ResMed Targets 12%-14% EPS Growth as GLP-1 Patients Lift Sleep Therapy Demand

Key Points

• ResMed targets 12%–14% core EPS growth and 5%–7% core constant-currency revenue growth, supported by higher therapy adoption, resupply activity, product innovation and ongoing margin improvements.
• Patients prescribed both GLP-1 drugs and positive airway pressure therapy showed an 11-percentage-point higher therapy-start rate and stronger resupply rates than CPAP-only patients; ResMed estimates GLP-1s could add 50–125 basis points to Americas sleep-device growth.
• ResMed is reshaping its portfolio by acquiring restless-legs treatment maker Noctrix, divesting MatrixCare and sunsetting the Astral platform after fiscal 2027, while shifting non-invasive ventilation focus to Air11-based devices.

ResMed NYSE: RMD outlined its growth outlook, margin strategy and portfolio plans during a Morgan Stanley discussion, with executives emphasizing demand generation, patient adherence and ongoing product innovation in sleep and respiratory care.

Chairman and Chief Executive Officer Mick Farrell said the company has issued guidance for 5% to 7% core constant-currency revenue growth, including an estimated $75 million impact from its Astral field safety notice. Excluding that impact, Farrell said the outlook implies approximately 6.3% to 8.3% top-line growth. Chief Financial Officer Aaron Bloomer characterized the adjusted range as roughly 6.5% to 8.5% growth.

Farrell said the company expects low-double-digit EPS growth, while Bloomer said ResMed is targeting 12% to 14% core EPS growth for the year.

Demand Generation and Patient Conversion

Farrell described ResMed’s addressable market as 2.7 billion people worldwide with sleep-health or breathing-health disorders, including people with obstructive sleep apnea, insomnia, restless legs syndrome and chronic obstructive pulmonary disease.

The company is working to convert more patients from screening and diagnosis into long-term therapy. Farrell highlighted acquisitions including Ectosense, maker of the NightOwl home sleep apnea test; Somnoware, which provides workflow software for pulmonary physicians; and VirtuOx, which operates a home sleep apnea testing protocol.

ResMed has also conducted 95,000 continuing medical education interactions with 55,000 unique clinicians, most of whom were primary care physicians, Farrell said. The company is seeking to make referrals and home testing easier for primary care providers as more patients enter the system through consumer health technology and GLP-1-related care.

Farrell said ResMed aims to achieve or exceed mid-single-digit growth in Americas sleep devices and high-single-digit growth in masks and accessories. He pointed to 8% Americas sleep-device growth in the company’s most recently reported quarter.

On resupply, Farrell said more than 80% of the opportunity involves motivating existing patients to obtain replacement masks, tubing and humidifier components. The company has expanded its Brightree resupply offerings, added Snap automated resupply technology and introduced Snap Light for home medical equipment providers that do not use Brightree.

ResMed’s myAir patient app now has more than 10 million users, Farrell said. The company has also added its “Dawn” generative AI sleep-health concierge to the app, generating 1.5 million inquiries since its launch roughly a quarter and a half ago.

GLP-1 Patients Show Higher Therapy Engagement

Farrell said ResMed is tracking 2.5 million de-identified patients with prescriptions for both positive airway pressure therapy and newer-generation GLP-1 treatments. The company has found that patients in the GLP-1 cohort had an 11-percentage-point higher therapy start rate than a control group after receiving a prescription for CPAP, APAP or bilevel therapy.

At one year, the GLP-1 cohort had a resupply rate 300 basis points above the CPAP-only control group, according to Farrell. At three years, the difference widened to 600 basis points.

“There is no downside of someone having a GLP-1 prescription,” Farrell said, adding that the company is monitoring the population closely. He said the data suggest GLP-1s could add between 50 and 125 basis points to Americas sleep-device growth, rather than doubling the company’s growth rate.

Margins, Pricing and Investment

Bloomer said ResMed has expanded gross margin by more than 500 basis points over the past three years, but is facing inflation in freight, fuel, logistics and electromechanical components. He said cost increases have been particularly significant for components used in older products, including the AirSense 10 platform.

The company has begun implementing modest price increases, though Bloomer said pricing will represent only a small share of overall growth, which ResMed expects to be driven principally by volume. Pricing is expected to have little effect in the first quarter and build through the second, third and fourth quarters.

Farrell said ResMed continues to expect low-double-digit-basis-point gross-margin improvement annually through fiscal 2030. The company plans to offset cost pressures through supply-chain productivity initiatives, supplier cost-reduction programs and selective pricing.

ResMed also plans to support marketing efforts intended to normalize CPAP use and raise awareness of untreated sleep apnea, while using productivity improvements elsewhere in selling, general and administrative expenses to fund those investments. Bloomer said the company intends to maintain earnings growth while making disciplined investments to generate demand.

Portfolio Changes and Astral Sunset

Farrell said ResMed invested $340 million to acquire Noctrix, which offers a non-invasive, drug-free and reversible treatment for restless legs syndrome. He said Noctrix currently generates about $20 million in revenue.

Separately, ResMed divested its MatrixCare business for $490 million to Frazier Partners, exiting a slower-growth software-as-a-service market serving nursing homes, hospice providers and senior-living facilities.

The company also announced it will sunset its Astral platform after 15 years and will make no new Astral sales in fiscal 2027. ResMed previously took a $42 million charge related to the platform’s global field safety notice.

Farrell said the company will prioritize printed circuit board assemblies for patients affected by the field safety notification. ResMed is shifting its non-invasive ventilation focus toward AirCurve S, ST and ST-A devices on its Air11 platform, which were launched in the U.S. during the most recent quarter.

About ResMed (NYSE:RMD)

ResMed Inc is a medical equipment and software company that develops products and services for the diagnosis and treatment of sleep-disordered breathing and other respiratory conditions. Its offerings include continuous positive airway pressure (CPAP) and other positive airway pressure devices, masks, ventilation systems, oxygen-related solutions, and connected health technologies.

The company also provides cloud-based software and digital health platforms that help clinicians, home medical equipment providers, and patients monitor therapy, manage equipment, and support adherence to treatment.

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