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ELXMF (ELXMF) Q1 2027 Earnings Report, Transcript and Summary

ELXMF (ELXMF)

Q1 2027 Earnings Call· Sun, Nov 1, 2026

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ELXMF Q1 2027 Earnings Call Key Takeaways

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ELXMF Q1 2027 Earnings Call Transcript

Mark Flynn

Operator

Good morning, everyone, and thank you again for joining us. My name is Mark Flynn, Investor Relations for Nova Eye Medical. Today, as you know, we're covering the September 2026 quarterly report, which we lodged with the ASX last week, and it's our first quarter of the 2027 financial year. Always a quick housekeeping note. Our session today will include forward-looking statements, so please read the disclaimer in the presentation. [Operator Instructions] Thank you to everyone who has sent questions through in advance. Presenting today, as always, is Tom Spurling, Managing Director of Nova Eye Medical. The big headline for the quarter is our sales of USD 6.3 million, up 30% on the same quarter last year. Our trailing 12-month sales are now up above USD 25.1 million, and the business generated positive operating cash flow of $0.5 million with a positive EBITDA as we guided. FY '27 guidance of USD 26 million to USD 31 million has been confirmed as well. So some great news and a great quarter. So over to you, Tom.

Thomas Spurling

Analyst

Thanks, Mark. Yes, we're very proud of what we've achieved this quarter. We have a very -- we're at a very good stage, growth stage ophthalmology company. We put that up at June. That means that we're not conducting trials. We're not carrying on. We are just selling stuff, and we're doing well. Mark? -- is our disclaimer. I know we -- a lot of you have been on this call before, and I appreciate that. But glaucoma is a leading cause of blindness. We build devices that enable surgeons to treat patients with glaucoma. Our treatment -- glaucoma is about blockages in the ocular irrigation system that give rise to a buildup of pressure because that liquid-rich protein that rotates through the eye gets locked in. Our device works with the body's anatomy, opens the natural outflow pathway and in doing so, relieves that pressure -- unblocks things. Next slide. This, I know I put up at the June result and the scale is dodgy. I accept that, but we're proud of it. But it's the consistency is important, 26% compound annual growth rate now for 4 years. So -- and as we'll say later, that seems to be -- that -- well, not seems to be, it is accelerating in FY '27. So we're very proud of that progression. We have a good story. Next one. So interventional glaucoma, surgeons treat the disease surgically and early instead of relying on drops and a wait-and-see approach. The gray shows the legacy approach, drops, more drops. And then when it gets really bad, we drill a hole in the eye, filtration surgery is the nice word for it. Those drops either mostly suppress the production of liquid-rich protein in the eye. But 90% of patients don't take their drops and half of them stop taking within 6 months. And that is a big market. Pharmaceuticals for glaucoma, USD 4.3 billion, where you'd like to think that the growth part for our business includes eating into that eventually. The interventional mindset is SLT first, tissue-sparing MIGS, minimally invasive glaucoma surgery more and then later filtration surgery, get the patients off drops because drops hurt people's eyes and because people don't take them, the glaucoma progresses. Next one. There's some data here from Glaukos, the market leader. It's a large market. Glaukos is saying that the market is only just starting to grow, and we agree with them. We believe now we have just probably 4% to 5% market share in America, where the data we have is fairly robust. And that small market share means that our company has a great deal of room to grow. And that is why we have a great product, and that's why we have a great outlook for the future. Next one. So I'm often asked, and this is the first time we've put in this slide for a while, often asked, well, you're just growing at the rate of growth of the market in such an exciting market. Well, there is some independent analysis from Market Scope. So we've tracked out the growth for the last 5 years, including a mini projection there for U.S. stand-alone. And you can see that our rate of growth has exceeded the market rate of growth. We are gaining market share in a growing market. I think that's a good place to be. Next one. So iTrack Advance is ready for the interventional glaucoma movement. We don't have trials to run. We don't need it. We don't need -- we have all our approvals from the MDR and FDA. We have reimbursement in place. The reimbursement is a really valuable asset. Our CPT 1 code makes sure that the doctor -- the 3 parties to any surgical intervention, which is who is, which is the doctor, the surgery center and us as the device supplier, all get a good return out of the reimbursement dynamic with the U.S. government. And those -- they've been confirmed through to the end of 2027. They're confirmed annually -- sorry, they'll be confirmed the draft results. The draft 2027 has been tabled in July, and that will be usually confirmed during November. We're past first revenue and we're in revenue growth. It's a tick for revenue growth, but we still see there's plenty of revenue growth to come. Next slide. The key takeaways from our Q1, 30% up on the PCP. You'll recall my first slide had 26% growth on a trailing basis. The trailing revenues are now USD 25.1 million, which is 30% up. So since June 30, our sales growth has accelerated, which is fantastic. And with that, of course, is -- or because of that, our first quarter sales of USD 6.3 million were up 30% on that previous comparative period. We generated an operating cash inflow, which we're very pleased with. It's been a [indiscernible] but we're excited that we're generating our own cash and EBITDA. We have confirmed our guidance, excluding China, to be USD 26 million to USD 31 million. People say, gee, that's a wide band. And I say, yes, it is a wide band. We're a small company, and we want to hit our targets. So we are choosing to leave that where it is for now, but we'll keep monitoring that as the year progresses. Next slide. Here's our 25% growth, USD 5.2 million in the U.S., 25% growth. Germany