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RMD Q3 EPS rose 20.7% to $2.86 and beat estimates, while revenues climbed 11% to $1.43B.
RMD saw growth across Sleep and Breathing Health and Residential Care Software segments.
RMD expanded margins, with gross margin up 289 bps and operating margin rising to 36.7%.
Resmed Inc.’s (RMD - Free Report) adjusted earnings per share (EPS) in the third quarter of fiscal 2026 were $2.86, up 20.7% year over year. The metric beat the Zacks Consensus Estimate by 2.58%.
The adjustments include certain non-recurring expenses/benefits like the amortization of acquired intangibles, along with the income tax effect on those adjustments.
GAAP EPS in the reported quarter was $2.74, up 10.5% from the year-ago level.
RMD’s Revenue Details
On a reported basis, revenues increased 11% year over year (up 8% at the constant exchange rate or CER) to $1.43 billion. The figure topped the Zacks Consensus Estimate by 0.79%.
Following the earnings announcement yesterday, Resmed shares dropped 2.3% in the after-market session.
Resmed’s Q3 Sales: A Closer View
Resmed operated through two reporting units — Sleep and Breathing Health (formerly Sleep and Respiratory Care) and Residential Care Software (formerly Software as a Service).
Sleep and Breathing Health
Total revenues improved 11% (up 8% at CER) from the prior-year period’s level to $1.26 billion.
Within this business, Devices revenues were $735.7 million, up 9% (6% at CER). This includes an increase of 6% year over year in the United States, Canada and Latin America, and a jump of 14% in combined Europe, Asia and other markets.
Revenues from Masks and other were $524.8 million, up 15% (12% at CER). This includes a rise of 14% year over year in the United States, Canada and Latin America, and 20% growth in combined Europe, Asia and other markets.
Residential Care Software
Revenues in this segment grew 6% year over year (up 4% at CER) to $170.9 million.
Resmed’s Q3 Margin Performance
In the fiscal third quarter, the company’s cost of sales (excluding amortization of acquired intangible) totaled $532.6 million, up 2% year over year. Adjusted gross margin was 62.8%, reflecting an expansion of 289 basis points (bps), supported by cost improvements and manufacturing and logistics efficiencies, alongside a minor positive impact of product mix and foreign currency movements.
Selling, general and administration expenses jumped 14.1% year over year to $279.8 million. Research and development expenses increased 12.3% to $94.3 million.
The adjusted operating profit was $524.8 million in the quarter, up 18% from the year-ago quarter’s level. The adjusted operating margin expanded 224 bps year over year to 36.7%.
RMD’s Financial Updates
Resmed exited the third quarter of fiscal 2026 with cash and cash equivalents of $1.66 billion compared with $1.42 billion at the end of the second quarter.
The cumulative net cash provided by operating activities at the end of the fiscal third quarter was $554.1 million compared with $578.7 million in the year-ago period.
The company paid out $87 million in dividends in the fiscal third quarter and also repurchased 673,000 shares for consideration of $175 million as part of its ongoing capital management.
Our Take on RMD Stock
Resmed closed the fiscal third quarter on a solid note, with both earnings and revenues beating respective estimates. Performance reflects sustained global strength, driven by steady demand for the company’s products and strategic execution. Resmed benefited from continued growth in its mask portfolio and ReSupply, as well as incremental revenues from the VirtuOx acquisition. Growth in Residential care software revenues reflects the robust performance from the MediFox Dan software vertical.
Resmed continued the global rollout of its portfolio of novel fabric-based masks and also advanced the AirSense 11 platform rollout, most recently in the Latin America market. The expansion of both margins in the quarter is highly encouraging.
RMD’s Zacks Rank and Key Picks
Resmed currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Intuitive Surgical (ISRG - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared to the industry’s negative 1.4% yield. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.
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RMD Stock Down Despite Q3 Earnings & Revenue Beat, Margins Rise
Key Takeaways
Resmed Inc.’s (RMD - Free Report) adjusted earnings per share (EPS) in the third quarter of fiscal 2026 were $2.86, up 20.7% year over year. The metric beat the Zacks Consensus Estimate by 2.58%.
The adjustments include certain non-recurring expenses/benefits like the amortization of acquired intangibles, along with the income tax effect on those adjustments.
GAAP EPS in the reported quarter was $2.74, up 10.5% from the year-ago level.
RMD’s Revenue Details
On a reported basis, revenues increased 11% year over year (up 8% at the constant exchange rate or CER) to $1.43 billion. The figure topped the Zacks Consensus Estimate by 0.79%.
Following the earnings announcement yesterday, Resmed shares dropped 2.3% in the after-market session.
Resmed’s Q3 Sales: A Closer View
Resmed operated through two reporting units — Sleep and Breathing Health (formerly Sleep and Respiratory Care) and Residential Care Software (formerly Software as a Service).
Sleep and Breathing Health
Total revenues improved 11% (up 8% at CER) from the prior-year period’s level to $1.26 billion.
Within this business, Devices revenues were $735.7 million, up 9% (6% at CER). This includes an increase of 6% year over year in the United States, Canada and Latin America, and a jump of 14% in combined Europe, Asia and other markets.
ResMed Inc. Price, Consensus and EPS Surprise
ResMed Inc. price-consensus-eps-surprise-chart | ResMed Inc. Quote
Revenues from Masks and other were $524.8 million, up 15% (12% at CER). This includes a rise of 14% year over year in the United States, Canada and Latin America, and 20% growth in combined Europe, Asia and other markets.
Residential Care Software
Revenues in this segment grew 6% year over year (up 4% at CER) to $170.9 million.
Resmed’s Q3 Margin Performance
In the fiscal third quarter, the company’s cost of sales (excluding amortization of acquired intangible) totaled $532.6 million, up 2% year over year. Adjusted gross margin was 62.8%, reflecting an expansion of 289 basis points (bps), supported by cost improvements and manufacturing and logistics efficiencies, alongside a minor positive impact of product mix and foreign currency movements.
Selling, general and administration expenses jumped 14.1% year over year to $279.8 million. Research and development expenses increased 12.3% to $94.3 million.
The adjusted operating profit was $524.8 million in the quarter, up 18% from the year-ago quarter’s level. The adjusted operating margin expanded 224 bps year over year to 36.7%.
RMD’s Financial Updates
Resmed exited the third quarter of fiscal 2026 with cash and cash equivalents of $1.66 billion compared with $1.42 billion at the end of the second quarter.
The cumulative net cash provided by operating activities at the end of the fiscal third quarter was $554.1 million compared with $578.7 million in the year-ago period.
The company paid out $87 million in dividends in the fiscal third quarter and also repurchased 673,000 shares for consideration of $175 million as part of its ongoing capital management.
Our Take on RMD Stock
Resmed closed the fiscal third quarter on a solid note, with both earnings and revenues beating respective estimates. Performance reflects sustained global strength, driven by steady demand for the company’s products and strategic execution. Resmed benefited from continued growth in its mask portfolio and ReSupply, as well as incremental revenues from the VirtuOx acquisition. Growth in Residential care software revenues reflects the robust performance from the MediFox Dan software vertical.
Resmed continued the global rollout of its portfolio of novel fabric-based masks and also advanced the AirSense 11 platform rollout, most recently in the Latin America market. The expansion of both margins in the quarter is highly encouraging.
RMD’s Zacks Rank and Key Picks
Resmed currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Intuitive Surgical (ISRG - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared to the industry’s negative 1.4% yield. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.