ResMed slides 3% after Q3 earnings: beat on sales, but costs and outlook worry
ResMed shares fell about 3% on April 30, 2026 after reporting fiscal Q3 results that topped expectations but weren’t enough to reset sentiment after a steep drawdown. Investors focused on costs and outlook as the company disclosed higher SG&A and acquisition/portfolio-review expenses despite margin expansion.
1. What’s moving the stock
ResMed (RMD) traded down roughly 3% on Thursday, April 30, 2026, after releasing fiscal third-quarter results for the period ended March 31, 2026. The company posted revenue of $1.431 billion (+11% year over year) and GAAP diluted EPS of $2.74 (non-GAAP diluted EPS of $2.86), alongside gross margin of 62.2% (non-GAAP 62.8%). Despite the growth and margin gains, the market reaction suggested expectations were higher after the stock’s prior decline, with attention turning to operating expense growth and what the quarter implies for the remainder of the fiscal year.
2. The key debate: strong fundamentals vs. lingering overhangs
Heading into the print, investors were looking for clarity on two recurring issues weighing on the sleep-apnea device group: whether GLP-1 weight-loss drugs could eventually shrink the sleep-apnea therapy market, and when Philips could materially return to the U.S. market. With the stock already near 52-week lows, the quarter needed to do more than “beat”—it needed to reduce uncertainty and reinforce durability of demand and pricing power. The results showed continued strength in ResMed’s business, but the post-earnings pullback reflected lingering skepticism and a high bar for incremental confidence.
3. Costs and one-time items drew attention
ResMed’s SG&A rose to $285.7 million (+16% year over year), and the company also recorded $5.9 million of acquisition and portfolio-review related expenses tied to evaluating strategic transactions. The combination of higher operating expenses and deal-related costs likely contributed to the stock’s decline even as profitability improved: income from operations increased 17% to $499.8 million, and non-GAAP net income increased 20% to $417 million.
4. Margin expansion and capital returns were bright spots
Management highlighted a 290-basis-point gross margin improvement, driven mainly by component cost improvements and manufacturing/logistics efficiencies, plus smaller benefits from mix and currency. ResMed also returned cash to shareholders, paying $87 million in dividends and repurchasing 673,000 shares for $175 million during the quarter, while declaring a quarterly dividend of $0.60 per share (record date May 14, 2026; payable June 18, 2026). The company also flagged an operational expansion with a new U.S. distribution center in Greenwood, Indiana, planned to begin operations in 2027.