RESMED INC 10-Q

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. 25 Table of Contents 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 six months ended December 31, 2025. 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 December 31, 2025, we invested $91.0 million on research and development activities, which represents 6.4% 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 December 31, 2025 was $1.4 billion, an increase of 11% compared to the three months ended December 31, 2024. Gross margin was 61.8% for the three months ended December 31, 2025 compared to 58.6% for the three months ended December 31, 2024. Diluted earnings per share was $2.68 for the three months ended December 31, 2025, compared to diluted earnings per share of $2.34 for the three months ended December 31, 2024. At December 31, 2025, our cash and cash equivalents totaled $1.4 billion, our total assets were $8.5 billion and our stockholders’ equity was $6.3 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. 26 Table of Contents 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 December 31, 2025 Compared to the Three Months Ended December 31, 2024 Net Revenue Net revenue for the three months ended December 31, 2025 increased to $1,422.8 million from $1,282.1 million for the three months ended December 31, 2024, an increase of $140.7 million or 11% (a 9% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region (in thousands): Three Months Ended December 31, % Change Constant Currency* 2025 2024 U.S., Canada and Latin America Devices $ 448,047 $ 414,453 8 % Masks and other 386,984 334,496 16 Total U.S., Canada and Latin America $ 835,031 $ 748,949 11 % Combined Europe, Asia and other markets Devices $ 278,167 $ 254,849 9 % 5 % Masks and other 142,740 121,795 17 8 Total Combined Europe, Asia and other markets $ 420,907 $ 376,644 12 % 6 % Global revenue Total Devices $ 726,214 $ 669,302 9 % 7 % Total Masks and other 529,724 456,291 16 14 Total Sleep and Breathing Health $ 1,255,938 $ 1,125,593 12 % 10 % Residential Care Software 166,870 156,496 7 % 5 % Total $ 1,422,808 $ 1,282,089 11 % 9 % * 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 December 31, 2025 was $1,255.9 million, an increase of 12% compared to net revenue for the three months ended December 31, 2024. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $22.5 million for the three months ended December 31, 2025. Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended December 31, 2025 increased by 10% compared to the three months ended December 31, 2024. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales. Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the three months ended December 31, 2025 increased to $835.0 million from $748.9 million for the three months ended December 31, 2024, an increase of $86.1 million or 11%. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales. Net revenue from our Sleep and Breathing Health business in combined Europe, Asia and other markets increased for the three months ended December 31, 2025 to $420.9 million from $376.6 million for the three months ended December 31, 2024, an increase of $44.3 million or 12% (a 6% increase on a constant currency basis). The constant currency increase in device and mask sales in combined Europe, Asia and other was primarily attributable to increased demand and unit sales. Net revenue from devices for the three months ended December 31, 2025 increased to $726.2 million from $669.3 million for the three months ended December 31, 2024, an increase of $56.9 million or 9%, including an increase of 8% in the U.S., Canada and Latin America and an increase of 9% in combined Europe, Asia and other markets (a 5% increase on a constant currency basis). Excluding the impact of foreign currency movements, device sales for the three months ended December 31, 2025 increased by 7%. 27 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Net revenue from masks and other for the three months ended December 31, 2025 increased to $529.7 million from $456.3 million for the three months ended December 31, 2024, an increase of $73.4 million or 16%, including an increase of 16% in the U.S., Canada and Latin America and an increase of 17% in combined Europe, Asia and other markets (an 8% increase on a constant currency basis). Excluding the impact of foreign currency movements, masks and other sales for the three months ended December 31, 2025 increased by 14%. Residential Care Software Net revenue from our Residential Care Software business for the three months ended December 31, 2025 increased to $166.9 million from $156.5 million for the three months ended December 31, 2024, an increase of $10.4 million or 7%. