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Risk Overview Q2, 2026
Risk Distribution
33% Legal & Regulatory
18% Finance & Corporate
18% Tech & Innovation
13% Macro & Political
10% Ability to Sell
8% Production
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Resmed Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2026
Main Risk Category
Legal & Regulatory
With 13 Risks
Legal & Regulatory
With 13 Risks
Number of Disclosed Risks
39
+1
From last reportS&P 500 Average: 31
39
+1
From last reportS&P 500 Average: 31
Recent Changes
3Risks added
1Risks removed
6Risks changed
Since Jun 2026
3Risks added
1Risks removed
6Risks changed
Since Jun 2026
Number of Risk Changed
6
+6
From last reportS&P 500 Average: 1
6
+6
From last reportS&P 500 Average: 1
See the risk highlights of Resmed in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 39
Legal & Regulatory
Total Risks: 13/39 (33%)Above Sector Average
Regulation6 | 15.4%
Regulation - Risk 1
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.Changed
Regulation - Risk 2
We are subject to new areas of direct healthcare oversight by federal government agencies due to our acquisitions of VirtuOx and Noctrix.Changed
In 2025, we acquired VirtuOx, a software-enabled independent 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, VirtuOx, and as a
Medicare-enrolled DME supplier, Noctrix, are each subject to laws, regulations and policies pertaining to their 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 may 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 covered 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 and Noctrix's direct billing statuses increase their risk relative to Resmed under the healthcare fraud and abuse laws and false claims laws. 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.
Regulation - Risk 3
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 operationsWe 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.
Regulation - Risk 4
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.
Any new product introduction or existing product modification could be subjected to a lengthier, more rigorous FDA examination process. For example, in certain cases we may need to conduct clinical trials of a modified or new product before submitting a 510(k) notice. We may also be required to obtain premarket approvals for certain of our products. Indeed, recent trends in the FDA's review of premarket notification submissions suggest that the FDA is often requiring manufacturers to provide new, more expansive, or different information regarding a particular device than what the manufacturer anticipated upon 510(k) submission. This has resulted in increasing uncertainty and delay in the premarket notification review process. For example, in November 2018, FDA officials announced steps that the FDA intended to take to modernize the 510(k) premarket notification pathway. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. In September 2019, the FDA also issued revised final guidance establishing a "Safety and Performance Based Pathway" for "manufacturers of certain well-understood device types" allowing manufacturers to rely on objective safety and performance criteria recognized by the FDA to demonstrate substantial equivalence, obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA has developed and maintains a list of device types appropriate for the "safety and performance based" pathway and continues to develop product-specific guidance documents that identify the performance criteria and recommended testing methodologies for each such device type, where feasible. Some of these proposals have not yet been finalized or adopted, although the FDA may work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect our business.
The FDA's ongoing review of the 510(k) program may make it more difficult for us to make modifications to our previously cleared products, either by imposing stricter requirements on when a manufacturer must submit a new 510(k) for a modification to a previously cleared product, or by applying more onerous review criteria to such submissions. FDA continues to review its 510(k) clearance process which could result in additional changes to regulatory requirements or guidance documents which could increase the costs of compliance or restrict our ability to maintain current clearances. The requirements of the more rigorous premarket approval process and/or significant changes to the 510(k) clearance process could delay product introductions and increase the costs associated with FDA compliance. Marketing and sale of our products outside the U.S. are also subject to regulatory clearances and approvals, and if we fail to obtain these regulatory approvals, our sales could suffer. We cannot assure that any new products we develop will receive required regulatory approvals from U.S. or foreign regulatory agencies.
The definition of "device" in the FD&C Act was amended in 2016 to exclude certain software functions. Our software offerings may include functions that fall under FDA's jurisdictional definition of a medical device, while there may be software offerings that are considered exempt from the "device" definition even when utilizing data coming from an FDA regulated medical device. Our determination of the appropriate classification of our digital offerings may lead to regulatory inquiry and the expenditure of time and resources to meet FDA feedback as to the appropriate category for particular digital offerings.
Regulation - Risk 5
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 QMSR, requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. It remains unclear the extent to which the QMSR may impose additional or different regulatory requirements on us. Compliance may require ongoing updates to our processes, systems, and training, and failure to maintain compliance could result in regulatory actions, product recalls, or delays in approvals, which could adversely affect our business, financial condition, 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.
