RMD 10-K & 10-Q changes, risk factors and insider trading

•Our inability to compete with new and existing technology to treat OSA successfully may harm our business.

•We are subject to new areas of direct healthcare oversight by federal government agencies due to our acquisitionacquisitions of VirtuOx.VirtuOx and Noctrix.

•Our business depends on our ability to market effectively toeducate and engage dealers of home healthcare products, sleep clinics,clinics and physicians.physicians, health care providers, and patients regarding the benefits of our products, software solutions and services.

•We are subject to various risks relating to our compliance with fraud and abuse laws and transparency laws relating to our interactions with our customers, healthcare providers, other referral sources and patients, which could subject us to government investigation, litigation, or other penalties to the extent our activities or relationships are found not to comply or could otherwise cause us to incur significant costs to defend our actions, and could result in substantial fines, penalties, harm our reputation in the market, divert our management’s attention, or result in changes in our business operations that could harm our ability to successfully market and sell our products and services.

•TaxIncome tax laws, regulations, and enforcement practices in various jurisdictions are evolving,evolving and, as a result, tax authorities are aggressively pursuedpursuing intaxpayers. some jurisdictions, andThis may causeresult in expense as well as management distraction, which may result in a material adverse effect on our results of operations, cash flows and financial position.

•We are subject to ongoing tax audits by various local tax authorities, some of which are aggressively pursuing taxes on transferred or discontinued local operations.

•Sustainability and corporate governance issues are constantly evolving, leading to distractionadditional investment and expense, and may have an adverse effect on our business, financial condition and results of operations and reputation.

Our inability to compete with new and existing technology to treat OSA successfully may harm our business. The geographic markets for our products, which encompass Sleep and Breathing Health products and Residential Care Software offerings, are highly competitive and are characterized by frequent product improvements and evolving technology, and new therapies, including existing and new pharmaceuticals. Our ability to compete successfully depends, in part, on our ability to develop, manufacture and sell innovative new products and to enhance existing products that treat OSA more effectively than competing treatments. For our Sleep and Breathing Health business, the development of innovative new products by our competitors or the discovery of alternative treatments or potential cures for the conditions that our products treat could make our products noncompetitive or obsolete. Current competitors, new entrants, academics, and others currently may be developing, or may develop, new devices, alternative treatments or cures, and targeted or indirect pharmaceutical solutions to the conditions our products treat that could provide better features, clinical outcomes or economic value than those that we currently offer or subsequently develop. For example, certain pharmaceutical treatments, such as GLP-1s currently approved to treat diabetes and for weight loss, may enhance patient health, lower the occurrence of obesity, or potentially reduce the severity or existence of OSA. For Residential Care Software, the demand for business management software is highly competitive, rapidly evolving,evolving subjectand tocharacterized by changing technology,technologies, with low barriers to entry, shifting customer needs, increasedincreasing useadoption of AIartificial intelligence, or AI, and frequent introductions of new products and services. ManyRapid advances in AI, including generative AI and autonomous software agents, may fundamentally change how healthcare providers manage administrative, operational and clinical workflows. Customers also increasingly expect AI-enabled capabilities to be incorporated into software offerings, requiring us to make significant investments in research and development, data infrastructure, cybersecurity, regulatory compliance and AI governance to remain competitive. In addition, many prospective customers have invested substantial personnel and financial resources to create, implement and integrate their currentexisting business management software into their operations and, therefore,and may therefore be reluctant or unwilling to change from their current in-house solution or providerswitch to one of our platforms or products. If we are unable to successfully innovate, develop, acquire or integrate capabilities that meet evolving customer expectations, or if competitors offer superior solutions, demand for our software offerings, competitive position, financial condition and results of operations could be adversely affected.

Additionally, some of our competitors, including those described above, have greater financial, research and development, manufacturing and marketing resources than we do. The past several years have seen a trend towards consolidation in the healthcare industry and in the geographic markets for our products. Industry consolidation could result in greater competition if our competitors combine their resources, if our competitors are acquired by other companies with greater resources than ours, or if our competitors become affiliated with customers of ours. The healthcare space is attractive to many companies, particularly new entrants interested in developing digital health models to compete with offerings of more established companies like us. Additionally, one of our competitors, Philips, continues to operate in the U.S. under a consent decree resulting from its product recall. We cannot predict the timing or nature of their substantial return or the impact to our business, financial condition, and results of operations. The temporary ban against sales of Philips flow generators has provided an opportunity for smaller companies to compete for customers. Continuing competition could increase pressure on us to reduce the selling prices of our products or could cause us to increase our spending on research and development and sales and marketing. If we are unable to develop innovative new products, maintain competitive pricing, enhance existing products, and offer products that purchasers perceive to be as good as those of our competitors, including the use of pharmaceuticals, our sales and gross margins could decreasedecrease, which would harm our business.

Consolidation in the healthcare industry and healthcare payment reform could have an adverse effect on our revenues and results of operations. Many HME providers, durable medical equipment (DME) suppliers, and residential health providers are consolidating, which may result in greater concentration of purchasing power. Numerous initiatives and reforms by legislators, regulators, and third-party payors to curb the rising cost of healthcare have catalyzed a consolidation of aggregate purchasing power where we sell our products and services. Some HME providers, durable medical equipment (DME) suppliers, third-party payors and residential health providers are also consolidating or forming strategic alliances. As the healthcare industry consolidates, competition to provide goods and services to industry participants may become more intense. These industry participants may try to use their market power to negotiate price concessions or volume reductions for medical devices and components produced by us. IfWe weexpect arethat forcedmarket demand, government regulation and third-party coverage and reimbursement policies will continue to reduce our prices because of consolidation inchange the worldwide healthcare industry, resulting in further business consolidations and alliances among our revenuescustomers, which may decreaseincrease competition and exert downward pressure on the prices of our consolidatedproducts earnings,and services which may adversely impact our business, results of operations, financial condition, and/or cash flows may suffer.flows.

Global macroeconomic conditions, including the direct and indirect effects of inflation, supply chain disruptions, reciprocal tariffs, and fluctuations in foreign currency exchange rates, could adversely affect our operations and profitability. Global economic conditions, geopolitical instability, the impact of tariffs and trade wars on our suppliers, and other macroeconomic factors, including inflation, supply chain disruptions, such as recent shipping disruptions in the Red Sea,disruptions, interest rate and foreign currency rate fluctuations, and volatility in the capital markets could negatively impact our business, financial condition, and results of operations. The growth of our business and demand for our products and services are affected by changes in the health of the overall global economy. Deterioration in the global economic environment may cause decreased demand for our products and services which could result in lower product sales, services revenue, lower prices for our products, or reduced reimbursement rates by third-party payors, while increasing the cost of operating our business.

We sell our products in many countries, and we also source many components and materials for our products from and manufacture our products in various countries. Recently, theThe U.S. government imposed significant tariffs, as well as increases to existing tariffs, impacting a wide variety of goods across multiple countries and indicated that additional tariffs may be imposed in the near future. In response to the tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the U.S. The extent to which these threats will be enacted and the duration for which enacted tariffs will be in place remain uncertain and could lead to economic decline, which could negatively impact demand for our products and adversely affect our results of operations.

Tariffs or trade restrictions that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and changes in purchasing behaviors for our customers, limits on trade with the U.S. or other potentially adverse economic outcomes. Additionally, specific legislative and regulatory proposals may be introduced to change international trade law, regulations or interpretations thereof (possibly with retroactive effect) of various jurisdictions or limit trade relief benefits that, if enacted, could materially increase the cost of our goods to export internationally, increase our effective tax rate, or have a material adverse impact on our financial condition and results of operation. We cannot predict whether our own or industry initiatives to maintain, extend or create tariff relief for our products and manufacturing will be successful. We also cannot predict the effect, if any, of the imposition of new or increased tariffs by one country and retaliatory responses by other countries who are trade partners. It is possible that these changes could adversely affect our business beyond the resilience of our current supply chain and investment in manufacturing flexibility. Further, actions we take to adapt to new tariffs or trade restrictions may increase our costs or risks or may cause us to modify our operations, which could be time-consuming and expensive; impact pricing of our products, which could impact our sales, profitability, and our reputation; or cause us to forgo new business opportunities. While tariffs and other retaliatory trade measures imposed by other countries on U.S. goods and services have not yet had a significant impact on our business or results of operations, we cannot predict further developments, and such existing or future tariffs could have a material adverse effect on results of our operations, financial position and cash flows.

