Nanosonics Limited

Hello and welcome everyone to the Nanosonics FY26 four-year results investor briefing. My name is Catherine Strong and I'm Head of Investor Relations at Nanosonics. Today's presentation will be led by Michael Kavanagh, Chief Executive Officer and President, and Jason Baris, 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 Kavner. Please go ahead, Mike.

Thank you very much, Catherine, and good morning, everybody, and thank you all for joining us today. But by now, many of you will have seen the FY26 results. 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. 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% and that's supported by I would think we will have seen disciplined cost control whilst of course we continue to invest in our future growth. The second point is the Tropon Only business. 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. And also we successfully launched our next generation technologies, the Tropon 3 and the Tropon T2 Plus. Importantly, the Tropon-only business eBit for the year on a reported basis delivered $50.6 million in EBIT. Our inconstant currency was up 16% to $56.5 million. And that continues to demonstrate the strong profitability, cash generation, and operating leverage that we are getting from the Tropon business. The third, and importantly, is Chorus continues to plan with key regulatory approvals achieved. control market relief activity advance across our launch markets. And you'll be pleased to know that the commercial launch is now planned for this half in FY27. And I would say with that, with the upcoming launch of Chorus, 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 Trofond continuing to generate strong profits and cash. We've got a debt-free balance sheet and the flexibility to invest in Chorus whilst of course you would have seen this morning the announcement that we're returning further capital to shareholders with a 40 million buyback. So turning then to some of the details, well, reported revenue was just under 204 million, 203.9 million, and that was up 3% on PCP. However, at constant currency, revenue was 211.5 million, and that represented 6% growth. 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's not structural that the consumable volumes did come back up in Q4. Also in that third quarter, we did expect a bit more Tropon-3 versus Tropon-2. You 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. 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. So that did impact a little bit. So it was more some transitionary impacts that we experienced during COVID. 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 than consumables. but also we had the currency movements. But on a constant currency basis, the gross margin is still a very healthy 77.6%. Operating 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 basis. 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 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 results. The TrollFund franchise, and Jason 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 TrollFund only business was just under $51 million or just under $57 million in constant currency, which was up 16% on prior corresponding period. So in short, the TrollFund definitely remains a highly profitable engine. that gives us the flexibility to fund chorus, 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've mentioned some of the highlights already, but it's worth touching on a couple of them on the overall progress. 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, and particularly in the fourth quarter. The overall global cumulative installed base, that grew 6% to 39,213 units. And importantly, that represents the protection of approximately 31 million patients on an annual basis from the risk of cross-contamination. Upgrades, they continue to perform very well, up 20% for the year. And importantly, upgrades were up 32% in North America. And there are still over 8,000 older first-generation Tropon EPR devices remaining in North America to upgrade, so still a significant opportunity moving forward. For Chorus, we made important regulatory and commercial progress during the year, including clearances across the UK, Europe, Australia, and the first FDA 510K clearance for the first round of expanded scope indications. And that second 510K is currently in with the FDA and undergoing the review process. And as mentioned earlier, we move into commercial launch this first half. We also then to support a lot of this, we continue to strengthen our operations throughout the year. And in addition to establishing a dedicated chorus device manufacturing line in Australia, we did expand our US Indianapolis facility and have now started the manufacturing and distribution of Trofons core consumables from our local manufacturing facility in Indianapolis. 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. And that's all to support our next phase of growth. and during this year, 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 Troll Fund business. As I mentioned, the total Troll Fund unit placements were 4,230 units. So that's up 9% on the prior year. And that does represent the strongest annual placements that we've delivered in three years. And 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, the 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 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. With Chorus, we have the opportunity to apply the proven commercial foundations we've built through Trofon. That includes our customer relationships, our sales and service capability, regulatory clinical expertise that we've developed, our manufacturing capability, and of course, the proven recurring revenue models. to a second highly significant infection prevention opportunity. So while the Chorus 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. So I'll now hand over to Jason to take you through some of more of the details around the financials.

