Full Year 2026 Nanosonics Ltd Earnings Call

August 25, 2026

Catherine Strong: Hello and welcome everyone to the Nanosonics FY26 full-year results investor briefing. My name is Catherine Strong and I am Head of Investor Relations at Nanosonics. Today's presentation will be led by Michael Kavanagh, Chief Executive Officer and President, and Jason Burriss, Chief Financial Officer. Management will speak to a selection of slides that were lodged earlier this morning with the ASX. The briefing will be followed by a question and answer session. If you wish to ask a question, please press star followed by one on your telephone keypad when prompted by the operator. I would now like to hand the call over to Michael Kavanagh. Please go ahead, Mike.

Speaker #1: Today's presentation will be led by Michael Kavanagh, Chief Executive Officer and President, and Jason Barras, Chief Financial Officer. Management will speak to a selection of slides that were lodged earlier this morning with the ASX.

Speaker #1: The briefing will be followed by a question-and-answer session. If you wish to ask a question, please press star followed by 1 on your telephone keypad when prompted by the operator.

Speaker #1: I would now like to hand the call over to Michael Kavanagh. Please go ahead, Mike.

Speaker #2: Thank you very much, Catherine, and good morning, everybody. Thank you all for joining us today. By now, many of you will have seen the FY26 results.

Michael Kavanagh: Thank you very much, Catherine, and good morning, everybody, and thank you all for joining us today. Well, by now many of you will have seen the FY26 results, and there is a lot of information contained in the materials that were lodged this morning. But before we get into some of that detail, there are a number of key takeaway messages I would like to highlight. The first, I think, is on a constant currency basis, which of course provides a clear review of the business's performance. The FY26 results demonstrate a solid outcome, with constant currency revenue up 6% for the year and EBIT up 21%. That is supported by, I would think we will have seen disciplined cost control whilst of course we continued to invest in our future growth. The second point is the trophon only business.

Speaker #2: And there's a lot of information contained in the materials that were lodged this morning. But before we get into some of that detail, there are a number of key takeaway messages I would like to highlight.

Speaker #2: The first, I think, is on a constant currency basis, which, of course, provides a clear review of the business's performance. The FY26 results demonstrate a solid outcome.

Speaker #2: With constant currency revenue up 6% for the year and EBIT up 21%, that's supported by, I would think, what you will have seen—disciplined cost control—while, of course, we continued to invest in our future growth.

Speaker #2: The second point is the trophon-only business. It delivered its strongest placement performance in three years, with over 4,200 units placed during the year. That involved expanding the cumulative installed base to more than 39,000 devices out there today and also achieving record upgrade activity in North America. We also successfully launched our next-generation technologies, the trophon 3 and the trophon T2 Plus.

Michael Kavanagh: It delivered its strongest placement performance in three years, with over 4,200 units placed during the year, and that involved expanding the cumulative installed base to more than 39,000 devices out there today, and also achieving record upgrade activity in North America. Also we successfully launched our next generation technologies, the trophon3 and the trophon2 Plus. Importantly, the trophon only business EBIT for the year on a reported basis delivered AUD 50.6 million in EBIT or in constant currency was up 16% to AUD 56.5 million. That continues to demonstrate the strong profitability, cash generation, and operating leverage that we are getting from the trophon business. The third, and importantly, CORIS continues on plan with key regulatory approvals achieved. Control market release activity advanced across our launch markets. You will be pleased to know that the commercial launch is now planned for this half in FY27.

Speaker #2: Importantly, the trophon-only business EBIT for the year, on a reported basis, delivered $50.6 million in EBIT, or in constant currency, was up 16% to $56.5 million.

Speaker #2: And that continues to demonstrate the strong profitability, cash generation, and operating leverage that we are getting from the Tropon business. Third, and importantly, Corus continues on plan, with key regulatory approvals achieved, controlled market release activity advanced across our launch markets, and you'll be pleased to know that the commercial launch is now planned for this half in FY27.

Speaker #2: And I would say, with that and with the upcoming launch of Corus, the company is now certainly entering what we consider a defining period of new growth, as we move from a single platform to becoming a multi-platform infection prevention company.

Michael Kavanagh: And I would say with that, with the upcoming launch of CORIS, the company is now certainly entering what we consider a defining period of new growth as we now move from a single platform to becoming a multi-platform infection prevention company. And we definitely enter FY27 from a position of strength with trophon continuing to generate strong profits and cash. We have a debt-free balance sheet and the flexibility to invest in CORIS. Whilst of course, you would have seen this morning the announcement that we are returning further capital to shareholders with a AUD 40 million buyback. So turning then to some of the details. Well, reported revenue was just under AUD 204 million, AUD 203.9 million, and that was up 3% on PCP. However, at constant currency, revenue was AUD 211.5 million, and that represented 6% growth.

Speaker #2: And we definitely enter FY27 from a position of strength, with Tropon continuing to generate strong profits and cash. We've got a debt-free balance sheet.

Speaker #2: And the flexibility to invest in Corus, whilst, of course, you would have seen this morning the announcement that we're returning further capital to shareholders with a $40 million buyback.

Speaker #2: So, turning then to some of the details. Well, reported revenue was $204 million—$203.9 million, to be exact—and that was up 3% on PCP. However, at constant currency, revenue was $211.5 million, and that represented 6% growth.

Speaker #2: Of note, probably a point to call out here was in Q3 of the year, we did experience a bit of softness in consumables, and that happened to coincide with the severe weather events that took place in the Northeast of the United States, that many of you would have seen the reports on.

Michael Kavanagh: Of note, probably a point to call out here was in Q3 of the year, we did experience a bit of softness in consumables, and that happened to coincide with the severe weather events that took place in the northeast of the United States, that many of you would have seen the reports on. It was all over the news globally at the time. We saw that result in lower traffic to the hospitals, and we actually also saw that in terms of our shipments to that whole region. Our shipments of consumables were down. But importantly, it is not structural that those consumable volumes did come back up in Q4. Also in that third quarter, we did expect a bit more trophon3 versus trophon2. You remember in the H1 the balance was towards trophon2, which is a lower price than trophon3.

Speaker #2: It was all over the news globally at the time. We saw that result in lower traffic to the hospitals, and we actually also saw that in terms of our shipments to that whole region—our shipments of consumables were down.

Speaker #2: But importantly, it's not structural that those consumable volumes did come back up in Q4. Also, in that third quarter, we did expect a bit more Tropon 3 versus Tropon 2.

Speaker #2: You'll remember in the first half, the balance was towards Tropon 2, which is a lower price than Tropon 3. And whilst the Tropon 3 did grow in the third quarter, there was still a decent percentage of Tropon 2, which moderated the ASP a bit.

Michael Kavanagh: And whilst the trophon3 did grow in the third quarter, there was still a decent percentage of trophon2, which moderated the ASP a bit. But again, importantly in Q4, the trophon3 became the dominant device and we are seeing that going into this year as well. So ASP did come up. So that did impact a little bit. So it was more some transitionary impacts that we experienced during Q3 rather than anything structural. The gross profit margin for the year was 76.9%. And the 1.3-point moderation from FY25, that reflected the product mix because we had those record capital unit placements and the capital unit gross margin is lower to consumables. But also we had the currency movements. But on a constant currency basis, the gross margin is still a very healthy 77.6%.

Speaker #2: But again, importantly, in Q4, the Tropon 3 became the dominant device, and we're seeing that going into this year as well. So, ASP did come up.

Speaker #2: So that did impact a little bit. It was more some transitionary impacts that we experienced during Q3 rather than anything structural. The gross profit margin for the year was 76.9%.

Speaker #2: And the 1.3 points moderation from FY25, that's reflected in the product mix because we had those record capital unit placements. And you know the capital unit gross margin is lower than consumables.

Speaker #2: But also, we had the currency movements. But on a constant currency basis, the gross margin is still a very healthy 77.6% for the year, very well controlled without compromising our growth investments.

Michael Kavanagh: Expenses for the year, very well controlled without compromising our growth investments, and they just increased 2% on a reported basis and 4% at constant currency. So together, all of those delivered a reported EBIT of AUD 16 million for the year, or AUD 21.6 million if you look at it on constant currency, which was up 21% on prior year. So operationally, a good performance. It is worth calling out, I think the strength of the trophon only business, and it is a continuing feature of the Nanosonics result. The trophon franchise, and Jason Burriss will cover this a little bit later, it continues to generate strong profitability and cash flow. And the reported EBIT for the year for the trophon only business was just under AUD 51 million, or just under AUD 57 million in constant currency, which was up 16% on prior corresponding period.

Speaker #2: And they just increased 2% on a reported basis and 4% at constant currency. So together, all of those delivered a reported EBIT of $16 million for the year, or $21.6 million if you look at it on constant currency, which was up 21% on the prior year.

Speaker #2: So, operationally, a good performance. It is worth calling out, I think, the strength of the trophon-only business, and it is a continuing feature.

Speaker #2: Of the Nanosonics result, the Tropon franchise—and Jason will cover this a little bit later—continues to generate strong profitability and cash flow.

