Resmed Stock Up on Q1 Earnings & Revenue Beat, Margins Expand

Resmed Inc.’s RMD adjusted earnings per share (EPS) in the first quarter of fiscal 2026 were $2.55, up 15.9% year over year. The metric beat the Zacks Consensus Estimate by 2.41%.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 $2.37, up 12.3% from the year-ago level.RMD’s Revenue DetailsOn a reported basis, revenues increased 9.1% year over year (up 8% at the constant exchange rate or CER) to $1.34 billion. The figure beat the Zacks Consensus Estimate by 0.94%.Following the announcement, shares of RMD rose 3.1% in the after-market trading yesterday.Resmed’s Q1 Sales: A Closer ViewResmed 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 HealthTotal revenues improved 9.5% (up 8% at CER) from the prior-year period’s level to $1.17 billion. The figure topped our model’s projection of $1.15 billion.ResMed Inc. Price, Consensus and EPS Surprise ResMed Inc. price-consensus-eps-surprise-chart | ResMed Inc. QuoteWithin this business, Devices revenues were $680.3 million, up 8.7% (7% at CER). This includes an increase of 8% in the United States, Canada and Latin America and an increase of 11% in combined Europe, Asia and other markets. Our model forecasted Devices revenues to be $673.4 million.Revenues from masks and other were $489.1 million, up 10.7% (10% at CER). This includes an increase of 12% in the United States, Canada and Latin America, and 7% growth in combined Europe, Asia and other markets. Our model projected masks and other revenues to be $479.4 million.Residential Care SoftwareRevenues in this segment grew 5.9% year over year (up 5% at CER) to $166.1 million. Our model forecast was $167.6 million. Resmed’s Q1 Margin PerformanceIn the fiscal first quarter, the company’s adjusted cost of sales (excluding amortization of acquired intangible) totaled $506.9 million, up 1.5% year over year.Despite that, the adjusted gross profit rose 14.3% to $828.7 million. The adjusted gross margin for the fiscal first quarter was 62%, reflecting an expansion of 285 basis points (bps).Selling, general and administration expenses rose 8.5% year over year to $259.2 million. Research and development expenses increased 9.8% to $87.3 million.The adjusted operating income was $482.1 million in the quarter, up 18.6% from the year-ago quarter’s level. The adjusted operating margin expanded 291 bps year over year to 36.1%.RMD’s Financial UpdatesResmed exited the first quarter of fiscal 2026 with cash and cash equivalents of $1.38 billion compared with $1.21 billion at the end of fiscal 2025. Total debt (short and long-term) amounted to $668.6 million compared with $668.3 million at the end of fiscal 2025.The cumulative net cash provided by operating activities at the end of the fiscal first quarter was $457.3 million compared with $325.5 million in the year-ago period.Additionally, the company paid out $88 million in dividends in the fiscal first quarter and also repurchased 523,000 shares for consideration of $150 million as part of its ongoing capital management.Our Take on RMD StockResmed delivered earnings and revenue beat in the first quarter of fiscal 2026. Within Residential Care Software, the company saw strong performance from the MEDIFOX platform, the core Brightree platforms, along with growth in the MatrixCare home health business. Geographically, Masks and other sales in the United States, Canada and Latin America benefited from continued growth in resupply, new patient setups and incremental revenues from the VirtuOx acquisition. The expansion of both margins in the quarter also bodes well. As Resmed moves through fiscal year 2026, it remains focused on ongoing operational excellence and strategic investment in innovation to deliver strong, sustainable, profitable growth.RMD’s Zacks Rank and Key PicksResmed currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, Intuitive Surgical ISRG and Boston Scientific BSX.Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 14.28%.Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%.ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. 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Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report ResMed Inc. (RMD): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks