RESMED INC (RMD)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This report contains or may contain certain forward-looking statements and information that are based on the beliefs of our management as well as estimates and assumptions made by, and information currently available to, our management. All statements other than statements regarding historical facts are forward-looking statements. The words “believe,” “expect,” “intend,” “anticipate,” “will continue,” “will,” “estimate,” “plan,” “future” and other similar expressions, and negative statements of such expressions, generally identify forward-looking statements, including, in particular, statements regarding expectations of future revenue or earnings, expenses, new product development, new product launches, new markets for our products, the integration of acquisitions, our supply chain, domestic and international regulatory developments, litigation, tax outlook, and the expected impact of macroeconomic conditions on our business. These forward-looking statements are made in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements reflect the views of our management at the time the statements are made and are subject to a number of risks, uncertainties, estimates and assumptions, including, without limitation, and in addition to those identified in the text surrounding such statements, those identified in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and elsewhere in this report. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources.

In addition, important factors to consider in evaluating such forward-looking statements include changes or developments in healthcare reform, social, macroeconomic, market, legal or regulatory circumstances, including the impact of public health crises; changes in our business or growth strategy or an inability to execute our strategy due to changes in our industry or the economy generally, the emergence of new or growing competitors, disruptions and delays in the supply chain, the actions or omissions of third parties, including suppliers, customers, competitors and governmental authorities, geopolitical and economic conditions in foreign jurisdictions impacting our business, including new or increased tariffs, and various other factors. If any one or more of these risks or uncertainties materialize, or underlying estimates or assumptions prove incorrect, actual results may vary significantly from those expressed in our forward-looking statements, and there can be no assurance that the forward-looking statements contained in this report will in fact occur.

Before deciding to purchase, hold or sell our common stock, you should carefully consider the risks described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, in addition to the other cautionary statements and risks described elsewhere in this report and in our other filings with the Securities and Exchange Commission, or the SEC, including our subsequent reports on Forms 10-Q and 8-K. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any of these known or unknown risks or uncertainties actually occurs with material adverse effects on us, our business, financial condition and results of operations could be seriously harmed. In that event, the market price for our common stock will likely decline and you may lose all or part of your investment.

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PART I – FINANCIAL INFORMATION Item 2

RESMED INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following is an overview of our results of operations for the three and nine months ended March 31, 2026. Management’s discussion and analysis of financial condition and results of operations, or the MD&A, is intended to help the reader understand our results of operations and financial condition. It is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and notes included in this report.

We are a global leader in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing, or SDB, chronic obstructive pulmonary disease, neuromuscular disease and other chronic diseases. SDB includes obstructive sleep apnea and other respiratory disorders that occur during sleep. Our products and solutions are designed to improve patient quality of life, reduce the impact of chronic disease and lower healthcare costs as global healthcare systems continue to drive a shift in care from hospitals to the home and lower cost settings. Our digital cloud-based health software applications, along with our devices, are designed to provide connected care to improve patient outcomes and efficiencies for our customers.

Since the development of continuous positive airway pressure therapy, we have expanded our business by developing or acquiring a number of products and solutions for a broader range of respiratory disorders including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes and customer and provider business processes. Our growth has been fueled by geographic expansion, our research and product development efforts, acquisitions and an increasing awareness of SDB and respiratory conditions like chronic obstructive pulmonary disease as significant health concerns.

We are committed to ongoing investment in research and development and product enhancements. During the three months ended March 31, 2026, we invested $94.3 million on research and development activities, which represents 6.6% of net revenues, with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs. For example, our newest device, AirSense 11, introduced new features such as a touch screen, algorithms for patients new to therapy, digital enhancements, and over-the-air update capabilities. Our operations include residential care software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. These platforms comprise our Residential Care Software business and, along with our cloud-based remote monitoring and therapy management system, and a robust product pipeline, these products should continue to provide us with a strong platform for future growth.

We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry, or Sleep and Breathing Health, and the supply of business management software as a service to out-of-hospital health providers, or Residential Care Software.

