ResMed’s CPAP Growth Gets a Boost from GLP-1 Patients

Date of Call: Jan 29, 2026

Financials Results

• Revenue: $1.42B, up 11% YOY (9% on a constant currency basis)
• EPS: GAAP EPS growth of 16% YOY
• Gross Margin: 32.3%, up 110 basis points YOY and 30 basis points sequentially
• Operating Margin: 36.3%, up from 34% in the prior year period

Guidance:

• Gross margin for FY2026 expected to be in the range of 62% to 63%.
• SG&A expenses as a percentage of revenue expected to be in the range of 19% to 20% for FY2026.
• R&D expenses as a percentage of revenue expected to be in the range of 6% to 7% for FY2026.
• Effective tax rate for FY2026 estimated to be in the range of 21% to 23%.

Business Commentary:

Revenue and Profit Growth:

• ResMed Inc. reported revenue of $1.42 billion for Q2 FY 2026, representing an 11% headline increase and 9% growth on a constant currency basis.
• The company achieved GAAP EPS growth of 16%.
• The growth was driven by strong performance in devices and masks, accessories, and other revenue segments, as well as operating leverage leading to margin expansion.

Geographic Revenue Distribution:

• Revenue in the U.S., Canada, and Latin America increased by 11%, while other regions saw a 6% increase on a constant currency basis.
• Device sales grew by 11% globally, and masks and other sales increased by 14%.
• Growth was supported by strategic expansion in direct-to-consumer markets and the introduction of new products like the F30i Comfort and F30i Clear masks.

Operational Excellence and Margin Expansion:

• ResMed achieved a year-over-year gross margin expansion of 110 basis points, reaching 32.3%.
• The expansion was driven by component cost improvements and manufacturing and logistics efficiencies.
• The company aims for continued gross margin improvements, targeting double-digit basis points of improvement annually through 2030.

Impact of GLP-1 Medications on Patient Funnel:

• Analysis of claims data showed that patients with both GLP-1 and CPAP prescriptions were 10% to 11% more likely to start CPAP therapy.
• These patients were also 3% more likely to have a resupply event at one year and 6% at three years.
• The increased motivation and adherence to CPAP therapy among GLP-1 users are attributed to symptomatic relief and improved quality of life.

Supply Chain and Manufacturing Enhancements:

• The global supply chain team delivered 310 basis points of year-over-year gross margin expansion.
• ResMed is expanding its manufacturing footprint, including a new U.S. distribution center in Indiana, to be operational by calendar year 2027.
• These efforts are part of a strategy to improve shipping efficiency and enhance ResMed's position as an operating excellence machine.

Sentiment Analysis:

Overall Tone: Positive

• "We delivered another strong quarter with 11% headline revenue growth... We drove operating leverage leading to margin expansion sequentially and year-on-year, and we achieved GAAP EPS growth of 16%, strong double-digit bottom line growth." "ResMed remains a compelling investment opportunity amidst global macro uncertainty." "ResMed remains a very strong free cash flow generation machine. We have an incredibly robust balance sheet..."

Q&A:

• Question from Jonathan Block (Stifel, Nicolaus & Company, Incorporated): Great. Thanks, guys. Appreciate it. Really strong U.S. mask number, I think it was 16%. Maybe if you could just help us out a little bit. Was that -- we're counting roughly a 400 basis point benefit from VirtuOx when you think about that? And then Mick or Brett, any movement or stocking, if you would, from F30, relatively new, good reception. So should we calibrate any sort of benefit or stocking from that dynamic?
  Response: U.S. masks and accessories grew double-digits even excluding VirtuOx. New fabric masks (F30i Comfort/Clear) are expected to see strong adoption over time, with some initial seasonality impact from health plan benefit cycles.