We are subject to various risks relating to international activities that could affect our overall profitability. We manufacture substantially all of our products outside the U.S. and sell a significant portion of our products outside the U.S. Sales in combinedRest Europe,of Asia and otherWorld regions accounted for approximately 36%37% and 36% of our net revenues in the years ended June 30, 20252026 and June 30, 2024,2025, respectively. Our sales and operations outside of the U.S. are subject to several difficulties and risks that are separate and distinct from those we face in the U.S., including:

In December 2021, the U.S. adopted the Uyghur Forced Labor Prevention Act, or the UFLPA, which creates a rebuttable presumption that any goods, wares, articles, and merchandise mined, produced, or manufactured in whole or in part in the Xinjiang Uyghur Administrative Region of China, or that are produced by certain entities, are prohibited from importation into the U.S. and are not entitled to entry. These import restrictions came into effect in June 2022. Additionally, the military conflict between Russia and Ukraine has resulted in the implementation of sanctions by the U.S. and other governments against Russia and has caused significant volatility and disruptions globally. TheConflicts conflictin betweenthe IsraelMiddle andEast Iranhave may leadled to fluctuations in oil prices and global economic instability, resulting in higher supply and transportation costs. While we are not presently aware of any direct impacts these restrictions have had on our suppliers’ supply chains, disruptions resulting from the conflictconflicts in Iran and Ukraine and the UFLPA may materially and negatively impact our suppliers’ ability to obtain a sufficient supply of raw materials necessary to meet the quantity and/or timing of our product demands. Further, it is not possible to predict the short- and long-term implications of global conflict, which could include but are not limited to further sanctions, uncertainty about economic and political stability, increases in inflation rate and energy prices, cyber-attacks, supply chain challenges and adverse effects on currency exchange rates and financial markets. Our combined sales of medical devices into Iran, Russia and Ukraine did not constitute a material portion of our total revenue in fiscal year 2025.2026.

We are subject to potential product liability claims that may exceed the scope and amount of our insurance coverage, which would expose us to liability for uninsured claims. We are subject to potential product liability claims as a result of the design, manufacture and marketing of medical devices. Any product liability claim brought against us, with or without merit, could result in thean increase of our product liability insurance rates. In addition, we would have to pay any amount awarded by a court outside of our policy limits. Our insurance policies have various exclusions, and thus we may be subject to a product liability claim for which we have no insurance coverage, requiring us to pay the entire amount of any award. We cannot assure that our insurance coverage will be adequate or that all claims brought against us will be covered by our insurance and we cannot assure that we will be able to obtain insurance in the future on terms acceptable to us or at all. A successful product liability claim brought against us in excess of our insurance coverage, if any, may require us to pay substantial amounts, which could harm our business. We may also be affected by the product recalls and other risks associated with the products of our competitors if customers and patients are uncertain if issues affecting our competitors may also affect us.

If we fail to source, develop and retain key employees, our business may suffer. Our ability to compete effectively depends on our ability to source and retain key employees, including people in senior management, sales, marketing, technology, and research and development positions.development. Competition for top talent in the healthcare, technologyhealthcare and Residentialhealth Care Softwaretechnology industries can be intense. Our ability to source and retain such talent will depend on many factors, including hiring practices of our competitors, compensation and benefits, flexibility regarding virtual and hybrid work arrangements, work location, work environment, industry economic conditions, and corporate culture. If we cannot effectively source, develop and retain qualified employees to drive our strategic goals, our business could suffer.

Our leverage and debt service obligations could adversely affect our business. As of June 30, 2025,2026, our total consolidatedoutstanding debt was $0.7$660 billionmillion and we may incur additional indebtedness in the future. Our indebtedness could have adverse consequences, including:

Our debt service obligations will require us to use a portion of our operating cash flow to pay interest and principal in indebtedness, which could impede our growth. Our ability to make payments on, and to refinance, our indebtedness, and to fund capitalthe expendituresfuture expansion of our business will depend on our ability to generate cash in the future. This is subject to general economic, financial, competitive, legislative, regulatory, and other factors, many of which are beyond our control.

We are subject to new areas of direct healthcare oversight by federal government agencies due to our acquisitionacquisitions of VirtuOx.VirtuOx and Noctrix. In May 2025, we acquired VirtuOx, a software-enabled IDTFindependent diagnostic testing facility, or IDTF, and provider of technology solutions to facilitate in-home and remote testing services for sleep, respiratory, cardiac, and other health conditions across the U.S. Additionally, in June 2026, we acquired Noctrix, a DME supplier and manufacturer of a neurostimulation FDA-cleared device to treat restless legs syndrome. As a Medicare-enrolled IDTF, VirtuOxVirtuOx, isand as a Medicare-enrolled DME supplier, Noctrix, are each subject to laws, regulations and policypolicies pertaining to itstheir Medicare enrollment, state Medicaid participation, and direct billing of both governmental and commercial insurance programs. These laws include but are not limited to the federal Anti-Kickback Statute, the Stark Law, the federal civil and criminal False Claims Acts, the Civil Monetary Penalty Law’s beneficiary inducement prohibition, and their state law equivalents. Additionally, VirtuOx ismay be subject to state laws prohibiting the corporate practice of medicine, due to its engagements of healthcare professionals for the provision of medical services. Both VirtuOx and Noctrix are also subject to HIPAA as a covered entity,entities, which requires additional compliance efforts to meet all provisions under the HIPAA Privacy Rule and applicable requirements under the Electronic Standard Transactions Rule. As Resmed has historically only been subject to HIPAA as a business associate, these additional compliance requirements will require new policies, procedures, and data processing protocols, as well as the dedication of additional privacy, security and compliance personnel to ensure compliance with HIPAA. Further, VirtuOx’sVirtuOx and Noctrix's direct billing statusstatuses increasesincrease itstheir risk relative to Resmed under the healthcare fraud and abuse laws and false claims laws. IDTFs,IDTFs and DMEs, in particular, have extensive Medicare participation, billing and documentation requirements that will require additional compliance and legal resources to ensure that ongoing operations comply with applicable laws. Both entity types are also subject to heightened governmental scrutiny due to the belief that fraudulent actions and claims for services are more prevalent in the IDTF and DME industries, leading to a higher volume of payor denials, audits, and investigations. If we become the subject of a government investigation, payor audit, or whistleblower lawsuit based on an allegation of noncompliance with one or more of these requirements, we risk potential refund of overpayments, financial penalties for violations, potential removal of participation in federal, state, and/or commercial payor programs, negative publicity, loss of public trust, and diversion of management’s time, attention and resources. Many of these risks exist even if we are able to successfully defend against such allegations. In the event that a violation is found, or we are forced to resolve a dispute with a governmental entity, our revenue, reputation, strategic goals, and business operations could suffer.

If we are unable to support our continued growth or achieve expected operating efficiencies, our business could suffer. As we continue to grow, the complexity of our operations increases, placing greater demands on our management. Our ability to manage our growth effectively depends on our ability to implement and improve our financial and management information systems on a timely basis and to effect other changes in our business including the ability to monitor and improve manufacturing systems, and implement information technology, and quality and regulatory compliance systems, among others. Unexpected difficulties during upgrades, expansion, the failure to attract and retain qualified employees, the failure to successfully replace or upgrade our management information systems, the failure to manage costs or our inability to respond effectively to growth or plan for future expansion could cause our growth to slow or stop.

Our business depends on our ability to market effectively toeducate and engage dealers of home healthcare products, sleep clinics,clinics and physicians.physicians, health care providers, and patients regarding the benefits of our products, software solutions and services. We market our products and services primarily to HME providers, sleep clinics, and physicians that diagnose OSA and other sleep disorders, as well as to non-sleep specialist physician practices that diagnose and treat sleep disorders in the course of providing primary care to patients. We believe that these groups play a significant role in determining which brand or type of product a patient will use. The success of our business depends on our ability to market effectively to these groups to ensure that our products are properly prescribed, marketed and sold by these third parties.

We have expanded our marketing activities in some areas to target the population with a predisposition to sleep-disordered breathing as well as primary care physicians and various medical specialists. We cannot assure that these marketing efforts will be successful in increasing awareness or sales of our products and services. Additionally, as our business increasingly includes digital health solutions and patient-facing technologies, our ability to educate, engage and support patients throughout their therapy journey has become increasingly important. If we are unable to effectively engage patients through our digital platforms, educational initiatives or other programs, or if patients do not adopt or continue to use these offerings as intended, patient satisfaction, therapy adherence and demand for certain of our products and services could be adversely affected.

