Netwealth Group (NWL) H2 2024 earnings summary

Executive summary

• Funds Under Administration (FUA) reached AUD 88.0 billion, up 25.2% year-over-year, with net inflows of AUD 11.2 billion for FY2024 and positive market movement of AUD 6.5 billion.

• Total income rose 18.9% to AUD 255.2 million, EBITDA increased 23.8% to AUD 124.7 million (margin 48.8%), and NPAT grew 24.1% to AUD 83.4 million.

• Market share increased to 7.7% by March 2024, outperforming legacy platforms and supporting growth in high net worth and private client segments.

• Completed 100% acquisition of Xeppo, enhancing data, analytics, and AI-driven capabilities, with integration adding AUD 3 million in revenue and breakeven profitability.

• Recognized with multiple industry awards, including 'Advised Product of the Year,' and expanded financial literacy and client-focused programs.

Financial highlights

• Platform revenue rose 18.0% to AUD 249.5 million; other income up 75.6% to AUD 5.7 million.

• EBITDA margin improved to 48.8% (approx. 50% in H2); NPAT margin increased to 32.7%.

• Operating net cash flow before tax was AUD 127.3 million, up 19.8% year-over-year; free cash flow before tax up 20.9% to AUD 120.1 million.

• Platform revenue per account increased to AUD 1,864, with average FUA per account at AUD 583,000.

• Capitalised software spend decreased 17.7% to AUD 4.1 million.

Outlook and guidance

• Strong new business pipeline and significant client wins, with AUD 1.2 billion FUA net inflows in July 2024.

• Continued investment in people, product, security, and technology expected to result in a small percentage increase in expense growth for FY2025.

• Management confident in ongoing and sustainable profit growth, supported by high recurring revenue, strong cash reserves, and a debt-free position.