Pro Medicus delivered a robust FY26 with 28% underlying revenue growth, a surge in new contract wins worth $407 million, and a 25% increase in fully franked dividends, underpinned by strong AI product development and rapid implementations.
- 28% underlying revenue growth on constant currency basis
- New contracts worth A$407 million, including $170 million UCHealth Colorado deal
- Six contract renewals secured with 5-year extensions
- AI-enabled products progressing, breast cancer detection pending FDA clearance
- Fully franked dividend increased 25.5% to 69 cents per share
Record Contract Wins Drive Revenue Surge
Pro Medicus (ASX:PME) has reported a standout FY26, with underlying revenue up 28.4% on a constant currency basis to A$273.5 million. The company secured 10 new contracts valued at A$407 million, including a landmark 10-year, A$170 million deal with UCHealth Colorado, its second-largest contract ever. Other significant wins included a $90 million, 7-year contract with Beth Israel Lahey Health and a $44 million, 5-year deal with Radiology Associates of North Texas. These wins reflect growing traction across academic medical centres, integrated delivery networks (IDNs), and private practices in North America and Europe.
Renewals were equally impressive, with six contracts worth A$141 million extended for five years, all at higher transaction fees, underscoring strong customer confidence. Notable renewals include agreements with Northwestern Health, Medstar, and Ohio State University, the latter incorporating cardiology modules for the first time.
Strong Profit Growth and Balance Sheet Resilience
Underlying EBIT rose 30.6% on a constant currency basis to A$206 million, lifting margins to 74.9%, while underlying NPAT increased 32.5% to A$154.5 million. The reported NPAT surged 130.3% to A$265.3 million, boosted by a substantial unrealised fair value gain of A$174 million on financial assets. Pro Medicus remains debt-free with cash and financial assets of A$252.3 million, up nearly 20%, supporting ongoing investments and shareholder returns.
The company declared a fully franked final dividend of 37 cents per share, bringing total dividends for the year to 69 cents, a 25.5% increase. This reflects confidence in the company’s cash flow generation and growth prospects.
Accelerated Implementations and AI Product Progress
FY26 was the busiest year yet for implementations, with 16 go-lives including four cohorts of the massive Trinity Health contract and major projects at University of Colorado and BayCare. Pro Medicus’ rapid deployment methodology, delivering implementations in a fraction of the industry norm, is a key competitive advantage that frees up resources and accelerates revenue recognition.
On the product front, Pro Medicus continues to expand its AI capabilities. Its breast cancer detection algorithm, co-developed with NYU, is pending FDA clearance, while investments in 4DMedical and Echo IQ deepen its AI portfolio. The company also launched new modules for digital pathology and AI-optimised reporting, extending its ‘one platform’ strategy to cover all imaging modalities including cardiology.
Market Position and Growth Pipeline
Pro Medicus now serves approximately 11% of the US market, including 11 of the top 20 US hospitals, and is expanding its footprint in Europe with the University of Heidelberg win. The company’s cloud-native Visage 7 platform, with its unique streaming technology, addresses the growing data demands of modern imaging and the acute radiologist shortage, positioning PME well for continued growth.
The pipeline remains robust with increased inbound RFPs across all segments, driven by cloud adoption, data explosion, and network effects from its expanding client base. The company sees cardiology and digital pathology as important growth levers complementing its core radiology offerings.
Bottom Line?
Pro Medicus’ FY26 results showcase a company capitalising on its cloud-native platform and AI integration to capture a growing share of a complex, data-intensive healthcare market, setting the stage for strong FY27 revenue growth from recent implementations.
Questions in the middle?
- How will FDA clearance of the breast cancer AI algorithm impact Pro Medicus’ competitive position and revenues?
- Can Pro Medicus sustain its rapid implementation pace as contract sizes and complexity increase?
- What is the potential scale and timing of revenue contributions from new digital pathology and AI reporting products?