Sonova's Rechargeable ITE Inflection: Virto R Goes from Zero to CHF 120M

The Virto R Surprise

Sonova's full-year results were a study in executing on a focused strategy. Revenue and margin growth came in ahead of the market, with normalized EBITDA margin up 240 bps and Virto R rewriting the custom in-ear (ITE) category playbook. The device, a rechargeable ITE launched in August 2025, went from a product that didn't exist in Sonova's portfolio to a CHF 120 million annual run-rate in under a year, according to CEO Eric Bernard. He put it plainly:

We were not playing in this category of rechargeable ITEs. We came up with Virto. It's an incredible success, and we have reached a cruising altitude of about CHF 120 million per annum of revenue from zero as we were not playing in that space.

That success drove the highest year-on-year market share gain since the Marvel platform launched six years ago. In the wholesale business, sales grew 9.5%, with double-digit acceleration in the second half, helped by new platform launches and the broader ITE category expansion. Eric Bernard highlighted the broad-based nature of the gains: “In our Hearing Instruments segment, growth accelerated in the second half, and this was driven by a very strong development in wholesale, translating into the highest year-on-year market share gain since the introduction of our Marvel platform 6 years ago.” — Eric Bernard, Chief Executive Officer (CEO) · 2026-05-18

APAC: From Strategy to Execution

The APAC strategy, laid out in March, is now showing concrete numbers. Sonova's market share in Asia ex-Australia trails its Western positions by roughly half, but the company is closing the gap with targeted investments. The most striking evidence comes from Japan, where the right product and channel focus are generating explosive growth. “In Japan for the last 5 to 6 months... you are looking at the growth rates of 30% to 45% by just bringing the right product in the right channels with the right focus.” — Eric Bernard, Chief Executive Officer (CEO) · 2026-05-18 This is a step-change from the prior year, when APAC was more about structural readiness than organic momentum. In the November call, the focus was still on setting up the regional structure; now the results are starting to flow through.

The company is also building a physical base in Singapore with government support, signaling a long-term commitment to the region. The broader Asian market opportunity remains one of the biggest underappreciated levers, with management explicitly measuring progress via the KPI of "natural market share"—a target that implies doubling the business in the region if executed well.

Cochlear and the Road Ahead

Not everything was rosy. The Cochlear Implants segment continued to face headwinds from VBP in China, a competitor's launch, and a maturing upgrade cycle. Sales declined 11% (or 3.8% ex-China), and normalized EBITDA margin compressed to 6.8%. Management expects a pickup in the second half of FY27 with the launch of a new sound processor, but regulatory timing remains a variable. As Eric noted, “We are extremely excited about what's coming, but I need to mention that the timing of the launch is subject to regulatory approvals.” — Eric Bernard, Chief Executive Officer (CEO) · 2026-05-18

Financially, the company is in a strong position. Operating free cash flow conversion remained above 90%, leverage fell to 1.1x, and the Board proposed a 7% dividend increase. The Consumer Hearing divestment (now classified as discontinued operations) removes a margin drag and sharpens focus on the core hearing care franchise. For FY27, guidance calls for 5-8% sales growth and 7-10% core EBIT growth at constant FX, with 1-2% retail M&A contribution. The company's confidence is backed by the success of Virto R and the innovation pipeline, including a new AI-enabled platform and a new CI processor.

From a prior call, the Virto R opportunity was framed as a potential CHF 100 million incremental revenue. “It's a segment valued at roughly CHF 400 million. If we reach our natural share of 25% to do the math, it could be an additional CHF 100 million of revenue over time.” — Eric Bernard, Chief Executive Officer (CEO) · 2025-11-15 That ambition has already been exceeded, and the company is barely two quarters into the launch. This is not just a product win; it's a strategic validation that Sonova can create new growth vectors and execute on them.

The real takeaway from this report is that Sonova is no longer just riding a cycle. It is actively reshaping its portfolio through innovation (Virto R, AI platforms), geography (APAC), and capital allocation (divesting Consumer Hearing). The market has yet to fully price in the compounding effect of these moves, especially if the APAC trajectory normalizes toward its stated potential.