Regulation - Risk 6
Laws regulating consumer contacts could adversely affect our business operations or create liabilities.Our business activities include contacts with consumers in different parts of the world. Certain laws, such as the U.S. Telephone Consumer Protection Act, regulate telemarketing practices and certain automated outbound contacts with consumers, such as phone calls, texts or emails. Our use of outbound contacts may be restricted by existing laws, or by laws, regulations, or regulatory decisions that may be adopted in the future. Similarly, certain data privacy laws, including CCPA, and subsequently CPRA, and the GDPR require disclosure of our privacy practices to consumers. If we are found to have violated these laws or regulations, we may be subjected to substantial fines, penalties, or liabilities to consumers.
Litigation & Legal Liabilities3 | 7.7%
Litigation & Legal Liabilities - Risk 1
Off-label marketing of our products could result in substantial penalties.Litigation & Legal Liabilities - Risk 2
We are subject to potential professional services liability claims due to our recent acquisition of VirtuOx, which may exceed the scope and amount of our insurance coverage, which would expose us to liability for uninsured claims.Added
As an independent diagnostic testing facility, VirtuOx operates in the diagnostic services business, which exposes us to claims alleging malpractice. While VirtuOx engages physicians to interpret its diagnostic tests on an independent contractor basis and therefore, may be able to shed malpractice liability to the extent that those professional interpretations are incorrect, most likely a harmed patient or healthcare provider will bring claims against both VirtuOx and its interpreting physicians and VirtuOx could be held liable. Any professional liability claim brought against us, with or without merit, could result in an increase of our malpractice liability insurance rates. In addition, we would have to pay any amount awarded by a court or jury outside of our policy limits. Our insurance policies have various exclusions, and thus we may be subject to a malpractice 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 malpractice 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.
Litigation & Legal Liabilities - Risk 3
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 an 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.
Taxation & Government Incentives3 | 7.7%
Taxation & Government Incentives - Risk 1
Income tax laws, regulations, and enforcement practices in various jurisdictions are evolving and, as a result, tax authorities are aggressively pursuing taxpayers. This may result 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.Changed
Taxation & Government Incentives - Risk 2
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.Changed
Our income tax returns are based on calculations and assumptions that require significant judgment and are subject to audit by various tax authorities. In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws, including current and evolving government policies that encourage the establishment or relocation of certain activities, such as manufacturing, research and development, information technologies, and other business operations in their jurisdictions. As a result, companies must carefully consider commercial and related tax impacts in those jurisdictions, which may increase time-consuming and costly tax compliance, as well as responses to inquiries, examinations and audits. We regularly assess the potential outcomes of examinations and audits by tax authorities in determining the adequacy of our provision for income taxes. If any ongoing tax audits are resolved in a manner not consistent with management's expectations, the result could be a material adjustment to our past or future taxable income, tax payable or deferred tax assets, and may require us to pay penalties and interest that could materially adversely affect our financial results.
We are currently under audit by the Australian Taxation Office, or the ATO, for the 2018 tax year. Additionally, tax years 2018 to 2025 remain open to examination by the major jurisdictions in which we are subject to tax. The taxing authorities of the jurisdictions in which we operate may challenge our positions and methodologies related to transfer pricing, including valuing developed technology, intercompany arrangements and intellectual property transfers. If challenged by tax authorities, Resmed will vigorously defend our positions and methodologies. Although we believe our tax positions are appropriate, any final assessment arising from tax audits may result in material changes to our past or future taxable income, tax payable or deferred tax assets, and may require us to pay penalties and interest that could materially adversely affect our financial results.
Taxation & Government Incentives - Risk 3
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 43 days beginning on October 1, 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.
Environmental / Social1 | 2.6%
Environmental / Social - Risk 1
Our use and disclosure of personal information, including health information, is subject to federal, state and foreign privacy, artificial intelligence, data, biometrics and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability, regulatory investigations, legal actions, or reputational harm.Finance & Corporate
Total Risks: 7/39 (18%)Below Sector Average
Share Price & Shareholder Rights2 | 5.1%
Share Price & Shareholder Rights - Risk 1
Sustainability and corporate governance issues are constantly evolving, leading to additional investment and expense, and may have an adverse effect on our business, financial condition and results of operations and reputation.Share Price & Shareholder Rights - Risk 2
Delaware law and provisions in our charter could make it difficult for another company to acquire us.Provisions of our certificate of incorporation may have the effect of delaying or preventing changes in control or management which might be beneficial to us or our security holders. Our board of directors has the authority to issue up to 2 million shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without further vote or action by the stockholders. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control, may discourage bids for our common stock at a premium over the market price of our common stock and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock.
