Good morning and welcome to ASX's results briefing for the financial year ending 30th of June , 2025. Thank you for taking part in this virtual presentation. I hope you're well wherever you're joining us. My name is Helen Lofthouse, and I'm the Managing Director and CEO of ASX. I'm pleased to be presenting these results today along with ASX's Chief Financial Officer, Andrew Tobin. First, I'd like to acknowledge the Gadigal people of the Eora Nation, who are the traditional custodians of the country where I'm speaking today. We recognize their continuing connection to the land and waters and pay our respects to the elders, past and present. We extend that respect to any First Nations people joining us today. Today's presentation will cover four areas, and then Andrew and I will take your questions.
I'll begin with the highlights from the year, then Andrew will provide a more detailed view of our financial performance, and I'll then provide an update on the delivery of our accelerate and technology modernization programs, as well as progress on some of our customer-driven growth opportunities. This will be followed by some observations on market outlook and its implications for ASX. We'll finish with Q&A. Let's begin with highlights from FY 2025. We delivered strong operating revenue, which was driven by our portfolio of high-quality businesses, which deliver value for our markets and for our shareholders. We saw strong revenue growth in our markets, technology and data, and securities and payments businesses, with listings being stable. Andrew will provide more detail on our financial performance shortly, including each line of business, and I'll talk about business outlook at the end of the presentation.
We run critical market infrastructure, and Australia's financial system depends on us. We hold nine licenses, which means that we must make sure we're operating at the highest standards commensurate with this. That's crucial to creating sustainable long-term shareholder value. To support this, we have been investing in our great fundamental strategic pillar, and particularly our key focus areas of operational risk management and resilience uplift, and technology modernization. I'll provide more detail on our progress in these focus areas shortly. Finally, we continue to be cost-conscious in the way we run the business, including being disciplined in our approach to prioritization and improving efficiency. During FY 2025, this included further actions taken as part of our operating efficiency program, which Andrew will talk to in more detail shortly. Turning to our financial highlights, ASX delivered a strong financial performance in FY 2025.
We reported operating revenue of $1.11 billion, which is up 7% compared to last year. Underlying net profit after tax also benefited from growth in net interest income and increased by 7.5%. Statutory profit was up by 6% following the impact of significant items. The Board has determined a fully franked final dividend of $112.10 per share, reflecting a payout ratio of 85% of underlying NPAT, which is in the middle of our guidance range. This brings the total dividend to $223.30 per share, an increase of 7.4%. Our EBITDA margin also increased by 70 basis points to 62.8%, and we're targeting margin expansion from the current level over the medium term. Underlying return on equity, one of the key metrics by which we measure the performance of the organization, is up by 60 basis points to 13.6% for the year and well within our medium-term target range.
Our five-year strategy is about transforming ASX to make sure we're operating at the highest standards commensurate with our role in the Australian financial system and positioning ourselves to capture future growth opportunities. As you'll remember, this strategy required a reset of our capital management settings to support the investment required in our organization. As I said earlier, this investment in the great fundamentals of ASX is focused on modernizing our technology environment and uplifting our operating management frameworks. We're making good progress on delivering our technology roadmap. However, we're not where we want to be in terms of operational risk management and resilience. Earlier this year, we implemented a program which will prioritize and increase the pace of our work in this area, and that's what Accelerate is about.
At our investor forum, we provided some detail on the Accelerate program and how we see it as a key vehicle for achieving our operational risk management and resilience uplift. It will be enabled by our focus on capability and culture, including uplifting our leadership capability, risk culture, cross-organizational change capability, and workforce strategy and planning. While many of the elements of the Accelerate programme were already underway as part of our five-year strategy, the development of this programme gives us a further opportunity to make sure that we achieve our key milestones through rigorous planning, disciplined execution, and embedding the uplifts we're making. All of this needs to be supported by effective change management, culture, and capabilities. An important part of Accelerate is ensuring that the lessons we've learned and the uplifts that we make are applied across our entire organization where relevant.
