Key Highlights

• For the year to 30 June 2026, ASX reported Operating Revenue of $1,254.6 million, up 13.3% on FY25's $1,107.2 million.

• Operating expenses rose 18.9% to $489.6 million, and Depreciation and Amortisation climbed 40.1% to $67.8 million.

• Underlying net profit after tax was $536.4 million, up 5.2%.

• Statutory net profit after tax was $484.9 million, down 3.5%, reflecting significant items of $51.5 million after tax.

What does ASX Limited (ASX:ASX)'s latest update tell investors about the cost of modernising Australia's share market plumbing? In short, the exchange operator has delivered the first stage of its CHESS replacement and grew revenue encouragingly in the 2026 financial year, but it is spending heavily on technology, has cut its payout ratio, and still has a larger second stage to complete.

What ASX does and how it earns revenue

ASX Limited operates Australia's primary securities exchange and related infrastructure. Its income comes from several sources: listings and issuer services, cash equities trading, Derivatives and over-the-counter markets, clearing and settlement, and technical services such as data and connectivity. It also earns net interest income on Collateral and balances held for clearing participants.

Activity levels matter.

FY26 results: revenue up, statutory profit down

For the year to 30 June 2026, ASX reported operating revenue of $1,254.6 million, up 13.3% on FY25's $1,107.2 million. Operating expenses rose 18.9% to $489.6 million, and depreciation and amortisation climbed 40.1% to $67.8 million. EBITDA was $765.0 million, up 10.0%.

Underlying net profit after tax was $536.4 million, up 5.2%. Statutory net profit after tax was $484.9 million, down 3.5%, reflecting significant items of $51.5 million after tax. Net interest income fell 15.7% to $73.2 million.

The total Dividend for FY26 was 206.5 cents per share, fully franked, down 7.5%. The final dividend was 104.7 cents, set at a 75% payout of underlying profit. That compares with 85% in FY25. Management has indicated the 75% ratio is expected to remain for at least the FY27 interim dividend.

The link between the lower payout and Capital needs is our interpretation, not a stated reason.

CHESS: one stage done, another to go

The central development is the CHESS replacement. CHESS is the system that clears and settles Australian Equity trades and records ownership. After years of delay and a project reset, ASX confirmed in April 2026 that Release 1 was ready for market open, and it has since reported Release 1 as delivered successfully.

Release 2 is the larger piece.ing on ASX's technical committee updates, it covers settlement, payments, issuer-sponsored records, registry processes and corporate actions, and is still in build and testing. ASX itself has said industry readiness is the main risk.

Costs, capital and guidance

Delivery has a price. For FY27, ASX has reaffirmed total expense growth of 18% to 21%, with operating expenses excluding depreciation and amortisation growing 13% to 16%. Capital Expenditure is guided at $180 million to $200 million in FY27 and $170 million to $190 million in FY28, mainly for technology modernisation.

Guidance is an expectation, not a certainty.

Regulatory reset and governance

At its Annual General Meeting on 22 October 2026, ASX said ASIC's inquiry into governance, capability and risk management found in April 2026 and that it is implementing the expert panel's recommended actions. It also said ASIC and the RBA had approved the reset Accelerate Program, that the 2024 ASIC litigation over statements about the earlier CHESS project had been resolved, and that a more independent clearing and settlement board structure had been introduced.

Under the inquiry outcomes, ASX must build an additional $150 million of capital by 30 June 2027.

A new strategy, described as "fix, grow and expand", is due at a Capital Markets Day in the first half of calendar 2027. A new chief financial officer was announced on 21 September 2026.

Recent trading activity

At the AGM, ASX said that in the first quarter of FY27 cash Market Value traded rose 7% and futures Volume rose 32% against the same period a year earlier. It attributed activity mainly to geopolitical uncertainty and shifting expectations for monetary policy, and noted Glencore had joined ASX through a dual listing.

The September 2026 monthly report showed average daily on-market cash value of $7.744 billion, up 4% on September 2025, and average daily futures and Options on futures contracts of 1,435,295, up 44%. New capital quoted was $4,181 million, down 84%, against a September 2025 period that included very large new listings. Total listed entities were 2,044, broadly flat.

Competitive position and sector conditions

ASX remains the dominant venue for Australian-listed equities and the main provider of clearing and settlement for them, which gives it scale. It does face competition in equities trading from Cboe Australia and in some services from other providers, and it operates under close regulatory oversight, including the capital requirement noted above.

Its futures Franchise tends to benefit when investors reposition for Monetary Policy changes, which also makes Earnings sensitive to sentiment.

Key risks and what to watch

• Execution: Release 2 of CHESS depends on industry readiness, and delays could raise costs or draw further regulatory attention.

• Costs: guided expense growth is well above revenue growth in FY26, so margins depend on sustained market activity.

• Capital: the $150 million build by June 2027 constrains distributions.

• Market conditions: lower volumes or weaker capital raising would reduce revenue.

• Legal and governance: the statutory derivative action notice and the board changes Warrant monitoring.

Upcoming items include monthly activity reports, any Release 2 timetable update, and the Capital Markets Day in the first half of 2027.

Bottom line

ASX has growing revenue and a encouraging market position, but it is in the middle of an expensive, closely watched overhaul.