Nanosonics Ltd (ASX:NAN) is a Sydney-based infection prevention company. Its main product, trophon, is a system for high-level disinfection of ultrasound probes, used in hospitals and clinics around the world. The company earns Capital Revenue from device sales and Recurring Revenue from consumables, service and spare parts. Nanosonics is also commercialising its second platform, the CORIS System, for endoscope reprocessing. Michael Kavanagh is CEO and President.

On 2 October 2026, Nanosonics shares were trading at $2.88, up 0.35%. The company reports in Australian dollars but generates most of its revenue in US dollars. Its full-year results, released in August, covered trophon performance, CORIS progress and guidance for the 2027 financial year.

The company holds a global installed base of more than 39,000 trophon devices, which supports recurring revenue from consumables and service. North America is its largest market.

Recent Developments

On 25 August 2026, Nanosonics announced its results for the year ended 30 June 2026. Key figures include:

  • Revenue increased 3% to $203.9 million, or 6% to $211.5 million at constant currency.
  • Capital revenue rose 4% to $54.7 million, and recurring revenue grew 2% to $149.2 million.
  • Gross Margin was 76.9%, compared with 78.2%.
  • EBIT was $16.0 million, down 10%, or up 21% to $21.6 million at constant currency.
  • trophon-only EBIT was $50.6 million, up 5%, or $56.5 million at constant currency.
  • Total trophon placements increased 9% to 4,230 units, including record North American upgrades of 1,980 units, up 32%.
  • The global installed base grew 6% to 39,230 devices.
  • Cash was $155.2 million with no debt, after a $20 million buyback.

Mr Kavanagh said trophon remains the economic engine of the business, achieving its highest annual Placement Volume in three years. Next-generation trophon3 and trophon2 Plus launched, with accelerating adoption in the second half. North America delivered a record 3,880 placements. The company recovered $2.5 million in US tariffs paid under the International Emergency Economic Powers Act.

The CORIS System controlled market release is progressing, with sites active in Australia, the UK, Ireland and the US and positive customer feedback. CORIS has regulatory approvals in Australia, Europe and the UK, and its first FDA 510(k) clearance, with a second 510(k) submitted. Commercial launch is planned in the UK, Ireland and Australia in the first half of FY27, with the US to follow. Nanosonics announced a new on-market buyback of up to $40 million in FY27. FY27 guidance at constant currency is revenue of $220 million to $228 million, gross margin of 74% to 76% and operating expenses of $156 million to $163 million, reflecting a step-up in CORIS investment.

Recurring revenue was supported by core consumables, ecosystem products and service revenue, with Annuity revenue, which excludes spare parts, growing 8% at constant currency. Nanosonics said a decline in spare parts revenue is a positive signal of fleet modernisation as customers move to newer trophon systems. Operating expenses were $141.4 million, up 2%, reflecting cost control while continuing to invest in innovation and CORIS preparations. Excluding the $20 million buyback, the company generated $13.6 million in cash, which included increased inventory investment. The second half benefited from improved capital pricing as trophon3 became a larger share of sales, and uptake of trophon2 Plus software upgrades accelerated in Q4.

Sector Context

Infection prevention is a critical area of healthcare, as inadequate cleaning of medical devices can lead to cross-contamination between patients. Regulatory guidelines and clinical standards increasingly require high-level disinfection of devices such as ultrasound probes and endoscopes, supporting Demand for automated solutions.

Medical device companies with an installed base can benefit from recurring consumables and service revenue. However, launching new platforms requires Investment in sales, Training and regulatory approvals, and adoption can take time as hospitals evaluate new technologies. Tariffs and currency movements also affect companies that manufacture in one country and sell globally.

Endoscopes are complex instruments that require thorough cleaning and disinfection between patients, and reprocessing practices vary between hospitals. New technologies that automate and standardise reprocessing may appeal to hospitals seeking consistency, traceability and workflow efficiency. However, hospitals often evaluate new systems carefully, and adoption depends on capital budgets, clinical evidence and integration with existing processes.

Risks and Uncertainties

Nanosonics expects gross margin to moderate in FY27 due to a full year of US tariffs at 12.5% and higher freight costs. Operating expenses will rise as the company invests in CORIS, which may weigh on near-term earnings. CORIS adoption is uncertain, and initial revenue is expected to be only in the low single-digit millions. The strengthening Australian dollar reduces reported revenue, and the company estimates its revenue range would be about $3 million lower at current exchange rates. Changes in Tariff policy could also affect costs.

The CORIS Business is at an early stage, and the costs of commercialisation will be incurred before meaningful revenue is generated. Competition in ultrasound probe disinfection and endoscope reprocessing includes established providers, which could affect pricing and market share.

Freight costs are also expected to rise due to higher volumes and price increases linked to geopolitical events.

Catalysts Investors Can Watch

Investors may watch for the commercial launch of CORIS in the UK, Ireland and Australia, progress toward US launch, further trophon3 and trophon2 Plus adoption, and execution of the up to $40 million buyback. The half-year result will show progress against FY27 guidance.

Revenue from trophon2 Plus software upgrades, which the company said is expected to be meaningful in FY27, and the outcome of the second FDA 510(k) submission for further endoscope indications will also be relevant to the growth outlook.

Key Takeaways

Nanosonics' FY26 result showed constant currency growth in trophon Earnings and placements, with CORIS moving toward commercialisation. Higher investment and tariff costs in FY27 mean execution on CORIS and trophon will be closely followed.