RMD Q3 Deep Dive: ResMed Launches New Mask Platform and Invests in U.S. Operations

Medical device company ResMed (NYSE:RMD) met Wall Streets revenue expectations in Q3 CY2025, with sales up 9.1% year on year to $1.34 billion. Its non-GAAP profit of $2.55 per share was 2.1% above analysts’ consensus estimates.

Is now the time to buy RMD? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

ResMed’s third quarter results aligned with Wall Street’s revenue expectations, while its non-GAAP earnings per share moderately outpaced consensus. Management attributed the quarter’s performance to robust demand for both devices and masks, particularly in the U.S., Canada, and Latin America, where mask resupply programs and new product launches drove growth. CEO Michael Farrell highlighted the contribution of recent acquisitions and continued investment in digital health, noting, “Our global team delivered a strong quarter with 9% reported revenue growth, with multiple areas of high performance.”

Looking ahead, ResMed’s strategy emphasizes expanding its direct-to-consumer reach, accelerating product innovation, and enhancing digital health capabilities. Management is focused on scaling new mask platforms, deploying AI-powered patient support tools, and optimizing the patient funnel through targeted acquisitions. Farrell stated, “Our R&D investments in the next generation of market-leading masks, cloud connected device platforms and digital health software position us well to keep delivering the world’s most intelligent therapy solutions.”

Key Insights from Management’s Remarks

Management cited strong growth in U.S. and international device sales, successful new product launches, and operational efficiency as key contributors to the quarter’s performance. The company also outlined steps to reaccelerate its software portfolio and strengthen its supply chain.

• U.S. and international device momentum: High single-digit growth in device sales was reported in both North America and international markets, with mask and resupply categories seeing double-digit expansion in the Americas. Management credited targeted demand generation and improved patient funnel management for this performance.
• Mask innovation and launches: The introduction of the AirTouch F30i, the industry’s first full face fabric mask, expanded ResMed’s AirTouch portfolio. Initial launches in Australia and the U.S. were seen as a step toward changing the basis of competition in mask materials, shifting from silicone to fabric for enhanced comfort and patient adherence.
• Digital health software integration: The rollout of the Dawn AI assistant within the myAir platform in the U.S. aims to improve patient engagement and therapy adherence. Early launches in Australia demonstrated positive results, with the company now measuring engagement, comfort, and clinical outcomes as success criteria.
• Portfolio management in software: The residential care software (RCS) segment delivered mid-single-digit growth, but management is shifting investments toward higher-margin, higher-growth SaaS platforms like MEDIFOX and Brightree, while scaling back on lower-margin services to optimize long-term profitability.
• Operational leverage and U.S. expansion: Gross margin expansion was driven by lower component costs and logistics efficiencies. The planned Indianapolis distribution center is expected to enhance U.S. manufacturing and logistics capacity, positioning ResMed to serve 90% of customers within two days once operational.

Drivers of Future Performance

ResMed’s forward outlook is built upon scaling new product platforms, expanding digital health services, and optimizing manufacturing and distribution in response to global healthcare trends.

• Product innovation pipeline: Management aims to sustain growth through continued rollout of new mask platforms, including expanded fabric mask offerings and AI features integrated into therapy support tools. These initiatives are expected to drive higher patient adherence and recurring resupply revenue.
• Direct-to-consumer and digital expansion: The company is investing in demand generation and AI-driven patient engagement, with a focus on integrating wearables and remote diagnostic services. These steps are intended to improve patient onboarding, screening, and long-term therapy outcomes, particularly as awareness of sleep disorders grows globally.
• Manufacturing footprint and regulatory environment: Expansion of U.S. manufacturing and logistics capabilities is designed to reduce supply chain risk, support “Made in America” initiatives, and improve responsiveness to government policies and tariffs. Management sees this as vital for resilience amid shifting trade and reimbursement landscapes.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will monitor (1) the market adoption and patient adherence rates for new mask platforms and digital health tools; (2) the pace and impact of the Indianapolis distribution center expansion and broader U.S. manufacturing initiatives; and (3) progress on shifting the software portfolio toward higher-margin SaaS offerings. Results from these initiatives will be key indicators of ResMed’s ability to sustain growth and margin improvements amid evolving industry dynamics.

ResMed currently trades at $251.05, in line with $252.34 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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