Alcidion Group (ASX:ALC) reported a “strong performance” for the first half of FY2026, highlighted by record half-year revenue growth, a sharp improvement in underlying EBITDA, and continued momentum from contract expansions in Australia and the UK, according to management’s earnings call.
The company said results reflected higher recurring revenue contributions from customer wins signed in FY2025, plus expansion activity including contracts with Leidos and North Cumbria. Management also reiterated its focus on scaling its modular, cloud-native Miya Precision platform across key markets, while pursuing selective expansion into new geographies such as Canada and the Middle East.
Financial performance and revenue mix
Gepp said recurring revenue in ANZ rose AUD 2.9 million, driven by the third Leidos expansion announced in November and a full six months of recurring revenue from Peninsula and NALHN, which were signed late in the prior year’s first half. This was partly offset by a decline of about AUD 800,000 in ANZ services revenue, largely due to completion of the Hume project in the prior year and Leidos implementation work on the original two contracts being materially completed in the prior period.
In the UK, recurring revenue increased AUD 2.7 million, attributed to revenue from the Haldar Flow and North Cumbria EPR deals, which did not contribute in the prior year’s first half. UK services revenue increased AUD 2.1 million, largely from implementation work on Haldar and North Cumbria. The company also recognized a AUD 1 million capital license from the North Cumbria Mosaic expansion signed in September.
Management said recurring revenue totaled AUD 19.3 million and represented 76% of first-half revenue, with the UK contributing “just more than half” of the total result.
ARR, contract activity, and profitability
Alcidion reported Annual Recurring Revenue (ARR) of AUD 31.1 million as of Dec. 31, 2025, up 9% from June 30, 2025, which management attributed to contract expansions during the half. The company also signed AUD 23.6 million in new total contract value (TCV) in the period, up over 29% year over year.
Underlying EBITDA was AUD 4.2 million, up 675%, representing a AUD 3.7 million improvement from the prior corresponding period. Net profit after tax (NPAT) for the half was AUD 1.3 million, which Gepp said included a AUD 1.9 million amortization charge on acquired intangibles.
Gross margin declined compared with FY2025. Management attributed the change to a higher portion of third-party products in first-half deals, including the Mosaic expansion and third-party medications management components in the Sussex opportunity. The company said it expects gross margin to be lower in FY2026 than FY2025, calling the impact an “anomaly” and anticipating a return to margins in the “higher 80s” in FY2027 and beyond.
Cash, balance sheet, and operating cash flow
Alcidion ended the half with AUD 14.2 million in cash, which Gepp described as a AUD 6.5 million improvement compared with cash of AUD 7.7 million at the end of the prior year’s December half. First-half receipts were AUD 17 million, around 11% higher than the prior year.
The company posted an operating cash outflow of AUD 2.6 million, improving by about AUD 1.6 million to AUD 1.7 million versus the prior period depending on the comparison referenced by management. Gepp said working capital movements were a seasonal feature tied to billing cycles, with trade receivables typically higher at December than June and collections historically stronger in the second half.
Capital expenditure remained limited, with AUD 32,000 spent in the half, largely on staff equipment upgrades. Management said the company’s model does not require heavy CapEx and that full-year CapEx rarely exceeds about AUD 150,000.
Contract expansions, Sussex EPR, and market strategy
Management highlighted multiple expansions at North Cumbria, including the previously announced Mosaic expansion and additional purchases of Smartpage modules. In the Q&A, Gepp said the Smartpage Non-Clinical win was about GBP 600,000 (around AUD 1.2 million), slightly below the Smartpage Clinical contract previously referenced at AUD 1.5 million.
Alcidion also cited a “material expansion” with Leidos related to the Australian Defence Force’s Healthcare Knowledge Management System (JP 2060). Management said a AUD 12.3 million TCV expansion was signed in November, and the company now expects the Leidos contract ARR to exceed AUD 5.5 million. The original contract runs to June 2028, with an option for the project to extend out to 2036.
Post period-end, Alcidion said it was selected as preferred provider by University Hospital Sussex for a new electronic patient record (EPR) platform. Management said Sussex is an existing customer for Patientrack observations and one of the largest acute trusts in the UK, with seven hospitals and about 1.5 million appointments per year. Alcidion expects a minimum seven-year term and a total contract value of around AUD 35 million, with negotiations ongoing and signing targeted for mid-Q4. Implementation is expected to begin shortly after signing and run for around 18 months, depending on final scope.
During Q&A, management said its UK pipeline included three main “buckets”: large EPR opportunities, new customers for modules such as emergency department flow and remote patient monitoring, and expansion opportunities within the existing base. The company estimated the first two categories comprised roughly 70% (or more) of the pipeline, with add-on expansion making up the remainder.
Management also discussed expanding the addressable UK market into mental health and community care trusts, noting it already has a mental health trust customer in Hereford and Worcester using Miya Precision.
AI developments and FY2026 guidance
Management said it is expanding product capabilities in AI, citing releases including Miya Scribe, Miya Insight, and Miya AI. The company also referenced registering Miya Precision’s “Concept Detection” as a Class I software device in Australia and the UK. Executives said healthcare customers remain cautious about AI, but Alcidion views a standardized data foundation as a key differentiator and “moat.” The company also said it is using tools such as Claude internally to improve development and testing speed, but does not expect AI to drive near-term headcount reductions.
Looking ahead, management said it entered the second half with AUD 43.1 million in total FY2026 contracted and renewal revenue, excluding any second-half new sales and excluding Sussex. Assuming Sussex is signed as expected and incorporating marginal staffing increases across sales, marketing, and deployment, the company guided that FY2026 revenue is expected to exceed AUD 50 million, with EBITDA in excess of AUD 5 million, and operating cash flow positive and in line with FY2025 operating cash flow of AUD 5.8 million. The company confirmed the revenue guidance includes an upfront fee component for Sussex, alongside a third-party component for medications management.
On geographic expansion, management said it is participating in RFIs in Canada and expects to appoint a reseller partner in the Middle East “in the very near term,” while noting these markets are unlikely to contribute materially in FY2026.
About Alcidion Group (ASX:ALC)
Alcidion Group Limited, together with its subsidiaries, engages in the development and licensing of healthcare software products in Australia, New Zealand, and the United Kingdom. The company offers Miya Precision, a consolidated fast healthcare interoperability resource (FHIR) based platform to deliver smart healthcare; Smartpage, a smartphone and web-based system for hospital communication and task management to address the requirements of clinical and non-clinical users; Patientrack, a real-time patient monitoring and risk screening solution; Silverlink, a patient administration system; and ExtraMed, a clinical and patient flow management software.