Speaker #2: And the reported EBIT for the year for the Tropon-only business was just under $51 million, or just under $57 million in constant currency, which was up 16% on the prior corresponding period.

Speaker #2: So, in short, the trophon definitely remains a highly profitable engine. That gives us the flexibility to fund Corus, maintain a debt-free balance sheet, and continue investing for the long term.

Michael Kavanagh: So in short, the trophon definitely remains a highly profitable engine that gives us the flexibility to fund CORIS, maintain a debt-free balance sheet, and continue investing for the long term. FY26 was also a year of important operational delivery across the whole business. I have mentioned some of the highlights already, but it is worth touching on a couple of them on the overall progress. Across the trophon franchise, we launched trophon3 and trophon2 Plus, and that was launched halfway through the H1, and we saw adoption of these new innovations increase in the H2, and particularly in the Q4. The overall global cumulative installed base, that grew 6% to 39,230 units. Importantly, that represents the protection of approximately 31 million patients on an annual basis from the risk of cross-contamination. Upgrades, they continued to perform very well, up 20% for the year.

Speaker #2: FY26 was also a year of important operational delivery across the whole business. I've mentioned some of the highlights already, but it's worth touching on a couple of them and the overall progress.

Speaker #2: So, across the trophon franchise, we launched trophon 3 and trophon 2 plus. That was launched halfway through the first half, and we saw adoption of these new innovations increase in the second half, particularly in the fourth quarter.

Speaker #2: The overall global cumulative installed base grew 6% to 39,230 units. Importantly, that represents the protection of approximately 31 million patients on an annual basis from the risk of cross-contamination.

Speaker #2: Upgrades continue to perform very well, up 20% for the year. Importantly, upgrades were up 32% in North America. There are still over 8,000 older, first-generation Tropon EPR devices remaining in North America to upgrade.

Michael Kavanagh: Importantly, upgrades were up 32% in North America. There are still over 8,000 older first-generation trophon EPR devices remaining in North America to upgrade. So still a significant opportunity moving forward. For CORIS, we made important regulatory and commercial progress during the year, including clearances across the UK, Europe, Australia, and the first FDA 510(k) clearance for the first round of expanded scope indications. That second 510(k) is currently in with the FDA and undergoing the review process. As mentioned earlier, we move into commercial launch this H1. We also then to support a lot of this, we continued to strengthen our operations throughout the year. In addition to establishing a dedicated CORIS device manufacturing line in Australia, we did expand our US Indianapolis facility and have now started the manufacturing and distribution of trophon's core consumables from our local manufacturing facility in Indianapolis.

Speaker #2: So, still a significant opportunity moving forward. For Corus, we made important regulatory and commercial progress during the year, including clearances across the UK, Europe, Australia, and the first FDA 510(k) clearance for the first round of expanded scope indications. That second 510(k) is currently in with the FDA and undergoing the review process.

Speaker #2: And as mentioned earlier, we move into commercial launch this first half. We also, then, to support a lot of this, continue to strengthen our operations throughout the year.

Speaker #2: And in addition to establishing a dedicated CORIS device manufacturing line in Australia, we did expand our US Indianapolis facility and have now started the manufacturing and distribution of trophon's core consumables from our local manufacturing facility in Indianapolis.

Speaker #2: And the Corus Quantum consumable line, that's now in place, also in Indianapolis and ready to go. I should also mention that in Q3 this year, we will be moving our corporate headquarters, manufacturing, and laboratories to a new facility quite close to where we already are in Macquarie Park.

Michael Kavanagh: The CORIS Quantum consumable line, that is now in place also in Indianapolis and ready to go. I should also mention that in Q3 this year, we will be moving our corporate headquarters, manufacturing, and laboratories to a new facility quite close to where we already are in Macquarie Park, and that is all to support our next phase of growth. During this year, for FY26, we did have that site registered. All the regulatory approvals for manufacturing were achieved. All the capital works now are currently underway, readying for that Q3 move. So quickly, just briefly back to the trophon business. As I mentioned, the total trophon unit placements were 4,230 units. So that is up 9% on the prior year. That does represent the strongest annual placements that we have delivered in 3 years.

Speaker #2: And that's all to support our next phase of growth. And during this year, FY26, we did have that site registered, and all the regulatory approvals for manufacturing were achieved.

Speaker #2: All the capital works are now currently underway, readying for that Q3 move. So, quickly, just briefly back to the Tropon business. As I mentioned, the total Tropon unit placements were 4,230 units.

Speaker #2: So that's up 9% on the prior year, and that does represent the strongest annual placements that we've delivered in three years. Of the total placements, the cumulative installed base increased 6% to 39,230 devices, and there were 2,230 new installed base units added during the year.

Michael Kavanagh: Of the total placements, the cumulative installed base increased 6% to 39,230 devices, and there were 2,230 new installed base units added during the year. Mentioned already the upgrade, a record year, 2,000 units, but the majority of those, in fact, 1,980 of them in North America, and that was up 32%, and we expect ongoing growth over there. So overall, a very strong year for total unit volumes. Before I hand over to Jason Burriss to go into some of the financials in a bit more detail, I do think it is worth noting that with the imminent commercial launch now of CORIS, we believe that Nanosonics is now entering an exciting new phase. With CORIS, we have the opportunity to apply the proven commercial foundations we have built through trophon.

Speaker #2: As mentioned already, the upgrades saw a record year: 2,000 units. But the majority of those—in fact, 1,980 of them—were in North America, and that was up 32%. We expect ongoing growth over there.

Speaker #2: So overall, a very strong year for total unit volumes. Before I hand over to Jason to go into some of the financials in a bit more detail, I do think it's worth noting that, with the imminent commercial launch now of Corus, we believe that Nanosonics is now entering an exciting new phase.

Speaker #2: With Corus, we have the opportunity to apply the proven commercial foundations we've built through trophon. That includes our customer relationships, our sales and service capability, regulatory and clinical expertise that we've developed, our manufacturing capability, and, of course, the proven recurring revenue model to a second highly significant infection prevention opportunity.

Michael Kavanagh: That includes our customer relationships, our sales and service capability, regulatory clinical expertise that we have developed, our manufacturing capability, and of course, the proven recurring revenue model to a second highly significant infection prevention opportunity. While the CORIS is a new platform, I believe we are launching it from a position of strength, and we certainly do believe it has the potential to become our second transformational growth platform, an important driver for long-term value for Nanosonics. But more on this a little bit later. I will now hand over to Jason to take you through some of more of the details around the financials. Jason?

Speaker #2: So, while the Corus is a new platform, I believe we are launching it from a position of strength, and we certainly do believe it has the potential to become our second transformational growth platform—an important driver for long-term value for Nanosonics.

Speaker #2: But more on this a little bit later. So I'll now hand over to Jason to take you through some more of the details around the financials.

Speaker #2: Jason.

Speaker #1: Thanks, Michael. As you said, I'll take you through the details of the FY26 results. For Nanosonics, FY26 was a year of solid earnings growth at constant currency.

Jason Burriss: Thanks, Michael. As you said, I will take you through the more details of the FY26 results. For Nanosonics, FY26 was a year of solid earnings growth at constant currency and a disciplined OpEx performance. EBIT grew 21% at constant currency, supported by revenue growth and disciplined OpEx control. We also continued to see operational leverage in the trophon-only business. At the same time, we invested in CORIS, which we believe will become a second growth engine for our business. We also returned AUD 20 million to shareholders through the buyback, with a further buyback announced today of up to AUD 40 million. Turning to the P&L. Our revenue was AUD 203.9 million, up 3% on a reported basis and 6% on a constant currency basis to AUD 211.5 million. Gross profit margin was 76.9%, moderating by 1.3 points.

Speaker #1: And a disciplined operating expense performance. EBIT grew 21% at constant currency, supported by revenue growth and disciplined operating expense control. We also continued to see operational leverage in the trophon-only business.

Speaker #1: At the same time, we invested in Corus, which we believe will become a second growth engine for our business. We also returned $20 million to shareholders through the buyback, with a further buyback announced today of up to $40 million.

Speaker #1: Turning to the P&L. Our revenue was $203.9 million, up 3% on a reported basis, and up 6% on a constant currency basis to $211.5 million.

Speaker #1: Gross profit margin was 76.9%, moderating by 1.3 points. This reflected product mix and the impact of the stronger Australian dollar against the US dollar.

Jason Burriss: This reflected product mix and the impact of the stronger Australian dollar against the USD. At constant currency, gross profit margin was 77.6%, which is only 0.6 points lower than last year, and as Michael said earlier, is primarily associated with increased capital unit sales, which is obviously a positive thing for the long-term benefit of the business. We recovered AUD 2.5 million in US tariffs paid under the International Emergency Economic Powers Act up to February 2026. These are included in our FY26 financials. Our residual FY26 tariffs, i.e., the ones that affected the P&L, were AUD 0.6 million, making them comparable to FY25 when we paid AUD 0.5 million. OpEx were AUD 141.4 million, up 2% on a reported basis and at 4% at constant currency, reflecting disciplined cost management. And of course, within the OpEx, trophon costs were AUD 106.8 million, down 1%.

