Full Year 2026 Somnomed Ltd Earnings Call

August 28, 2026

Speaker #2: Welcome to SomnoMed's results presentation for the FY26 full year. My name is Jane Lowe, and I will be your moderator for today's session. With me today are Karen Borg, who is CEO, and Yifei Guo, who is CFO of SomnoMed.

Operator: Welcome to SomnoMed's results presentation for the FY26 full year. My name is Jane Lowe, and I will be your moderator for today's session. With me today are Karen Borg, who is CEO, and Ye-Fei Guo, who is CFO of SomnoMed. They will take us through the results presentation, which was lodged with the ASX this morning.

Speaker #2: They will take us through the results presentation, which was lodged with the ASX this morning. A bit of housekeeping before we kick off: today's webinar is being recorded, including the Q&A, and we will post this on SomnoMed's website following the completion of the webinar.

Operator: A bit of housekeeping before we kick off. Today's webinar is being recorded, including the Q&A, and we will post this on SomnoMed's website following the completion of the webinar. We will invite you to ask questions at the end of the presentation, and you can do so either via the online Q&A function or by using the raise your hand function in the Zoom ribbon at the bottom of your screen.

Speaker #2: We will invite you to ask questions at the end of the presentation, and you can do so either via the online Q&A function or by using the "Raise Hand" function in the Zoom ribbon at the bottom of your screen.

Speaker #2: If you'd like to ask a question that way, we will take you off mute so that you can use audio for that. For now, though, I'll pass over to Karen to kick off the presentation.

Moderator: If you would like to ask a question that way, we will take you off mute so that you can use audio for that. For now, though, I will pass over to Karen to kick off the presentation. Thank you, Karen.

Speaker #2: Thank you, Karen.

Speaker #3: Great, thanks, Jane. Before we begin, I'd like to draw your attention to the disclaimer on the screen. Today's presentation contains forward-looking statements, which involve risks and uncertainties.

Karen Borg: Great. Thanks, Jane. Before we begin, I would like to draw your attention to the disclaimer on the screen. Today's presentation contains forward-looking statements which involve risks and uncertainties. Actual results may differ from those anticipated, and investors should not place undue reliance on these statements. Now let us have a look at the company highlights. Looking at these dynamics around the SomnoMed business, and then we will look at our financial and operating highlights. SomnoMed's vision is a world where oral appliance therapy is the standard of care for obstructive sleep apnea treatment or OSA. Our mission is to set the standard for outcomes, innovation, and patient experience while helping drive the transformation of sleep medicine worldwide. The market opportunity remains vast. Approximately 1 billion people globally suffer from obstructive sleep apnea, which presents a significant opportunity for market penetration with the appropriate therapy.

Speaker #3: Actual results may differ from those anticipated, and investors should not place undue reliance on these statements. So, now let's have a look at the company highlights.

Speaker #3: Looking at these dynamics around the SomnoMed business, and then we'll look at our financial and operating highlights. Now, SomnoMed's vision is a world where oral appliance therapy is the standard of care for obstructive sleep apnea treatment, or OSA.

Karen Borg: Looking at these dynamics around the SomnoMed business, and then we will look at our financial and operating highlights. SomnoMed's vision is a world where oral appliance therapy is the standard of care for obstructive sleep apnea treatment or OSA. Our mission is to set the standard for outcomes, innovation, and patient experience while helping drive the transformation of sleep medicine worldwide.

Speaker #3: Our mission is to set the standard for outcomes, innovation, and patient experience, while helping drive the transformation of sleep medicine worldwide. The market opportunity remains vast.

Karen Borg: The market opportunity remains vast. Approximately 1 billion people globally suffer from obstructive sleep apnea, which presents a significant opportunity for market penetration with the appropriate therapy.

Speaker #3: Approximately one billion people globally suffer from obstructive sleep apnea, which presents a significant opportunity for market penetration with the appropriate therapy. At the same time, increasing consumer awareness, growth in GLP-1 therapies, and rising demand for CPAP alternatives continue to expand the oral appliance therapy market.

Karen Borg: At the same time, increasing consumer awareness, growth in GLP-1 therapies, and rising demand for CPAP alternatives continue to expand the oral appliance therapy market. Importantly, we also operate within a large potential customer market of more than 700,000 dentists across our key regions. While we ultimately service the patient, our customer is the dentist, so every extra dentist we build a relationship with has the potential to support our market penetration. As the global market leader in oral appliances for OSA, we believe SomnoMed is well-positioned to drive growth. Looking at our financial highlights, FY26 delivered a solid financial result and demonstrated our continued disciplined approach to cost and capital management. EBITDA increased 19% to AUD 10.9 million, with EBITDA margin improving to 9.6%. Revenue increased 3% to AUD 114.5 million, with North America leading the results.

Speaker #3: Importantly, we also operate within a large potential customer market of more than 700,000 dentures across our key regions. While we ultimately service the patient, our customer is the dentist, so every extra dentist we build a relationship with has the potential to support our market penetration.

Karen Borg: While we ultimately service the patient, our customer is the dentist, so every extra dentist we build a relationship with has the potential to support our market penetration. As the global market leader in oral appliances for OSA, we believe SomnoMed is well-positioned to drive growth.

Speaker #3: As the global market leader in oral appliances for OSA, we believe SomnoMed is well positioned to drive growth. Looking at our financial highlights, FY26 delivered a solid financial result and demonstrated our continued disciplined approach to cost and capital management.

Karen Borg: Looking at our financial highlights, FY26 delivered a solid financial result and demonstrated our continued disciplined approach to cost and capital management. EBITDA increased 19% to AUD 10.9 million, with EBITDA margin improving to 9.6%. Revenue increased 3% to AUD 114.5 million, with North America leading the results.

