ResMed's Q3 Earnings Call: Our Top 5 Analyst Questions

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.”

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From ResMed’s Q3 Earnings Call

• Davinthra Thillainathan (Goldman Sachs) asked about the differentiation and strategic importance of the new full-face mask. CEO Michael Farrell emphasized the comfort benefits and high-margin potential, noting strong early success and plans for global rollout.
• Laura Sutcliffe (Citi) inquired about the scale of patient funnel leakage and potential for further acquisitions. Farrell explained ongoing efforts to minimize patient drop-off with AI tools and recent acquisitions, stating, “There is churn in the channel... our goal is to minimize the loss of people as they go through.”
• Saul Hadassin (Barrenjoey) questioned the evolution of U.S. manufacturing strategy. Farrell highlighted the company’s commitment to expanding production of devices and masks domestically to improve supply resilience and meet regulatory expectations.
• Lyanne Harrison (Bank of America) sought clarity on sustaining high single-digit device growth in the U.S. Farrell responded that demand initiatives, education programs, and partnerships with primary care physicians are expected to drive above-market growth, though not necessarily at consistently high single-digit rates.
• Brett Fishbin (KeyBanc Capital Markets) asked about the slower growth in the software segment. Farrell detailed a shift in investment focus toward higher-margin SaaS platforms, with plans to reaccelerate growth and improve profitability in the coming quarters.

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 $245.22, down from $252.34 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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