and the rest of the world, smaller numbers, but still good digit -- good growth. Sales excluding China 26% up. And we've made a delivery to China in the quarter, getting us to USD 6.3 million at the bottom. This slide, I want to highlight October USA sales. This story was published in our last Friday or Thursday with our AGM. October has been fantastic. And there's a little squiggly line there that says 30%, I can confirm that, that is -- it's on the positive side of the 30%. It's not 29%, it's more than 30%. So where really the last few days of October have been fantastic, it augurs well for that second quarter revenue. I'm very bullish about how we'll be looking at U.S.A. sales this quarter, which is a pretty big -- historically been a big season surgeries. Next slide. Our trailing revenues is an important number. But because we're growing so quickly, just referring to our annual revenues is $23.6 million because that's what they were in June, quickly puts them out of date. So we're providing [ 3 rolling ] every quarter, I guess, last 12 months sales, and we're proud of about $25 million, up 30%, which is up on an acceleration from the 26%, as I mentioned at June. All markets growing, some faster than others, but it's all -- it is dominated, as you can see by the American growth. Actually, Mark, we just got -- no, here we are. Sorry, here we go. This is the one I thought. Yes. So this is a bit more granularity on our quarterly sales in America. You can see that our quarter was a little bit lower than the quarter -- previous quarter. That happened last year as well, but it just didn't make it on to the graph. The difference was very small. There's some seasonality there because July and August are months where doctors take summer holidays and patients do too, so there are less surgeries. As I mentioned, our October through to December period is a complete reversal of that. And you can see that we -- well, I can -- we're forecasting, obviously, nice growth in Q2 FY '27 to be delivered. And the important step here is that our revenue per rep, which we reluctantly provide for the benefit of our shareholders because people often ask us. But I can tell you that at the trade shows, all the other -- our competitors all come up and say, thanks Tom for providing all that information that really helps us manage our reps. So I hope people -- which is annoying, and I hope people appreciate that important statistic. So that is -- and they all confirm that it's a high revenue per rep compared with their own reps. The other feedback we get is obviously from doctors who really confirmed back on whatever our meeting was October 10 or 11, that our tissue-sparing, implant-free canaloplasty is only just starting to be understood by more and more doctors. Our green light has been really well received. Our special tech that enables the thinning, the Shear Clear, which allows our unique thinning of the high volumes of viscoelastic into the ocular structures, has been really well received. So we're excited by the prospects. And as I said, it looks like October is bearing fruit already in October. Next slide. We're obviously proud of that. There's a lot of dark blue, horrible times behind us there and now we're in green with positive cash flow. We got to keep doing that. But our EBITDA positive situation, I suppose, now is a harbinger of continued cash flow positive, which is great. We have cash and undrawn debt totaling $4.1 million, which is, of course, up on 30 June by $500,000. And that provides us as we are saying again and again with the liquidity we need to meet our targets. I know it's not a lot, but it's enough for us to do what we want to do, raising money just to put it on our balance sheet doesn't make sense, our Board -- to me or the Board. So we are working with the resources we have to avoid dilution and make sure that we are returning -- making the return on the investments, the equity investments already made in our company. Next slide, Mark. This slide is a bit complicated, but it is meant to show that the improving bottom line, the operating leverage that's taking place with the fixed and variable costs, it enables students of such matters to do their own estimates about the trajectory of sales and marketing and how it varies with sales going forward. So we really are providing a lot of data there and anybody can get their calculator out with our guidance and work out what next year is going to look like. And you can see the fixed costs of operating quality and reg, product engineering, clinical data is a bit fixed and the corporate costs are all falling relative to sales, and we're proud of that. Sales and marketing is also falling relative to sales. We're often asked about leverage, when are you going to make a profit, you spend too much on sales and marketing. Well, this is showing that it is flowing through and the evidence is in the P&L and we're saying it's continuing into F '27. Next slide. So we've got a strong start. We're confirming USD 26 million to USD 31 million, excluding China, which is a broad band, as I said, and given the reasons, 26% sales excluding China, EBITDA positive and enough cash, not plenty of cash, but enough cash to meet our objectives. We don't need plenty of cash. We ration our resources, and we're doing it well. We're enabling the growth that we're projecting with those resources. I think one more slide, Mark. Yes. I wanted to put this and we debated this, but our company is very U.S.-centric. More than 90% of the revenues of our company are invoiced in U.S. dollars, 85% of our operating costs are in U.S. dollars. We report internally in U.S. dollars. And our revenue guidance is in U.S. dollars. I was amused by an analyst report where we lifted our guidance in April or May. And because of the exchange rate, the poor analyst had to run our Australian dollar revenue down, that just doesn't seem right to me. So we will be -- our presentation currency will be in U.S. dollars from 31 December. And we think that will streamline things and provide more meaningful period-on-period comparisons for the readers of financial statements as well as reduce the number of numbers I need to put into these presentations. So I think that's it. Yes, growth, market share, the things really early. We've built this company for this opportunity, and we are now just starting to hit our straps and we thank you for your support. Mark?