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $3.0 million for the three months ended December 31, 2025. Excluding the impact of currency movements, net revenue from our Residential Care Software business for the three months ended December 31, 2025 increased by 5% compared to the three months ended December 31, 2024. The increase was predominantly due to strong growth in the MEDIFOX DAN and Home and Hospice business verticals, partially offset by weaker performance in our Senior Living and Long-Term Care business vertical. Six Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024 Net Revenue Net revenue for the six months ended December 31, 2025 increased to $2,758.4 million from $2,506.6 million for the six months ended December 31, 2024, an increase of $251.8 million or 10% (an 8% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region (in thousands): Six Months Ended December 31, % Change Constant Currency* 2025 2024 U.S., Canada and Latin America Devices $ 861,485 $ 798,983 8 % Masks and other 748,300 657,271 14 Total U.S., Canada and Latin America $ 1,609,785 $ 1,456,254 11 % Combined Europe, Asia and other markets Devices $ 545,039 $ 496,104 10 % 6 % Masks and other 270,560 240,972 12 6 Total Combined Europe, Asia and other markets $ 815,599 $ 737,076 11 % 6 % Global revenue Total Devices $ 1,406,524 $ 1,295,087 9 % 7 % Total Masks and other 1,018,860 898,243 13 12 Total Sleep and Breathing Health $ 2,425,384 $ 2,193,330 11 % 9 % Residential Care Software 333,006 313,268 6 % 5 % Total $ 2,758,390 $ 2,506,598 10 % 8 % * 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 six months ended December 31, 2025 was $2,425.4 million, an increase of 11% compared to net revenue for the six months ended December 31, 2024. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $36.0 million for the six months ended December 31, 2025. Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the six months ended December 31, 2025 increased by 9% compared to the six months ended December 31, 2024. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales. 28 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Net revenue from our Sleep and Breathing Health business in the U.S., Canada and Latin America for the six months ended December 31, 2025 increased to $1,609.8 million from $1,456.3 million for the six months ended December 31, 2024, an increase of $153.5 million or 11%. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales . Net revenue in combined Europe, Asia and other markets increased for the six months ended December 31, 2025 to $815.6 million from $737.1 million for the six months ended December 31, 2024, an increase of $78.5 million or 11% (a 6% increase on a constant currency basis). The constant currency increase in device and mask sales in combined Europe, Asia and other markets was primarily attributable to increased demand and unit sales. Net revenue from devices for the six months ended December 31, 2025 increased to $1,406.5 million from $1,295.1 million for the six months ended December 31, 2024, an increase of $111.4 million or 9%, including an increase of 8% in the U.S., Canada and Latin America and an increase of 10% in combined Europe, Asia and other markets (a 6% increase on a constant currency basis). Excluding the impact of foreign currency movements, device sales for the six months ended December 31, 2025 increased by 7%. Net revenue from masks and other for the six months ended December 31, 2025 increased to $1,018.9 million from $898.2 million for the six months ended December 31, 2024, an increase of $120.6 million or 13%, including an increase of 14% in the U.S., Canada and Latin America and an increase of 12% in combined Europe, Asia and other markets (a 6% increase on a constant currency basis). Excluding the impact of foreign currency movements, masks and other sales increased by 12%, compared to the six months ended December 31, 2024. Residential Care Software Net revenue from our Residential Care Software business for the six months ended December 31, 2025 increased to $333.0 million from $313.3 million for the six months ended December 31, 2024, an increase of $19.7 million or 6%. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $5.0 million for the six months ended December 31, 2025. Excluding the impact of currency movements, net revenue from our Residential Care Software business for the six months ended December 31, 2025 increased by 5% compared to the six months ended December 31, 2024. The increase was predominantly due to continued growth in the MEDIFOX DAN vertical within our Residential Care Software business, partially offset by weaker performance in our Senior Living and Long-Term Care business vertical. Gross Profit and Gross Margin Gross profit increased for the three months ended December 31, 2025 to $878.7 million from $751.3 million for the three months ended December 31, 2024, an increase of $127.4 million or 17%. Gross margin, which is gross profit as a percentage of net revenue, for the three months ended December 31, 2025 was 61.8% compared to 58.6% for the three months ended December 31, 2024. The increase in gross margin for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 was due primarily to manufacturing and logistics efficiencies and component cost improvements. Gross profit increased for the six months ended December 31, 2025 to $1,699.5 million from $1,468.5 million for the six months ended December 31, 2024, an increase of $231.0 million or 16%. Gross margin for the six months ended December 31, 2025 was 61.6% compared to 58.6% for the six months ended December 31, 2024. The increase in gross margin for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 was due primarily to manufacturing and logistics efficiencies and component cost improvements. 