Smartgroup (SIQ) H1 2025 earnings summary

Executive summary

• Revenue grew 7% year-over-year to $159.1 million in H1 2025, driven by higher novated leasing volumes, new client wins, and record customer numbers across salary packaging, novated leasing, and fleet management.

• EBITDA increased 13% to $63.6 million, with margin improving to 40%, up 2 percentage points year-over-year.

• NPATA rose 12% to $38.1 million, with statutory NPAT up 11% year-over-year and return on equity reaching 30.7%.

• Interim fully franked dividend of 19.5 cents per share declared, up 11% year-over-year, representing 69% of NPATA.

• Strategic priorities advanced, including digital onboarding, new partnerships, and recognition for ESG and gender equality.

Financial highlights

• Revenue up 7% year-over-year to $159.1 million; net revenue up 8% to $153.1 million.

• Operating expenses increased 4% to $89.5 million, mainly due to investments in demand generation and efficiency.

• Operating cash flow was $52.5 million, representing 138% of NPATA, aided by favorable working capital and tax timing.

• Product costs declined 9% year-over-year due to lower attachment rates of aftermarket products.

• Return on equity reached 30.7%, up 1.9 percentage points year-over-year.

Outlook and guidance

• Targeting EBITDA margin in the mid-40% range by 2027, with acceleration expected post-2026.

• Continued focus on strategic priorities, technology investment, and automation to drive growth.

• 2026 expected to be a significant year for technology investment and change delivery.

• Software/technology capex for 2025 expected at $11–$13 million.

• Demand for products and services remains strong, with short-term uncertainties easing.