Resmed CEO Mick Farrell (NYSE: RMD) reported “broad-based momentum” and strong 2025 third-quarter fiscal year results during the company’s April 23 earnings call.
Farrell credited Resmed’s “excellent top line and bottom line results” to the company’s “disciplined execution to capture growing demand for our products. Our continued success is driven by our market-leading value proposition with top-quality hardware and top-quality software products, as well as our expansive digital health software ecosystem, with cloud-connected devices, digital health platforms and investments in machine learning, artificial intelligence as well as generative AI technology.”
He also shared an update about the impact of tariffs on Resmed’s operations.
An evolving global trade environment
“As the global leader in helping patients with chronic respiratory conditions, we are closely monitoring the evolving global trade environment, particularly in the area of tariffs,” Farrell said on the call. As a board member of the Advanced Medical Technology Association (AdvaMed) and chair of the board’s international committee, Farrell said Resmed would “continue to urge countries around the world to exempt all medical devices from tariffs on a humanitarian basis,” he added.
Regarding Resmed specifically, Farrell had even better news.
“I can report that because our products are used to treat patients with chronic respiratory conditions, [they] have been subject to global tariff relief for decades,” he said. “We have reaffirmed that that is the case with federal authorities just this month in the current setting. In short, ResMed is very well positioned with exemptions in place for our products that are used to treat sleep apnea, as well as other chronic respiratory conditions.”
Chief Financial Officer Brett Sandercock also commented “on the expected impact of U.S. tariffs, particularly associated with the introduction of a 10% tariff on exports to the U.S. from Australia and Singapore. These locations are where we currently manufacture most of our devices and masks for the U.S. market.
“We have for many years been importing our products under a chapter of the harmonized tariff schedule of the United States that governs importation of certain medical devices, including equipment to treat sleep apnea and other chronic respiratory conditions. We have worked hard over the years to achieve that status and to maintain it for products we sell in the United States. As a result, we have historically paid negligible duties or tariffs on the importation of most of our products.”
Sandercock added that on April 5, “U.S. Customs and Border Protection issued a notice of implementation confirming that current tariff treatment of our products continues. Accordingly, we do not expect the introduction of U.S. tariffs to have a material impact on our financial results.”
NightOwl launch powers Resmed’s sleep apnea segment
Repeatedly during the call, Farrell emphasized the importance of Resmed’s disciplined, thoughtful approach in a potentially volatile business environment.
“ResMed is all about stability and balance in times like this,” he said. “Ultimately, we’re committed to make sure that sleep therapy, breathing therapy and health-care technology that’s delivered in the home is both accessible and affordable, as well as ensuring that the delivery of our solutions is consistently available for our patients, providers and all of the health-care partners in our global ecosystem.”
Farrell said Resmed is preparing to open a new manufacturing facility in Calabasas, California, which will “double the size of our current manufacturing footprint in the United States of America, serving as the hub of our research and development for our motor technology, increasing the manufacturing capacity of core motor technology even closer to our largest market here in the U.S., and expanding manufacturing of silicone mass cushions, leveraging advanced molding technology that Resmed leads the world in.”
In addition to helping Resmed to keep pace with the rapidly growing demand for sleep apnea masks, “We’re also investing in getting our products to our home-care providers even more efficiently here in the United States,” Farrell added. “Over half of our global research and development investment is now U.S.-based, with tenfold growth in American R&D over this last decade. These investments reflect our leadership, our economic development focus, and the health-care impact that we have as Resmed right here in the U.S., where we have our global headquarters and where we support our largest global market, the U.S. domestic market.”
Farrell said Resmed’s new NightOwl, a disposable sleep apnea diagnostic device worn on a patient’s fingertip, has seen “widespread adoption” and can help “more efficiently move patients through the screening and diagnostic funnel, so that physicians can then write prescriptions and home-care providers can then set up those patients on therapy and take care of them for life.
“Our investments in testing devices and diagnostic tracking software — which benefits potential patients, sleep labs and our home care providers — demonstrate Resmed’s depth of commitment to the entire sleep health and breathing health ecosystems.”
Evidence that sleep apnea interventions work
Farrell also shared research information that demonstrated the efficacy of sleep apnea therapy. He pointed out a March 2025 study — “Positive airway pressure therapy and all-cause and cardiovascular mortality in people with obstructive sleep apnea“ — published in The Lancet Respiratory Medicine found that people with sleep apnea who used CPAP therapy “reduced all-cause mortality by 37%. CPAP therapy reduces cardiovascular mortality by 55%. And this study wasn’t small; this meta-analysis included over 1 million participants.
“Here at Resmed, we’ve known for decades that CPAP improves quality of life for sleep apnea patients. We’ve talked internally about these improvements in cardiovascular and mortality health. But now we have proof that it helps people to ultimately live longer and to live better. These data show that CPAP is not just another medical therapy. It’s literally a case of life and death. So here at Resmed, we make the smallest, quietest, most comfortable, most cloud-connected and most intelligent therapies for sleep apnea, insomnia and respiratory insufficiency.”
During the conference call’s Q&A session, Farrell was asked if sleep apnea patients who lost weight after using GLP-1 medications to manage type 2 diabetes might choose to discontinue their CPAP therapy.
“We’re now tracking over 1 million patients, and we see that high start rate on CPAP therapy for a GLP-1 prescribed patient plus a PAP prescription,” he answered. “We see that high reimbursement rate at one year, and we see a higher reimbursement rate at two years; we’re tracking that, and it’s really consistent.”
While industry pundits initially wondered if patients on sleep apnea therapy would start using GLP-1 medications, lose some weight, and then discontinue their sleep apnea regimens, Farrell said, “It’s just not happening. Talk to any patient, do the clinical research, look at the clinical data. If you don’t believe our 1 million patients in our study, go interview a doctor who says, ‘No, absolutely not. They wouldn’t think about it. They were actually doubling down on their use of [sleep apnea therapy] because they’re feeling better across the board.’”
CFO Sandercock reported “strong financial performance in Q3,” with group revenue of $1.29 billion. That represented “an 8% headline increase and 9% in constant currency terms.”
“Revenue growth reflects positive contributions across our product and resupply portfolio,” Sandercock added. “Device sales in the U.S., Canada and Latin America increased by 6%; masks and other sales increased by 13%, reflecting continued growth in resupply and new patient setups. In Europe, Asia and other regions, device sales increased by 9% on a constant currency basis, while masks and other sales increased by 7% on a constant currency basis.”
“This quarter’s results show the strength of our strategy, our investment in R&D, the clarity of our execution and the scale of our impact,” Farrell said. “We launched a renewed and refreshed brand. We scaled digital diagnostics and titration tools. We expanded intelligent therapy. We activated new patients. Really importantly, we replenish supplies for existing patients worldwide.
“And we remain on track toward our ambitious goal of improving 500 million people’s lives in 2030, half a billion worldwide.”