Speaker #1: At constant currency, gross profit margin was 77.6%, which is only 0.6 points lower than last year and, as Michael said earlier, is primarily associated with increased capital unit sales—which is obviously a positive thing for the long-term benefit of the business.

Speaker #1: We recovered $2.5 million in US tariffs paid under the International Emergency Economic Powers Act, up to February 2026. These are included in our FY26 financials.

Speaker #1: Our residual FY26 tariffs, that is, the ones that affected the P&L, were $0.6 million, making them comparable to FY25 when we paid $0.5 million. Operating expenses were $141.4 million, up 2% on a reported basis, and up 4% at constant currency.

Speaker #1: Reflecting disciplined cost management. And of course, within OPEX, trophon costs were $106.8 million, down 1%. While the investment went into CORIS, which increased the OPEX spend by around 13% to $34.6 million, as we continued to prepare for launch.

Jason Burriss: While the investment went into CORIS, which increased the OpEx spend by around 13% to AUD 34.6 million as we continued to prepare for launch. The OpEx, of course, included R&D, which continued to ease as a percentage of sales from 17% in FY25 to 16% in FY26 as the new trophon technology arrived in the market. EBIT was AUD 16 million on a reported basis or AUD 21.6 million in constant currency, a 21% increase in constant currency terms. Looking specifically at capital revenue, we report growth of 4% to AUD 54.7 million or 8% in constant currency terms. The result was primarily driven by higher volumes, with North America remaining the key growth driver and delivering record placements, including record upgrades. Pleasingly, average selling price strengthened through the H2 of the year as trophon3 became a larger proportion of sales.

Speaker #1: The OPEX, of course, included R&D, which continued to ease as a percentage of sales—from 17% in FY25 to 16% in FY26—as the new Tropon technology arrived in the market.

Speaker #1: EBIT was $16 million on a reported basis, or $21.6 million in constant currency—a 21% increase in constant currency terms. Looking specifically at capital revenue, we reported growth of 4% to $54.7 million, or 8% in constant currency terms.

Speaker #1: The result was primarily driven by higher volumes, with North America remaining the key growth driver and delivering record placements, including record upgrades. Pleasingly, average selling price strengthened through the second half of the year, as Tropon 3 became a larger proportion of sales.

Speaker #1: We also saw strong contributions from Trophon2 plus software upgrades in Q4, and we expect this momentum to continue into FY27. Moving to annuity revenue.

Jason Burriss: We also saw trophon2 Plus software upgrades contributing more strongly in Q4, and we expect this momentum to continue into FY27. Moving to annuity revenue. On this slide, we share the growth in annuity revenue. To refresh you, annuity revenue is recurring revenue less spare parts, which has become a suitable metric for Nanosonics because it provides a clearer view of the underlying quality, resilience, and growth of the recurring revenue base. Annuity revenue grew 4% on a reported basis to AUD 141.8 million or 8% growth at constant currency. Core consumables, which are the trophon disinfectant and chemical indicators used in every cycle, were up 4% at constant currency. Ecosystem revenue grew 6% at constant currency, and the ecosystem products include the wider range of trophon workflow products, including probe covers, cleaning wipes, and other consumables.

Speaker #1: On this slide, we share the growth in annuity revenue. To refresh you, annuity revenue is recurring revenue less spare parts, which has become a suitable metric for Nanosonics because it provides a clearer view of the underlying quality, resilience, and growth of the recurring revenue base.

Speaker #1: Annuity revenue grew 4% on a reported basis to $141.8 million, or 8% growth at constant currency. For consumables, which are the tropon disinfectants and chemical indicators used in every cycle, revenue was up 4% at constant currency.

Speaker #1: Ecosystem revenue grew 6% at constant currency, and the ecosystem products include the wider range of trophon workflow products, including probe covers, cleaning wipes, and other consumables.

Speaker #1: Service revenue grew 19% at constant currency, growing strongly as more customers adopt the service offerings associated with both Tropon 2 and Tropon 3. Service includes preventative maintenance, support contracts, along with our pay-as-you-go customers.

Jason Burriss: Service revenue grew 19% at constant currency, growing strongly as more customers adopt the service offerings associated with both trophon2 and trophon3. Service includes preventative maintenance, support contracts, along with our pay-as-you-go customers. Spare parts moderated as expected as customers upgraded to newer trophon systems and the record result of upgrades in North America. Looking at our regional performance, North America had record total placements and upgrades in FY26. We placed a record 3,880 devices this year, up 13%. The growth driver was upgrades, with 1,980 units, up 32% on the prior year, while new install base continued to grow, adding 1,900 units. Upgrades will continue to represent a significant opportunity for Nanosonics in North America. As Michael Kavanagh said earlier on, there are approximately 8,000 original EPR devices remaining for potential conversion.

Jason Burriss: Service revenue grew 19% at constant currency, growing strongly as more customers adopt the service offerings associated with both trophon2 and trophon3. Service includes preventative maintenance, support contracts, along with our pay-as-you-go customers. Spare parts moderated as expected as customers upgraded to newer trophon systems and the record result of upgrades in North America. Looking at our regional performance, North America had record total placements and upgrades in FY26. We placed a record 3,880 devices this year, up 13%. The growth driver was upgrades, with 1,980 units, up 32% on the prior year, while new install base continued to grow, adding 1,900 units. Upgrades will continue to represent a significant opportunity for Nanosonics in North America. As Michael said earlier on, there are approximately 8,000 original EPR devices remaining for potential conversion.

Speaker #1: Spare parts moderated as expected as customers upgraded to newer Tropon systems, and there was a record result of upgrades in North America. Looking at our regional performance, North America had record total placements and upgrades in FY26.

Speaker #1: We placed a record 3,880 devices this year, up 13%. The growth driver was upgrades, with 1,980 units—up 32% on the prior year—while the new installed base continued to grow, adding 1,900 units.

Speaker #1: Upgrades will continue to represent a significant opportunity for Nanosonics in North America. As Michael said earlier, there are approximately 8,000 original EPR devices remaining for potential conversion.

Speaker #1: The new installed base additions lift our cumulative installed base in North America to 34,210 devices, up 6%. And, of course, every device is a multi-year stream of consumables, ecosystem, and service revenue, so a larger base directly expands the annuity foundation.

Jason Burriss: The new install base additions lift our cumulative installed base in North America to 34,210 devices, up 6%. Of course, every device is a multi-year stream of consumables, ecosystem, and service revenue. So a larger base directly expands the annuity foundation. Reported revenue for North America was AUD 186.4 million, up 3% or 8% at constant currency, showing the underlying demand remains strong in that region. Reported annuity revenue reached AUD 126.8 million, up 4% or 9% at constant currency. With annuity revenue within, core consumables grew 5%, the service business growing 19%. Both of these are constant currency numbers.

Speaker #1: Reported revenue for North America was $186.4 million, up 3%, or 8% at constant currency, showing the underlying demand remained strong in that region. Reported annuity revenue reached $126.8 million, up 4%, or 9% at constant currency.

Speaker #1: Annuity revenue within core consumables grew 5%, with the service business growing 19%. Both of these are constant currency numbers. Reported capital revenue was $52.3 million, up 6%, or 10% at constant currency, driven by the record placement activity we've just discussed, and as already mentioned, the improved capital pricing in the second half as Tropon 3 became a larger proportion of sales.

Jason Burriss: Reported capital revenue was AUD 52.3 million, up 6% or 10% at constant currency, driven by the record placement activity we have just discussed and as already mentioned, the improved capital pricing in the second half as trophon3 became a larger proportion of sales and increasing the uptake of trophon2 Plus upgrades in the Q4. Spare parts, which are not part of annuity revenue, was AUD 7.3 million, down 21% or 19% at constant currency, and we expect that to continue to moderate as customers upgrade to newer trophon systems. Overall, North America continued to be a strong performing region for us. In EMEA and APAC, we continued to grow the cumulative installed base. Turning to EMEA. Our cumulative installed base grew 8% on the prior year to 2,630 units, with the addition of 200 new units, consistent on last year.

Speaker #1: An increase in the uptake of Tropon T2 Plus upgrades in the fourth quarter. Spare parts, which are not part of annuity revenue, were $7.3 million.

Speaker #1: Down 21%, or 19% at constant currency, and we expect that to continue to moderate as customers upgrade to newer Trophon systems. Overall, North America continued to be a strong performing region for us.

Speaker #1: In EMEA and APAC, we continued to grow the cumulative installed base. Turning to EMEA, our cumulative installed base grew 8% on the prior year to units, consistent with last year.

Speaker #1: In this region, the majority of the original trophon EPR fleet has already been upgraded. Reported annuity revenue rose 7%, while total revenue grew 1% to $12.3 million, driven by a moderation in capital revenue.