Speaker #3: EBITDA increased 19% to $10.9 million, with EBITDA margin improving to 9.6%. Revenue increased 3% to $114.5 million, with North America leading the result. This is in line with preliminary unaudited results provided in the ASX announcement on the 27th of July this year.

Karen Borg: This is in line with preliminary unaudited results provided in the ASX announcement on 27 July this year. We invested AUD 5.7 million in capital expenditure, with more than 50% of CapEx spend driven by growth initiatives and capacity investment. We generated positive operating cash flow before leases of AUD 8.3 million, and after leases of AUD 5.2 million, while maintaining a solid 30 June closing cash position of AUD 17.2 million and AUD 16.8 million of net cash. Overall, the business has established a strong foundation from which to advance and deliver on its strategic priorities. Looking at the operational highlights, FY26 was a year of focused execution, strengthening the foundation of our strategic priorities. During FY26 and into FY27, our leadership team transitioned to a single CEO structure, which is a privilege to step into. Greg Knight was appointed as Chief Operating Officer and Nathan Minnich joining as Chief Marketing Officer.

Speaker #3: We invested $5.7 million in capital expenditure, with more than 50% of CapEx spend driven by growth initiatives and capacity investment. We generated positive operating cash flow before leases of $8.3 million, and after leases of $5.2 million, while maintaining a solid 30 June closing cash position of $17.2 million and $16.8 million of net cash.

Speaker #3: Overall, the business has established a strong foundation from which to advance and deliver on its strategic priorities. Looking at the operational highlights, FY26 was a year of focused execution.

Karen Borg: Overall, the business has established a strong foundation from which to advance and deliver on its strategic priorities. Looking at the operational highlights, FY26 was a year of focused execution, strengthening the foundation of our strategic priorities. During FY26 and into FY27, our leadership team transitioned to a single CEO structure, which is a privilege to step into. Greg Knight was appointed as Chief Operating Officer and Nathan Minnich joining as Chief Marketing Officer.

Speaker #3: Strengthening the foundation of our strategic priorities, during FY26 and into FY27, our leadership team transitioned to a single CEO structure, which is a privilege to step into.

Speaker #3: Greg Knight was appointed as Chief Operating Officer, and Nathan Minnich joined as Chief Marketing Officer. In late July, Amrita Blixsted announced her decision to step down as Co-CEO.

Karen Borg: In late July, Amrita Blickstead announced her decision to step down as Co-CEO. The board and I thank Amrita for her leadership and service to SomnoMed over the last six years, initially as non-executive director and later as Co-CEO. It was a real pleasure working with Amrita as Co-CEO. The partnership we built was instrumental in the company's turnaround and in shaping a strong platform for SomnoMed's future. I sincerely wish her well in all that lies ahead. We delivered a number of production improvements. Manufacturing capacity expanded by over 20% in FY26 and by over 40% across two years. Manufacturing production times improved by more than 50% across two years. We advanced the controlled market release of Virtus, our purpose-built solution for OSA patients with coexisting sleep bruxism.

Speaker #3: The board and I thank Amrita for her leadership and service to SomnoMed over the last six years, initially as Non-Executive Director and later as Co-CEO.

Speaker #3: It was a real pleasure working with Amrita as Co-CEO. The partnership we built was instrumental in the company's turnaround and in shaping a strong platform for SomnoMed's future.

Speaker #3: I sincerely wish her well in all that lies ahead. We delivered a number of production improvements. Manufacturing capacity expanded by over 20% in FY26, and by over 40% across two years.

Karen Borg: I sincerely wish her well in all that lies ahead. We delivered a number of production improvements. Manufacturing capacity expanded by over 20% in FY26 and by over 40% across two years.

Speaker #3: Manufacturing production times improved by more than 50% across two years. We advanced the controlled market release of Virtus, our purpose-built solution for OSA patients with coexisting sleep bruxism.

Karen Borg: Manufacturing production times improved by more than 50% across two years. We advanced the controlled market release of Virtus, our purpose-built solution for OSA patients with coexisting sleep bruxism.

Speaker #3: Virtus uniquely addresses their dental needs and is engineered to withstand the intense clenching and grinding forces that typically damage standard oral appliance therapy appliances—a meaningful opportunity, given that more than half of all OSA patients experience bruxism.

Karen Borg: Virtus uniquely addresses their dental needs and is engineered to withstand the intense clenching and grinding forces that typically damage standard oral appliance therapy appliances, a meaningful opportunity given that more than half of all OSA patients experience bruxism. For dentists and patients, Virtus fills a critical gap in care by providing a durable solution where traditional OAT appliances often fail. I will now hand over to you, Fay, to take you through the financial results in more detail.

Speaker #3: For dentists and patients, Virtus fills a critical gap in care by providing a durable solution where traditional appliances often fail. I will now hand over to Yifei, who will take you through the financial results in more detail.

Karen Borg: For dentists and patients, Virtus fills a critical gap in care by providing a durable solution where traditional OAT appliances often fail. I will now hand over to you, Fay, to take you through the financial results in more detail.

Speaker #4: Thank you, Karen. FY26 represented a year of solid performance for SomnoMed. First half revenue was up 13%, or 8% in constant currency, with this outcome driven by growth in both North America and Europe.

Ye-Fei Guo: Thank you, Karen. FY26 represented a year of solid performance for SomnoMed. The H1 revenue was up 13%, or 8% in constant currency, with this outcome driven by growth in both North America and Europe. In a tale of two halves, the H2 revenue was down by 7%, or less than 1% in constant currency, impacted by a change in European market dynamics and the significant appreciation of the Australian dollar against our key currencies. EBITDA increased 19% to AUD 10.9 million, and the EBITDA margin improved from 8.2% to 9.6%, reflecting higher revenue, improved growth margin, and disciplined operating cost management. Operating cash flow after lease payments increased 8% to AUD 5.2 million, compared with AUD 4.8 million in the prior year, owing to both revenue growth and cost management. Turning now to regional performance.

