ResMed's 9% Q4 Growth Looks Clean-But the Real Alpha Is in FY26 Margin and Cash-Flow Power

ResMed heads into a quarter that matters more for quality than for simplicity

Verdict: The key question is not whether ResMed can post another decent quarter. It is whether the company can reinforce the case for a higher-quality growth profile just as investors become more selective about durable earnings power. That conversation starts with fourth-quarter results due after the close today.

The latest completed quarter closed FY26 on strong terms, with 9% Q4 revenue growth, 16% non-GAAP EPS growth, and a record $1.5 billion in revenue. The real debate is whether that strength reflects a more resilient operating pattern rather than a temporary recovery bounce.

Bulls point to both device and mask portfolios driving growth. In the most recently reported quarter, devices rose 6% and masks and other sales grew 12% on a constant-currency basis. That breadth matters because it suggests momentum was not dependent on a single product line.

The next step is to see whether that pattern holds and whether software, digital health, and related extensions support the core sleep-care business rather than merely offsetting weakness elsewhere.

Device and mask momentum shows breadth, but margins tell the bigger story

Device stability and mask momentum were both visible in the latest reported quarter

The most recent fully reported quarter gave ResMed $1.43 billion in revenue, up 8% on a constant-currency basis. Devices rose 6%, while masks and other sales grew 12%. In the Americas, devices were up 6% and masks/other up 14%, with mask growth remaining double-digit even excluding the VirtuOx acquisition.

That mix matters. Device growth suggests the core sleep-care base is holding up, while masks benefit from resupply, broader attachment, and patient continuity. When masks grow faster than devices, revenue can become somewhat more recurring and less dependent on discrete device replacement cycles.

Margin expansion is the more compelling upgrade path

The clearer source of upside is profitability. In the latest reported quarter, ResMed posted 62.8% gross margin, up 290 basis points year over year, driven by component-cost improvements and operational efficiencies. Operating profit rose 18%, and free cash flow reached $520 million.

That is the more important lens for this stock. If revenue remains near the 8.4% growth implied by Q4 consensus and cost discipline holds, operating income can grow faster than sales. For investors, that is the cleaner rerating path: not only top-line growth, but better conversion of each revenue dollar into profit.

What would confirm the bull case, and what would challenge it

The bull case is straightforward: if ResMed shows growth across devices and masks again, while preserving margin and cash generation, the business looks more durable than the market sometimes gives it credit for.

The main watchpoints are simpler too. Management needs to show that growth remains broad, that cost advantages are holding, and that newer digital and care-extension offerings are reinforcing the core business rather than masking weakness in the legacy base. If those signals hold, the quarter matters beyond the headline numbers.