Healthcare sector is likely to witness enhanced imaging volumes as cloud adoption accelerates, and AI reshapes clinical decision-making, Pro Medicus is set to ride all three waves.
And as Australia and its allies step up defence capabilities, DroneShield stands out as a Top ASX-listed player riding the wave of militarised AI adoption. With governments like the U.S. allocate billions toward AI-enabled defence systems, DroneShield finds itself squarely in the funding flow.
Pro Medicus: The AI-Healthcare Powerhouse Transforming Medical Imaging on the ASX
Pro Medicus Limited (ASX: PME) is Australia’s global success story in AI-enabled healthcare imaging. Through its U.S.-based subsidiary Visage Imaging, the company delivers high-speed, cloud-native diagnostic platforms to some of the largest hospital systems in North America. With its flagship Visage 7 platform, Pro Medicus is quietly reshaping how radiologists work by replacing legacy systems with intelligent, scalable solutions designed for precision, speed, and AI integration.
Record Deals That Redefine Scale
FY25 has already been massive for PME. In just the first half of the year, the company secured a $170 million, 10-year contract with UCHealth in Colorado - its largest ever. That followed a $53 million deal with BayCare, a $40 million win with LucidHealth, and another $20 million renewal with FMOLHS. In total, PME added over $365 million in new deals, many of them full-stack rollouts covering its entire product suite including Viewer, Workflow, Archive, and Cardiology modules all in the cloud.
These aren't just contracts; they're long-term volume-based relationships with some of the most respected names in U.S. healthcare. They reflect both PME’s deep technical edge and the healthcare sector’s accelerated shift to cloud-native, AI-ready infrastructure.
Financials Built for Long-Term Compounding
Pro Medicus isn’t just signing deals - it’s delivering strong financials quarter after quarter:
- Revenue surged to $97.2M in H1 FY25 (+31.1% YoY)
- Net profit climbed to $51.7M (+42.7%)
- EBIT margins expanded to 72%
- Operating cash flow reached $48.7M, up from $29M
- Cash reserves rose to $182.3M
- No debt on the balance sheet
This is a company that’s not only profitable it’s extremely capital-efficient, maintaining world-class margins while growing at speed. With a recurring, transaction-based revenue model, PME is now compounding from a position of strength.
Why PME’s AI Playbook Sets It Apart
What truly separates PME from healthcare peers is its investment in clinically embedded AI. Through its Visage AI Accelerator, the company is enabling hospitals to integrate third-party and in-house AI algorithms directly into radiologist workflows. In early 2025, it signed a landmark research collaboration with UCSF, one of the top academic medical centers in the U.S., to co-develop and deploy cutting-edge AI models.
This kind of direct pipeline from research to deployment is rare and it gives PME a massive edge in capturing the next wave of diagnostic innovation. With FDA support growing for AI imaging tools, Pro Medicus is already at the forefront.
Outlook FY25-26: Premium Valuation, Justified
PME is executing flawlessly. It’s profitable, debt-free, and building strategic moats through cloud migration, product integration, and AI innovation. The company is also expanding globally, with North America now contributing the bulk of revenues, and further geographic growth on the radar.
For investors seeking healthcare exposure with high margins, real contracts, and zero hype - PME is more than just a defensive play. It’s the ASX’s healthcare tech champion.
DroneShield: Leading Australia’s AI-Powered Defence Revolution
DroneShield Limited (ASX: DRO) is a Sydney-headquartered defence technology company that specialises in AI-driven counterdrone and electronic warfare systems. Serving military, government, law enforcement, and infrastructure clients across 70+ countries, it offers integrated hardware and proprietary software to detect and neutralise drone threats.
Record-Breaking Momentum
DroneShield’s commercial scale-up has been swift and strategic. In June 2025, it secured a $9.7 million contract from a Latin American military client. More notably, just days earlier, it announced a $61.6 million deal with a European defence agency the largest in company history, surpassing its entire 2024 revenue of $57.5 million.
These aren’t isolated wins. They follow a pattern of repeat contracts from earlier evaluation units, signalling growing trust in DroneShield’s performance, reliability, and innovation.
Performance Metrics That Matter
DroneShield’s Q1 FY25 performance shows significant year-on-year growth:
- Revenue: $33.5 million (+102% YoY)
- SaaS Revenue: $1.67 million (+198% YoY)
- Operating Cash Receipts: $16.8 million (+136% YoY)
- Active Projects: 268 (+188% YoY)
- Global Pipeline: $2.41 billion across 6 key regions
- Cash Balance (May 2025): $213.4 million
- Debt: None
The company aims to derive over 50% of its revenue from recurring software and system sales within the next five years — a notable pivot toward margin expansion and capital efficiency.
Winning the AI Arms Race
At the core of DroneShield’s appeal is its seamless fusion of artificial intelligence with battlefield-ready equipment. Products like DroneSentry-C2 and RFAI-ATK use proprietary machine learning to detect, classify, and engage drone threats in real time even in noisy RF environments. This intelligent decision-making is made possible by a deep, proprietary dataset and real-world testing through defence partnerships.
Outlook: Scaling Smart and Fast
Backed by a strong cash position, no debt, and scalable infrastructure, DroneShield is now expanding manufacturing and deepening SaaS deployment. It’s eyeing opportunities in civilian sectors such as airports, correctional facilities, and stadiums while continuing to grow its military pipeline in Europe, the U.S., and Asia-Pacific.
New product launches, wider SaaS features, and lifecycle contracts are on the roadmap. And as global drone activity increases, so does the relevance of its integrated threat response systems.
Final Take
In the FY25-26 outlook, few ASX companies combine AI, defence, and growth potential as well as DroneShield. It has the cash, contracts, and credibility to scale rapidly and its tech is already battle-tested. For investors looking at defence stocks with real AI leverage, DRO isn’t just an option it’s a standout.
(Source: Company Announcements)
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