Jason Burriss: In this region, the majority of the original trophon EPR fleet has already been upgraded. Reported annuity revenue rose 7%, while total revenue grew 1% to AUD 12.3 million, driven by a moderation in capital revenue. Capital revenue was softer because we saw a greater proportion of managed equipment service model versus capital purchase model in the UK compared to last year. As a reminder, units purchased under the MES model have no upfront capital revenue, but the capital value is built into a higher price for the consumables. Turning to APAC. New installed base devices grew by 130 units, up 44% on the prior year, with a good contribution coming from Japan. This increased the cumulative installed base to 2,390 units, reflecting 6% growth. Total units placed of 150 included 20 upgrade devices in a region where the majority of EPR units have already been upgraded.

Speaker #1: Capital revenue was softer because we saw a greater proportion of the managed equipment service model versus the capital purchase model in the UK compared to last year.

Speaker #1: As a reminder, units purchased under the MES model have no upfront capital revenue, but the capital value is built into a higher price for the consumables.

Speaker #1: Turning to APAC, new installed base devices grew by 130 units, up 44% on the prior year, with a good contribution coming from Japan. This increased the cumulative installed base to 2,390 units, reflecting 6% growth.

Speaker #1: Total units placed of 150 included 20 upgrade devices in a region where the majority of EPR units have already been upgraded. Reported revenue in APAC was $5.1 million, down 14% on the prior year. Annuity revenue was $4.2 million, also down 14%, while capital revenue was $0.9 million, down 18%.

Jason Burriss: Reported revenue in APAC was AUD 5.1 million, down 14% on the prior year. Annuity revenue was AUD 4.2 million, also down 14%, while capital revenue was AUD 0.9 million, down 18%. The capital softness was driven by placement mix, particularly in Japan, where the majority of units were placed under a rental model. Annuity revenue also softened. However, we believe our next generation trophon offering is compelling, and further strong momentum in device sales will help support annuity revenue going forward. Nanosonics remains in a strong financial position. We ended FY26 with AUD 155.2 million in cash and cash equivalents. Business cash flow, which excludes the funds spent on the share buyback, was AUD 13.6 million, reflecting strong cash generation from trophon, while at the same time funding CORIS commercialization, an increase in inventory to support trophon growth and the CORIS launch.

Speaker #1: The capital softness was driven by placement mix, particularly in Japan, where the majority of units were placed under a rental model. Annuity revenue also softened; however, we believe our next-generation Tropon offering is compelling.

Speaker #1: Further strong momentum in device sales will help support annuity revenue going forward. Nanosonics remains in a strong financial position. We ended FY26 with $155.2 million in cash and cash equivalents.

Speaker #1: Business cash flow, which excludes the funds spent on the share buyback, was $13.6 million, reflecting strong cash generation from TROPHON, while at the same time funding CHORUS commercialization and an increase in inventory to support TROPHON growth and the CHORUS launch.

Speaker #1: We also completed a plan for FY26 to return capital to our shareholders. And, as Michael mentioned, we announced a further buyback of up to $40 million in fiscal year 27.

Jason Burriss: We also completed a AUD 20 million share buyback in FY26 to return capital to our shareholders. As Michael Kavanagh mentioned, we announced a further buyback of up to AUD 40 million in fiscal year 2027. This, we believe, is an attractive and efficient way to return capital to shareholders while preserving the capacity to invest for long-term growth. Before I hand back to Michael Kavanagh, I think it's important to highlight the strength of the trophon only business. Central to our growth strategy, due to its earnings power and strong cash generation. The trophon only business EBIT of AUD 50.6 million was up 5% or AUD 56.5 million in constant currency terms, up 16%. The strong financial profile of the trophon business is what enables us to invest in CORIS, continue innovation, and maintain the balance sheet flexibility that we have. This covers the financials.

Jason Burriss: We also completed a AUD 20 million share buyback in FY26 to return capital to our shareholders. As Michael mentioned, we announced a further buyback of up to AUD 40 million in fiscal year 2027. This, we believe, is an attractive and efficient way to return capital to shareholders while preserving the capacity to invest for long-term growth. Before I hand back to Michael, I think it's important to highlight the strength of the trophon only business. Central to our growth strategy, due to its earnings power and strong cash generation. The trophon only business EBIT of AUD 50.6 million was up 5% or AUD 56.5 million in constant currency terms, up 16%. The strong financial profile of the trophon business is what enables us to invest in CORIS, continue innovation, and maintain the balance sheet flexibility that we have. This covers the financials.

Speaker #1: This, we believe, is an attractive and efficient way to return capital to shareholders while preserving the capacity to invest for long-term growth. Before I hand back to Michael, I think it's important to highlight the strength of the trophon-only business.

Speaker #1: Central to our growth strategy, due to its earnings power and strong cash generation. The trophon-only business EBIT of $50.6 million was up 5%, or $56.5 million in constant currency terms, up 16%.

Speaker #1: The strong financial profile of the Tropon business is what enables us to invest in Chorus, continue innovation, and maintain the balance sheet flexibility that we have.

Speaker #1: That covers the financials. Michael, I'll hand back to you to talk more about trophon and CORIS, and our guidance for fiscal year '27.

Jason Burriss: Michael Kavanagh, I'll hand back to you to talk more about trophon and CORIS and our guidance for fiscal year 2027.

Jason Burriss: Michael, I'll hand back to you to talk more about trophon and CORIS and our guidance for fiscal year 2027.

Speaker #2: Thanks very much, Jason. A few comments, first of all, on our expectations for the Tropon business for FY27. We do expect to see continued strong growth within the Tropon franchise.

Michael Kavanagh: Thanks so much, Jason. A few comments, first of all, on our expectations for the trophon business for FY27. We do expect to see continued strong growth within the trophon franchise. trophon remains a market leading growth platform with multiple capital and recurring revenue levers that is shown on this slide that we believe can continue to expand revenue earnings and of course, customer value. On the capital side of things, we do expect the installed base to continue to grow across all regions. We continue to expand the new installed base in North America, and we expect trophon3 to continue to do that. In EMEA, the trophon3 does strengthen our customer proposition and potentially supports even further country-level opportunities as adoption fundamentals improve.

Speaker #2: TROPHON remains a market-leading growth platform with multiple capital and recurring revenue levers, as shown on this slide, that we believe can continue to expand revenue, earnings, and, of course, customer value.

Speaker #2: On the capital side of things, we do expect the installed base to continue to grow across all regions. We continue to expand the new installed base in North America, and we expect Tropon 3 to continue to do that.

Speaker #2: In EMEA, the Tropon 3 does strengthen our customer proposition and potentially supports even further country-level opportunities as adoption fundamentals improve. In Japan, we are definitely making progress on the building blocks for broader adoption, including local guideline development, and regulatory clearance is expected for Tropon 3 in this half as well.

Michael Kavanagh: In Japan, we are definitely making progress on the building blocks for broader adoption, including local guideline development and regulatory clearance is expected for trophon3 in this H1 as well. As Jason mentioned, Japan did contribute nicely in units in FY26 to the APAC region. Still on the capital side, upgrades also remain a significant opportunity. We saw excellent growth in FY26. These upgrades, they not only modernize the fleet, but unlock, in many cases, new service opportunities and workflow value as well. As a reminder, many of those old EPRs were under service contracts with GE HealthCare historically, and as we sell the upgrades, Nanosonics captures the new service contracts. In addition, the trophon2 Plus software upgrades, they provide a way to extend value across the existing trophon2 installed base, of which there is well over 25,000.

Speaker #2: And, as Jason mentioned, Japan did contribute nicely in units in FY26 to the APAC region. Still on the capital side, upgrades also remain a significant opportunity.

Speaker #2: We saw excellent growth in FY26. And these upgrades, they not only modernize the fleet, but unlock, in many cases, new service opportunities and workflow value as well. Because, as a reminder, many of those old EPRs were under-serviced contracts with GE Healthcare, historically. And as we sell the upgrades, Nanosonics captures the new service contracts.

Speaker #2: In addition, the trophon2 Plus software upgrades provide a way to extend value across the existing trophon2 installed base, of which there's well over 25,000.

Speaker #2: And we saw the Tropon 2 Plus software upgrades begin to accelerate in Q4. So we do expect them to be a meaningful contribution in FY27.

Michael Kavanagh: We saw the trophon2 Plus software upgrades begin to accelerate in Q4. We do expect them to be a meaningful contribution in FY27. Overall, we expect upgrades to be a continuing growth driver as well moving forward. On the annuity revenue side, I think the core consumables, they grow with procedure utilization. As I said earlier, whilst we saw a bit of softness in Q3, that reversed going into Q4 and in the early stages now of FY27. These consumables, they grow with procedure utilization. Our ecosystem consumables, they provide an opportunity to broaden our share of the full workflow. Service, as I mentioned, it also continues to be an important and meaningful growth opportunity. It did really well in FY26. When we have those service contracts out there, it certainly provides customer value, but also great retention opportunities. Finally, connectivity.

Speaker #2: So overall, we expect upgrades to be a continuing growth driver as well moving forward. On the annuity revenue side, I think the core consumables grow with procedure utilization and, as I said earlier, while we saw a bit of softness in Q3, that reversed going into Q4 and in the early stages now of FY27.

