Alcidion Group (ASX:ALC) Announces $12.3 Million Contract Expansion with Leidos Australia
In a recent ASX announcement, Alcidion Group Limited (ASX: ALC) has confirmed a substantial $12.3 million contract expansion with Leidos Australia, marking a significant development in the healthcare technology sector. The Alcidion Leidos contract expansion highlights the growing demand for advanced digital health solutions within government operations and positions the company for sustained long-term growth. This agreement extends through June 2028, with potential for further extensions until 2036, offering considerable revenue visibility for investors.
Work on the expanded contract will commence immediately. For this investor update, Alcidion has noted it expects to recognise between $5.5-6.5 million of the contract value in FY26. The expansion is focused on delivering additional software modules from its flagship Miya Precision platform, enabling Leidos Australia to provide enhanced solution components to the Commonwealth of Australia.
What does the expanded agreement with Leidos entail?
The agreement centres on additional software modules from Miya Precision, building upon an existing partnership and demonstrating the scalability of Alcidion’s healthcare technology platform. Miya Precision is designed to address critical challenges in healthcare information management by aggregating patient information into centralised dashboards, supporting system interoperability, and delivering clinical decision support.
The contract structure provides Alcidion with balanced cash flow through both recurring and implementation revenue streams.
| Revenue Component | Value | Timeline |
|---|---|---|
| Total Contract Value | $12.3 million | Through June 2028 |
| Additional ARR | $2.5 million | Ongoing recurring revenue |
| Implementation Revenue | $9.8 million | One-time deployment fees |
| Contract Duration | 2.7 years | Initial term with potential for extensions |
The agreement aligns with Alcidion’s broader contract with Leidos Australia, which includes possible extensions through 2036. This structure indicates the Commonwealth’s commitment to sustained technology partnerships and validates Alcidion’s strategic position within government healthcare.
How much revenue will Alcidion recognise in FY26?
Alcidion expects to recognise between $5.5 million and $6.5 million from this expanded contract in FY26. This figure represents approximately 45-53% of the total contract value flowing through in the first full financial year, reflecting the immediate implementation requirements. Furthermore, the $2.5 million addition to annual recurring revenue (ARR) establishes a foundation for sustained revenue streams beyond FY26.
The immediate commencement and substantial first-year revenue recognition highlight the importance of the expanded capabilities for Leidos Australia’s commitments to the Commonwealth. The rapid deployment schedule suggests that the additional Miya Precision modules address critical operational requirements within government healthcare.
What are the key technical capabilities of the Miya Precision platform?
The Miya Precision platform’s technical capabilities position it as a comprehensive healthcare technology solution. Its design philosophy centres on creating actionable insights from complex healthcare data whilst maintaining seamless integration with existing systems.
Key Technical Capabilities:
- Real-time patient data aggregation from multiple systems
- Clinical decision support tools integrated into workflows
- Interoperability solutions connecting disparate technologies
- Task management and communication tools for clinical teams
- Operational efficiency analytics and reporting
The adoption of the Miya Precision platform by government operations validates its mission-critical value and demonstrates its scalability potential. Furthermore, its focus on interoperability addresses a fundamental challenge in healthcare technology: creating a unified patient view from disparate systems.
What extension possibilities exist for the partnership?
The current Alcidion Leidos contract expansion runs through to June 2028, with potential extensions that could prolong the partnership until 2036. This long-term structure provides Alcidion with significant future revenue potential and visibility. However, any extensions remain subject to factors such as performance, budget allocations, and evolving technology requirements.
Partnership Timeline:
- Current expansion term: 2.7 years through June 2028
- Potential extensions: Through to 2036
- Total possible partnership duration: Up to 11 years from the current date
The alignment of this expanded contract with the broader Leidos Australia agreement suggests strategic coordination, indicating that this deal is part of a larger healthcare technology ecosystem.
How does this contract validate Alcidion’s strategy?
This significant contract reinforces Alcidion’s strategic positioning as a trusted technology partner for critical healthcare infrastructure. The Commonwealth’s continued investment via Leidos Australia validates the effectiveness of the Miya Precision platform and positions Alcidion for further government opportunities in the healthcare technology ASX space.
Strategic Validation Points:
- Proven credibility in the government sector
- Demonstrated platform scalability with module additions
- Long-term partnership potential through to 2036
- Immediate revenue impact with $2.5 million in additional ARR
This validation serves as a powerful reference for Alcidion’s expansion into new markets. The decision to expand the existing solution demonstrates satisfaction with the platform’s performance and Alcidion’s service delivery capabilities.
What is Alcidion’s current market position?
Since listing on the ASX in 2016, Alcidion has expanded its footprint to service over 400 hospitals and 87 healthcare organisations across Australia, the United Kingdom, and New Zealand. The company’s 25 years of experience provide a strong foundation for continued expansion.
Current Market Presence:
- Hospital coverage: Over 400 facilities globally
- Organisations served: 87 across three countries
- Geographic presence: Australia, UK, and New Zealand
The new Leidos agreement demonstrates the company’s ability to grow existing partnerships whilst pursuing new market opportunities. It also validates Alcidion’s strategy of building deep, long-term relationships with major healthcare and government entities.
What is the financial impact of this contract?
The $12.3 million contract provides immediate financial benefits whilst establishing a foundation for sustained revenue growth. The structure balances implementation fees with recurring subscriptions, creating both near-term cash flow and long-term stability.
Revenue Recognition Schedule:
- FY26 expected recognition: $5.5-6.5 million
- Annual recurring revenue addition: $2.5 million
- Implementation revenue: $9.8 million over the contract term
The balanced revenue structure between implementation and recurring components reflects industry best practices in healthcare technology contracting. Implementation revenue provides upfront cash flow to support deployment, whilst recurring revenue ensures predictable, long-term financial stability for the company and its shareholders.
Want more ASX news?
Looking to stay ahead of major developments in ASX healthcare technology companies? Subscribe to StockWire X’s free Big News Blasts and join over 20,000 investors receiving instant email alerts on significant healthcare announcements, each accompanied by detailed analysis. With a quality filter ensuring only major news events are distributed, subscribers gain access to the most important market-moving information without the noise. Join today to receive comprehensive insights delivered directly to your inbox.