Accounting & Financial Operations2 | 5.1%
Accounting & Financial Operations - Risk 1
Our quarterly operating results are subject to fluctuation for a variety of reasons.Accounting & Financial Operations - Risk 2
Our ability to sustain or grow dividends or repurchase shares is subject to board discretion.Our dividend declarations, share-repurchase programs and other capital allocations are subject entirely to the discretion of our board of directors. The board of directors reviews these matters periodically and may, at any time and for any reason, decide to decrease, suspend or discontinue dividends, reduce or pause share repurchases, or redirect available cash toward alternative uses-such as strategic acquisitions, organic growth initiatives or other corporate purposes.
Among the factors the board of directors considers are our operating results, cash-flow generation, future funding requirements, prevailing economic and market conditions, legal and regulatory constraints under applicable corporate law, and the overall balance between returning capital to shareholders and investing for long-term growth. As these factors can change rapidly and are influenced by events beyond our control, investors should not rely on past dividend payments or repurchase activity as an indication of future distributions. Any modification to our capital return practices could adversely affect the market price of our common stock and diminish the total return to shareholders.
Debt & Financing1 | 2.6%
Debt & Financing - Risk 1
Our leverage and debt service obligations could adversely affect our business.Corporate Activity and Growth2 | 5.1%
Corporate Activity and Growth - Risk 1
If we are unable to support our continued growth or achieve expected operating efficiencies, our business could suffer.Corporate Activity and Growth - Risk 2
Failure to identify, execute, and integrate acquired businesses into our operations successfully, or challenges related to the Company's strategic initiatives, including divestitures.Added
As part of our strategy to develop and identify new solutions and technologies and optimize our portfolio of products, we have completed several acquisitions and investments and may make additional acquisitions, investments, or divestitures in the future. Our integration of the operations of acquired businesses, or a divestiture of part of our existing businesses, including the separation of our MatrixCare business, requires significant efforts, including the coordination of information technologies, research and development, sales and marketing, operations, manufacturing, and finance. These efforts result in additional expenses, and our management may have attention diverted while trying to integrate acquisitions. In addition, the cumulative effect of simultaneously executing multiple transactions may increase operational complexity and heighten execution and timing risks. Our ability to realize the anticipated benefits of acquisitions depends not only on the successful integration of acquired businesses, but also on our ability to identify appropriate acquisition targets, evaluate their strategic fit and long-term value, accurately assess risks and liabilities, and negotiate and complete transactions on acceptable terms. Our acquisitions may involve the undertaking of additional risk areas and the investment of additional resources and personnel to manage that risk. In addition, we cannot be certain that the businesses we acquire will become profitable or remain profitable. We also could experience negative effects on our business, results of operations, financial condition, and cash flows from acquisition-related charges, and amortization of intangible assets. Moreover, we have recorded intangible assets, including goodwill, in connection with our acquisitions. We evaluate goodwill for impairment annually and other acquired intangible assets whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Our impairment assessments require significant judgments and assumptions, including those related to macroeconomic conditions, industry and market trends, projected revenues and cash flows, and discount rates. If actual results differ from these assumptions or market conditions change, we may be required to record material impairment charges that could adversely affect our results of operations. These effects, combined with transaction costs, retention or separation-related expenses, and potential delays in realizing anticipated synergies or strategic benefits, may place pressure on earnings or cash flows.
In addition, expected strategic benefits from any planned or completed divestiture, including the separation of our MatrixCare business, may not be realized or may take longer to realize than expected, and there can be no assurance that disputes will not arise under transition service, or other agreements that have or may be executed as part of a divestiture. Challenges associated with executing these transactions may materially adversely affect our business, results of operations, financial condition, and cash flows.
