Key Highlights

• Underlying EBIT was $196.1 million, up 24.4%, and underlying net profit after tax (NPAT) was $144.7 million, up 24.1%.

• The company reported signing 10 new contracts worth at least $407 million, including a 10-year agreement with UC Health in Colorado.

• Cash and financial Assets were $252.3 million, up 19.7%, and the company has no debt.

• The company's constant-currency growth target, and whether management maintains the 30% ambition, will also be a useful indicator.

Pro Medicus (ASX:PME) answered on 18 August 2026 with FY26 results that combined faster Revenue growth, higher margins and a large set of new and renewed contracts. The result matters because the company's valuation has long rested on the idea that a small number of very large, multi-year contracts convert into predictable, high-margin transaction revenue.

The FY26 numbers

Underlying EBIT was $196.1 million, up 24.4%, and underlying net profit after tax (NPAT) was $144.7 million, up 24.1%. Those figures imply an underlying EBIT Margin of roughly three-quarters of revenue, which is exceptionally high for a software Business and reflects a model with limited incremental cost per additional transaction.

Reported NPAT was $265.3 million, up 130.3%. Readers comparing Earnings should use the underlying figures for Trend Analysis and consult the company's ASX release for the reconciliation.

Currency also matters, because a large share of Pro Medicus revenue comes from United States hospitals and is billed in US dollars. On a constant-currency basis, revenue, EBIT and NPAT each grew by more than 28%, according to the summary, so the Australian-dollar growth rates understate the underlying momentum. Chief executive Dr Sam Hupert said the company exceeded its goal of 30% growth in EBIT and NPAT on a constant-currency basis.

How the business earns revenue

Pro Medicus develops Visage, a cloud-capable platform for viewing and managing diagnostic images such as CT and MRI scans, together with related radiology information system and reporting tools. Customers, mostly large hospital networks and academic medical centres, typically sign long-term contracts, often five to ten years, under which fees are charged per imaging study, subject to minimums. Revenue therefore scales with the Volume of scans the customer performs rather than with the number of software licences sold.

That structure produces two features investors should understand. First, revenue is recurring and contracted but not fixed: it depends on scan volumes, which tend to grow over time but can vary. Second, because costs are largely fixed once a customer is live, margins expand as volumes rise. The trade-off is concentration risk, since implementations are complex and lumpy.

New contracts and renewals

The company reported signing 10 new contracts worth at least $407 million, including a 10-year agreement with UC Health in Colorado. It also renewed six key contracts worth $141 million on five-year terms with higher transaction fees. The renewals are significant because they show existing customers staying with the platform and accepting higher pricing, which supports the margin structure.

A caution on interpretation: contract values are the company's estimates of total fees over the contract term, based on assumed volumes, rather than guaranteed revenue. They also arrive in revenue gradually, after implementation. A large contract signed today may contribute little in the current year and more in subsequent years, which is why the timing of go-lives is as important as the headline value.

Products and growth options

Management said the Trinity implementation is nearly complete, which matters because large rollouts typically ramp volumes as sites go live. New products in digital pathology and AI-optimised reporting are launching, and cardiology is described as a growing focus.

These adjacent markets widen the addressable opportunity beyond radiology, but they are also unproven as revenue contributors. AI-assisted reporting is also an area where larger technology companies and start-ups are investing. Investors should treat the product commentary as an indication of strategy, not as a forecast of revenue.

Balance sheet and Shareholder returns

Cash and financial assets were $252.3 million, up 19.7%, and the company has no debt. The total fully Franked Dividend was 69 cents per share, up 25.5%, including a final dividend of 37 cents.

Competition

Pro Medicus competes with established imaging IT vendors and larger healthcare technology groups, many of which have deeper sales networks and bundled product suites. Its differentiators are performance, particularly speed in loading large image sets, and a single platform architecture. Competitors can respond on price or integration, and hospitals can be slow to change imaging systems.

Risks and what to monitor

The main risks are customer concentration, delays in implementation, scan volume variability, foreign exchange movements (which can reduce Australian-dollar earnings when the US dollar weakens), regulatory and data-security obligations in healthcare, and competition in new product areas.

Items to watch include the pace at which new contracts go live and contribute revenue, whether the digital pathology and cardiology offerings secure paying customers, further renewals at higher transaction fees, and the half-year result for the period to 31 December 2026. The company's constant-currency growth target, and whether management maintains the 30% ambition, will also be a useful indicator.

Summary

FY26 was an encouraging operating year by the reported figures: revenue, underlying EBIT and underlying NPAT all grew by more than 20%, large contracts were signed or renewed, and the company remains debt-free. The open questions are how quickly the contract book converts into revenue, how durable growth is as the base gets larger, and whether the market's expectations are realistic.