Highlights

• Two new US contracts announced in October 2026 are worth A$24 million with Billings Clinic and A$43 million with Virtua Health, both over seven years.

• Revenue rose 22.9% to A$261.7 million in FY26, and underlying net profit after tax rose 24.1% to A$144.7 million.

• North America produced A$236.8 million of the group's A$261.7 million revenue in FY26.

• Forward contracted Recurring Revenue is estimated at about A$1.34 billion over the next five years.

What does a steady stream of new US hospital contracts tell investors about Pro Medicus (ASX:PME), the Melbourne-based medical imaging software company? Two further US contracts announced in October 2026 have added to an already record contract book.

The timing matters.

The October contract wins

On or around 19 October 2026, Pro Medicus announced a seven-year, A$24 million agreement with Billings Clinic – Logan Health in the United States. The deal involves a full cloud implementation of Visage 7, replacing legacy systems and integrating images into the client's electronic health records, with go-live targeted for early 2027.

Two days later the company disclosed a seven-year, A$43 million contract with Virtua Health, a New Jersey health system with five hospitals and roughly 15,000 staff. That deal covers the Visage 7 Viewer, Workflow, Open Archive and Cardiology modules, delivered entirely in the cloud and priced on a per-transaction basis. Implementation was due to begin immediately.

Chief executive Dr Sam Hupert said Virtua joined a growing list of clients choosing the fully cloud-based version of the platform. The inclusion of cardiology is notable, given management's growing emphasis on that module.

How Pro Medicus makes its money

Pro Medicus, through its Visage Imaging subsidiary, sells software that lets radiologists and other clinicians view, store and report on medical images such as CT and MRI scans. Its key selling point is speed: large image files stream rapidly from the cloud.

Most revenue is earned per examination processed, under long-term contracts that typically include minimum commitments. That model means revenue builds gradually as each new site goes live and scan volumes rise, rather than arriving upfront when a contract is signed.

North America is the engine. Australia contributed A$19.0 million and Europe A$5.9 million, according to the company's results presentation.

What the FY26 result showed

Revenue rose 22.9 per cent to A$261.7 million, while underlying Earnings before interest and tax climbed 24.4 per cent to A$196.1 million. The underlying EBIT Margin edged up to 74.9 per cent.

Underlying net profit after tax rose 24.1 per cent to A$144.7 million. Reported net profit was much higher, at A$265.3 million, but most of the difference came from a non-cash Fair Value gain on financial assets, which the presentation linked chiefly to the company's Investment in 4DMedical (ASX:4DX).

A stronger Australian dollar weighed on reported numbers. On a constant currency basis revenue grew 28.4 per cent and underlying net profit 32.5 per cent, and Dr Hupert said the company had exceeded its internal aim of 30 per cent EBIT and profit growth on that basis. The board declared a fully franked final Dividend of 37 cents, taking the full-year payout to 69 cents. The company held A$252.3 million in cash and financial Assets and no debt.

Contracts, renewals and the FY27 runway

FY26 was one of the strongest sales years in the company's history. Pro Medicus signed ten new contracts worth a minimum of A$407 million, led by a ten-year, A$170 million deal with UCHealth in Colorado and a seven-year, A$90 million agreement with Beth Israel Lahey Health. All six contracts that came up for renewal were extended on five-year terms, for a combined A$141 million.

It completed 16 implementations during the year, including the bulk of the large Trinity Health rollout, but many went live late in the period. Management therefore expects a significant step-up in transaction revenue in FY27, although it does not give formal earnings guidance.

Sector conditions and competitive position

Pro Medicus estimates that Visage is used for about 11 per cent of the North American imaging market, which it puts at roughly 690 million examinations a year. That leaves considerable room to grow, but it also means the company competes against larger, diversified incumbents in picture archiving and imaging informatics.

Its pitch rests on performance and on one platform spanning viewing, workflow, archiving, reporting and, increasingly, cardiology. The company also integrates third-party artificial intelligence tools and has a breast cancer detection algorithm, co-developed with NYU, awaiting US Food and Drug Administration clearance. A consistent record of renewals suggests existing customers see value in the product.

Risks and what to watch

The most immediate test is whether newly live sites, including Trinity Health, deliver the transaction growth management expects in FY27. Because almost all revenue comes from North America, currency movements will continue to affect reported results, as they did in FY26.

Other uncertainties include competition for large hospital contracts, the timing of regulatory clearance for its AI products, and movements in the value of its listed investments, which can swing reported profit. Key dates ahead are the AGM on 25 November 2026 and half-year results, which some data providers expect around mid-February 2027. Further contract and implementation updates will also be watched.