Speaker #4: In a tale of two halves, second half revenue was down by 7%, or less than 1% in constant currency, impacted by a change in European market dynamics and the significant appreciation of the Australian dollar against our key currencies. EBITDA increased 19% to $10.9 million, and the EBITDA margin improved from 8.2% to 9.6%, reflecting higher revenue, improved gross margin, and disciplined operating cost management.

Ye-Fei Guo: In a tale of two halves, the H2 revenue was down by 7%, or less than 1% in constant currency, impacted by a change in European market dynamics and the significant appreciation of the Australian dollar against our key currencies.

Ye-Fei Guo: EBITDA increased 19% to AUD 10.9 million, and the EBITDA margin improved from 8.2% to 9.6%, reflecting higher revenue, improved growth margin, and disciplined operating cost management.

Speaker #4: Operating cash flow after lease payments increased 8% to $5.2 million, compared with $4.8 million in the prior year, owing to both revenue growth and cost management.

Ye-Fei Guo: Operating cash flow after lease payments increased 8% to AUD 5.2 million, compared with AUD 4.8 million in the prior year, owing to both revenue growth and cost management. Turning now to regional performance.

Speaker #4: Turning now to regional performance, Europe, our largest and most mature region, contributed $61.9 million in revenue for the full year, up a reported 1%, but down 1% on a constant currency basis.

Ye-Fei Guo: Europe, our largest and most mature region, contributed AUD 61.9 million in revenue for the full year, up a reported 1%, but down 1% on a constant currency basis. While H1 growth was strong, H2 sales were impacted by structural shifts in key European markets, slowing the pace at which patients were able to access oral appliance therapies. These included changes to clinical eligibility and public payer reimbursement criteria, plus a shift in patient referral pathways. In response to these challenges, the company has restructured its European commercial, administrative, and operational leadership to strengthen customer focus and is reviewing its commercial and product strategies to respond to the changing environment. North America is our primary growth region and continued to perform strongly, contributing AUD 45.8 million in FY26 revenue, up 6% on a reported basis and 11% on a constant currency basis.

Speaker #4: While first-half growth was strong, second-half sales were impacted by structural shifts in key European markets, slowing the pace at which patients were able to access oral appliance therapies.

Speaker #4: These included changes to clinical eligibility and public payer reimbursement criteria, plus a shift in patient referral pathways. In response to these challenges, the company has restructured its European commercial, administrative, and operational leadership to strengthen customer focus and is reviewing its commercial and product strategies to respond to the changing environment.

Ye-Fei Guo: These included changes to clinical eligibility and public payer reimbursement criteria, plus a shift in patient referral pathways. In response to these challenges, the company has restructured its European commercial, administrative, and operational leadership to strengthen customer focus and is reviewing its commercial and product strategies to respond to the changing environment.

Speaker #4: North America is our primary growth region and continued to perform strongly, contributing $45.8 million in FY26 revenue, up 6% on a reported basis and 11% on a constant currency basis.

Ye-Fei Guo: North America is our primary growth region and continued to perform strongly, contributing AUD 45.8 million in FY26 revenue, up 6% on a reported basis and 11% on a constant currency basis.

Speaker #4: APAC, our first commercial region, contributed $6.8 million of revenue for FY26, down 3% on a reported basis and 2% on a constant currency basis.

Ye-Fei Guo: APAC, our first commercial region, contributed AUD 6.8 million of revenue for FY26, down 3% on a reported basis and 2% on a constant currency basis. Cost of living pressures impacted patient demand across these largely non-reimbursed markets. While regional dynamics varied throughout FY26, all markets remain strategically important and continue to provide attractive long-term opportunities. Turning to the P&L statement with a few notable call-outs. Operating expenses were tightly managed with year-on-year total OpEx growth of less than 3%. The other line within the EBITDA section increased primarily due to higher share-based payment expenses, which were non-cash in nature. Margins improved across all key metrics despite European market dynamics and the foreign exchange headwinds. Turning to the balance sheet, cash and cash equivalents ended the year at AUD 17.2 million, broadly unchanged from the prior year, with net cash increasing from AUD 16.5 million to AUD 16.8 million.

Speaker #4: Cost of living pressures impacted patient demand across these largely non-reimbursed markets. While regional dynamics varied throughout FY26, all markets remained strategically important and continue to provide attractive long-term opportunities.

Speaker #4: Turning to the P&L statement, with a few notable call-outs, operating expenses were tightly managed, with year-on-year total OpEx growth of less than 3%. The 'other' line within the EBITDA section increased primarily due to higher share-based payment expenses, which were non-cash in nature.

Ye-Fei Guo: Turning to the P&L statement with a few notable call-outs. Operating expenses were tightly managed with year-on-year total OpEx growth of less than 3%. The other line within the EBITDA section increased primarily due to higher share-based payment expenses, which were non-cash in nature. Margins improved across all key metrics despite European market dynamics and the foreign exchange headwinds.

Speaker #4: And margins improved across all key metrics despite European market dynamics and the foreign exchange headwinds. Turning to the balance sheet, cash and cash equivalents ended the year at $17.2 million, broadly unchanged from the prior year, with net cash increasing from $16.5 million to $16.8 million.

Ye-Fei Guo: Turning to the balance sheet, cash and cash equivalents ended the year at AUD 17.2 million, broadly unchanged from the prior year, with net cash increasing from AUD 16.5 million to AUD 16.8 million.

Speaker #4: Trade receivables reduced materially during the period, reflecting improved collections performance and working capital management. The balance sheet remained strong and provides flexibility to support future investments and growth.