• Question from Anthony Petrone (Mizuho Securities USA LLC): Congrats on an excellent quarter here. Maybe, Mick, you gave an update on just the GLP-1 landscape here, the claims data, obviously, holding solid here on the attach rate for CPAP post starting GLP-1 therapy. We now have orals out there, and it's been almost a year, since the initial clearance. Maybe just an update on the impact to the front end of the funnel more specifically in the latest channel checks that we're hearing is that this indeed is actually bringing more patients in and it's resulting in a high CPAP attach rate.
  Response: GLP-1s are bringing more motivated patients into the funnel. Claims data shows a 10-11% higher CPAP start rate and 6% higher resupply rate at 3 years for patients on GLP-1s. Channel checks and CME engagement confirm this trend, with PCPs changing clinical practices.

• Question from Dan Hurren (MST Financial Services Pty Limited): A question for Brett. Can I just ask about the SG&A. The SG&A growth is uncharacteristically ahead of revenue growth. I'm just wondering if there's any transient expenses in there as you settle these acquisitions? Or is this a rebasing higher with promotional activities in sales force, et cetera?
  Response: SG&A growth was partly due to the VirtuOx acquisition and some promotional marketing activities (e.g., Singles Day in China). Excluding these, SG&A growth tracks closely with revenue growth.

• Question from Laura Sutcliffe (Citigroup Inc. Exchange Research): Another one on the patients funnel, if I can, please. Which sort of areas or stage is the patient funnel from -- all the way from an initial visit to a PCP through to their first night with a ResMed device do you think you've had the most impact on in the last couple of years? And where do you think there's most work left to do?
  Response: Most progress is at the top of the funnel, driven by awareness from big pharma (GLP-1 ads) and big tech (wearables). Focus is on scaling home sleep apnea testing (via acquisitions like Ectosense, VirtuOx) and helping HME partners manage increased patient flow.

• Question from Lyanne Harrison (BofA Securities): I'd like to come back to Anthony's questions on GLP-1. Obviously, you're tracking a lot of patients now and you've got 3 years' worth of data. But with the GLP-1 prices coming now in pill form, we expect more people be on GLP-1 for longer. Are you seeing any changes in compliance or therapy for those GLP-1 OSA patients in the cohort you're tracking who have been with you for 3 years now, in particular, those who have mild or moderate sleep apnea?
  Response: Patients on GLP-1s show higher adherence and longer-term motivation for CPAP therapy, even with mild/moderate sleep apnea. Symptomatic relief from CPAP and the side effects of GLP-1s create a strong patient preference for continued therapy.

• Question from Matthew Taylor (Jefferies LLC): Mick, you actually sort of led into what I wanted to ask about, which is you've given a lot of positive stats about how GLP-1s are helping the funnel and your business. I guess I was wondering if you tried to quantify that now with some of the data that you have. Could you help us understand how much of a tail end it is now or it could be in the future? Or if they didn't exist, how much would you be growing?
  Response: GLP-1s are a contributor to growth, but the exact quantification is still being analyzed internally. The company is working to quantify the impact through myAir user surveys and may publish peer-reviewed evidence in the future.

• Question from David Bailey (Morgan Stanley): One of the most frequent questions we get is the potential return of Philips back into the U.S. device market. Just thoughts on any potential timing of that reentry to the extent you've got any thoughts there? Are there potential impacts? And where they have reentered your observations in relation to the competitive dynamics, that would be great.
  Response: No specific timing on Philips' potential U.S. device reentry is known. Competition is welcome; ResMed believes its product portfolio (smaller, quieter, more comfortable, connected devices) and ecosystem (myAir, AirView, Brightree) are strong differentiators.

• Question from Davinthra Thillainathan (Goldman Sachs Group, Inc.): It's good segue to my question, Mick, on the question about devices for the ex-U.S. markets, sort of 5% constant currency growth. Could you sort of help us understand that growth a little bit better. Clearly, it's a market that is quite lumpy. Was there any sort of pull forward of demand that have been in the previous quarters that sort of weighed on the growth this quarter?
  Response: 5% growth in EMEA/APAC devices was solid and in line with market. Some lumpiness existed due to prior-year strength in Japan. Growth was supported by promotional activities in key markets like China and Australia.