29 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Operating Expenses The following table summarizes our operating expenses (in thousands): Three Months Ended December 31, Change % Change Constant Currency 2025 2024 Selling, general, and administrative $ 278,396 $ 241,613 $ 36,783 15 % 12 % as a % of net revenue 19.6 % 18.8 % Research and development $ 90,969 $ 81,372 $ 9,597 12 % 10 % as a % of net revenue 6.4 % 6.3 % Amortization of acquired intangible assets $ 11,764 $ 11,047 $ 717 6 % 2 % Six Months Ended December 31, Change % Change Constant Currency 2025 2024 Selling, general, and administrative $ 537,590 $ 480,592 $ 56,998 12 % 10 % as a % of net revenue 19.5 % 19.2 % Research and development $ 178,292 $ 160,897 $ 17,395 11 % 10 % as a % of net revenue 6.5 % 6.4 % Amortization of acquired intangible assets $ 23,721 $ 22,451 $ 1,270 6 % 2 % Selling, General, and Administrative Expenses Selling, general, and administrative expenses increased for the three months ended December 31, 2025 to $278.4 million from $241.6 million for the three months ended December 31, 2024, an increase of $36.8 million or 15%. Selling, general, and administrative expenses were unfavorably impacted by the movement of international currencies against the U.S. dollar, which increased our expenses by approximately $7.5 million, as reported in U.S. dollars. Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended December 31, 2025 increased by 12% compared to the three months ended December 31, 2024. As a percentage of net revenue, selling, general, and administrative expenses were 19.6% for the three months ended December 31, 2025, compared to 18.8% for the three months ended December 31, 2024. The constant currency increase in selling, general, and administrative expenses during the three months ended December 31, 2025 compared to the three months ended December 31, 2024 was primarily due to employee-related costs, additional expenses associated with our VirtuOx acquisition during the three months ended June 30, 2025 and marketing and technology investments. Selling, general, and administrative expenses increased for the six months ended December 31, 2025 to $537.6 million from $480.6 million for the six months ended December 31, 2024, an increase of $57.0 million or 12%. Selling, general, and administrative expenses were unfavorably impacted by the movement of international currencies against the U.S. dollar, which increased our expenses by approximately $11.0 million, as reported in U.S. dollars. Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the six months ended December 31, 2025 increased by 10% compared to the six months ended December 31, 2024. As a percentage of net revenue, selling, general, and administrative expenses were 19.5% for the six months ended December 31, 2025, compared to 19.2% for the six months ended December 31, 2024. The constant currency increase in selling, general, and administrative expenses during the six months ended December 31, 2025 compared to the six months ended December 31, 2024 was primarily due to employee-related costs, additional expenses associated with our VirtuOx acquisition during the three months ended June 30, 2025 and marketing and technology investments. Research and Development Expenses Research and development expenses increased for the three months ended December 31, 2025 to $91.0 million from $81.4 million for the three months ended December 31, 2024, an increase of $9.6 million, or 12%. Research and development expenses were unfavorably impacted by the movement of international currencies against the U.S. dollar, which increased 30 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations our expenses by approximately $1.1 million for the three months ended December 31, 2025, as reported in U.S. dollars Excluding the impact of foreign currency movements, research and development expenses increased by 10% compared to the three months ended December 31, 2024. As a percentage of net revenue, research and development expenses were 6.4% for the three months ended December 31, 2025 and 6.3% for the three months ended December 31, 2024. The increase in research and development expenses during the three months ended December 31, 2025 compared to the three months ended December 31, 2024 was primarily due to increases in employee-related costs. Research and development expenses increased for the six months ended December 31, 2025 to $178.3 million from $160.9 million for the six months ended December 31, 2024, an increase of $17.4 million, or 11%. Research and development expenses were unfavorably impacted by the