Investment/ASX: PME/Health technology
Why we hold Pro Medicus for the long term.
Pro Medicus builds Visage 7, the imaging platform used by many of America's leading hospital networks. DMS Group holds a long-term position because the business combines contracted recurring revenue, exceptional margins and a long runway in the world's largest healthcare market.
+22.9%
+24.1%
EBIT margin
revenue, next 5 yrs
rate (6 of 6 in FY26)
Visage 7: the image never leaves the server.
Medical scans are huge. Instead of downloading gigabytes to each workstation, Visage renders images on its own servers and streams only the pixels the radiologist sees. Studies open in seconds, on any device.
- 1
Capture
CT, MRI, X-ray and mammography scanners send each study to Visage, often several gigabytes at a time.
- 2
Store & render
Visage 7 Open Archive stores the study, and the server renders 2D, 3D and AI views close to the data.
- 3
Stream
Radiologists read from the hospital, home or anywhere else. One platform covers viewer, workflow, archive, cardiology and pathology.
Why we believe it is a good long-term investment.
We look for businesses that compound quietly: high margins, sticky customers and revenue that is contracted years ahead. Pro Medicus ticks every box.
- 01 / 06
Contracted, recurring revenue
Hospitals sign 5 to 10 year deals priced per study read. Pro Medicus has A$1.34bn of minimum contracted revenue over the next five years, up 41% in twelve months.
- 02 / 06
Customers don't leave
All six contracts up for renewal in FY26 were renewed, at higher minimum commitments and higher fees per transaction. The historical renewal rate is 100%.
- 03 / 06
Exceptional margins
Underlying EBIT margin reached 74.9% in FY26. Each new study adds revenue at very little extra cost, so profit grows faster than revenue.
- 04 / 06
Growth already signed
16 implementations were completed in FY26, including Trinity Health, UCHealth and BayCare. Much of their transaction revenue starts flowing in FY27.
- 05 / 06
Fortress balance sheet
A$252.3m in cash and financial assets, no debt, and a fully franked dividend of 69c, up 25.5% on FY25.
- 06 / 06
A better entry price
The share price fell from A$336 (July 2025) to A$107.75 (Feb 2026) on sector-wide software fears, while the business kept growing. We see the reset as a chance to build a long-term position.
Five years of compounding.
Figures from Pro Medicus's FY26 results, released to the ASX on 18 August 2026. All amounts in Australian dollars.
Revenue & underlying profit
Revenue up 2.8× and profit up 3.3× in four years.
Underlying EBIT margin
Margins expand as more studies run through the same platform.
FY26 revenue by region
North America drives growth, the world's largest imaging market.
- North America$236.8m · 90.5%
- Australia$19.0m · 7.3%
- Europe$5.9m · 2.3%
FY26 contracts signed
The second-largest sales year in the company's history.
- UCHealth Colorado 10 yrs$170m
- Beth Israel Lahey Health 7 yrs$90m
- Radiology Assoc. (RANT) 5 yrs$44m
- BayCare 7 yrs$25m
- University of Maryland 5 yrs$23m
- Heidelberg University 5 yrs$10m
- 5 other contracts$55m
Share price reset
Key points only. The business kept growing while the price fell.
- Jul 2025Shares reach their all-time high of A$336.
- Feb 2026Low of A$107.75 as fears of AI disrupting software hit the whole sector.
- 18 Aug 2026FY26 results beat forecasts; shares close up 11.9% on the day.
- 12 Oct 2026A$168.37, still about half the 2025 high.
The risks we accept.
A long-term position means knowing what could go wrong, and checking it every result.
- i.Valuation
Even after the fall, PME trades on a high earnings multiple. Any slowdown in growth would weigh on the price.
- ii.Currency
About 90% of revenue is earned in US dollars. A stronger Australian dollar cut FY26 revenue by roughly $12m.
- iii.Execution in FY27
Growth now depends on recently completed sites ramping up their transaction volumes as planned.
- iv.Software sentiment
Fears that AI will disrupt software companies hit the whole sector in 2026. Pro Medicus is building AI into Visage rather than competing against it.
A quality business we intend to own, not trade.
- Investment above A$50,000, classified Long Term
- Held through share price volatility; no short-term price target
- Reviewed at each half-year and full-year result
- Key signals: contracted revenue, renewal rate, FY27 transaction growth
