Let's start with the big picture.

Medical scans produce lots of very, VERY, large image files. And the number and size of these files is growing rapidly. We are talking about a massive data explosion. Modern high-density multi-slice CT scans can generate over 10,000 images per scan. HD Breast Tomosynthesis files routinely exceed 6 gigabytes, while Optoacoustic breast ultrasounds and Total Body PET Scans can easily surpass 10 gigabytes of data!!

Traditionally, these files were stored locally and administered with software developed by the hardware manufacturers. It was slow, inconvenient and offered very little in the way of software tooling. Legacy technology relied on a clunky "compress and send" model. Clinicians were forced to wait and download massive files entirely across a network before they could even begin viewing them. On top of that, hospitals needed multiple independent desktop systems just to handle different types of imaging like 2D, 3D, and advanced visualization functions.

ProMedicus changed the game with Visage, a bit of fancy kit they acquired off a German mob back in 2009. They paid $4.5 million for it.. actually, the purchase also gave them a broader visualization business they later sold for $14.8m in 2012, which means they effectively got visage for free!

The rest, as they say, is history.

Between 2009 and 2025 revenue and profit has grown ~13x and ~20x respectively. This was achieved with no new debt or equity capital, virtually no share dilution, and all while ~50% of net profit was paid out in dividends. In fact, since its IPO in 2000, the company has increased its shares on issue by less than 5 percent, with all new shares issued simply as part of staff incentives. The business is entirely self-funding, completely debt-free, and sits on a cash and investments pile that topped $220 million by the end of 2025.

Visage was the right solution, at the right time. Radiologists could stream massive scan images almost instantly, using their phone while on the golf course. By leveraging proprietary GPU-based streaming technology, Visage 7 accesses images on-demand rather than moving massive files around. And also using a growing variety of visualisation tools all integrated into the same platform. Instead of siloed programs, Visage provides a single viewer for all images in a patient's medical record, including radiology, cardiology, digital pathology, and even high-resolution photos and videos. By boosting efficiency by up to 50 percent and seamlessly supporting remote work without any speed degradation, the software actively combats the modern crisis of radiologist burnout.

Importantly, the software was easy to set-up, easy to use, and compatible with legacy archives. Through a highly optimized "fast track" implementation methodology, Pro Medicus rolls out large-scale systems in under a fifth of the time it takes industry competitors. For example, they successfully deployed their software across the massive Baylor, Scott and White network in just three months, setting an industry record. And, the upfront costs for customers wasn't onerous, with a minimal upfront commitment and a 'pay-per-view' pricing model. Visage 7 operates on a 100 percent cloud-native architecture, utilizing public clouds like AWS, Azure, and Google Cloud, which strips away the need for expensive on-premise hardware.

As this is a pure software business, it was super capital light and offered incredible operating leverage. Without heavy hardware capital expenditures, the company maintains a highly contained cost base that simply gets better as its footprint scales. Indeed, the business' enjoys net margins that are north of 50%.. NET margins! Even more impressively, their underlying EBIT margins have continued to climb, hitting a staggering 72.6 percent by the first half of 2026.

Today the business represents the gold standard in visualistion software, and despite it's insane growth still only has ~10% of the global imaging market. In the US alone, there are around 650 to 670 million exams performed annually, leaving a massive runway for future expansion. Yet in the absolute top tier, their dominance is clear, with 11 of the top 20 hospitals in the US currently relying on Visage 7 for their PACS. And there's still a strong tailwind of more images, of higher fidelity, and greater tooling (especially AI). Because Visage's streaming architecture is built on the very same GPU processors used for artificial intelligence, the platform is intrinsically AI-capable and ready to incorporate future diagnostic algorithms. They are even pioneering immersive spatial computing experiences using the Apple Vision Pro.

It should be mentioned they also provide practice management software, but that's something like 8% of total revenue. This product, known as Visage RIS, handles the administrative, scheduling, and billing side of the clinic. While it only makes up a small fraction of their global revenue, it remains the undisputed market leader in Australia, secured by long-term contracts with the country's biggest radiology providers.

It really is an incredible Aussie success story, and there's (potentially) a long way left to run. The question, for me at least, has always been about value. While there's little doubt the company has a lot of growth potential left, it needs to be of a degree that it can offset the likely PE compression you get as businesses mature.

For example, per share earnings could 5x in the next 5 years, but if the PE drops to 25x, shares will be at the same price as they are today.