If our software products fail to perform properly or if we fail to develop enhancements, we could lose customers, become subject to service performance or warranty claims and our sales could decline. Our Residentialsoftware Care Softwaresolutions operations are dependent upon our ability to prevent system interruptions and, as we continue to grow, we will need to devote additional resources to improving our infrastructure to maintain the performance of our products and solutions. The applications underlying our Residentialsoftware Care Softwaresolutions products are inherently complex and may contain material defects or errors, which may cause disruptions in availability or other performance problems. We have from time to time found defects in our products and may discover additional defects in the future that could result in data unavailability, unauthorized access to, loss, corruption or other harm to our customers’ data. While we implement bug fixes and upgrades as part of our regularly scheduled system maintenance, we may not be able to detect and correct defects or errors before implementing our products and solutions. Consequently, we or our customers may discover defects or errors after our products and solutions have been deployed. If we fail to perform timely maintenance, or if customers are otherwise dissatisfied with the frequency and/or duration of our maintenance services and related system outages, our existing customers could elect not to renew their contracts, delay or withhold payment, or potential customers may not adopt our products and solutions and our brand and reputation could be harmed. In addition, the occurrence of any material defects, errors, disruptions in service or other performance problems with our software could result in warranty or other legal claims against us and diversion of our resources. The costs incurred in addressing and correcting any material defects or errors in our software and expanding our infrastructure and architecture in order to accommodate increased demand for our products and solutions may be substantial and could adversely affect our operating results. Further,In addition, our software products and digital health solutions increasingly rely on interoperability with third-party technologies and platforms, and other connected health technologies. Changes to these technologies or platforms, including modifications to technical standards, application programming interfaces, operating systems, security requirements or commercial terms, could require significant development resources, delay product enhancements, reduce interoperability or negatively affect the functionality or adoption of our products and services. In addition, if we failare unable to innovateestablish, maintain or adequatelyexpand investstrategic intechnology newpartnerships technologies,or weintegrations that support our digital ecosystem, our ability to compete effectively and deliver connected care solutions could losebe ouradversely competitive position in the markets that we serve. To the extent that we fail to introduce new and innovative products, or such products are not accepted or suffer significant delays in development, our financial results may suffer. An inability, for technological or other reasons, to successfully develop and introduce new products on a timely basis could reduce our growth rate or otherwise have an adverse effect on our business.affected.

Climate change and natural disasters, or other events beyond our control, could negatively impact our business operations and financial condition. Natural disasters and other business disruptions could adversely affect our business and financial condition, and global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects. The impacts of climate change may include physical risks (such as frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (including due to regulatory changes), shifts in market trends (including customer preference for sustainably produced or reusable products) and other adverse effects. Such impacts may disrupt parties in our supply chain, our customers, and our operations. For example, if a natural disaster strikes our manufacturing facilities, such as those in Sydney, Australia and Singapore which are vulnerable to such events, we may be unable to manufacture our products for a substantial amount of time and our sales and profitability may decline. Our facilities and the manufacturing equipment we use to produce our products would be costly to replace and could require substantial lead-timelead time to repair or replace. In the event our facilities are affected by natural or man-made disasters, we could be forced to rely on third-party manufacturers. Although we believe we possess adequate insurance for the disruption of our business, it may not be sufficient to cover our potential losses and may not continue to be available to us on acceptable terms, or at all.

Other federal legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011 required, among other things, mandatory across-the-board reductions in certain types of federal spending, also known as sequestration. Medicare claims with dates-of-service or dates-of-discharge on or after July 1, 2022 and effective until further notice, incur a 2% reduction in Medicare payment, known as Medicare Sequestration Payment Reductions. In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012, was signed into law, which further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. More recently, the Consolidated Appropriations Act of 2024 (CAA) was signed into law in March 2024. Among other things, the CAA reduced by half the 3.37% reduction to 2023’s Medicare Physician Fee Schedule (PFS) conversion factor that had been in place since January 1, 2024, increasing the conversion factor to $33.32 for services furnished between March 9 and December 31, 2024. On November 1, 2024, CMS issued a rule finalizing changes for Medicare payments under the PFS and other Medicare Part B policies, effective on or after January 1, 2025. Under this final rule, the average payment rates under the PFS would be reduced by 2.93% in CY 2025, removing the temporary increase in payment for CY 2024. This amounts to an estimated CY 2025 PFS conversion factor of $32.35, resulting in lower Medicare payments to Part B suppliers. Notably,On however,July 4, 2025 the One Big Beautiful Bill Act,Act includeswas signed into law and provided a 1-year, 2.5% increasestatutory topayment update under the PFS for 2026,CY 2026. CMS subsequently finalized the CY 2026 PFS, which temporarilyincorporates addressesthat statutory update together with other payment adjustments and policy changes. Future Medicare physician payment rates remain subject to annual CMS rulemaking and potential legislative action, and we cannot predict the 2025extent paymentto cuts.which Additionally,future changes may affect payments for services furnished under the Medicare telehealthprogram. flexibilitiesAdditionally, underpursuant to the COVID-19Consolidated publicAppropriations health emergency are set to expire at the endAct of 2025.2026, Without Congressional action, Medicare will no longer cover most telehealth services furnished to beneficiaries in their home or to individuals residing in urban areas after the endmany of the yeartemporary whichMedicare couldtelehealth flexibilities, including the waiver of geographic and originating site restrictions for certain telehealth services, have anbeen adverseextended impactthrough onDecember rates31, of2027. diagnosisCertain oftelehealth OSA.flexibilities applicable to behavioral health services have been made permanent. Congress or CMS may modify these policies through future legislation or rulemaking, and we cannot predict whether the temporary flexibilities will be further extended, modified, or allowed to expire.

In 2022, the VA proposed an adjustment through regulation to amend the previously adopted schedule of VA ratings for sleep apnea. Specifically, the proposed rule would remove in its entirety the current 30% disability rating for veterans exhibiting excessive daytime sleepiness and replace it with a 10% disability rating for veterans with a sleep apnea diagnosis with incomplete relief (as determined by a sleep study) with treatment including a CPAP machine, and further, remove the automatic 50% disability rating for veterans with a documented need for a CPAP machine (50% disability would instead require that the veteran have a sleep apnea diagnosis with ineffective treatment, as determined by a sleep study, or who is unable to use treatment due to comorbid conditions, without end-organ damage). The VA has not yet changedfinalized itsthese proposed revisions, and the current rating criteria remains in effect, but should this proposal, or another similar proposal to limit disability ratings criteria,be butadopted, itfewer couldveterans happenmay thispursue year.treatment of sleep apnea using CPAP or more veterans would claim ineffective treatment with CPAP to obtain a higher rating. If the changes are implemented, veterans who were rated for sleep apnea before the change in criteria will be grandfathered and retain their rating. However, all veterans filing new claims on and after the change in ratings criteria would be evaluated under the new criteria. The VA hasmay notfinalize, yetmodify, adoptedor these changes towithdraw the disabilityproposed ratingsrevisions systemthrough fora sleepfuture apneafinal butrule, shouldthe thistiming proposal,and or another similar proposal to limit disability ratings be adopted, fewer veterans may pursue treatmentsubstance of sleepwhich apnearemain using CPAP or more veterans would claim ineffective treatment with CPAP to obtain the higher rating.uncertain.

Various healthcare reform proposals have also emerged at the state level within the U.S. The ACA as well as other federal and/or state healthcare reform measures that may be adopted in the future, singularly or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. We cannot predict the timing, scope, or effect of future legislation, rulemaking, or other governmental actions affecting the U.S. health care system.

In the U.S., we sell our products primarily to HME providers, health systems and sleep clinics. Reductions in reimbursement to our customers by third-party payors, if they occur, may have a material impact on our customers and, therefore, may indirectly affect our pricing and sales to, or the collectability of receivables we have from, those customers. A development negatively affecting reimbursement stems from the Medicare competitive bidding program mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Under the program, our customers who provide services must compete to offer products in designated competitive bidding areas, or CBAs. The competitiveDMEPOS biddingCompetitive Bidding Program (CBP) remains in a temporary gap period following the expiration of Round 2021 contracts for off-the-shelf (OTS) back braces and OTS knee braces on December 31, 2023. Following the CY 2026 final rule and related program implementation activities, CMS is currently onpreparing temporaryfor pause;Round however,2028, which is structured as a nationwide Remote Item Delivery (RID) Competitive Bidding Program covering seven (7) specified product categories. CPAP and other respiratory devices are not included in Round 2028, set to begin January 1, 2028. CMS could restartmake changes to the program as part of further cost-cutting measures. We cannot predict the status or impact the competitive bidding program and the developments in the competitive bidding program will have on our business and financial condition. If changes are made to this program in the future, it could affect amounts being recovered by our customers and subsequent purchases from us.

