NIOX Group Sees Clinical Revenue Rise Amid H1 2026 Research Revenue Dip; NIOX PRO® Approvals Set to Boost H2 Growth

Clinical Revenue Growth Driven by NIOX PROAE Regulatory Success and Accumulated Demand

NIOX Group reported clinical revenue of approximately A320.6 million in H1 2026, up A30.6 million or roughly 3% from A320.0 million in H1 2025. This performance aligns closely with the prior year, reflecting the timing of regulatory approvals for the next-generation NIOX PROAE device. The company obtained CE Mark and UK MHRA approval during H1 2026, a key regulatory milestone supporting future clinical sales growth.

The timing of these approvals led to pent-up clinical demand expected to be fulfilled in H2 2026. CEO Jonathan Emms highlighted positive customer feedback on NIOX PROAE, reinforcing confidence in the commercial outlook. Regulatory submissions in the US and Japan are progressing, with approvals anticipated in the second half of 2026, potentially accelerating clinical revenue momentum as customers transition to the new platform.

Research Revenue Decline Reflects Strategic Inventory Focus and Normalised Clinical Trial Activity

Research revenue fell to about A33.4 million in H1 2026 from A35.2 million in H1 2025, a 35% decrease. This drop stems from a deliberate strategy to prioritise clinical inventory over research revenue, rather than reduced demand. The company noted that 2025 research revenue was unusually high due to numerous COPD studies, with clinical trial activity returning to typical levels in 2026.

To improve revenue forecasting, NIOX signed a Master Services Agreement with its largest customer, expected to enhance visibility of future research revenues. Research revenue is projected to increase in H2 2026 as clinical trials normalise and the agreement’s benefits materialise, reducing historical volatility and fostering shareholder confidence in revenue stability.

Gross Margin Rises to 71% on Improved Clinical Sales Mix

Gross margin increased by 100 basis points to approximately 71% in H1 2026 from 70% in H1 2025, attributed to a higher proportion of clinical sales. This margin expansion indicates that prioritising clinical inventory is yielding better unit economics and profitability, supporting enhanced cash flow and financial flexibility.

Operational execution in manufacturing and supply chain remained strong despite transitioning to NIOX PROAE production. Operating expenses were controlled at around A38.8 million in H1 2026, a modest 2.3% rise from A38.6 million in H1 2025, despite ongoing US commercial and product development investments. This disciplined cost management combined with margin improvement signals operational leverage during strategic transition, enabling cash generation and shareholder returns alongside growth investments.

Adjusted EBITDA and Strong Balance Sheet Underpin Shareholder Capital Return Plans

Adjusted EBITDA was approximately A38.3 million in H1 2026, down from A39.2 million in H1 2025, a 9.8% decrease. This decline reflects strategic clinical inventory prioritisation and research revenue timing rather than operational deterioration. The balance sheet remains robust with net cash of A316.8 million as of 30 June 2026, after paying a A36.5 million final dividend. This compares to A319.9 million net cash at 31 December 2025, reflecting dividend payments and working capital investments for NIOX PROAE inventory buildup.

Trading aligns with consensus full-year 2026 expectations of A350.5 million revenue and A317.5 million adjusted EBITDA as of 27 July 2026. The strong cash position supports the Board’s plan to return excess capital to shareholders in H2 2026, with details to be announced alongside interim results expected at September’s end. This strategy reflects confidence in cash generation exceeding operational and debt servicing needs.

NIOX PROAE Regulatory Approvals and Commercial Expansion Mark Key Progress

In H1 2026, NIOX secured CE Mark and UK MHRA approvals for NIOX PROAE, a crucial step for the next-generation platform. US and Japan approvals are anticipated in H2 2026, broadening market access and driving revenue growth. Regulatory submissions are advancing steadily, reducing approval risks.

The company expanded its US sales force fully by March 2026 to accelerate North American market penetration post-approval. It also signed a 10-year exclusive sensor supply agreement, ensuring long-term supply security and supporting product development. Additionally, a Japan pricing increase effective 1 June 2026, following a Ministry of Health reimbursement rise, is expected to boost revenue per unit. These achievements demonstrate a cohesive strategy to grow commercial presence, strengthen supply chains, and leverage pricing power.

Long-Term Agreements Enhance Revenue Visibility and Supply Chain Stability

NIOX’s Master Services Agreement with its largest customer aims to reduce revenue forecasting uncertainty by establishing a framework for clinical research work and revenue recognition, addressing historic variability in research income.

The 10-year exclusive sensor supply deal secures critical component availability, mitigating supply chain risks and supporting anticipated demand growth as NIOX PROAE enters new markets. Together, these agreements build a resilient operational foundation to sustain margin and EBITDA growth over the medium term.

Japan Market Growth Supported by Pricing and Regulatory Advances

Japan is a key growth market, highlighted by a pricing increase effective 1 June 2026 following a Ministry of Health reimbursement boost. This reflects recognition of NIOX’s clinical value in asthma and COPD management. With US and Japan NIOX PROAE approvals expected in H2 2026, combined regulatory and pricing improvements are poised to drive significant revenue acceleration in Japan and beyond.

MyNOAE Home-Use Device Development Adds Medium-Term Growth Potential

NIOX is developing the MyNOAE home-use FeNO testing device, representing a strategic growth diversification opportunity. While details on timeline and commercialization remain limited, this initiative aligns with trends in patient empowerment and digital health, potentially enabling more frequent monitoring and earlier intervention in chronic respiratory diseases.

Successful commercialization of MyNOAE could open new revenue streams through direct-to-consumer sales and home healthcare platforms. Investors should track updates on development progress and launch plans as this could become a significant medium- to long-term value driver.

H2 2026 Outlook and Full-Year Guidance Consistent with Market Expectations

Management expects stronger performance in H2 2026, driven by NIOX PROAE rollout and Japan pricing increases. Consensus forecasts as of 27 July 2026 project full-year revenue of A350.5 million and adjusted EBITDA of A317.5 million, implying H2 revenue of about A326.5 million and EBITDA of A39.2 million.

Key catalysts include delivery of pent-up clinical demand post-US and Japan approvals, recovery in research revenue as clinical trials normalize, and pricing benefits in Japan. Management’s confidence in meeting guidance indicates regulatory timelines remain on track, though investors should monitor approval timing and demand fulfillment closely, as delays could impact H2 results.

Capital Allocation and Shareholder Returns Reflect Strong Cash Flow

NIOX plans to return excess capital to shareholders in H2 2026, reflecting robust cash flow and balance sheet strength. The Board is evaluating the optimal method—potentially special dividends, share buybacks, or a combination—with details expected at the interim results announcement in late September 2026.

This capital return policy underscores management’s confidence in business sustainability and balances shareholder distributions with investments in growth initiatives like MyNOAE and geographic expansion. Investors should watch for updates on the return mechanism, timing, and quantum alongside management’s outlook on reinvestment priorities.