Iress H2 Earnings Call Highlights
by Renee Jackson · The Cerbat GemIress (ASX:IRE) executives said the company delivered FY2025 results ahead of guidance, citing improved momentum in the second half, ongoing simplification efforts, and continued progress on margin expansion and cash generation.
Group CEO Andrew Russell and CFO Cameron Williamson told investors the business has been reshaped into a more focused software company centered on two core areas—Wealth and Trading & Market Data—after completing additional divestments during the year. The company also reinstated dividends and strengthened its balance sheet, while outlining FY2026 guidance that includes a shift in headline profitability reporting to “cash EBITDA.”
FY2025 results: revenue growth and margin expansion
Russell said the “simplified continuing business” revenue increased to AUD 504.3 million, up 6.5% year-on-year. Adjusted EBITDA rose to AUD 132.6 million, up 14.9%, and the adjusted EBITDA margin expanded 192 basis points to 26.3%. He added that underlying profit after tax increased 34.3% versus the prior comparable period, describing it as a milestone showing earnings growth now outpacing revenue growth and indicating operating leverage in the simplified business.
Williamson provided additional profit detail, reporting underlying profit after tax of AUD 73.9 million and underlying EPS of AUD 0.396 per share, both up about 16% year-on-year. He noted these metrics included contributions from divested businesses, while the continuing business delivered 6.5% revenue growth, or 4.5% on a constant currency basis, helped by favorable foreign exchange.
Operationally, Russell highlighted:
- Global Trading & Market Data delivering “solid” revenue and earnings growth, and successful delivery of the ASX Single Open initiative.
- APAC Wealth returning to stronger second-half momentum.
- UK Wealth and Sourcing delivering “strong” EBITDA expansion.
- A 15-point improvement in net promoter score, alongside an emphasis that customer-first execution remains a priority.
Portfolio simplification and balance sheet changes
Management reiterated that FY2025 included further divestments of the company’s superannuation and QuantHouse businesses. Williamson said the two transactions brought total divestments over the past two years to six, with proceeds totaling AUD 71 million. The company used these proceeds to retire debt, with leverage now at 0.5x.
Net debt was AUD 66 million at 31 December, which Williamson said was more than AUD 250 million lower than two years earlier. He said the stronger balance sheet provides flexibility for capital management and supports investment into the core business, noting software capex rose to AUD 27.3 million, or about 5% of revenue, compared with 2%–3% historically. Williamson attributed the higher investment primarily to spending on a new EMS buy-side trading platform.
The board declared a final fully franked dividend of AUD 0.13 per share, bringing the total FY2025 dividend to AUD 0.24 per share and a 61% payout ratio, within the company’s stated target range of 50%–70%.
Reporting changes and cost focus
Williamson said FY2026 will include a transition in headline EBITDA reporting from adjusted EBITDA to cash EBITDA, which he defined as adjusted EBITDA less capex (software capex and PPE, excluding landlord-funded lease incentives). He said the metric better reflects free cash flow generation and capital deployment.
For FY2025, cash EBITDA was AUD 102.7 million with approximately AUD 33.5 million in capex.
On costs, Williamson said staff costs were held broadly flat in FY2025, while non-wage and R&D operating expenses increased year-on-year. He said the second half improved versus the first, and that additional expense savings had already been achieved in Q1 FY2026 to date. In the Q&A, he described the FY2025 beat versus November guidance as “substantially cost driven,” estimating the contribution at roughly 80% cost and 20% revenue.
He also pointed to several non-operating items: depreciation and amortization down 21% due to asset sales and a smaller footprint; net interest trending down on lower debt levels and improved terms; tax expense up 46% due to “normalization” in tax rates; and non-core excluded expenses declining to about half the prior year level, driven largely by lower transformation-related costs. Williamson said excluded items were expected to decline further in FY2026 to around AUD 10 million–AUD 12 million.
FY2026 strategy and guidance
Russell said Iress had engaged with third parties to assess whether a change-of-control transaction could deliver value, but no offer was received. He said management determined the best path to maximize shareholder value is disciplined execution of its strategy as a public company.
For FY2026, Russell described four strategic pillars:
- Product-led execution
- Capital discipline
- Customer focus
- Ambition delivered at pace
He said the company is expanding its business efficiency program to “reset the operating model,” improving delivery cadence and accountability, investing in targeted modular modernization of wealth and trading platforms (including Xplan user interface modernization and a sourcing uplift), and aligning pricing and monetization more directly with customer value. Russell emphasized this is not a “big bang” transformation but a staged approach.
Russell also outlined an AI strategy across infrastructure, internal efficiency, and product embedding, describing AI as a “tailwind” and stating the company’s approach is “remediate first, modernize second, and monetize third.”
The company issued FY2026 guidance of:
- Revenue: AUD 520 million to AUD 528 million
- Cash EBITDA: AUD 116 million to AUD 123 million
- UPAT: AUD 84 million to AUD 90 million
Management said it expects an exit run rate cash EBITDA margin of more than 25% by Q4 FY2026. Russell said the outlook assumes continued investment in platform modernization at similar capex levels to FY2025, alongside further benefits from business efficiencies. Williamson added that guidance was provided on a constant currency basis.
In discussion of revenue drivers, Williamson said the improvement versus prior years was helped by lower churn, while “the bulk” of current growth remained price driven, with new business contributing “at the fringes.” He said the company is viewing the business through a net revenue retention lens and expects to share more detail in future periods.
Closing the call, Russell said FY2025 marked completion of the simplification phase and that FY2026 will focus on accelerating delivery, strengthening competitiveness, and lifting performance.
About Iress (ASX:IRE)
Iress Limited engages in the designing and developing software and services for the financial services industry in the Asia Pacific, the United Kingdom and Europe, Africa, and North America. It offers client management, business automation, portfolio data, research, financial planning tools, scaled advice journeys, digital client solutions, data-driven compliance and analytics, and regulatory obligations management solutions; and market data, trading interfaces, order and execution management, smart order routing, FIX services, portfolio management, securities lending, analytical tools, algorithmic trading, market making, CFD clearing, post trade solutions, and trading and market data APIs.