We are subject to various risks relating to our compliance with fraud and abuse laws and transparency laws relating to our interactions with our customers, healthcare providers, other referral sources and patients, which could subject us to government investigation, litigation, or other penalties to the extent our activities or relationships are found not to comply or could otherwise cause us to incur significant costs to defend our actions, and could result in substantial fines, penalties, harm our reputation in the market, divert our management’s attention, or result in changes in our business operations that could harm our ability to successfully market and sell our products and services. We are subject to healthcare fraud and abuse regulation and enforcement by federal, state and foreign governments, which could significantly impact our business. We also are subject to foreign fraud and abuse laws, which vary by country.

•federal civil and criminal false claims laws, including the False Claims Act, and civil monetary penalty laws, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government. These laws may apply to manufacturers and distributors who provide information on coverage, coding, and reimbursement of their products to persons who do bill third-party payors. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Violations of the Stark Law can also constitute a false or fraudulent claim for purposes of the False Claims Act, if the requisite intent is established. Violations can result in debarment, suspension or exclusion from participation in government healthcare programs, including Medicare and Medicaid. When an entity is determined to have violated the federal civil False Claims Act, the government may impose significant civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.

•Thethe federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transferring of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of items or services reimbursable by Medicare or a state healthcare program, unless an exception applies. As a medical device manufacturer, the beneficiary inducement prohibition under the Civil Monetary Penalties Law did not directly apply to us (unless we engaged in activities that influenced a Medicare or Medicaid beneficiary to select a particular provider, practitioner or supplier); however, following our acquisitionacquisitions of VirtuOx,VirtuOx aand Noctrix, each Medicare supplier,suppliers, we are directly subject to the beneficiary inducement prohibition if we provide any remuneration to a Medicare or Medicaid beneficiary that is intended to or that we should know would be likely to influence that beneficiary to select VirtuOx or Noctrix as their supplier.

The scope and enforcement of these laws are uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Responding to investigations can be time-and resource-consuming and can divert management’s attention. Additionally, as a result of these types of investigations, healthcare providers and entities may face litigation or have to agree to settlements that can include monetary penalties and onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any such investigationinvestigation, even if unfounded and even if we are in compliance with applicable laws, could damage our reputation, increase costs, and otherwise have an adverse effect on our business.

On May 11, 2022, VirtuOx entered into a civil settlement of $3.2M$3 million and agreed to a five-year CIA with the OIG which resolved allegations that, from January 2016 to December 2020, the company violated the False Claims Act by falsely identifying the place of service for certain services it performed to obtain a higher rate of reimbursement from Medicare and further, that the company administered overnight pulse oximetry tests and, at times, also billed Medicare for single determination pulse oximetry tests (commonly referred to as an oxygen “spot check”) for the same patient when the only test performed was the overnight test. Under the CIA, VirtuOx must retain an outside expert to perform annual claims reviews that address the place of service identified on the claim. VirtuOx will be under the CIA through 2027 and any failure to comply with its obligations under the CIA could result in monetary penalties and exclusion from participating in federal healthcare programs. The costs associated with compliance with the CIA, or any liability or consequences associated with its breach, could have an adverse effect on our operations, liquidity and financial condition.

HIPAA establishes a set of national privacy and security standards for the protection of individually identifiable health information, or protected health information, by health plans, healthcare clearinghouses and healthcare providers that submit certain covered transactions electronically, collectively referred to as “covered entities,” and their “business associates,” which are persons or entities that perform certain services for, or on behalf of, a covered entity that involve creating, receiving, maintaining or transmitting protected health information, as well as their covered subcontractors. Both Noctrix and VirtuOx is aare covered entityentities under HIPAA and isare required to comply in all respects with the Privacy Rule, Security Rule, Breach Notification Rule, and Electronic Standard Transactions Rule. Additionally, certain portions of our business, such as the cloud-based software digital health applications, subject us to HIPAA as a business associate of our covered entity clients. To provide our covered entity clients with services that involve access to PHI, HIPAA requires us to enter into business associate agreements that require us to safeguard PHI in accordance with HIPAA. As a business associate, we are also directly liable for compliance with HIPAA. Penalties for violations of HIPAA regulations include civil and criminal penalties.

The UK GDPR mirrors the fines under the EU GDPR, i.e., fines up to the greater of approximately £17.518 million or 4% of global turnover.

Our business activities are subject to extensive regulation, and any failure to comply could have a material adverse effect on our business, financial condition, or results of operations. We are subject to extensive U.S. federal, state, local and international regulations regarding our business activities. Failure to comply with these regulations could result in, among other things, recalls of our products, substantial fines and criminal charges against us or against our employees. Furthermore, certain of our products could be subject to recall if the FDA, other regulators or we determine that those products are not safe or effective. Any recall or other regulatory action could increase our costs, damage our reputation, affect our ability to supply customers with the quantity of products they require and materially affect our operating results. Certain of our products and services include the use of artificial intelligence (AI), which is intended to enhance the operation of our products and services. AI innovation presents risks and challenges that could impact our business. AI algorithms may be flawed. Datasets may be insufficient or contain biased information. Ineffective AI development and deployment practices could subject us to competitive harm, regulatory action, increased cyber risks and legal liability, including under new AI regulations in the European Union. The FTC has issued a report expressing a concern regarding AI and bias across industry sectors, including in the healthcare space, and has suggested that such bias could lead to unfair and deceptive practices, among other concerns. Any changes to our ability to use AI or concerns about bias could require us to modify our products and services or could have other negative financial impact on our business.

The legal and regulatory framework governing AI continues to evolve globally. New or changing laws, regulations or industry standards may increase our compliance obligations, require modifications to existing products, delay product introductions or enhancements, or increase development and operating costs. In addition, our AI capabilities depend on access to appropriate data, technology infrastructure and specialized personnel. If we are unable to responsibly develop, deploy and maintain AI-enabled technologies, our business, financial condition and results of operations could be materially adversely affected Product sales, introductions or modifications may be delayed or canceled as a result of FDA regulations or similar foreign regulations, which could cause our sales and profits to decline. Unless a product is exempt or may be commercialized based on current FDA enforcement discretion policies, before we can market or sell a new medical device in the U.S., we must obtain FDA clearance or approval, which can be a lengthy and time-consuming process that may be affected by external factors including FDA resourcing. We generally receive clearance from the FDA to market our products in the U.S. under Section 510(k) of the Federal Food, Drug, and Cosmetic Act, or the FD&C Act, or our products are exempt from the Section 510(k) clearance process. The 510(k) clearance process can be expensive, time-consuming and uncertain. In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a predicate device with respect to intended use, technology and safety and effectiveness, in order to clear the proposed device for marketing. The FDA has a high degree of latitude when evaluating submissions and may seek additional information before clearing a proposed device or may ultimately determine that a proposed device submitted for 510(k) clearance is not substantially equivalent to a predicate device. After a device receives 510(k) premarket notification clearance from the FDA, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in the intended use of the device, technology, materials, packaging, and certain manufacturing processes may require a new 510(k) clearance or premarket approval. We have modified some of our Section 510(k) approved products without submitting new Section 510(k) notices, which we do not believe were required. However, if the FDA disagrees with us and requires us to submit new Section 510(k) notifications for modifications to our existing products, we may be required to stop marketing the products while the FDA reviews the Section 510(k) notification.

We are subject to substantial regulation related to quality standards applicable to our manufacturing and quality processes. Our failure to comply with these standards could have an adverse effect on our business, financial condition, or results of operations. The FDA regulates the approval, manufacturing, and sales and marketing of many of our products in the U.S. Significant government regulation also exists in Canada, Japan, Europe, Australia, China, and other countries in which we conduct business. In February 2026, the FDA implemented the Quality Management System Regulation (QMSR), which replaces the prior FDA Quality System Regulation in setting forth the current good manufacturing practice (cGMP) requirements for medical devices, and incorporates ISO 13485 into U.S. law. The QMSR introduces changes to documentation, terminology, and inspection approaches, including expanded FDA visibility into internal audit, supplier oversight, and management review activities. As a device manufacturer, we are required to register with the FDA and are subject to periodic inspection by the FDA for compliance with the FDA’s QSRQMSR, requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. ForIt example, on January 31, 2024, the FDA issued a final rule to amend and replace the QSR, which sets forth the FDA's current good manufacturing practice requirements for medical devices, to align more closely with the International Organization for Standardization standards. Specifically, this final rule, which the FDA expects to go into effect on February 2, 2026, establishes the QMSR, which among other things, incorporates by reference the quality management system requirements of ISO 13485:2016. Although the FDA has stated that the standards contained in ISO 13485:2016 are substantially similar to those set forth in the QSR, and although our quality system is currently designed to comply with ISO standards in connection with our device certifications, it isremains unclear the extent to which thisthe finalQMSR rule, once effective, couldmay impose additional or different regulatory requirements on usus. thatCompliance may require ongoing updates to our processes, systems, and training, and failure to maintain compliance could increaseresult thein costsregulatory ofactions, complianceproduct recalls, or otherwisedelays negativelyin affect our business. If we are unable to comply with QMSR, once effective, or with any other new or existing laws or regulations enforced by FDA or comparable regulatory authorities, we may be subject to enforcement action,approvals, which could haveadversely an adverse effect onaffect our business, financial conditioncondition, and results of operations. In addition, the federal Medical Device Reporting regulations require us to provide information to the FDA whenever there is evidence that reasonably suggests that a device may have caused or contributed to a death or serious injury or, if a malfunction were to occur, could cause or contribute to a death or serious injury. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections by the FDA. In the European Union, we are required to maintain certain ISO certifications and comply with the Medical Device Regulation (MDR) in order to sell our products and must undergo periodic inspections by notified bodies to obtain and maintain these certifications. Failure to comply with current governmental regulations and quality assurance guidelines could lead to temporary manufacturing shutdowns, product recalls or related field actions, product shortages or delays in product manufacturing. Efficacy or safety concerns, an increase in trends of adverse events in the marketplace, and/or manufacturing quality issues with respect to our products could lead to product recalls or related field actions, withdrawals, and/or declining sales.