We also need to apply learnings from other financial institutions, both domestic and offshore. As part of the Accelerate programme, we're targeting the delivery of several uplifts to our operational risk and resilience profile during FY 2026. This includes a refreshed risk operating model and enhancements to core risk capabilities, and this will underpin our approach as we move to a more proactive risk and learning culture. We also plan to continue improving our technology environment and data management, as well as uplifting our business resilience profile. The Accelerate programme is a high priority for us, and we've taken important steps to make sure that we're in a position to deliver. We're taking an integrated approach across the organization, which includes investment in capacity and capability, and the enhancement of governance and oversight to track our progress. While we have plenty to do, I am confident this is achievable.
This is a crucial part of how we're building a better ASX and driving long-term shareholder value. Now I'd like to provide an update on the progress in our indicative technology modernization roadmap. We last published this roadmap at our investor forum in June, and since then, Release 15, which is part of our cash market trading project, went live on the 23rd of June . We've also begun replacing and simplifying our trading network infrastructure. These private telecommunications networks underpin our cash market trading and derivatives market trading systems. They provide secure and dedicated connectivity for participants to our applications. Once the replacement is complete, we expect that it will improve customer experience and increase network resiliency. For the CHESS project, we're working closely with the industry as we continue the technology build and undertake testing.
Industry testing for Release 1 is continuing, and we've had good levels of engagement with approved market operators, or AMOs, and their specific software providers. The code required by AMOs to complete their remaining testing activities in preparation for the accreditation phase was delivered last month. We continue to target Q4 of this financial year for the go-live of Release 1. In mid-June, ASIC announced that it will commence a compliance assessment and inquiry into how well ASX is complying with its obligations as a market licensee and a clearing and settlement licensee. Since then, it's appointed an expert panel to examine the frameworks and practices within the ASX group related to governance, capability, and risk management. This is a wide-ranging inquiry that will provide an independent and transparent view of the work we've done and the work that we still need to do.
It's expected that the panel will provide their report to ASIC by the end of March 2026. We're taking this inquiry very seriously and are cooperating fully. We have a dedicated team who are ensuring that we quickly and proactively coordinate our response to the inquiry. This response requires a significant investment of time and resources by the organization, and we announced the financial impact of this last week. As I said earlier, ASX is two years into a multifaceted transformation, driven by the significant investments we're making in our organization as part of our five-year strategy. The Accelerate program is a key vehicle driving our operational risk and resilience uplift, and we'll actively review and refresh this program based on feedback from the inquiry. More broadly, we run critical market infrastructure, and trust and confidence in ASX is a goal we share with all of our stakeholders.
I've said previously that our role has always meant that we're subject to scrutiny, and that's appropriate. We have high expectations of ourselves, and the community has high expectations of us too, which is why last week's issue relating to TPG Telecom was very disappointing. It demonstrates how an error by ASX can be very disruptive, and we've acknowledged that mistake and apologized to TPG Telecom for the incorrect cross-referencing of their ticker to a market announcement by another company. We're reviewing that incident and making sure that we are learning and improving. I'll now hand over to Andrew to provide a more detailed view of the financial results.
Thanks, Helen, and good morning, everyone. As Helen has already mentioned, we delivered strong operating revenue this financial year, demonstrating the quality of our portfolio of businesses. Operating revenue was $1.11 billion, which was an increase of 7% compared to the prior corresponding period, or PCP. Total expenses for the year were $460.3 million, which is up by 7.2% and below the midpoint of our guidance range. Net interest income was up by 13.2% to $86.8 million, supported by higher net interest received from ASX's cash and collateral balances. Underlying net profit after tax was up by 7.5% compared to 2024 due to the strong growth in operating revenue and net interest income. ASX's statutory net profit after tax was up by 6% following the impact of a significant item.
