The Cochlear Ltd (ASX: COH) share price is in focus today after the hearing implant leader posted a modest 1% lift in sales revenue to $1,176 million for the half year ended December 2025, but underlying net profit fell 9% to $195 million. The board declared an interim dividend of $2.15 per share, steady on last year and representing a 72% payout ratio.
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What did Cochlear report?
- Sales revenue up 1% to $1,176 million (down 2% in constant currency)
- Underlying net profit dropped 9% to $194.8 million
- Statutory net profit down 21% to $161.5 million
- Underlying earnings per share declined 9% to $2.98
- Interim dividend steady at $2.15 per share, 72% payout and 85% franked
- Operating cash flow increased to $136.8 million, free cash flow rose to $82.7 million
What else do investors need to know?
Cochlear launched the Nucleus Nexa System, the world's first upgradeable smart cochlear implant, following 20 years of R&D. Uptake was strong, with the new system making up 80% of December implant sales, but the registration and contract renewal process delayed momentum in the first half.
Growth in emerging markets saw cochlear implant units lift 6%, although revenue was flat due to a greater proportion of lower-priced devices, particularly in China. Services revenue climbed 2% while Acoustics revenue remained steady. The company increased investment in R&D by 9% and continued to build inventory, lifting working capital.
What did Cochlear management say?
CEO & President Dig Howitt said:
We remain confident of the opportunity to grow our markets. There remains a significant, unmet and addressable clinical need for cochlear and acoustic implants that is expected to continue to underpin the long-term sustainable growth of the business.
What's next for Cochlear?
Management expects a stronger second half, buoyed by the Nexa System's availability, more services uptake, and improved Acoustics performance. FY26 underlying net profit is forecast to be at the lower end of the $435–460 million range, reflecting the slower than expected contracting for Nexa. The dividend policy remains at a 70% payout of underlying net profit, and Cochlear will keep investing in R&D and capacity expansion. Foreign exchange movements may influence profit levels in the coming months.
Cochlear share price snapshot
Over the past 12 months, Cochlear shares have declined 19%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.