Disruptions at the FDA and other government agencies caused by funding shortages, personnel reductions, or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business. The ability of the FDA to review and clear or approve new products can be affected by a variety of factors, including government budget and funding levels, staffing reductions, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Agency restructuring, changes in appropriations, reductions in force and other disruptions at the FDA and other agencies may slow the time necessary for medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 3543 days beginning on DecemberOctober 22,1, 2018,2025, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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 selected financial data and consolidated financial statements and notes included in this report.

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 broaderbroad range of respiratorysleep 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,devices. In addition, we are a leading provider of cloud-based health applications, software and cloud-baseddevices softwaredesigned informaticsto solutionsprovide connected care, enabling clinicians to manage patientmore outcomespatients efficiently and customereffectively, as well as enabling and providerencouraging businesspatients’ processes.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 SDBsleep and respiratoryrelated conditionsbreathing health conditions, like chronic obstructive pulmonary diseasedisease, as significant health concerns.

We are committed to ongoing investment in research and development and product enhancements. During fiscal year 2025,2026, we invested $331.3$378 million on research and development activities, which represents 6.4%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 platformsplatforms, comprise our Residential Care Software business and, alongtogether with our cloud-based remote monitoring and therapy management system,system and a robust product pipeline, these products should continue to provide us with a strong platformfoundation 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. During fiscal year 2025, we renamed our operating segments from Sleep and Respiratory Care to Sleep and Breathing Health and from Software as a Service to Residential Care Software in alignment with our 2030 strategy. There have been no changes in the preparation and disclosure of financial information by operating segment.

Net revenue in fiscal year 20252026 increased to $5,146.3$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 2024.2025. Gross profit increased for the year ended June 30, 20252026 to $3,055.0$3,452 million, from $2,655.3$3,055 million for the year ended June 30, 2024,2025, an increase of $399.7$397 million or 15%.13% compared to fiscal year 2025. Our net income for the year ended June 30, 20252026 was $1,400.7$1,523 millionmillion, or $9.51$10.43 per diluted shareshare, compared to net income of $1,021.0$1,401 millionmillion, or $6.92$9.51 per diluted shareshare, for the year ended June 30, 2024.2025.

Total operating cash flow for fiscal year 20252026 was $1,751.6$1.8 millionbillion and at June 30, 2025,2026, our cash and cash equivalents totaled $1,209.5$1.5 million.billion. At June 30, 2025,2026, our total assets were $8.2$9.0 billion and our stockholders’ equity was $6.0$6.6 billion. We paid a quarterly dividend of $0.53$0.60 per share during fiscal 20252026 with a total amount of $310.9$350 million paid to stockholders.

Net revenue for the year ended June 30, 20252026 increased to $5,146.3$5,653 million from $4,685.3$5,146 million for the year ended June 30, 2024,2025, an increase of $461.0$507 million or 10% (aan 10%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, 20252026 compared to the year ended June 30, 20242025 (in thousands):

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

Net revenue from our Sleep and Breathing Health business for the year ended June 30, 20252026 increased to $4,504.9$4,978 million from $4,101.2$4,505 million for the year ended June 30, 2024,2025, an increase of $403.7$473 million or 10%. Movements in international currencies against the U.S. dollar positively impacted net revenues by approximately $4.0$83 million for the year ended June 30, 2025.2026. Excluding the impact of currency movements, total net revenue from our Sleep and Breathing Health business for the year ended June 30, 20252026 increased by 10%9% compared to the year ended June 30, 2024.2025. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.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 U.S., Canada and Latin AmericaAmericas for the year ended June 30, 20252026 increased to $2,997.5$3,281 million from $2,722.6$2,998 million for the year ended June 30, 2024,2025, an increase of $275.0$284 million or 10%.9%. The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.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 combinedRest Europe,of Asia and other marketsWorld increased for the year ended June 30, 20252026 to $1,507.4$1,697 million from $1,378.6$1,507 million for the year ended June 30, 2024,2025, an increase of $128.8$189 million or 9%13% (a 9%7% increase on a constant currency basis). The constant currency increase in device and mask sales in combinedRest Europe,of Asia and otherWorld was primarily attributable to increased demand and unit sales.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, 20252026 increased to $2,665.2$2,892 million from $2,444.0$2,665 million for the year ended June 30, 2024,2025, an increase of $221.2$227 million or 9%, including an increase of 9%7% in the U.S., Canada and Latin AmericaAmericas and an increase of 10%11% in combinedRest Europe,of Asia and other marketsWorld (a 9%6% increase on a constant currency basis). Excluding the impact of foreign currency movements, device sales for the year ended June 30, 20252026 increased by 9%.7%.

Net revenue from masks and other for the year ended June 30, 20252026 increased to $1,839.7$2,085 million from $1,657.2$1,840 million for the year ended June 30, 2024,2025, an increase of 11%,13%, including an increase of 12%13% in the U.S., Canada and Latin AmericaAmericas and an increase of 9%15% in combinedRest Europe,of Asia and other marketsWorld (ana 8%9% increase on a constant currency basis). Excluding the impact of foreign currency movements, masks and other sales increased by 11%,12%, compared to the year ended June 30, 2024.2025.

Net revenue from our Residential Care Software business for the year ended June 30, 20252026 was $641.4$676 million, compared to $584.1$641 million for the year ended June 30, 2024,2025, an increase of $57.3$34 million or 10%.5%. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $10 million for the year ended June 30, 2026. Excluding the impact of foreign currency movements, net revenue from our Residential Care Software for the year ended June 30, 2026 increased by 4% compared to the year ended June 30, 2025. The increase was driven by continued growth in the MEDIFOX DAN, Home and Hospice, and Home Medical Equipment, or HME, and MEDIFOX DAN verticals within our Residential Care Software business.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 year ended June 30, 20252026 to $3,055.0$3,452 million from $2,655.3$3,055 million for the year ended June 30, 2024,2025, an increase of $399.7$397 million or 15%.13%. Gross margin, which is gross profit as a percentage of net revenue, was 61.1% for the year ended June 30, 2026, compared with the 59.4% for the year ended June 30, 2025, compared with the 56.7% for the year ended June 30, 2024.2025. The increase in gross margin was due primarily to procurement, manufacturing and logistics efficiencies, $14.3partially millionoffset of combinedby expenses associated with thea field safety notificationsnotification for masks with magnets and Astral devices recognized duringin the year ended June 30, 2024, as well as a reduction in the amortization of acquired intangibles during the year ended June 30, 2025. The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that incorporate magnets.2026. The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.devices.

Selling, general and administrative expenses increased for the year ended June 30, 20252026 to $991.0$1,120 million from $917.1$993 million for the year ended June 30, 2024,2025, an increase of $73.9$126 million or 8%.13%. Selling, general and administrative expenses, as reported in U.S. dollars, were favorablyunfavorably impacted by the movement of international currencies against the U.S. dollar, which decreasedincreased our expenses by approximately $0.2$30 million. Excluding the impact of foreign currency movements, selling, general and administrative expenses for the year ended June 30, 20252026 increased by 8%10% compared to the year ended June 30, 2024.2025. As a percentage of net revenue, selling, general and administrative expenses for the year ended June 30, 20252026 improvedincreased to 19.3%19.8% compared to 19.6%19.3% for the year ended June 30, 2024.2025.

