CONNEQT Health delivered sharp FY26 revenue growth and reduced its statutory loss as Pulse sales and clinical subscriptions expanded. But the ASX-listed medtech group ended the year with negative net assets, heavy cash burn and a material uncertainty over its ability to continue as a going concern.
- Revenue rose 77% to A$6.30 million
- Statutory net loss narrowed 40% to A$10.86 million
- Clinical subscription sites increased from two to 17
- Operating cash outflow remained A$9.71 million
- Post-year-end equity issues settled A$1.5 million in related-party loans
Revenue growth collides with a funding warning
CONNEQT Health Limited (ASX:CQT) more than doubled the commercial momentum around its Pulse arterial health monitor in FY26, lifting revenue 77% to A$6.30 million. Yet the annual report carries a less comfortable message alongside the growth: the group finished 30 June with net liabilities of A$228,046, operating cash outflows of A$9.71 million and a disclosed material uncertainty that may cast significant doubt on its ability to continue as a going concern.
The statutory net loss narrowed 40% to A$10.86 million, while total expenses including cost of goods sold fell 22% to A$18.84 million. The improvement was helped by the non-recurrence of a A$4.72 million fair-value loss recorded in FY25, as well as lower product development and employee costs. Marketing and sales spending, however, increased by A$2.29 million as CONNEQT invested in building demand for Pulse.
Pulse becomes the main commercial engine
Pulse sales increased through each quarter, with consumer revenue reaching a record A$1.3 million in the June quarter and unit sales rising 33% to 3,574 devices. A temporary shortage of large cuffs affected a configuration that had represented about 70% of historical Pulse sales, but the company said quarterly sales still finished slightly ahead of the December quarter.
The hardware sale is only part of CONNEQT’s intended model. The company rebuilt its app and introduced in-app purchases for Care+ and its Cardiology Report. Care+ was purchased by 12.2% of new customers in the December quarter, with 72% of those customers selecting an annual plan; in-app purchases then increased 71% quarter on quarter to A$68,000 in the June quarter. Those figures suggest early customer uptake, although the digital stream remains small relative to the group’s operating costs.
Clinical subscriptions expand from two sites to 17
CONNEQT also moved its enterprise offering away from one-off equipment sales and towards subscription and usage-based arrangements. Its first two pilots converted into two-year commercial agreements during the December quarter, while active clinical subscription sites increased from two to 17 by 30 June.
Contracted enterprise annual recurring revenue rose 70% during the June quarter to A$94,200, and cumulative contracted value increased 65% to A$163,800. The absolute revenue contribution is still modest, but the figures provide evidence that some clinical customers have adopted a recurring model rather than simply buying capital equipment. Research, pharmaceutical, academic and clinical activities generated about A$2.3 million during FY26, including an approximately A$1.1 million US Phase 2b trial contract covering vascular assessment services across 30 sites.
Post-year-end funding buys time, not profitability
The balance sheet remains the central constraint. Cash at 30 June was A$2.57 million, against current liabilities of A$8.90 million, while the group used A$9.71 million in operating activities during the year. Directors point to continued Pulse growth, expanding enterprise revenue, a lower cost base, an expected FY26 R&D tax refund of about A$1.5 million and further access to equity or debt funding as grounds for preparing the accounts on a going concern basis.
Several financing events occurred after year end. An August share purchase plan raised about A$379,000 before costs, while shareholders later approved the issue of 68.18 million shares to C2 Ventures Pty Ltd, an entity controlled by directors Niall Cairns and Craig Cooper, in settlement of A$1.5 million in loans. A further 20 million performance rights were issued to employees, and additional shares were issued in lieu of director and corporate advisory fees. These actions reduce immediate cash repayment pressure in some areas, but they also increase the issued capital and leave shareholders weighing dilution against the company’s need for funding.
SphygmoCor Cloud is the next regulatory test
CONNEQT is also trying to extend its arterial health technology beyond its own hardware. It lodged an FDA Pre-Submission for SphygmoCor Cloud during the June quarter and is targeting an FDA clearance submission in mid-FY27. The proposed cloud architecture is intended to support Software as a Medical Device, Biomarker-as-a-Service, the Pulse SDK and partner integrations.
That pathway could broaden how the company delivers its vascular biomarkers, but it remains a development and regulatory program rather than current earnings. The more immediate test is whether Pulse sales, Care+ adoption and clinical site growth can develop quickly enough to narrow the funding gap before further capital is required. The annual report gives shareholders a growing commercial base to assess, but not yet a self-funding business.
Bottom Line?
CONNEQT has produced stronger operating evidence, but FY27 must show that Pulse and subscriptions can convert growth into a materially lower cash burn before the funding question returns.
Questions in the middle?
- Can Pulse sales and digital subscriptions grow fast enough to reduce reliance on new capital?
- How quickly can 17 clinical subscription sites translate into meaningful recurring revenue and utilisation income?
- What cash runway remains after the post-year-end equity issues, related-party loan conversion and expected R&D tax refund?