There are few ASX companies that have captured investors’ attention this decade like Pro Medicus (PME). Revenue up 180% over five years saw its share price increase 23-fold from the COVID lows, earning the medical imaging software company one of the market’s most demanding valuations along the way.

But that valuation came unstuck late last year, when the “SaaSpocalypse” hit – the market’s name for the savaging of software-as-a-service stocks. The argument is that AI has collapsed software development costs, so customers can build their own tools or buy far cheaper ones. Investors didn’t wait to find out whether it was true – they simply stopped paying premium prices for SaaS-style revenues, and PME, among the most expensive stocks on the ASX, had the furthest to fall.

Pro Medicus (PME) price chart (Source: Market Index)

By late February, PME shares had lost over two-thirds of their value, bottoming at $107.75 against an all-time high of $336 set in July 2025. Today’s numbers are the first full-year scorecard since the swoon, and the first chance the company has had to answer the doubters.

When a market prices perfection, a strong result and a disappointing one can look very similar. So, did PME deliver? Is AI hollowing out its lucrative software contracts? What’s to come? Let’s dive in.

FY26 by the numbers: ahead of forecasts but currency drag

Every headline line item landed ahead of where the market had it. Macquarie had forecast FY26 revenue of $255 million, net profit of $139 million and an EBIT margin of 73.7% – numbers broadly in line with the wider analyst consensus.

• Revenue: $261.7 million, up 22.9% – 2.6% ahead of forecast
• Underlying EBIT: $196.1 million, up 24.4%
• Underlying net profit after tax: $144.7 million, up 24.1% – 4.1% ahead of forecast
• EBIT margin: 74.9%, vs 74.0% last year – ahead of 73.7% forecast
• Cash and financial assets: $252.3 million, up 19.7%, with no debt
• Total dividends: 69 cents per share, fully franked, up 25.5%

The profit line beat by more than the top line, and that gap is improved margin doing the work. On revenue above $260 million, 1.2 percentage points of upside is worth roughly $3 million, straight to the bottom line. The stronger Australian dollar trimmed around $12 million of revenue and $9.8 million of profit, and stripping that out, revenue was up 28.4%, EBIT up 30.6% and net profit up 32.5%. Classic Pro Medicus growth rates, and a reminder of why the market loves this software story.

Contracts and renewals: 100%

Ten new contracts worth a minimum $407 million made this the second-biggest sales year in company history, behind FY25’s Trinity Health win. The key deals: a 10-year, $170 million deal with UC Health Colorado and a seven-year, $90 million deal with Beth Israel Lahey Health.

On renewals, six contracts came up and six were renewed, all on five-year terms, for a combined $141 million – most with higher minimum commitments and all at higher fees per transaction.

That matters because the renewal book is where the SaaSpocalypse thesis gets tested first. If AI really is hollowing out software contracts, this is where it would show up. CEO Dr Sam Hupert met the question head-on, saying the company's renewals performance points to customer confidence in its value proposition. PME's historical renewal rate remains 100%.

Customers were free to test the market, AI-engineered or otherwise, and so far it seems PME remains their best option.

Implementations: signed in FY26, earned in FY27

Management’s performance is best explained by one number: 16 – the implementations completed during the year, including the first four Trinity Health cohorts and large-scale rollouts at the University of Colorado and BayCare. Hupert framed PME’s installation speed as a competitive weapon, arguing most rivals need years for even one such rollout.

Pro Medicus is paid largely per transaction, so revenue only starts once a site goes live. Many of those implementations landed late in the second half, which means the revenue lands in FY27. Hupert expects them to deliver “a significant step-up in transaction revenue” as each contributes a full twelve months.

Conclusion

Almost $550 million of business written or renewed in a single year, and sixteen systems brought live – with most of the revenue from all of it still ahead of the company rather than behind it. If FY26 was the year the work was done and FY27 is when it gets paid for.

The risks are just as visible, however. The currency can keep moving, the FY27 step-up depends on sites that have only just gone live, and at a consensus P/E multiple for FY27 of 103, PME is arguably still priced for near-perfect execution. This means it has little room to disappoint.

What to watch over coming months is whether transaction revenue steps up as management has signalled, and whether the renewal book holds its shape. Often the strongest confirmation that a narrative is playing out is a rising share price, and investors should watch it closely.

This article draws on institutional research from Macquarie (August 2026), and on Pro Medicus Limited’s FY26 results announcement and an accompanying interview with chief executive Dr Sam Hupert, both released to the ASX on 18 August 2026.