ResMed delivered 11 percent revenue growth to $1.4 billion in the third quarter of fiscal 2026, alongside meaningful margin expansion that reflects improving operational leverage across the company’s global business. Gross margins expanded by 290 basis points on a non-GAAP basis to 62.8 percent, a substantial move that demonstrates ResMed’s ability to scale efficiently while maintaining pricing discipline and controlling costs effectively across its operations.
The earnings results provided further evidence of operational momentum. Non-GAAP diluted earnings per share reached $2.86, up from $2.37 a year earlier, representing a 21 percent increase that substantially outpaced revenue growth. Non-GAAP operating income climbed 18 percent year-over-year, showing that ResMed is converting top-line expansion into bottom-line profit growth at an accelerating rate. Currency movements added some of this benefit. When adjusted for foreign exchange effects, revenue growth stands at 8 percent rather than 11 percent, meaning tailwinds from currency contributed roughly 3 percentage points to reported results. Understanding this distinction helps investors assess the underlying organic momentum in the business.
Cash generation remained robust. Operating cash flow totaled $554 million during the quarter, while the company returned $262 million to shareholders through a combination of repurchases and dividends. This balanced capital approach reflects management confidence in the business outlook while preserving resources for growth investments. The nine-month performance showed revenue of $4.19 billion, up 10 percent, with non-GAAP diluted earnings per share of $8.22 for the period.
Looking ahead, management identified three areas of focus: expanding access to care globally, scaling digital health capabilities, and delivering continued profitable growth. For investors, the critical question is whether the 290 basis point margin improvement will prove sustainable as ResMed invests in digital health, a segment that typically requires meaningful upfront spending before generating returns. The magnitude of the margin expansion suggests either substantial operating leverage in the core business or exceptional cost discipline, both of which warrant close attention in subsequent quarters as the company pursues its strategic agenda. This announcement is flagged as price sensitive and material by the ASX.
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About ResMed Inc (ASX: RMD)
ResMed Inc develops and manufactures medical devices and cloud-based software for diagnosing, treating, and managing respiratory disorders including sleep apnea, chronic obstructive pulmonary disease, and neuromuscular disease. The company supplies flow generators, masks, and accessories globally, with the majority of revenue derived from operations in the Americas. ResMed also pursues digital health initiatives and acquisitions to enhance clinical data offerings for patients, healthcare providers, and payers in out-of-hospital settings.
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