After already delivering a standout 12-month run, Cogstate Ltd (ASX: CGS) shares are back in the green on Wednesday.
The gain follows a quarterly business update that highlighted continued strength in clinical trial contract activity and improving future revenue visibility.
In afternoon trade, the stock is changing hands at $2.30, up 7.48%.
That brings the company's market capitalisation to roughly $393 million and extends its 12-month gain to just over 70%.
Let's take a closer look at what was announced.
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Sales contracts keep building in FY26
According to its third-quarter business update, Cogstate executed US$25.4 million in sales contracts during the March quarter.
That brings total sales contracts executed over the first 9 months of FY26 to US$67.1 million. That is well ahead of the US$41.3 million recorded over the same period a year earlier.
It also marked the company's strongest March quarter contract result in recent years. The result extends the momentum seen in the first-half as demand broadened across its central nervous system (CNS) trial work.
Another closely watched metric is contracted future revenue.
Cogstate said FY26 revenue under contract had risen to US$67.1 million as at 31 March, up from US$53.1 million at 31 December.
Within that, revenue already locked in for the June quarter increased to US$35.6 million, compared with US$27 million previously.
Broader trial demand is supporting confidence
The latest update reinforces the strength of the company's clinical trials pipeline rather than pointing to a one-off contract win.
Cogstate's technology is used by pharmaceutical and biotech groups running CNS-focused trials, including Alzheimer's disease, mood disorders, sleep conditions, and other neurological programs.
The business has increasingly benefited from a broader mix of trial work outside Alzheimer's. Investors appear to favour this because it improves diversification and reduces reliance on any single drug development cycle.
With the stock still below its 52-week high of $2.97, today's gain suggests investors are responding to improving revenue visibility.
Foolish Takeaway
I believe Cogstate remains a stock worth buying and holding for the long term, particularly as revenue certainty continues improving.
The steady lift in sales contracts and stronger revenue already locked in for the June quarter both support a more reliable earnings outlook. Broader demand beyond Alzheimer's also points to a business generating steadier revenue over time, which could be a major win for shareholders.
After a 70% gain over the past year, the latest update supports the market view that Cogstate's longer-term growth outlook remains very attractive.
