Key Highlights

  • Net Revenue rose 6% to $1,415 million in the fiscal first quarter, from $1,336 million a year earlier.
  • Diluted EPS was $2.92, compared with $2.37, while non-GAAP diluted EPS was $2.91 versus $2.55.
  • Gross Margin was 61.5%, up from 61.2%, on Manufacturing and logistics efficiencies.
  • A $62 million gain on the MatrixCare sale was recorded in other income.
  • The board declared a quarterly Dividend of $0.66 per share, payable on December 17, 2026.

The MatrixCare sale reshapes a quarter of 6% revenue growth

ResMed (NYSE:RMD), a maker of cloud-connected devices and masks for sleep apnea and related breathing conditions, filed its Quarterly Report for the three months ended September 30, 2026, the first quarter of its 2027 fiscal year. Net revenue was $1,415 million against $1,336 million a year earlier, up 6% reported and in constant currency, and up 7% on a core constant currency basis.

On September 1, 2026, the company completed the sale of its MatrixCare Business as part of a portfolio optimization strategy to focus on sleep, breathing and connected home-based care.

Sleep and Breathing Health grows 8% while software revenue falls 7%

Sleep and Breathing Health revenue was $1,260 million, up 8%. Devices rose 6% to $720 million, and masks and other rose 10% to $540 million, partly offset by lower life support unit sales as the Astral device is discontinued.

By region, the Americas grew 8% to $833 million and Rest of World grew 8% to $426 million. Residential Care Software revenue fell 7% to $155 million, mainly because of the MatrixCare sale, partly offset by growth in the MEDIFOX DAN and Brightree businesses.

Gross margin edges up to 61.5% as operating costs grow faster than sales

Gross profit rose 6% to $871 million, with gross margin at 61.5% against 61.2%. The company credited manufacturing and logistics efficiencies, component cost improvements and lower intangible amortization, and expects component Inflation to continue through fiscal 2027.

Research and development expense rose 15% to $103 million, or 7.3% of revenue, and selling, general and administrative expense rose 12% to $315 million, or 22.2% of revenue. Income from operations was $453 million versus $447 million, which is a calculated Operating Margin of 32.0% versus 33.4%.

Non-GAAP EPS of $2.91 lands almost level with GAAP EPS of $2.92

Other income was $86 million versus $0.3 million, driven by the $62 million divestment gain and a $6 million gain on Equity investments compared with a $6 million loss a year earlier. Net Income was $418 million, up 20%, and diluted EPS was $2.92, up 23%.

After removing the divestment gain, amortization, restructuring and other items, non-GAAP net income was $418 million and non-GAAP diluted EPS was $2.91, compared with $375 million and $2.55 a year ago. The effective tax rate was 22.4%, against 22.0%.

Cash, Buybacks and Debt after the MatrixCare proceeds

Operating cash flow was $422 million, down from $457 million, as inventory rose partly with the Supply chain expansion. Cash and cash equivalents were $1.0 billion at September 30, 2026, down from $1.5 billion at June 30, 2026.

The company entered a $450 million accelerated share repurchase on August 31, 2026, and received an initial 1.6 million shares, with final settlement expected by December 29, 2026. It repurchased 3.6 million shares in total during the quarter for $855 million and had $410 million of debt outstanding. The board declared another $0.66 dividend on October 29, 2026.

What to watch after the portfolio reset

Component inflation, higher restructuring costs and the final share count from the repurchase settlement are the items that will shape coming quarters.