Net revenue for the three months ended March 31, 2026 was $1.4 billion, an increase of 11% compared to the three months ended March 31, 2025. Gross margin was 62.2% for the three months ended March 31, 2026 compared to 59.3% for the three months ended March 31, 2025. Diluted earnings per share was $2.74 for the three months ended March 31, 2026, compared to diluted earnings per share of $2.48 for the three months ended March 31, 2025.

At March 31, 2026, our cash and cash equivalents totaled $1.7 billion, our total assets were $8.8 billion and our stockholders’ equity was $6.5 billion.

In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency” basis, which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP.

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PART I – FINANCIAL INFORMATION Item 2

RESMED INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Net Revenue

Net revenue for the three months ended March 31, 2026 increased to $1,431.4 million from $1,291.7 million for the three months ended March 31, 2025, an increase of $139.7 million or 11% (an 8% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):

*Constant currency numbers exclude the impact of movements in international currencies.

Sleep and Breathing Health

Net revenue from our Sleep and Breathing Health business for the three months ended March 31, 2026 was $1,260.5 million, an increase of 11% compared to net revenue for the three months ended March 31, 2025. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $35.2 million for the three months ended March 31, 2026. Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended March 31, 2026 increased by 8% compared to the three months ended March 31, 2025. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenu

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ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Management’s discussion and analysis of financial condition and results of operations, or the MD&A, is intended to help the reader understand our results of operations and financial condition. It is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and notes included in this report.

We are a global leader in digital health and cloud-connected medical devices. We design innovative technology with the intention to empower people to live happier, healthier lives. Our artificial intelligence, or AI, powered digital health solutions, cloud-connected devices and intelligent software are designed to make home healthcare more personalized, accessible and effective. By enabling better care, our products seek to improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems.

Since the development of continuous positive airway pressure therapy, we have expanded our business by developing or acquiring a number of innovative products and solutions for a broad range of sleep and related breathing health disorders including technologies to be applied in medical and consumer products, life support and ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, and dental devices. In addition, we are a leading provider of cloud-based health applications, software and devices designed to provide connected care, enabling clinicians to manage more patients efficiently and effectively, as well as enabling and encouraging patients’ long-term adherence to and satisfaction with their therapy. Our growth has been fueled by geographic expansion, our research and product development efforts, acquisitions and an increasing awareness of sleep and related breathing health conditions, like chronic obstructive pulmonary disease, as significant health concerns.

We are committed to ongoing investment in research and development and product enhancements. During fiscal year 2026, we invested $378 million on research and development activities, which represents 6.7% of net revenues with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs. For example, our newest device, AirSense 11, introduced new features such as a touch screen, algorithms for patients new to therapy, digital enhancements and over-the-air update capabilities. Our operations include residential care software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. These platforms, together with our cloud-based remote monitoring and therapy management system and robust product pipeline, should continue to provide a strong foundation for future growth.

We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry, or Sleep and Breathing Health, and the supply of business management software as a service to residential healthcare providers, or Residential Care Software.

In June 2026, we acquired Noctrix Health, LLC, or Noctrix, a company with an FDA De Novo classified medical device that treats restless legs syndrome. The acquisition expands our clinical sleep health portfolio into an adjacent area of unmet need. Noctrix will operate as a wholly owned subsidiary of Resmed.

On June 30, 2026, we entered into a definitive agreement to sell our MatrixCare business for $490 million in an all-cash transaction, subject to certain closing adjustments. The transaction includes MatrixCare and related software offerings historically sold under the MatrixCare brand, including Healthcare First, Citus, and home health and hospice solutions, collectively defined as the "MatrixCare business”. The transaction is expected to close in the first quarter of fiscal year 2027. During fiscal year 2026, the MatrixCare business represented approximately $220 million of revenue and approximately $28 million of operating profit, which included approximately $28 million of amortization from acquired intangibles. As of June 30, 2026, we determined that the MatrixCare business meets the criteria to be classified as held for sale. The results of operations of the MatrixCare business are included in continuing operations for all periods presented, as the disposition does not represent a strategic shift that will have a major effect on our operations or financial results and therefore does not meet the criteria to be classified as discontinued operations. Additional information regarding the sale of the MatrixCare business and the acquisition of Noctrix is included in Note 18 – Business Combinations and Divestitures of the Notes to Consolidated Financial Statements (Part II, Item 8).

