The Pro Medicus Ltd (ASX: PME) share price is down 2% after reporting its FY25 first-half result.
Pro Medicus is a healthcare tech company that provides a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups worldwide.
HY25 result
Here are some of the impressive highlights from the six months to 31 December 2024:
- Revenue rose 31.1% to $97.2 million
- Underlying EBIT margin up to 72% (up from 66% in HY24)
- Underlying profit before tax up 42.9% to $69.9 million
- Net profit after tax (NPAT) up 42.7% to $51.7 million
- Interim dividend per share up 39% to $0.25 per share
- Cash and other financial investments up 17.7% to $182.3 million
During the half-year period, the company won a number of contracts including Trinity Health, Lurie Children’s Hospital and Duly Health and Care. These contracts were for a minimum of $365 million spread over seven to ten-year deals.
It also renewed a large contract with Mercy Health for $98 million over eight years and with a large Australian radiology practice for $32 million over five years.
Additional modules were also added to existing contracts, worth $39 million over five years.
In HY25, the company’s profit margins improved more than expected, mainly because of an increase in transaction revenue.
Management comments
The Pro Medicus CEO Dr Sam Hupert said:
We feel it’s a strong result, underlined by record contract wins and several key implementations, including Baylor Scott & White (BS&W) – which was fully implemented in 11 months from date of signing, a record for the industry. BS&W contributed three months of full revenue in the half and will help build the base for the second half with a full 6 months of revenue.
In addition, contracts won in the first half including Trinity Health will start to contribute revenue in the first half of FY26 and beyond as these implementations ramp up.
Duke and NYU Langone adding Visage 7 Open Archive to their existing contracts as they transition from on-premise to Cloud as well as the two large contract renewals we signed in the half, demonstrate long-term confidence in our technology and products.
Outlook for the Pro Medicus share price
Pro Medicus said the company’s pipeline remains strong across all client classes. It’s seeing “many opportunities” in the USA, many on the back of its annual RSNA conference which in 2024 was the biggest to date.
The fact that its profit margins continue to grow, it’s winning new clients and each client is becoming more valuable to the ASX share – it’s all very promising.
Each year, Pro Medicus is staking a greater claim that it’s the best business on the ASX.
The question is the valuation. What’s a good price? The price/earnings ratio (p/e ratio) is extremely high. But it just keeps rising.
I’d personally look at other ASX growth shares, but I’ve missed on large gains up until now.
