Nanosonics (NAN) H2 2024 earnings summary

Executive summary

• Revenue reached AUD 170 million (or $170 million), up 2% year-over-year, with a strong second half recovery driven by a 24% increase in capital unit sales and 20% growth in capital revenue over H1.

• Global installed base grew 7% to 34,790 units, with 2,340 new units placed, and trophon business achieving 50% penetration in North America.

• Operating profit before tax was AUD 13 million (or $13.0 million), down from AUD 21.6 million (or $21.6 million), reflecting lower capital sales and ongoing investment in growth initiatives.

• Free cash flow was AUD 20.4 million (or $20.4 million), with cash reserves of AUD 129.6 million (or $129.6 million) and no debt at year-end.

• Significant progress on CORIS, with FDA De Novo submission filed and under review; regulatory process is ongoing with no unexpected delays.

Financial highlights

• FY24 revenue was AUD 170 million (or $170 million), up 2% year-over-year, with a significant second half recovery.

• Capital revenue declined 11% to AUD 48.2 million (or $48.2 million), but second half capital revenue rose 20% over the first half.

• Consumables and service revenue grew 9% to AUD 121.8 million (or $121.8 million), with 11% growth in the second half.

• Gross margin for the year was 77.9%, down 0.8 points, with a second half dip to 76.3% due to a one-off manufacturing slowdown.

• Operating expenses rose 10% to AUD 125.6 million (or $125.6 million), including R&D, ERP, and expansion investments.

Outlook and guidance

• FY25 revenue growth targeted at 8%-12%, driven by capital unit growth, upgrades, and recurring revenue.

• Gross margin expected to recover to 77%-79% in FY25 as manufacturing normalizes.

• Operating expenses projected to grow 6%-10%, slower than FY24, with ongoing R&D and ERP investments.

• Trophon-only business expected to deliver positive operating leverage and margin expansion.

• Beyond FY25, aims for global expansion of trophon, international CORIS commercialization, and continued R&D and M&A.