01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
ResMed Inc. reported net revenue of $1,335.6 milliona for the three months ended September 30, 2025, up from $1,224.5 million a year earlier, an increase of $111.1 million or 9% (8% on a constant currency basis).
Sleep and Breathing Health revenue was $1,169.4 millionb, up 10%, and Residential Care Software revenue was $166.1 million, up 6%. Gross margin rose to 61.5% from 58.6%, which the company attributed primarily to manufacturing and logistics efficiencies and component cost improvements. Net income was $348.5 million, up 12%, and diluted earnings per share were $2.37 compared with $2.11.
Non-GAAP diluted earnings per share were $2.55c compared with $2.20. Operating results also absorbed $15.8 million of restructuring charges for employee severance and termination benefits tied to workforce planning. Cash provided by operating activities was $457.3 million, compared with $325.5 million a year earlier.
Cash and cash equivalents were $1.4 billiond at September 30, 2025, and total debt outstanding was $670.0 million under the revolving credit facility, term credit agreement and senior notes. The company repurchased 523,212 shares for $150.0 million and paid dividends of $0.60 per share, totaling $87.8 million. On October 30, 2025, the board declared a further $0.60 per share dividend payable December 18, 2025.
Litigation remains a watch item. The Federal Circuit affirmed PTAB decisions invalidating the claims of the NYU patents on August 8, 2025, and Fractus filed a new patent infringement suit against ResMed Corp. and ResMed Inc. on October 9, 2025. The company stated that it cannot make a reasonable estimate of loss or range of losses for matters that remain open.
02—Key points
Key Highlights
- Net revenue of $1,335.6 million rose 9% year over year (8% on a constant currency basis), with Sleep and Breathing Health up 10% to $1,169.4 million and Residential Care Software up 6% to $166.1 million.
- Gross margin expanded to 61.5% from 58.6%, driven primarily by manufacturing and logistics efficiencies and component cost improvements; non-GAAP gross margin was 62.0% versus 59.2%.
- Net income of $348.5 million increased 12%, and diluted EPS rose to $2.37 from $2.11; non-GAAP diluted EPS was $2.55 versus $2.20.
- Operating cash flow was $457.3 million, up from $325.5 million, and cash and cash equivalents reached $1,383.8 million at September 30, 2025.
- Restructuring expenses of $15.8 million were recorded for employee severance and one-time termination benefits tied to workforce planning, affecting both segments.
- Capital returns continued: $150.0 million of share repurchases (523,212 shares) and $87.8 million of dividends paid, with a further $0.60 per share dividend declared on October 30, 2025; 10.3 million shares remain available under the repurchase program.
- Short-term debt, net rose to $259.9 million from $9.9 million, while long-term debt, net fell to $408.7 million from $658.4 million; $1,500.0 million remained available under the revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, ResMed kept $0.26.
- Revenue$1.34B100.0%
- Cost of revenue−$517.9M38.8%
- Gross profit$817.7M61.2%
- Operating costs−$371.1M27.8%
- Operating income$446.5M33.4%
- Interest, other & tax−$98.0M7.3%
- Net income$348.5M26.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed October 31, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.34B$1.22B | +9.1% |
| Cost of Revenue | $517.92M$507.29M | +2.1% |
| Gross Profit | $817.66M$717.22M | +14.0% |
| R&D Expenses | $89.48M$79.52M | +12.5% |
| SG&A Expenses | $281.65M$238.98M | +17.9% |
| Operating Expenses | $371.13M$329.91M | +12.5% |
| Operating Income | $446.54M$387.31M | +15.3% |
| Net Income | $348.54M$311.36M | +11.9% |
| EPS (Basic) | $2.38$2.12 | +12.3% |
| EPS (Diluted) | $2.37$2.11 | +12.3% |
| Shares Outstanding (Basic) | 146.18M146.86M | −0.5% |
| Shares Outstanding (Diluted) | 146.90M147.60M | −0.5% |
05—Questions
Frequently Asked Questions
What drove the improvement in profitability this quarter?
Gross profit increased to $820.8 million from $717.2 million, and gross margin rose to 61.5% from 58.6%. The company attributed the margin gain primarily to manufacturing and logistics efficiencies and component cost improvements. Operating expenses grew more slowly than revenue in percentage terms, with SG&A at 19.4% of net revenue compared with 19.5% a year earlier.
How did the restructuring affect results, and what is the remaining exposure?
ResMed recorded $15.8 million of restructuring charges for employee severance and one-time termination benefits related to workforce planning, and these costs were not allocated to segment results. The company had $11.7 million remaining in accruals at September 30, 2025, and stated it does not expect any remaining expense under existing one-time termination benefit arrangements to be material.
What is the company's liquidity and debt position?
Cash and cash equivalents were $1.4 billion at September 30, 2025, and the company had $1,500.0 million available under its revolving credit facility, for a combined $2,883.8 million in cash and available liquidity under that facility. Total debt outstanding was $670.0 million across the revolving credit agreement, term credit agreement and senior notes, and the company stated it was in compliance with its debt covenants. Short-term debt, net increased to $259.9 million, and management believes current liquidity sources are sufficient for the next 12 months and beyond.
What legal developments should investors monitor?
On August 8, 2025, the Federal Circuit affirmed PTAB decisions invalidating the NYU patent claims asserted against ResMed. Cleveland Medical has appealed a PTAB ruling on one of its patents, and PTAB final written decisions in several inter partes reviews are expected by July 2026. On October 9, 2025, Fractus filed a patent infringement suit against ResMed Corp. and ResMed Inc. relating to several AirSense and AirCurve devices and the Connectivity Module, and ResMed had not yet filed its legal response. The company stated it cannot make a reasonable estimate of loss or range of losses for open matters.
How are shareholder returns and the tax rate trending?
During the quarter, ResMed repurchased 523,212 shares for $150.0 million and paid $87.8 million in dividends at $0.60 per share, compared with $50.0 million of repurchases and $77.9 million of dividends a year earlier. The effective income tax rate was 22.0% versus 18.8%, which the company attributed primarily to the impact of global minimum taxes under Pillar Two and a shift in its global mix of earnings.
06—Continue