Resmed Inc (NYSE:RMD) Reports Q1 FY2026 Results: Mixed Earnings Beat Fails to Prevent Stock Decline

Resmed Inc (NYSE:RMD) has reported financial results for the first quarter of fiscal year 2026, delivering a performance that largely aligned with Wall Street's expectations. The market's initial reaction, however, has been negative, with the stock trading lower in after-hours activity following the announcement.

Quarterly Performance Versus Estimates

The medical device manufacturer posted revenue of $1.34 billion for the quarter, representing a 9% year-over-year increase. This figure came in slightly below the analyst consensus estimate of $1.34 billion. On the bottom line, the company's non-GAAP earnings per share of $2.55 surpassed the estimated $2.52.

• Revenue: $1.34 billion actual vs. $1.34 billion estimated
• Non-GAAP EPS: $2.55 actual vs. $2.52 estimated

The company's ability to exceed earnings expectations while delivering solid revenue growth was not enough to satisfy the market, as shares declined following the report. This suggests investors may have been hoping for a more significant top-line beat or are evaluating the results against high pre-earnings expectations.

Key Financial Highlights from the Quarter

Resmed's quarterly results were characterized by significant margin expansion and strong profitability. The company demonstrated operational efficiency alongside its revenue growth.

• Gross Margin Expansion: GAAP gross margin increased by 290 basis points to 61.5%, while non-GAAP gross margin improved by 280 basis points to 62.0%.
• Profit Growth: Non-GAAP income from operations grew by 19% year-over-year.
• Robust Cash Flow: The company generated $457 million in operating cash flow.
• Capital Return: Resmed returned capital to shareholders through $88 million in dividend payments and $150 million in share repurchases.

CEO Mick Farrell described the quarter as a "strong start" to the fiscal year, attributing the performance to the company's strategy of transforming healthcare in the home through a combination of hardware, software, and solutions.

Operational and Strategic Developments

Beyond the financial figures, Resmed highlighted several strategic initiatives and achievements during the quarter. The company continues to focus on innovation and market development for sleep apnea and other respiratory care solutions.

• Restructuring Charges: The company recorded $16 million in restructuring-related charges tied to workforce planning activities aligned with its 2030 strategic priorities.
• Market Research: A landmark study published in The Lancet projected a significant increase in U.S. adults with obstructive sleep apnea by 2050, underscoring the long-term market opportunity.
• Product Recognition: The company's AirTouch N30i mask received dual Red Dot Product Design awards for 2025.
• Clinical Initiatives: Resmed launched the Sleep Institute, a global clinical insights initiative aimed at elevating sleep health as a public health priority.

Looking Ahead

While the press release did not provide specific quantitative financial guidance for the coming quarters, the company expressed confidence in its strategy. Management stated they "remain committed to ongoing operational excellence and strategic investment in innovation, ultimately delivering strong, sustainable, profitable growth."

Analyst estimates for the full fiscal year 2026 project revenue of $5.65 billion. For the upcoming second quarter, the consensus estimates are for revenue of $1.41 billion. The company's ability to meet or exceed these future estimates will be a key factor for investor sentiment moving forward.

For a detailed overview of future earnings estimates and historical performance, review the earnings and estimates data for RMD.

Disclaimer: This article is for informational purposes only and does not constitute investment advice of any kind. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.