Integral Diagnostics Lifts FY26 Earnings as Capitol Synergies Beat Expectations

Integral Diagnostics (ASX: IDX) lifted FY26 revenue 25.6% to $788.7 million and operating NPAT by 50.1% to $47.4m as higher patient volumes, Medicare indexation, and a favourable modality mix combined with benefits from the Capitol Health integration.

The FY25 comparison includes Capitol operations only from 20 December 2024, while revenue growth on a constant-currency basis excluding closed or sold sites was 7.0% after adjusting for working days.

Operating EBITDA rose 30.3% to $164.8m, with the EBITDA margin expanding 80 basis points to 20.9%, while statutory NPAT climbed to $22.0m from $2.8m.

Annual ongoing merger synergies reached more than $14.0m, exceeding the at least $10.0m expected at the time of the merger as procurement, workforce integration and greater teleradiology use delivered additional efficiencies.

The group declared a fully franked final dividend of 6.0 cents per share, up 50%, while targeting sustainable revenue growth, an EBITDA margin above 21.0%, and further de-gearing in FY27.

Strong Capitol Synergies

Capitol integration is now largely complete, with the group procurement function producing savings above initial synergy projections and radiologists contributing to increased teleradiology scale.

On an adjusted pro forma merged basis, FY26 operating EBITDA was 9.8% higher and the margin improved to 20.9% from 20.2%, with labour costs falling 40 basis points as a share of revenue despite continued clinical staff shortages and labour cost inflation.

“IDX delivered a strong FY26 result, with solid revenue growth, improved margins and disciplined execution across the business, resulting in performance in line with our guidance,” chief executive officer Jason Martinez said.

“Looking ahead, IDX is well positioned to benefit from favourable industry fundamentals, including increasing demand for diagnostic imaging services, growth in higher-value modalities, and advances in technology.”

Imaging Demand Growth

Organic Australian revenue increased 7.4%, including 8.9% growth from the legacy IDX business and 5.4% from legacy Capitol, while New Zealand organic revenue rose 2.1% on a constant-currency basis.

Average fees per Australian exam increased 6.5%, comprising a 2.6% price contribution and 3.9% mix benefit as activity continued shifting towards higher-value computed tomography (CT), magnetic resonance imaging (MRI) and positron emission tomography (PET) modalities.

MRI deregulation and the National Lung Cancer Screening Program supported growth during FY26, with Integral Diagnostics holding 42 licensed MRI machines in Australia from July 2025 compared with 23 in the previous corresponding period.

Its network reached 142 sites across Australia and New Zealand with 468 employed or contracted reporting radiologists, while IDXt had 143 teleradiologists at 30 June 2026 compared with 114 a year earlier.

Across FY26, the group served about 1.7 million patients and performed about 4.0 million exams, recording an average patient Net Promoter Score of 81.

Robust Cash Flow Foundation

Operating free cash flow increased 30.7% to $106.4m, with conversion before replacement capital expenditure of 82.0%, while total FY26 capital expenditure was $49.8m including $21.0m directed to growth initiatives.

Net debt was broadly steady at $298.9m, but leverage declined to 2.3 times EBITDA from 2.6 times a year earlier, with $117.0m of committed debt facilities remaining undrawn at 30 June.

Integral Diagnostics expects FY27 capital expenditure of $50.0m to $60.0m as it prioritises revenue optimisation, margin improvement, network expansion, productivity, and technology-enabled transformation.

“Our scale, clinical capability and ongoing focus on operational excellence provide a strong foundation to continue improving patient access, supporting our referrers and delivering sustainable growth, improvement in productivity, margin expansion, and long-term value for shareholders,” Mr Martinez added.