Healius (ASX: HLS) FY2026 Results: Revenue Up 2.1% to $1.37B as EBIT Jumps 76.6% on Pathology Margin Turnaround

Healius posted improved FY2026 profits despite reduced Pathology volumes. Better margins, improved costs, and technological improvements drove performance, with Healius also outlining their FY2027 outlook.

Healius Limited (ASX: HLS)

On 19 August 2026, issued its FY2026 performance. The group recorded an increase in revenue by 2.1%, reaching $1.37 billion. There was an 8.1% rise in EBITDA, resulting in $258.6 million. There was also a significant increase of 76.6% in EBIT to reach $30.2 million. Pathology revenue grew 1.8% to $1.33 billion, while Agilex revenue rose 14.1% to $43.6 million. Agilex EBITDA increased 67.2% to $10.7 million. Net debt was $32.8 million. The company said stronger earnings, improved second-half Pathology margins and cost management helped offset volume and labour cost pressures.

Pathology Performance

Pathology revenue increased 1.8%, despite volumes falling 1.3% from the previous year. Pricing and a favourable revenue mix supported the result, while volumes excluding lost and new hospital contracts increased 0.3%. Genomic Diagnostics, Public Hospitals, Veterinary Pathology and B2B, including Clinical Trials, recorded strong growth. Average fee per episode increased 4.0%. Volumes were affected by Medicare changes to B12 and Urine testing criteria introduced in July 2025, GP attendances falling 0.9%, the loss of two material hospital contracts and rationalisation of the Healius ACC network, which decreased by 100 to 1,883. Pathology EBITDA rose 6.4% to $247.9 million.

Costs Technology

Cost growth was contained at 0.8%, while labour costs were flat year-on-year, including inflation and the Fair Work Commission gender undervaluation determination. Labour costs declined 2.9% in 2H2026. A labour optimisation program reduced overall FTE headcount by approximately 5%. Consumable costs fell 3.8% through favourable test mix, procurement benefits and cost management. The major digital implementation phase was completed, with digital costs included in underlying results from 1 January 2026. The Medway Collections Portal was rolled out across more than 1,700 collection centres, with over 80% of episodes processed digitally. eReferrals are integrated with all major practice management software systems. AI co-workers support high-volume transactions and workforce planning, while two additional AI co-workers are now live. Further AI-supported back-office functions are planned for FY2027. IBEX AI is being used for clinical decision support in complex histopathology.

Outlook

On 13 May 2026, Healius announced it was exploring a sale of Agilex Biolabs following several unsolicited approaches. Strong interest has been received and the process remains ongoing, with an update expected before the Annual General Meeting. UBS Securities Australia Limited is assisting. Under the T27 Plan, Healius has invested in technology, reshaped its cost base and improved revenue quality. The target of mid-to-high single-digit EBIT margins has been extended by approximately 18 months due to Fair Work Commission costs, reduced GP attendances and telehealth mix changes. For FY2027, Healius expects EBIT of $39.7 million, in line with consensus. Pathology volumes are expected to grow with MBS on a like-for-like collection centre basis, with additional profitable sites. Cost growth is expected at 3.5%, with the T27 margin target expected by approximately December 2028. Agilex order book and revenue conversion remain strong and in line with expectations.

(Source: Company Report)