Ye-Fei Guo: Trade receivables reduced materially during the period, reflecting improved collections, performance, and working capital management. The balance sheet remains strong and provides flexibility to support future investments and growth. The business delivered operating cash flow before lease payments of AUD 8.3 million and after lease payments of AUD 5.2 million. One-off expenses were slightly higher at AUD 0.9 million, up from AUD 0.5 million in the prior year as a result of cash settlement of prior year and current year one-off cost provisions. Capital expenditure totaled AUD 5.7 million, consisting primarily of investment in manufacturing infrastructure and research and development activities. Free cash flow was -AUD 0.6 million, reflecting these planned growth investments. The sale of 2.86 million shares through the employee share trust delivered net proceeds of AUD 2 million during the year to the business.

Speaker #4: The business delivered operating cash flow before lease payments of $8.3 million, and after lease payments of $5.2 million. One-off expenses were slightly higher at $0.9 million, up from $0.5 million in the prior year, as a result of cash settlement of prior year and current year one-off cost provisions.

Ye-Fei Guo: One-off expenses were slightly higher at AUD 0.9 million, up from AUD 0.5 million in the prior year as a result of cash settlement of prior year and current year one-off cost provisions. Capital expenditure totaled AUD 5.7 million, consisting primarily of investment in manufacturing infrastructure and research and development activities.

Speaker #4: Capital expenditure totaled $5.7 million, consisting primarily of investment in manufacturing infrastructure and research and development activities. Free cash flow was negative $0.6 million, reflecting these planned growth investments.

Ye-Fei Guo: Free cash flow was AUD -0.6 million, reflecting these planned growth investments. The sale of 2.86 million shares through the employee share trust delivered net proceeds of AUD 2 million during the year to the business.

Speaker #4: The sale of 2.86 million shares through the employee share trust delivered net proceeds of $2 million during the year to the business. An important note here on foreign exchange adjustments, which reflects the appreciation of the Australian dollar against key currencies—primarily the USD and the Euro—in FY26, and in particular in half two.

Ye-Fei Guo: An important note here on foreign exchange adjustments, which reflects the appreciation of the Australian dollar against key currencies, primarily the USD and the euro in FY26, and in particular in H2. Approximately 95% of the company's revenues are derived in non-AUD currencies. Overall, we continue to balance growth investments with disciplined cash management. I will now hand back to Karen to take you through our strategy and outlook.

Speaker #4: Approximately 95% of the company's revenues are derived in non-AUD currencies. Overall, we continue to balance growth investments with disciplined cash management. I will now hand back to Karen to take you through our strategy and outlook.

Speaker #3: Thank you, Yifei. Now let's have a look at the strategy and outlook section. The sleep apnea market continues to evolve. Up to 50% of CPAP patients discontinue therapy, creating a significant opportunity for oral appliance alternatives.

Karen Borg: Thanks to you, Fay. Now let's have a look at the strategy and outlook section. The sleep apnea market continues to evolve. Up to 50% of CPAP patients discontinue therapy, creating a significant opportunity for oral appliance alternatives. At the same time, we're seeing growth in lower cost OAT products and clinical differentiation challenges, GLP-1s and other emerging pharmaceutical entrants driving patient growth, newer high cost invasive neurostimulation procedures and direct-to-consumer models that remain emerging but nascent. While these trends are reshaping the marketplace, they also contribute to greater awareness of sleep health and reinforce the attractiveness of oral appliance therapy within the broader treatment pathway. Our strategy is focused on moving from the financial and operational turnaround delivered through FY26 and into the next phase of growth and profitability. From FY24 to FY26, we established the foundation for that next phase.

Karen Borg: Thanks to you, Fei. Now let's have a look at the strategy and outlook section. The sleep apnea market continues to evolve. Up to 50% of CPAP patients discontinue therapy, creating a significant opportunity for oral appliance alternatives.

Speaker #3: At the same time, we're seeing growth in lower-cost OAT products and clinical differentiation challenges, GLP-1s and other emerging pharmaceutical entrants driving patient growth, newer high-cost invasive neurostimulation procedures, and direct-to-consumer models that remain emerging but nascent.

Karen Borg: At the same time, we're seeing growth in lower cost OAT products and clinical differentiation challenges, GLP-1s and other emerging pharmaceutical entrants driving patient growth, newer high cost invasive neurostimulation procedures and direct-to-consumer models that remain emerging but nascent.

Speaker #3: Now, while these trends are reshaping the marketplace, they also contribute to greater awareness of sleep health and reinforce the attractiveness of oral appliance therapy within the broader pathway.

Karen Borg: While these trends are reshaping the marketplace, they also contribute to greater awareness of sleep health and reinforce the attractiveness of oral appliance therapy within the broader treatment pathway.

Speaker #3: Our strategy is focused on moving from the financial and operational turnaround delivered through FY26, and into the next phase of growth and profitability. From FY24 to FY26, we established the foundation for that next phase.

Karen Borg: Our strategy is focused on moving from the financial and operational turnaround delivered through FY26 and into the next phase of growth and profitability. From FY24 to FY26, we established the foundation for that next phase.

Speaker #3: Financially, we cleared the company's legacy, higher-cost debt and delivered positive operating cash flow. We made deliberate investments in talent to support execution, and operationally, we increased manufacturing capacity and improved turnaround times for our customers and patients.

Karen Borg: Financially, we cleared the company's legacy higher costing debt and delivered positive operating cash flow. We made deliberate investments in talent to support execution. Operationally, we increased manufacturing capacity and improved turnaround times for our customers and patients. Now looking ahead to FY30, our objectives include returning to double-digit revenue growth, progressively expanding EBITDA margins through scale and efficiency gains, and remaining focused on organic growth while considering small-scale acquisition opportunities where appropriate. Looking at our product portfolio, it's been clearly designed to reflect the different reimbursement and market requirements that exist globally. Flex and Fusion are established platforms reimbursed across key European markets. In North America, Herbst Advance Elite is our Medicare reimbursed platform. Virtus represents our next generation of OAT innovation, with the controlled market release underway.

