Sonic Healthcare Limited reported improved earnings and steady operational performance for the half year ended 31 December 2025. The healthcare diagnostics group confirmed it remains on track to meet its full-year earnings guidance despite cost pressures and regional challenges.
The Company released the results alongside a scheduled investor presentation hosted by Chief Executive Officer Dr Jim Newcombe. The board authorised the release to the Australian Securities Exchange. The update highlighted revenue growth, margin improvement, and continued capital management discipline.
Sonic Healthcare reported 17% revenue growth and reaffirmed FY26 earnings guidance in its half-year results update. [Southern.IML Pathology]
Group revenue reached A$5.45 billion for the half year. This represented a 17 percent increase from the prior corresponding period. Net profit rose 11 percent to A$262 million. Earnings per share increased to 53.1 cents, reflecting an 8 percent rise year on year.
Revenue growth driven by organic expansion and acquisitions
Sonic Healthcare achieved organic revenue growth of 5 percent across its global operations. The group also benefited from recently completed acquisitions, which contributed to statutory revenue gains in several markets.
Cash generated from operations rose to A$682 million. This marked a 10 percent increase from the previous half-year. The Company stated that strong cash flow supported investment activity and balance sheet stability.
Adjusted for constant currency movements, the group maintained steady underlying performance. Management noted that organic growth remained a key focus across pathology, radiology, and clinical services divisions.
The Company operates a diversified portfolio of diagnostic businesses. This structure helped offset slower growth in some regions while supporting margin stability at the group level.
EBITDA margins improve despite regional cost pressures
Group EBITDA increased to A$907 million, up 10 percent from the prior period. Reported EBITDA margins declined to 16.7 percent due to acquisition costs and regional adjustments. However, adjusted EBITDA margins improved by 30 basis points to 18.1 percent.
Management attributed the margin improvement to operating leverage, synergy realisation, and cost control measures. The Company incurred A$8 million in acquisition costs during the period, compared with A$2 million a year earlier.
Germany experienced a margin impact from regulatory changes to statutory insurance fee quotas. The United States reported margin pressure linked to restructuring costs and lower organic growth. Management expects the US impact to reduce in the second half of the financial year.
Overall, the group stated that most regions delivered margin expansion after adjusting for one-off items.
FY26 earnings guidance reaffirmed
Sonic Healthcare reaffirmed its full-year EBITDA guidance of A$1.87 billion to A$1.95 billion on a constant currency basis. The Company first issued the guidance in August 2025 and confirmed it again in November.
The Company revised depreciation expense expectations downward to between A$770 million and A$780 million. Interest expense is now expected to rise by around 15 percent compared with the prior year. The effective tax rate remains forecast at approximately 27 percent.
Management confirmed that the guidance excludes property sale gains and assumes stable interest rates. It also includes only completed acquisitions and assumes no major regulatory changes.
The Company stated that current trading conditions support delivery of the guidance range.
Balance sheet remains within investment grade targets
Net interest-bearing debt increased to A$3.6 billion at 31 December 2025. The rise reflected recent acquisitions, including LADR in Germany and Cairo Diagnostics in the United States.
Equity increased to A$8.72 billion, supporting a gearing ratio of 29 percent. Debt cover stood at 2.5 times EBITDA, well below the covenant limit of 3.5 times. Interest cover remained strong at 9.5 times.
The Company reported available funding headroom of approximately A$1 billion before payment of the interim dividend. Management stated that maintaining an investment-grade balance sheet remains a core priority.
Credit metrics remained within banking covenant limits across all measures.
Capital management initiatives progress
Sonic Healthcare continued to advance capital management initiatives during the half year. The Company commenced a sale and leaseback process for its Brisbane hub laboratory, with expected proceeds between A$450 million and A$500 million.
Management targets completion of the transaction by June 2026. The Company expects a significant gain on sale, with part of the capital gain potentially offset by prior tax losses.
The group also entered a conditional agreement to sell a surplus Australian property, with settlement expected in FY27. Management confirmed it may consider additional property transactions.
The Company stated it may use surplus capital from property sales to fund an on-market share buy-back, subject to market conditions.
ASX Share Price Reaction: SHL jumps over 13%
Sonic Healthcare Limited (ASX: SHL) shares surged following the earnings release. The stock traded at $24.10, up $2.86 or 13.47 percent for the session. 
Sonic Healthcare Limited Share Price [ASX]
Trading volume reached 1,783,512 shares. The bid-offer range stood between $24.10 and $24.11. The Company’s market capitalisation increased to $10.49 billion after the price jump.
Also Read: Santos flags 10% workforce cut as profit drops 35% on weaker oil and gas prices
Interim dividend declared as regional operations stabilise
Sonic Healthcare declared an interim dividend of 45 cents per share, 60 percent franked. This represented a 2.3 percent increase compared with the prior year interim payment.
The record date is set for 5 March 2026, with payment scheduled for 19 March 2026. The Company confirmed it remains committed to a progressive dividend policy, targeting a payout ratio of 70 to 80 percent of net profit over the medium term.
Operationally, the Company reported stable trends across key regions. Germany recorded strong statutory revenue growth following the LADR acquisition. Australia delivered steady pathology and radiology performance supported by Medicare indexation.
The United Kingdom continued to benefit from new NHS and private contracts. The United States progressed restructuring efforts, including the rationalisation of anatomical pathology operations.
Management stated that ongoing cost discipline and operational integration remain priorities for the remainder of FY26.
FAQs
- Why did Sonic Healthcare shares rise?
Sonic Healthcare Limited shares rose after the company reported strong half-year FY26 results. Revenue increased 17% to A$5.45 billion, while net profit rose 11% to A$262 million. The company also reaffirmed its full-year EBITDA guidance, which supported investor confidence.
- What were Sonic Healthcare’s H1 FY26 earnings results?
For the half year ended 31 December 2025, Sonic Healthcare reported:
- Revenue of A$5.45 billion
- EBITDA of A$907 million
- Net profit of A$262 million
- Earnings per share of 53.1 cents
The company maintained FY26 EBITDA guidance between A$1.87 billion and A$1.95 billion.
- What is Sonic Healthcare’s dividend for FY26?
Sonic Healthcare declared an interim dividend of 45 cents per share, 60% franked. The record date is 5 March 2026, and payment is scheduled for 19 March 2026.
- What is Sonic Healthcare’s ASX ticker symbol?
Sonic Healthcare trades on the Australian Securities Exchange under the ticker SHL.
- What is Sonic Healthcare’s market capitalisation?
Following the share price increase to $24.10, Sonic Healthcare’s market capitalisation stands at approximately A$10.49 billion.
- What is Sonic Healthcare’s FY26 guidance?
The company reaffirmed its full-year FY26 EBITDA guidance of A$1.87 billion to A$1.95 billion on a constant currency basis. Guidance assumes stable interest rates and no major regulatory changes.