Jason. Thanks, Michael. As you said, I'll 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 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. At the same time, we invested in Corus, which we believe will become a second growth engine for our business. And we also returned $20 million to shareholders through the buyback, with a further buyback announced today of up to $40 million. Turning to the P&L. Our revenue was $203.9 million, up 3% on a reported basis. and 6% on a constant currency basis to $211.5 million. 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. 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 $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 $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 at 4% at constant currency, reflecting discipline cost management. And of course, within the OPEX, profond costs were $106.8 million, down 1%. While the investment went into chorus, which increased the OPEX spend by around 13% to $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 Tropon technology arrived in the market. 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 report growth of 4% to $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 second half of the year, as Trofon 3 became a larger proportion of sales. We also saw Trofon T2 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 $141.8 million or 8% growth at constant currency. Poor consumables, which are the tropon 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 Trofon workflow products, including probe covers, cleaning wipes and other consumables. Service revenue grew 19% at constant currency, growing strongly as more customers adopt the service offerings associated with both Trofon 2 and Trofon 3. Service includes preventative maintenance, support contracts along with our pay-as-you-go customers. Their parts moderated, as expected, as customers upgraded to newer Trofon 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 installed 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. 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. Reported revenue for North America was $186.4 million, up 3% or 8% of constant currency, showing the underlying demand remains strong in that region. Reported annuity revenue reached $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. 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 Trofon 3 became a larger proportion of sales, and increasing the uptake of Trofon T2 Plus upgrades in the fourth quarter. Spare parts, which are not part of annuity revenue, were $7.3 million, down 21% or 19% of constant currency, and we expect that to continue to moderate as customers upgrade to newer Trofon systems. Overall, North America continued to be a strong performing region for us. In EMEA and APAC, we continued to grow the cumulative install base. Turning to EMEA, our cumulative install base grew 8% on the prior years of 2,630 units with the addition of 200 new units, consistent on last year. In this region, the majority of the original TROFON 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. 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, so 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. 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%. The capital softness was driven by a 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 Trofon 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 $155.2 million in cash and cash equivalents. Business cash flow, which excludes the funds spent on the share buyback, was $13.6 million, reflecting strong cash generation from Profile, while at the same time funding Corus commercialisation, an increase in inventory to support Trofon growth, and the Corus launch. We also completed a $20 million share buyback in 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. This, we believe, is an attractive and efficient way to return capital to shareholders while preserving their capacity to invest for long-term growth. Before I hand back to Michael, I think it's important to highlight the strength of the Trofon-only business, central to our growth strategy due to its earnings power and strong cash generation. The Trofon-only business EBIT of $50.6 million was up 5% or $56.5 million in constant currency terms, up 16%. The strong financial profile of the Trofon business is what enabled us to invest in Chorus, continue innovation and maintain the balance sheet flexibility that we have. This covers the financials. Michael, I'll hand back to you to talk more about Trofon and Chorus and our guidance for fiscal year 27. Thanks very much Jason.