Speaker #2: So the consumables, they grow with procedure utilization. And our ecosystem consumables provide an opportunity to broaden our share of the full workflow. Service, as I mentioned, also continues to be an important and meaningful growth opportunity to do really well in FY26.

Speaker #2: And when we have those service contracts out there, it certainly provides customer value, but also great retention opportunities. And finally, connectivity over time—we think connectivity subscriptions, especially now with our new DICOM and the capabilities in Tropon 3, will become more meaningful as we move forward.

Michael Kavanagh: Over time, we think connectivity subscriptions, especially now with our new DICOM and the capabilities in trophon3, will become more meaningful as we move forward. Taken together, the trophon remains a high-quality, strong growth platform, multiple levers to drive ongoing durable revenue growth, earnings, and cash generations, and all of that is seen in our guidance. With trophon continuing to provide strong growth in earnings, I want to turn to CORIS briefly, because we believe this represents the next major step expanding Nanosonics beyond just ultrasound reprocessing. CORIS is now moving to commercial launch in the H1. This is a major milestone for Nanosonics and our shareholders, no doubt, and represents a transition from years of technology development, regulatory progress, controlled market release execution, into beginning of commercial adoption.

Speaker #2: So, taken together, the Tropon remains a high-quality, strong growth platform, with multiple levers to drive ongoing, durable revenue growth, earnings, and cash generation—and all of that is reflected in our guidance.

Speaker #2: So, with trophon continuing to provide strong growth and earnings, I want to turn to Chorus briefly because we believe this represents the next major step in expanding Nanosonics beyond just ultrasound reprocessing.

Speaker #2: And Chorus is now moving to commercial launch in the first half, and this is a major milestone for Nanosonics and our shareholders, no doubt.

Speaker #2: And it represents a transition from years of technology development, regulatory progress, and controlled market release execution into the beginning of commercial adoption. And the Chorus opportunity is substantial.

Michael Kavanagh: The CORIS opportunity is substantial, with around 60 million endoscope procedures each year across our target markets. Importantly, CORIS is solving a real and significant problem in endoscope reprocessing. Today, the cleaning of flexible endoscope channels remains one of the most challenging. It is manual, has many variable steps in the whole reprocessing workflow. It is difficult to standardize, difficult to verify, difficult to perform consistently across complex, narrow, and in many cases, branched channels. That is what we witnessed during our controlled market release, and that is the problem CORIS is designed to address. For customers, CORIS delivers, I believe, a clear value proposition. It delivers automation, superior efficacy, consistency of outcome. It verifies all the key cycle parameters, which gives better traceability. It provides workflow support for the people who have to do this, and ultimately confidence that that critical step has been performed effectively.

Speaker #2: With around 60 million endoscope procedures each year across our target markets, importantly, chorus is solving a real and significant problem in endoscope reprocessing. Today, the cleaning of flexible endoscope channels remains one of the most challenging—it's manual, with many variable steps in the whole reprocessing workflow.

Speaker #2: It's difficult to standardize, difficult to verify, and difficult to perform consistently across complex, narrow, and, in many cases, branched channels. That's what we witnessed during our controlled market release, and that is the problem Chorus is designed to address.

Speaker #2: For customers, Chorus delivers, I believe, a clear value proposition. It delivers automation, superior efficacy, consistency of outcome. It verifies all the key cycle parameters, which means better traceability. It provides workflow support for the people who have to do this, and ultimately, confidence that that critical step has been performed effectively.

Speaker #2: And all of those value propositions are practical, credible reasons for hospitals to adopt, because they speak directly to patient safety, quality assurance, compliance, and operational efficiency—all of those dimensions are critically important for the adoption of a new technology.

Michael Kavanagh: All of those value propositions are practical, credible reasons for hospitals to adopt because they speak directly to patient safety, quality assurance, compliance, and operational efficiency. All of those dimensions, critically important for the adoption of a new technology. The slide that is on front of you and in the investor deck, shows why we believe CORIS can become a very, very attractive business over time. I guess today, the best reference point investors have is trophon. With trophon, every installed device creates a long-term revenue stream through consumable service and broader workflow products. That installed base model has delivered high-quality annuity revenue, strong gross margins, operating leverage, and significant cash generation as we have outlined today. CORIS is built on the same core principles. However, the capital equipment is expected to be three to fivefold the current trophon price.

Speaker #2: The slide that's in front of you, and in the investor deck, shows why we believe Chorus can become a very, very attractive business over time.

Speaker #2: And I guess today, the best reference point investors have is Tropon. And with Tropon, every installed device creates a long-term revenue stream through consumable service and broader workflow products.

Speaker #2: And that installed base model has delivered high-quality annuity revenue, strong gross margins, operating leverage, and significant cash generation, as we've outlined today. Now, Chorus is built on the same core principles.

Speaker #2: However, the capital equipment is expected to be three to five times the current Tropon price. Each unit is expected to run approximately 10 cycles per day on average, which is, again, three to four times that of Tropon.

Michael Kavanagh: Each unit is expected to run approximately 10 cycles per day on average, which is again, three to four times that of trophon. Price per cycle is expected to be four to six times that of trophon. Service adoption for this type of equipment is also expected to be higher than trophon, which today is in the order of 55% to 60%, whereas technologies like these can be between 80% and 100%. So the investment case is clear. CORIS definitely gives Nanosonics a second platform with trophon-like annuity characteristics. It is targeted at a large unmet need and supported by commercial capabilities we have already proven. That is why we believe CORIS definitely has the potential to become a major long-term value driver for Nanosonics.

Speaker #2: Price per cycle is expected to be four to six times that of Tropon, and service adoption for this type of equipment is also expected to be higher than Tropon, which today is in the order of 55 to 60 percent, whereas technologies like these can be between 80 and 100 percent.

Speaker #2: So, the investment case is clear. Chorus definitely gives Nanosonics a second platform with trophon-like annuity characteristics. It's targeted at a large unmet need and supported by commercial capabilities we've already proven.

Speaker #2: That's why we believe Chorus definitely has the potential to become a major long-term value driver for Nanosonics. Moving to our launch, we will start this half in the UK, Ireland, and Australia, and that will be followed by the US this year as well.

Michael Kavanagh: Moving to our launch, we will start this H2 in the UK, Ireland, and Australia, and that will be followed by the US this year as well. The launch year will focus on establishing broad market awareness now, build pipeline as we get into the customer budget cycles, and of course, initial customer and reference site adoptions as preparation, all of that as preparation for acceleration in FY28. This year, we do expect revenue coming through from CORIS, but we expect it, as many of the analysts have predicted, to be in the low single-digit millions. As I say, as many of the analysts have forecasted for a launch year. As you expect with a launch, we are making a deliberate increase in investment in CORIS FY27.

Speaker #2: And the launch year will focus on establishing broad market awareness now, building pipeline as we get into the customer budget cycles, and, of course, initial customer and reference site adoptions—all of that as preparation for acceleration in FY28.

Speaker #2: And this year, we do expect revenue coming through from Chorus, but we expect it, as many of the analysts have predicted, to be in the low single-digit millions.

Speaker #2: As I say, as many of the analysts have forecast for a launch year, as you would expect with a launch, we are making a deliberate increase in investment in Chorus in FY27.

Speaker #2: The investment is focused on expanding the dedicated Chorus launch capability, and that will include increasing endoscope reprocessing sales specialists, and they'll support our existing sales team.

Michael Kavanagh: The investment is focused on expanding the dedicated CORIS launch capability, and that will include increasing endoscope reprocessing sales specialists, and they will support our existing sales team, clinical and application support, field service, and installation support. We today believe that this is the best use of our capital considering the size of the opportunity that CORIS represents. I should note that we do expect the trophon business to continue to deliver operating leverage and cash generation, strong cash generation in FY27. That gives us the capacity to invest behind CORIS. The majority of the OpEx increase that you are seeing for FY27 is directly attributed to the CORIS commercial launch. trophon, we expect to continue to deliver operating leverage and cash generation. With that, moving to our outlook and our guidance for FY27.

Speaker #2: Clinical and application support, field service, and installation support. And we today believe that this is the best use of our capital, considering the size of the opportunity that Chorus represents.

Speaker #2: I should note that we do expect the Tropon business to continue to deliver operating leverage and strong cash generation in FY27. That gives us the capacity to invest behind Chorus.

Speaker #2: So, the majority of the opex increase that you're seeing for FY27 is directly attributed to the ChorUS commercial launch. trophon, we expect, will continue to deliver operating leverage and cash generation.

Speaker #2: So with that, moving to our outlook and our guidance for FY27. As I said, we entered the year with momentum in Tropon, a strong balance sheet, and now a clear path to invest in the Chorus launch.

