Investors are offloading ASX Ltd (ASX: ASX) shares on Tuesday after the market operator outlined a heavier spending outlook.
At the time of writing, the ASX share price is down 8.35% to $53.90.
The sell-off comes despite a solid start to the year. ASX shares are still up around 5% in 2026, although they remain about 24% lower over the past 12 months.
Let's take a closer look at the release.
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Costs are heading higher
In today's update, ASX provided financial guidance for FY 2027 and confirmed its FY 2026 outlook.
ASX said FY 2027 total expense growth is expected to be between 18% and 21%. Operating expenses, excluding depreciation and amortisation, are forecast to rise by between 13% and 16%.
The company said the increase is being driven mainly by technology modernisation, the Accelerate Program, remediation work, and spending linked to the ASIC inquiry and customer growth initiatives.
Capital expenditure is moving up as well.
ASX expects FY 2027 capital expenditure of between $130 million and $150 million. That's up from its FY 2026 capex guidance of between $100 million and $120 million.
The company also expects FY 2028 capex to move higher again, with guidance of between $170 million and $190 million.
A large part of this spending is tied to technology upgrades, including work connected to CHESS Release 1, enterprise cloud, data and integration platforms, and other internal systems.
Why investors are selling
ASX is still a high-quality market infrastructure business, but today's update shows how much money is going into keeping it that way.
The company said the spending reflects its role as a steward of critical market infrastructure. It also pointed to investment in resilience, operational efficiency, data management, AI, automation, and new product initiatives.
But with expenses and capex both moving higher, investors appear to be questioning how long this heavier spending period will last.
Dividends may also be part of the selling pressure.
ASX said its dividend payout range remains unchanged at 75% to 85% of underlying net profit after tax (NPAT). But it expects the payout to sit at the bottom end of that range over at least the next two dividends.
FY 2026 guidance unchanged
ASX did leave its FY 2026 guidance unchanged.
The company said unaudited operating revenue for the 10 months to 30 April 2026 was $1.03 billion, up 12.5% on the same period last year.
It also continues to expect FY 2026 total expense growth of 20% to 23%, including costs linked to the ASIC inquiry and CHESS Replacement Partnership Program.
ASX said it will release its FY 2026 results on 13 August 2026.