This primarily represents an onerous lease provision incurred in the first half as a result of moving our Sydney headquarters to Martin Place. Our EBITDA margin was 62.8%, an increase of 70 basis points compared to FY 2024 following the strong operating revenue performance and lower operating expense growth. Underlying earnings per share of $262.90 is consistent with the trend in underlying net profit after tax. Underlying ROE generated in the year was 13.6%, up 60 basis points compared to the PCP, which reflects the increase in underlying NPAT. Now, turning to the business unit revenue outcomes, starting with listings, total listings revenue was stable at $208 million. Annual listing fees make up around half of total revenue for listings and are driven by market capitalization, as at 31 May each year. Higher market capitalization in May 2024 supported revenue growth of 2.9% to $110.3 million in the period.
We recognize the revenue derived from initial listings and secondary raisings over five years and three years, respectively, and so the revenue outcomes reported mainly reflect prior period activity. This is shown on the bar charts on the slide. This amortization profile was the primary driver for lower initial listing revenue recognized in the year of $18.9 million, down 5.5%, and secondary raisings revenue of $68.5 million, down 5.9% compared to the PCP. Total new capital quoted for the year was $90 billion, up 10.1% due to stronger activity across our listed markets, particularly secondary raisings and dual listings, and total net new capital quoted for the year was $35.6 billion, up 27.9%. Moving now to the markets business, this business generated revenue of $349.2 million, up 10.7% compared to FY 2024.
Futures and OTC revenue of $262.6 million was up by 10.4% on last year, supported by a 19.5% increase in total futures and options on futures volumes, as global interest rate market conditions in the period drove strong activity along the curve. Strong growth was observed across all major products, including 90-day bank bill futures and three and ten-year treasury bond futures, with traded volumes up 23%, [30%], and 19%, respectively. Commodities revenue was down, primarily driven by lower trading activity in electricity derivatives as a result of lower volatility in electricity prices. Cash market trading revenue was $69.5 million, up 15.3% on PCP, driven by a 15.8% increase in the total ASX on-market value traded. This was also supported by options traded value, which was up by 19.9%. ASX's share of on-market cash market trading averaged 88% for the year, which was consistent with the PCP.
Equity options revenue was $17.1 million, down 0.6%, reflecting lower trading activity in index options, which was partially offset by an increase in single stock options. Now, looking at the technology and data business, this business had another strong period with total revenue of $275.6 million, increasing by 8% compared to FY 2024. Information services generated revenue of $171.3 million, up 9.6%, supported by strong demand for data across equities and derivatives markets. Technical services was also up, with revenue coming in at $104.3 million, up 5.6%, despite the decline in the number of cabinets at our ALC data centre. Revenue growth was primarily driven by demand for core infrastructure services, increased access to ASX applications and third-party ecosystem connections, along with targeted fee increases. Finally, moving on to our fourth business segment, securities and payments. This business generated revenue of $274.4 million, up 7.4%.
Issuer services revenue was $58.5 million, up 0.7%, driven by a higher number of CHESS statements issued, reflecting higher activity in cash markets. Equity post-trade services revenue also benefited from higher activity in cash markets, increasing by 5.4% to $136.4 million. Austraclear generated revenue of $79.5 million, up 16.7% compared to last year. It benefited from strong debt market activity during the year, leading to a 16.2% increase in transaction volume and a 5.6% growth in the balance of issuances to $3 trillion at 30 June. Austraclear revenue also includes the net operating contribution from Sympli, ASX's property settlement joint venture. ASX's share of Sympli's operating loss was $11 million, compared to a loss of $10.8 million in FY 2024.
There remains ongoing uncertainty around the timing of interoperability between e-conveyancing platforms, and we continue to review our equity portfolio to consider if it is delivering the right return for our shareholders. Turning now to expenses. Total expenses for the year were $460.3 million, up 7.2% on the PCP , which is below the midpoint of our guidance range. Employee expenses were well contained and up by 0.5%. Permanent and contractor headcount increased from 1,193 in FY 2024 to 1,331 at the end of this year. The growth in project-related headcount primarily relates to our technology modernization program and reflects the increased level of activity in the trading, derivatives clearing, and CHESS projects. Technology expenses were higher, primarily due to higher licensing fees and costs related to technology projects. This was partly offset by a decline in administration expenses and the ASIC levy in the period.