movement of international currencies against the U.S. dollar, which increased our expenses by approximately $1.1 million for the six months ended December 31, 2025, as reported in U.S. dollars. Excluding the impact of foreign currency movements, research and development expenses increased by 10% compared to the six months ended December 31, 2024. As a percentage of net revenue, research and development expenses were 6.5% for the six months ended December 31, 2025, compared to 6.4% for the six months ended December 31, 2024. The increase in research and development expenses in constant currency terms was primarily due to increases in employee-related costs. Amortization of Acquired Intangible Assets Amortization of acquired intangible assets for the three months ended December 31, 2025 totaled $11.8 million compared to $11.0 million for the three months ended December 31, 2024. Amortization of acquired intangible assets for the six months ended December 31, 2025 totaled $23.7 million compared to $22.5 million for the six months ended December 31, 2024. The increase in amortization of acquired intangible assets for the three and six months ended December 31, 2025 compared to the three and six months ended December 31, 2024 is due to amortization of intangibles from the VirtuOx acquisition during the three months ended June 30, 2025. Restructuring Expenses During the three and six months ended December 31, 2025, we recorded $5.9 million and $21.7 million of restructuring related charges, respectively, for employee severance and one-time termination benefits associated with workforce planning activities. We did not record any restructuring expenses during the three and six months ended December 31, 2024. Total Other Income (Loss), Net The following table summarizes our other income (loss) (in thousands): Three Months Ended December 31, 2025 2024 Change Interest income (expense), net $ 7,949 $ (775) $ 8,724 Gain (loss) attributable to equity method investments 1,515 1,077 438 Gain (loss) on equity investments 306 (1,439) 1,745 Other, net (5,282) 2,216 (7,498) Total other income (loss), net $ 4,488 $ 1,079 $ 3,409 31 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Six Months Ended December 31, 2025 2024 Change Interest (expense) income, net $ 16,742 $ (2,436) $ 19,178 Gain (loss) attributable to equity method investments 3,004 2,040 964 Gain (loss) on equity investments (5,884) (2,119) (3,765) Other, net (9,117) (219) (8,898) Total other income (loss), net $ 4,745 $ (2,734) $ 7,479 Total other income (loss), net for the three months ended December 31, 2025 was income of $4.5 million compared to income of $1.1 million for the three months ended December 31, 2024. We recorded interest income, net of $7.9 million for the three months ended December 31, 2025 compared to interest expense, net of $0.8 million for the three months ended December 31, 2024 due to lower debt levels following repayments on our revolving credit facility. Additionally, we recorded a gain associated with our equity investments of $0.3 million for the three months ended December 31, 2025 compared to a loss of $1.4 million for the three months ended December 31, 2024. Total other income (loss), net for the six months ended December 31, 2025 was income of $4.7 million compared to a loss of $2.7 million for the six months ended December 31, 2024. We recorded interest income, net of $16.7 million for the six months ended December 31, 2025 compared to interest expense, net of $2.4 million for the six months ended December 31, 2024 due to lower debt levels following repayments on our revolving credit facility. Interest income, net, was partially offset by a loss associated with our equity investments of $5.9 million for the six months ended December 31, 2025 compared to a loss of $2.1 million for the six months ended December 31, 2024. Income Taxes Our effective income tax rate for the three and six months ended December 31, 2025 was 20.9% and 21.4%, respectively, as compared to 17.6% and 18.2% for the three and six months ended December 31, 2024, respectively. Our effective rate of 20.9% for the three months ended December 31, 2025 differs from the statutory rate of 21.0% primarily due to foreign operations and research credits. The increase in our effective tax rate for the three and six months ended December 31, 2025 was primarily due to the impact of global minimum taxes implemented in accordance with Pillar Two and a shift in our global mix of earnings. Our Singapore operations operate under certain tax holidays and tax incentive programs that will expire in whole or in part at various dates through June 30, 2030. As a result of the U.S. Tax Cuts and Jobs Act of 2017, we treated all non-U.S. historical earnings as taxable during the year ended June 30, 2018. Therefore, future repatriation of cash held by our non-U.S. subsidiaries will generally not be subject to U.S. federal tax, if repatriated. The Organization of Economic Co-operation and Development, or the OECD, and the G20 Inclusive Framework on