ResMed Inc.

ResMed reported Q4 FY2026 group revenue of $1.5 billion, up 9% headline and 8% in constant currency. Non-GAAP EPS increased 16% to $2.95. Non-GAAP gross margin was 62.3%, up 90 basis points year over year, and operating margin was 35.2%, down 10 basis points. Free cash flow was $404 million for the quarter, down 21% year over year, and the company ended Q4 with about $1.5 billion in cash. For FY2026, revenue grew 10% headline and 8% constant currency, non-GAAP EPS grew 17%, and free cash flow was $1.6 billion. For FY2027, ResMed expects core revenue growth of 5% to 7% after excluding MatrixCare and Noctrix, reported revenue of $5.75 billion to $5.85 billion, and non-GAAP EPS of $12 to $12.25. The company expects low-double-digit gross margin expansion for FY2027 and a slight increase in operating margin percentage. Q1 FY2027 is expected to show typical seasonality, slight year-over-year gross margin contraction, and operating expense dollars roughly flat with Q4.

Mick Farrell framed the quarter as another proof point in ResMed’s growth and transformation strategy, emphasizing demand generation, connected care, and innovation across devices, masks, and software. He highlighted the Oura partnership, GLP-1 tailwinds, the AirSense 11 rollout, new AirCurve 11 platforms, and the GenAI-powered patient coach in MyAir as evidence that the company is expanding its ecosystem. His tone was confident and expansive, but also disciplined around portfolio management, patient safety, and capital allocation.

Aaron Bloomer said Q4 gross margin reached 62.3%, up 90 basis points year over year, helped by supply chain productivity that offset inflation. He noted R&D rose 22% headline and 19% constant currency, SG&A rose 10% headline and 7% constant currency, and Q4 free cash flow was $404 million, with about $1.5 billion of cash on hand. For FY2027, he guided to core revenue growth of 5% to 7%, reported revenue of $5.75 billion to $5.85 billion, and non-GAAP EPS of $12 to $12.25, including roughly $0.30 of dilution from MatrixCare and $0.20 from Noctrix. He also said share repurchases will total $1.5 billion, including a $450 million accelerated buyback, and capital expenditures will increase to $160 million to $180 million.

Analysts focused on the sequential gross margin decline, the split between price and volume, the FY2027 revenue guide, and how much Astral safety-related actions affect EPS. Management said the sequential gross margin pressure was mainly from inflation in electronic components and freight, plus about a 20 basis point FX headwind, while pricing increases will be very modest and build through the year. On the revenue guide, management said the underlying core growth rate is north of 6% to north of 8% after adjusting for Astral, and that growth is still driven mainly by volume. They also said the Astral field action is fully reflected in the $42 million Q4 charge and about a $75 million FY2027 revenue headwind, or roughly $0.15 per share.