Tech & Innovation
Total Risks: 7/39 (18%)Below Sector Average
Innovation / R&D1 | 2.6%
Innovation / R&D - Risk 1
Our products are the subject of clinical trials conducted by us, our competitors, or other third parties, the results of which may be unfavorable, or perceived as unfavorable, and could have a material adverse effect on our business, financial condition, and results of operations.Trade Secrets1 | 2.6%
Trade Secrets - Risk 1
Our intellectual property may not protect our products, and/or our products may infringe on the intellectual property rights of third parties.Cyber Security1 | 2.6%
Cyber Security - Risk 1
Actual or attempted breaches of security, unauthorized disclosure of information, attacks which reduce availability of systems such as denial of service, or the perception that personal and/or other sensitive or confidential information in our possession is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.Technology4 | 10.3%
Technology - Risk 1
We are increasingly dependent on information technology systems and infrastructure. Failed, substandard or delayed efforts to improve our IT System infrastructure may result in disruption to our business or materially increased costs.Technology - Risk 2
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 software solutions 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 software solutions 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. 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 are unable to establish, maintain or expand strategic technology partnerships or integrations that support our digital ecosystem, our ability to compete effectively and deliver connected care solutions could be adversely affected.
Further, if we fail to innovate or adequately invest in new technologies, we could lose our 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.
Technology - Risk 3
If there are interruptions or performance problems associated with our technology or infrastructure, our existing software customers may experience service outages, and our new customers may experience delays in the deployment of our platforms.We depend on services from various third parties as well as our own technical operations infrastructure to distribute our Residential Care Software products via the internet. If a service provider fails to provide sufficient capacity to support our platforms or otherwise experiences service outages, such failure could interrupt our customers' access to our service, which could adversely affect their perception of our platform's reliability and our revenues. Any disruptions in these services, including as a result of actions outside of our control, would significantly impact the continued performance of our Residential Care Software products. In the future, these services may not be available to us on commercially reasonable terms, or at all. Any loss of the right to use any of these services could result in decreased functionality of our Residential Care Software products until equivalent technology is either developed by us or, if available from another provider, is identified, obtained and integrated into our infrastructure.
To meet our business needs, we must maintain sufficient excess capacity in our operations infrastructure to ensure that our Residential Care Software products are accessible. Design and mechanical errors, spikes in usage volume and failure to follow system protocols and procedures could cause our systems to fail, resulting in interruptions in our Residential Care Software products. Any interruptions or delays in our service, whether caused by our products, or as a result of third-party error, our own error, natural disasters or security breaches, whether accidental or willful, could harm our relationships with customers and cause our revenue to decrease and/or our expenses to increase.
Any of the above circumstances or events may harm our reputation, cause customers to terminate their agreements, impair our ability to obtain contract renewals from existing customers, impair our ability to grow our customer base, result in the expenditure of significant financial, technical and engineering resources, subject us to financial penalties and liabilities under our service level agreements, and otherwise harm our business, results of operations and financial condition.
Technology - Risk 4
Our use of artificial intelligence in certain products, software solutions and business operations may expose us to operational, regulatory and reputational risks that could adversely affect our business, financial condition and results of operations.Added
We increasingly incorporate artificial intelligence, or AI, including machine learning, into certain products, software solutions and business processes to enhance patient engagement, support clinical workflows and improve operational efficiencies. AI-enabled features may not perform as intended and could produce inaccurate, inconsistent or unintended outputs. If our AI-enabled products or services fail to perform as expected, are perceived as unreliable, or do not gain market acceptance, our reputation, competitive position and operating results could be adversely affected.
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
Macro & Political
Total Risks: 5/39 (13%)Above Sector Average
Economy & Political Environment2 | 5.1%
Economy & Political Environment - Risk 1
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.Economy & Political Environment - Risk 2
Healthcare reform or other cost-cutting measures, including changes in coverage policy for our products and services, by government or commercial payors may have a material adverse effect on our industry and our results of operations.In March 2010, the ACA was signed into law in the U.S. The ACA made changes, effective over time, that significantly impacted the healthcare industry, including medical device manufacturers. One of the principal purposes of the ACA was to expand health insurance coverage to millions of Americans who were uninsured. The ACA required adults not covered by an employer or government-sponsored insurance plan to maintain health insurance coverage or pay a penalty, a provision commonly referred to as the individual mandate.