A few comments first of all on our expectations for the Trofon business for FY27. We do expect to see continuous strong growth within the Trofon franchise. Tropon remains a market leading growth platform with multiple capital and recurring revenue levers that's 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 Tropon 3 to continue to do that. In EMEA, the TROPHON3, it 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 TROPHON3 in this half as well. And as Jason mentioned, Japan did contribute nicely in units in FY26 to the AIPAC region. Still on the capital side, upgrades also remain a significant opportunity. We saw excellent growth in FY26, and these upgrades, they not only modernized the fleece, but unlocked in many cases, new service opportunities and workflow value as well. Because as a reminder, many of those old EPRs are under service contracts with GE Healthcare historically. And as we sell the upgrades, then Sonics captures the new service contracts. In addition, the Trofon 2 Plus software upgrades, they provide a way to extend value across the existing Trofon 2 installed base. of which there is well over 25,000. 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. 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, they grow with procedure utilization. And 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. So these consumables, they grow with procedure utilization. And our ecosystem consumables, they provide an opportunity to broaden our share of the full workflows. Service, as I mentioned, it also continues to be an important and meaningful growth opportunity. It did really well in FY26. And, you know, 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 Trofon 3 will become more meaningful as we move forward. So taken together, the Trofon 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. So with Trofon continuing to provide Strong growth and earnings. I want to turn to Chorus briefly because we believe this represents the next major step expanding nanosonics beyond just ultrasound reprocessing. And Chorus is now moving to commercial launch in the first half. And this is a major milestone for nanosonics and shareholders, no doubt. and represents a transition from years of technology development, regulatory progress, controlled market release execution into the beginning of commercial adoption. And the chorus opportunity is substantial, with around 60 million endoscope procedures each year across our target market. 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. There's many variable steps in the whole reprocessing workflow. It's difficult to standardize, difficult to verify, difficult to perform consistently across complex, narrow, and in many cases branched channels. And that's what we witnessed during our control market release. And that is the problem Chorus is designed to address. 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 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. 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 critically important for the adoption of a new technology. The slide shows that's on front of you and in the investor deck shows why we believe Chorus can become a very, very attractive business over time. And I guess today the best reference point investors have is Troll Fund. With Troll Fund, every installed device creates a long-term revenue stream through consumable service and broader workflow products. And that installed base model has delivered high-quality annuity revenue, strong gross margins, operating leverage, and significant cash generation that we've outlined today. Now, Chorus is built on the same core principles. However, the capital equipment is expected to be three to five-fold the current Troll Fund price. Each unit is expected to run approximately 10 cycles per day on average, which is, again, three to four times that of Troll Fund. Price per cycle is expected to be four to six times that of Trophon. And 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. Of course, 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. That's why we believe Chorus definitely has the potential to become a major long-term value driver for nanosonics. And moving to our launch, well, we will start this half in the UK, Ireland, and Australia, and that will be followed by the US this year as well. And the launch year will focus on establishing broad market awareness now, build pipeline as we get into the customer budget cycles, and of course, the mutual customer and reference site adoptions as preparation, all of that is preparation for acceleration in FY28. And this year, we do expect revenue coming through from quarters, or we expect it, as many of the analysts have predicted, to be in the low single-digit millions. 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 Chorus FY27. 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, 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. 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 Chorus. So the majority of the OPEX increase and that you're seeing for FY27 is directly attributed to the Chorus commercial launch. Trophon, we expect to continue to deliver operating leverage and cash generation. So with that, moving to our outlook and our guidance for FY27. As I've said, we entered the year with momentum in Trophon, a strong balance sheet, and now a clear path to invest in the Chorus launch whilst maintaining disciplined capital allocation. At constant currency, we expect FY27 revenue of between $220 and $228 million for the year, and that represents growth of 8% to 12% on FY26. And as already mentioned, Cores is expected to contribute initial revenues in the low single-digit million, so most of that is associated with continuous growth on growth. Our gross profit margin is expected to be between 74-76%, and that reflects the higher tariffs that Jason 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. Operating expenses, expected to be between 156 and 163 million. And as mentioned, the absolute majority of that OPEX growth relates to Chorus, including the step-up in investments for the Chorus launch I mentioned. So for Tropon, again, we're targeting further operating leverage improvements as that business continues to perform. And finally, just you will have seen this morning as well, and 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 and 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 so with that I will now hand back to the operator and open the call for questions

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. And today's first question comes from Shane Story at Kennecourt Genuity. Please go ahead.

Good morning, everyone. Maybe just if I could start with just where we left off there, Michael, with the additional OpEx into the Chorus business. Could you just give us maybe some more specific details about what that delta in investment is going to fund this year? And I'm right to think of that new OpEx base for Chorus then hopefully being maybe a little bit stable, say, as we go into 28 and 29, just

at the moment you can appreciate it's quite difficult to sort of forecast you know when in fact that that part of the business you know sort of breaks even thanks yeah um great question thanks shane the we're going into the the launch here now the absolute majority of that incremental opex goes out into the regions not necessarily here at headquarters as in the regions where will be adding more headcounts to support the Chorus franchise. We'll obviously be leveraging the existing infrastructure that we have, but as we said all along, once we launch, we will add supplementary specialist support for the Chorus franchise. So we will be specialist salespeople that will come in, not to the effect of all the size of the Trocon sales team, but specialist sales team that will come in will require people now from supporting the project management and installation because unlike Trofon where if you ship it and it can be a plug and play with Chorus you deal with the facilities, departments, hospitals in project managing to make sure all the necessary infrastructure, all the water lines etc. are ready for the installation. so it's 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 clinical applications and education on top of that of course we're now launching so there'll be increased marketing space 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 investments will be made this year.

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

Yeah, I think if we see that softness in Q3, and I do want to reiterate, you know, we didn't see that softness continue into Q4. It reversed. 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, you know, all of the U.S., you probably would have added another $2 million in consumables to the business in Q3. So, you know, it did impact, but that's why we feel confident, you know, as we enter into FY27 on the consumables front.

Last one from me. Did you see, I mean, when I reconciled my, even when I reconciled 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?

Within the NHS, and this is publicized, there is extreme pressure in sonography. A... compared to the demand, the number of sonographers that exist is a lot lower. They're actually considering this to be a significant issue over there. So you're probably right, whilst we saw some growths, you're 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 12.3 launch and going into this year, certainly our forecast going into this year are higher.

Thanks, Michael. Thanks, Tim.

Thanks, Shane.

Thank you. And as a reminder, if you'd like to ask a question, please press star then 1. Our next question comes from Josh Kinarakis with Bear & Joey. Please go ahead.