Mark Flynn

Operator

Thanks, Tom. A couple of questions coming through. A very simple one. What's driving the growth in the iTrack Advance?

Thomas Spurling

Analyst

Well, we are getting more of our people in front of doctors, particularly in the U.S., but also in Germany and Canada and in the U.K., where we are getting the chance for them to understand that nobody needs to put in a metal implant or tear tissue. The tissue-sparing, implant-free message associated with iTrack Advance is unique in the world. And with all the doctors do no harm, we have data that shows you don't have to harm the eye. You don't have to do anything with it. We just flush the eye and get it going. That resonates. That's driving growth. The green light, our new IP around the Shear Clear, the thinning of the viscoelastic, just today a doctor sent us a video of how the blanching, how the washing of the viscoelastic through the ocular irrigation system is very visible to the -- under a microscope, almost to the naked eye. It's a great product. That's why sales are growing.

Mark Flynn

Operator

Question here is how many sales reps do we have? And are you hiring more?

Thomas Spurling

Analyst

Well, we are hiring more. I've given -- I feel like we have given enough hints there's revenue and there's the number of revenue per rep, at least make it a bit more difficult for our competitors to work it out because they don't tell us how many reps they've got. But we are hiring them. We have hired them in September, and we are continuing to because the opportunity in some of the larger areas of the United States, the north, east, Florida, Texas and down in Southern California are very fertile ground for sales revenue growth.

Mark Flynn

Operator

Question that's come through is on a percentage of ophthalmologists does your sales team have contact or relationships with across the U.S. Do you have sort of a broad guidance of how many people are there?

Thomas Spurling

Analyst

No, I can't -- that's too. That's -- I think the closest to that we've given is our market share. I can't -- and you could work out how much a surgeon can do in a month. I mean, you could work out our units, you could work out what the market share is. We're not touching too many and there's plenty more to come.

Mark Flynn

Operator

When a surgeon does adopt iTrack, do they continue to use that product? And is there repeat sales data?

Thomas Spurling

Analyst

Yes, absolutely, there's repeat. I mean we get a doctor to adopt. You've got to keep on top of them. Doctors have choices. Doctors listen to sales reps and want to try things. But we're showing that we are getting new customers. That's a source of revenue growth. But if they were recycling, if they were then dropping off as fast as we were getting, we wouldn't have sales growth. So yes, we do keep doctors. And it's a fundamental part of the sales mission, get new accounts and look after your old ones because -- not the old ones, the existing ones because it's easier to keep a customer than it is to get a new one.

Mark Flynn

Operator

Okay. Question on why we didn't lift guidance in this quarter after a solid quarter?

Thomas Spurling

Analyst

Just because I'm gutless. I think we want to hit our guidance. We're obviously confident and shareholders can form their own view.

Mark Flynn

Operator

Excellent. Questions coming through. Also, the positive EBITDA in the quarter, how positive was that EBITDA? And where do you see it going?

Thomas Spurling

Analyst

We haven't disclosed how positive. Positive is positive. And we have given guidance, we've given the ratios there. And so it's a very simple exercise with the calculator and the pencil or with Excel for shareholders to form a view as to what -- how positive that EBITDA should be given the data we provided in this deck.

Mark Flynn

Operator

And the positive cash flow, so calling that sustainable or a one-off?

