This article first appeared on GuruFocus .
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Revenue:FY26 revenue grew 15% year-over-year to just shy of $61 million, with second-half revenue up 27% versus the first half.
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Gross Margin:Gross margin decreased from 61% to 58% for the full year, but improved significantly in the second half to 62% from 53% in the first half.
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EBIT Margin:EBIT margin was 25% for the full year, with second-half EBIT margin reaching 30%.
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EBITDA Margin:EBITDA margin was 30% for the full year, improving from 24% in the first half to 35% in the second half.
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Profit Before Tax:Profit before tax grew 16% year-over-year, with profit before tax margin maintained at 26%.
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Net Profit After Tax:Net profit after tax grew 17% year-over-year.
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Sales Contracts:New sales contracts totaled $89 million, up 116% year-over-year.
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Contracted Future Revenue:Record contracted future revenue of $118.5 million as of June 30, 2026, with $48.3 million expected to be recognized in FY27, up 54% year-over-year.
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Clinical Trials Revenue:Second-half clinical trials revenue was $32.7 million, up 17% on the prior corresponding period and 27% versus the first half of FY26.
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New Indications Revenue:Revenue from mood, sleep, and other neurological disorders grew 148% year-over-year, now representing 30% of FY26 revenue, up from 14% in FY25.
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Central Rating Revenue:Central rating revenue grew 31% year-over-year.
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Scale Management Revenue:Scale management revenue grew 186% year-over-year.
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Operating Expenses:Operating expenses declined as a percentage of revenue from 31% in FY25 to 28% in FY26.
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Cash Position:Company ended the year with almost $35 million in cash and no debt.
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Dividend:Declared second annual dividend of $0.04 per share, up from $0.02 per share last year, representing a payout ratio of 40% of net profit after tax.
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New Trials Initiated:90 new trials initiated during FY26, up from 35 in FY25.
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Active Trials:Managing 171 clinical trials at year-end, up from 110 at the same time last year.
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Phase Two Trials:Active phase two trials increased 73% to 78 studies.
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Release Date: August 18, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record financial results with revenue up 15% to nearly $61 million and profit before tax up 16%.
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Strong sales performance with $89 million in new contracts, up 116% year-over-year, and a record 90 new trial starts.
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Diversification into mood, sleep, and other neurological disorders, with revenue from these areas growing 148% and now representing 30% of total revenue.
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Significant growth in contracted future revenue, with $118.5 million under contract and $48.3 million expected to be recognized in FY27, up 54%.
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Successful expansion of strategic partnerships, with 40% of new sales contracts coming through channel partners, including a growing pipeline from Medidata.
Negative Points
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Gross profit margin decreased from 61% to 58% due to intentional investment in capabilities ahead of expansion into new indications.
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Revenue growth is expected to show a second-half bias, with the first half of FY27 likely weaker than the second half.
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Dependence on in-period conversion of sales contracts for FY27 revenue growth, which can be lumpy and unpredictable.
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Foreign exchange gains provided a small boost to EBITDA, and maintaining margins without such gains will require operational improvements.
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The increase in phase two trials (up 73%) carries risk as not all studies will progress to phase three, potentially impacting future revenue.
Q & A Highlights
Q: What is the business case and expected financial impact of the company's technology and AI investment? A: Darren Watson (CFO) detailed a well-defined two-year plan to build an AI-powered operating platform. The investment, which will be largely capital in nature, targets workflow automation and orchestration to replace manual processes (e.g., email, spreadsheets) and build out customer-facing portals. The goal is to limit headcount growth as the business scales, thereby expanding gross profit margins beyond the current 58-60% range over the medium term. The project will deliver value in regular releases throughout the two-year build.
Q: What visibility does CogState have on future Alzheimer's disease work from major pharmaceutical companies, and how is it positioned for the shift towards pre-symptomatic programs? A: Brad O'Connor (CEO) stated that while new trial starts in Alzheimer's have slowed, the company remains bullish on the space, awaiting readouts from important pre-symptomatic studies. Rachel Colite (EVP Clinical Trials) added that long-standing relationships provide line-of-sight into late-phase pipelines. On pre-symptomatic positioning, Brad O'Connor highlighted that CogState is the market leader in this patient population and that recent analysis shows its digital endpoints, combined with biomarkers, provide a five-fold increase in predicting the rate of decline in patients with abnormal amyloid levels.
Q: Has the win rate for channel partners stabilized, and what is the trend? A: Brad O'Connor (CEO) explained that the Medidata partnership, launched in October 2024, has matured significantly. After a learning phase in FY25, channel partners contributed to ~40% of new sales contracts in FY26, with about half of that coming from Medidata. He noted a second-half skew in sales through Medidata as the win rate improved, and that the September quarter is seeing an even higher win rate on proposals, indicating substantial upside from the FY26 performance.
Q: What are the key risks in converting future contracts into revenue? A: Brad O'Connor (CEO) stated that the primary risk is not conversion but the inherent volatility in quarterly sales figures. He noted that while FY26 saw consistent quarterly sales of $20-25 million, this level of consistency is not guaranteed. He advised investors to focus on the bigger pictureclinical trial starts, investment in new indications like psychedelics and sleep, and the maturing go-to-market strategyrather than short-term quarterly fluctuations.
Q: With the FY27 guidance to maintain EBITDA margins, does this imply that the actual operating margin, excluding foreign exchange gains, will improve? A: Brad O'Connor (CEO) confirmed this interpretation. He acknowledged that the company benefited from favorable forward hedging following the US "Liberation Day" tariff announcement, which boosted FY26 results. Since the company cannot rely on a similar favorable FX move, maintaining the EBITDA margin in FY27 will require genuine underlying margin improvement from operations.
Q: What is the typical duration of a clinical trial contract? A: Rachel Colite (EVP Clinical Trials) explained that contract duration varies widely by indication. Alzheimer's disease trials can range from 12-18 months for Phase 2 asymptomatic studies to 5-8 years for disease-modifying trials. In contrast, sleep and psychiatric trials (e.g., depression, anxiety) can be much shorter, often enrolling quickly and completing in a matter of months.
Q: Are pharmaceutical companies looking at the effect of anesthesia and cancer treatment on brain function? A: Rachel Colite (EVP Clinical Trials) confirmed that CogState has seen such trials, particularly in an academic setting as investigator-led studies supported by its academic research group, and has also observed a few in the pharmaceutical-sponsored space.
Q: What is driving the increase in activity and revenue growth beyond Alzheimer's disease? A: Rachel Colite (EVP Clinical Trials) attributed the growth to the successful strategy of expanding into psychiatry, sleep, and broader neuro indications, which are attracting significant biopharma investment (e.g., psychedelics, orexin programs). The company has also expanded its services, such as central rating and rater training, which increases the value of contracts. Favorable market conditions and the expanding strategic partner model, particularly with Medidata, are also key drivers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
