ResMed Inc.
Analysis
ResMed closed FY2026 doing what it always does, steady high-single-digit growth and a beat every quarter, but the last call changed the question: factory savings no longer cover rising costs, and FY2027 guidance lands below the company's own long-term goal. How much of ResMed's FY2027 guidance is lost Astral revenue?
- The margin engine stopped running on efficiency alone.
Q1 FY2027 gross margin was guided to a decline after the Q4 gain shrank to under a point. Productivity no longer covers component and freight inflation, so ResMed is raising prices. Profit growth now depends on customers accepting them. How much of FY2026's margin gain came from freight versus component costs?
- Fabric masks are pulling the mask business away from the market.
Masks grew double digits in the Americas and reaccelerated in Europe and Asia. Management says fabric masks 'change the basis of competition': the N30i keeps 6% more patients on therapy, which drives the resupply that earns the profit. How much of Americas mask growth came from VirtuOx rather than resupply?
- Guidance now sits below the company's own long-term target.
Revenue growth is guided to 5% to 7%, below the high-single-digit five-year outlook. The gap is ResMed's own doing: ventilators are off sale during a recall, and a slow software unit is being sold. Management says growth is faster.
- Weight-loss drug awarenessThe bull case is that weight-loss drugs and wearables bring far more people to ask about sleep apnea, and ResMed's testing tools convert that interest into patients.
- Fabric mask resupplyNew fabric mask designs keep patients on therapy longer, which lifts repeat mask and accessory purchases in a business that already outgrows the market.
- Reimbursement and trade policyReimbursement and trade policy have moved ResMed's way, with sleep devices kept out of Medicare bidding and long-standing duty relief reaffirmed.
- Slower core revenue growthThe bear case is that growth slows as ventilator sales stop and device demand settles near the market rate, leaving guidance below the company's recent pace.
- Software turnaround delaySoftware has repeatedly missed its own recovery targets, and management is now shrinking the unit through a divestiture rather than proving the promised growth.
- Input cost inflationComponent and freight inflation has overtaken supply chain savings, so margin progress now depends on modest price increases holding with hospital and home care buyers.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$15K | Aug 26 | Oct 8 |
Donald Trump Republican · Executive | Sale | ≥$1K | Jul 8 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$50K | Jun 24 | Aug 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jun 23 | Aug 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jun 3 | Aug 22 |
Congressional trading data provided by QuiverQuant
How ResMed turned $4.7B of revenue into $1.3B of operating income.
| Revenue | ||
|---|---|---|
| Sleep And Respiratory | $4.1B | ▲ 10.10% YoY |
| Software As Service | $584.1M | ▲ 17.30% YoY |
| Total revenue | $4.7B | |
| Gross profit | $2.7B | 56.7% |
| Operating income | $1.3B | 28.2% |