Total other income (loss), net for the year ended June 30, 20252026 was a lossincome of $7.8$33 million, compared to a loss of $55.1$8 million for the year ended June 30, 2024.2025. We recorded interest income, net, of $4.1$50 million for the year ended June 30, 2026 compared to interest income, net, of $4 million for the year ended June 30, 2025 compared to interest expense, net of $45.7 million for the year ended June 30, 2024 due to lower debt levels following the repayment of our revolving credit facilityfacility, gains recognized on cross-currency swaps associated with our fair value and net investment hedges, and interest earned on cash balances. LossesWe associatedalso with our investments in marketable and non-marketable equity securities were $10.3 million for the year ended June 30, 2025 compared to a loss of $4.0 million or the year ended June 30, 2024. Losses associated with our investments in marketable and non-marketable equity securities were partially offset byrecognized a gain attributable to equity method investments for the year ended June 30, 20252026 of $3.6$7 million, compared to a lossgain of $1.8$4 million for the year ended June 30, 2024.2025. Interest income, net, and gains attributable to equity method investments were partially offset by losses associated with our investments in marketable and non-marketable equity securities of $15 million for the year ended June 30, 2026 compared to a loss of $10 million or the year ended June 30, 2025.

Our effective income tax rate decreasedincreased to 20.6% for the year ended June 30, 2026 from 16.5% for the year ended June 30, 20252025. fromOur 19.3%effective rate of 20.6% for the year ended June 30, 2024. Our effective rate of 16.5% for the year ended June 30, 20252026 differs from the statutory rate of 21.0% primarily due to interest and penalties refunded by the IRS in relation to certain amended returns, tax benefits realized from the cessationimpact of certain business activities, along with research credits and foreign operations. The decreaseincrease in our effective tax rate for the year ended June 30, 20252026 was primarily duedriven toby the IRSimplementation of the Pillar Two global minimum tax and certain non-recurring tax benefits recognized during the year ended June 30, 2025, including the refund of interest and penalties from the IRS and tax benefits realized from the cessation of certain business activities.

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 TCJA, 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, except as discussed in Note 12 – Income Taxes of the Notes to the Consolidated Financial Statements (Part II, Item 8).

The Organization of Economic Co-operation and DevelopmentDevelopment, (OECD)or OECD, and the G20 Inclusive Framework on Base Erosion and Profit Shifting (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. TheseDuring the fiscal year ended June 30, 2026, these changes in legislation did not havehad a material impact on our income tax expense and cash flows for the fiscal year ending June 30, 2025.flows.

On JuneJanuary 28,1, 2025,2026, the G7OECD issuedreleased athe jointSide-by-Side, statementor inSbS, Package, which itsexempts membersU.S.-headquartered agreedmultinational thatenterprises from Pillar Two will operate alongside the U.S. system of tax and proposed that U.S.-parented multinational groups would not be subject to theTwo’s income inclusion rules and undertaxed profitsprofit rules offor Pillartax Two.years beginning on or after January 1, 2026. The remaining OECD countries are in the process of implementing the SbS package in local legislation to align with the OECD. likely to consider changes to existing and proposed tax laws to align with the recommendations and guidelines proposed by G7. We are continuing to evaluate the potential impacts of the Inclusive Framework for future periods.

In addition to financial information prepared in accordance with GAAP, our management uses certain non-GAAP financial measures, such as non-GAAP cost of sales, non-GAAP selling, general, and administrative expenses, non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, 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 and field safety notification expenses. The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that incorporate magnets. The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.devices. 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.

The measure “non-GAAP netselling, incomegeneral, and administrative expenses” is equal to GAAP netselling, incomegeneral, onceand adjustedadministrative forexpenses amortizationless acquisition and portfolio review related expenses. Non-GAAP selling, general, and administrative expenses as a percentage of acquired intangibles, restructuring expenses, field safety notification expenses, acquisition related expenses, and associated tax effects, in addition to tax benefits from business cessation, and the tax effect of interest and penalties on tax refunds. The measure “non-GAAP diluted earnings per share”revenue is the ratio of non-GAAP netselling, incomegeneral, and administrative expenses to dilutedGAAP sharesnet outstanding.revenue. These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except for per share amountspercentages):

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, the expenditures associated with possible future acquisitions,acquisitions and divestitures, 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.

On June 30, 2025,2026, there was a total of $670.0$660 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes. WeOn expectJuly to10, satisfy2026, allour 3.24% senior notes with a principal balance of our$250 liquiditymillion matured and long-termwere debtrepaid requirementsin through a combination of cash on hand, cash generated from operations and debt facilities.full.

Cash provided by operating activities was $1,751.6$1,806 million for the year ended June 30, 2025,2026, compared to cash provided of $1,401.3$1,752 million for the year ended June 30, 2024.2025. The $350.3$54 million increase in cash flow from operations was primarily due to increased net income, partially offset by higher working capital during the year ended June 30, 20252026 compared to the year ended June 30, 2024. During the year ended June 30, 2025, our operating cash flows included $124.4 million of income tax refunds and associated interest and penalties.2025.

Cash used in investing activities was $200.0$545 million for the year ended June 30, 2025,2026, compared to cash used of $269.8$200 million for the year ended June 30, 2024.2025. The $69.7$345 million decreaseincrease in cash flow used in investing activities was primarily due to cash used for business acquisitions, including for the acquisition of Noctrix, increased purchases of property, plant and equipment, and lower net proceeds from maturity of foreign currency contracts during the year ended June 30, 2025 compared to net payments from maturity of foreign currency contracts and decreased purchases of property, plant and equipment during the year ended June 30, 2025.2026.

Cash used in financing activities was $606.3$1,007 million for the year ended June 30, 2025,2026, compared to cash used of $1,119.3$606 million for the year ended June 30, 2024.2025. We repurchased $300.0$700 million of treasury stock during the year ended June 30, 20252026 compared to repurchases of $150.0$300 million during the year ended June 30, 2024.2025. Cash outflows for treasury stock repurchases were offset by lower net repayments under our Revolving Credit Agreement of $40.0$10 million for the year ended June 30, 20252026 compared to net repayments of $730.0$40 million for the year ended June 30, 2024.2025.

During the year ended June 30, 2025,2026, we paid cash dividends of $2.12$2.40 per common share totaling $310.9$350 million. On JulyAugust 31,6, 2025,2026, our board of directors declared a cash dividend of $0.60$0.66 per common share, to be paid on September 18,24, 2025,2026, to shareholders of record as of the close of business on August 14,20, 2025.2026. Future dividends are subject to approval by our board of directors.

(3)Revenue Recognition. We have determined that we have two operating segments, which are Sleep and Breathing Health and Residential Care Software. For products in our Sleep and Breathing Health business, we transfer control and recognize a sale when products are shipped to the customer in accordance with the contractual shipping terms. For our Residential Care Software business, revenue associated with cloud-hosted services are recognized as they are provided. The timing of revenue recognition may differ from the timing of invoicing to customers. Unbilled receivables arise when revenue is recognized forupon goodsthe orcompletion servicesof transferredperformance obligations, but thein advance of customer hasbilling notschedules. yetUnbilled beenreceivables invoiced,primarily typicallyreflect dueproducts shipped prior to billinginvoicing under the terms orof our customer agreements and timing differences.differences related to our software as a service billing cycles. We defer the recognition of a portion of the consideration received when performance obligations are not yet satisfied. Consideration received from customers in advance of revenue recognition is classified as deferred revenue. Performance obligations resulting in deferred revenue in our Sleep and Breathing Health business relate primarily to extended warranties on our devices and the provision of data for patient monitoring. Performance obligations resulting in deferred revenue in our Residential Care Software business relate primarily to the provision of software access with maintenance and support over an agreed term and material rights associated with future discounts upon renewal of some Residential Care Software contracts. Generally, deferred revenue will be recognized over a period of one to five years. Our contracts do not contain significant financing components.

The discussion of our business and operations should be read together with the risk factors contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, or the Annual Report, which was filed with the SEC and describe various material risks and uncertainties to which we are or may become subject. As of DecemberMarch 31, 2025,2026, there have been no material changes to such risk factors.

The following is an overview of our results of operations for the three and sixnine months ended DecemberMarch 31, 2025.2026. 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 committed to ongoing investment in research and development and product enhancements. During the three months ended DecemberMarch 31, 2025,2026, we invested $91.0$94.3 million on research and development activities, which represents 6.4%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.

