Why Investors Are Watching Nanosonics (ASX: NAN) After a Strong Earnings Surge

Is CORIS the Catalyst for Nanosonics’ (ASX: NAN) Next Phase of Expansion?

Nanosonics (ASX: NAN) has caught the market’s attention, with its share price climbing 14 percent over the past week as excitement built ahead of its full-year results.

 The earnings release did not disappoint, giving investors fresh confidence in the company’s long-term growth story. At its core, Nanosonics is a leader in infection prevention, a space that is becoming increasingly critical as hospitals seek safer and more reliable ways to protect patients.

The company’s trophon system, which disinfects ultrasound probes, has already built a profitable base of recurring revenue. Now, attention is shifting to CORIS, its new technology designed to tackle the far more complex challenge of cleaning endoscopes. 

For context, endoscopes are the long, flexible tubes with cameras that doctors use to look inside the body, and they are notoriously difficult to disinfect properly. That makes the potential market for CORIS significantly larger, and the opportunity far more interesting for investors.

The question is whether Nanosonics can turn its innovation into the next growth engine while maintaining the strength of its existing business. That is where the real story for investors begins.

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Nanosonics: A Leader in Infection Prevention

Nanosonics is an Australian medical technology company specialising in infection prevention within healthcare. Its products are designed to reduce the risk of harmful germs spreading between patients when reusable medical devices such as ultrasound probes and endoscopes are used. 

The company generates revenue through the sale of its machines as well as recurring income from consumables like disinfectant cartridges, wipes, and probe covers, along with service contracts. Recurring revenue now represents more than 70 percent of total sales, providing a stable and scalable business model. 

The company’s core technology is the trophon system, an automated disinfection unit for ultrasound probes. Instead of relying on manual cleaning, Trophon uses a sonicated hydrogen peroxide process to reliably eliminate bacteria and viruses. With more than 37,000 units installed globally and an estimated 28 million patients protected each year, Nanosonics has established itself as a leader in infection prevention.

Nanosonics Delivers 17% Growth with Strong Recurring Revenue Base

Investors remain optimistic about Nanosonics’ growth outlook after the company delivered revenue of $198.6 million, up 17 percent. More importantly, recurring revenue from consumables and services grew 20 percent and now accounts for 73 percent of total sales. This steady shift toward a recurring model reduces dependence on more volatile capital sales and provides greater earnings stability.

EBIT Nearly Doubles on Stable 78% Gross Margins

Gross profit rose 17 percent to $155 million, with margins holding firm at 78 percent. This reflects strong operational execution and pricing discipline. Importantly, the benefit of scale is now evident, with EBIT almost doubling to $17.8 million as cost growth lagged revenue growth. Operating expenses increased by 10 percent, but this was directly tied to initiatives that support future expansion.

Nanosonics Reinvests in Next Growth Phase

The margin expansion provides the capacity for reinvestment, and Nanosonics is actively deploying capital into its next growth platform, CORIS. Capital expenditure rose to $8.7 million from $2.5 million last year as the company advanced FDA clearance, built out supply chain capacity, and prepared for commercialisation. Alongside this, Nanosonics launched trophon3 and trophon2 Plus, expanded U.S. manufacturing to localise consumables production, and invested in digital infrastructure through an ERP upgrade and enhanced cyber security.

CORIS Holds the Key to Nanosonics’ Next Growth Phase

For investors, Nanosonics is likely to maintain momentum following a strong earnings report, with attention now shifting to how its recent increase in capital expenditure translates into long-term value. A significant portion of this investment is directed toward the commercialisation of CORIS, the company’s new platform targeting the large endoscopy market.

If successfully executed, CORIS has the potential to open new avenues of growth and broaden the company’s revenue base beyond its core ultrasound disinfection business. That said, hospital procurement cycles can be lengthy, and budget constraints may slow adoption in the early stages. Monitoring the pace of CORIS uptake will therefore be critical to assessing whether these investments deliver the economic returns investors anticipate.