ResMed Inc. Q1 FY2026 earnings call

Michael Farrell highlighted strong quarter with 9% reported revenue growth. Discussed operating leverage, including freight expense optimization and multiyear productivity programs. Announced expansion of Calabasas, California facility and investment in Indianapolis distribution center. Talked about innovation in masks, launching AirTouch F30i masks. Also discussed AI initiatives like Dawn on myAir platform and Comfort Match technology. Mentioned SG&A investments in CME programs and direct-to-consumer awareness campaigns. Brett Sandercock provided financial overview, including revenue, gross margin, operating expenses, and cash flow details.

Group revenue for the September quarter was $1.34 billion, a 9% headline increase and 8% in constant currency terms. Revenue growth reflected positive contributions across product and resupply portfolio. Device sales: U.S., Canada and Latin America devices up 8%; Europe, Asia and other regions devices up 7% constant currency. Masks and other: U.S., Canada and Latin America masks and other up 12%; Europe, Asia and other regions masks and other up 4% constant currency. Residential care software revenue up 5% constant currency. Gross margin 62% in September quarter, up 280 basis points year-over-year and 60 basis points sequentially. Operating profit up 19%, operating margin 36.1% of revenue. Net income up 15%, non-GAAP diluted earnings per share up 16%.

Gross margin expected to be in range of 61% to 63% for fiscal year 2026. SG&A expenses as percentage of revenue expected to be in range of 19% to 20% for fiscal year 2026. R&D expenses as percentage of revenue expected to be in range of 6% to 7% for fiscal year 2026. Effective tax rate estimated to be in range of 21% to 23% for fiscal year 2026. Board declared quarterly dividend of $0.60 per share and plans to continue share buyback program.

Monitors global trade environment and evolving regulatory landscape. Discussed competitive bidding program and 232 investigation impacts. Also mentioned potential leakage in the patient funnel and churn in the channel.

Q: Touch on new mask launched in Australia and U.S., unique attributes and importance for ex U.S. growth.

A: Michael Farrell talked about AirTouch F30i mask, fabric-based technology, full-face category, and its importance for growth.

Q: Talk on tuck-in acquisitions related to patient funnel.

A: Michael Farrell discussed acquisitions like Ectosense, VirtuOx, Somnoware and their role in patient funnel.

Q: Plans related to manufacturing in U.S.

A: Michael Farrell talked about expanding manufacturing in U.S., including Calabasas, Indianapolis, etc.

Q: Demand in U.S. devices, initiatives and future growth.

A: Michael Farrell discussed demand gen, capture, curation, and future growth plans.

Q: Impact of global minimum tax jurisdiction on tax rate.

A: Brett Sandercock talked about offset from refundable investment credit.

Q: Penetration of U.S. market and RePAP opportunity.

A: Michael Farrell discussed PCP awareness, penetration rates, and RePAP.

Q: Mid-single-digit growth trend in SaaS, incremental headwinds and return to growth.

A: Michael Farrell talked about portfolio management in SaaS.

Q: NightOwl metrics and converting fleet patients.

A: Michael Farrell discussed NightOwl growth and its role.

Q: Thoughts on competitive bidding outcome.

A: Michael Farrell talked about sophisticated HME base and positive outcome of competitive bidding.