Hi, Michael. Jason, can you hear me okay?

Yes, Josh. How are you? 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 do you think that's currently sitting for the Trofon business, even if it's broad sort of terms?

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

Sorry, chorus price you mean? Chorus. Chorus, yep, yep. Okay, down to the lower end of that. Okay, I got it. Okay.

which is still a significant increase on the profile. Yeah, to be clear, the range, $10 to $37 US, which we've talked about previous, so towards the lower end of that range.

Yeah, got it. Okay, so four to six times on the price per cycle. And I think you said on utilization, 10 cycles per device per day. Yeah, okay, that's really helpful. And just in terms of just clarifying on Shane's question from before on the OPEX step up from Cora. So as you were saying, you've got quite a bit in terms of the installation related teams. Like as you ramp up and how we should obviously into the US, the bigger markets. So you're saying only into 28 and other years, you should only see more incremental cost sort of growth coming through in terms of OPEX. from there on out. There's no major step-ups, just clarifying that.

Yeah, we're not expecting double-digit step-up increases in earthquakes and chorus beyond this year. This year is the big... The launch year is, as you would expect, the big investment year from a commercialisation perspective.

Got it. That's really helpful. And then just also just in... in relation to the Tremont you mentioned on the call and apologies if you've sort of clarified this but you know the ASP pricing and some of those issues you also saw sort of improved sounds that towards the end of the year can you give us a feeling is that sort of back to you know the levels that we should be expecting and on a go forward is it mostly some T3s that should be the incremental new install based sales?

Yeah, Michael, maybe I'll take that one. Yeah, the second half pricing was encouraging. It was back towards previous year's levels, and that was really on the back of the transition towards T3. 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, certainly when we release the results of the first half. So as that mix has moved towards Trifon 3 and our customers see the additional value, we have seen the pricing improve and as the mix improves in 27, I'd expect we'll see further improvement.

Okay, that's really helpful. And final one, guys, just in terms of go-to-market on Chorus, so obviously there's a a number of sort of different models you could adopt in terms of the sales model but you know you've got a very strong balance sheet and lots of cash. Apologies if you sort of run through this but how should we sort of think about as you do scale up into market in the first few years how either your fund that would still be capital could potentially you look at more of the MES models like 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 markets more powerful and it's more likely to support growth.

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, it provides us that flexibility. And the most important thing here is getting units in. This is all about consumables because the sort of gross margin levels you're talking at are consumables for cars will be similar to what you have been used to with the Troll Fund. 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. We can lease. We can place and like MES and put it on our balance sheet. And we might see more MES type in the UK and more capital in the U.S.

Got it. Thanks, guys.

Thanks, guys.

Thank you. And our next question today comes from Devin Thelonathan with Goldman Sachs. Please go ahead.

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 U.S. 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?

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. and volumes improved, which gave us comfort as we entered FY27 for some of those growth numbers and guidance that we've given. So the data that we have and see in some of the large US hospital results is foot traffic in the third quarter was slower, and we're associating it with that.

Yeah, no worries and 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, is the fourth quarter and the year-to-date trading in 27 suggests, you know, most of those units are getting upgraded and no one's really holding off on using their consumables?

Yeah, that's a good question. And certainly, you know, 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. So, we're not seeing any significant indications or 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 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 to that with respect to the value propositions and the data we have on Tropon. So I think most of the consumables that we're seeing was really on the traffic side of things. There may be some I would be naive to think that we'll retain 100% market share and there may be some units because we do see and stare publicly you've got the crystal growing in the United States But for the Trovan customers there, I think if they're low-volume users, there may be a few like that that have used Tristel. But we've also seen some Tristel customers go back to Trovan. So overall, I think it's just really the traffic that Jason was talking about. But it's something that we've got to keep actively our eyes on.

Yeah, thanks, Michael. And last one for me. Just the chorus pricing strategy three to five times on the capital side of things. I understand there's different sales models that you are looking to employ. 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. Is it largely upfront capital sales, or do you feel it's more weighted to the consumable side of things? Thank you.

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's 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 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. It could end up being 50-50 or capital placement or capital rental, but we'll see how that goes.

Thanks. Thank you. There are no further questions at this time. I'll hand the conference back to Mr. Cavanaugh for any closing remarks.

Thank you very much. Well, again, thank you all for joining. I know it's a very busy day and very, very busy season. But, you know, I'd 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 the chorus, launch phase now that we're all very excited for, and we certainly enter this new year with a strong momentum. So, again, thank you for all attending, and I look forward to catching up with many of you over the coming days.

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