Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

RMD · Q2 2026 Earnings

ResMed

Reported January 29, 2026

30-second summary

Revenue grew 11% to $1.42B with non-GAAP gross margin at 62.3% (+310bps YoY, +30bps QoQ) and non-GAAP EPS of $2.81 (+10% YoY), and management raised the FY26 gross margin floor to 62–63% from 61–63%. But the RCS reacceleration story that anchored the last two prints just got pushed out: prior guidance for "mid-to-high single-digit growth in H2 FY26" is now "maintain mid single digit growth" through June, with the high-single-digit recovery deferred to FY27. The buyback was also stepped up to ">$600M for FY26" from the prior ~$150M/quarter cadence.

Headline numbers

EPS

Q2 FY2026

$2.81

Revenue

Q2 FY2026

$1.42B

+11.0% YoY

Gross margin

Q2 FY2026

61.8%

Free cash flow

Q2 FY2026

$0.31B

Operating margin

Q2 FY2026

34.6%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$1.42B	+11.0%	$1.34B	+6.5%
EPS	$2.81	—	$2.55	+10.2%
Gross margin	61.8%	—	61.5%	+30bps
Operating margin	34.6%	—	33.4%	+120bps
Free cash flow	$0.31B	—	$0.41B	-25.0%

Guidance

Gross margin guidance raised at low end to 62-63%, but RCS growth expectations substantially reset downward to mid-single digits through FY2026 with deferred recovery to FY2027.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Share repurchase authorization	FY2026	more than $600 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Gross margin	FY2026	61% to 63%	62% to 63%	+1 percentage point at low end	Raised
RCS growth expectation	FY2026	mid to high single-digit growth in the back half of fiscal year 2026; confidence in acceleration to high single-digit growth	mid single digit growth for March and June quarters; return to sustainable high single digit growth and double digit operating profit growth in FY2027	Expectations reset to mid-single-digit for H1 FY2026, with acceleration deferred to FY2027	Lowered

Reaffirmed unchanged this quarter: SG&A as % of revenue (19% to 20%), R&D as % of revenue (6% to 7%), Effective tax rate (21% to 23%)

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
Sleep and Breathing Health	$1.256B	+12.0%
Residential Care Software	$0.167B	+7.0%
Devices	$0.726B	+9.0%
Masks and other	$0.53B	+16.0%
Masks and Accessories Growth	16%	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
U.S., Canada, and Latin America	$0.835B	+11.0%
Europe, Asia, and other markets	$0.421B	+12.0%
Non-GAAP Gross Margin	62.3%	—
Non-GAAP Operating Margin	36.4%	—
Operating Cash Flow	$340 million	—
SG&A as % of Revenue	19.6%	—
R&D Expenses	$91 million	—
Constant Currency Revenue Growth	9%	—
Digital Health Ecosystem Coverage	140+ countries	—

Management tone

Margin recovery (FY24) → Margin reset as structural (Q4 FY25) → Margin delivered at midpoint (Q1 FY26) → Margin floor lifted and RCS recovery deferred (Q2 FY26).

The first shift is on RCS, and it's the most consequential of the print. Two quarters ago RCS was a +10% reported growth segment; last quarter Q1's deceleration to +6% was sold as deliberate portfolio management with an explicit, falsifiable commitment to mid-to-high single-digit growth in H2 FY26. This quarter Q2 printed +7%, and management quietly walked the commitment back: "For this March and the June quarters we expect to continue our portfolio management process and maintain mid single digit growth across our RCS business...return to sustainable high single digit growth and double digit operating profit growth in fiscal year 2027." The H2 FY26 reacceleration thesis investors were asked to hold management to has been deferred a full year. This is a hidden cut dressed in confident language about FY27.

The second shift is the most positive: GLP-1 risk is now framed as definitively resolved in ResMed's favor. A year ago GLP-1s were the bear case du jour. This quarter management said: "The thesis that this could be a headwind is completely gone. It's a tailwind and the question is now how much of a tailwind will it be." Quantified evidence — 10–11% higher CPAP start rates and 6.2% higher resupply at 3 years among GLP-1 cohorts — moves GLP-1 from defensive to offensive in the narrative. Combined with December's removal of CPAP/APAP/bi-level from CMS competitive bidding (first time in 15 years), two of the largest macro overhangs cleared in the same quarter.

The third shift is on gross margin durability. Last quarter Farrell called the expansion "not a one-and-done." This quarter, reiterating remarks from the J.P. Morgan healthcare conference earlier in the month, he quantified the long-term commitment: "I have challenged our supply chain team to deliver double digit basis points improvement in gross margin every year through 2030." Coupled with the FY26 floor raise from 61% to 62%, this moves the margin story from "structural improvement is happening" to "structural improvement has a 5-year runway." The low-end raise is small in absolute terms but meaningful as a credibility signal.