Thomas Spurling

Analyst

We are guiding to sustainable positive cash flow. Cash is lumpy. So that's where we are. Our answer is that our total facility of $4.1 million meets our objectives, and that's what we're working with.

Mark Flynn

Operator

Just on competitors. We've talked about the 3% to 5% already today. How do we compete with people like Glaukos or the other bigger players?

Thomas Spurling

Analyst

So it's interesting, Glaukos, it reported its revenues on Thursday, maybe Friday. Their stent revenue has stalled at about $40 million a quarter for about the last 5, 6 quarters in a row, and they are very much focused on iDose, which is the procedural pharmaceutical, which is kind of -- it doesn't compete directly with us at the moment. But the answer to that, you often get asked that question, how can this little Australian company compete with those big companies. Well, we have the best product, it's as simple as that. I'll go back, it sounds boring, it sounds rough, but it's implant-free, it's tissue-sparing. All of our competitors are either tear tissue or leave something behind in order to impact the clinical benefit. Our Light and our Shear Clear tech really does make a difference and doctors are paying attention.

Mark Flynn

Operator

Recent trip to AAO in New Orleans. Have you got any feedback on that?

Thomas Spurling

Analyst

I provided that there. I mean I had one doctor walk into a meeting with us and he said, there's 2 problems with your company. And my first answer was it's not my company, it's our company. The second thing I said -- and so went on to tell me, you haven't got enough sales reps out there. So -- and you are not -- the second point is you've got to really get that message across about the tissue-sparing, implant-free nature of what you're providing here because it's completely different to everybody else in the market. I said, thank you, doctor. That's what we're trying to do.

Mark Flynn

Operator

One question online and what we always see is any change to U.S. reimbursement?

Thomas Spurling

Analyst

So reimbursement is -- well, for 15 -- well, for as long as we've owned the business, which is a long time, reimbursement has been very steady. CPT 1 code, Current Procedural Terminology Code 1, CPT, has been in place for canaloplasty and the rates for calendar year '27 have been proposed and are usually confirmed as final during the month of November, the month we're currently in. So we have -- the proposed rates are the same as the rates in 2026. And then broadly the same has been in place for many, many years before that. So we never -- we're -- we -- within our timing window, our planning window, we're confident about our reimbursement. We're going to keep working at it, though.

Mark Flynn

Operator

Is a future NASDAQ listing being considered?

Thomas Spurling

Analyst

We're a little company at the moment. And you can see sometimes we have trouble getting the attention of the Australian stock market. We have a really interesting company, it would be great. But I think we just focus on where we are today for the time being.

Mark Flynn

Operator

And poor little Australia, we always get the question, are you selling in Australia? If not, why not?

Thomas Spurling

Analyst

So I answered this question in disparaging towards reimbursement people in Australia, and I'm sorry for that. But we've presented data to the American government and said, this is what canaloplasty can do. And they say, okay, that's cool. We will reimburse you for that. We present that data to the Australian government and they say, give us more data, you can conduct a clinical study. And we go, well, internally, the market is not big enough for us to conduct a clinical study just for the Australian market. So it's a work in progress. We see some other ways through. We provide a lot of data on our registry. If you study that registry, it's possible that, that data has lots of market access uses. So for the time being, we are focusing -- we're just going to see the Australian market doesn't compare to the U.S. market in terms of a dollar invested, a dollar return and the speed of dollar return.

Mark Flynn

Operator

I think in the interest of time. One last final question here is if you could point investors to one number, what's the one number they should be watching over the coming months?

Thomas Spurling

Analyst

I think growth stage ophthalmology company, we are -- well, we're all looking at is top line growth, staying up high and a bottom line that doesn't -- that means we can sort out our cash. So we -- top line growth is probably the easiest one to do, but we are doing it in a way to make sure we don't destroy our bottom line. So that's not an easy -- that's not a one-word answer. Sorry about that, Mark.

Mark Flynn

Operator

That's all right. No problems. That's all we have time for today. So thank you, as always, to Tom, and thanks, everyone, for joining us and for your questions as well. If any further, please feel free to e-mail me directly or give me a call. Tom and I will also be on the road through November. We are in Melbourne next week on Thursday, the 12th, and also in Sydney. Tom is in Sydney for another health care conference on Tuesday, the 17th. So if you would like to meet with Tom, please e-mail me or reach out. Our next update will be the half year result in February, which will be the first set of accounts reported in U.S. dollars, which we'll see there. But other than that, thanks again, and have a great day.

Thomas Spurling

Analyst

Thank you.