Speaker #3: So now, looking ahead to FY30, our objectives include returning to double-digit revenue growth, progressively expanding EBITDA margins through scale and efficiency gains, and remaining focused on organic growth while considering small-scale acquisition opportunities where appropriate.

Karen Borg: Now looking ahead to FY30, our objectives include returning to double-digit revenue growth, progressively expanding EBITDA margins through scale and efficiency gains, and remaining focused on organic growth while considering small-scale acquisition opportunities where appropriate. Looking at our product portfolio, it's been clearly designed to reflect the different reimbursement and market requirements that exist globally.

Speaker #3: Looking at our product portfolio, it's been clearly designed to reflect the different reimbursement and market requirements that exist globally. Flex and Fusion are established platforms, reimbursed across key European markets.

Karen Borg: Flex and Fusion are established platforms reimbursed across key European markets. In North America, Herbst Advance Elite is our Medicare reimbursed platform. Virtus represents our next generation of OAT innovation, with the controlled market release underway.

Speaker #3: In North America, Herbst Advanced Elite is our Medicare-reimbursed platform. And now, Vertus represents our next generation of OAT innovation, with the controlled market release underway.

Speaker #3: Each of these products allows SomnoMed to effectively address differing regional reimbursement and market requirements to ensure that our therapies reach as many patients and customers as possible.

Karen Borg: Each of these products allow SomnoMed to effectively address differing regional reimbursement and market requirements to ensure that our therapies reach as many patients and customers as possible. Our commercial priorities are focused on the most tangible growth opportunities in each region. In North America, our major growth driving region, we are focused on product innovation, targeting the most accessible CMS reimbursement codes, and on developing customer-specific engagement strategies. As noted earlier, Europe, our most mature region, delivered a strong H1 before encountering reimbursement and referral path pressures in the H2. We have responded by reshaping commercial and operational leadership, sharpening product strategies, and advancing a key reimbursement application. Within Asia Pacific, our first commercial region, we are continuing engagement with a GLP-1 manufacturer and investigating product line extensions suited to the non-reimbursed environment. Looking beyond, our longer-term growth vision is underpinned by three key themes.

Speaker #3: Our commercial priorities are focused on the most tangible growth opportunities in each region. In North America, our major growth-driving region, we are focused on product innovation targeting the most accessible CMS reimbursement codes and on developing customer-specific engagement strategies.

Karen Borg: In North America, our major growth driving region, we are focused on product innovation, targeting the most accessible CMS reimbursement codes, and on developing customer-specific engagement strategies. As noted earlier, Europe, our most mature region, delivered a strong H1 before encountering reimbursement and referral path pressures in the H2.

Speaker #3: As noted earlier, Europe, our most mature region, delivered a strong first half before encountering reimbursement and referral path pressures in the second half. We have responded by reshaping commercial and operational leadership, sharpening product strategies, and advancing a key reimbursement application.

Karen Borg: We have responded by reshaping commercial and operational leadership, sharpening product strategies, and advancing a key reimbursement application. Within Asia Pacific, our first commercial region, we are continuing engagement with a GLP-1 manufacturer and investigating product line extensions suited to the non-reimbursed environment. Looking beyond, our longer-term growth vision is underpinned by three key themes.

Speaker #3: Within Asia-Pacific, our first commercial region, we are continuing engagement with a GLP-1 manufacturer and investigating product line extensions suited to the non-reimbursed environment.

Speaker #3: And looking beyond, our longer-term growth vision is underpinned by three key themes. Firstly, we're focused on capturing the growing patient pool. GLP weight loss drugs, connected care, home diagnostics, and CPAP failures are all expanding the number of patients who may benefit from oral appliance therapy.

Karen Borg: Firstly, we are focused on capturing the growing patient pool, GLP-1 weight loss drugs, connected care, home diagnostics, and CPAP failures. These are all expanding the number of patients who may benefit from oral appliance therapy. This shift is creating a larger cohort actively seeking alternative treatment options. Second, accelerating new products aligned to market needs across our established portfolio, Virtus, and future connected care opportunities. Thirdly, expanding the number of referring and treating clinicians through stronger clinician connectivity, engagement, and an expanded reimbursement framework. We will be detailing a broader strategic roadmap at the upcoming AGM. Looking now towards FY27, our focus is on delivering growth while continuing to invest in the business. As we announced on 27 July this year, the company is targeting high single-digit revenue growth in FY27 while maintaining EBITDA margins consistent with FY26.

Speaker #3: This shift is creating a larger cohort actively seeking alternative treatment options. Second, accelerating new products aligned to market needs across our established portfolio—Vertus and future connected care opportunities.

Speaker #3: And thirdly, expanding the number of referring and treating clinicians through stronger clinician connectivity, engagement, and expanded reimbursement frameworks. We will be detailing a broader strategic roadmap at the upcoming Annual General Meeting.

Karen Borg: Thirdly, expanding the number of referring and treating clinicians through stronger clinician connectivity, engagement, and an expanded reimbursement framework. We will be detailing a broader strategic roadmap at the upcoming AGM.

Speaker #3: So, looking now towards FY27, our focus is on delivering growth while continuing to invest in the business. As we announced on the 27th of July this year, the company is targeting high single-digit revenue growth in FY27 while maintaining EBITDA margins consistent with FY26.

Karen Borg: Looking now towards FY27, our focus is on delivering growth while continuing to invest in the business. As we announced on 27 July this year, the company is targeting high single-digit revenue growth in FY27 while maintaining EBITDA margins consistent with FY26.