The fourth shift is AI moving from feature to FDA-cleared clinical product. Smart Comfort (referred to as ComfortMatch in prepared remarks) is now described as "ResMed's first FDA-cleared, AI-enabled medical device" and a "sleep coach" — a different posture than Q1's beta-rollout framing.

The fifth shift, and the one investors should treat warily: capital return is being accelerated (>$600M FY26 buyback vs implied ~$600M prior) at the same time the RCS recovery is being deferred. Increased buybacks alongside lowered organic growth expectations in a problem segment is a familiar pattern.

Recurring themes management leaned on this quarter:

Operating excellence and supply chain margin expansion (310 bps YoY gross margin improvement)GLP-1 as demand funnel accelerant with 10-11% higher CPAP start rates and 6.2% higher resupply at 3 yearsPCP education as emerging channel (60,000 CME completions, 77% intent to change practice)AI-enabled personalization (ComfortMatch, sleep coach functionality)Digital ecosystem lock-in (MyAir 11M users, AirView, BrightTree integration)Capital return acceleration ($600M+ share buybacks FY26, dividend increases)

Risks management surfaced:

Global macro uncertainty and trade environment volatilitySection 232 tariff investigation outcomes on medical suppliesPhilips re-entry into US device market (though minimized)Residential care software vertical headwinds in senior living/long-term careCurrency headwinds and foreign exchange volatility

Answers to last quarter's watch list

RCS growth trajectory toward the H2 FY26 mid-to-high single-digit commitment. Q2 printed +7%, one point better than Q1's +6% but well short of the +7–9% H2 range previously committed. Critically, management deferred the high-single-digit recovery to FY27 entirely, with mid-single-digit growth now expected through both March and June quarters. The reacceleration thesis as originally framed is no longer operative.

Resolved negatively

EAOR masks acceleration to "high single-digit growth starting in the current quarter." Management stated EMEA and APAC masks delivered 8% growth in Q2, meeting the high-single-digit commitment made last quarter. Total Masks and other accelerated to +16% reported from +11% in Q1.

Resolved positively

Non-GAAP gross margin tracking in the upper half of 61–63%. Q2 came in at 62.3% (+30bps QoQ from 62.0%), and management raised the FY26 floor to 62%. The durability thesis is operationally reinforced, though margin is tracking the lower half of the new 62–63% band rather than pushing toward the high end.

Resolved positively

Section 232 tariffs and CMS competitive bidding disclosure. CMS resolved favorably — CPAP/APAP/bi-level products excluded from upcoming competitive bidding programs, first such exclusion in 15 years. Section 232 medical supplies investigation remains pending with no new disclosure. Status: Resolved positively (CMS); Continue monitoring (Section 232)

Capital return cadence sustained alongside Indianapolis capex. Buyback authorization stepped up to ">$600M for FY26" from the prior ~$150M/quarter cadence, with Indianapolis still on track for 2027. Capital return is accelerating rather than competing with capex.

Resolved positively

What to watch into next quarter

RCS Q3 print against the reset "mid single digit" bar. Q2 was +7%; with management now anchoring expectations at mid-single-digit through June, anything below +5% is a second downgrade and the FY27 recovery commitment becomes the next falsifiable line.

Devices growth holding above ~7–8% as masks +16% laps. Q2 masks +16% sets a tough comp; the underlying SBH engine needs devices to hold for total SBH growth to stay double-digit.

Non-GAAP gross margin moving toward the upper half of the new 62–63% band. Q2 at 62.3% is in the lower half; Q3 toward 62.5%+ supports Farrell's "double-digit bps annually through 2030" framing, anything below 62.0% would call the floor-raise into question.

Buyback execution pace vs the >$600M FY26 commitment. H1 cadence vs the new annual figure tells us whether ">$600M" is a meaningful step-up or a relabeling.

Quantified GLP-1 cohort disclosure. Management said they "may peer review and publish some evidence" on the 10–11% CPAP start uplift and 6.2% resupply lift — formal disclosure would be a material data point for the demand-funnel thesis.

Any updated framing on the FY27 RCS recovery commitment. With H2 FY26 deferred, FY27 high-single-digit growth + double-digit operating profit growth is now the standing commitment investors should hold management to.

Sources

ResMed Q2 FY2026 Press Release (Form 8-K Exhibit 99.1), filed January 29, 2026 — https://www.sec.gov/Archives/edgar/data/943819/000119312526029326/d80310dex991.htm
ResMed Q2 FY2026 earnings call commentary (CEO Mick Farrell and CFO Brett Sandercock prepared remarks)

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