Highlights

  • Iress (ASX:IRE) reported 1H26 continuing revenue of $250.0m, up 2.5% in constant currency
  • Continuing Cash EBITDA rose 47.1% to $61.1m, with margin up to 24.5%
  • Fully franked interim dividend lifted 27.3% to 14.0 cents per share
  • FY26 Cash EBITDA guidance raised to $121–126m in constant currency while revenue guidance was trimmed

Iress is a technology company providing software and services to the financial services industry across wealth management, financial advice, trading and market data, and life and pensions.

Company Business

Iress operates across Asia-Pacific, North America, Africa, the UK and Europe. Its software is used by financial advisers, wealth managers, brokers and trading firms, with Xplan, its financial advice platform, among its best-known products. Following a multi-year program of divestments and restructuring, the company stated in August 2026 that the simplification of the group was complete. The continuing business now comprises APAC Wealth, Global Trading and Market Data, and UK Wealth and Sourcing. Recurring revenue made up about 95% of group revenue in the first half of 2026, reflecting the subscription-based nature of the business.

Recent Development

Iress released its half-year results for the six months to June 30, 2026 in mid-August. Group CEO and Managing Director Andrew Russell said execution had shifted from simplifying the business to investing in product evolution and sustainable growth.

A key part of that shift is a partnership with technology consultancy Thoughtworks, announced in May 2026 and since mobilised. Iress said the partnership is intended to build engineering capability and accelerate delivery. The company is embedding artificial intelligence across engineering and product development, and the next phase of Xplan capabilities is underway, including AI-enabled adviser workflow and productivity tools. Iress also refreshed its client portal and accelerated the delivery of new data and insights features in its trading business. The company indicated it would increase product development spending in the second half, with a focus on AI capabilities and Xplan.

Earlier in the year, Iress held its 2026 Annual General Meeting in late April, where shareholders voted on the resolutions put before the meeting.

Financial Performance and Sector Context

On a continuing business basis, measured in constant currency, ASX:IRE reported 1H26 revenue of $250.0 million, up 2.5% on the prior corresponding period. Operating costs fell 1.9% to $181.4 million, and Cash EBITDA rose 47.1% to $61.1 million. The Cash EBITDA margin expanded by 742 basis points to 24.5%. Underlying net profit after tax (UPAT) increased 24.5% to $38.8 million, and underlying earnings per share rose to 20.8 cents.

On a headline basis, which includes businesses no longer part of the group in the comparison period, revenue fell 16.5% from $299.5 million, while statutory net profit after tax rose 85.0% to $32.0 million. The board declared a fully franked interim dividend of 14.0 cents per share, up 27.3%.

The business efficiency program delivered $31.5 million in annualised cost savings, which the company described as ahead of plan, with a further $6–9 million expected in the second half. Leverage stood at 0.5 times at June 30, 2026.

Iress updated its FY26 guidance in constant currency. Revenue guidance was lowered to $509–515 million, or growth of 1–2%, from $520–528 million, reflecting lower non-recurring revenue. Cash EBITDA guidance was raised to $121–126 million, representing growth of 21–26%, while UPAT guidance was narrowed to $84–88 million. On a reported basis after foreign exchange effects, guidance is revenue of $499–505 million, Cash EBITDA of $119–124 million and UPAT of $82–86 million. The company reaffirmed its 25% Cash EBITDA margin exit run-rate target.

Wealth and advice software providers continue to adapt to regulatory change, adviser productivity demands and the wider adoption of AI tools across financial services. Mr Russell noted that revenue growth is expected to remain measured in the near term.

Risks to Consider

Revenue growth remains measured, and the downgrade to revenue guidance shows the business is exposed to softer non-recurring revenue. Increased product development spending could put pressure on margins if new AI features and Xplan enhancements do not translate into client uptake. Iress reports across several currencies, and foreign exchange movements have already reduced reported guidance figures. Delivering the remaining cost savings and the Thoughtworks-led engineering program on schedule are further execution considerations.

What to Watch Next

The full-year result for the period to December 2026, expected in early 2027, will show whether Iress (ASX:IRE) has achieved its FY26 guidance ranges and the 25% Cash EBITDA margin exit run-rate. Market participants may also watch for the delivery of AI-enabled Xplan features, the remaining $6–9 million in cost savings, and any update on the mix between recurring and non-recurring revenue. Any further commentary on capital management and dividends will also be of interest.

Key Insights

Iress has moved past a period of restructuring and divestments, and its 1H26 result showed lower operating costs and a sizeable margin increase on a continuing basis. Revenue growth was modest and revenue guidance was trimmed, while earnings guidance was lifted. The company's next phase centres on product development, AI integration and Xplan, supported by the Thoughtworks partnership and a lower cost base.