Iress (IRE) H1 2025 earnings summary

Executive summary

• Underlying EPS for continuing business rose 19.2% year-over-year, with strong 1H25 performance in core wealth and trading segments and transformation to a streamlined, capital-light business.

• Proceeds from multiple non-core asset sales, including Superannuation and QuantHouse, were used to reduce leverage to 0.8x and enhance financial flexibility.

• Interim dividend of 11.0 cents per share (50% franked) declared, with a payout ratio of 62%, resuming after the transformation period.

• Strategic investments in data, AI, and new product initiatives are underway, including launches in data insights and retirement solutions.

• Early engagement with potential acquirers for a possible sale of the Group announced post-period end.

Financial highlights

• Continuing business revenue rose 6.8% year-over-year to $249.4m, with adjusted EBITDA up 8.7% to $60.2m and margin improving to 24.1%.

• Statutory NPAT was $17.3m, flat compared to the prior period, as divestments offset core growth.

• Underlying profit after tax (UPAT) and underlying EPS both increased by about 19% year-over-year.

• Operating costs for continuing business increased due to higher R&D investment.

• Net debt at 30 June was $92.6 million, reduced by asset sale proceeds.

Outlook and guidance

• FY25 guidance reaffirmed: adjusted EBITDA of $127m–$135m and UPAT of $65m–$73m for continuing business.

• Revenue growth expected to accelerate to 6%-8% over the next three to five years, with EBITDA margins targeted at 26%-27% by 2028.

• Ongoing cost management and stranded cost program to deliver $12–$16m in annualized savings over two years.

• R&D CapEx to rise to 5%-7% of revenue, supporting new product development and organic growth.

• Board remains committed to sustainable dividends and strategic growth.