The quarter cleared a modest earnings hurdle, not a major growth bar. Published expectations were approximately $1.47 billion of revenue and $2.91 of adjusted EPS; ResMed delivered $1.464 billion and $2.95, respectively—revenue was effectively in line while adjusted EPS beat by about $0.04. The beat is therefore narrow rather than evidence of a broad upside surprise.
| Metric | Q4 FY2026 | Q4 FY2025 | Expectation / change |
|---|---|---|---|
| Revenue | $1.464B | $1.348B | ~ $1.47B consensus |
| GAAP diluted EPS | $2.64 | $2.58 | — |
| Non-GAAP diluted EPS | $2.95 | $2.55 | ~ $2.91 consensus |
| Non-GAAP gross margin | 62.3% | 61.4% | +90 bps |
| Non-GAAP operating margin | 35.2% | 35.3% | -10 bps |
| Operating cash flow | $455M | $539M | -16% |
| Free cash flow | $404M | $508M | -21% |
(Financial Results and Operating Metrics)
Underlying demand remained solid, but operating leverage was less impressive than the headline EPS suggests. Sleep and Breathing Health revenue rose 9% reported, or 8% in constant currency, with Rest of World up 10% constant currency and Americas up 8%; however, Residential Care Software grew only 2% constant currency. Non-GAAP gross margin improved 90 basis points, but non-GAAP operating margin slipped 10 basis points as research and development expense rose 22% and non-GAAP SG&A rose 10%. (Revenue by Product and Region) (Financial Results and Operating Metrics)
GAAP profitability absorbed a real $42 million Astral safety cost, while the adjusted result removes it. That charge pushed GAAP gross margin down to 58.8% from 60.8% and GAAP operating income down 1% year over year, even though non-GAAP operating income rose 8%. The adjustment is disclosed rather than hidden, but investors should distinguish the clean adjusted EPS beat from the weaker reported operating result. (Discussion of Fourth Quarter Results) (Condensed Consolidated Statements of Operations) (Reconciliation of Non-GAAP Financial Measures)
Cash conversion was the clearest soft spot. Fourth-quarter operating cash flow fell 16% and free cash flow fell 21%, despite revenue growth, while full-year free cash flow was essentially flat at $1.65 billion versus $1.66 billion. That limits how much of the $1.0 billion returned during FY2026 should be interpreted as accelerating underlying cash generation. (Financial Results and Operating Metrics) (Cash Flow statement)
The capital-return outlook adds a modest positive signal, but does not replace missing FY2027 operating guidance. ResMed raised the quarterly dividend 10% to $0.66 and guided to more than $1.85 billion of FY2027 repurchases and dividends; it also announced the planned MatrixCare sale and completed the Noctrix Health acquisition. These actions reshape portfolio and shareholder-return expectations, but the filing provides no specific FY2027 revenue or earnings target. (Item 8.01) (Financial Highlights) (Other Business and Operational Highlights)
Net: narrowly better than expectations, with the benefit concentrated in adjusted EPS and capital returns rather than revenue or cash flow. The filing supports a slight positive read because earnings modestly exceeded consensus and shareholder distributions are being stepped up, but the near-in-line revenue, flat full-year free cash flow, softer reported margins, and lack of explicit FY2027 earnings guidance keep the surprise contained.
Read the original 8-K on SEC EDGAR ↗