Base Erosion and Profit Shifting, or the Inclusive Framework, has put forth two proposals—Pillar One and Pillar Two—that (i) revise the existing profit allocation and nexus rules and (ii) ensure a minimal level of taxation, respectively. Effective in our fiscal year beginning July 1, 2024, various jurisdictions in which we operate began implementing the global minimum tax prescribed under Pillar Two. Pillar Two legislation in effect as of December 31, 2025 has been incorporated into our condensed consolidated financial statements. On January 5, 2026, the OECD issued administrative guidance regarding the Side-by-Side, or SbS, Safe Harbor under the Pillar Two global minimum tax framework, which is expected to exempt U.S. companies and their subsidiaries from certain provisions of Pillar Two beginning in fiscal year 2027. The SbS Safe Harbor does not impact us in the current fiscal year. However, we will continue to monitor regulatory developments and the implementation of the SbS Safe Harbor in the jurisdictions in which we operate. Net Income and Earnings per Share As a result of the factors above, our net income for the three months ended December 31, 2025 was $392.6 million compared to $344.6 million for the three months ended December 31, 2024, an increase of $48.0 million, or 14%. Our diluted earnings per share for the three months ended December 31, 2025 was $2.68 per diluted share compared to $2.34 for the three months ended December 31, 2024, an increase of $0.34, or 15%. 32 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations As a result of the factors above, our net income for the six months ended December 31, 2025 was $741.1 million compared to $656.0 million for the six months ended December 31, 2024, an increase of $85.2 million, or 13%. Our diluted earnings per share for the six months ended December 31, 2025 was $5.05 per diluted share compared to $4.45 for the six months ended December 31, 2024, an increase of $0.60, or 13%. Summary of Non-GAAP Financial Measures In addition to financial information prepared in accordance with GAAP, our management uses certain non-GAAP financial measures, such as non-GAAP revenue, non-GAAP cost of sales, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP net income, and non-GAAP diluted earnings per share, in evaluating the performance of our business. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide investors better insight when evaluating our performance from core operations and can provide more consistent financial reporting across periods. For these reasons, we use non-GAAP information internally in planning, forecasting, and evaluating the results of operations in the current period and in comparing it to past periods. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Non-GAAP financial measures as presented herein may not be comparable to similarly titled measures used by other companies. The measure “non-GAAP cost of sales” is equal to GAAP cost of sales less amortization of acquired intangible assets relating to cost of sales. The measure “non-GAAP gross profit” is the difference between GAAP net revenue and non-GAAP cost of sales, and “non-GAAP gross margin” is the ratio of non-GAAP gross profit to GAAP net revenue. These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except percentages): Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 GAAP Net revenue $ 1,422,808 $ 1,282,089 $ 2,758,390 $ 2,506,598 GAAP Cost of sales $ 544,084 $ 530,814 $ 1,058,847 $ 1,038,104 Less: Amortization of acquired intangibles (7,808) (7,634) (15,630) (15,304) Non-GAAP cost of sales $ 536,276 $ 523,180 $ 1,043,217 $ 1,022,800 GAAP gross profit $ 878,724 $ 751,275 $ 1,699,543 $ 1,468,494 GAAP gross margin 61.8 % 58.6 % 61.6 % 58.6 % Non-GAAP gross profit $ 886,532 $ 758,909 $ 1,715,173 $ 1,483,798 Non-GAAP gross margin 62.3 % 59.2 % 62.2 % 59.2 % The measure “non-GAAP income from operations” is equal to GAAP income from operations once adjusted for amortization of acquired intangibles and restructuring expenses. Non-GAAP income from operations is reconciled with GAAP income from operations below (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 GAAP income from operations $ 491,660 $ 417,243 $ 938,195 $ 804,554 Amortization of acquired intangibles - cost of sales 7,808 7,634 15,630 15,304 Amortization of acquired intangibles - operating expenses 11,764 11,047 23,721 22,451 Restructuring expenses 5,935 — 21,745 — Non-GAAP income from operations $ 517,167 $ 435,924 $ 999,291 $ 842,309 The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles, restructuring expenses and associated tax effects. The measure “non-GAAP diluted earnings per share” is the 33 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations ratio of non-GAAP net income to diluted shares outstanding. These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except for per share amounts): Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 GAAP net income $ 392,593 $ 344,622 $ 741,129 $ 655,977 Amortization of acquired intangibles - cost