01—Abstract
Summary
Summary of the 10-Q filed October 30, 2026. Cited figures are marked; the original filing is the authoritative source.
ResMed Inc. reported net revenue of $1.4 billiona for the three months ended September 30, 2026, up 6% from the prior year period.
Sleep and Breathing Health revenue rose 8% to $1,260 millionb, driven by increased demand and unit sales of devices and masks, while Residential Care Software revenue fell 7% to $155 million, mainly due to the September 1, 2026 sale of the MatrixCare business. Gross margin was 61.5% compared with 61.2%. Diluted earnings per share were $2.92, compared with $2.37, and net income was $418 million compared with $349 million, an increase of 20%.
Results were helped by a $62 millionc pre-tax gain on the MatrixCare divestment, which is preliminary and included in other income, and by $86 million of total other income, net. Operating income was $453 million compared with $447 million. Cash and cash equivalents declined to $1.0 billion from $1.5 billion at June 30, 2026.
Cash flows reflected $1,278 milliond used in financing activities, including $936 million of treasury stock purchases and $250 million repayment of senior notes, partly offset by $392 million provided by investing activities, mainly $451 million of net proceeds from the MatrixCare divestment. Operating cash flow was $422 million compared with $457 million, which the company attributed to higher working capital, including higher inventory. Total debt was $410 million at September 30, 2026, down from $659 million, and $1,500 million remained available under the revolving credit facility.
The company declared a quarterly dividend of $0.66 per share on October 29, 2026, and has an accelerated share repurchase agreement of $450 million expected to settle no later than December 29, 2026. The filing also discloses ongoing patent litigation with Cleveland Medical Devices and a patent suit by Fractus, S.A.
For these matters, the company states it is unable to make a reasonable estimate of loss or range of losses, if any, for matters that remain open. One customer accounted for 11% of total net revenue in the quarter.
02—Key points
Key Highlights
- Net revenue rose 6% to $1.4 billion; Sleep and Breathing Health grew 8% to $1.26 billion, while Residential Care Software declined 7% to $155 million following the MatrixCare sale.
- Diluted EPS was $2.92 versus $2.37, and net income was $418 million versus $349 million, an increase of 20%, aided by a $62 million pre-tax gain on the MatrixCare divestment.
- Gross margin was 61.5% versus 61.2%; the company cited manufacturing and logistics efficiencies, component cost improvements, and lower acquired-intangible amortization, partly offset by higher restructuring and business transformation costs.
- Operating cash flow was $422 million versus $457 million, reflecting higher working capital including inventory; cash and cash equivalents fell to $1.0 billion from $1.5 billion.
- The company returned capital through $936 million of treasury stock purchases (including a $450 million accelerated share repurchase), $95 million of dividends, and repaid $250 million of senior notes.
- Total debt declined to $410 million from $659 million, with $1,500 million available under the revolving credit facility and compliance with debt covenants as of September 30, 2026.
- Ongoing patent litigation with Cleveland Medical Devices and Fractus, S.A.; the company cannot yet estimate a loss or range of losses for open matters.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2027, ResMed kept $0.30.
- Revenue$1.41B100.0%
- Cost of revenue−$544.2M38.5%
- Gross profit$870.6M61.5%
- Operating costs−$417.6M29.5%
- Operating income$453.0M32.0%
- Interest, other & tax−$34.6M2.4%
- Net income$418.4M29.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2027filed October 30, 2026Financial Statements
Q1 FY2027 against Q1 FY2026
| Line item | Q1 FY2027Q1 FY2026 | Change |
|---|---|---|
| Revenue | $1.41B$1.34B | +5.9% |
| Cost of Revenue | $544.25M$517.92M | +5.1% |
| Gross Profit | $870.57M$817.66M | +6.5% |
| R&D Expenses | $102.86M$89.48M | +15.0% |
| SG&A Expenses | $314.72M$281.65M | +11.7% |
| Operating Expenses | $417.58M$371.13M | +12.5% |
| Operating Income | $452.98M$446.54M | +1.4% |
| Net Income | $418.41M$348.54M | +20.0% |
| EPS (Basic) | $2.93$2.38 | +23.1% |
| EPS (Diluted) | $2.92$2.37 | +23.2% |
| Shares Outstanding (Basic) | 142.99M146.18M | −2.2% |
| Shares Outstanding (Diluted) | 143.41M146.90M | −2.4% |
05—Questions
Frequently Asked Questions
What drove revenue growth in the quarter?
Sleep and Breathing Health revenue increased 8% to $1,260 million, with devices up $40 million (6%) and masks and other up $50 million (10%). The company attributed the increase primarily to increased demand and unit sales across its sleep health portfolio, partly offset by lower unit sales of life support devices reflecting the planned discontinuation of the Astral device. Residential Care Software revenue fell 7% to $155 million, predominantly due to the MatrixCare sale, partially offset by growth in the MEDIFOX DAN and Brightree verticals.
How much of the net income increase came from the MatrixCare sale?
The filing records a pre-tax gain of $62 million on the MatrixCare divestment in other income, net. This gain is described as preliminary and subject to adjustment for post-closing purchase price adjustments. Total other income, net was $86 million compared with $0.3 million in the prior year period. The company's non-GAAP reconciliation shows net income of $418 million on a GAAP basis and $418 million on a non-GAAP basis after excluding the gain and other adjustments.
How is the company deploying its cash?
During the quarter the company paid $450 million for an accelerated share repurchase agreement entered on August 31, 2026, and repurchased 3.6 million shares in total at a cost of $855 million. It paid $95 million in dividends at $0.66 per share and repaid $250 million of senior notes. Capital expenditures were $49 million. At September 30, 2026, 4.3 million shares remained available under the repurchase program, and the board declared a $0.66 per share dividend payable December 17, 2026.
What are the main legal and liquidity risks disclosed?
The filing describes patent infringement suits by Cleveland Medical Devices and Fractus, S.A., and states that, based on currently available information, the company is unable to make a reasonable estimate of loss or range of losses, if any, for open matters. The company also notes it is under audit by the Australian Taxation Office for the 2018 tax year. On liquidity, it reports $1.0 billion of cash, $1,500 million available under its revolving credit facility, $410 million of total debt outstanding, and a belief that current sources of liquidity will be sufficient for the next 12 months and beyond. The revolving and term credit agreements terminate on June 29, 2027.
06—Continue