• Sales revenue up 6% in constant currency to $1,170m
• Underlying net profit up 7% (1% in constant currency) to $206m
• Cochlear implant revenue increased 13% in constant currency

Cochlear Ltd reported its HY25 results, with sales revenue up 6% in constant currency to $1,170m. Cochlear implant revenue increased 13% in constant currency, while acoustics revenue increased 22% in constant currency. Services revenue declined 12% in constant currency, following 29% constant currency growth in HY24. Underlying net profit was up 7% (1% in constant currency) to $206m, with a gross margin of 75% in line with the long-term target. Operating expenses increased 10% (10% in constant currency) reflecting growing investment in R&D and market growth activities. The company has a strong balance sheet with net cash of $383m and is paying an interim dividend of $2.15 per share, up 8%. For FY25, the company expects underlying net profit to be at the lower end of the $410-430m guidance range provided in August 2024, incorporating a lower contribution from Services revenue and higher cloud-related investment.

For FY25, the company expects underlying net profit to be at the lower end of the $410-430m guidance range provided in August 2024, incorporating a lower contribution from Services revenue and higher cloud-related investment.

Cochlear implant trading conditions continue to be solid across most markets, with continuing strong growth in adult referral rates across the developed markets. The company is preparing for the release of its next generation cochlear implant, which is expected to be commercially available from mid-2025. Services growth has slowed since launching the Nucleus® 8 Sound Processor in FY23, and the company now expects a single-digit decline in Services revenue for FY25. Acoustics growth rates are expected to be strong with continuing geographic expansion of the Osia System. The company is also investing in operating model redesign and core business systems upgrades, with an expected investment of around $250 million overall, a $100 million increase on the previous estimate.