The ACA also contained provisions designed to generate the revenues necessary to fund the coverage expansions. This included new fees or taxes on certain health-related industries, including medical device manufacturers. Beginning in 2013, entities that manufacture, produce or import medical devices were required to pay an excise tax in an amount equal to 2.3% of the price for such devices sold in the U.S. This excise tax was applicable to our products that are primarily used in hospitals and sleep labs, which includes ApneaLink, VPAP Tx and certain breathing health products. Through a series of legislative amendments, the tax was suspended beginning in 2016, and permanently repealed effective January 1, 2020. In addition to the competitive bidding changes discussed above, the ACA also included, among other things, the implementation of new payment methodologies for voluntary coordination of care by groups of providers, such as physicians and hospitals, and the establishment of a new Patient-Centered Outcomes Research Institute to oversee, identify, prioritize and conduct comparative clinical effectiveness research. The increased funding and focus on comparative clinical effectiveness research, which compares and evaluates the risks and benefits, clinical outcomes, effectiveness and appropriateness of products, may result in changes to Federal healthcare program coverage and reimbursement methodologies for our products and services which could also lead to lower reimbursements for our products and services by payors and decreased revenues to us.
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. On July 4, 2025 the One Big Beautiful Bill Act was signed into law and provided a 1-year, 2.5% statutory payment update under the PFS for CY 2026. CMS subsequently finalized the CY 2026 PFS, which incorporates that 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 extent to which future changes may affect payments for services furnished under the Medicare program. Additionally, pursuant to the Consolidated Appropriations Act of 2026, many of the temporary Medicare telehealth flexibilities, including the waiver of geographic and originating site restrictions for certain telehealth services, have been extended through December 31, 2027. Certain telehealth 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 finalized these proposed revisions, and the current rating criteria remains in effect, but should this proposal, or another similar proposal to limit disability ratings be adopted, fewer veterans may pursue 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 may finalize, modify, or withdraw the proposed revisions through a future final rule, the timing and substance of which remain uncertain.
On June 9, 2025, CMS finalized a National Coverage Determination (NCD) entitled "Noninvasive Positive Pressure Ventilation (NIPPV) in the Home for the Treatment of Chronic Respiratory Failure (CRF) Consequent to Chronic Obstructive Pulmonary Disease (COPD)." The NCD establishes a uniform national coverage criteria for Respiratory Assist Devices (RADs) with bi-level capacity, with or without a backup rate feature, and for the first time, Home Mechanical Ventilators (HMVs) for patients with chronic respiratory failure (CRF) consequent to COPD. CMS subsequently issued implementation guidance on August 21, 2025 instructing Medicare contractors to process claims under the NCD effective June 9, 2025. Although the NCD establishes national coverage criteria that may reduce reimbursement uncertainty and replace previously applicable local coverage determination (LCD) policies for this indication, it also imposes specific clinical qualification, documentation, and ongoing patient monitoring requirements. The extent to which these national coverage criteria and associated operational requirements will affect providers, suppliers, utilization of these products, or reimbursement by other third-party payors remains uncertain.
On July 4, 2025, President Trump signed the budget reconciliation bill (entitled "One Big Beautiful Bill Act", referred to herein as the "Bill") to meet spending targets aimed at funding the Trump Administration's domestic priorities that includes significant changes to the Medicaid program. Among other things, the Bill includes changes to Medicaid eligibility and enrollment requirements, provider taxes, and state-directed payment policies that are intended to reduce federal Medicaid spending over time. According to the Congressional Budget Office (CBO), the Bill is projected to reduce federal spending on Medicaid and Marketplace coverage by approximately $1.1 trillion over the 2025-2034 period, increase the federal deficit by approximately $3.4 trillion on a conventional scoring basis over the same period, and result in approximately 10 million additional uninsured individuals by 2034. CBO has also estimated that, after accounting for macroeconomic effects, the Bill could increase federal deficits by approximately $4. trillion over the budget window.
In February 2026, the CBO projected that federal health programs will cost over $26 trillion through 2036, projected to grow in size from less than $2 trillion today to over $3 trillion by 2036. Medicare spending is projected to nearly double over the next decade, while the cost of Medicaid and the Children's Health Insurance Program (CHIP) will grow a projected 36% and ACA subsidies by 33%. Finally, Medicare's Hospital Insurance Trust Fund is projected to become insolvent in 2040, highlighting the continuing fiscal pressures facing the Medicare program. Future legislative and other governmental actions to curb this projected spending could include stricter eligibility requirements and more restrictive Medicaid programs at the state level, leaving fewer individuals eligible for coverage, which could have an adverse impact on the number of individuals who seek to use our products and services.
