the first quarter of fiscal year 2026, with revenue climbing 9% year-over-year to $1.3 billion. On a constant currency basis, revenue grew 8%, reflecting sustained demand for its portfolio of sleep devices, masks, and accessories across global markets. This growth was led by a 10% increase in the Americas and a 6% rise in Europe, Asia, and other regions.
Chairman and CEO Mick Farrell highlighted the company’s mission to enhance sleep and respiratory health through home-based care solutions, emphasizing that the quarter’s results validate Resmed’s strategy of integrating hardware, software, and services to transform healthcare delivery.
Margin Expansion and Profitability Gains
Resmed achieved a significant gross margin improvement, expanding by 290 basis points to 61.5%, driven by manufacturing efficiencies and lower component costs. The non-GAAP gross margin similarly rose by 280 basis points to 62.0%. These operational efficiencies translated into a 15% increase in GAAP income from operations and a 19% rise on a non-GAAP basis.
Non-GAAP diluted earnings per share grew 16% to $2.55, underscoring strong bottom-line momentum. The company’s operating cash flow was a robust $457 million, reflecting healthy cash generation from ongoing operations.
Strategic Investments and Capital Management
While selling, general, and administrative expenses increased by 7% on a constant currency basis, this was largely attributed to the integration costs of the VirtuOx acquisition, employee-related expenses, and investments in marketing and technology. Resmed also recorded $16 million in restructuring charges aligned with its 2030 strategic priorities, signaling a focus on operational agility.
Capital management remained a priority, with the company declaring a quarterly dividend of $0.60 per share and repurchasing 523,000 shares for $150 million. These moves reflect confidence in the company’s growth trajectory and commitment to returning value to shareholders.
Innovation and Leadership Updates
Beyond financials, Resmed announced the launch of its Sleep Institute, a global clinical insights initiative aimed at advancing sleep health research and policy. The company also received dual Red Dot Product Design awards for its AirTouch N30i mask, reinforcing its focus on patient-centered innovation.
On the leadership front, Nicole Mowad-Nassar joined the board, while longtime director Rich Sulpizio announced his retirement, marking a transition in governance as the company continues to evolve.
Bottom Line?
Resmed’s strong Q1 results and strategic initiatives set the stage for sustained growth, but investors will watch closely how restructuring and innovation investments unfold through fiscal 2026.
Questions in the middle?
- How will restructuring charges impact profitability in upcoming quarters?
- What are the growth prospects for Resmed’s Residential Care Software segment?
- How might currency fluctuations affect future revenue and margins?