Speaker #3: I know we promised a more definitive guidance outlook at these results, but in hindsight, it's too early in the new financial year, and there are still some key assumptions and sensitivities that we need to establish further.

Karen Borg: I know we promised a more definitive guidance outlook at these results, but in hindsight, it is too early in the new financial year, and there are still some key assumptions and sensitivities that we need to establish further, such as seeing the growth continue in North America and seeing Europe stabilize. Executing a successful global rollout and adoption of Virtus in the H2 of FY27. Ensuring that we are maintaining stable EBITDA margins while continuing to invest to support future growth. Of course, monitoring for significant FX movements as we saw in the H2 of FY26. It would be more appropriate for SomnoMed to provide our guidance ranges alongside the AGM in November. A quick word on investor engagement. We have listened closely to market feedback, and it is clear that you want more regular engagement with SomnoMed across the year.

Speaker #3: For example, seeing growth continue in North America and seeing Europe stabilize; executing a successful global roll-out and adoption of Vertus in the second half of FY27; ensuring that we're maintaining stable EBITDA margins while continuing to invest to support future growth; and, of course, monitoring for significant FX movements as we saw in the second half of FY26.

Karen Borg: Ensuring that we are maintaining stable EBITDA margins while continuing to invest to support future growth. Of course, monitoring for significant FX movements as we saw in the H2 of FY26.

Speaker #3: So, it would be more appropriate for SomnoMed to provide our guidance ranges alongside the AGM in November. And a quick word on investor engagement.

Karen Borg: It would be more appropriate for SomnoMed to provide our guidance ranges alongside the AGM in November. A quick word on investor engagement. We have listened closely to market feedback, and it is clear that you want more regular engagement with SomnoMed across the year.

Speaker #3: We've listened closely to market feedback, and it's clear that you want more regular engagement with SomnoMed across the year. In response, we have plans to increase our cadence of ASX updates, as we do have some important news flow coming.

Karen Borg: In response, we have plans to increase our cadence of ASX updates as we do have some important news flow coming, and to introduce new FY27 initiatives that provide greater access to management. We look forward to sharing more shortly. With that, I would like to hand back to Jane and ask her to open up the floor for Q&A. Thanks, Jane.

Speaker #3: And to introduce new FY27 initiatives that provide greater access to management. We look forward to sharing more shortly. With that, I'd like to hand back to Jane and ask her to open up the floor for Q&A.

Speaker #3: Thanks, Jane.

Speaker #2: Thank you, Karen, and thanks to you also, Yufei. That concludes the formal presentation, and we'll now open up the floor for questions. As mentioned, participants are invited to ask questions by either typing them into the Q&A function in the ribbon at the bottom of your screen, or by raising your hand, at which point I can enable your mic.

Moderator: Thank you, Karen, and thanks to you also, Yifei. That concludes the formal presentation, and we will now open up the floor for questions. As mentioned, participants are invited to ask questions by either typing them into the Q&A function in the ribbon at the bottom of your screen or by raising your hand, at which point I can enable your mic. We do have a couple of questions in the queue already, so we will go to those. The first one, what initiatives does SomnoMed have in mind to address the European reimbursement changes and pace at which patients can access oral appliance therapy?

Speaker #2: We do have a couple of questions in the queue already, so we'll go to those. The first one: What initiatives does SomnoMed have in mind to address the European reimbursement changes and the pace at which patients can access oral appliance therapy?

Speaker #3: Well, it's a great question. So I think we'll start off just as I already touched on in the presentation. We already have a significant reimbursement submission underway in one of our largest markets.

Karen Borg: Well, great question. I think we will start off just as I already touched on in the presentation. We already have a significant reimbursement submission underway in one of our largest markets, in fact, in probably our highest growth market, which I am at this point not disclosing, my apologies, because as you think you might all be aware, we obviously are the only oral appliance manufacturer that reports. At this point, we are trying to manage that obviously as it is commercially and somewhat sensitive. We definitely are already, as I said, we have our submission underway there. The second thing is obviously, there has been some changes to reimbursement pathways in other parts of Europe. We are currently investigating those to see how we might best ensure that our strategies for engagement in those markets now take into account some of those changes.

Speaker #3: In fact, in probably our highest growth market—which I'm, at this point, not disclosing, my apologies—because, as I think you might all be aware, we obviously are the only oral appliance manufacturer that reports.

Speaker #3: So, at this point, we're trying to manage that, obviously, as it is commercially and somewhat sensitive. But we definitely are already, as I said, we have our submission underway there.

Speaker #3: The second thing is, obviously, there have been some changes to reimbursement pathways in other parts of Europe. We're currently investigating those to see how we might best ensure that our strategies for engagement in those markets now take into account some of those changes.

Speaker #3: And then, I think the other question was around the—

Karen Borg: I think the other question was around the

Moderator: The pace at which

Speaker #2: The pace at which patients can access OAT.

Karen Borg: Yes

Moderator: patients can access OAT.

Speaker #3: Yeah, so look, I mean, I think the reality is that it's a real challenge for patients, depending on the jurisdiction, as to how fast they can get access to this therapy.

Karen Borg: Yeah. So look, I think the reality is that it's a real challenge for patients, depending on the jurisdictions, as to how fast they can get access to this therapy. To be honest, at times, it's not even the patient's, it's not necessarily the clinician's fault or the system's fault, it's purely because it really is a therapy that the patient has to actively pursue to some extent themselves. We are working on ways that we can facilitate access for patients so we can make sure that the awareness is made more broadly visible to them, and also what pathways they need to see. Certainly in reimbursed environments, obviously it's very critical for patients to maintain a close relationship between their sleep clinician, who's the diagnosing clinician, and also with the dentist with whom they have to make the appointment.

