ResMed Posts Strong Q2 Growth, Eyes GLP-1 Tailwind and AI-Driven Innovation

San Diego-based medical device leader ResMed (NYSE: RMD) showcased a quarter of solid financial performance and strategic momentum, beating market expectations on key metrics. The company's latest earnings report underscores its dual focus on operational execution and innovation in the sleep and respiratory care market.

For the quarter ending December 31, 2025, ResMed reported revenue of $1.42 billion, marking an 11% increase year-over-year. On a constant currency basis, growth stood at a healthy 9%. CEO Mick Farrell attributed the results to "disciplined execution across our supply chain and commercial teams," which fueled a 16% jump in GAAP earnings per share.

Digging into the segments, the core hardware business showed resilience. Global device sales grew 7%, while the masks and accessories segment—a critical driver of recurring revenue—surged 14% on a constant currency basis. CFO Brett Sandercock noted particular strength in the Americas and a return to high single-digit growth in masks for Europe and Asia, fueled by new product launches like the fabric-based F30i series.

A significant portion of the earnings call was devoted to ResMed's software and AI initiatives. Farrell highlighted "Comfort Match," an FDA-cleared AI tool within the myAir platform that recommends personalized comfort settings for CPAP users. "This isn't just a feature; it's our first AI-enabled medical device designed to improve long-term therapy adherence," Farrell stated, signaling a deeper push into data-driven care.

Perhaps the most closely watched topic was management's updated stance on GLP-1 weight-loss drugs, such as Ozempic and Mounjaro. Once seen as a potential threat to sleep apnea diagnosis, ResMed now positions them as a tailwind. Citing data from nearly 2 million patients, Farrell revealed that individuals prescribed both a GLP-1 and CPAP therapy are 10-11% more likely to start treatment and show higher long-term resupply rates. "The data is becoming clearer," he said. "These medications are bringing more patients into the care continuum."

Profitability metrics also improved, with gross margin expanding 110 basis points year-over-year to between 62-63%. This was partly offset by increased investment in sales, marketing, and R&D, which grew 15% and 12% respectively, as the company funds new product launches and direct-to-consumer campaigns.

In a sign of confidence, the board approved a quarterly dividend of $0.60 per share and announced an acceleration of its share repurchase program, planning to buy back over $600 million in stock this fiscal year.

Analyst & Investor Commentary:

Dr. Anya Sharma, Healthcare Portfolio Manager at Horizon Capital: "ResMed is executing a masterful pivot. They're no longer just a CPAP company; they're building a connected ecosystem. The early data on GLP-1s as a demand driver is compelling and could reshape long-term growth models for the entire sleep therapy sector."

Michael Torres, Independent Retail Investor: "The numbers speak for themselves—margins up, cash flow strong, buybacks increased. This is a textbook example of a high-quality compounder. My only question is when the market will fully price in the software and AI initiatives, which seem undervalued relative to the hardware business."

Sarah Chen, Editor at 'The Critical Investor' Newsletter: "Let's not get swept away by the 'AI' buzzword. A comfort setting recommender is a far cry from transformative AI. And the GLP-1 'tailwind' narrative feels conveniently optimistic—correlation isn't causation. They're spending heavily on marketing to keep growth alive, and the software division is still a laggard. I'm not convinced the premium valuation is justified."

David R. Miller, Retired Pulmonologist: "From a clinical perspective, the focus on adherence through tools like Comfort Match is the right one. The biggest challenge in sleep medicine isn't diagnosis; it's getting patients to use the device every night. If AI can help with that, even incrementally, it's a meaningful advance. The continued medical education figures for clinicians are also very encouraging."