Chrysos delivered an FY26 result that was broadly in line with expectations, but importantly, it avoided the deterioration in machine uptake that the market had become increasingly nervous about. Management was upbeat on the conference call, and the stock continued to trade well through the session, finishing ~17% higher, albeit off a low base.
Key FY26 numbers:
- Revenue of A$88.1 million, broadly in line with the A$89.2 million expected, and up from A$66.1m in FY25
- EBITDA of A$27.2 million, around 2% below the A$27.7 million expected, but up from A$16.07m in FY25
- EBIT of A$5.8 million, below the A$7.4 million expected.
- Net profit of A$1.8 million, versus a loss in FY25.
- EPS of 1.5c, compared with consensus around 2.1c.
- Gross margin of 75.8%, modestly below the 77.0% expected.
FY27 guidance was also reassuring. Chrysos expects revenue of A$108–118 million, with the midpoint of A$113 million slightly ahead of current consensus around A$112 million. EBITDA guidance of A$35–42 million relative to current expectations around A$39 million, with deployment running well to start FY27.
Our thesis on Chrysos has centred on the long-term adoption of its proprietary PhotonAssay technology across the global gold mining industry. The business is founder-led, has a differentiated product and, importantly, a model that should benefit materially as deployments accelerate and utilisation builds across the installed base.
The issue over the past 12 months has been execution. Deployments have underwhelmed expectations, which drove a meaningful derating in the stock. More recently, the doubling of Chrysos’ debt facility has given us greater comfort that the company is preparing for a faster rollout, while very little of that potential acceleration appears to be captured in current sell-side forecasts.
We also believe the share price has been affected by factors beyond the underlying business, including redemptions across growth-oriented funds and tax-loss selling. With the stock trading down ~40% below its March highs (pre-result), there is now ample scope for a strong and ongoing re-rating, in our view.
Against that backdrop, this result was important because the key downside fear did not materialise. Recent weakness in gold prices had raised concerns that miners and laboratories might pull back on PhotonAssay deployments, but there was little evidence of that in either the numbers or management commentary.
MM’s view: This was essentially an in-line result, but against low expectations it was enough to spark a strong relief rally. More importantly, the investment thesis remains intact: PhotonAssay adoption is continuing, management remains confident on deployments, and the balance sheet now has greater capacity to support growth. We continue to own C79 in the Emerging Companies Portfolio and believe the market is still underestimating the earnings leverage available if deployment momentum accelerates through FY27.
MM remains long & bullish C79
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