Highlights

• Cochlear booked FY26 sales revenue of A$2,343.4 million, down 1% reported but up 2% in constant currency.

• Underlying net profit fell 22% to A$322.4 million, landing at the upper end of guidance reset in April.

• The final dividend dropped 40% to A$1.30 per share, taking the full-year payout to A$3.45 per share.

• Management guided FY27 underlying net profit to A$330 million to A$350 million, with low single-digit constant currency sales growth.

A non-cash write-down on a start-up investment and a trimmed final dividend defined the year just reported by Cochlear Limited (ASX:COH), yet the hearing implant maker has pointed to a modest profit rebound for FY27. Shares were trading at A$146.81 on 23 October 2026, up 4.42%.

A Reset Year Lands Within the Lowered Range

Cochlear's FY26 result, released on 18 August 2026, came after a trading update on 22 April that cut underlying net profit guidance to A$290 million to A$330 million. The final underlying figure of A$322.4 million sat at the upper end of that range, though it was still 22% below the prior year. Underlying earnings per share fell to A$4.93 from A$6.33.

Sales revenue reached A$2,343.4 million. Growth improved through the year, with second-half sales up 6% in constant currency. Gross margin slipped to 71% from 74%, which the company tied to weaker developed market revenue, more low-tier sales in China, lower manufacturing volumes and currency.

Statutory net profit dropped 62% to A$147.3 million. Two after-tax items drove the gap: a A$66.0 million cloud expense and a A$109.1 million non-cash write-down on investments, mainly Epiminder.

Implants Lead, Services and Acoustics Follow

Cochlear implant revenue came in at A$1,435.2 million, flat in constant currency, while implant units rose 5% to 56,692. The Nucleus Nexa System, launched during the year, accounted for more than 95% of developed market implant sales by June and carried an average 3% price increase.

Among developed markets, the United States grew 4% and Asia Pacific 7%, while Western Europe fell 8%. Emerging markets slid 2% on declines in the Middle East and China, partly offset by Latin America and Eastern Europe.

Services revenue climbed 6% in constant currency to A$634.9 million. Acoustics rose 1% to A$273.3 million, with second-half growth of 5%. Research and development spending increased 15% to A$323.2 million, or 14% of sales.

Cash Recovers, Payout Shrinks

Free cash flow rose to A$263.5 million, up A$141.1 million, helped by working capital discipline. Net cash finished at A$187.7 million. The share buyback stayed inactive because net cash sat below the company's target of around A$200 million.

The final dividend of A$1.30 per share, franked at 85%, fell 40% and represented a 67% payout of underlying net profit. With an unchanged interim dividend of A$2.15, the full-year dividend totalled A$3.45 per share, down 20%. The payment date was 14 October 2026.

FY27 Targets, Launches and Dates Ahead

For FY27, Cochlear expects low single-digit constant currency sales growth and underlying net profit of A$330 million to A$350 million. Gross margin is guided at about 70% to 71%, and reported operating expenses are expected to decline slightly. R&D should run near 13% of sales.

The guidance assumes AUD/USD of 70 cents and AUD/EUR of 61 cents. The company said a stronger Australian dollar would reduce underlying net profit by about 10% against FY26 average rates. About A$60 million after tax of cloud program costs will be reported as a significant item, completing that program.

In acoustics, the Osia 3 Sound Processor, which the FDA has cleared, is expected to support first-half growth. Cochlear said US availability is planned for early fall 2026. The medium-term target is a net profit margin returning to 18%. The company's annual general meeting is scheduled for 26 October 2026.