Cochlear shares pare losses after guidance downgrade, product launch
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More news: Cochlear shares were trading higher on Thursday morning after initially sinking at market open on the back of the hearing implant company's downgrade of its full-year guidance. The company also announced the launch of an upgradeable implant system.
Cochlear shares were up 0.6% to $272.09 at 11:10am AEST. They initially dropped more than 8% at the open.
What they said: "It is concerning that developed markets growth has been slower than expected and there have been some small market share losses in a few countries," said RBC Capital Markets analyst Craig Wong-Pan.
"However FY26 revenues should be supported by new product launches, including the new off-the-ear Kanso 3 and its new Nucleus Nexa CI system."
Cochlear cuts guidance, unveils upgradeable implant system
The news: Hearing device maker Cochlear has slashed its full-year profit guidance following slower-than-expected sales growth in recent months.
The numbers: Cochlear said it now expects to deliver underlying net profit of between $390 million and $400 million for fiscal 2025, down from its previous range of $410 million to $430 million.
The company told investors in February that it expected to deliver towards the lower end of the previous guidance range, incorporating a lower contribution from services revenue and higher cloud-related investment of around $40 million for the year.
The context: Cochlear said it had anticipated a single digit decline in services revenue for FY25 after two years of strong growth following the launch of its Nucleus 8 sound processor, but now expects it to decline by "low double-digits".
The company expects to lift services revenue in FY26 through ongoing work to identify and connect with recipients who could benefit from its products, as well as the introduction of its new off-the-ear Nucleus Kanso 3 sound processor.
Cochlear's implant units are still expected to increase by around 10% year over year, with growth weighted towards emerging markets. Growth in the higher value developed markets has been impacted by slower-than-expected market growth and a small loss of market share in a few countries, the company said.
Cochlear also announced today the launch of its Nucleus Nexa System, describing it as the "world's first and only smart cochlear implant system." The new product will launch in Europe and Asia Pacific from mid-June, with further markets to follow pending regulatory approvals.
What they said: "The Nucleus Nexa Implant is the outcome of a 20 year investment in R&D," said Cochlear CEO and president Dig Howitt.
"It is the first cochlear implant to run its own firmware. Similar to smartphones, the implant firmware can be updated to enable new features and access to future innovations."
