Pro Medicus Ltd (ASX: PME) shares are having a day to forget on Thursday.
In morning trade, the health imaging technology company's shares are down almost 20% to $136.75.
This follows the release of the company's half-year results.
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Pro Medicus shares crash on results day
For the six months ended 31 December, Pro Medicus reported a 28.4% increase in revenue to $124.8 million. This was underpinned by six key implementations in the half, all of which are cloud-based.
Pro Medicus' underlying EBIT margin increased to 73% from 72% a year earlier. This underpinned a 29.7% lift in underlying profit before tax to a record of $90.7 million.
Reported net profit after tax came in at $171.2 million, which is up 230.9% on the prior corresponding period. This reflects unrealised gains from its investment in 4DMedical Ltd (ASX: 4DX).
Commenting on the company's performance, CEO Dr Sam Hupert said:
Our profits continue to grow strongly even though our biggest implementation during the period in Trinity Cohort 1 went live towards the end of October so had limited impact on the half. Importantly, our margins also grew, and we made more sales in this half than we used to make in a full year just 2 years ago. Most contracts were for the full stack of Visage products – Viewer, Workflow and Archive and two also included our cardiology offering making them full stack +1, a trend we see continuing.
What about the AI threat?
In an accompanying interview, Dr Hupert spoke at length about the threat of AI on the company's business.
The good news is that he doesn't believe its Visage software is going to be replaced by AI. He explains:
The second concern is a belief held by some that new AI tools will radically disrupt software development with Vibe coding helping destroy the "IP moat" of all software and SaaS providers. They claim anyone will be able to use AI tools to write industry grade software in a fraction of the time.
This, in our view, is an overly simplistic generalisation, one that certainly doesn't apply to us. Visage 7 was built from the ground up using our own proprietary technology. It is not based on some readily available tool kit or platform. It is a very specialised, highly technical, patented suite of software that incorporates more than 30 years of domain knowledge; it is not a product that can be readily replicated with or without AI. We have not left a roadmap for others to follow.
