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Oticon financials: Wholesale price for hearing aids

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Oticon just released their 2024 financial results (see here35) and it occurred to me that with the information they provide it should be possible to calculate the average wholesale price of their hearing aids. However, the result seems too low, so please tell me where I’m wrong:

Oticon reports 10,022M Danish Krona in revenue from their Hearing Aids division:

Oticon HA revenue 2024

They also brag about having improved the lives of 10.9M people, by which they mean those people were outfitted with their hearing aids:

People who got Oticon HAs in 2024

Simple math leads to

kr10,022M revenue / 10.9M pairs of sold = kr919.45 per HA pair.

Converted to USD, that’s $127 per pair or $63.5 per HA

Since small minority of people may not have needed 2 HAs, Oticon might have sold slightly less HAs. That increases the average price a bit. I’m going to guess we end up somewhere around $70.

That seems… very low…!

[LATER EDIT: a more realistic average price is probably around $250 to $300 - see posts below]

Can anybody shed light on this? Is there a fundamental mistake in the calculation above?

12 people in this conversation9 min readJump to latest

I don’t think you can use those figures to calculate wholesale price.
Someone on this forum had a link to the Veterans HA procurement prices, maybe worth checking.

I agree, it seems wrong, but where is the mistake?

The revenue figure seems pretty clear. I should have included the footnote from the ‘Number of lives improved’ graph, but that also seems pretty clear:

Number of HA wearers

Maybe Oticon’s “number of people who benefit from hearing aids” doesn’t just count the wearer, but also their spouse and maybe even extended family? That might explain it, but it would certainly be misleading…

I found the link, thanks: VA HA procurement33

Their numbers are $400+, presumably per HA. Is there another middleman involved? Or are they overpaying just like any other entity in the American health care system?

If Costco pays the same, I think it would be hard for them to offer the all-inclusive pricing they have right now.

I get my aids from the Veterans Administration, I saw a report about 10 years ago that said that the contracts with the hearing aid companies, all of them, was for the VA to get aids for 10% of the cost. At that time it was figured to be just under $500.

image Came across this on AliExpress while searching for bits and bobs. Who on earth would buy from them, £4635 for a pair of More1’s. A little more than the wholesale price!!

Do we know what is included in revenue received? I suspect that they have sources of revenue other than just sales of hearing aids.

In reply to @Baltazard

The 10,022M revenue are for hearing aids only. Total revenue for Oticon/Demant is 22,419M.

Demant Revenue 2024

However, I should have used the ‘total revenue’ figure and not just ‘external revenue’. I think total revenue includes internal sales to their own ‘Hearing Care’ division.

Redoing the math with kr12,413M revenue leads to a price of $85 per . Seems still too low.

I’m not 100% on this, but would the helping number include:

  1. NHS monaural fittings at £60 a pop.
  2. Developing nations sales.
  3. Repairs.
  4. Refurbished products to charities.
  5. Training and teaching.
  6. 9050s at way less than the headline rate that Costco tell you they pay.

In reply to @wtolkien

How do they calculate the “number of lives improved”? Does that represent the number of hearing aids sold in the current year? If that is a cumulative number (number of new units sold, plus units in use last year, minus number of units discontinued etc) it might or might not make sense. Is there a better description of that number?

I think the definition of ‘number of lives improved’ really is key here. I think it’s clear that they report on an annual basis (they have numbers for each year), but it’s not clear to me that they just count wearers.

If they include spouses and other family, it would mean that they sold less HAs, which would bring up the average price.

The footnote to the chart identifies as : “The number of people who benefit from hearing aids from Dement” It looks to be in the context of their longer range plan ending in 2030. I don’t believe it represents current year units sold.

I agree. I believe that the number is cumulative not the number per year. For example if 1 million people bought hearing aids per year then after 10 years the number would be 10 million - not 1 million.

That would also explain the linear growth i.e. the numbers go up by the same 0.6 or 0.7 million per year.

So from that table it would appear that they sell hearing aids to say 650,000 people per year. Assuming most are sold a pair of aids that would be at least 1 million aids per year. I know almost as many people with one aid as with a pair so it is not as rare as you may think.

In reply to @raylock1

For 2024 it’s 10.9 million and by 2030 they want to achieve 16 million. All numbers are annual.

If it’s cumulative, then they would have only improved 600,000 lives from 2023 to 2024. That’s too low.

Here is another number I found:

In 2024, the European Hearing Instrument Manufacturers Association (EHIMA) reported that global hearing aid sales grew by 7.7% to a total 21.81 million units in 2023.

Given that Demant has about 30% market share, they probably sold between 6-7 million units in 2024. That means they do include family members in their “10.9M people benefitted” number.

That would lead to a unit price of somewhere between $250 and $290. Which seems much more realistic.

Of course, deaf people are the richest people in the world. All luxury cars, yachts, islands, villas, diamonds and emeralds are in the hands of only deaf people. The casino in Monaco is our second home. That’s what hearing aid manufacturers think.

Very true, maybe with the exception of Costco. If Costco pays $600 for a pair of and then adds $1K for the fitting by a professional and ongoing service (and profit), that seems fair to me.

From what you have there is no way you can figure out cost of a unit. Plus that still would not be the cost of purchase for a dealer and they have a variety of instruments. And there is so much more involved in that figure. Seems waste of time to even try and figure it out. JMHO

Suggest looking at the company Financial Report to get more details.
Oticon is a subsidiary of Demant A/S, a Danish company that specializes in hearing aids, audiometric equipment, and personal communication.it does not have a stock symbol. However, its parent company, Demant A/S, is publicly traded on the Nasdaq Copenhagen Stock Exchange under the stock symbol: DEMANT.CO4
Anyone can access their financial reports on their official investor website:
Demant Investor Relations
To find the latest quarterly report, follow these steps:

  1. Visit the Investor Relations page.
  2. Look for the Financial Reports & Presentations section.
  3. Download the latest Q4 2023 or Q1 2024 financial report.
    Here are some highlights of what I found in the lastest filing:

  • Oticon Intent – The latest premium hearing aid launched in February 2024.

  • Features 4D Sensor Technology, which detects the user’s listening intentions and adjusts sound accordingly.

  • Strong sales driver for Oticon, contributing to revenue growth in the hearing aid sector.

  • -Powered Hearing Aids – Demant is investing in artificial intelligence for its in-the-ear devices, with new models launching in Q1 2025.

  • Rechargeable and Custom-Fit Devices – Expansion of smallest form-factor hearing aids to meet market demand.
    Overall Demant A/S Revenue:

  • DKK 22.42 billion (4% increase from 2023).

  • EBIT: DKK 4.4 billion (19.6% margin).

Oticon Sales via Costco

  • Costco continues to sell Philips HearLink hearing aids (made by DEMANT), priced at $1,499 ~ $1,699 per pair.
  • Independent Oticon products (such as Oticon Real and Intent) are priced significantly higher, often exceeding ~$5,000 per pair.
  • Oticon hearing aids are not available directly at Costco, but its Philips-branded products are.

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