Monash IVF downgrades FY26 profit again as industry volumes fall

Monash IVF (ASX: MVF) has flagged it will miss profit guidance by 10-15%, blaming headwinds hitting the entire IVF industry. While the stock opened 5.9% lower on Friday, it managed to claw its way back up to breakeven by noon. 

FY26 underlying net profit is now expected to land between $17-18 million, down 12.5% (at the midpoint) on what Monash IVF expected just four months ago. It also marks the second downgrade of the financial year. 

Monash originally forecast FY26 profit of $20–23 million at its FY25 results, but by November had already cut that to the bottom end of the range, citing 12% volume declines and 300 basis points of margin compression. 

The company appeared on track to hit its full-year target at the half, posting $10.4 million in NPAT in its 1H26 result. That kept Macquarie (May-25) comfortable holding full-year guidance at $20 million. There was expectation that it would be a slower second half, but not this slow!

Headwinds for the entire industry

Medicare data shows that stimulated cycle volumes were down 4.7% across the whole Australian market in the three months to the end of April, and volumes continued deteriorating through May and June.

Monash announced operational and cost efficiency initiatives at the first half result in February, but they were implemented too late in the financial year to meaningfully impact FY26 earnings. The benefits are expected to flow through in FY27 instead — essentially, the fix is in motion but the timing didn't align with this financial year.

The company has also been fending off a takeover bid. In April, a consortium comprising Genesis Capital and Soul Potts offered 90 cents per share, which at the time represented a 20% premium to its last close. Monash rejected the bid a week later, citing that the offer price was “at a substantial discount to comparable IVF transactions in the Australian market".

While Monash knocked back the bid and has since downgraded earnings, that 90 cent offer still hangs over the register as a reminder of what someone was willing to pay.

On a brighter note

Within this sector wide contraction, Monash managed to grow its market share from ~19.1% to 20.1% on a rolling three-month basis, with "some states showing significant market share gains". It's a fairly remarkable achievement when you remember that last year Monash implanted the wrong embryo into a patient. Twice. The problem is that it won a bigger slice of a shrinking pie.

The trading update also mentioned that its international operations performed well and overseas volumes are expected to be "materially higher" in H2, which helped offset some domestic weakness.

Though the stock slid early, it seems the market understands that Monash missing its profit guidance for FY26 is largely an external, market-wide volume problem rather than Monash losing ground to competitors or making operational mistakes, as it is now up marginally on the day.