Can Nova Eye Medical Sustain Growth Amid Regulatory and Market Challenges?

Record Revenue and Profitability Gains

Nova Eye Medical Limited (ASX – EYE) has delivered a standout performance for the 2025 financial year, posting record group revenue of A$29.2 million. This represents a robust 23% increase over the prior year, underscoring the company’s growing footprint in the ophthalmic medical device market. The second half of FY25 was particularly strong, with sales surging 51% compared to the previous corresponding period, culminating in the highest quarterly revenue in company history during Q4.

Driving this growth was the glaucoma segment, which notably achieved a positive EBITDA of US$65,000 in the second half of the year. This marks a significant turnaround from the first half and aligns with management’s guidance, reflecting improved operational efficiencies and gross margin expansion.

Cash Flow and Financial Position

Alongside revenue growth, Nova Eye Medical has made meaningful strides in cash flow management. The group’s cash outflow from operations narrowed to A$847,000 in the June quarter, continuing a downward trend in operational cash burn. The company ended the quarter with a solid cash balance of A$5.1 million, providing a buffer as it pursues further growth and regulatory milestones.

Outlook and Market Opportunities

Looking ahead, Nova Eye Medical has set FY26 sales revenue guidance between US$21 million and US$24 million, excluding China, which translates to approximately A$32 million to A$37 million at current exchange rates. The company aims to achieve breakeven EBITDA in the first half of FY26, signaling confidence in continued operational improvements and market traction.

Key to this outlook is the recent proposal by the US Centers for Medicare and Medicaid Services to maintain favorable reimbursement rates for glaucoma surgical devices in 2026. If finalized, these rates will sustain strong incentives for ophthalmologists to adopt Nova Eye Medical’s products, particularly in the minimally invasive glaucoma surgery (MIGS) segment where the company is recognized as the fastest growing player in the US market.

Strategic Developments and Innovation

Beyond financials, Nova Eye Medical continues to advance its proprietary iTrack™ technology, exploring novel applications such as targeted drug delivery within the eye. The company awaits evaluation results from a pharmaceutical partner expected in the first half of FY26, which could open new therapeutic avenues.

Regulatory progress is also underway in China, with approval for the iTrack™ Advance device anticipated later this calendar year after a 15-month review process. Meanwhile, ongoing sales of the original iTrack™ microcatheter in China maintain the company’s presence in this critical market.

Additionally, Nova Eye Medical has secured a $488,000 grant in partnership with Adelaide University to develop quantum technology-based early detection methods for eye diseases, focusing initially on indigenous communities. This collaboration highlights the company’s commitment to innovation and expanding its technological edge.