ResMed Inc.

RMD · NYSE · USD

Can ResMed keep growing faster than the mid-single-digit sleep device market now that ventilator sales are halted and its software unit has been partly sold?

Last 4 earnings calls · through Q4 FY2026

Bull case

  • Weight-loss drug awareness

    The 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 resupply

    New 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 policy

    Reimbursement and trade policy have moved ResMed's way, with sleep devices kept out of Medicare bidding and long-standing duty relief reaffirmed.

  • Cash returns to shareholders

    Strong cash conversion funds large buybacks and a growing dividend while the balance sheet stays in net cash, so per-share earnings rise faster than profit.

Bear case

  • Slower core revenue growth

    The 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 delay

    Software 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 inflation

    Component and freight inflation has overtaken supply chain savings, so margin progress now depends on modest price increases holding with hospital and home care buyers.

  • Mask pricing economics

    Premium fabric masks may not pay for home care providers at prevailing reimbursement rates, which could cap how quickly new products replace older ones.

Bull and bear points

Growth & Execution

In short: Mask and device demand outgrows the market, while ventilator sales are suspended and software growth lags.

Bull · 1

  • Fabric masks raise adherence and mask resupply

    Management says its fabric nasal mask delivers 6% higher 90-day compliance than the silicone version, which matters because adherence drives the high-margin resupply revenue that repeats every year.

    Q3 FY2026 call
Bear · 2

  • Software recovery target has slipped and the unit is shrinking

    ResMed promised high single-digit software growth within a year, later moved the date to fiscal 2027, and is now selling MatrixCare, so the remaining Brightree and MEDIFOX platforms still must prove that growth.

    Tone shiftQ1 FY2026 → Q4 FY2026

  • Fiscal 2027 guidance sits below the recent growth rate

    Management guides fiscal 2027 constant-currency revenue growth of 5% to 7%, well below the roughly 10% growth recorded over the past twelve months.

    Q4 FY2026 call

Profitability & Financial Strength

In short: Cash generation is strong, while a recall charge and component inflation pressure reported margins.

Bull · 2

  • Free cash flow covers buybacks and the higher dividend

    ResMed turned about 29% of revenue into free cash flow over the past year while ending the period with net cash, so capital returns do not depend on borrowing.

    Filed financials

  • Guidance shifted from expense ratios to annual revenue and EPS

    Management used to guide only spending as a share of revenue and now gives full-year revenue and earnings ranges plus a split between sleep and life support devices, which makes the forecast checkable.

    Tone shiftQ1 FY2026 → Q4 FY2026
Bear · 2

  • Astral recall provision lowers the reported operating margin

    A $42 million provision for the Astral field safety notice pulled the reported operating margin down 3.1 points to 30.7% in the fourth quarter, below the adjusted figure management highlights.

    Q4 FY2026 call

  • Component inflation outpaces supply chain productivity gains

    After years of supply chain savings, management says productivity alone can no longer offset inflation in electronic components and freight, so it is asking customers for modest price increases.

    Q3 FY2026 call

Market Position

In short: ResMed leads sleep devices, while competitor re-entry and home care pricing pressure test it.

Bull · 2

  • Sleep devices stay outside Medicare competitive bidding

    CPAP, APAP and bilevel products were left out of the CMS competitive bidding program, removing a recurring reimbursement threat for ResMed and for the home care providers that buy its devices.

    Q2 FY2026 call

  • Duty relief on sleep devices survives new U.S. tariff reviews

    ResMed says its long-standing Chapter 98 duty relief remains in place after the recent Section 301 announcement, which keeps U.S. import costs and patient access stable despite trade policy uncertainty.

    Q4 FY2026 call
Bear · 2

  • Philips device re-entry would add U.S. competition

    Philips has sold only masks and accessories in the U.S. for several years, so a return of its sleep devices would add a competitor in the market that supplies most of ResMed's device revenue.

    Q2 FY2026 call

  • Premium mask pricing does not work for every home care provider

    Management concedes the new fabric masks will not earn a profit for every home care provider at current reimbursement rates, and those providers decide which mask each patient receives.

    Q3 FY2026 call