ResMed Holds FY2027 Revenue Outlook at $5.75–$5.85 Billion, Expects $1.85 Billion in Shareholder Returns
Key Facts
ResMed kept its fiscal 2027 revenue outlook at $5.75–$5.85 billion, with expected underlying growth of 5%–7% on a constant-currency basis, according to its first-quarter results statement published on October 29. The company did not raise the range it announced in August, despite quarterly growth and earnings per share exceeding analyst estimates. The guidance sets a clear ceiling for revenue growth during the fiscal year, while the constant-currency rate separates underlying operating growth from the effects of exchange-rate movements. The company said revenue for the quarter ended September 30 was $1.415 billion, up 6% year over year, or 7% on a constant-currency basis after excluding the effects of the Noctrix acquisition and the MatrixCare divestiture. Maintaining the previous guidance was the most notable change in the annual outlook, rather than announcing a new range after the results.
GAAP diluted earnings per share rose to $2.92 in the first quarter from $2.37 in the corresponding period of the previous fiscal year. Non-GAAP diluted earnings per share also increased 14% to $2.91, compared with $2.55 a year earlier. The adjusted figure exceeded the analyst estimate of $2.68 by $0.23, according to Investing.com, which also reported that quarterly revenue was close to $1.4 billion, against a consensus estimate of $1.39 billion. The comparison indicates that the company reported quarterly earnings above market estimates, while its annual revenue outlook remained at the previously announced range. The stock closed at $252.83 on October 29, according to EL7 data.
ResMed said sales growth was driven primarily by strong demand for sleep devices, masks and accessories. On a constant-currency basis, revenue in the sleep and respiratory health segment rose 7% in the Americas and 8% in the rest of the world, while residential care software revenue increased 5% in the first quarter. The results show growth across the two main geographic regions and software, with the rest of the world posting the faster increase in sleep and respiratory health. Non-GAAP gross margin rose to 62.5%, up 50 basis points year over year. The company attributed the improvement mainly to the execution of productivity initiatives, adding support from margins to revenue growth.
By contrast, free cash flow fell to $374 million in the first quarter from $414 million in the corresponding period of FY2026. Management attributed the decline mainly to higher inventory levels and increased cash tax prepayments. Free cash flow declined in a quarter when the company announced more than $1 billion in shareholder returns, including about $936 million in share repurchases, according to its results presentation. The purchases included an accelerated share repurchase agreement funded with proceeds from the sale of the MatrixCare business and certain other assets. The quarter therefore showed revenue and earnings growth, an annual decline in free cash flow, and substantial shareholder returns.
ResMed expects to return more than $1.85 billion to shareholders during fiscal 2027, including about $1.5 billion in share repurchases, as well as a 10% increase in the quarterly dividend to $0.66 per share, according to its annual agency statement published in October. The company announced the return target in August and confirmed in October that it remained its outlook for the year. Share repurchases account for most of the expected amount, while cash dividends provide direct payments to shareholders. The company announced a quarterly cash dividend of $0.66 per share, with November 12, 2026, as the record date for eligible shareholders and December 17, 2026, as the payment date. The announcement adds a specific date for the next dividend to the year's capital return plan.
Over a five-year period, ResMed presented a global revenue growth outlook in the high single digits annually, with earnings growing faster than revenue. During the quarter, the company completed the previously announced divestiture of its MatrixCare business and announced the launch of the AirTouch F40 mask in the United States. It also announced a partnership with Eight Sleep to connect its technology with ResMed sleep insights in the United States and Australia. These steps accompany growth in sleep devices, masks and accessories, while the company kept its annual outlook unchanged despite beating earnings-per-share estimates. The announced dividend is the nearest-term action: the record date for eligible shareholders is November 12, followed by payment on December 17, 2026.