Cochlear Ltd (ASX: COH) shares have come under heavy pressure on Thursday.
In morning trade, the hearing implant leader's shares are down 9% to $246.52.
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Cochlear shares sink on guidance downgrade
Investors have been hitting the sell button today after the company downgraded its guidance for FY 2025.
According to the release, Cochlear now expects its underlying net profit for FY 2025 to be in the range of $390 million to $400 million. This will be a small increase on FY 2024's profit of $387 million.
Previously, it was expecting its underlying net profit to be at the lower end of its original $410 million to $430 million guidance range.
Management notes that after two years of strong Services growth following the Nucleus 8 Sound Processor launch, Cochlear had forecast a single-digit revenue decline for the segment this year. That decline is now expected to be in the low double digits.
The company blamed softer-than-expected growth in developed markets, where it has also experienced a small loss in market share in a few countries. While implant unit volumes are still expected to rise around 10%, this growth is skewed towards lower-margin emerging markets.
The good news is that Cochlear highlights that initiatives to improve service uptake — including the launch of the new off-the-ear Kanso 3 Sound Processor — are expected to support a revenue recovery in FY 2026.
Smart implant launch
In a separate announcement, Cochlear has unveiled the world's first smart cochlear implant system: the Nucleus Nexa System.
According to the release, this next-gen innovation introduces upgradeable firmware, giving recipients access to future features and enhancements without the need for hardware replacements. This marks a significant leap forward for patient care and convenience.
The new Nucleus 8 Nexa Sound Processor is also the smallest and lightest on the market, with all-day battery life and internal memory that stores hearing settings directly on the implant — simplifying patient experience and reducing clinic visits.
Chief Executive Dig Howitt described it as the result of 20 years of R&D. He said:
The Nucleus Nexa Implant is the outcome of a 20 year investment in R&D. It is the first cochlear implant to run its own firmware. Similar to smartphones, the implant firmware can be updated to enable new features and access to future innovations. Recipients will now have access to a better hearing experience with both implant and sound processor updates.
The Nucleus Nexa System builds upon Cochlear's industry-leading portfolio of electrodes, which are designed to optimise the electrode-neural interface and protect cochlea health and opens the door to even greater hearing potential for patients into the future
The Nexa system will launch in Europe and Asia Pacific from mid-June. Further market launches are planned pending regulatory approvals.
