ResMed's FY2026 (year to June 30) revenue rose 10% to $5.65B and gross margin widened to 61.1% on manufacturing and procurement savings, but a $42M Astral ventilator recall charge and a tax rate up to 20.6% held GAAP EPS growth to 9.7% ($10.43).
Revenue
$5.7B
+9.9% YoY
Net income
$1.5B
+8.8% YoY
Diluted EPS
$10.43
+9.7% YoY
Operating margin
33.4%
FY2026 in one line: masks outgrew devices, factory and supply-chain savings lifted margins, and a higher tax rate took part of the gain back
ResMed's fiscal year runs July to June, so "FY2026" is the twelve months ended June 30, 2026. Revenue rose 10% to $5,653 million (8% in constant currency, meaning with the effect of exchange-rate moves stripped out). Gross margin — the share of each sales dollar left after the cost of making the product — widened from 59.4% to 61.1%. The 10-K puts this "primarily" down to "procurement, manufacturing and logistics efficiencies." Diluted EPS rose 10% to $10.43. That is slower than operating profit (up 12%) because the effective tax rate jumped from 16.5% to 20.6%.
The year also changed what ResMed is. On June 30, 2026 it agreed to sell its MatrixCare software business for $490 million in cash, with closing expected in the first quarter of FY2027. A month earlier it bought Noctrix Health for $335 million. Noctrix makes an FDA De Novo-classified wearable device for restless legs syndrome.
Key figures
Metric
FY2026
FY2025
YoY Change
Net revenue
$5,653M
$5,146M
+9.9% (+8% constant currency)
Sleep & Breathing Health revenue
$4,978M
$4,505M
+10.5% (+9% cc)
– Devices
$2,892M
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Constant-currency and non-GAAP figures are the company's own. Non-GAAP figures exclude acquired-intangible amortization, restructuring, field-safety-notice costs and deal costs. Other growth rates are computed from the reported dollar figures.
What drove revenue
Masks outgrew devices. ResMed's business has two parts. One is the CPAP machine (the "device"), which a patient buys once every several years. The other is the mask, cushions and tubing ("masks and other"), which wear out and get replaced regularly. In FY2026 masks and other grew 13% (12% constant currency), against 9% (7% constant currency) for devices. The 10-K says growth in both came from "increased demand and unit sales across our sleep health portfolio, partially offset by lower unit sales of our life support devices." Masks and other are now 42% of Sleep & Breathing Health revenue. Faster growth in the replacement stream means patients already on therapy are staying on it and resupplying, not just that more new patients are starting.
Geography: the international growth is partly currency.
Region (Sleep & Breathing Health)
FY2026
FY2025
Reported
Constant currency
Americas – devices
$1,768M
$1,654M
+7%
n/a (mostly USD)
Americas – masks and other
$1,513M
$1,343M
+13%
n/a
Americas total
$3,281M
$2,998M
+9%
—
Rest of World – devices
$1,124M
$1,011M
+11%
+6%
Rest of World – masks and other
$572M
$497M
+15%
+9%
Rest of World total
$1,697M
$1,507M
+13%
+7%
Rest of World looks like the faster-growing region at +13%, but a weaker US dollar did much of that work. Currency moves added about $83 million to Sleep & Breathing Health revenue, and Rest of World grew only 7% in constant currency. The Americas, which are almost all in dollars, grew 9% on real volume, so they were the stronger underlying region.
Software grew slowly. Residential Care Software, which sells business-management software to home-care, hospice and senior-living providers, grew 5% (4% constant currency). The 10-K credits the MEDIFOX DAN, Home and Hospice, and home medical equipment lines, "partially offset by weaker performance in our Senior Living and Long-Term Care business vertical." The MatrixCare business being sold brought in about $220 million of this segment's revenue in FY2026. It earned about $28 million of operating profit, which the 10-K says "included approximately $28 million of amortization from acquired intangibles."
Margins: better at the core, masked by a one-off device recall charge
GAAP gross margin rose 1.7 points to 61.1%. That figure includes a $41.9 million charge for an Astral field safety notification (a notice to users of the Astral life-support ventilator). The 10-K says the charge covers "estimated costs associated with the replacement of a certain component in some of our Astral devices." Without it and acquired-intangible amortization, non-GAAP gross margin was 62.4%, up 2.4 points.
The full-year numbers hide how that charge hit a single quarter. In the fiscal fourth quarter (April–June 2026), the August 6 earnings release shows GAAP gross margin fell to 58.8% from 60.8%. Q4 GAAP operating margin fell to 30.7% from 33.7%, and Q4 GAAP EPS rose only 2% to $2.64. Non-GAAP Q4 gross margin rose 90 basis points to 62.3%, and non-GAAP Q4 EPS grew 16% to $2.95. The release attributes the gap to "our $42 million Astral field safety notification expenses." In other words, the underlying manufacturing economics kept improving through year-end. The weak-looking Q4 GAAP margin is the recall charge, not a trend.
