Resmed (NYSE: RMD) reported third-quarter results that exceeded Wall Street’s forecast, citing an increased demand for the company’s portfolio of sleep devices, masks and accessories.
The sleep respiratory technology company also announced its chief financial officer’s retirement and plans to acquire a startup with an FDA de novo classified device.
Resmed reported $1.43 billion in Q3 revenue, up 11% year-over-year and beating analysts’ estimates of $1.42 billion. Non-GAAP diluted third-quarter earnings per share (EPS) increased 21% year-over-year to $2.86, surpassing analysts’ estimates of $2.80.
Resmed’s stock traded up on the day, but dropped over 4% in after-hours trading immediately after reporting.
“These results demonstrate the operational excellence that is a Resmed hallmark,” Resmed chairman and CEO Mick Farrell said. “We’ve continued to execute on our pipeline of supply chain optimization initiatives.
“These efforts, along with our experience from past supply chain perturbations, including COVID impacts, the major recall of a competitor and semiconductor chip shortages, position us well to navigate the current geopolitical uncertainty and any other external impacts to our resilient global supply chain.”
“We’ve done a very good job of going from air freight to a very, very, vast majority of our work on sea freight, but there are some component costs we’re looking at,” Farrell said. “Our pipeline of supply chain improvement opportunities is such that at this moment, we’re not changing our guidance, which is that Resmed plans to have gross margin accretion through 2030 and double-digit basis points improvements each year from here to 2030, even amidst all the changes that are happening.
“Obviously, these changes happen daily, and things continue to move, and we will watch everything,” he said.
The company’s gross margin expansion for the quarter was 290 basis points year-over-year and by 50 basis points sequentially, which it attributed to component cost improvements, manufacturing and logistics efficiencies and a small, positive impact from product mix and foreign currency movements.
“Our supply chain team continues to focus on our pipeline of productivity initiatives,” Resmed CFO Brett Sandercock said. “Despite some of the current headwinds around fuel costs and emerging component cost pressures, we remain focused on making ongoing, long-term gross margin improvements. Looking forward, and subject to currency movements, we still expect gross margin to be in the range of 62% to 63% for fiscal year 2026.”
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Last quarter, analysts were split about the company’s growth as GLP-1’s threaten demand for sleep respiratory devices, but today, Farrell said GLP-1s could bring more demand for the company.
“These two therapies (GLP-1 and CPAP) are better together,” Farrell said.
“We believe GLP-1s are truly a mega trend and a once-in-a-generation, demand opportunity for Resmed,” he continued. “Both GLP-1s and wearables alike are driving more patients to talk with their doctors, and ultimately, we believe this will lead to more patients coming into the Resmed ecosystem.”
CFO retirement and planned startup acquisition
During the company’s earnings call, Resmed announced that its Chief Financial Officer Brett Sandercock will retire on May 4, 2026, and serve as an advisor to the CEO through the end of 2027.
“It has truly been a great honor and privilege to have worked for our investors over the last two decades,” Sandercock said on today’s earnings call. “I will continue to be a huge advocate for the great company that Resmed is.”
Resmed also announced its plans to acquire Noctrix Health, a startup with a novel device to treat drug-refractory Restless Legs Syndrome (RLS).
Noctrix received FDA de novo classification in 2023 for its NTX100 Tonic Motor Activation System, an external lower extremity nerve stimulator to treat moderate-to-severe Restless Legs Syndrome.
The prescription, wearable device uses external electrical stimulators and cutaneous electrodes to stimulate nerves in the lower extremities and evoke tonic, sustained muscle activation in the legs to reduce symptoms of RLS, according to the device’s FDA classification letter.
“Its revenue growth rate is higher than Resmeds, its gross margin is higher than Resmeds, and we’re very excited about this tuck-in,” Farrell said. “The reach of our Resmed brand among sleep physicians and providers, as well as our national and international distribution channel strength, makes us the best owner of this scarce asset.
“The market and clinical need are incredible. 7% of the world’s adult population [with RLS] need our help.”
Farrell said the acquisition is expected to close on or around June 1, 2026
“As we advance through the remainder of our fiscal year 2026, we remain focused on expanding access to care globally, scaling our digital health capabilities, and delivering further strong, profitable growth,” Farrell said.
