HUB24 (ASX:HUB) outlined record first-half FY2026 results, highlighting strong platform inflows, earnings growth, and an increased interim dividend, alongside continued investment in technology initiatives including the development of its “myhub” ecosystem and expanded retirement income solutions.
Record platform inflows and market recognition
Chief Executive Officer Andrew Alcock opened the call by describing the half-year as an “outstanding result,” driven by record net inflows in the platform business and higher earnings and dividends.
Operationally, the company reiterated its position as a leading platform for net inflows, including inflows from superannuation member switching, which management linked to demographic tailwinds including retirement and intergenerational wealth transfer.
Financial performance: revenue, earnings, and dividend
Chief Financial Officer Kitrina Shanahan reported group operating revenue of A$245.9 million, up 26% from the prior corresponding period (PCP), with operating expenses up 20% to A$141.0 million. Underlying EBITDA rose 35% to A$104.9 million, with underlying EBITDA margin increasing to 42.7%.
Underlying NPAT increased 60% to A$68.3 million, while statutory NPAT rose 80% to A$59.7 million. Shanahan noted the statutory result benefited from a lower effective tax rate of 18% in the half, reflecting recognition of the full year’s R&D tax benefit in the first half and the utilization of treasury shares to service employee share schemes.
The board declared a fully franked interim dividend of A$0.36 per share, up 50% on PCP. Management reiterated the company’s target payout ratio of 40% to 60%, noting the board remained focused on maintaining flexibility for potential M&A and other activities.
Platform segment: FUA growth, flows, and margin dynamics
In the platform segment, revenue was reported at just under A$200 million for the half, up 30%, and underlying EBITDA was A$93.3 million (up 40%), with an underlying EBITDA margin of 46.7% (up 3.5 percentage points on PCP).
Total funds under administration (FUA) were A$152.3 billion at 31 December, comprising A$127.9 billion in custody and A$24.4 billion in non-custody. Platform custody net flows were A$10.7 billion, with custody market movements of A$4.5 billion and a further A$0.7 billion contribution from non-custody “pass offers.” Management said net flows were up 13% on PCP and total FUA was up 26% on PCP.
Shanahan said the platform custody revenue margin was maintained at 32 basis points. She attributed this to the offsetting impact of higher trading and cash contribution to revenue against “normal admin fee margin compression” due to higher average balances and accounts moving into higher pricing tiers or hitting fee caps. In Q&A, management said it does not disclose a cash-versus-trading split, but noted cash balances as a percentage of FUA were around 7% in the half, and that trading was “very resilient.” Management also confirmed there were no changes to rate cards, describing the uplift in cash and trading as volume-driven.
Management also emphasized increasing usage by existing advisers. Alcock said 92% of flows in the half came from existing advisers, and highlighted an increase in average FUA per adviser to A$24 million, up from A$15 million in 1H FY2022. He linked the trend to advisers using fewer platforms (“platform monogamy”), and described the longer timeline required to win share of an adviser’s book due to advice and best-interest obligations.
Tech Solutions: Class, NowInfinity, and myprosperity
Tech Solutions revenue increased 10% to A$41.9 million, while underlying EBITDA was A$14.1 million. The underlying EBITDA margin in Tech Solutions was 33.8%, down 2.6 percentage points on PCP; Shanahan said expenses included timing differences and suggested the first-half cost base should be viewed as a “normal baseline” going forward.
- Class: accounts grew 5% on PCP, which management described as the strongest growth since 2020. Alcock also cited ATO data showing the highest level of new SMSF establishments in Q1 FY2026 since reporting began.
- NowInfinity: documents ordered rose 16% to over 231,000 in the half; companies using the corporate compliance solution grew 10% to over 904,000.
- myprosperity: management said usage across practices is increasing. The “front end” integration for Class is expected to reach general release in 2H FY2026.
Strategy, AI, retirement solutions, and FY2027 guidance update
Management reiterated the group strategy of “leading today and creating tomorrow,” including building an integrated ecosystem spanning the platform and Tech Solutions businesses. Alcock said HUB24 is developing myhub, an ecosystem integrating advice technology solutions, leveraging investment in myprosperity. A first release of myhub is planned to be piloted in 1H FY2027, with Alcock describing it as featuring AI and human intelligence and providing a single point of access to HUB24 and partner applications. Management said the commercial model is still being worked through and myhub is not yet in front of advisers, though some are involved in design discussions.
On AI, Alcock said HUB24 views recent AI developments as an opportunity and noted the company has used AI and machine learning for more than eight years. Management described existing applications including AI prompts for call center staff, automated testing in development, and tooling to improve productivity, while emphasizing a “human-in-the-loop” approach given regulatory requirements. In response to questions, management said it is not pursuing an aggressive cost-out strategy, instead focusing on growth and reinvestment, while expecting development velocity to increase over time.
HUB24 also discussed a forthcoming lifetime retirement solution with TAL, expected to launch on the platform “in the next couple of months.” Alcock said the offering is intended to provide income for life and manage longevity risk, and he referenced concessional Centrelink treatment features tied to innovative retirement income solutions.
Looking ahead, management updated its FY2027 guidance for custody FUA at 30 June 2027, lifting the range to A$160 billion to A$170 billion from a previous “low water mark” of A$148 billion cited by Alcock. Alcock said this represented a A$12 billion increase six months after the prior guidance was issued. In Q&A, Shanahan said base case assumptions implied around 5% market growth and net flows in the range of A$18 billion to A$20 billion across FY2026 and FY2027, and stated the base case did not assume any large transitions, while noting the range could accommodate one at the upper end. Management also referenced expectations to retain a large part of an MDA portfolio linked to its arrangement with Lonsec.
On costs, Shanahan said the company continues to invest for growth, with employee headcount at 1,010 as of 31 December, up 128 on PCP. Management reconfirmed expected full-year FY2026 group operating expense growth of 18% to 20%, and indicated second-half hiring could be up to around 100 FTE, depending on market conditions and hiring quality.
Shanahan also noted the group held A$27 million of net cash (A$57 million cash less A$30 million in borrowings), and highlighted that cash balances were impacted by increased operational risk financial requirements for the HUB24 Super Fund, rising from A$5 million at 30 June to A$78 million following regulatory changes effective 1 July.
About HUB24 (ASX:HUB)
HUB24 Limited, a financial services company, provides integrated platform, technology, and data solutions to wealth industry in Australia. It operates in Platform and Tech Solutions segments. The company develops and operates HUB24 and Xplore Wealth that are investment and superannuation platforms; and portfolio administration and reporting services for financial advisers, stockbrokers, accountants and their clients, and direct consumers. It also provides accounting, portfolio management, legal documentation, corporate compliance, and self-managed superannuation fund administration solutions; and application and technology products for the financial services sector, as well as license and consulting services for data management, software, and infrastructure.