of sales 7,808 7,634 15,630 15,304 Amortization of acquired intangibles - operating expenses 11,764 11,047 23,721 22,451 Restructuring expenses 5,935 — 21,745 — Income tax effect on non-GAAP adjustments (6,627) (4,962) (15,875) (10,033) Non-GAAP net income $ 411,473 $ 358,341 $ 786,350 $ 683,699 Diluted shares outstanding 146,372 147,481 146,633 147,520 GAAP diluted earnings per share $ 2.68 $ 2.34 $ 5.05 $ 4.45 Non-GAAP diluted earnings per share $ 2.81 $ 2.43 $ 5.36 $ 4.63 Liquidity and Capital Resources Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from operations and access to our revolving credit facility. Our primary uses of cash have been for research and development activities, selling and marketing activities, capital expenditures, strategic acquisitions and investments, dividend payments, share repurchases and repayment of debt obligations. We expect that cash provided by operating activities may fluctuate in future periods as a result of several factors, including fluctuations in our operating results, which include impacts from supply chain disruptions, working capital requirements and capital deployment decisions. Our future capital requirements will depend on many factors including our growth rate in net revenue, third-party reimbursement of our products for our customers, the timing and extent of spending to support research development efforts, the expansion of selling, general and administrative activities, the timing of introductions of new products, and the expenditures associated with possible future acquisitions, investments or other business combination transactions. As we assess inorganic growth strategies, we may need to supplement our internally generated cash flow with outside sources. If we are required to access the debt market, we believe that we will be able to secure reasonable borrowing rates. As part of our liquidity strategy, we will continue to monitor our current level of earnings and cash flow generation as well as our ability to access the market considering those earning levels. As of December 31, 2025 and June 30, 2025, we had cash and cash equivalents of $1,417.1 million and $1,209.5 million, respectively. Our cash and cash equivalents held within the U.S. at December 31, 2025 and June 30, 2025 were $794.5 million and $555.0 million, respectively. Our remaining cash and cash equivalent balances at December 31, 2025 and June 30, 2025, were $622.6 million and $654.5 million, respectively. Our cash and cash equivalent balances are held at highly rated financial institutions . As of December 31, 2025, we had $1,500.0 million available for draw down under the revolving credit facility and a combined total of $2,917.1 million in cash and available liquidity under the revolving credit facility. As a result of the U.S. Tax Cuts and Jobs Act of 2017, we treated all non-U.S. historical earnings as taxable, which resulted in additional tax expense of $126.9 million which was payable over the proceeding eight years. Therefore, future repatriation of cash held by our non-U.S. subsidiaries will generally not be subject to U.S. federal tax if repatriated. We believe that our current sources of liquidity will be sufficient to fund our operations, including expected capital expenditures, for the next 12 months and beyond. Revolving Credit Agreement, Term Credit Agreement and Senior Notes On June 29, 2022, we entered into a second amended and restated credit agreement, or as amended from time to time, the Revolving Credit Agreement. The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $1,500.0 million, with an uncommitted option to increase the revolving credit facility by an additional amount equal to the greater of $1,000.0 million or 1.00 times the EBITDA for the trailing twelve-month measurement period. Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the 34 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Syndicated Facility Agreement, or the Term Credit Agreement. The Term Credit Agreement, among other things, provides ResMed Pty Limited a senior unsecured term credit facility of $200.0 million. The Revolving Credit Agreement and Term Credit Agreement each terminate on June 29, 2027, when all unpaid principal and interest under the loans must be repaid. As of December 31, 2025, we had $1,500.0 million available for draw down under the revolving credit facility. On July 10, 2019, we entered into a Note Purchase Agreement with the purchasers to that agreement, in connection with the issuance and sale of $250.0 million principal amount of our 3.24% senior notes due July 10, 2026, and $250.0 million principal amount of our 3.45% senior notes due July 10, 2029, or Senior Notes. On December 31, 2025, there was a total of $665.