Iress (ASX: IRE) Lifts Half-Year Profit 85% as Costs Fall

Iress reported an 85% increase in statutory net profit after tax for the six months ended June 30, 2026. Profit reached $32.0 million, up from $17.3 million a year earlier.

Underlying profit after tax rose 18.4% to $38.8 million. However, revenue and other income fell 16.5% to $250.0 million. The decline mainly reflected the 2025 sales of the Superannuation and QuantHouse businesses.

Excluding those divestments, revenue increased 2.5% on a constant-currency basis. Recurring revenue grew 3.4% on the same basis to $237.8 million. It represented 95% of total revenue, highlighting the subscription-heavy nature of Iress’ software business.

Efficiency Program Reshapes Earnings

Operating expenses declined 22.8% to $181.4 million. On a continuing-business and constant-currency basis, expenses were 1.9% lower.

Average full-time equivalent staffing fell about 5% to 1,138. Iress attributed the reduction to its business efficiency program and disciplined workforce management.

Cash EBITDA increased 34% to $61.1 million. Excluding divested businesses, it rose 44.1%. The associated margin reached 24.5%, up 7.4 percentage points on a continuing-business basis.

Iress now uses Cash EBITDA as its headline EBITDA measure. It deducts capital expenditure from adjusted EBITDA, providing a view of earnings after software and equipment investment.

The company is targeting a 25% Cash EBITDA margin exit run-rate by the end of 2026. First-half capital expenditure fell 60% to $7.5 million.

Segment Gains Offset UK Revenue Decline

Global Trading and Market Data generated $125.3 million of revenue, broadly unchanged from the prior period. Its Cash EBITDA rose 60.1% to $28.1 million, mainly because capital expenditure dropped after the 2025 trading-platform build.

APAC Wealth revenue increased 4.4% to $68.2 million. Cash EBITDA climbed 38.4% to $24.5 million as recurring revenue increased and operating expenses declined.

UK Wealth and Sourcing revenue fell 6.9% to $53.5 million. Unfavourable currency movements accounted for $3.5 million of that decrease. Even so, constant-currency recurring revenue rose 3.1%, while Cash EBITDA reached $8.5 million.

Cash Flow, Debt and Dividend

Net operating cash inflow increased to $45.4 million from $32.0 million. Cash and cash equivalents ended the period at $46.3 million.

Net debt was $70.2 million, up $3.9 million from December. Iress said first-half cash use was seasonally higher due to staff variable remuneration and the final 2025 dividend.

The company also had $125 million of undrawn bank facilities at June 30. Its existing borrowings included £60.5 million of fixed-rate notes maturing in May 2029.

Basic earnings per share rose to 17.1 cents from 9.3 cents. The board declared a fully franked interim dividend of 14 cents per share, compared with 11 cents previously. Payment is scheduled for September 28, with an August 31 record date.

Capital expenditure is expected to increase during the second half as Iress accelerates its product evolution program. That planned step-up makes the first-half margin improvement important when assessing progress toward the year-end target.