Michael Kavanagh: As I have said, we enter the year with momentum in trophon, a strong balance sheet, and now a clear path to invest in the CORIS launch whilst maintaining disciplined capital allocation. At constant currency, we expect FY27 revenue of between AUD 220 million and AUD 228 million for the year, and that represents growth of 8% to 12% on FY26. As already mentioned, CORIS is expected to contribute initial revenues in the low single-digit millions. Most of that associated with continued trophon growth. Our gross profit margin is expected to be between 74% and 76%, and that reflects the higher tariffs that Jason Barrass has already mentioned, which are now 12.5%, but also freight impacts because of the higher volumes that we are shipping as well as increased pricing on freight due to the geopolitical situations.

Speaker #2: Whilst maintaining disciplined capital allocation. At constant currency, we expect FY27 revenue of between $220 million and $228 million for the year, and that represents growth of 8% to 12% on FY26.

Speaker #2: And, as already mentioned, CHORUS is expected to contribute initial revenues in the low single-digit millions, with most of that associated with continued TROPHON growth.

Speaker #2: Our gross profit margin is expected to be between 74 and 76 percent, and that reflects the higher tariffs that Jason has already mentioned, which are now 12.5 percent.

Speaker #2: But also freight impacts because of the higher volumes that we are shipping, as well as increased pricing on freight due to the geopolitical situations.

Speaker #2: Operating between $156 million and $163 million, and as mentioned, the absolute majority of that opex growth relates to Chorus, including the step-up in investment to support the Chorus launch I mentioned.

Michael Kavanagh: Operating expenses expected to be between AUD 156 million and AUD 163 million. As mentioned, the absolute majority of that OpEx growth relates to CORIS, including the step-up in investments for the CORIS launch I mentioned. For trophon, again, we are targeting further operating leverage improvements as that business continues to perform. Finally, you will have seen this morning as well, and we have already mentioned, we are launching a share buyback of up to AUD 40 million, and this follows the AUD 20 million we completed in FY26. The decision to initiate a further on-market buyback, I think that reflects the strength of our balance sheet, the cash generation of the business, and also the confidence that we have in the outlook ahead while continuing to invest in our long-term growth strategies.

Speaker #2: So, for Tropon, again, we're targeting further operating leverage improvements as that business continues to perform. And finally, just as you will have seen this morning as well, as we have already mentioned, we are launching a share buyback of up to $40 million, and this follows the $20 million we completed in FY26.

Speaker #2: And the decision to initiate a further unmarked buyback, I think, reflects the strength of our balance sheet, the cash generation of the business, and also the confidence that we have in the outlook ahead.

Speaker #2: While continuing to invest in our long-term growth strategies. So, with that, I will now hand back to the operator and open the call for questions.

Michael Kavanagh: With that, I will now hand back to the operator and open the call for questions.

Speaker #1: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator 2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question comes from Shane Storey at Canaccord Genuity. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question comes from Shane Storey at Canaccord Genuity. Please go ahead.

Speaker #1: If you're on speakerphone, please pick up the handset to ask your question. Today's first question comes from Shane Story at Kennick Originuity.

Speaker #1: Please go ahead.

Speaker #3: Yeah, good morning, everyone. Maybe, if I could start with where we left off there, Marco, with the additional opex into the CORIS business.

Shane Storey: Yeah. Good morning, everyone. Maybe if I could start with just where we left off there, Michael Kavanagh, with the additional OpEx into the CORIS business. Could you just give us maybe some more specific details about what that delta in investment is going to fund this year? Am I right to think of that new OpEx base for CORIS then hopefully being maybe a little bit stable say as we go into 2028 and 2029? Just at the moment, you can appreciate it is quite difficult to sort of forecast.

Speaker #3: Could you just give us maybe some more specific details about what that delta in investment is going to fund this year? And then, am I right to think of that new opex base for Chorus then hopefully being maybe a little bit stable as we go into '28 and '29?

Speaker #3: Just at the moment, you can appreciate it's quite difficult to forecast when, in fact, that part of the business breaks even.

Michael Kavanagh: Yeah

Michael Kavanagh: Yeah.

Shane Storey: When in fact that part of the business sort of breaks even. Thanks.

Speaker #3: Thanks.

Speaker #2: Yep. Yep. Great question. Thanks, Shane. Going into the launch year now, the absolute majority of that incremental opex was out into the regions, not necessarily here at headquarters, but out in the regions where we'll be adding more headcount to support the Chorus franchise.

Michael Kavanagh: Yep. Great question. Thanks, Shane. Going into the launch year now, the absolute majority of that incremental OpEx goes out into the regions. Not necessarily here at headquarters, out in the regions where we will be adding more headcounts to support the CORIS franchise. We will obviously be leveraging the existing infrastructure that we have, but as we have said all along, once we launch, we will add supplementary specialists support for the CORIS franchise. So there will be specialist salespeople that will come in, not to the effect of the size of the trophon sales team, but specialist sales team that will come in.

Speaker #2: We'll obviously be leveraging the existing infrastructure that we have, but as we've said all along, once we launch, we will add supplementary specialist support for the Chorus franchise.

Speaker #2: So we will be specialist salespeople that will come in—not to the extent of the size of the Tropon sales team—but a specialist sales team that will come in.

Speaker #2: We'll require people now supporting the project management and installation, because unlike Tropon, where you ship it and it can be plug and play—which, of course, you deal with the facilities departments in hospitals—the project management is to make sure all the necessary infrastructure, all the water lines, etc., are ready for the installation.

Michael Kavanagh: We'll require people now from supporting the project management and installation, because unlike trophon, where if you ship it and it can be a plug-and-play, with CORIS, you deal with the facilities department of hospitals in project managing to make sure all the necessary infrastructure, all the water lines, et cetera, are ready for the installation. It's traditionally this type of equipment, you have people there that project manage that with the hospitals. So there's increased resources on that, as well as some specialist resources for our clinical applications and education. On top of that, of course, we're now launching, so there'll be increased marketing spend. But what I would say is that going into FY28, FY27 then forms the baseline, and you shouldn't be seeing step-up changes even in CORIS at that stage. The majority of the major incremental investment will be made this year.

Speaker #2: So, traditionally, for this type of equipment, you have people there that project manage that with the hospitals. So there's increased resources on that, as well as some specialist resources for our clinical applications and education.

Speaker #2: On top of that, of course, we're now launching, so there'll be increased marketing spend. But what I would say is that going into FY28, FY27 then forms the baseline, and you shouldn't be seeing step-up changes. Even in chorus at that stage, the majority of the major incremental investment will be made this year.

Speaker #3: That's terrific, thanks. My second question is really back to the consumables piece. I heard what you said about the ultrasound procedural volumes sort of shifting around a bit, but maybe if you could help us by just putting some numbers around that—perhaps if we were to look at the differential between the third quarter and the fourth quarter in percentage terms, or what that would be. And perhaps, how did the fourth quarter, say, compare across what you saw in the first half?

Shane Storey: That's terrific. Thanks. My second question is really back to the consumables piece. I heard what you said about the ultrasound procedural volumes sort of shifting around a bit, but maybe if you could help us by just putting some numbers around that, perhaps by like if we were to look at the differential between the Q3 and the Q4 in percentage terms, what would that be? Perhaps how did Q4, say, compare with across what you saw in the H1? Thanks.

Speaker #3: Thanks.

Speaker #2: Yeah, I think if we see that softness in Q3—and I do want to reiterate, we didn't see that softness continue into Q4. It reversed.

Michael Kavanagh: Yeah. I think if we see that softness in Q3, and I do want to reiterate, we didn't see that softness continue into Q4. It reversed. When we went back and looked at it, we could actually see changes in our shipments, especially to all that customer base across the whole Northeast of the US. You probably would've added another AUD 2 million in consumables to the business in Q3. So, it did impact. But that's why we feel confident as we enter into FY27 on the consumables front.

Speaker #2: And when we went back and looked at it, we could actually see changes in our shipments, especially to all that customer base across the whole Northeast, all of the US.

Speaker #2: You probably would have added another $2 million in consumables to the business in Q3, so it did impact, but that's why we feel confident.

Speaker #2: As we enter into FY27 on the consumables front,

Speaker #3: Last one from me. Did you see—I mean, when I reconciled my, even when I reconciled my EMEA model, there was still a little bit lower utilization.

Shane Storey: Last one from me. When I reconcile my EMEA model, sort of noticed a little bit lower utilization. Anything to sort of call out there in terms of utilization patterns you're seeing across that region? Just cognizant that there's some different sort of effects playing through that and might be an artifact.

Speaker #3: And I think, to sort of call out there in terms of utilization patterns you're seeing across that region, just cognizant that there's some different sort of FX playing through that.

Speaker #3: And might be an artifact.

Michael Kavanagh: Within the NHS, and this is publicized, there is extreme pressure in sonography. Compared to the demand, the number of sonographers that exist is a lot lower. They are actually considering this to be a significant issue over there. So you are probably right. Whilst we saw some growth, you are probably right that procedural volume was impacted. We think it would have been impacted a lot by what was happening in the NHS. We would have liked to have seen more come out of Europe, without a doubt, during the year. We think now on the back of the trophon3 launch, and going into this year, certainly our forecasts going into this year are higher.

Speaker #2: Within the NHS—and this is publicized—there is extreme pressure in sonography. Compared to the demand, the number of sonographers that exist is a lot lower.

