The PEXA Group Ltd (ASX: PXA) share price is edging lower today despite the digital property exchange platform reaffirming its full-year guidance and posting solid growth across both its Australian and UK operations in the first quarter of FY26.
At the time of writing, PEXA shares are down around 0.4%, despite kicking off early morning trade almost 2% higher. That might have something to do with weakness across the broader ASX, with the ASX All Ordinaries down 1% at the time of writing.
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A refresher on what PEXA does
PEXA is the digital backbone of Australia's property settlements system. Every time a home is bought, sold, or refinanced, banks and conveyancers use the PEXA Exchange to complete the transaction electronically.
PEXA has around 90% market share, and it charges a small transaction fee each time a transaction occurs, with those fees adding up quickly. Since its launch in 2013, more than 25 million settlements have flowed through the platform.
The company also earns revenue from:
- Refinancing activity, which generally rises when interest rates fall
- Digital Solutions, offering subscription-based tools for property professionals
- Its UK platform, which is now processing remortgages and preparing to launch a full NatWest-backed service next year
In short, PEXA's business model combines recurring, high-margin transaction revenue with a scalable platform.
What the latest quarter showed
In the September quarter, PEXA processed 1.06 million transactions, representing a 6% increase from the same period last year. Property transfers rose 3%, but refinancing activity jumped 16% thanks to recent interest rate cuts.
This demonstrates that even when property sales activity slows down, PEXA can keep making money via refinancing activity, which acts as a cushion.
In the UK, remortgage volumes jumped 32% at Optima Legal and 22% at Smoove. PEXA has now processed more than £200 million in property transfers in the UK since launching there in 2022, and plans to roll out a NatWest-backed remortgage service next year. This is a great indicator that the UK could become a serious second growth engine for PEXA.
Finally, management reaffirmed its FY26 guidance, despite a slight softening in the property market, with revenue expected to be between $405m and $430m, an EBITDA margin of 32% to 35%, and NPAT of $5m to $15m.
Foolish Bottomline
PEXA is a uniquely placed company with its dominant, transaction-based platform that is growing steadily. The UK story is gathering pace, and reaffirmed guidance shows confidence from management. While the share price dipped today, the fundamentals remain strong.
