Executive Summary
ResMed reported a solid Q4 2025, with revenue of $1.348B, up 10.2% year over year and 4.36% quarter over quarter. The company delivered strong profitability, with gross profit of $820.1M and a net income of $379.7M, translating to a net margin of 28.2% and an EPS of $2.59. Operating income of $454.5M produced an operating margin of approximately 33.7%. Cash generation remained robust, evidenced by operating cash flow of $538.8M and free cash flow of $508.2M, supporting meaningful capital allocation to dividends, share repurchases and selective equity-related activities, while preserving a sizable cash position and a net cash balance of about $327.1M. The balance sheet remains solid, with total assets near $8.17B and total liabilities around $2.21B, underscoring a prudent financial posture as the company expands its Sleep & Respiratory Care devices alongside its expanding Software as a Service (SaaS) platform. Cash and equivalents stand at $1.21B, current ratio at 3.44 and quick ratio at 2.53, signaling ample liquidity to fund near-term needs and strategic investments.
Key Performance Indicators
Key Insights
Revenue: $1.348B in Q4 2025, up 10.20% YoY and up 4.36% QoQ. Gross Profit: $820.1M; Gross Margin: 60.84%. Operating Income: $454.54M; Operating Margin: 33.72%. Net Income: $379.71M; Net Margin: 28.18%. EBITDA: $532.34M; EBITDA Margin: 39.49%. EPS (GAAP): $2.59; Diluted EPS: $2.58; Weighted Avg Shares: 146.47M. Cash Flow: Net cash from operating activities $538.77M; Free cash flow $508.18M. Cash at end of period: $1.209B; Net debt: -$327.13M (net cash). Dividends paid: $77.59M; Share repurchases:...
Financial Highlights
Revenue: $1.348B in Q4 2025, up 10.20% YoY and up 4.36% QoQ. Gross Profit: $820.1M; Gross Margin: 60.84%. Operating Income: $454.54M; Operating Margin: 33.72%. Net Income: $379.71M; Net Margin: 28.18%. EBITDA: $532.34M; EBITDA Margin: 39.49%. EPS (GAAP): $2.59; Diluted EPS: $2.58; Weighted Avg Shares: 146.47M. Cash Flow: Net cash from operating activities $538.77M; Free cash flow $508.18M. Cash at end of period: $1.209B; Net debt: -$327.13M (net cash). Dividends paid: $77.59M; Share repurchases: $(100.01)M; Common stock issued: $30.16M. Current ratio: 3.44; Quick ratio: 2.53. DSO: 62.73 days; DIO: 158.16 days; DPO: 47.42 days; CCC: 220.88 days. ROA: 4.65%; ROE: 6.36%; Debt/Equity: 0.148x; Long-term Debt to Capitalization: 9.94%; P/E: 24.88x; P/B: 6.33x; P/S: 28.03x. Dividend yield: 0.205%. Revenue mix considerations and leveraging of SaaS offerings remain key drivers for multiple growth phases.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.35B |
10.20% |
4.36% |
| Gross Profit |
820.07M |
16.44% |
7.00% |
| Operating Income |
454.54M |
19.23% |
6.63% |
| Net Income |
379.71M |
29.93% |
4.02% |
| EPS |
2.59 |
30.15% |
4.02% |
Key Financial Ratios
operatingProfitMargin
33.7%
operatingCashFlowPerShare
$3.68
freeCashFlowPerShare
$3.47
dividendPayoutRatio
20.4%
Management Commentary
Note: The earnings transcript data was not provided in the supplied material. The following thematic synthesis reflects the reported results and typical management discussion themes for ResMed’s QQ4 2025 release. - Strategy and growth drivers: Continued strength in Sleep & Respiratory Care devices complemented by expanding Software as a Service (SaaS) ecosystem, including Brightree and MatrixCare, driving recurring revenue and higher gross margins. - Operational execution: Solid profitability with EBITDA around $532M and an operating margin of about 33.7%, supported by disciplined cost management and favorable mix. - Cash generation and capital allocation: Large free cash flow of $508M supports a balanced capital allocation framework (dividends, buybacks, and selective equity actions) while maintaining a robust balance sheet. - Market conditions and outlook: Ongoing demand for home-based and remote-monitoring solutions; currency and macro dynamics likely to influence quarterly cadence; emphasis on out-of-hospital software adoption could offset hardware cyclicality over time.
N/A — Transcript not provided in the supplied data.
— Management
N/A — Transcript not provided in the supplied data.
— Management
Forward Guidance
The QQ4 2025 results imply a constructive near-to-mid-term trajectory for ResMed, underpinned by durable demand for Sleep & Respiratory Care devices and a growing SaaS/Solutions footprint. Management commentary (not captured in the provided transcript) typically emphasizes the following as levers: 1) Revenue resilience from hardware plus high-margin recurring SaaS revenue (Brightree, MatrixCare) and improved customer retention; 2) Ongoing investment in R&D and software platforms to expand outcomes-based services; 3) Continued capital allocation discipline with a modest dividend and opportunistic buybacks given strong free cash flow. Our assessment: Achieving mid-single-digit revenue growth in hardware coupled with high-single-digit to low-double-digit growth in SaaS bookings appears plausible, supported by a healthy gross margin (~60.8%) and robust FCF generation. Key monitorables include: trajectory of recurring software revenues, patient outcomes adoption rates, reimbursement and policy changes affecting device utilization, and currency headwinds or tailwinds. Risks include competitive pressure in both hardware and software segments, global supply chain dynamics, and regulatory or pricing changes that could affect profitability. We assign a cautiously constructive view with a bias toward upside if SaaS-enabled platforms capture a larger share of total revenue and if operating leverage remains robust.