Speaker #2: They're actually considering this to be a significant issue over there, so you're probably right. Whilst we saw some growth, you're probably right that procedural volume was impacted.

Speaker #2: We think it would have been impacted a lot by what was happening in the NHS. We would have liked to have seen more come out of Europe.

Speaker #2: Without a doubt, during the year—we think now, on the back of the trophon3 launch and going into this year—certainly, our forecasts going into this year are higher.

Speaker #3: Thanks, Marco. Thanks, team.

Shane Storey: Thanks, Michael. Thanks, team.

Speaker #2: Thanks, Shane.

Michael Kavanagh: Thanks, Shane.

Speaker #1: Thank you. And as a reminder, if you'd like to ask a question, please press star then one. Our next question comes from Josh Kanarikis with Bear and Joey.

Operator 2: Thank you. As a reminder, if you would like to ask a question, please press star then one. Our next question comes from Josh Kannourakis with Barrenjoey. Please go ahead.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star then one. Our next question comes from Josh Kannourakis with Barrenjoey. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Hi, Michael. And Jason, can you hear me okay?

Josh Kannourakis: Hi, Michael and Jason. Can you hear me okay?

Speaker #2: Yes, Josh. How are you?

Michael Kavanagh: Yes, Josh. How are you?

Speaker #4: Great. Yeah, well, thanks. Just first question on chorus, on some of the economics there that you've given, which is helpful. Just on the consumables, can you remind us sort of as we're looking for a base around price per cycle, just in the current environment, maybe in US dollar terms, where you think that's currently sitting for the Tropon business, even if it's broad sort of terms?

Josh Kannourakis: Well, thanks. Just first question on CORIS, on some of the economics there that you have given, which is helpful. Just on the consumables, can you remind us, as we are looking for a base around price per cycle, just in the current environment, maybe in USD terms, where you think that is currently sitting for the trophon business, even if it is broad terms?

Speaker #2: I think what we've said all along, the cost today to clean a device is anywhere between the anywhere from 10 USD up to 30 USD, depending on how the level of details so when you think of the Tropon price, the expected price of that, the chorus consumable is down towards the down towards the lower end, not the absolute low end of that, but down towards the lower end of that.

Michael Kavanagh: I think what we have said all along, the cost today to clean a device is anywhere between, anywhere from 10 USD up to 30 USD, depending on the level of details. So when you think of the trophon price, the expected price of the CORIS consumable is down towards the lower end. Not the absolute low end of that, but down towards the lower end of that.

Speaker #4: Sorry, chorus price, you mean?

Josh Kannourakis: Sorry, CORIS price you mean?

Speaker #2: Oh, sorry. The chorus price.

Michael Kavanagh: Oh, sorry.

Josh Kannourakis: CORIS. Yep. Okay. Down to the lower end of that. Okay. No, got it.

Speaker #4: Chorus: Yeah. Yeah. Okay. Down to the lower end of that. Okay. No, got it. And then...

Michael Kavanagh: Sorry, I should say, which is still a significant increase.

Speaker #2: Sorry, I should say, which is still a significant increase on the trophon.

Josh Kannourakis: Yeah

Josh Kannourakis: Yeah.

Michael Kavanagh: on the trophon.

Michael Kavanagh: On the trophon.

Speaker #4: Yeah. To be clear, the range is $10 to $37 US, which—about previous—so towards the lower end of that range. Yeah. Got it.

Josh Kannourakis: Yeah. To be clear, the range, USD 10 to USD 37, which about previous, so towards the lower end of that range.

Michael Kavanagh: Yep.

Josh Kannourakis: Got it. Okay. So 4 to 6 times on the price per cycle. Then I think you said on utilization, 10 cycles.

Speaker #4: Okay, so four to six times on the price per cycle. And then, I think you said on utilization, 10 cycles per device per day.

Michael Kavanagh: Yeah

Michael Kavanagh: Yeah.

Josh Kannourakis: per device, per day. Yeah. Okay. That's really helpful. Just in terms of just clarifying on Shane Storey's question from before on the OpEx step-up from CORIS. As you were saying, you've got quite a bit in terms of the installation-related teams. As you ramp up and how we should obviously into the US, the bigger markets. So you're saying only into 2028 and other years, you should only see more incremental cost, sort of growth coming through in terms of from there on out. There's no sort of major step-ups. Just clarifying that.

Josh Kannourakis: Per device, per day. Yeah. Okay. That's really helpful. Just in terms of just clarifying on Shane Storey's question from before on the OpEx step-up from CORIS. As you were saying, you've got quite a bit in terms of the installation-related teams. As you ramp up and how we should obviously into the US, the bigger markets. So you're saying only into 2028 and other years, you should only see more incremental cost, sort of growth coming through in terms of from there on out. There's no sort of major step-ups. Just clarifying that.

Speaker #4: Yeah, okay, that's really helpful. And just in terms of clarifying Shane's question from before on the opex step up from Chorus—as you were saying, you've got quite a bit in terms of the installation-related teams.

Speaker #4: As you ramp up, and as we should obviously expand into the US and the bigger markets, you're saying that only into '28 and other years should we see more incremental cost growth coming through from there on out.

Speaker #4: There's no sort of major step-ups, just clarifying that.

Speaker #2: Yeah. We're not expecting double-digit step-up increases in opex and chorus beyond this year. This year is the big the launch year is, as you would expect, the big investment year from a commercialization perspective.

Michael Kavanagh: Yeah, we are not expecting double digit step-up increases in OpEx and CORIS beyond this year. This year is the big. The launch year is, as you would expect, the big investment year from a commercialization perspective.

Speaker #4: Got it. That's really helpful. And then, also, just in relation to the tropon, you mentioned on the call—and apologies if you've already clarified this—but the ASP pricing and some of those issues, you also saw sort of improve, it sounds like, towards the end of the year.

Josh Kannourakis: Got it. That is really helpful. Also, just in relation to trophon, you mentioned on the call, and apologies if you have clarified this, but the ASP pricing on some of those issues you also saw improved towards the end of the year. Can you give us a feeling, is that back to the levels that we should be expecting? On a go forward, is it mostly trophon3s that should be the incremental new install base sales?

Speaker #4: Can you give us a feeling? Is that sort of back to the levels that we should be expecting on a go-forward basis? Is it mostly sort of T3s that should be the incremental new install base sales?

Speaker #3: Yeah, Marco, maybe I'll take that one. Yeah, the second-half pricing was encouraging. It was back towards the previous year's levels, and that was really on the back of the transition towards T3.

Jason Burriss: Yeah. Michael, maybe I will take that one. The H2 pricing was encouraging. It was back towards previous years' levels, and that was really on the back of the transition towards trophon3. As Michael mentioned, because of the long pipeline or the long sales cycle on some of the larger deals, we still did sell more trophon2 in the H2 than we expected, certainly when we released the results of the H1. As that mix has moved towards trophon3 and our customers see the additional value, we have seen the pricing improve. As the mix improves in 2027, I would expect we will see further improvement.

Speaker #3: And as Michael mentioned, because of the long pipeline or the long sales cycle on some of the larger deals, we still did sell more T2 in the second half than we expected.

Speaker #3: Certainly, when we released the results of the first half, as that mix has moved towards Tropon 3 and our customers see the additional value, we have seen the pricing improve.

Speaker #3: And as the mix improves in '27, I'd expect we'll see further improvement.

Speaker #4: Okay, no, that's really helpful. And final one, guys, just in terms of go-to-market on Chorus—so obviously, there's a number of sort of different models you could adopt.

Josh Kannourakis: Okay. No, that is really helpful. Final one, guys. Just in terms of go to market on CORIS. Obviously, there is a number of different models you could adopt, in terms of the sales model. But you have a very strong balance sheet and lots of cash. Apologies if you have run through this, but how should we think about, as you do scale up into market in the first few years, how either you will fund it will still be capital? Could potentially you look at more of the MES models? Maybe just to run us through what some of the initial feedback has been from some of your trial clients and what you feel like the market is more powerful and is more likely to support growth.

Speaker #4: In terms of the sales model, you've got a very strong balance sheet and lots of cash. Apologies if you already ran through this, but how should we think about things as you scale up into the market in the first few years?

Speaker #4: How either your funder or still-be capital could potentially—can you look at more of the MES models? Maybe just run us through what some of the initial feedback has been from some of your trial clients, and what you feel like the market finds more palatable and is more likely to support growth?

Speaker #2: Yeah. What you're going to see, Josh, is really going to be a mix. And the great thing about the strength of the balance sheet that we have today is it provides us that flexibility.

Michael Kavanagh: Yeah. What you are going to see, Josh, is really going to be a mix.

Josh Kannourakis: Yeah.

Michael Kavanagh: The great thing about the strength of the balance sheet that we have today, it provides us that flexibility. Because the most important thing here is getting units in. This is all about consumables because the sort of gross margin levels you are talking at are consumables for CORIS will be similar to what you have been used to with the trophon. So there will be a mix where some will be capital sale. That is just the market. That is what they want to do. There will be a mix of rentals. We can lease. We can place like MES and put it on our balance sheet. We might see more MES type in the UK and more capital in the US.

