Cochlear Limited’s FY26 results delivered underlying net profit of $322 million, up 22% year on year, achieving the upper end of revised guidance despite a challenging operating environment. Sales revenue reached $2.3 billion, representing 2% growth in constant currency with a notably stronger second half expanding 6%, signalling momentum heading into the new financial year.
The successful launch of the Nucleus Nexa System proved to be the key driver, capturing over 95% of the developed market implant mix by June. Combined with an average 3% price increase across the portfolio, Nexa is driving both volume and margin expansion. Cochlear implants, representing 61% of sales revenue, remained flat in constant currency despite challenging market conditions, supported by a 5% increase in the number of units sold, demonstrating the pricing power of the new platform.
Performance was mixed across geographies. The United States delivered 4% revenue growth with stable market share, though overall US market growth remained softer than prior years. Direct-to-consumer surgeries surged 10%, indicating Cochlear’s marketing efforts are effectively reaching patients who might not otherwise navigate the healthcare system. Asia Pacific performed strongly with 7% growth and market share gains, buoyed by momentum in Korea following the Nexa launch and more established referral pathways in Australia. Western Europe presented headwinds, declining 8% due to elective surgery backlogs in the UK, industrial action in Spain, and share losses in Germany. Emerging markets contracted 2%, with growth in Latin America and Eastern Europe offset by geopolitical challenges in the Middle East and reimbursement reductions in China.
The dividend increase to $3.45 per share, up 20% year on year, reflects confidence in the earnings trajectory. Management is pursuing a dual strategy of reducing fixed costs while investing in growth, a discipline that should support margin expansion as volumes recover. The medicalisation of hearing loss, evidenced by a doubling of referrals in the UK over three years and 15% private surgery growth in Australia, points to a structural shift in how hearing loss is treated. This transition from patient-initiated discovery to professional referral pathways should drive more predictable, sustainable volume growth over time.
The key questions for investors centre on whether Nexa momentum sustains and whether medicalisation initiatives can offset Western European weakness and Chinese reimbursement headwinds. The company’s ability to grow implants volumes while extracting price increases will be critical to margin progression. Regional performance, particularly stability in North America and recovery trajectories in Europe and emerging markets, will determine whether the 6% second half growth can be sustained into FY27. This announcement is price sensitive and has been classified as material by the ASX.
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About Cochlear Limited (ASX: COH)
Cochlear Limited is the world’s leading manufacturer of cochlear implant devices and other implantable hearing solutions for individuals with severe to profound hearing loss. The company develops and manufactures cochlear implant systems, bone conduction devices, sound processors, and related accessories for children and adults worldwide. Headquartered in Sydney, Australia, Cochlear operates across developed markets in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific region.
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