Nova Eye Medical has delivered solid FY25 results, meeting sales guidance outside China and achieving six consecutive halves of growth in the US market. The company also improved gross margins and reduced cash burn, setting an optimistic tone for FY26 with breakeven EBITDA guidance.
- FY25 sales growth across all territories, meeting prior guidance excluding China
- Six consecutive halves of sales growth in the US market
- Gross margin improved to 70% in H2FY25 from 66% in H1FY25
- Operating expenditure as a percentage of sales reduced to 70% in H2FY25
- FY26 sales guidance set between US$21 million and US$24 million with breakeven EBITDA targeted in H1
Steady Sales Growth Across Key Markets
Nova Eye Medical Limited (ASX – EYE) has reported its financial results for the year ended 30 June 2025, confirming steady sales growth across all major territories. The company met its sales guidance issued earlier in the year, excluding China, with total sales reaching approximately A$29.1 million. Notably, the US market continues to be a strong driver, delivering six consecutive halves of sales growth, underscoring the company’s expanding footprint in a critical healthcare segment.
Margin Improvement and Operating Leverage
Alongside revenue growth, Nova Eye Medical achieved a meaningful improvement in gross margins, rising from 66% in the first half of FY25 to 70% in the second half. This was attributed to process improvements that enhanced production efficiency. The company also demonstrated operating leverage, with operating expenditure as a percentage of sales falling from 88% in H1FY25 to 70% in H2FY25. This reduction in operating costs relative to sales highlights management’s focus on cost discipline as the business scales.
Cash Flow and Profitability Trends
Cash outflow from operations improved significantly, dropping to A$6.2 million for FY25 from A$7.9 million in the prior year. The downward trend continued into the final quarter, with cash burn narrowing to just A$847,000. The glaucoma segment, a core part of Nova Eye’s portfolio, achieved breakeven EBITDA in line with guidance, signaling progress toward sustainable profitability. The group’s overall EBITDA also improved by US$2.1 million in the second half compared to the first half.
Outlook and FY26 Guidance
Looking ahead, Nova Eye Medical provided FY26 sales guidance projecting revenue between US$21 million and US$24 million (approximately A$32 million to A$37 million at current exchange rates), excluding China. The company expects to reach breakeven EBITDA in the first half of FY26, with further improvements in cash flow from operations anticipated. This guidance reflects confidence in the company’s growth trajectory and operational improvements, although it remains subject to typical market and execution risks.
Strategic Positioning and Market Potential
Nova Eye’s focus on glaucoma treatment products positions it well within a growing medical device market addressing eye health challenges. The sustained US sales momentum and margin enhancements suggest the company is gaining traction with its innovative offerings. However, the relatively modest cash reserves of A$5.1 million at year-end and ongoing cash burn highlight the importance of continued operational discipline and market execution to support future growth.
Bottom Line?
Nova Eye Medical’s FY25 results set a solid foundation, but the path to sustained profitability will hinge on maintaining US growth momentum and managing costs in FY26.
Questions in the middle?
- Can Nova Eye sustain its US sales growth amid increasing competition?
- What impact will currency fluctuations have on reported revenue and margins?
- How will the company manage cash flow to support expansion without diluting shareholders?