Net revenue for the three months ended DecemberMarch 31, 20252026 was $1.4 billion, an increase of 11% compared to the three months ended DecemberMarch 31, 2024.2025. Gross margin was 61.8%62.2% for the three months ended DecemberMarch 31, 20252026 compared to 58.6%59.3% for the three months ended DecemberMarch 31, 2024.2025. Diluted earnings per share was $2.68$2.74 for the three months ended DecemberMarch 31, 2025,2026, compared to diluted earnings per share of $2.34$2.48 for the three months ended DecemberMarch 31, 2024.2025.

At DecemberMarch 31, 2025,2026, our cash and cash equivalents totaled $1.4$1.7 billion, our total assets were $8.5$8.8 billion and our stockholders’ equity was $6.3$6.5 billion.

Three Months Ended DecemberMarch 31, 20252026 Compared to the Three Months Ended DecemberMarch 31, 20242025

Net revenue for the three months ended DecemberMarch 31, 20252026 increased to $1,422.8$1,431.4 million from $1,282.1$1,291.7 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $140.7$139.7 million or 11% (aan 9%8% increase on a constant currency basis). The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):

Net revenue from our Sleep and Breathing Health business for the three months ended DecemberMarch 31, 20252026 was $1,255.9$1,260.5 million, an increase of 12%11% compared to net revenue for the three months ended DecemberMarch 31, 2024.2025. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $22.5$35.2 million for the three months ended DecemberMarch 31, 2025.2026. Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the three months ended DecemberMarch 31, 20252026 increased by 10%8% compared to the three months ended DecemberMarch 31, 2024.2025. 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 DecemberMarch 31, 20252026 increased to $835.0$818.7 million from $748.9$749.3 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $86.1$69.4 million or 11%.9%. 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 DecemberMarch 31, 20252026 to $420.9$441.8 million from $376.6$381.3 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $44.3$60.6 million or 12%16% (a 6%7% 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 DecemberMarch 31, 20252026 increased to $726.2$735.7 million from $669.3$676.2 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $56.9$59.5 million or 9%, including an increase of 8%6% in the U.S., Canada and Latin America and an increase of 9%14% in combined Europe, Asia and other markets (a 5%6% increase on a constant currency basis). Excluding the impact of foreign currency movements, device sales for the three months ended DecemberMarch 31, 20252026 increased by 7%.6%.

Net revenue from masks and other for the three months ended DecemberMarch 31, 20252026 increased to $529.7$524.8 million from $456.3$454.4 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $73.4$70.4 million or 16%,15%, including an increase of 16%14% in the U.S., Canada and Latin America and an increase of 17%20% in combined Europe, Asia and other markets (ana 8%10% increase on a constant currency basis). Excluding the impact of foreign currency movements, masks and other sales for the three months ended DecemberMarch 31, 20252026 increased by 14%.12%.

Net revenue from our Residential Care Software business for the three months ended DecemberMarch 31, 20252026 increased to $166.9$170.9 million from $156.5$161.2 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $10.4$9.7 million or 7%.6%. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $3.0$4.1 million for the three months ended DecemberMarch 31, 2025.2026. Excluding the impact of foreign currency movements, net revenue from our Residential Care Software business for the three months ended DecemberMarch 31, 20252026 increased by 5%4% compared to the three months ended DecemberMarch 31, 2024.2025. The increase was predominantly due to strong growth in the MEDIFOX DANDAN, Home and Hospice, and Home andMedical HospiceEquipment, or HME, business verticals, partially offset by weaker performance in our Senior Living and Long-Term Care business vertical.

SixNine Months Ended DecemberMarch 31, 20252026 Compared to the SixNine Months Ended DecemberMarch 31, 20242025

Net revenue for the sixnine months ended DecemberMarch 31, 20252026 increased to $2,758.4$4,189.8 million from $2,506.6$3,798.3 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $251.8$391.5 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):

Net revenue from our Sleep and Breathing Health business for the sixnine months ended DecemberMarch 31, 20252026 was $2,425.4$3,685.9 million, an increase of 11% compared to net revenue for the sixnine months ended DecemberMarch 31, 2024.2025. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $36.0$71.2 million for the sixnine months ended DecemberMarch 31, 2025.2026. Excluding the impact of currency movements, total Sleep and Breathing Health net revenue for the sixnine months ended DecemberMarch 31, 20252026 increased by 9% compared to the sixnine months ended DecemberMarch 31, 2024.2025. 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 sixnine months ended DecemberMarch 31, 20252026 increased to $1,609.8$2,428.5 million from $1,456.3$2,205.6 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $153.5$222.9 million or 11%.10%. 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 sixnine months ended DecemberMarch 31, 20252026 to $815.6$1,257.4 million from $737.1$1,118.3 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $78.5$139.1 million or 11%12% (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 sixnine months ended DecemberMarch 31, 20252026 increased to $1,406.5$2,142.3 million from $1,295.1$1,971.3 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $111.4$171.0 million or 9%, including an increase of 8%7% in the U.S., Canada and Latin America and an increase of 10%11% 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 sixnine months ended DecemberMarch 31, 20252026 increased by 7%.

Net revenue from masks and other for the sixnine months ended DecemberMarch 31, 20252026 increased to $1,018.9$1,543.6 million from $898.2$1,352.6 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $120.6$191.0 million or 13%,14%, including an increase of 14% in the U.S., Canada and Latin America and an increase of 12%15% in combined Europe, Asia and other markets (a 6%7% increase on a constant currency basis). Excluding the impact of foreign currency movements, masks and other sales increased by 12%, compared to the sixnine months ended DecemberMarch 31, 2024.2025.

Net revenue from our Residential Care Software business for the sixnine months ended DecemberMarch 31, 20252026 increased to $333.0$503.9 million from $313.3$474.4 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $19.7$29.5 million or 6%. Movements in international currencies against the U.S. dollar positively impacted net revenue by approximately $5.0$9.1 million for the sixnine months ended DecemberMarch 31, 2025.2026. Excluding the impact of foreign currency movements, net revenue from our Residential Care Software business for the sixnine months ended DecemberMarch 31, 20252026 increased by 5%4% compared to the sixnine months ended DecemberMarch 31, 2024.2025. The increase was predominantly due to continued growth in the MEDIFOX DAN vertical within our Residential Care Software business, Home and Hospice, and HME, business verticals, partially offset by weaker performance in our Senior Living and Long-Term Care business vertical.

Gross profit increased for the three months ended DecemberMarch 31, 20252026 to $878.7$891.0 million from $751.3$766.4 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $127.4$124.6 million or 17%.16%. Gross margin, which is gross profit as a percentage of net revenue, for the three months ended DecemberMarch 31, 20252026 was 61.8%62.2% compared to 58.6%59.3% for the three months ended DecemberMarch 31, 2024.2025.

The increase in gross margin for the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 20242025 was due primarily to manufacturing and logistics efficiencies and component cost improvements.improvements, as well as a small positive impact from product mix and foreign currency movements.

Gross profit increased for the sixnine months ended DecemberMarch 31, 20252026 to $1,699.5$2,590.5 million from $1,468.5$2,234.9 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $231.0$355.6 million or 16%. Gross margin for the sixnine months ended DecemberMarch 31, 20252026 was 61.6%61.8% compared to 58.6%58.8% for the sixnine months ended DecemberMarch 31, 2024.2025.

The increase in gross margin for the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 20242025 was due primarily to manufacturing and logistics efficiencies and component cost improvements.

Selling, general, and administrative expenses increased for the three months ended DecemberMarch 31, 20252026 to $278.4$285.7 million from $241.6$245.3 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $36.8$40.4 million or 15%.16%. 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$13.0 million, as reported in U.S. dollars. Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended DecemberMarch 31, 20252026 increased by 12%11% compared to the three months ended DecemberMarch 31, 2024.2025. As a percentage of net revenue, selling, general, and administrative expenses were 19.6%20.0% for the three months ended DecemberMarch 31, 2025,2026, compared to 18.8%19.0% for the three months ended DecemberMarch 31, 2024.2025.

The constant currency increase in selling, general, and administrative expenses during the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 20242025 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. Additionally, during the three months ended March 31, 2026, we recorded $5.9 million of acquisition and portfolio review related charges associated with the evaluation of strategic transactions, including legal and professional fees for diligence and related consultations. We did not incur material acquisition and portfolio review related expenses during the three months ended March 31, 2025.

Selling, general, and administrative expenses increased for the sixnine months ended DecemberMarch 31, 20252026 to $537.6$823.2 million from $480.6$725.9 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $57.0$97.4 million or 12%.13%. 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$23.9 million, as reported in U.S. dollars. Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the sixnine months ended DecemberMarch 31, 20252026 increased by 10% compared to the sixnine months ended DecemberMarch 31, 2024.2025. As a percentage of net revenue, selling, general, and administrative expenses were 19.5%19.6% for the sixnine months ended DecemberMarch 31, 2025,2026, compared to 19.2%19.1% for the sixnine months ended DecemberMarch 31, 2024.2025.

