Key Highlights

• Management reported that platform Revenue made up 47% of group revenue in the 2026 financial year and 51% in the latest quarter, compared with 33% five years ago.

• For the year to 30 June 2026 (FY26), the company reported revenue of $520 million, up 21% on $431 million, and normalised EBITDA of $163 million, up 29%.

• The normalised EBITDA Margin was about 31%, against 29% the year before.

• Normalised net profit after tax was reported at $59 million, with normalised Earnings Per Share of 11.5 cents.

Why has Imdex (ASX:IMD)'s first-quarter update drawn attention, and what does it tell investors about the business? In short, the Mining technology group reported September-quarter revenue of $161 million, which management says was 31% higher than a year earlier, indicating that its shift towards integrated, data-driven drilling services is outpacing the exploration drilling market it serves.

What Imdex does

Imdex, based in Balcatta, Western Australia, supplies technology to mineral exploration and mining customers. Its products help drillers and geologists collect information about what lies beneath the surface, from downhole survey tools and sensors to drilling fluids and cloud-based software that turns the data into usable geological models.

Revenue falls broadly into two groups. The first is what the company calls platform revenue, which covers integrated hardware, software and services that are rented or subscribed to and tend to recur. The second is equipment, sales and services, which includes product sales such as drilling fluids. Management reported that platform revenue made up 47% of group revenue in the 2026 financial year and 51% in the latest quarter, compared with 33% five years ago.

The central development: a record year, then a encouraging start

For the year to 30 June 2026 (FY26), the company reported revenue of $520 million, up 21% on $431 million, and normalised EBITDA of $163 million, up 29%. The normalised EBITDA margin was about 31%, against 29% the year before. Normalised net profit after tax was reported at $59 million, with normalised earnings per share of 11.5 cents.

The full-year Dividend was 3.4 cents per share, fully franked, including a final payment of 1.75 cents, equivalent to roughly 30% of normalised profit. Cash conversion eased to 83% from 95%.

In the September 2026 quarter (1Q27), management said revenue of $161 million was up 7% on the previous quarter, with organic growth of 21% and about $12 million contributed by acquisitions. Platform revenue was $82 million, up 44%, while equipment, sales and services revenue was $79 million, up 20%.

By region, the Americas generated $77 million, Europe, Middle East and Africa $41 million, Asia-Pacific $36 million and the smaller DEK segment $7 million. All four were higher than a year earlier.

Acquisitions and the balance sheet

Growth has been supported by five FY26 acquisitions: Earth Science Analytics, Datarock, ALT, Mount Sopris Instruments and Krux. These broaden Imdex's software and downhole-measurement offering. Management said integration was complete for three of the five.

The cost shows up in the balance sheet. Net Debt rose to $199 million from $13 million a year earlier, and Leverage was 1.3 times, which the company has described as within its target range. Higher debt makes the Business more sensitive to any slowdown in customer activity and to interest costs, even though earlier Acquisition debt, associated with Devico, was reportedly repaid in under three years.

Sector conditions and competitive position

Imdex's earnings depend on exploration spending, which tends to follow Commodity prices and the ability of smaller explorers to raise capital. Management pointed to supportive conditions: exploration budgets that rose by double digits in 2026, more encouraging gold prices, copper at historically high levels, and government focus on critical minerals Supply chains. It also cited junior and intermediate miners raising about US$27 billion over the past twelve months, versus roughly US$15 billion in the prior period.

Its "share of wallet", the amount it captures per $100 of global exploration spend, was reported at $2.40 at 30 June 2026 and $2.50 for the latest quarter.

Those figures are management measures, presented in dollars that are presumably Australian, rather than independently audited numbers, and the market-growth comparisons rest on company estimates. Imdex competes with large drilling-services groups and specialist instrument makers, and its position rests on keeping its technology embedded in drill sites and winning more customers onto its platform.

Investment and margins

Research and development spending was 9% of revenue so far this financial year, and management forecasts 10% for FY27. A transformation program is aimed at lifting the EBITDA margin from FY28, which suggests near-term margins could be influenced by continued Investment and integration costs. The company said integration spending was trending lower.

Risks and uncertainties

Several points deserve attention:

• Cyclical demand: exploration budgets can contract quickly if commodity prices fall or Equity markets close to junior explorers.

• Acquisition execution: two of the five acquired businesses were still being integrated, and benefits may take time to appear.

• Leverage: net debt is materially above last year's level.

• Currency: Imdex earns much of its revenue overseas, and FY26 revenue growth was 23% at constant currency versus 21% as reported, showing foreign exchange can matter.

• Cash conversion: the decline to 83% is worth monitoring.

• Customer adoption: results depend on how many drill sites use its integrated solutions, which rose 42% on average in FY26 but could slow if customers cut budgets.

• Margin delivery: the planned uplift from FY28 is a company ambition, not a guarantee.

What to watch next

Investors may wish to watch whether platform revenue keeps rising as a share of the total, how integration costs evolve, whether debt falls, and whether exploration spending holds up.