Speaker #3: And to be honest, at times it's not even the patients — it's not necessarily the clinician's fault or the system's fault; it's purely because it really is a therapy that the patient has to actively pursue, to some extent, themselves.

Speaker #3: So we are working on ways that we can facilitate access for patients, that we can make sure that the awareness is made more broadly visible to them, and also what pathways they need to seek.

Speaker #3: Certainly, in reimbursed environments, it's very critical for patients to maintain a close relationship between their sleep clinician, who's the diagnosing clinician, and also with the dentist, with whom they have to make the appointment.

Speaker #3: And in some instances, we actually facilitate those appointments for patients directly. So, we are doing various things to help them along the way, so to speak.

Karen Borg: In some instances, we actually facilitate those appointments for patients directly. We are doing various things to help them along the way, so to speak.

Speaker #2: Thanks, Karen. What does the feedback been on the Vertus sorry, what has the feedback been on Vertus during its controlled market release in late FY26?

Moderator: Thanks, Karen. What has the feedback been on Virtus during its controlled market release in late FY26?

Karen Borg: Well, it's quite early. We have actually, we didn't launch in every single location globally at the same time, simply because obviously there are different regulatory pathways into these regions, so each of those had to be observed. As a result, and also as you can imagine, it takes a bit of time before the patient then receives the product. Early-stage feedback, we're about, I'd say six weeks into patients having them, I guess, in their mouth, so to speak, at nighttime. It's very positive. Certainly, patients who for many years have had huge challenges finding a product that allows them to both treat their sleep apnea and their bruxing, has been very, very positive. I can only say to you that some people, they really do have very, very strong forces every night in their mouth, due to bruxism.

Speaker #3: Look, it's quite early. We actually didn't launch in every single location globally at the same time, simply because, obviously, there are different regulatory pathways into these regions.

Speaker #3: So, each of those have to be observed. And so, as a result—and also, as you can imagine—it takes a bit of time before the patient then receives the product.

Speaker #3: Early stage feedback—we're about, sort of, I'd say, six weeks into patients having them, I guess, in their mouth, so to speak, at nighttime.

Speaker #3: It's very positive. And certainly, patients who for many years have had huge challenges finding a product that allows them to both treat their sleep apnea and their bruxing have found this very, very positive.

Speaker #3: I can only say to you that some people really do have very, very strong forces every night in their mouth due to bruxism.

Speaker #3: So you need a very strong product indeed. And more importantly, their clinicians have said—and I can say anecdotally, one clinician actually said to me—that their patient was literally going through a new product every six months, and they've had this product now and it looks like they may not be coming back every six months.

Karen Borg: You need a very strong product indeed. More importantly, their clinicians have said. I can say anecdotally one clinician actually said to me that their patient was literally going through products, a new product every 6 months. They have had this product now, and it looks like they may not be coming back every 6 months. I think the early-stage feedback is positive. Nevertheless, I am cautious. I am a great believer in test before you launch, to ensure that you really understand all aspects of how products will interact with clinicians and with patients. We are still going to gather some more feedback before we commercialize.

Speaker #3: So, I think the early-stage feedback is positive. But nevertheless, I am cautious. I’m a great believer in testing before you launch, to ensure that you really understand all aspects of how products will interact with clinicians and with patients.

Speaker #3: So, we are still going to gather some more feedback before we commercialize.

Speaker #2: Thanks, Karen. Just a reminder: if you'd like to ask a question, you can do so using the Q&A function in the ribbon at the bottom of your screen, or by raising your hand.

Moderator: Thanks, Karen. Just a reminder, if you would like to ask a question, you can do so using that Q&A function in the ribbon at the bottom of your screen or by raising your hand. As it stands at the moment, we are at the last couple of questions in the queue. Jump in now if you would like to ask one. The last two that we have are fairly similar, so I will wrap them up into one. Which is, what has happened with Rest Assure, and do we have a likely date for FDA approval? What is the current timetable?

Speaker #2: As it stands at the moment, we're at the last couple of questions in the queue. So, jump in now if you'd like to ask one.

Speaker #2: And the last two that we have are fairly similar, so I'll wrap them up into one. Which is: what's happened with Rest Assure? Do we have a likely date for FDA approval?

Speaker #2: Stroke, what's the current timetable?

Speaker #3: Sure. So, I mean, I think, first of all, we did actually receive FDA approval for the compliance component of Rest Assure. And so, we have been looking now, obviously, at the second section, which is around the AHI.

Karen Borg: Sure. I think first of all, we did actually receive FDA approval for the compliance component of Rest Assure. We have been looking now, obviously, at the second section, which is around the AHI. We did receive feedback from the FDA on their requirements for the AHI to be approved, and we are currently working through how that might best be done. We have looked very carefully in the last few weeks, certainly, now that my leadership team has transitioned, and I am now in the role, to really work out what is the best way to optimize connected care. There are now, of course, a couple of products in the market, particularly in North America. For us, it is let us really understand how we might best deliver connected care to the market.

Speaker #3: We did receive feedback from the FDA on their requirements for the AHI to be approved, and we're currently working through how that best might be done.

Speaker #3: We have looked very carefully in the last few weeks, certainly now that my leadership team has transitioned and I'm now in the role to really work out what is the best way to optimize connected care.

Speaker #3: There are now, of course, a couple of products in the market, particularly in North America. And so for us, it's really about understanding how we might best deliver connected care to the market.

Speaker #3: And ultimately, ensure that we get a fast and highly accretive result from entering into this category. So that will be something that we look to, obviously, share with our investors—ideally around the same time as the AGM—because we do want to then share our strategy going forward, which will include, of course, Rest Assure.

Karen Borg: Ultimately ensure that we get a fast and highly accretive result for entering into this category. That will be something that we look to obviously share with our investors, ideally around the same time as the AGM, because we do want to then share our strategy for going forward, which will include, of course, Rest Assure.

