IMEXHS Faces Contract Timing and Political Risks Amid Margin Gains
IMEXHS Limited reported a 9% rise in Q3 FY25 revenue and a positive swing to $0.6m underlying EBITDA, reaffirming full-year guidance. Key contract wins and AI-driven efficiencies underpin margin gains despite political uncertainties in Colombia.
- Q3 FY25 revenue up 9% to $7.2m, underlying EBITDA improves to $0.6m
- Annual Recurring Revenue (ARR) grows 24% to $36.4m year-on-year
- New and renewed software contracts in Latin America add $417,000 in NARR
- Radiology services contract in Colombia expected to contribute $1.4m NARR
- AI-driven cost savings and disciplined portfolio management boost margins
Financial Performance and Guidance
IMEXHS Limited (ASX, IME), a cloud-based medical imaging software and radiology services provider, has delivered a solid Q3 FY25 performance with revenue rising 9% year-on-year to $7.2 million. Underlying EBITDA turned positive at $0.6 million, marking a notable improvement from break-even in the prior corresponding period. Year-to-date revenue reached $20.8 million, up 6% excluding a one-off item, while underlying EBITDA climbed to $0.9 million.
The company reaffirmed its FY25 guidance, targeting revenue between $27.5 million and $28.2 million, representing growth of 4.0% to 6.6%, and underlying EBITDA of $1.3 million to $1.6 million, up from $0.5 million the previous year. This steady outlook reflects confidence in ongoing operational execution despite some contract delays into Q4 and early FY26.
Operational Highlights and Contract Wins
IMEXHS’s Annual Recurring Revenue (ARR) surged 24% year-on-year to $36.4 million, driven by growth in radiology services and software segments. The company secured several key contract wins in Latin America, including regaining the flagship OMNI Hospital in Ecuador and renewing and upgrading contracts with Peru’s Grupo San Pablo, collectively adding $174,000 in new annual recurring revenue (NARR).
In Colombia, RIMAB, IMEXHS’s radiology services arm, signed a significant one-year contract with Oncolife, a leading oncology provider, expected to contribute approximately $1.4 million in combined services and software NARR. This deal underscores IMEXHS’s expanding footprint in high-complexity radiology services across the region.
Margin Expansion and AI-Driven Efficiencies
Margin improvement was a key theme in Q3, supported by AI-orchestrated call-centre workflows and a disciplined cost-saving program. The company’s revised pricing structure and active portfolio management, including exiting underperforming contracts, have strengthened profitability in radiology services. IMEXHS expects similar margin gains in its software business over the next six to nine months.
Technological enhancements continued with the rollout of the Aquila+ Radiology Information System (RIS), delivering faster workflows, AI-assisted study prioritisation, and improved user experience. These innovations not only enhance customer value but also reduce the marginal cost to serve, supporting scalable growth.
Navigating Political and Market Risks
Political uncertainty in Colombia’s healthcare sector remains a challenge, with ongoing debates over reform and intermittent payment delays. IMEXHS has implemented a robust contingency plan involving tightened credit controls, re-phased collections, and conservative pricing to safeguard cash flow and working capital. Despite these pressures, the company maintained a strong cash position of $3.0 million and reduced debt to $1.0 million as of 30 September 2025.
Looking ahead, IMEXHS aims to accelerate software growth through a balanced mix of direct sales and an expanding partner network, which now includes 26 high-performing partners across 14 countries. The company’s strategic focus on Latin America, combined with technological innovation and operational discipline, positions it well for sustainable growth amid a complex market environment.
Bottom Line?
IMEXHS’s Q3 momentum and disciplined execution set the stage for growth, but contract timing and Colombia’s political landscape remain key watchpoints.
Questions in the middle?
- Will the delayed contracts in Q3 close successfully in Q4 FY25 or early FY26, and how will they impact revenue recognition?
- How effectively can IMEXHS mitigate ongoing political and payment risks in Colombia’s healthcare sector?
- Can the software segment reverse its slight ARR decline and sustain growth through partner expansion and product innovation?
