Cochlear (COH) investor relations material

Executive summary

• FY26 results reached the upper end of revised guidance, with sales revenue up 2% in constant currency to AUD 2.3 billion ($2,343 million) and underlying net profit of AUD 322 million, despite flat cochlear implant revenue and lower gross margin.

• Strategic progress included the launch of the Nucleus Nexa System, strong adoption, and increased R&D investment focused on innovation and market expansion.

• Actions to reduce fixed costs, accelerate the medicalisation of hearing loss, and expand adult cochlear implantation as standard care are underway to support long-term growth.

• Over 55,000 people enabled to hear for the first time or regain hearing in FY26, with more than 50,000 recipients receiving new speech processors.

Financial highlights

• Sales revenue grew 2% in constant currency to AUD 2.3 billion ($2,343 million); underlying net profit was AUD 322 million, down 22% year-over-year; statutory net profit was $147 million, down 62% due to significant items.

• Gross margin declined three percentage points to 71%, impacted by product mix, manufacturing overhead absorption, and FX headwinds.

• R&D expenses increased 15% to AUD 323 million, representing 13–14% of sales revenue.

• Free cash flow more than doubled year-over-year to $263–264 million, driven by improved working capital and lower taxes.

• Dividends per share were $3.45, with a payout ratio of 70% of underlying net profit.

Outlook and guidance

• FY27 guidance: low single-digit constant currency revenue growth; underlying net profit between AUD 330 million and AUD 350 million.

• Gross margin expected to remain flat at 70–71%; modest revenue growth in developed markets, low growth in emerging markets.

• Services growth to be slightly lower; acoustics growth driven by Osia 3 Sound Processor launch.

• Medium-term target to return to 18% net profit margin, with profits expected to grow faster than revenue.

• FX headwinds anticipated to reduce underlying net profit by 8–10% relative to FY26 average rates.