ResMed's Q4 2025: Unpacking Contradictions in Gross Margin, Market Growth, and FX Impact

Strong Financial Performance and Cash Flow:
- ResMed reported 10% year-over-year revenue growth for the fourth fiscal quarter, with a 230 basis points year-over-year increase in gross margin.
- The company generated $1.7 billion in free cash flow for fiscal year 2025, which reflects strong operating results and disciplined working capital management.

Global Demand and Market Presence:
- ResMed serves more than 154 million lives through its hardware and software platforms, and is on track to achieve its goal of improving over 500 million people's lives by 2030.
- The company continues to see robust demand for its products, particularly in underpenetrated markets with significant growth in Europe, Asia, and other regions.

Innovation and Product Pipeline:
- ResMed's innovation in AI and GenAI technologies is evident in its digital assistant Dawn, which is set for wider rollout in fiscal year 2026, and its smart coaching feature in the myAir app.
- The company is focused on integrating its products with wearables and health data to enhance personalized care and has expanded its residential care software capabilities through recent acquisitions.

Strategic Investments and Dividend Increase:
- ResMed has authorized an increase in its quarterly dividend to $0.60 per share and plans to significantly increase its targeted share repurchase activity for fiscal year 2026.
- These strategic moves reflect ResMed's strong financial position and commitment to returning capital to shareholders while maintaining a solid balance sheet for future investments.