Iress (IRE) H1 2024 earnings summary

Executive summary

• Transformation program delivered strong results ahead of schedule, with adjusted EBITDA up 52% to $67 million and significant margin expansion driven by cost reductions and operating leverage.

• Balance sheet deleveraged, with net debt reduced by $240.6 million year-over-year to $135.2 million post-UK Mortgages sale; leverage ratio now at 1.2x, within target range.

• Dividend payments to be reinstated for FY24, reflecting improved cash flow and financial health.

• Divestments of non-core businesses (Platforms, Mortgages, Pulse) completed, with proceeds used for debt reduction.

Financial highlights

• Adjusted EBITDA up 52% to $67 million for 1H24; margin expanded by 760bps to 21.7% year-over-year.

• Underlying NPAT more than doubled to $33 million; statutory NPAT rebounded to $17.3 million from a $139.8 million loss in 1H23.

• Pro forma revenue up 4% year-over-year to $302.4 million; headline revenue down 1% due to asset sales.

• Operating expenses fell 10% to $242 million, with staff costs reduced by 11% and FTEs down 11%.

• Net debt reduced by $240 million, lowering annual interest charges by over $10 million.

Outlook and guidance

• FY24 adjusted EBITDA guidance upgraded to $126–133 million post-asset sales, a 9% uplift from prior guidance.

• Transformation program to conclude by year-end, with ongoing cost and commercial discipline to continue into 2025.

• Guidance for 2025 to be provided in February 2025, focusing on Adjusted EBITDA and NPATA.

• Full year dividend to be paid in March 2025.