SomnoMed H1 Earnings Call Highlights
by Scott Moore · The Cerbat GemSomnoMed (ASX:SOM) reported record first-half FY 2026 revenue and improved profitability, with management describing the period as one of “disciplined execution and continued growth across our core markets.” Co-CEOs Karen Borg and Amrita Blickstead, alongside CFO Yi-Fei Goh, outlined results that showed higher earnings, ongoing investment in manufacturing and R&D, and continued work to advance the company’s technology-enabled oral appliance, RestAssure.
Record first-half revenue and higher EBITDA
For the first half of FY 2026, SomnoMed delivered revenue of AUD 60.7 million, up 13% year over year on a reported basis and 8% in constant currency. Goh said growth was driven by continued strength in the company’s largest markets in Europe and North America, adding that unit sales growth exceeded the first half of FY 2025, when sales benefited from backlog clearance.
EBITDA rose to AUD 7.8 million from AUD 5.8 million in the prior corresponding period, with EBITDA margin improving from 11% to 13%. Management attributed margin expansion to improved operating leverage and the timing of certain operational and personnel investments, which were described as being weighted toward the second half.
Gross margin was 61.3%, broadly stable compared with 61.6% in the prior corresponding period. Goh said the company achieved NPAT profitability in the half, which was highlighted as a milestone in its earnings progression.
Cash flow, capex, and balance sheet position
SomnoMed generated positive operating cash flow of AUD 4.1 million before leases and AUD 2.5 million after lease payments, which management said was broadly consistent with the prior corresponding period. Free cash flow was negative AUD 0.9 million, compared with positive AUD 1.3 million in the first half of FY 2025, reflecting higher investment spending.
Capital expenditure totaled AUD 3.4 million in the half, up from AUD 1.4 million a year earlier, and was described as primarily focused on manufacturing expansion and product development initiatives.
The company ended the half with AUD 18 million in cash and cash equivalents, compared with AUD 17.3 million at 30 June 2025. Total assets were AUD 79.9 million, while net assets increased to AUD 50 million from AUD 46.4 million at year-end, reflecting earnings improvement and an Employee Share Trust transaction. Borrowings were described as minimal at AUD 0.7 million, primarily related to European government-backed facilities, and lease liabilities declined to AUD 5.9 million from AUD 7.2 million.
Regional performance: Europe and North America drive growth
Europe remained SomnoMed’s largest region at 54% of group revenue and increased 17% over the period. Management said performance was supported by reimbursement across most Western European jurisdictions.
North America contributed over 40% of group revenue and was up 11% compared to the first half of FY 2025, with management pointing to sustained demand and an increased contribution relative to prior years.
APAC represented approximately 6% of revenue and declined 4% in the half. Management attributed the softer performance to increased competition and broader economic headwinds.
Manufacturing expansion and leadership appointments
On operations, Blickstead said SomnoMed progressed its manufacturing expansion program by investing in capacity ahead of peak demand. Manufacturing capacity increased by more than 20% during the period, driven by installation of milling machines and facility upgrades. She said the added capacity reduced reliance on overtime during elevated demand periods and improved turnaround times.
Production turnaround time improved “significantly,” with December 2025 levels reported to be more than 50% lower than June 2025, reflecting operational efficiency and facility optimization. Management said the expansion program would continue into the second half.
The company also strengthened its leadership team with two appointments:
- Nathan Minnich was appointed Chief Marketing Officer and will be based in North America. Management said moving a key leadership position from Australia to North America reflects a commitment to scaling the business there and building the foundation to launch and scale RestAssure.
- Greg Knight was appointed Chief Transformation Officer, a newly created role focused on mobilizing new projects, improving margins, and enabling innovation. Management noted Knight has more than 15 years of experience at ResMed across product, manufacturing, and operations.
RestAssure update, tariffs, and reaffirmed FY 2026 guidance
Borg said RestAssure remains central to SomnoMed’s long-term innovation and differentiation strategy. The company reiterated that RestAssure has received FDA clearance for built-in compliance monitoring, which management described as making it the first oral appliance of its kind with integrated monitoring capability.
Management also said it received FDA feedback late last year regarding a proposed U.S. clinical study for efficacy monitoring and is continuing to work through that feedback, with plans to update the market as appropriate. In parallel, SomnoMed said it has commenced evaluating pathways to accelerate commercialization under the existing FDA clearance for compliance monitoring. In the Q&A, Borg said the company believed it “might be able to do something a little sooner” around leveraging the compliance claim, but added that plans had not been finalized.
Discussing timing, Borg indicated that a launch related to compliance monitoring would likely be in FY 2027. She also noted that in the United States, compliance is a key driver for reimbursement, and management is focused on accelerating efforts around compliance monitoring.
In response to a question about U.S. tariffs and a self-assessment under the Nairobi Protocol, Goh said the company is still waiting for correspondence from U.S. Customs and Border Protection, and that SomnoMed is continuing to self-assess as exempt, as it has in the past.
SomnoMed reaffirmed FY 2026 guidance of AUD 119 million to AUD 126 million in revenue and AUD 10 million to AUD 12 million in EBITDA, with expected capital expenditure of AUD 6 million to AUD 8 million for the year. In the Q&A, management said the reaffirmed guidance took into consideration recent foreign exchange movements, though it did not provide specific FX assumptions.
About SomnoMed (ASX:SOM)
SomnoMed Limited, together with its subsidiaries, engages in the production and sale of devices for the oral appliances for the treatment of sleep related disorders in Europe, North America, and the Asia Pacific region. Its flagship product SomnoDent Avant, as well as SomnoDent Classic, SomnoDent Flex, and SomnoDent Fusion are offered for the treatment of obstructive sleep apnea. The company also offers SomMorning Repositioner, a product designed to help return patient's mandible back to its pre-treatment centric position; SomnoBrux splint, a custom fit, acrylic splint for patient's upper teeth designed to protect teeth from grinding and scraping during Bruxism; and SomTabs are cleaning tablets, developed to clean oral appliances safely and effectively.