Healius (HLS) H1 2026 earnings summary

Executive summary

• Revenue grew 3.8% to $688.1 million in H1 FY26, with underlying EBITDA up 13.1% to $122.2 million and EBIT improving to $7.9 million from a prior loss.

• Cost reduction initiatives, especially in labor, are delivering benefits, with annualized savings of $18 million achieved so far and more expected in H2.

• Strategic focus remains on digital modernization, customer service, and expanding high-value segments like genomics, clinical trials, and B2B services.

• Net cash position at 31 December was $11.6 million, down from $57.2 million due to non-operational outflows including ATO payments and restructuring.

• Net loss after tax widened to $30.4 million from $12.8 million year-over-year, reflecting a 137.5% increase in reported losses.

Financial highlights

• Pathology revenue up 3.5% year-over-year to $666.3 million; Agilex revenue up 16% to $21.8 million, with EBIT up 145.5% to $2.7 million and margin at 12.4%.

• Labor costs reduced to 49.3% of revenue in Q2, with headcount reductions and efficiency gains.

• Consumables costs fell to 15.8% of revenue, down from 16.6% prior period, despite higher volumes.

• Non-underlying items totaled $20.8 million, mainly digital transformation and restructuring.

• Interest costs fell 29.8% to $23.6 million due to lower average debt levels.

Outlook and guidance

• FY26 earnings expected to be in line with consensus EBIT of around $48 million.

• Revenue and profitability expected to be weighted to H2 due to seasonality and timing of cost savings.

• Targeting high single-digit EBIT margins by June 2027, driven by volume growth, pricing, and cost control.

• Full benefit of cost savings to be realized from FY27 onward.

• Labour cost forecasts expected to remain broadly flat year-on-year, excluding Fair Work Commission impacts.