ASX Limited (ASX:ASX) operates Australia's primary securities and Derivatives exchange, spanning listings, cash equities, futures trading, clearing, settlement, registry services, data and technology. Its FY26 result showed the benefit of higher market activity, with Operating Revenue rising strongly, while a faster increase in expenses limited Underlying Profit growth and contributed to a lower full-year dividend.

Record Revenue Reflects Higher Market Activity

For the year ended 30 June 2026, ASX Limited reported operating revenue of $1,254.6 million, up 13.3 per cent.

The increase reflected stronger activity across several parts of the exchange. The company recorded 100 new listings during FY26, representing an increase of 45 per cent, while net Capital quoted reached $37.1 billion.

Trading activity also increased. Futures volumes rose 14.4 per cent during the year, while cash market trading volumes increased 24.2 per cent.

ASX's revenue base is influenced by market participation across listings, capital raisings, cash equities and derivatives. Higher activity can support revenue growth, although these areas can also be affected by changing market conditions and investor participation.

The FY26 result therefore reflected a year in which stronger trading and listing activity translated into higher exchange revenue.

Higher Expenses Limited Profit Growth

While revenue increased at a double-digit rate, expenses rose more quickly.

Total expenses increased 21.1 per cent to $557.4 million. The increase reflected continued Investment in technology, operational capacity and the broader modernisation programme.

EBITDA rose 10.0 per cent to $765.0 million. EBITDA represents Earnings before interest, tax, Depreciation and Amortisation and provides a measure of operating profitability before non-cash depreciation and financing costs.

Underlying net profit after tax was $536.4 million, representing growth of 5.2 per cent.

The difference between revenue growth and underlying profit growth highlights the impact of the higher cost base. The result showed that increased market activity supported earnings, but the benefit was partly offset by the scale of ongoing expenditure.

Statutory Profit Was Affected by Significant Items

ASX Limited reported statutory net profit of $484.9 million, down 3.5 per cent.

The statutory result included $51.5 million of significant items. These included costs associated with legal and regulatory matters.

During FY26, the company settled Federal Court proceedings relating to statements made about an earlier clearing and settlement replacement project. The settlement included a $20.5 million penalty.

The distinction between statutory and underlying earnings is therefore important when assessing the FY26 result. Underlying profit increased, while statutory profit declined because of significant charges recognised during the year.

Lower Dividend Reflects the FY26 Capital Allocation Position

ASX Limited declared a final dividend of 104.7 cents per share, fully franked.

This brought the total FY26 dividend to 206.5 cents per share, down 7.5 per cent from the prior year.

The payout represented approximately 75 per cent of underlying profit.

The lower dividend came despite higher operating revenue and underlying earnings, highlighting the effect of increased investment requirements and a more demanding cost environment.

ASX is undertaking substantial spending on technology and infrastructure, meaning capital allocation must balance Shareholder distributions with expenditure required to maintain and modernise critical market systems.

CHESS Modernisation Remains a Central Operational Priority

A major area of focus remains the replacement and modernisation of CHESS, the system used to support clearing and settlement of Australian equities.

CHESS Release 1 was delivered during FY26, marking the first stage of the programme.

The remaining phases continue to carry execution importance because clearing and settlement infrastructure is fundamental to ASX's operations. Successful delivery requires coordination across technology systems, Market Participants and operational processes.

The earlier replacement project was abandoned, making execution of the revised programme an important measure of operational progress.

Future releases will therefore remain significant milestones, not only from a technology perspective but also in determining how quickly associated investment begins to translate into completed infrastructure.

FY27 Guidance Points to Further Cost Growth

ASX has guided to another substantial increase in expenses during FY27.

Total expenses are expected to rise by between 18 per cent and 21 per cent, while operating expenses excluding depreciation and amortisation are expected to increase by 13 per cent to 16 per cent.

The distinction is significant because depreciation is expected to increase as technology projects are completed and placed into service.

Capital expenditure is expected to be between $180 million and $200 million in FY27. For FY28, Capital Expenditure is guided at between $170 million and $190 million.

These spending levels indicate that technology investment remains a multi-year programme rather than a short-term cost increase.

The key financial question for FY27 will therefore be whether revenue growth is sufficient to absorb the higher operating and depreciation expense base.

Revenue Growth Remains Sensitive to Market Conditions

ASX Limited (ASX:ASX) benefits when Capital Markets are active.

Higher listing activity, capital raisings, cash market turnover and futures volumes supported the FY26 result. However, these revenue drivers can fluctuate from year to year.

A quieter period for Equity markets or capital raising could reduce transaction-related income while a large proportion of ASX's technology, infrastructure and staffing costs remain in place.

This creates Operating Leverage in both directions. Higher market activity can support revenue growth without an equivalent increase in all costs, but weaker activity can place pressure on profitability when fixed expenditure remains elevated.

The relationship between revenue growth and expense growth will therefore be particularly important during FY27.

Key Risks and Operational Considerations

The main near-term Financial Risk is that expenses continue to grow faster than revenue.

If this occurs, underlying profit growth could remain constrained even if market activity stays relatively supportive.

Technology execution is another key consideration. The remaining stages of the CHESS replacement programme must be delivered while ASX continues to operate critical market infrastructure without disruption.

Regulatory and legal oversight also remains relevant given the central role ASX plays in Australia's financial markets.

Revenue cyclicality adds another layer of uncertainty because listings, capital raisings and trading volumes are influenced by broader market conditions.

Together, these factors mean that FY27 performance will depend not only on market activity but also on management's ability to execute major technology programmes while controlling the pace of cost growth.

What to Watch in FY27

The progression of expenses against the FY27 guidance range will be one of the most important financial measures to monitor.

Further CHESS releases will also provide evidence of progress on the company's technology modernisation programme.

The pipeline for new listings and capital raisings will remain relevant, along with trends in cash equities and futures volumes.

The next half-year result should provide clearer evidence of whether revenue growth is keeping pace with the higher expense base and whether increased technology investment is beginning to move through to completed operational infrastructure.

For ASX Limited (ASX:ASX), FY26 demonstrated that active markets can produce strong revenue growth, but FY27 will place greater emphasis on the cost of supporting and modernising the exchange.