Oxford Nanopore Technologies H1 Earnings Call Highlights

Key Points

• First-half revenue rose 12.3% to £116.7 million at constant currency, below expectations, as China, the Middle East and delayed Americas orders weighed on growth. Oxford Nanopore maintained its 2026 core-business growth target of 16%–20%.
• Profitability improved significantly: gross margin expanded to 62.2%, operating expenses fell 7%, and the adjusted EBITDA loss narrowed 54% to £22.1 million. Net cash was £234.5 million at period-end, with management expecting improved cash performance in the second half.
• Device revenue jumped 32.6%, but consumables grew only 2.7%; management expects consumables growth to strengthen as new systems become active. A new licensing deal adds a $20 million second-half upfront fee, potential future royalties and reported 2026 growth of 23%–27% including the fee.

Oxford Nanopore Technologies LON: ONT reported first-half revenue growth below its expectations as declines in China, the Middle East and delayed orders in the Americas weighed on performance, while gross-margin expansion and lower operating expenses narrowed its adjusted EBITDA loss.

Revenue for the first half totaled £116.7 million, up 12.3% at constant currency. Chief Financial Officer Nick Keher said revenue in China fell about 16% year over year because of enhanced export-control restrictions and changes to commercial operations. Revenue in the Middle East declined about 14% amid the region’s geopolitical situation.

Excluding China and the Middle East, constant-currency revenue growth was approximately 16%, Keher said. EMEAI revenue rose 23.8% at constant currency despite Middle East disruption and research-market headwinds. The timing of customer orders and contract wins in the Americas also affected first-half growth, and the company does not expect to recover those missed revenues in the second half.

Margins improve as EBITDA loss narrows

Despite the softer top-line result, Oxford Nanopore posted gross margin of 62.2%, a 400-basis-point improvement from the prior year and in line with its guidance. The company cited the absence of a prior-year inventory charge, its shift toward a capital-expenditure pricing model, improved yields and consumable recycling as contributors to the improvement.

Adjusted operating expenses declined 7% year over year, reflecting restructuring and efficiency measures undertaken in 2025. As a result, adjusted EBITDA loss improved 54% to £22.1 million from £48.3 million a year earlier.

Net cash stood at £234.5 million at the end of the period, down roughly £70 million from December 2025. Keher attributed the decline to normal working-capital seasonality and one-off items, including bonus payments, and said the company expects a meaningful improvement in cash performance during the second half. Oxford Nanopore continues to expect net cash to bottom above £100 million as it moves toward breakeven.

Device growth outpaces consumables

Device sales increased 32.6%, led by the PromethION range. Revenue and placements for the P2i more than doubled, according to Keher. The company expects the expanded device base to support future consumables demand as customers install and ramp use of their systems.

Consumables revenue grew 2.7%, a slower rate than management anticipated. Keher pointed to the non-recurrence of several large research programs that contributed consumables sales in the first half of 2025, lower average selling prices as customers qualified for higher-volume discounts, and buying-pattern normalization under the company’s CapEx-first device pricing model.

PromethION flow-cell volumes increased more than 20% in the period. Management said consumables growth should strengthen in the second half as new devices become active, comparisons ease against ended research programs, and underlying flow-cell volume growth continues.

• Research revenue increased 5.4% to £76 million, despite an £8.3 million headwind from programs that ended last year.
• Clinical revenue rose 35.4% on a reported basis to £17.6 million, supported by reimbursement-funded laboratories.
• Biopharma revenue grew 25% to £9.5 million.
• Industrial revenue rose 6.2% to £30.7 million, driven by plasmid sequencing adoption.

Guidance maintained; licensing deal provides additional upside

Oxford Nanopore maintained its 2026 guidance for core-business constant-currency revenue growth of 16% to 20% and gross margin of approximately 62%. The company now expects adjusted operating expenses to decline 2% or remain flat year over year, compared with previous guidance for 0% to 5% growth.

The guidance excludes a $20 million upfront licensing fee from a newly announced cross-licensing agreement with an unnamed global diagnostics company. The fee is expected to be recognized during the second half at 100% gross margin. Management also described committed product purchases over 2027 and 2028 and a low- to mid-single-digit royalty on specified products for the life of the relevant patents.

Keher said the company believes roughly 90% of the agreement’s economic value lies in the longer-term royalty stream. Royalties are not included in 2026 or medium-term guidance because Oxford Nanopore cannot reliably forecast the counterparty’s platform revenue.

Including the $20 million upfront fee, management said reported 2026 constant-currency growth would rise to 23% to 27%, while reported gross margin would increase by about 200 basis points to approximately 64%.

Strategy targets research, biopharma and clinical markets

Chief Executive Officer Francis Van Parys said his initial review identified strong technology and global reach but also a need for more customer-focused product development, portfolio prioritization and consistent execution.

The company’s strategy is built around customer-centric growth, focused innovation, disciplined execution and a high-performance culture. Oxford Nanopore plans to prioritize research whole-genome sequencing, biopharma workflows and selected clinical applications, while using partnerships where they can speed adoption or provide capabilities outside its core platform.

Management targets more than £700 million in organic revenue by 2030, adjusted EBITDA margin above 15%, and positive and growing free cash flow from 2028. The 2030 target excludes future business-development deals, licensing and royalty opportunities.

Van Parys said research remains the company’s largest market today, but clinical and biopharma are expected to grow faster and together represent about two-thirds of group revenue by 2030. Management expects biopharma to be the larger near-term growth contributor because adoption cycles can be faster than in clinical markets, where regulatory, evidence and reimbursement requirements can lengthen commercialization timelines.

About Oxford Nanopore Technologies (LON:ONT)

Oxford Nanopore Technologies' goal is to bring the widest benefits to society through enabling the analysis of anything, by anyone, anywhere. The Group has developed a new generation of nanopore-based sensing technology that is currently used for real-time, high-performance, accessible, and scalable analysis of DNA and RNA. The technology is used in more than 125 countries, to understand the biology of humans, plants, animals, bacteria, viruses and environments as well as to understand diseases such as cancer.

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