Despite the ACA going into effect over a decade ago, there have been numerous legal and Congressional challenges to the law's provisions and the effects of certain provisions has made compliance costly. For instance, changes to the ACA included in the Bill, such as shortening enrollment periods and eliminating automatic re-enrollment, could reduce overall ACA enrollment. We expect material changes in health policy, enforcement initiatives, and coverage and reimbursement for health care items and services from the Trump Administration and Congress. As such, our costs to monitor these changes and respond to new requirements are expected to increase.
The full impact on our business of the ACA, the Medicare Sequestration Payment Reductions, VA disability ratings criteria, Medicaid funding, and other new laws is uncertain. Nor is it clear whether other legislative changes will be adopted, if any, or how such changes would affect the demand for our products and services. Future actions by the Administration and the U.S. Congress could have a material adverse impact on our results of operations or financial condition. It is unclear exactly how the new presidential administration will impact healthcare reform measures or what new cost-saving measures could be implemented, including what, if any, impact such changes will have on our business. We cannot predict what additional new legislation, agency priorities, and rulemaking may be on the horizon as the U.S. continues to reassess how it pays for healthcare. As a result, we cannot quantify or predict what impact any changes might have on our business and results of operations. However, any changes that lower reimbursement for our products or services could materially and adversely affect our business, financial condition, and results of operations.
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.
International Operations1 | 2.6%
International Operations - Risk 1
We are subject to various risks relating to international activities that could affect our overall profitability.Natural and Human Disruptions2 | 5.1%
Natural and Human Disruptions - Risk 1
Our business, financial condition and results of operations could be harmed by the effects of pandemics, epidemics, or other public health crises.Natural and Human Disruptions - Risk 2
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 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.
In addition, the increasing concern over climate change has resulted and may continue to result in more legal and regulatory reporting requirements on the risks and costs of effects of climate change on the environment, including regulating greenhouse gas emissions and related reporting requirements, alternative energy policies and sustainability initiatives. If such laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet the regulatory obligations, as well as adverse impacts on the availability of raw materials, manufacturing operations and the distribution of our products, which could adversely affect our operations and profitability.
Ability to Sell
Total Risks: 4/39 (10%)Above Sector Average
Competition1 | 2.6%
Competition - Risk 1
Our inability to compete with new and existing technology may harm our business.Changed
Demand2 | 5.1%
Demand - Risk 1
Consolidation in the healthcare industry and healthcare payment reform could have an adverse effect on our revenues and results of operations.Demand - Risk 2
The success of our software offerings depends substantially on customers entering, renewing, upgrading and expanding their agreements for cloud services, term licenses, and maintenance and support agreements with us. Any decline in our customer renewals, upgrades or expansions could adversely affect our future operating results.We typically enter into term-based agreements for our licensed on-premises offerings, cloud services, and maintenance and support services, which customers have discretion to renew or terminate. To improve our operating results, it is important that new customers enter into renewable agreements, and our existing customers renew, upgrade and expand their term-based agreements when the initial contract term expires. Our customers have no obligation to renew, upgrade or expand their agreements with us after the terms have expired. Our customers' renewal, upgrade and expansion rates may decline or fluctuate for a number of factors, including their satisfaction or dissatisfaction with our offerings, our pricing, the effects of general economic conditions, competitive offerings or alterations or reductions in our customers' spending levels. If our customers do not renew, upgrade or expand their agreements with us or renew on terms less favorable to us, our revenues may decline.
Sales & Marketing1 | 2.6%
Sales & Marketing - Risk 1
Our business depends on our ability to effectively educate and engage dealers of home healthcare products, sleep clinics and physicians, health care providers, and patients regarding the benefits of our products, software solutions and services.Changed
Production
Total Risks: 3/39 (8%)Below Sector Average
Employment / Personnel1 | 2.6%
Employment / Personnel - Risk 1
If we fail to source, develop and retain key employees, our business may suffer.Supply Chain1 | 2.6%
Supply Chain - Risk 1
Disruptions in the supply of components from our suppliers could result in a significant reduction in sales and profitability.Costs1 | 2.6%
Costs - Risk 1
Government and private insurance plans may not adequately reimburse our customers for our products, which could result in reductions in sales or selling prices for our products.See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.