• Question from Brandon Vazquez (William Blair & Company L.L.C.): Mick, I wanted to ask, it's been a little bit over a year now that you started kind of stepping up the investments within the PCP channel. Talk to us a little bit about what are you seeing from that channel? How excited are you about it? And what can it mean for growth on the devices side? And what kind of metrics should the investors be looking for as maybe like positive ROI on these investments within the PCP channel?
  Response: PCP channel investments (CME training) are showing strong engagement (60,000 trainings completed, up 50% in Q2). This is helping PCPs identify sleep apnea patients earlier and refer them for testing and therapy, though the exact quantified impact on growth is still being analyzed.

• Question from Nathan Treybeck (Wells Fargo Securities, LLC): Great. Congrats on a great quarter. Are you seeing anything that would suggest that U.S. mass strength that you saw in fiscal Q2 will persist at that level into the second half of the year?
  Response: U.S. masks and accessories grew 16% in Q2, outperforming the high-single-digit market. The company expects to meet and/or beat high-single-digit mask growth going forward, supported by promotional campaigns and ROI-driven marketing investments.

Contradiction Point 1

U.S. Masks & Accessories Growth Sustainability

Contradiction on whether strong double-digit mask growth is a sustainable target.

Will the 16% U.S. masks & accessories growth from Q2 continue at the same rate in the second half of the year? - Nathan Treybeck (Wells Fargo)

2026Q2: Even excluding the VirtuOx contribution, U.S. masks & accessories growth remained in the double digits. The goal is to meet and beat high single-digit market growth consistently for masks. - Michael Farrell(CEO)

What are the key features of the AirTouch F30i full-face mask and how do they contribute to growth in non-U.S. markets? - Davinthra Thillainathan (Goldman Sachs)

20251031-2026 Q1: The AirTouch F30i... aiming to drive high single-digit growth in the Europe/Asia/RoW category. - Michael Farrell(CEO)

Contradiction Point 2

GLP-1 Impact Quantification

Contradiction on the stage of quantifying GLP-1's contribution to growth.

What percentage of recent growth is attributable to GLP-1s, and how have they impacted your funnel? - Matthew Taylor (Jefferies)

2026Q2: Internally, ResMed is working to quantify the GLP-1 contribution to U.S. device growth... Results will be shared via peer-reviewed publications in the future. - Michael Farrell(CEO)

What demand initiatives are driving strong U.S. device growth, and how sustainable is the potential for high single-digit market growth? - Lyanne Harrison (Bank of America)

20251031-2026 Q1: Demand generation is sophisticated... aided by initiatives and pharma D2C campaigns. - Michael Farrell(CEO)

Contradiction Point 3

Characterization of GLP-1s as a Market Tailwind

The framing of GLP-1s shifts from a neutral external factor to a direct business tailwind.

Are lower pill prices for GLP-1 affecting compliance or therapy duration in OSA patients, particularly those with mild/moderate sleep apnea? - Lyanne Harrison (BofA Securities)

2026Q2: GLP-1s are now a tailwind, not a headwind, for patient acquisition and retention. - Michael Farrell(CEO)

What demand initiatives are driving strong growth in U.S. devices, how effective are they, and can high single-digit growth be expected moving forward? - Lyanne Harrison (BofA Securities)

2026Q1: External tailwinds like big pharma's D2C advertising on OSA are expected to bring more patients into the funnel. - Michael Farrell(CEO)

Contradiction Point 4

Quantification of GLP-1 Impact on Growth

The company's ability to precisely measure GLP-1 contribution shifts between quarters.

