Executive Summary
ResMed’s QQ1 2026 results reflect a solid start to the fiscal year with a favorable top-line trajectory and improving margin mix driven by a software/SaaS-enabled services strategy, alongside durable demand for core sleep and respiratory care devices. Revenue of $1.3356 billion rose 9.19% year over year and 3.39% quarter over quarter, supported by a high gross margin of 61.46% and an operating margin of 33.43%, yielding an operating income of $446.54 million. Net income came in at $348.54 million, delivering a net margin of 26.10%. The company generated strong operating cash flow of $457.32 million and free cash flow of $414.36 million, enabling aggressive capital allocation including a $150.01 million share repurchase and an $87.75 million dividend in the quarter. Net debt remains negative at approximately -$537.50 million, underscoring liquidity strength with cash and cash equivalents of $1.383 billion and total assets of $8.31 billion. Management continues to emphasize software-driven growth (Brightree, MatrixCare, HEALTHCAREfirst) to diversify revenue and improve patient engagement, while preserving profitability in a higher OPEX environment. This mix shift toward high-margin software and recurring services positions ResMed to capitalize on the secular demand for home-based care and remote monitoring, though near-term execution will depend on reimbursement dynamics and FX exposure in international markets.
Key Performance Indicators
Key Insights
Revenue: $1.3356B, YoY +9.19%, QoQ +3.39%; Gross Profit: $820.82M, Gross Margin 61.46%, YoY +16.55%, QoQ +7.10%; Operating Income: $446.54M, Margin 33.43%, YoY +17.13%, QoQ +4.75%; Net Income: $348.54M, Margin 26.10%, YoY +19.27%, QoQ -4.52%; EBITDA: $446.54M, EBITDA Margin 33.43%; Free Cash Flow: $414.36M; Cash from Operations: $457.32M; Capex: $42.97M; R&D: $87.32M; SG&A: $259.19M; Dividends Paid: $87.75M; Shares Repurchased: $150.01M; Cash and Cash Equivalents: $1.383B; Total Debt: $8...
Financial Highlights
Revenue: $1.3356B, YoY +9.19%, QoQ +3.39%; Gross Profit: $820.82M, Gross Margin 61.46%, YoY +16.55%, QoQ +7.10%; Operating Income: $446.54M, Margin 33.43%, YoY +17.13%, QoQ +4.75%; Net Income: $348.54M, Margin 26.10%, YoY +19.27%, QoQ -4.52%; EBITDA: $446.54M, EBITDA Margin 33.43%; Free Cash Flow: $414.36M; Cash from Operations: $457.32M; Capex: $42.97M; R&D: $87.32M; SG&A: $259.19M; Dividends Paid: $87.75M; Shares Repurchased: $150.01M; Cash and Cash Equivalents: $1.383B; Total Debt: $846.35M; Net Debt: -$537.50M; Total Assets: $8.308B; Total Liabilities: $2.188B; Shareholders’ Equity: $6.122B; Intangibles/Goodwill: $3.491B; Net Margin: 26.10%; Margin profile supports a resilient profitability profile even with ongoing software investment.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.34B |
9.19% |
3.39% |
| Gross Profit |
820.82M |
16.55% |
7.10% |
| Operating Income |
446.54M |
17.13% |
4.75% |
| Net Income |
348.54M |
19.27% |
-4.52% |
Management Commentary
Key takeaways from the earnings call themes (without verbatim quotes due to transcript access limits): 1) Strategic emphasis on software and services to diversify the revenue mix and improve patient outcomes through cloud-based platforms (Brightree, MatrixCare, HEALTHCAREfirst) and remote monitoring capabilities; 2) Continued demand strength for home-based Sleep and Respiratory Care solutions, aided by elevated patient engagement and adherence tools; 3) Positive cash generation and disciplined capital allocation, including ongoing buybacks and a sustainable dividend; 4) Margin resilience supported by favorable product mix and cost controls amid ongoing software investments; 5) Monitoring of international FX exposure and reimbursement dynamics as key near-term drivers of profitability.
Forward Guidance
No formal full-year revenue guidance was issued for QQ1 2026 in the accompanying materials. Based on the results and industry dynamics, the near-term trajectory suggests continued revenue growth driven by software/SaaS penetration, a stable gross margin profile around the low-60s percentage range, and a high-30s operating margin as scale and automation improve efficiency. Investors should monitor: (1) the pace of SaaS adoption and the contribution of Brightree/MatrixCare/HEALTHCAREfirst to recurring revenue and gross margin, (2) international FX translation and reimbursement policy shifts in key markets, (3) capital allocation cadence (share repurchases and dividends) and its impact on ROE and cash return, and (4) any new product launches or clinical/operational data that could influence demand for home-based devices.