Regulatory expenses increased by 9.5% and primarily relate to legal costs associated with an ASIC investigation and ongoing ASIC litigation. We reported depreciation and amortization of $48.4 million, up 30.8%, as more elements of our new technology systems started to go live. Turning now to total expenses growth. FY 2025 total expenses growth was 7.2%, which is below the midpoint of our guidance range. Operating expenses growth was 4.9%, which is at the lower end of our guidance range and reflects the cost optimization actions taken during the year. Last Thursday, we announced that we are expecting to incur additional operating expenses of between $25 million and $35 million to respond to the ASIC inquiry. This includes the establishment of a secretariat function to manage our response, legal costs, and other internal and external costs.
As a result of this, we have updated FY 2026 total expense growth guidance to be between 14% and 19% compared to FY 2025. Excluding the expenses related to our response to the ASIC inquiry, we expect total expense growth of between 8% and 11% for the core business. Depreciation and amortization is expected to make a higher contribution to FY 2026 total expenses than in previous periods. We expect D&A to increase by a similar dollar amount as FY 2026 in each year for the medium term, as more of our major technology projects go live. Excluding D&A, we expect operating expenses growth of 4% - 7% for the core business. Similar to FY 2025, we anticipate the growth in FY 2026 operating expenses will be primarily driven by a further increase in technology expenses due to higher software licensing fees and costs related to technology projects.
This element of our guidance also includes costs associated with the Accelerate program, which Helen talked about earlier. As we said at the investor forum, we've been taking further actions on core business operating expenses under the ongoing efficiency program. This is expected to achieve approximately $17 million in annualized savings in FY 2026. This program continues the work we've been doing on workforce optimization, the simplification and automation of processes, and strategic procurement. We will report the operating expenses we incur in relation to the response to the ASIC inquiry separately to give you transparency on the total expenses for our core business. Now moving to capital expenditure. FY 2025 CapEx was $176 million within our guidance range. Today, we confirm the forward guidance provided at the investor forum in June.
We have narrowed our guidance range for FY 2026 to be between $170 million and $180 million, with a range of $160 million and $180 million for FY 2027. This reflects the multi-year delivery profiles of our major projects, but noting the inherent delivery risks in the technology program may impact this guidance. Our aim is for CapEx to start to reduce after FY 2027. We also expect an average depreciation and amortization schedule of five to 10 years for these major projects once they go live, noting that the CHESS project is expected to be amortized over 10 years. Moving now to net interest income. Net interest income consists of net interest earned on ASX's cash balances and net interest earned from the collateral balances lodged by participants to meet margin requirements. Total net interest income for the year was $86.8 million, representing an increase of 13.2% compared to FY 2024.
Group interest income of $38.5 million was down 7.7% and was primarily driven by higher financing costs relating to the full-year impact of the $275 million corporate bond and an increase to the committed bank liquidity facilities to support ASX Clear. This was offset by higher earnings on ASX's cash due to the higher ASX group cash balances and higher average collateral balances during the year. As we said at the investor forum in June, any reduction in the RBA cash rate, including the two from May, will have an impact on the net interest income on ASX's group cash. Net interest earned on the collateral balances was $48.3 million this year, up 38% compared to the PCP. This reflects an increase in the average collateral balance to $12.2 billion this year due to growth in activity across our markets.
This was combined with a 6 basis point increase in the average investment spread on these balances to 16 basis points, as we saw opportunities to achieve higher returns by adding a small amount of tenor to our investment portfolio. We expect this spread to stay around the current level in the next financial year. The average collateral balances subject to risk management haircuts increased from $6.8 billion to $8.2 billion this year as overall collateral balances increased. As at 31 July , collateral balances of $13 billion and balances subject to risk management haircuts of $9.6 billion were higher than the full-year average. ASX's balance sheet continues to be strong and positioned conservatively with an S&P long-term rating of AA-. From a shareholder return perspective, underlying ROE for the year was 13.6%, up 60 basis points compared to FY 2024, reflecting the higher reported underlying profit.
