In May 2025, ResMed acquired VirtuOx, a software-enabled independent diagnostic testing facility. This acquisition strengthens the company's position in the sleep and breathing health market by expanding its end-to-end solutions, including home-based diagnostics and patient monitoring, aligning with the strategy to streamline the diagnostic process.

The company invested $331.3 million in research and development activities in fiscal year 2025, representing 6.4% of net revenues. This investment focuses on developing new, innovative products and solutions, including integrating AI and ML algorithms to enhance therapy performance and user experience, as well as digital enhancements like over-the-air updates for devices like AirSense 11.

ResMed is leveraging its installed base of over 30 million cloud-connected devices on AirView and 10 million patients on myAir to enable personalized, efficient, and data-driven care. The strategy aims to improve patient outcomes and customer efficiencies by connecting capabilities across residential care settings, supporting long-term adherence and satisfaction.

Management's focus on operational efficiency is evident in the 2.7 percentage point increase in gross margin, from 56.7% in FY24 to 59.4% in FY25. This improvement was primarily driven by procurement, manufacturing, and logistics efficiencies, indicating effective cost management.

Unlike fiscal year 2024, which saw $64.2 million in restructuring expenses related to operational efficiency efforts, no material restructuring expenses were incurred in fiscal year 2025. This suggests a period of stability and successful integration of prior year's efficiency initiatives.

Selling, general, and administrative expenses as a percentage of net revenue improved to 19.3% in fiscal year 2025 from 19.6% in fiscal year 2024. This indicates management's ability to control overhead costs while growing the top line, even with increases in employee-related and marketing expenses.

The company faces intense competition from existing and new technologies, including the development of alternative treatments and potential cures for OSA. Specifically, the emergence of injectable GLP-1 weight loss drugs, now approved for OSA in patients with obesity, could significantly impact future sales and market demand for ResMed’s products.

Changes in Medicare payment rates, including an estimated 2.93% reduction in CY 2025 PFS conversion factor (though partially offset by a 2.5% increase for 2026), proposed VA disability rating adjustments for sleep apnea, and Medicaid program changes from the 'One Big Beautiful Bill Act' (July 2025) pose material adverse impacts on revenues and profitability.

ResMed is subject to a rapidly changing regulatory landscape concerning AI, with new laws like the EU AI Act (August 2024) and state-level AI regulations (e.g., Colorado AI Act effective Feb 2026) imposing stringent requirements and potential fines of up to €35.0 million or 7% of global turnover. Additionally, the acquisition of VirtuOx subjects ResMed to new HIPAA compliance obligations as a covered entity.

ResMed remains a global leader in digital health and cloud-connected medical devices for sleep and breathing disorders. The company continues to differentiate its core CPAP portfolio by focusing on smaller, quieter, more comfortable, and connected products, integrating AI/ML algorithms to enhance therapy performance and user experience.

The market is highly competitive, with new entrants and the development of alternative treatments, including pharmaceuticals like GLP-1s for obesity and OSA, posing a threat. The temporary ban on sales of Philips flow generators provided an opportunity for smaller companies to compete, potentially intensifying future market dynamics.

Competition in the Residential Care Software business is intense, characterized by rapidly evolving technology, low barriers to entry, and frequent new product introductions. Many customers use in-house systems, making them reluctant to switch, and new innovative software solutions from competitors could render ResMed's offerings obsolete.

Gross margin increased to 59.4% in fiscal year 2025 from 56.7% in fiscal year 2024, a 2.7 percentage point improvement. This was primarily driven by 'procurement, manufacturing and logistics efficiencies,' indicating effective cost control and optimization within the supply chain and production processes.

ResMed operates a globally distributed manufacturing network in locations such as Singapore, Australia, and the U.S., designed to optimize quality, control costs, reduce time to market, and generate supply chain resilience. The company aims for continuous improvement in manufacturing processes to deliver year-on-year improvements in quality, availability, and value.

The company reported no material restructuring expenses in fiscal year 2025, a significant reduction from $64.2 million in 2024. This suggests that prior year's initiatives to increase operational efficiency, decrease costs, and increase profitability have been largely implemented and operations are stabilizing.

ResMed invested $331.3 million in research and development in fiscal year 2025, representing 6.4% of net revenues. This investment is focused on developing and commercializing innovative products and solutions, including new features for devices like AirSense 11 (touch screen, algorithms, over-the-air updates) and expanding digital product applications.

The company's strategy includes differentiating products by integrating artificial intelligence and machine learning (AI and ML) algorithms to further enhance therapy performance and user experience. This commitment to advanced technology aims to improve patient outcomes and drive higher rates of screening, diagnosis, and therapy adoption.

ResMed is leveraging its installed base of over 30 million cloud-connected devices on AirView and 10 million patients on myAir. These platforms enable personalized, efficient, and data-driven care, supporting remote monitoring, automated patient coaching, and improved long-term adherence to therapy.

The company significantly increased its share repurchases, spending $300.0 million to acquire approximately 1,262,000 shares in fiscal year 2025, up from $150.0 million and 828,000 shares in 2024. This aggressive repurchase activity, with 10.8 million shares remaining under authorization, signals management's confidence in the company's valuation and future cash flow generation.

ResMed paid cash dividends of $2.12 per common share in fiscal year 2025, totaling $310.9 million, an increase from $1.92 per share in 2024. The board also declared a $0.60 per share dividend for Q1 FY26, indicating a continued commitment to returning value to shareholders through dividends.

Long-term debt, net, decreased to $658.4 million at June 30, 2025, from $697.3 million at June 30, 2024. This reduction, alongside a total consolidated debt of $0.7 billion, indicates a prudent approach to managing the capital structure and reducing interest rate risk, especially with lower debt levels following revolving credit facility repayment.

ResMed prioritizes fostering an inclusive environment, supporting career growth through technical and management pathways, and offering curated online learning journeys. The company expanded global mentorship opportunities, launched a reverse mentorship program, and enhanced resources for mental health and psychological safety, including a company-wide 'Resmed Day' for employee wellbeing.

Sydney and Singapore manufacturing operations are certified to ISO 14001:2015 Environmental Management System (EMS), and ResMed is progressively extending this EMS across its entire manufacturing network. This demonstrates a commitment to environmental stewardship and meeting performance objectives beyond just scale and cost.

On August 6, 2025, the board approved Ninth Amended and Restated Bylaws, which remove references to a classified board of directors and modify limitations on stockholder action by written consent. This indicates a move towards more modern governance practices and potentially increased shareholder influence.

ResMed operates in sleep and related breathing health markets, which are globally underpenetrated, with an estimated less than 20% of OSA sufferers diagnosed or treated in the U.S. and less than 10% in other markets. This substantial unmet need, coupled with increasing awareness of comorbidities, provides a strong foundation for future growth.

Global macroeconomic conditions, including inflation, supply chain disruptions, and fluctuations in foreign currency exchange rates, continue to impact operations and profitability. Geopolitical tensions, such as the Uyghur Forced Labor Prevention Act and conflicts in Ukraine and the Middle East, introduce risks of increased costs, supply chain interruptions, and trade restrictions.

The U.S. healthcare environment faces ongoing changes from the DMEPOS Competitive Bidding Program (expected to restart), Medicare payment reductions (2.93% in CY25), proposed VA disability rating changes for sleep apnea, and Medicaid funding changes from the 'One Big Beautiful Bill Act'. These factors could lead to lower reimbursement rates and decreased demand for products and services.