ResMed Inc. (RMD) - 10-K Summary for Fiscal Year Ended June 30, 2026
Business Context and Reporting Period
This report covers the fiscal year ended June 30, 2026. ResMed Inc. is a global leader in digital health and cloud-connected medical devices, operating in two primary segments: Sleep and Breathing Health and Residential Care Software. The company designs innovative technology to treat sleep apnea, chronic respiratory diseases, and provides software solutions for residential care providers. During the fiscal year, ResMed expanded its portfolio through the acquisition of Noctrix Health (treating restless legs syndrome) and VirtuOx (diagnostic testing), while simultaneously agreeing to divest its MatrixCare business to sharpen its focus on core growth areas.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Net Revenue | $5,653 million | $5,146 million | +10% |
| Gross Profit | $3,452 million | $3,055 million | +13% |
| Gross Margin | 61.1% | 59.4% | +170 bps |
| Net Income | $1,523 million | $1,401 million | +9% |
| Diluted EPS | $10.43 | $9.51 | +10% |
| Operating Cash Flow | $1,806 million | $1,752 million | +3% |
| Cash and Equivalents | $1,469 million | $1,209 million | N/A |
| Total Debt | $660 million | $668 million | -1% |
Note: Non-GAAP diluted EPS was $11.17 for fiscal 2026.
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 10% (8% on a constant currency basis). The Sleep and Breathing Health segment grew 10%, driven by increased demand for devices and masks. The Residential Care Software segment grew 5%.
- Margin Expansion: Gross margin improved to 61.1% from 59.4%, primarily due to procurement and manufacturing efficiencies, partially offset by field safety notification expenses for Astral devices ($42 million).
- Acquisitions: Completed the acquisition of Noctrix Health for $335 million in June 2026, expanding into restless legs syndrome treatment. VirtuOx was acquired in 2025 to enhance diagnostic capabilities.
- Divestiture: Entered a definitive agreement on June 30, 2026, to sell the MatrixCare business for $490 million. The business is classified as "held for sale" with assets of $457 million and liabilities of $41 million.
- Tax Rate: The effective income tax rate increased to 20.6% from 16.5%, driven by the implementation of the Pillar Two global minimum tax.
Guidance, Outlook, and Risks
Management Commentary: Management emphasizes a strategy focused on AI-powered digital health solutions and connected care. The company is investing in R&D ($378 million, or 6.7% of revenue) to differentiate its core sleep apnea portfolio and capitalize on broader sleep and breathing health adjacencies. The divestiture of MatrixCare is intended to optimize the portfolio and focus resources on high-growth areas.
Key Risks and Contingencies:
- Regulatory and Reimbursement: Significant exposure to U.S. healthcare reform, including the "One Big Beautiful Bill Act" which impacts Medicaid funding and Medicare payment rates. The company faces ongoing audits and potential reimbursement reductions for CPAP and respiratory devices.
- Legal Proceedings: Ongoing patent infringement litigation with Cleveland Medical Devices and Fractus, S.A. regarding connected devices and antenna technology. A False Claims Act whistleblower complaint was voluntarily dismissed against ResMed in April 2026.
- Supply Chain and Geopolitics: Risks related to global trade disruptions, tariffs, and supply constraints on electronic components (e.g., semiconductors, magnets).
- Field Safety Notifications: Costs associated with replacing components in Astral devices and providing alternative masks due to magnet contraindications.
Investor Verification Checklist
- MatrixCare Divestiture: Verify the closing timeline (expected Q1 FY2027) and final sale price adjustments for the $490 million MatrixCare transaction.
- Reimbursement Policy Changes: Monitor the impact of the "One Big Beautiful Bill Act" and CMS competitive bidding programs on Medicare/Medicaid reimbursement rates for CPAP and respiratory devices.
- Patent Litigation Outcomes: Track the status of appeals and PTAB decisions regarding patent infringement claims from Cleveland Medical and Fractus.
- Field Safety Costs: Confirm the final costs associated with the Astral device component replacement and mask magnet safety notifications.
- Global Minimum Tax: Assess the ongoing impact of Pillar Two tax legislation on the effective tax rate in fiscal 2027.