ResMed Inc (NYSE:RMD) reported financial results for its fiscal second quarter, ended December 31, 2025, delivering a performance that exceeded analyst expectations on both the top and bottom lines. The medical device maker's results highlight continued strong demand for its sleep and respiratory care products alongside significant margin expansion.
Quarterly Performance Versus Estimates
The company's headline figures for the quarter came in ahead of Wall Street's projections. Revenue growth was robust, and profitability metrics showed marked improvement.
- Revenue: Reported revenue of $1.42 billion surpassed the analyst consensus estimate of approximately $1.41 billion. This represents an 11% increase year-over-year, or 9% growth on a constant currency basis.
- Earnings Per Share: Non-GAAP diluted EPS was $2.81, exceeding the estimated $2.75. This marks a 16% increase from the $2.43 reported in the same quarter last year.
The beat was driven by a combination of strong sales execution and operational efficiency. Gross margin expanded significantly to 61.8%, an increase of 320 basis points, which management attributed to manufacturing and logistics efficiencies as well as improved component costs.
Market Reaction and Price Action
Following the earnings release, the market's immediate reaction appears measured. In after-hours trading, the stock showed negligible movement. This muted response suggests that while the results were solid and beat expectations, they may have been largely anticipated by investors or were in line with a high-performance trajectory the market already expected from ResMed.
Looking at recent performance, the stock has gained approximately 6% over the past month, indicating some positive sentiment building ahead of the earnings report. The company's consistent execution and margin story seem to be supportive factors for the share price.
Key Highlights from the Earnings Report
Beyond the headline numbers, ResMed's earnings release emphasized several strategic and operational strengths:
- Geographic and Segment Growth: Revenue in the U.S., Canada, and Latin America (excluding software) grew by 11%, while Europe, Asia, and other markets saw 6% constant currency growth. The company's Residential Care Software segment revenue increased by 5%.
- Strong Cash Generation: The business generated $340 million in operating cash flow during the quarter, underscoring the profitability and financial health of its model.
- Capital Returns to Shareholders: ResMed continued its shareholder return program, paying $88 million in dividends and repurchasing 704,000 shares for $175 million during the quarter.
- Strategic and Regulatory Milestones: The company highlighted the FDA clearance of an AI-enabled digital medical device, "Smart Comfort," designed to personalize CPAP settings and improve patient adherence. It also published new research linking increased device usage to reduced healthcare utilization.
Looking Ahead
While the press release did not provide specific quantitative financial guidance for the coming quarters, CEO Mick Farrell expressed confidence in the company's direction, stating the intent to "continue to invest in innovation to scale our digital health capabilities and expand global access to life-saving care, while delivering sustainable, profitable growth."
Analysts currently estimate revenue of approximately $1.42 billion for the fiscal third quarter and full-year sales of around $5.66 billion for fiscal 2026. ResMed's second-quarter outperformance and sustained margin momentum provide a positive foundation as it moves into the second half of its fiscal year.
For a detailed look at ResMed's historical earnings, future estimates, and analyst projections, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation to buy or sell any security, or an endorsement of any investment strategy. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
