ResMed Inc.
ResMed Inc. (RMD)
Overview
ResMed is a global medical device and digital health company that designs, manufactures, and sells cloud-connected devices and software for the diagnosis and treatment of sleep apnea, chronic obstructive pulmonary disease (COPD), and other respiratory conditions, along with software platforms that support out-of-hospital care settings such as home health, hospice, and senior living. Founded in Australia in 1989 by Peter Farrell and now headquartered in San Diego, California, ResMed operates in more than 140 countries with manufacturing facilities in Australia, Singapore, France, and the United States. The company is a component of the S&P 500 and, for fiscal year 2026 (ended June 30, 2026), reported revenue of $5.65 billion and net income of $1.52 billion, with roughly 10,000+ employees worldwide.
What They Do & How They Make Money
ResMed's core business is built around a "razor and blades" model applied to medical devices: it sells continuous positive airway pressure (CPAP) and bilevel machines—used to treat obstructive sleep apnea by keeping a patient's airway open during sleep—along with the masks, tubing, filters, and other accessories that patients must regularly replace. The devices themselves (sold under brand names like AirSense and AirCurve) generate a large upfront or financed sale, but the real durability of the business comes from the recurring, high-margin replacement of masks and consumables that patients need every few months for hygiene and therapy-effectiveness reasons—creating a steady, predictable revenue stream that compounds as ResMed's installed base of active patients grows. ResMed further monetizes its device ecosystem through connected-health software: its devices transmit usage and therapy data to cloud platforms (such as AirView for clinicians and myAir for patients), which insurers and health systems increasingly require to verify therapy compliance before reimbursing costs—giving ResMed a data and workflow moat on top of the hardware sale. Separately, the company earns software-as-a-service (SaaS) subscription revenue by selling care-coordination, scheduling, and record-keeping software to home health, hospice, and senior-living care providers—an adjacent but distinct business from its sleep and respiratory hardware.
Business Segments
ResMed organizes its reporting around two segments:
- Sleep and Breathing Health (roughly 88% of FY2026 revenue, $4.98 billion) — the core device and consumables business, further split into:
- Devices ($2.89 billion) — CPAP/bilevel flow generators and diagnostic sleep-testing equipment for treating obstructive sleep apnea, COPD, and other respiratory disorders.
- Masks and other accessories ($2.09 billion) — the recurring, high-margin consumables (masks, cushions, tubing, humidifiers) that patients replace regularly.
- Residential Care Software (about $676 million in FY2026) — cloud-based SaaS platforms (including the Brightree and MatrixCare businesses, the latter of which ResMed announced it would divest in fiscal 2027) that provide clinical, operational, and billing software for home medical equipment providers, home health agencies, hospices, and senior-living/long-term-care facilities.
Geographically, roughly 58% of FY2026 revenue came from the Americas and the remainder from a "Rest of World" segment (EMEA and Asia-Pacific) that has been growing faster than the Americas.
Competitors
- Philips Respironics — ResMed's most direct, long-standing rival across CPAP devices, masks, and respiratory care equipment; Philips' 2021 product recall over foam degradation significantly damaged its market position and shifted share toward ResMed.
- Fisher & Paykel Healthcare — a premium New Zealand-based competitor particularly strong in masks, humidification, and respiratory support products.
- BMC Medical and other lower-cost Asian manufacturers — compete primarily on price in emerging markets and lower-cost distribution channels.
- Inspire Medical Systems — offers an implantable neurostimulation alternative to CPAP therapy, a smaller but growing therapy-substitution threat.
- Oral appliance makers (e.g., SomnoMed) and, more recently, GLP-1 weight-loss drugs (e.g., Ozempic, Zepbound) — an indirect but closely watched competitive/complementary threat, since significant weight loss can reduce sleep apnea severity for some patients, though clinical evidence also shows many patients still require PAP therapy.
- In residential care software, ResMed's SaaS platforms compete with other home-health and senior-care software vendors such as WellSky and PointClickCare.
Competitive Position
ResMed's competitive moat rests on three reinforcing pillars: an installed base of millions of patients that generates recurring consumables revenue; a connected-device ecosystem (AirSense/AirCurve devices paired with AirView clinician software and the myAir patient app) that creates data lock-in and improves therapy adherence, which increasingly matters for insurance reimbursement; and a reputation for clinical reliability that was further strengthened when its largest rival, Philips Respironics, suffered a multi-year product recall that pushed many patients and providers toward ResMed. This has allowed ResMed to command premium pricing and gain durable market share versus lower-cost Asian entrants, which mainly compete in less regulated or price-sensitive channels. The large and still-underdiagnosed global sleep apnea population (ResMed estimates roughly 1 billion people worldwide have obstructive sleep apnea, with only a fraction diagnosed and treated) gives the company a long runway of unit growth independent of competitive share shifts. Key risks include the emergence of GLP-1 drugs as a potential substitute or complement to PAP therapy (a debate still being resolved by clinical data), reimbursement and regulatory pressure from government and private payers, potential pricing competition from Philips as it works to regain FDA clearance and rebuild trust following its recall, currency exposure given ResMed's substantial non-U.S. revenue, and execution risk around ongoing portfolio moves such as the planned divestiture of its MatrixCare software business and continued acquisitions (e.g., Noctrix Health) to expand into adjacent therapy areas like restless leg syndrome.