Healius Limited reported solid half-year results for 1H26, with revenue growth driven by pathology and Agilex Biolabs, alongside significant progress in digital transformation and AI integration.
- Group revenue up 3.8% to $688.1 million
- Underlying EBITDA rises 13.1% to $122.2 million
- Pathology revenue growth supported by improved volume mix and cost efficiencies
- Agilex Biolabs pivots to large molecule development, boosting margins
- Completion of multi-year digital transformation and launch of AI co-workers
Strong Financial Momentum
Healius Limited has delivered a robust first half for fiscal 2026, reporting a 3.8% increase in group revenue to $688.1 million. This growth was primarily driven by its core pathology services and the Agilex Biolabs division, which saw a strategic pivot towards large molecule development. Underlying EBITDA climbed 13.1% to $122.2 million, reflecting both top-line growth and ongoing cost optimisation efforts.
The company’s underlying EBIT improved markedly to $7.9 million, reversing a prior period loss of $2.7 million. This turnaround was supported by a combination of revenue mix improvements, labour cost reductions, and efficiency gains across operations.
Pathology and Agilex, Growth and Strategic Shifts
Pathology revenue rose 3.5% to $666.3 million, underpinned by a favourable shift in volume mix, including increased contributions from specialists, hospitals, and business-to-business services such as clinical trials and genomic diagnostics. Labour optimisation programs have reduced labour costs as a percentage of revenue, with further improvements expected in the second half.
Agilex Biolabs reported a 16% revenue increase to $21.8 million and more than doubled its EBIT to $2.7 million. The division’s strategic exit from toxicology to focus on large molecule bioanalytical work, alongside the opening of a new Brisbane laboratory, has positioned it well for future growth.
Digital Transformation and AI Integration
Healius has completed a multi-year digital transformation program, delivering new platforms such as the Medway Collectors Portal, Results Portal, and a forthcoming Patient App. These initiatives aim to enhance patient and referrer experience, streamline workflows, and improve data accessibility.
The company has also introduced AI co-workers, Reva AI and Julie AI, targeting finance transactions and workforce planning respectively, with plans to deploy additional AI tools. This technological leap is expected to drive further operational efficiencies and support margin expansion.
Capital Management and Outlook
Net cash decreased to $11.6 million from $57.2 million at June 2025, influenced by a significant ATO payment, digital program costs, and restructuring expenses. Despite this, Healius remains comfortably within its banking covenants.
Looking ahead, the company targets high single-digit EBIT margins by the end of FY27, supported by continued volume growth, a shift towards higher-margin services, and the full benefits of its technology and cost-saving initiatives. The new five-year contract with the Australian Defence Force, commencing April 2026, is expected to contribute approximately $60 million in revenue over its initial term.
Bottom Line?
Healius’s blend of strategic growth, digital innovation, and disciplined cost management sets the stage for sustained margin improvement into FY27.
Questions in the middle?
- How will the Fair Work gender-based undervaluation decision impact future labour costs?
- What is the expected timeline and scale for additional AI co-worker deployments?
- How will the new Australian Defence Force contract influence Agilex Biolabs’ growth trajectory?