Key Highlights

  • ResMed reported fourth quarter fiscal 2026 revenue of $1.5 billion, up 9 percent on a headline basis, with non-GAAP earnings per share up 16 percent to $2.95.
  • The company issued its first-ever annual guidance, targeting fiscal 2027 core constant currency revenue growth of 5 to 7 percent and non-GAAP EPS of $12 to $12.25.
  • Guidance includes an approximately 130 basis point, or $75 million, revenue headwind from suspending Astral ventilator sales for the full fiscal year to support an ongoing field safety corrective action.
  • The board increased the quarterly dividend 10 percent to $0.66 per share and approved a $450 million accelerated share repurchase funded by proceeds from the pending MatrixCare divestiture.

Core Sleep and Mask Growth Outpaces Market as Awareness Builds

ResMed (NYSE:RMD) reported fourth quarter revenue of $1.5 billion, up 9 percent on a headline basis and 8 percent in constant currency, with non-GAAP gross margin expanding 90 basis points to 62.3 percent despite ongoing inflation in electronic components and freight. Sleep device revenue grew 8 percent in the Americas and 13 percent in the rest of world, both ahead of the mid-single-digit market growth rate management continues to cite, while masks and other revenue grew 10 percent in the Americas and 12 percent internationally against a high-single-digit market growth backdrop.

Management pointed to a recent partnership with wearable maker ŌURA as early validation of consumer wearables driving sleep health awareness, noting that approximately 75 percent of the roughly 13,000 users who completed a ResMed sleep assessment through the partnership identified as previously undiagnosed. The company's analysis of a claims database spanning more than 2.5 million de-identified patients continues to show that patients on GLP-1 medications are approximately 11 percent more likely to initiate PAP therapy and more likely to remain on resupply at both one and three years, reinforcing management's framing of GLP-1s as a durable tailwind rather than a competitive threat to CPAP therapy.

First-Ever Annual Guidance Absorbs Astral Suspension and Portfolio Moves

In response to investor requests for greater visibility, ResMed issued formal annual guidance for the first time in its history as a public company, targeting fiscal 2027 core constant currency revenue growth, which excludes Noctrix and adjusts for the MatrixCare divestiture, of 5 to 7 percent, and non-GAAP EPS of $12 to $12.25. That guidance embeds an approximately $75 million revenue headwind, or roughly $0.15 of EPS, from the company's decision to suspend new Astral ventilator sales for all of fiscal 2027 while it completes a field safety corrective action, a more conservative posture than the $42 million charge taken in the fourth quarter to cover the estimated cost of the recall itself.

Excluding the Astral headwind and dilution from the pending MatrixCare divestiture and recently closed Noctrix acquisition, management said core EPS growth would be in the range of 12 to 14 percent. The company expects the MatrixCare sale, which contributed approximately $220 million in fiscal 2026 revenue, to close around September 1, 2026, with transition service agreements largely offsetting stranded costs in the first year, while Noctrix, an FDA-cleared device for Restless Legs Syndrome that closed June 1, is expected to be a modest near-term dilution before scaling through the same sleep physician and DME channel ResMed already leads.

Capital Returns Accelerate as Company Signals Openness to Further M&A

The board increased the quarterly dividend 10 percent to $0.66 per share and approved a $450 million accelerated share repurchase funded by proceeds from the MatrixCare sale, part of a plan to return more than $1.85 billion to shareholders in fiscal 2027, an increase of more than 75 percent year over year and the second consecutive year of greater than 70 percent growth in capital returns. Management described its acquisition appetite as focused on tuck-ins in the $100 million to $500 million range, citing Noctrix, the VirtuOx home sleep testing acquisition, and the Snap Lite resupply software tool as templates for the type of deals it continues to evaluate.

Capital expenditures are guided to step up to $160 million to $180 million as the company expands and automates its U.S. and global manufacturing footprint, while gross margin is expected to see low double-digit basis point expansion for the full year even as management acknowledged that very modest, targeted price increases will now be needed to help offset inflation that productivity gains alone can no longer fully absorb. Should component and freight inflation continue at a pace exceeding what modest pricing and productivity can offset, the timing of margin recovery toward the company's long-term aspirations could slip further into fiscal 2028.

Conclusion

ResMed's decision to issue formal guidance for the first time signals a management team confident enough in its underlying growth drivers, an under-penetrated sleep health market, GLP-1 tailwinds, and expanding wearable partnerships, to commit to specific targets despite absorbing a meaningful, self-imposed Astral revenue suspension. The core EPS growth rate of 12 to 14 percent once the Astral, MatrixCare, and Noctrix effects are stripped out suggests the underlying business is performing well ahead of the blended guidance range, and the accelerated capital return program indicates the balance sheet can support both continued M&A and shareholder distributions simultaneously. The durability of that underlying momentum, particularly whether GLP-1 adoption continues to expand the diagnosed sleep apnea population rather than substitute for it, remains the central variable for the multi-year growth story ResMed is now guiding to publicly for the first time.