Highlights

  • First-half continuing Revenue reached A$250.0 million, while Recurring Revenue rose to A$237.8 million and represented 95% of continuing revenue.
  • Cash EBITDA increased 47.1% to A$61.1 million and the Margin reached 24.5%.
  • FY26 revenue guidance was lowered to A$509 million-A$515 million as non-recurring revenue softened, particularly in the United Kingdom.
  • Cash EBITDA guidance was set at A$121 million-A$126 million, while Underlying Profit after tax guidance was A$84 million-A$88 million.
  • Net Debt declined to A$70.2 million and the Interim Dividend increased to 14.0 cents per share, fully franked.

IRESS Limited (ASX:IRE) is an Australian financial software provider serving advisers, Brokers and institutions through Wealth Management software, trading systems and market data tools. Its first-half FY26 result showed a clear divergence between revenue and earnings: sales growth remained modest, while cost reductions and a more efficient operating base lifted profit measures and margins.

First-Half Earnings and Recurring Revenue

For the six months to 30 June 2026, continuing revenue was A$250.0 million, up 2.5% in constant currency. Recurring revenue reached A$237.8 million, up 3.4%, and represented 95% of revenue from continuing operations. Cash EBITDA rose 47.1% to A$61.1 million, with the cash EBITDA margin expanding to 24.5%. Statutory net profit after tax increased to A$32.0 million, while underlying profit after tax reached A$38.8 million.

Efficiency Program Drives Margin Expansion

The earnings improvement was supported by IRESS's efficiency program. The company reported A$31.5 million of annualised cost savings and targeted a further A$6 million-A$9 million in the second half. Capital Expenditure is also expected to be 20%-25% lower year on year, while Research and Development spending is targeted at about 5% of revenue. These measures support near-term profitability, although future earnings growth will increasingly depend on revenue conversion once the major savings are embedded.

FY26 Guidance Shows Revenue and Profit Moving Differently

IRESS lowered FY26 revenue guidance to A$509 million-A$515 million, implying growth of about 1%-2%. The change was linked mainly to A$7 million-A$8 million of lower non-recurring revenue as major projects completed and UK sales cycles lengthened. At the same time, cash EBITDA guidance was set at A$121 million-A$126 million and underlying profit after tax guidance at A$84 million-A$88 million. The company is also targeting an exit run-rate cash EBITDA margin of 25%.

Modernisation and Product Development

IRESS continues to modernise its technology platforms while integrating artificial intelligence into engineering and product roadmaps. Its Xplan adviser software remains a core product within APAC Wealth, while the trading and market data Business serves institutional clients. The company has also highlighted product evolution events in the United Kingdom and Australia, which are intended to demonstrate progress in platform development and new capabilities.

Balance Sheet, Dividend and Key Risks

Net debt declined to A$70.2 million from A$92.6 million, with Leverage at 0.5 times cash EBITDA. The interim dividend was 14.0 cents per share, fully franked. The main watch points are whether UK project activity converts into revenue, whether recurring revenue growth can be maintained, and whether structural churn in trading can be offset by new client wins. Currency is also a headwind, with an estimated A$10 million revenue effect forecast for FY26.

Key Insights

The first-half result shows that IRESS is currently generating earnings growth faster than revenue growth. Cost reduction, lower debt and recurring subscription revenue are supporting margins, while slower non-recurring revenue and longer UK sales cycles constrain top-line momentum. The FY26 outlook therefore depends on maintaining efficiency gains while improving the conversion of customer Demand into revenue.