Pro Medicus (ASX:PME) said it delivered another record half-year result, with CEO Dr. Sam Hupert highlighting revenue growth, expanding margins, and a surge in new contract wins as large implementations ramp up and new modality offerings begin to contribute.
Financial performance and capital management
Hupert said revenue rose 28.4% for the half, while underlying EBIT increased by about 30% and EBIT margins improved period-on-period. Cash and investments increased 5.3% despite share buybacks, higher dividends, and a $10 million investment made during the period.
Record contract wins and growing forward revenue
Management described the half as “another record” period, citing seven new contracts totaling AUD 280 million at minimum total contract value (TCV). Hupert said that level of sales would have represented a full year of contract wins just two years earlier.
Key wins and renewals discussed included:
- University of Colorado (UCHealth Colorado), described as a $170 million “full stack plus one” deal that includes cardiology in addition to worklist, viewer, and archive.
- University of Heidelberg in Germany, which management characterized as a high-profile academic and cancer research institution expected to expand the company’s footprint in Europe.
- A $44 million five-year contract with Radiology Associates of North Texas (RAN), described as the largest private radiologist-owned reading group in the U.S.
- BayCare, a $25 million deal that adds the archive to its viewer workflow and moves the client to “full stack.”
- Renewal of the FML contract.
Hupert said Pro Medicus’ five-year forward revenue based on contractual minimums exceeded AUD 1 billion for the first time, describing the model as an “annuity sales stream” with predictability and upside as client exam volumes grow above industry averages.
Implementation timing: Trinity cohorts and second-half weighting
Responding to questions on revenue timing, Hupert said the company expects a step-up in second-half revenue as major go-lives contribute for a fuller period—particularly the Trinity Health rollout. He said Trinity’s first cohort went live at the end of October (a timeline set by the customer), and the second cohort was completed in January.
Management said there are five cohorts in the first tranche, with four cohorts expected to be completed by June 30 and another early July, and that the full Trinity implementation is expected to be completed by October. In response to another question, management said those first five cohorts represent about 80%–85% completion of the Trinity project, supporting a stronger second half and momentum into FY2027.
On UCHealth Colorado, management said the implementation starts in April and finishes around July in three phases, implying a modest second-half FY2026 contribution and “pretty much full revenue” in FY2027.
Product strategy: cloud-native “full stack,” cardiology, and pathology
Hupert reiterated that Pro Medicus operates a software-only model with no CapEx requirements for hardware or cloud infrastructure and said this supports scalability and margin expansion. He said the company has not delivered an on-premise implementation in the U.S. in about five years and described Visage as cloud-native and cloud-vendor agnostic, with large deployments across AWS, Azure, and Google Cloud.
Management said clients are increasingly buying “full stack”—viewer, archive, and workflow—which it said increases contract value and simplifies implementations by reducing third-party dependencies.
On expansion beyond radiology, management emphasized cardiology’s early traction and pathology’s progress. Hupert said cardiology is on the same code base as Visage 7 and integrates with third-party reporting systems such as Epic Cupid. He said the company is seeing pipeline opportunities that include both radiology and cardiology, and noted cardiology represented about 13%–15% of the UCHealth Colorado contract value and about 10%–12% in another recent deal.
For digital pathology, management said the product was announced last year and is moving through validation and FDA approval processes. Hupert said an initial client deployment could occur within the next few months under internal validation, and that pathology is increasingly becoming an important factor in vendor selection even if not yet included in many RFPs.
AI commentary, investments, and federal opportunities
Hupert addressed investor questions on artificial intelligence, calling broad claims of AI “laying waste” to software businesses an overstatement. He said Pro Medicus expects to benefit from hyperscaler AI infrastructure buildouts given its capital-light model and described Visage as proprietary, domain-specific, and supported by regulated implementation processes and long-term contracts.
Management outlined two AI monetization approaches: AI embedded “under the bonnet” to improve workflow, and opt-in “second set of eyes” tools that would be charged on a per-use basis. The company also discussed third-party AI integrations designed to keep tools seamlessly embedded in the Visage workflow, citing partnerships such as cardiac CT AI with Ellucid and collaborations with academic medical centers. Hupert said a breast cancer detection algorithm developed with NYU is currently with the FDA.
On investments, management detailed a $10 million hybrid debt-and-equity investment in 4DMedical with a 12.5% annual coupon, noting an unrealized gain of about AUD 150 million as of Dec. 31, and said the investment cannot be realized until the two-year term ends.
In federal markets, management said VISN-23 is progressing toward a secure GovCloud deployment and is expected to be completed by the end of March, positioning it as a “poster child” for expansion to other VISNs and broader Department of Defense opportunities.
About Pro Medicus (ASX:PME)
Pro Medicus Limited engages in the development and supply of healthcare imaging software and services to hospitals, diagnostic imaging groups, and other related health entities in Australia, North America, and Europe. The company offers Visage radiology information systems (RIS), a proprietary medical software for practice management, training, installation, professional services, and after-sale support and service products; and Promedicus.net, an e-health platform. It also provides healthcare imaging software that provides radiologists and clinicians with visualization capability for viewing 2-D, 3-D, and 4-D medical images, as well as picture archive and communication system (PACS)/digital imaging software; and integration products.