Operating costs grew slightly faster than revenue. R&D rose 14% to $378 million (6.7% of revenue, from 6.4%), "primarily due to increases in employee-related costs." SG&A rose 13% to $1,120 million (19.8% of revenue, from 19.3%). About $30 million of the SG&A increase came from currency, and the rest from staff costs, the VirtuOx and Noctrix acquisitions, and "marketing and technology investments." There were also $21.7 million of severance-related restructuring charges and $11.5 million of deal and portfolio-review costs, neither of which existed in FY2025. So the year's operating-margin gain (+0.7 points GAAP) came entirely from gross margin, not from cost control below it.
Below the operating line: interest helped, tax hurt
Other income swung to +$33 million from −$8 million. Net interest income went from $4 million to $50 million, which the 10-K attributes to "lower debt levels following the repayment of our revolving credit facility," gains on cross-currency swaps, and interest earned on cash.
The tax rate rose to 20.6% from 16.5%. The 10-K cites the Pillar Two global minimum tax (an OECD rule setting a 15% floor on multinationals' tax) and "certain non-recurring tax benefits" in FY2025, including an IRS refund of interest and penalties. The result: pre-tax income grew about 14% ($1,919M vs. $1,678M), but net income grew only 8.8%.
Fewer shares. Buybacks more than doubled to $700 million from $300 million, and diluted shares fell about 0.9% to 146.1 million. That is why EPS (+9.7%) grew a bit faster than net income.
Takeaway: ResMed's core economics clearly improved in FY2026. Non-GAAP gross margin rose 2.4 points to 62.4% on procurement, manufacturing and logistics savings, and the recurring mask-and-accessory stream grew 12% in constant currency. GAAP EPS growth of 9.7% understates this because of three items outside the day-to-day business: a $42 million Astral ventilator recall charge, a tax rate up 4.1 points, and restructuring and deal costs. On the company's adjusted basis, EPS grew 17%.
Cash and capital returns
Operating cash flow was $1,806 million (+3%). It grew more slowly than net income because of higher working capital, meaning more cash tied up in inventory and receivables. The release puts free cash flow (operating cash flow minus equipment and facility spending) at $1,650 million, down 1%. Cash ended the year at $1,469 million, and total debt was $660 million. The $250 million of 3.24% notes that matured on July 10, 2026 were repaid in full. Dividends totalled $2.40 per share ($350 million), and the board raised the quarterly dividend 10% to $0.66.
Looking ahead
What management has said. The 10-K gives no revenue or margin guidance. The August 6 earnings release gives one forward number: it is "guiding to more than $1.85 billion in capital to be returned to shareholders through share repurchases and dividends during FY 2027," up from about $1.0 billion in FY2026. The MatrixCare sale is expected to close in the first quarter of FY2027.
GLP-1 weight-loss drugs — what the filing says. The 10-K's competition section addresses this directly: "injectable glucagon-like peptide-1, or GLP-1, weight loss drugs may lower the occurrence of obesity, eventually reducing the severity of OSA [obstructive sleep apnea], if significant weight loss is maintained." It also notes these drugs "have been approved for treatment of OSA in patients with obesity and moderate to severe OSA," and that oral versions are in development. So far FY2026's numbers do not show demand erosion: device unit demand and mask resupply both grew, and masks and other grew faster than devices. The company lists it as a risk, not a current headwind.
Tariffs. The 10-K says U.S. Customs confirmed in April 2025 that "current tariff relief for products like ours continues." It also flags that new tariffs and Chinese export controls on rare-earth materials and magnets could raise input costs. Tariffs are not cited as a drag on FY2026 margins.
Our read.
Comparisons get messier in FY2027. Removing about $220 million of MatrixCare revenue cuts the reported revenue base by roughly 4%. The profit effect is small, because MatrixCare earned only about as much operating profit as its own intangible amortization. Reported growth rates will need an "excluding MatrixCare" adjustment to be comparable. After the sale, ResMed will be even more a pure sleep-and-breathing device and consumables company.
The Astral charge should not recur, so GAAP gross margin has room to rise toward the ~62% non-GAAP level if the productivity savings hold. That depends on the tariff exemption staying in place.
Tax is the wildcard in the other direction. The OECD's January 2026 "Side-by-Side" package exempts U.S.-headquartered groups from parts of Pillar Two. The company says it is "continuing to evaluate the potential impacts," so whether FY2026's higher rate persists is still open.
The number to watch is the mask-versus-device growth gap. If GLP-1 drugs start reducing the pool of patients on CPAP, it should show up first as slower device growth in the Americas, where new patients start therapy, while resupply of existing users holds up for longer.