Hydrix Limited reported a 14% revenue decline and a sharp increase in net loss for H1 2026, raising concerns about its financial stability despite securing a major contract.
- 14% revenue decline to $4.84 million in H1 2026
- Net loss widens to $2.34 million from $636k prior year
- Cash balance improves to $584k but current liabilities exceed assets by $12 million
- New $2.5 million contract secured for artificial heart development
- Directors exploring capital and liquidity strategies amid going concern uncertainty
Hydrix’s Financial Performance in H1 2026
Hydrix Limited, a player in the medical technology sector, has reported a challenging first half for the financial year ending December 2025. The company’s revenue fell by 14% to $4.84 million, down from $5.6 million in the previous corresponding period. This decline was largely attributed to delays in new client project commencements and the completion of existing development programs.
Despite the revenue drop, operating costs edged higher by 7%, reaching $6.8 million. This increase was driven by factors including overseas sales travel, higher interest expenses, and consulting fees. Consequently, Hydrix recorded a net loss after tax of $2.34 million, a significant deterioration from the $636,000 loss reported in the prior period.
Segment Performance and Operational Highlights
The bulk of Hydrix’s revenue continues to come from its Services segment, which provides engineering, product design, and regulatory consulting primarily to the medical industry. This segment generated $4.84 million in revenue, down from $5.6 million a year earlier. Hydrix Medical, which distributes innovative cardiovascular technologies, remains in a pre-commercial revenue phase but is actively pursuing a sales pipeline exceeding $1.5 million in annual recurring revenue for its remote cardiac patient monitoring product.
Hydrix Ventures, the company’s investment arm, holds stakes in early-stage medtech companies such as Gyder Surgical and WaveWise Analytics. While Gyder Surgical has begun commercialising its orthopaedic surgical tool in the US, WaveWise Analytics experienced a $337,000 fair value write-down during the period.
Liquidity and Going Concern Challenges
Hydrix’s cash position improved to $584,000 at the end of December 2025, up from $298,000 six months prior. However, the company faces a net current liabilities deficit of over $12 million, reflecting significant short-term financial pressures. Operating cash flow was negative $22,000 for the half-year, a stark contrast to the prior period’s positive inflow of $558,000.
The directors have flagged material uncertainty regarding the company’s ability to continue as a going concern. To address this, they have secured a Letter of Support for $2.2 million valid until October 2026, alongside director loans and convertible notes maturing around the same time. The company is also negotiating a payment plan with the Australian Taxation Office to manage an overdue PAYG obligation of $2.5 million.
Strategic Outlook and Contract Wins
Looking ahead, Hydrix is focused on converting its substantial sales pipeline into revenue and maintaining sufficient engineering capacity to support growth. A notable post-period development was the announcement of a $2.5 million contract with SynCardia Systems LLC to develop the next-generation fully implantable Total Artificial Heart, known as the Emperor. This contract marks a significant milestone and is expected to be completed within calendar year 2026 as part of a broader staged development program.
Directors are actively exploring capital raising, alternative debt arrangements, and asset realisation strategies to bolster liquidity and support strategic growth. The company continues to defer certain payments, including interest and director fees, to preserve working capital.
Bottom Line?
Hydrix’s next steps hinge on converting its sales pipeline and securing financial support to navigate near-term liquidity risks.
Questions in the middle?
- Will Hydrix successfully convert its $40 million sales pipeline into revenue within the next 12 months?
- How will the company resolve its $2.5 million overdue PAYG obligation with the ATO and what impact will this have on cash flow?
- What are the prospects and timelines for potential capital raising or asset sales to strengthen Hydrix’s balance sheet?