Pro Medicus FY24 Earnings Call Highlights

Pro Medicus (ASX: PME) shares surged 8% on Wednesday after its FY24 results topped analyst expectations and management have guided to a "material step-up" in transaction volumes for FY25.

FY24 Earnings Summary

• Revenue up 29.3% to $161.5m, in-line with consensus

• EBIT margins up 230 bps to 69.5%

• Net profit up 36.5% to $82.8m, 4.5% beat vs consensus

• Cash at bank up 27.9% to $155.4m

• Final dividend of 22 cents per share

• Total dividend for FY24 up 33% to 40 cents per share

Earnings Call Highlights

Growing cash position: "We continue to accrue cash even after paying dividends and making an investment in Elucid ... The Board decided as final dividend, which was a record A$0.22 fully franked." – CEO Sam Hupert

Contract wins: "There were nine new contract wins in North America. All of them were cloud-based... Our first contract out of the gate was Memorial Sloan Kettering... followed in September by our biggest contract to date with Baylor Scott and White in Texas." – CEO Sam Hupert

Customer pipeline: "Our pipeline going forward continues to grow strongly... We have had increasing number of inbound RFPs... we see that cadence increasing further." – CEO Sam Hupert

On margins: "We had managed to contain our cost base. So, margins have grown further from last year as our footprint increases." – CEO Sam Hupert

Cloud adoption: "Most recent sales for more than one product, manifold stack, they have all been cloud and cloud deployed ..." – CEO Sam Hupert

New markets: "We are looking at some new geographic markets. But I think our main focus is currently the US simply because we have so much runway there, and we are making very significant inroads." – CEO Sam Hupert

Analyst Q&A Highlights

The below topics have all been answered by Chief Executive Sam Hupert.

On children's hospitals and price increases: “It’s a sub-specialised area, and children's hospitals do communicate with each other... It's a slice of the pie that we're showing we can address ... We are seeing price accretion in what we are quoting ... But it's always in combination with the number of features we put out.”

Potential to win a contract with a top 10 US hospital: “We do have opportunities across all segments of the market... Some shifting. We've had a number of opportunities in the past where they’ve gone further downstream.”

Operating leverage into 2025: “It is a highly scalable business, so margins could grow... We don’t expect that they’ll go down.”

Lost contracts in the past year: "Yeah. So the answer to the first one is, no, we haven't lost anybody. So our retention rate is 100%."

R&D as a percentage of revenue: "We spent about 7% on R&D as a percentage of revenue, which has come down from previous years, but not as an absolute number."

Top 10 customer contribution: "They contribute about 25% of our overall sales."

This article was generated with the support of AI and reviewed by an editor.