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Net revenue in fiscal year 2026 increased to $5,653 million, from $5,146 million for the year ended June 30, 2025, an increase of $507 million or 10% compared to fiscal year 2025. Gross profit increased for the year ended June 30, 2026 to $3,452 million, from $3,055 million for the year ended June 30, 2025, an increase of $397 million or 13% compared to fiscal year 2025. Our net income for the year ended June 30, 2026 was $1,523 million, or $10.43 per diluted share, compared to net income of $1,401 million, or $9.51 per diluted share, for the year ended June 30, 2025.

Total operating cash flow for fiscal year 2026 was $1.8 billion and at June 30, 2026, our cash and cash equivalents totaled $1.5 billion. At June 30, 2026, our total assets were $9.0 billion and our stockholders’ equity was $6.6 billion. We paid a quarterly dividend of $0.60 per share during fiscal 2026 with a total amount of $350 million paid to stockholders.

In order to provide a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis”, which is in addition to the actual financial information presented. To calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to United States, or U.S., dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP.

For discussion related to the results of operations and changes in financial condition for the fiscal year ended June 30, 2025 compared to fiscal year June 30, 2024, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the Year Ended June 30, 2025, which was filed with the U.S. Securities and Exchange Commission, or SEC, on August 8, 2025.

Fiscal Year Ended June 30, 2026 Compared to Fiscal Year Ended June 30, 2025

Net Revenues

Net revenue for the year ended June 30, 2026 increased to $5,653 million from $5,146 million for the year ended June 30, 2025, an increase of $507 million or 10% (an 8% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region for the year ended June 30, 2026 compared to the year ended June 30, 2025 (in thousands):

(A)    Constant currency numbers exclude the impact of movements in international currencies.

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(B)    Historically we have presented our geographical split of revenue as “U.S., Canada, and Latin America” and “Combined Europe, Asia, and other markets”. Effective this quarter, this presentation has been renamed to Americas (formerly U.S., Canada, and Latin America) and Rest of World (formerly Combined Europe, Asia, and other markets). The methodology for attributing revenue to these geographies remains unchanged. Revenue from prior periods is consistent and comparable to previous reporting.

Sleep and Breathing Health

Net revenue from our Sleep and Breathing Health business for the year ended June 30, 2026 increased to $4,978 million from $4,505 million for the year ended June 30, 2025, an increase of $473 million or 10%. Movements in international currencies against the U.S. dollar positively impacted net revenues by approximately $83 million for the year ended June 30, 2026. Excluding the impact of currency movements, total net revenue from our Sleep and Breathing Health business for the year ended June 30, 2026 increased by 9% compared to the year ended June 30, 2025. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales across our sleep health portfolio, partially offset by lower unit sales of our life support devices.

Net revenue from our Sleep and Breathing Health business in the Americas for the year ended June 30, 2026 increased to $3,281 million from $2,998 million for the year ended June 30, 2025, an increase of $284 million or 9%. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales across our sleep health portfolio, partially offset by lower unit sales of our life support devices.

Net revenue from our Sleep and Breathing Health business in Rest of World increased for the year ended June 30, 2026 to $1,697 million from $1,507 million for the year ended June 30, 2025, an increase of $189 million or 13% (a 7% increase on a constant currency basis). The constant currency increase in device and mask sales in Rest of World was primarily attributable to increased demand and unit sales across our sleep health, partially offset by lower unit sales of our life support devices.

Net revenue from devices for the year ended June 30, 2026 increased to $2,892 million from $2,665 million for the year ended June 30, 2025, an increase of $227 million or 9%, including an increase of 7% in the Americas and an increase of 11% in Rest of World (a 6% increase on a constant currency basis). Excluding the impact of foreign currency movements, device sales for the year ended June 30, 2026 i

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