Shares in Iress Ltd (ASX: IRE) have jumped 12% on Wednesday (at the time of writing) after the financial software provider delivered full-year results ahead of guidance and outlined a clear pathway to higher margins in FY26.
The rally reflects investor enthusiasm for improving earnings momentum, a strengthened balance sheet, and renewed dividend confidence.
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What did Iress report?
Iress reported statutory net profit after tax (NPAT) of $79.3 million for the year ended 31 December 2025, down 10% on the prior year. However, underlying profit after tax (UPAT) rose 16% to $73.9 million, beating guidance.
Headline adjusted EBITDA increased 2% to $136.2 million, ahead of the $128 million to $132 million guidance range. On a continuing business basis (i.e. excluding divested assets), revenue rose 6% to $504.3 million, while adjusted EBITDA climbed 15% to $132.6 million. Margins expanded to 26%, up 192 basis points.
Underlying earnings per share increased 16% to 39.6 cents.
The board declared a final dividend of 13 cents per share, 100% franked, bringing total FY25 dividends to 24 cents per share.
What else do investors need to know?
FY25 marked the completion of Iress' simplification strategy, exiting non-core businesses such as Superannuation and QuantHouse.
Proceeds from asset sales were used to reduce debt, with leverage falling to 0.5x at year-end, down from 1.0x a year earlier. Net debt reduced materially, providing flexibility to reinvest in product development and support capital returns.
Performance across the continuing business was robust:
- Global Trading & Market Data revenue rose 6%, with adjusted EBITDA up 8%
- APAC Wealth revenue grew 2%, with second-half momentum strengthening
- UK revenue increased 7%, driving a 50% lift in segment EBITDA
Operating discipline remained a key theme, with cost controls supporting margin expansion.
What did management say?
Group CEO Andrew Russell said FY25 reflected disciplined execution and sharper operational focus following the company's portfolio reset.
He highlighted progress on the accelerated business efficiency program, targeting around $30 million in annualised cost savings by the end of FY26, with approximately 60% already delivered.
What's next for Iress?
For FY26, Iress expects revenue of $520 million to $528 million and cash EBITDA of $116 million to $123 million, implying 15% to 23% growth. UPAT is forecast at $84 million to $90 million.
Importantly, management is targeting a FY26 cash EBITDA margin exit run-rate of more than 25%.
After a period of restructuring and divestments, investors appear to be backing Iress' leaner model and improving earnings trajectory.
