Medical device company ResMed (NYSE: RMD) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 10.8% year on year to $1.43 billion. Its non-GAAP profit of $2.86 per share was 2.2% above analysts’ consensus estimates.
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ResMed (RMD) Q1 CY2026 Highlights:
- Revenue: $1.43 billion vs analyst estimates of $1.42 billion (10.8% year-on-year growth, 0.8% beat)
- Adjusted EPS: $2.86 vs analyst estimates of $2.80 (2.2% beat)
- Adjusted EBITDA: $585.6 million vs analyst estimates of $558.5 million (40.9% margin, 4.9% beat)
- Operating Margin: 34.9%, up from 33% in the same quarter last year
- Free Cash Flow Margin: 36.4%, down from 43.2% in the same quarter last year
- Constant Currency Revenue rose 8% year on year (9% in the same quarter last year)
- Market Capitalization: $30.74 billion
“Our third quarter results reflect the continued strength of our global business, driven by ongoing demand for our market-leading products and disciplined execution of our strategy,” said Resmed’s Chairman and CEO, Mick Farrell.
Company Overview
Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, ResMed’s 12.4% annualized revenue growth over the last five years was solid. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. ResMed’s annualized revenue growth of 9.9% over the last two years is below its five-year trend, but we still think the results were respectable. 
We can dig further into the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 9.1% year-on-year growth. Because this number aligns with its reported revenue growth, we can see that foreign exchange has not had a meaningful impact on topline. 
This quarter, ResMed reported year-on-year revenue growth of 10.8%, and its $1.43 billion of revenue exceeded Wall Street’s estimates by 0.8%.
Looking ahead, sell-side analysts expect revenue to grow 7.3% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and implies the market sees some success for its newer products and services.
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Adjusted Operating Margin
ResMed has been a well-oiled machine over the last five years. It demonstrated elite profitability for a healthcare business, boasting an average adjusted operating margin of 32.3%.
Looking at the trend in its profitability, ResMed’s adjusted operating margin rose by 6.2 percentage points over the last five years, as its sales growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements. These data points are very encouraging and show momentum is on its side.
In Q1, ResMed generated an adjusted operating margin profit margin of 36.8%, up 2.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
ResMed’s EPS grew at 15.2% compounded annual growth rate over the last five years, higher than its 12.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into ResMed’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, ResMed’s adjusted operating margin expanded by 6.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q1, ResMed reported adjusted EPS of $2.86, up from $2.37 in the same quarter last year. This print beat analysts’ estimates by 2.2%. Over the next 12 months, Wall Street expects ResMed’s full-year EPS of $10.77 to grow 10.6%.
Key Takeaways from ResMed’s Q1 Results
It was good to see ResMed narrowly top analysts’ revenue expectations this quarter. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 3% to $207.51 immediately following the results.
So should you invest in ResMed right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
