Cochlear shares plunged 15.8% on Friday after the Australian hearing implants maker reported a 9% drop in underlying profit for the six months to December 31, alongside milder annual guidance that fell short of investor expectations. The selloff, which pushed shares to a three-year low, was driven by operational delays in its Nexa Implant System launch and rising cloud computing expenses. Cochlear now expects full-year underlying profit between A$435 million and A$460 million, down from its previous range, citing the Nexa contract renewal process as taking longer than anticipated.

While the company anticipates stronger second-half performance from Nexa and its acoustics unit, it warned of higher cloud-related costs totaling approximately A$80 million for the year. This earnings miss and guidance revision underscore the challenges facing Cochlear as it navigates both product launches and rising tech investments.