Okay, let's see. The user wants me to rewrite the earnings call question into a concise one. The original question is: "Can you quantify the impact of GLP-1s on your funnel and growth? How much of the recent growth would not have happened without them?" First, I need to understand what the core of the question is. The user is asking about the effect of GLP-1s on the company's growth and how much of that growth is directly attributable to GLP-1s. The two parts are about quantifying the impact and determining the portion of growth that wouldn't have occurred without them.Now, the task is to make this concise. The original has two questions. Maybe combine them into one. The first part asks for quantification of impact on the funnel and growth. The second part is about the percentage of growth that wouldn't have happened without GLP-1s. I need to merge these into a single question. Perhaps something like "What is the quantifiable impact of GLP-1s on your growth, and what percentage of recent growth would not have occurred without them?" That combines both parts into one question without losing the essence. Check if "funnel" is necessary. The original mentions "funnel and growth." If "funnel" refers to the sales funnel, maybe it's part of the growth metric. However, if the user wants to keep both terms, maybe include "funnel" but it might be redundant. The user might prefer to focus on growth. Let me check the input again. The input says "funnel and growth," so maybe it's important to mention both. But the user wants a concise question. Maybe "funnel" can be omitted if it's part of the growth. Alternatively, rephrase to "quantify the impact of GLP-1s on your growth funnel and overall growth?" Hmm. But the second part is about how much growth wouldn't have happened. So perhaps the key is to quantify the impact and the dependency. Alternative phrasing: "How much of your recent growth can be attributed to GLP-1s, and what portion would not have occurred without them?" That's two parts but maybe acceptable. Wait, the user wants a single concise question. Let me try to combine both elements into one. "How much of your recent growth would not have occurred without GLP-1s, and what is their quantifiable impact on your growth funnel?" Hmm, but the original question is two parts. Maybe the user wants to keep both aspects but in a more concise form. Alternatively, "What is the quantifiable impact of GLP-1s on your growth funnel and recent growth, and how much of that growth would not have occurred without them?" That's a bit long but covers both aspects. Wait, the strict output constraints say to output only the rewritten question, no explanations. So maybe the best way is to combine the two questions into one. The original is two questions. The user might want to merge them. Let me check the example given in the input. The input has two questions, but the output example (if any) might show how to merge. But the user hasn't provided an example. So I need to make sure that the concise question includes both quantifying the impact and determining the portion of growth that wouldn't have happened without GLP-1s. Perhaps: "What is the quantifiable impact of GLP-1s on your growth funnel and recent growth, and how much of that growth would not have occurred without them?" But maybe "growth funnel" can be simplified to "growth" if funnel is part of the growth metrics. Alternatively, "funnel" might refer to the sales process, so including both terms might be important. Alternatively, "How much of your recent growth is attributable to GLP-1s, and what portion would not have occurred without them?" This combines both aspects but uses "attributable" and "portion." I think that's concise and captures both parts. The original question is about quantifying the impact (how much is due to GLP-1s) and how much wouldn't have happened without them. The answer would need to address both. So the final concise question would be: "How much of your recent growth is attributable to GLP-1s, and what portion would not have occurred without them?" But the user might prefer to mention "quantify the impact" explicitly. Let me check the original input again. The first part is "Can you quantify the impact of GLP-1s on your funnel and growth?" So "quantify the impact" is key. The second part is about the portion of growth that wouldn't have happened. So combining these: "Can you quantify the impact of GLP-1s on your growth and how much of recent growth would not have occurred without them?" But the user wants a concise question. Maybe - Matthew Taylor (Jefferies)

2026Q2: Internally, ResMed is working to quantify the GLP-1 contribution to U.S. device growth... Results will be shared via peer-reviewed publications in the future. - Michael Farrell(CEO)

What demand initiatives are driving strong growth in U.S. devices, and how do you measure their effectiveness and expect high single-digit growth moving forward? - Lyanne Harrison (BofA Securities)

2026Q1: External tailwinds like big pharma's D2C advertising on OSA are expected to bring more patients into the funnel. - Michael Farrell(CEO)

Contradiction Point 5

Growth Drivers for U.S. Masks & Accessories

Contradiction on whether growth is driven by market outperformance or acquisition benefit.

Detail the 16% U.S. mask growth and the ~400 bps VirtuOx acquisition benefit. Is there initial stocking/benefit from the F30i mask launch? - Jonathan Block (Stifel)

2026Q2: Even excluding VirtuOx, U.S. masks & accessories achieved double-digit growth. - Michael Farrell(CEO) & Brett Sandercock(CFO)

What portion of the strong U.S. mask growth is attributable to share gains versus stronger industry ReSupply growth? - Saul Hadassin (Barrenjoey Markets Pty Limited)

2025Q4: Growth in U.S., Canada, and Latin America masks (12%) is attributed to a combination of factors... The market growth rate is estimated in the high single digits, and ResMed outperformed it. - Michael Farrell(CEO)