Speaker #2: And because the most important thing here is getting units in, this is all about consumables, because the sort of gross margin levels you're talking about for consumables with Chorus will be similar to what you have been used to with the Tropon.

Speaker #2: So, there will be a mix where some will be capital sale—that's just the market, that's what they want to do. There will be a mix of rentals.

Speaker #2: We can lease. We can place, and, like MES, put it on our balance sheet. We might see more MES-type arrangements in the UK and more capital in the US.

Speaker #4: Got it. Thanks, guys.

Josh Kannourakis: Got it. Thanks, guys.

Speaker #2: Thanks, Josh.

Michael Kavanagh: Thanks, Josh.

Speaker #1: Thank you. And our next question today comes from Davin Thillanathan with Goldman Sachs. Please go ahead.

Operator 2: Thank you. Our next question today comes from Davin Thillainathan with Goldman Sachs. Please go ahead.

Operator: Thank you. Our next question today comes from Davin Thillainathan with Goldman Sachs. Please go ahead.

Speaker #5: Yes. Morning, Michael. Morning, Jason. Thanks for your comments and presentation. I just want to touch on the consumables for FY26. Just thinking about the first half, second half dynamics—and I understand you've called out some utilization headwinds in the US market—but was there any sort of stocking-up activity in the first half that perhaps diluted the growth in the second half, considering you did put up prices in relation to US tariffs? Do you feel?

Davin Thillainathan: Yes. Morning, Michael. Morning, Jason. Thanks for your comments and presentation. I just want to touch on the consumables for FY26. Just thinking about the H1, H2 dynamics, and I understand you've called out some utilization headwinds in the US market. Was there any sort of stocking up activity in the H1 that perhaps diluted the growth in the H2, considering you did put up prices in relation to US tariffs, do you feel?

Speaker #3: Yeah, thanks for the question, Davin. I don't think there was any particular restocking or anything associated with pricing, and the reason for that is the bounce back that we saw in the fourth quarter.

Jason Burriss: Well, thanks for the question, Davin. I don't think there was any particular restocking or anything associated with pricing. The reason for that is the bounce back that we saw in the Q4. Volumes improved, which made us and gave us comfort as we enter FY27. So some of those growth numbers and guidance that we've given. The data that we have and see in some of the large US hospital results is foot traffic in the Q3 was slower. We're associating it with that.

Speaker #3: And volumes improved, which gave us comfort as we entered FY27 for some of those growth numbers and guidance that we've given.

Speaker #3: So the data that we have and see in some of the large US hospital results is that foot traffic in the third quarter was slower.

Speaker #3: And we're associating it with that.

Speaker #5: Yeah, no worries. And sorry to jump on it; I think it is a key focus for the market, just considering some of the questions that have been posed with regard to the changes in the competitive dynamic on this point.

Davin Thillainathan: Yeah, no worries. Sorry to harp on it because I think it is a key focus for the market, just considering some of the questions that have been posed with regards to the changes in the competitive dynamic on this point. So I just wanted to also clarify, do you feel the discontinuation of Trophon EPR, do you think that could have been an impact on your consumables business? Or again, it's the Q4 and the year-to-date trading in 2027 suggests most of those units are getting upgraded and no one's really holding off on using your consumables?

Speaker #5: So I just wanted to also clarify: do you feel the discontinuation of Tropon EPR—do you think that could have had an impact on your consumables business? Or, again, does the fourth quarter and the year-to-date trading in '27 suggest most of those units are getting upgraded, and no one's really holding off on using your consumables?

Speaker #3: Yeah. Look, a good

Michael Kavanagh: Yeah. Look, a good question. Certainly, over in the United States now, it is a more competitive market. We have had our record placements in the last three years over there. We are not seeing any significant indications of major attrition to competition in the United States. When we go in, we certainly have been in situations, especially in some of our larger deals that we have done, where they will have evaluated competition. There is not a single large deal like that where we were evaluated against competition that we lost. I think there are many reasons to that with respect to the value propositions and the data we have on trophon. I think most of the consumables that we are seeing was really on the traffic side of things. There may be some. I would be naive to think that we will retain 100% market share.

Speaker #2: And certainly, over in the United States now, it's a more competitive market. But we've had our record placements in the last three years over there.

Speaker #2: So we're not seeing any significant indications of major attrition to competition in the United States. When we go in, we certainly have been in situations, especially in some of our larger deals that we've done, where they will have evaluated competition.

Speaker #2: And there's not a single large deal like that where we were evaluated against competition that we lost. And I think that there are many reasons for that with respect to the value propositions and the data we have on trophon.

Speaker #2: So, I think most of the consumables that we're seeing was really on the trophon side of things. And there may be some—I would be naive to think that we'll retain 100% market share.

Speaker #2: And there may be some units, because we do see it's there publicly. You've got the Tristel, growing in the United States. But for the Trophon customers, there, I think if they're low-volume users, there may be a few like that that have used Tristel.

Michael Kavanagh: There may be some units, because we do see, and it is there publicly, you have Tristel growing in the United States. For the trophon customers there, I think if they are low volume users, there may be a few like that have used Tristel. We have also seen some Tristel customers go back to trophon. Overall, I think it is just really the traffic that Jason was talking about, but it is something that we have got to keep actively our eyes on.

Speaker #2: But we've also seen some Tristel customers go back to Tropon. So overall, I think it's just really the traffic that Jason was talking about.

Speaker #2: But it's something that we've got to keep our eyes on actively.

Speaker #5: Yeah, thanks, Michael. And last one from me—just the Chorus pricing strategy, three to five times on the capital side of things. I understand there are different sales models that you are looking to employ.

Davin Thillainathan: Yeah. Thanks, Michael. Last one from me. Just the CORIS pricing strategy three to five times on the capital side of things. I understand there are different sales models that you are looking to employ. Just the conviction underpinning that level of increase. Then somewhat related to that is in the initial contribution coming in for FY27, can you give us a sense of what the waiting for that would look like? Is it largely upfront capital sales, or do you feel it is more weighted to the consumable side of things? Thank you.

Speaker #5: But just the conviction underpinning that level of, I guess, increase—and then somewhat related to that is, in the initial contribution coming in for FY27, can you give us a sense of what the weighting for that would look like?

Speaker #5: Is it largely upfront capital sales, or do you feel it's more weighted to the consumable side of things? Thank you.

Speaker #2: On the capital price, I think in our conviction and that sort of price, is behind some pricing research that we have done. When you put the value proposition on front of customers, the sophistication of the technology, some comparable type you compare it to what they pay for AERs, it's still a lot less than that.

Michael Kavanagh: On the capital price, I think our conviction on that sort of price is behind some pricing research that we have done. When you put the value proposition in front of customers, the sophistication of the technology, some comparable type, you compare it to what they pay for AERs, it is still a lot less than that, but yet does as important a job and in some cases, more sophisticated from a technological perspective. So we feel okay about the capital pricing. In terms of the mix between the consumable and capital in the furthest this year, it is a little bit early to say, but on the capital side, as I mentioned, we are going to see a variety of models. It could end up being 50/50 or capital placement or capital rental. We will see how that goes.

Speaker #2: But yet does as important a job, and in some cases, is more sophisticated from a technological perspective. So we feel okay about the capital pricing.

Speaker #2: In terms of the mix between consumables and capital for this year, it's a little bit early to say. But on the capital side, as I mentioned, we are going to see a variety of models.

Speaker #2: It could end up being 50/50, or capital placement, or capital rental. But we'll see how that goes.

Speaker #5: Thanks.

Davin Thillainathan: Thanks.

Speaker #1: Thank you. There are no further questions at this time. I'll hand the conference back to Mr. Cavanagh for any closing remarks.

Operator 2: Thank you. There are no further questions at this time. I will hand the conference back to Mr. Kavanagh for any closing remarks.

Operator: Thank you. There are no further questions at this time. I will hand the conference back to Mr. Kavanagh for any closing remarks.

Speaker #2: Thank you very much. Well, again, thank you all for joining. I know it's a very busy day and a very busy season. But I'd like to reiterate what I said at the start.

Michael Kavanagh: Well, again, thank you all for joining. I know it is a very busy day and very busy season. But I would like to reiterate what I said at the start. We believe on a constant currency basis, a solid result for the business financially. Operationally, a lot of key things have been achieved in the last 12 months. Excitingly, moving to CORIS launch phase now that we are all very excited for, and we certainly enter this new year with strong momentum. Again, thank you for all attending, and I look forward to catching up with many of you over the coming days.

Speaker #2: We believe, on a constant currency basis, it's a solid result. For the business, financially and operationally, a lot of key things have been achieved in the last 12 months.

Speaker #2: Excitingly, moving to the chorus launch phase now, which we're all very excited for. And we certainly enter this new year with strong momentum.

Speaker #2: So again, thank you all for attending, and I look forward to catching up with many of you over the coming days.

Operator 2: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

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