Revenue up 42% but missed $2.8m guidance as debtors swelled to $1.0m

Gross margin expanded 140 bps to 31.5% from 30.1%. Despite the top-line lift, the loss before tax was essentially unchanged at NZD 2.3m (FY25: NZD 2.2m), a decline of 0.4%, indicating the gross margin gain was absorbed by operating spend rather than dropping through.

Operating cash outflow widened to NZD 2.5m from NZD 2.3m. Closing cash improved to NZD 1.5m from NZD 0.4m, but the lift came from the NZD 4m capital raise referenced at HY26, not from operations. Trade receivables jumped from NZD 0.02m to NZD 1.03m, lifting receivable days from 5 to 154 and increasing operating working capital by roughly NZD 0.9m.

Trade debtors rose NZD 1.0m year-on-year on revenue growth of NZD 0.7m. In effect, every dollar of additional FY26 sales – and more – is currently sitting in receivables rather than cash. For a sub-scale device business burning NZD 2.5m a year, the cash quality of new revenue matters more than the headline growth rate.

The reaffirmed NZD 2.8m guidance was missed by NZD 0.4m. Management entered 2H FY26 stating the NZD 2.8m target was intact, with a NZD 0.2m deferred revenue impact and public-screening programs expected to contribute around 20% of FY26 revenue. The 2H delivered NZD 1.6m of revenue – a step-up from NZD 0.9m in 1H – but not enough to close the gap. The release does not explain the shortfall.

Runway depends on receivables conversion. Closing cash of NZD 1.5m against an FY26 operating cash burn of NZD 2.5m implies less than a year of operating coverage on its own. Collection of the NZD 1.0m receivable book materially changes that calculation; non-collection or extended terms do not.

The 2H FY26 implied revenue of NZD 1.6m (versus NZD 0.9m in 1H) annualises to roughly NZD 3.1m, so the exit run-rate is directionally consistent with management's pursuit of broader-country sales, the Vietnam screening program targeting 260,000 women, and first sales into India.

No FY27 revenue target is provided in the supplied context. Commentary references a consortium-lead opportunity of up to US$18.4m, but the timing and probability of that figure are not quantified in the release. The result therefore supports a continuing growth thesis at low absolute scale, but does not yet support a path to operating profitability or operating cash breakeven.

The headline revenue growth is less clean: the entire incremental revenue – and more – is currently sitting in receivables, which means very little of the FY26 sales acceleration has yet turned into cash. Operating cash outflow widened by NZD 0.2m despite the revenue lift, and the cash balance improved only because of equity issuance.

The like-for-like loss read is genuine. There is no tax distortion (both periods carry a 0% effective rate) and no discontinued operation, so PBT and NPAT moved together at -0.4%. Inventory days fell from 164 to 99, partially offsetting the receivables build at the working-capital level, but the net operating working capital movement of approximately NZD 0.9m is the dominant balance-sheet signal of the year.

This briefing cannot assess the collectability of the receivables book, the probability or timing of the consortium revenue opportunity, or management's internal cash runway model.