Company Interview / Cochlear looks to tune up its margins

Key points:

Guidance for FY27: low single-digit revenue growth and $330–350m underlying net profitMedium-term goal to restore 18% EBIT margin through fixed cost reductions and margin initiativesDemand headwinds from softer US and European markets, capacity constraints, geopolitical and currency impacts

Sarah Thom the CFO of Cochlear outlines a challenging year for the hearing implant group, yet maintains a cautiously constructive outlook for FY27. Cochlear delivers FY26 sales revenue of $2.3 billion, with underlying net profit of $322 million, down 22% year on year. Thom states that FY27 guidance points to low single-digit revenue growth and underlying net profit of $330–350 million, while the company targets a return to its historic 18% EBIT margin over the medium term through fixed cost cuts and tighter margin management.

Thom attributes recent weakness to converging pressures: softer implant demand in developed markets such as the US and Europe, hospital capacity constraints, long surgical waitlists in the UK, disruption from Middle East conflict, and currency headwinds from a stronger Australian dollar, which she estimates at a 10% impact versus FY26 averages already embedded in guidance.

Despite this, Thom sees the fundamental opportunity in severe to profound hearing loss as intact, noting only about 5% of eligible patients currently receive an implant. Strategy priorities include “medicalising” adult hearing loss, strengthening referral pathways, supporting patients navigating health systems, and continued R&D investment. Thom highlights strong uptake of the Nucleus Nexa system, with more than 95% adoption across developed markets.