The constant currency increase in selling, general, and administrative expenses during the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 20242025 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. Additionally, during the nine months ended March 31, 2026, we recorded $5.9 million of acquisition and portfolio review related charges associated with the evaluation of strategic transactions, including legal and professional fees for diligence and related consultations. We did not incur material acquisition and portfolio review related expenses during the nine months ended March 31, 2025.

Research and development expenses increased for the three months ended DecemberMarch 31, 20252026 to $91.0$94.3 million from $81.4$83.9 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $9.6$10.3 million,million or 12%. 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$3.7 million for the three months ended DecemberMarch 31, 2025,2026, as reported in U.S. dollars Excluding the impact of foreign currency movements, research and development expenses increased by 10%8% compared to the three months ended DecemberMarch 31, 2024.2025. As a percentage of net revenue, research and development expenses were 6.4%6.6% for the three months ended DecemberMarch 31, 20252026 and 6.3%6.5% for the three months ended DecemberMarch 31, 2024.2025.

The increase in research and development expenses during the three months ended DecemberMarch 31, 20252026 compared to the three months ended DecemberMarch 31, 20242025 was primarily due to increases in employee-related costs.

Research and development expenses increased for the sixnine months ended DecemberMarch 31, 20252026 to $178.3$272.6 million from $160.9$244.8 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $17.4$27.7 million,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$4.8 million for the sixnine months ended DecemberMarch 31, 2025,2026, as reported in U.S. dollars. Excluding the impact of foreign currency movements, research and development expenses increased by 10%9% compared to the sixnine months ended DecemberMarch 31, 2024.2025. As a percentage of net revenue, research and development expenses were 6.5% for the sixnine months ended DecemberMarch 31, 2025,2026, compared to 6.4% for the sixnine months ended DecemberMarch 31, 2024.2025.

Amortization of acquired intangible assets for the three months ended DecemberMarch 31, 20252026 totaled $11.8$11.2 million compared to $11.0$10.9 million for the three months ended DecemberMarch 31, 2024.2025.

Amortization of acquired intangible assets for the sixnine months ended DecemberMarch 31, 20252026 totaled $23.7$35.0 million compared to $22.5$33.3 million for the sixnine months ended DecemberMarch 31, 2024.2025.

The increase in amortization of acquired intangible assets for the three and sixnine months ended DecemberMarch 31, 20252026 compared to the three and sixnine months ended DecemberMarch 31, 20242025 is due to amortization of intangibles from the VirtuOx acquisition during the three months ended June 30, 2025.2025, partially offset by certain acquired intangible assets reaching the end of their useful lives and becoming fully amortized.

We did not record any restructuring expenses during the three and six months ended DecemberMarch 31, 2024.2026.

Total other income (loss), net for the sixthree months ended DecemberMarch 31, 20252026 was income of $4.7$2.5 million compared to a loss of $2.7$8.6 million for the sixthree months ended DecemberMarch 31, 2024.2025. We recorded interestInterest income, net ofincreased $16.7to $12.3 million for the sixthree months ended DecemberMarch 31, 20252026 compared to interest expense, net of $2.4$0.8 million for the sixthree months ended DecemberMarch 31, 20242025 due to lower debt levels following repayments on our revolving credit facility.facility Interestand gains recognized on cross-currency swaps associated with our fair value and net investment hedges. The increase in interest income, net,net was partially offset by a loss associated with our equity investments of $5.9$10.1 million for the sixthree months ended DecemberMarch 31, 20252026 compared to a loss of $2.1$5.6 million for the sixthree months ended DecemberMarch 31, 2024.2025.

Our effective income tax rate for the three and sixnine months ended DecemberMarch 31, 20252026 was 20.9%20.6% and 21.4%,21.1%, respectively, as compared to 17.6%12.6% and 18.2%16.3% for the three and sixnine months ended DecemberMarch 31, 2024,2025, respectively. Our effective rate of 20.9%20.6% for the three months ended DecemberMarch 31, 20252026 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 sixnine months ended DecemberMarch 31, 20252026 was primarily due to the impact of global minimum taxes implemented in accordance with Pillar Two and ainterest shiftand penalties refunded from the IRS in ourthe globalprior mixyear of earnings.period.

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 DecemberMarch 31, 20252026 has been incorporated into our condensed consolidated financial statements.

As a result of the factors above, our net income for the three months ended DecemberMarch 31, 20252026 was $392.6$398.7 million compared to $344.6$365.0 million for the three months ended DecemberMarch 31, 2024,2025, an increase of $48.0$33.7 million,million or 14%.9%.

Our diluted earnings per share for the three months ended DecemberMarch 31, 20252026 was $2.68$2.74 per diluted share compared to $2.34$2.48 for the three months ended DecemberMarch 31, 2024,2025, an increase of $0.34,$0.26 or 15%.10%.

As a result of the factors above, our net income for the sixnine months ended DecemberMarch 31, 20252026 was $741.1$1,139.9 million compared to $656.0$1,021.0 million for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $85.2$118.8 million,million or 13%.12%.

Our diluted earnings per share for the sixnine months ended DecemberMarch 31, 20252026 was $5.05$7.79 per diluted share compared to $4.45$6.93 for the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $0.60,$0.86 or 13%.12%.

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 selling, general, and administrative expenses, 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 netselling, incomegeneral, and administrative expenses” is equal to GAAP netselling, incomegeneral, onceand adjustedadministrative forexpenses amortizationless acquisition and portfolio review related expenses. Non-GAAP selling, general, and administrative expenses as a percentage of acquired intangibles, restructuring expenses and associated tax effects. The measure “non-GAAP diluted earnings per share”revenue is the ratio of non-GAAP netselling, incomegeneral, and administrative expenses to dilutedGAAP sharesnet outstanding.revenue. These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except for per share amountspercentages):

As of DecemberMarch 31, 20252026 and June 30, 2025, we had cash and cash equivalents of $1,417.1$1,660.5 million and $1,209.5 million, respectively. Our cash and cash equivalents held within the U.S. at DecemberMarch 31, 20252026 and June 30, 2025 were $794.5$944.0 million and $555.0 million, respectively. Our remaining cash and cash equivalent balances at DecemberMarch 31, 20252026 and June 30, 2025, were $622.6$716.5 million and $654.5 million, respectively. Our cash and cash equivalent balances are held at highly rated financial institutions.

As of DecemberMarch 31, 2025,2026, we had $1,500.0 million available for draw down under the revolving credit facility and a combined total of $2,917.1$3,160.5 million in cash and available liquidity under the revolving credit facility.

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 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 DecemberMarch 31, 2025,2026, we had $1,500.0 million available for draw down under the revolving credit facility.

On DecemberMarch 31, 2025,2026, 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 provided by operating activities was $797.1$1,351.2 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to cash provided of $634.2$1,212.8 million for the sixnine months ended DecemberMarch 31, 2024.2025. The $162.9$138.4 million increase in cash flow from operations was primarily due to increased net income and improvements in working capital during the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 2024.2025.

Cash used in investing activities was $103.5$161.5 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to cash used of $34.5$66.3 million for the sixnine months ended DecemberMarch 31, 2024.2025. The $69.0$95.2 million increase in cash flow used in investing activities was primarily due to increased purchases of property, plant and equipment duringand theminority six months ended December 31, 2025investments, in addition to netcash paymentsused fromto acquire businesses during the nine months ended March 31, 2026, partially offset by increased proceeds upon the maturity of foreign currency contracts during the sixnine months ended DecemberMarch 31, 2025 compared to net proceeds from maturity of foreign currency contracts during the six months ended December 31, 2024.2026.

Cash used in financing activities was $488.6$743.9 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to cash used of $298.3$442.4 million for the sixnine months ended DecemberMarch 31, 2024.2025. WeThe repurchased$301.5 $325.0million increase in cash flow used in financing activities was primarily due to $500.0 million of treasury stock repurchases during the sixnine months ended DecemberMarch 31, 20252026 compared to repurchases of $125.0$200.0 million during the sixnine months ended DecemberMarch 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, 2024.2025.

During the three months ended DecemberMarch 31, 2025,2026, we paid cash dividends of $0.60 per common share totaling $87.6$87.2 million. On JanuaryApril 29,30, 2026, our board of directors declared a cash dividend of $0.60 per common share, to be paid on MarchJune 19,18, 2026, to shareholders of record as of the close of business on FebruaryMay 12,14, 2026. Future dividends are subject to approval by our board of directors.