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes and we were in compliance with our debt covenants. We expect to satisfy all of our liquidity and long-term debt requirements through a combination of cash on hand, cash generated from operations and debt facilities. Cash Flow Summary The following table summarizes our cash flow activity (in thousands): Six Months Ended December 31, 2025 2024 Net cash provided by (used in) operating activities $ 797,066 $ 634,161 Net cash provided by (used in) investing activities (103,520) (34,546) Net cash provided by (used in) financing activities (488,623) (298,295) Effect of exchange rate changes on cash 2,696 (17,737) Net increase (decrease) in cash and cash equivalents $ 207,619 $ 283,583 Operating Activities Cash provided by operating activities was $797.1 million for the six months ended December 31, 2025, compared to cash provided of $634.2 million for the six months ended December 31, 2024. The $162.9 million increase in cash flow from operations was primarily due to increased net income and improvements in working capital during the six months ended December 31, 2025 compared to the six months ended December 31, 2024. Investing Activities Cash used in investing activities was $103.5 million for the six months ended December 31, 2025, compared to cash used of $34.5 million for the six months ended December 31, 2024. The $69.0 million increase in cash flow used in investing activities was primarily due to increased purchases of property, plant and equipment during the six months ended December 31, 2025 in addition to net payments from maturity of foreign currency contracts during the six months ended December 31, 2025 compared to net proceeds from maturity of foreign currency contracts during the six months ended December 31, 2024. Financing Activities Cash used in financing activities was $488.6 million for the six months ended December 31, 2025, compared to cash used of $298.3 million for the six months ended December 31, 2024. We repurchased $325.0 million of treasury stock during the six months ended December 31, 2025 compared to repurchases of $125.0 million during the six months ended December 31, 2024. Cash outflows for treasury stock repurchases were partially offset by repayments of $5.0 million under our Revolving Credit Agreement for the six months ended December 31, 2025, compared to repayments of $35.0 million for the six months ended December 31, 2024. Dividends During the three months ended December 31, 2025, we paid cash dividends of $0.60 per common share totaling $87.6 million. On January 29, 2026, our board of directors declared a cash dividend of $0.60 per common share, to be paid on March 19, 2026, to shareholders of record as of the close of business on February 12, 2026. Future dividends are subject to approval by our board of directors. 35 Table of Contents PART I – FINANCIAL INFORMATION Item 2 RESMED INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Common Stock On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock. Since approval of the share repurchase program in 2014 through December 31, 2025, we have repurchased a total of 10.4 million shares under this repurchase program for an aggregate of $1.2 billion. During the six months ended December 31, 2025, we repurchased 1,226,914 shares at a cost of $325.0 million. Shares that are repurchased are classified as treasury stock pending future use and reduce the number of shares of common stock outstanding used in calculating earnings (loss) per share. The share repurchase program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors. At December 31, 2025, 9.6 million additional shares remain available for us to repurchase under the approved share repurchase program. Critical Accounting Principles and Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, including those related to allowance for doubtful accounts, inventory reserves, warranty obligations, goodwill, potentially impaired assets, intangible assets, income taxes and contingencies. We state these accounting policies in the notes to the financial statements and at relevant sections in this discussion and analysis. The estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions. For a full discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Recently Issued Accounting Pronouncements See note 1 to the unaudited condensed consolidated financial statements for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position and cash flows. Contractual Obligations and Commitments Other than for purchase obligations, there have been no material changes outside the ordinary course of business in our outstanding contractual obligations from those disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Details of our purchase obligations as of December 31, 2025 were as follows (in thousands): Payments Due by December 31, Total 2026 2027 2028 2029 2030 Thereafter Purchase obligations $ 861,220 $ 839,525 $ 11,488 $ 4,915 $ 3,541 $ 562 $ 1,189 Off-Balance Sheet Arrangements As of December 31, 2025, we are not involved in any significant off-balance sheet arrangements, as described in Instruction 8 to Item 303(b) of Regulation S-K promulgated by the SEC. 36 Table of Contents PART I – FINANCIAL INFORMATION Item 3 RESMED INC. AND SUBSIDIARIES Quantitative and Qualitative Disclosures About Market Risk