Nanosonics (ASX:NAN) management said the company delivered “another really good and positive half” in the first half of FY26, pointing to disciplined revenue growth, operating leverage, and progress on commercialization plans for its endoscope cleaning device, CORIS.
Financial performance: revenue growth and operating leverage
CEO and President Michael Kavanagh said first-half revenue rose 9% versus the prior corresponding period (8% in constant currency), supported by momentum in both recurring and capital revenue. Reported revenue for the half was AUD 102 million.
Operating expenses increased 4% to AUD 69.5 million, which management said reflected cost discipline while continuing to invest in R&D and growth priorities. Operating profit reached AUD 8.5 million, and consolidated EBIT was AUD 8.4 million, down 3% on a reported basis but up 15% in constant currency.
CFO Jason Burris said foreign exchange was a key driver of the reported EBIT decline. He cited a AUD 0.7 million FX loss in the half (versus a AUD 1.3 million gain in the prior period), tied primarily to revaluation of non-Australian dollar asset balances as the Australian dollar strengthened against the U.S. dollar to 0.67 at the balance date.
Installed base and recurring revenue trends
Burris said the global installed base ended the half at 38,080 devices, up 6% year over year, which management said supports protection of approximately 29 million patients annually. Recurring revenue increased 9% versus the prior period, with management highlighting growth in consumables and services.
- Core consumables grew in line with the installed base (management referenced ~9% growth in Q&A).
- Ecosystem consumables increased (management cited ~6% growth in Q&A), including items such as wipes and clean probe covers.
- Service and repairs grew 24%, which management attributed to deeper customer engagement and maturity of the fleet.
- Spare parts declined 23%, which management linked to customer inventory dynamics and lower replacement requirements as more customers upgrade to newer-generation systems.
Capital sales: upgrades drive volume, pressure ASP
Management emphasized that upgrades are becoming a more meaningful contributor to growth. Total installations increased 20% to 2,070 devices in the half, reflecting continued new placements and a “record level” of upgrades in North America.
Capital revenue increased 9% to AUD 26.5 million. Burris said the result included several large-scale upgrade agreements and reflected volume-based pricing that lowered the average selling price for Trophon units. Kavanagh added that the majority of upgrades in the half were to Trophon2, noting that Trophon3 launched midway through the period and many customer budget approvals were already well advanced for Trophon2.
Management argued that while this mix moderated near-term average selling prices, Trophon2 placements still expand the recurring revenue base and support “software-led value capture” over time via Trophon2 Plus, a software upgrade that brings many of Trophon3’s benefits to Trophon2 users.
In Q&A, Kavanagh said the company expects the Trophon2/Trophon3 mix to shift toward Trophon3 over time, with the pace influenced by hospital budget approval cycles. He also highlighted the opportunity to offer software upgrades to an installed base of “over 25,000+” Trophon2 units.
CORIS: regulatory progress and controlled market release
On CORIS, Kavanagh said commercialization is progressing as planned. During the half, Nanosonics secured regulatory registrations across Australia, Europe, and the UK, and submitted its first 510(k) application for expanded scope indications in the U.S., which is currently under FDA review.
Management also highlighted the start of a controlled market release (CMR) in the UK, announced after the half, calling it an important milestone. Looking ahead, Kavanagh said additional FDA submissions for broader indications are planned, further CMRs will start in Australia and Europe, and U.S. CMR timing will follow the first 510(k) and initial learnings from early CMR sites. As previously indicated, management said it expects broader commercialization to start in FY27 on a region-by-region basis.
Cash, buyback, and reaffirmed FY26 guidance
Burris said cash flow was a modest AUD 1.4 million outflow in the half, reflecting planned inventory investment for CORIS, continued CORIS-related investment, the commencement of a share buyback, and receivables timing that he said had already improved in January. The company executed around AUD 4 million of the buyback and expects to resume following the blackout period.
Nanosonics ended the half debt-free with a cash balance of AUD 159.8 million.
Management reaffirmed FY26 guidance on a constant currency basis, calling for:
- Revenue growth of 8%–12% for the year
- Gross margin of 75%–77%, assuming tariff rates remain at first-half levels
- Continued operating expense discipline while maintaining investments in CORIS and other growth projects
Kavanagh noted that average selling prices in capital could remain similar in the second half depending on the Trophon2/Trophon3 mix and the size of upgrade deals. He also said that if the revenue range were recast using an average AUD/USD exchange rate of approximately 0.70 for the second half, then, after considering hedging, the revenue range would be approximately 3% lower.
In response to questions about FX sensitivity, Burris said that if the Australian dollar remains around current levels, the potential impact on unrealized FX balances in the second half could be “more than likely 2–2.5 times” the first-half FX impact, based on the magnitude of currency movement.
About Nanosonics (ASX:NAN)
Nanosonics Limited, together with its subsidiaries, operates as an infection prevention company in Australia and internationally. The company manufactures and distributes the trophon ultrasound probe disinfector, and its related consumables and accessories, as well as research, develops, and commercialize of infection control and decontamination products and related technologies. Its product portfolio includes trophon2 that provides protection across various level disinfection HLD cycle; Nanosonics AuditPro, an infection control workflow compliance management; Trophon EPR for mitigating the risk of exposure to toxic chemicals; and CORIS, an instrument reprocessing product platform.