Speaker #2: Thank you. We have had another question come into the queue. Could you please elaborate on which areas of the business you wish to reinvest in through FY27, as per the guidance of flat EBITDA margins?

Moderator: Thank you. We have had another question come into the queue. Could you please elaborate on which areas of the business you wish to reinvest in through FY27 as per the guidance of flat EBITDA margins?

Speaker #3: So I'm going to assume that this is a question around OPEX and CAPEX, rather than just CAPEX. So, I think more broadly, I would say that we are very much focused on looking at how to ensure that we capture, as we always have, what is a growing patient pool.

Karen Borg: Well, I am going to assume that this is a question around OpEx and CapEx, rather than just CapEx. I think more broadly, I would say that we are very much focused on looking at how to ensure that we capture, as we always have, what is a growing patient pool. That is really how we might, should we say, enable and accelerate connected care. That is one big area of investment. The second is really, how do we expand our product pipeline? We really obviously have one product out there. We are looking to obviously now accelerate that pathway, so that is another area of investment. Clearly, obviously, the rollout of Virtus is obviously part and parcel of that.

Speaker #3: And that's really how we might, shall we say, enable and accelerate connected care. So, that is one big area of investment. The second is really, how do we expand our product pipeline?

Speaker #3: So we really, obviously, have one product out there. We're looking to, obviously, now accelerate that pathway, so that's another area of investment. And clearly, obviously, the rollout of Vertus is obviously part and parcel of that.

Speaker #3: I think the big opportunity and you can hopefully see that from the narrative that we shared with you today is not just saying that we obviously need to talk to dentists, but we need to recognize that that is a huge opportunity that we need to really crack.

Karen Borg: I think the big opportunity, and you can hopefully see that from the narrative that we shared with you today, is not just saying that we obviously need to talk to dentists, but we need to recognize that that is a huge opportunity that we need to really crack. We have some, I think, pretty good ideas in terms of how we. As we know dentists very well and obviously we have been talking to dentists now for nearly 20 years. We do have some ideas as to probably what will resonate most with them. But expanding that pool of customers is going to be really, I think, one of the big areas for us of focus.

Speaker #3: And we have some, I think, pretty good ideas in terms of how we—as we know dentists very well, and obviously, we have been talking to dentists now for nearly 20 years.

Speaker #3: So, we do have some ideas as to probably what will resonate most with them. But expanding that pool of customers is going to be really, I think, one of the big areas of focus for us.

Speaker #3: So I think, probably, if you're looking at total available market, there are lots of people with sleep apnea, but also lots of dentists who we want to then enroll in this sleep apnea treatment area.

Karen Borg: I think probably if you are looking at total available market, lots of people with sleep apnea, but lots of dentists who we want to then enroll in the sleep apnea treatment area. I think we have some ideas as to how we can make them very, very enticing for them very soon. That is kind of the three areas. Hopefully that helps.

Speaker #3: And I think we have some ideas as to how we can make them very, very enticing for them very soon. So that's kind of the three areas.

Speaker #3: So hopefully that helps.

Speaker #2: Thank you. Okay, final call for questions. I know it's a very busy day in the markets today with lots of people reporting, so we've kept people's attention for a good deal of time.

Moderator: Thank you. Okay. Final call for questions. I know it is a very busy day in the markets today with lots of people reporting. We have kept people's attention for a good deal of time. Okay. I think we are at the end of our question queue, Karen and Yifei. With that, I might just hand back to you, Karen, for any closing comments.

Speaker #2: Okay, I think we're at the end of our question queue, Karen and Yefe. So with that, I might just hand back to you, Karen, for any closing comments.

Speaker #3: Great. Thanks again, Jane. So, look, I think, first of all, thank you to everybody who's participated in this call. This is, obviously, now a new leadership team.

Karen Borg: Great. Thanks again, Jane. Look, I think first of all, thank you to everybody who has participated in this call. This is obviously now a new leadership team. We are looking at the business, and working out what is really, really important. Ultimately how we can do our best to ensure that you, as our investors, and those that have been supporting our company for a long time, can ensure that you feel that we really are getting you the best results possible. I would like to send a big thank you to Amrita, who I think might be listening to this call. So, a shout-out to her. I would also like to thank, of course, our employees around the world who every day do so much to ensure that ultimately people's treatment and, more importantly, their sleep is improved through the application, obviously, of oral appliance therapy.

Speaker #3: And so, we know we're looking at the business and working out what is really, really important, and ultimately how we can do our best to ensure that you, as our investors and those who have been supporting our company for a long time, can feel that we really are getting you the best results possible.

Speaker #3: I would like to send a big thank you to Amrita, who I think might be listening to this call. So, a shout out to her.

Speaker #3: And I'd also like to thank, of course, our employees around the world who every day do so much to ensure that ultimately people's treatment, and more importantly their sleep, is improved.

Speaker #3: Through the application, obviously, of oral appliance therapy, I'm excited about the future. There's a lot to do, so I look forward to your ongoing support.

Karen Borg: I am excited about the future, and there is a lot to do. I look forward to your ongoing support. Of course, I wish you a great day. Thank you.

Speaker #3: And, of course, I wish you a great day. Thank you.

Speaker #2: Thank you, Karen. Thank you, Yefe. I'll add my thanks to everyone else who joined us today. We look forward to keeping you updated on the MEDS progress.

Moderator: Thank you, Karen. Thank you, Yifei. I will add my thanks to everyone else who joined us today. We look forward to keeping you across SomnoMed's progress. With that, I will invite you all now to disconnect. Have a good day. Thanks.

Speaker #2: And with that, I'll invite you all now to disconnect. Have a good day. Thanks.

Operator: Goodbye

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