Cochlear posts modest sales growth but lower profit as Nexa launch continues

The Cochlear Ltd (ASX: COH) share price is in focus today after the hearing implant leader posted a modest 1% lift in sales revenue to $1,176 million for the half year ended December 2025, but underlying net profit fell 9% to $195 million. The board declared an interim dividend of $2.15 per share, steady on last year and representing a 72% payout ratio.

What did Cochlear report?

• Sales revenue up 1% to $1,176 million (down 2% in constant currency)
• Underlying net profit dropped 9% to $194.8 million
• Statutory net profit down 21% to $161.5 million
• Underlying earnings per share declined 9% to $2.98
• Interim dividend steady at $2.15 per share, 72% payout and 85% franked
• Operating cash flow increased to $136.8 million, free cash flow rose to $82.7 million

What else do investors need to know?

Cochlear launched the Nucleus Nexa System, the world’s first upgradeable smart cochlear implant, following 20 years of R&D. Uptake was strong, with the new system making up 80% of December implant sales, but the registration and contract renewal process delayed momentum in the first half.

Growth in emerging markets saw cochlear implant units lift 6%, although revenue was flat due to a greater proportion of lower-priced devices, particularly in China. Services revenue climbed 2% while Acoustics revenue remained steady. The company increased investment in R&D by 9% and continued to build inventory, lifting working capital.

What did Cochlear management say?

CEO & President Dig Howitt said:

We remain confident of the opportunity to grow our markets. There remains a significant, unmet and addressable clinical need for cochlear and acoustic implants that is expected to continue to underpin the long-term sustainable growth of the business.

What’s next for Cochlear?

Management expects a stronger second half, buoyed by the Nexa System’s availability, more services uptake, and improved Acoustics performance. FY26 underlying net profit is forecast to be at the lower end of the $435–460 million range, reflecting the slower than expected contracting for Nexa. The dividend policy remains at a 70% payout of underlying net profit, and Cochlear will keep investing in R&D and capacity expansion. Foreign exchange movements may influence profit levels in the coming months.

Cochlear share price snapshot

Over the past 12 months, Cochlear shares have declined 19%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Cochlear posts modest sales growth but lower profit as Nexa launch continues appeared first on The Motley Fool Australia.

More reading

• BWP Group posts strong half-year profit and higher distributions
• Meridian Energy lifts generation and storage in January 2026 update
• Westpac posts $1.9bn profit in 1Q26 as digital push and lending gains continue
• 5 things to watch on the ASX 200 on Friday
• What’s going on with ASX bank stocks this week?

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.