Cochlear Lowers FY25 Net Profit Guidance to $390-400 Million
Cochlear Limited has lowered its FY25 earnings guidance due to slower-than-expected sales growth and a sharper decline in Services revenue. Despite this, implant unit growth remains on track, driven by emerging markets.
- FY25 underlying net profit guidance revised down to $390-400 million
- Services revenue expected to decline by low double-digits, worse than prior forecast
- Cochlear implant unit growth still projected at around 10%, led by emerging markets
- Slower growth and minor market share losses in developed markets impact results
- Next generation cochlear implant system launching mid-June 2025 in Europe and Asia Pacific
Earnings Guidance Revision
Cochlear Limited, a global leader in implantable hearing solutions, has updated its earnings guidance for the fiscal year 2025, signaling a more cautious outlook amid slower sales momentum. The company now anticipates an underlying net profit between $390 million and $400 million, a downward revision from previous expectations. This adjustment reflects a combination of softer market conditions and operational challenges encountered over recent months.
Services Revenue Decline
One of the key factors behind the revised guidance is a steeper-than-expected decline in Services revenue. After two years of robust growth following the launch of the Nucleus® 8 Sound Processor, Cochlear had forecast a single-digit drop in this segment for FY25. However, the company now expects a low double-digit decline, indicating a more pronounced contraction. Efforts are underway to reconnect with recipients who could benefit from the latest sound processing technologies, with hopes that these initiatives, alongside the upcoming release of the off-the-ear Nucleus® Kanso® 3 Sound Processor, will help reverse the trend in FY26.
Implant Unit Growth and Market Dynamics
Despite the challenges in Services revenue, Cochlear remains optimistic about implant unit growth, projecting an approximate 10% increase for FY25. This growth is expected to be concentrated in emerging markets, where demand continues to expand. Conversely, developed markets have experienced slower-than-anticipated growth and a slight loss of market share in select countries, tempering overall performance. The company’s strategic focus includes launching its next generation cochlear implant system, which is set to debut in Europe and Asia Pacific starting mid-June 2025, with further rollouts pending regulatory approvals.
Looking Ahead
The updated guidance is based on year-to-date management accounts and remains subject to final June trading results, audit review, and Board approval. Cochlear plans to provide a comprehensive update with its full-year results scheduled for release on 15 August 2025. Investors will be watching closely to see how the new product launches and market strategies translate into financial performance in the coming year.
Bottom Line?
Cochlear’s revised forecast underscores near-term challenges but sets the stage for a pivotal product-driven recovery.
Questions in the middle?
- How will the new Nucleus® Kanso® 3 Sound Processor impact Services revenue in FY26?
- What factors contributed to the loss of market share in developed markets?
- How quickly will the next generation implant system gain regulatory approvals and market traction?
