Monash IVF Reports $10.4M Profit as Fertility Market Stabilises Ahead of FY27 Recovery

Monash IVF reports stabilising conditions in 1H26 as market recovery anticipated

Monash IVF Group (ASX: MVF) has delivered 1H26 Underlying NPAT of $10.4 million, positioning at the upper end of guidance issued in November 2025. The half-year period marks a phase of stabilisation following the disruption experienced in Q4 FY25 and Q1 FY26, with management now eyeing a return to market growth in FY27.

Revenue reached $137.9 million (down 1.8% on pcp), while Underlying EBITDA came in at $30.2 million (down 15.3%). The Underlying EBITDA margin held at 22.0%. Underlying NPAT declined 34.0% to $10.4 million, reflecting both sector softness and margin compression. The board declared an interim dividend of 1.2 cents per share, fully franked.

For investors, the result confirms that operations have stabilised. Management has reaffirmed full-year guidance, signalling confidence in executing the second half and positioning for recovery as market conditions improve.

Australian ARS market shows early signs of stabilisation

The Assisted Reproductive Services (ARS) market—encompassing IVF and fertility treatments—has shown tentative signs of bottoming out in Australia. Stimulated cycle volumes across the national market declined just 0.2% in 1H26, a marked improvement from the steeper falls recorded in prior periods.

State-level performance varied. Western Australia, South Australia, and Queensland posted market growth. Victoria stabilised, with volumes down 0.7%. New South Wales remained weak, with industry volumes declining 4.2%, reflecting broader macroeconomic pressures in that state.

Monash IVF’s stimulated cycle volumes fell 11.7%, and domestic market share declined 2.5% to 19.0%. Management attributed the share loss to negative media coverage, which had the most pronounced impact in jurisdictions carrying the Monash IVF brand. Returning patient levels were consistent with the decline in new patient pipeline on pcp.

The early signs of stabilisation suggest the cyclical trough may be forming. Management expects the ARS sector to return to growth in FY27, driven by both traditional and emerging demand factors.

Understanding the ARS sector—why fertility services are a structural growth market

For investors unfamiliar with the fertility industry, the ARS sector encompasses medical services related to IVF, egg freezing, genetic testing, and related reproductive treatments. Despite short-term volatility, structural tailwinds continue to underpin long-term growth.

Traditional demand drivers include advanced maternal age (women delaying childbearing), increasing obesity rates, improving IVF success rates, and favourable government funding policies. These factors are expected to support 2-3% annual growth in stimulated cycles.

Emerging demand drivers are becoming increasingly important. Genetic carrier screening uptake is rising, leading more patients to pursue IVF with preimplantation genetic testing (PGT). Egg freezing continues to expand. Growing patient segments such as LGBTQIA+ individuals, single parents, and corporate wellness programmes are also contributing to volume growth. Collectively, these emerging drivers could add a further 1-2% annual growth in industry cycles.

Management’s outlook is clear: the ARS sector fundamentals remain intact. Once market headwinds ease, Monash IVF is positioned to benefit from these structural trends. For investors, this combination of cyclical recovery and structural growth offers a compelling medium-term thesis.

CEO priorities signal operational transformation ahead

Dr Victoria Atkinson has outlined three strategic priorities as the group’s new CEO, each designed to drive sustainable performance improvement and margin expansion.

1. Deliver sustainable organic growth: Management is focused on reigniting volume and margin growth, restoring performance in the Victorian portfolio, and embedding data-led operational excellence across the network. The genetics offering will continue to scale, and the Asian clinics will be consolidated under a unified service model to drive efficiency.

2. Renew strategic priorities: The 2030 Strategic Plan will target improved return on invested capital and margin expansion. Enhanced premium service innovations are expected to drive patient volumes and improve experience. The new Brisbane IVF clinic and day hospital will open in Q4 FY26, alongside the completion of infrastructure projects in Clayton.

3. Align medical and executive leadership: Medical leadership structures are being amplified to drive clinical and strategic priorities. The executive team is being strengthened to accelerate performance and strategic delivery. Scientific and clinical governance frameworks are being reinforced across the group.

CEO Commentary

“Safe, quality care and strong doctor partnerships have ensured organisational resilience.”

Monash IVF retains 168 medical specialists across the group. In Australia, the number of fertility specialists has grown 44% over the past seven years, reaching 130 specialists. This doctor loyalty, combined with the CEO’s clinical background, positions the group to enhance both patient experience and operational efficiency.

Genetics and diagnostics emerging as growth engines

The genetics division is becoming a meaningful contributor to both patient retention and revenue diversification. PGT-M (preimplantation genetic testing for monogenic disorders) cycles increased 26% in 1H26, while PGT-A embryos tested rose 31%. This growth reflects increased uptake of genetic carrier screening, which is driving more patients into IVF pathways with genetic testing.

The appointment of Professor Martin Delatycki in August 2025 has strengthened the group’s genetics capability. Professor Delatycki is one of Australia’s most respected clinical geneticists and has contributed to improved PGT-M growth and service delivery.

Additionally, Monash University was awarded a $15 million mitochondrial donation MRFF grant. The project has moved into the pre-clinical research and training phase, with first procedures expected in February 2026. This medium-term innovation pipeline supports the group’s position as a leader in reproductive science.

For investors, genetics represents a high-margin, high-retention revenue stream. As carrier screening becomes more widespread, downstream referrals to IVF are expected to increase, supporting both volume growth and patient lifetime value.

Balance sheet supports growth with net leverage at 2.0x

Monash IVF’s balance sheet remains in a sound position to support both organic investment and potential bolt-on acquisitions. Net debt stood at $94.9 million as at 31 December 2025, with a net leverage ratio of 2.0x. This is well below the banking covenant requirement of below 3.5x.

The syndicated debt facility was increased from $100 million to $110 million and is expected to be refinanced before 30 June 2026. Interest cover remains strong at 9.3x, providing headroom for both debt servicing and strategic flexibility.

FY26 capital expenditure is expected to be $16-17 million, with the major infrastructure replacement programme completing in Q4 FY26 when the new Brisbane IVF clinic and day surgery commence operations. The dividend policy remains unchanged at 60-70% of underlying earnings.

For investors, the balance sheet provides capacity for both internal growth initiatives and external opportunities as market conditions improve. The completion of the Brisbane infrastructure project removes a significant capital commitment, freeing cash flow for shareholder returns and strategic investment.

FY26 outlook reaffirmed with recovery expected in FY27

Monash IVF has reaffirmed FY26 Underlying NPAT guidance of $20.0 million. Net debt is expected to remain at approximately $95 million at 30 June 2026, with the net leverage ratio holding at 2.0x.

Management’s view is clear: ARS sector volumes will return to growth in FY27. The business is positioned for recovery once market headwinds ease. With stabilisation evident in 1H26, cost base alignment underway, and infrastructure investments nearing completion, the group is set to benefit from both cyclical recovery and structural sector tailwinds.

For investors, Monash IVF offers exposure to a structural growth sector at a cyclical low point. With guidance reaffirmed, the balance sheet sound, and operational transformation underway, the investment case centres on the timing and magnitude of the FY27 recovery.

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