As Helen mentioned earlier, the Board has determined a final fully franked dividend of $112.10 per share, or 85% of underlying earnings per share, reflecting the midpoint of the dividend policy to pay out 80%- 90% of underlying NPAT. This takes the total dividend to $223.30 per share, fully franked. The Board has also approved the operation of the dividend reinvestment plan for the final dividend. No discount will be applied to the DRP share price, and shares issued will be neutralized. Our balance sheet and shareholder return profile provide the capital management flexibility to support ASX's future funding requirements. This includes a dividend payout ratio range of 80% - 90% of underlying NPAT and the operation of our dividend reinvestment plan.
We have $300 million in corporate debt facilities available, which are currently undrawn, as well as a $275 million corporate bond, which we raised in February last year. We also have a leasing program of up to $60 million to help support our future technology equipment requirements. In summary, the strong operating revenue we reported in the year reflects the strength of ASX's diversified businesses. Despite the additional operating expenses relating to our response to the ASIC inquiry, which we expect to incur in FY 2026, we continue to target an increase in our EBITDA margin percentage over the medium term from where we were in FY 2025. This demonstrates our ongoing focus on operating cost control, as well as revenue growth opportunities. We also continue to target an underlying ROE range of 13%- 14.5%, which illustrates the strength of our portfolio of businesses, market positions, and value chain.
I will hand back to Helen. Thank you.
Thanks, Andrew. I'll now provide an update on our customer-driven growth opportunities before finishing with outlook and guidance. Many of our customers have observed the uplift in the way we're listening and partnering with them to make sure that we're offering the products and services that they need. At the investor forum in June, I talked about the three main ways that we're looking to create customer-driven growth. These are market quality, pricing and rebates, and new initiatives. Today, I wanted to provide an update on the progress of some of our near-term opportunities since then. Starting with market quality, as I mentioned before, the recent update to our cash market trading platform is delivering benefits for participants and improving market quality. We've now moved to a single opening auction, which was strongly supported by our customers.
The removal of the staggered open also resolves structural challenges, including ETFs opening before their underlying constituents. Another feature is the introduction of a post-close trading session, which is supplementing the existing closing auction. This provides an additional opportunity for investors to execute any residual orders and has driven an increase in activity. We have a review underway of elements of the listing rules as they relate to shareholder approval requirements in transactions. We've held roundtables with investors, and we look forward to receiving input from a wide range of stakeholders as part of a public consultation later in the year. You may have seen our recent announcement that listed entities must now publish the nature and effect of any waivers granted by ASX in order to provide greater transparency to investors.
This is an important first step in the process, as we want to make sure that our market evolves to remain attractive to companies and investors in Australia and around the world. Next is pricing and rebates. We regularly review our pricing across our businesses, as well as our rebate structures in our markets and securities and payments businesses to ensure that we're delivering value for our customers while recognizing the value of the crucial services that we provide. As we're currently the only provider of cash market clearing and settlement services, pricing is subject to additional regulatory settings and oversight. We introduced a new pricing policy for those services from the 1st of July this year. This applies to cash market clearing and settlement and issuer services, which together equate to approximately 18% of ASX's FY 2025 group operating revenue.
This model uses a methodology similar to other regulated infrastructure providers, resulting in a targeted return of 11.5% each year on our capital allocated to this part of the business. We do not expect changes to fee levels in the next two years. In addition, this new pricing policy will replace the previous revenue share arrangements. For new initiatives, we launched our debt market activity product in the second half of FY 2025. This product offers aggregated repo, bond, and money market activity data from the Austraclear Settlement System. This newly available data allows issuers and market participants to accurately assess the size, market share, and relative activity levels in the primary and secondary market. It provides details of the most active instruments and tenors, and unique liquidity and concentration metrics for index tracking, relative value, and market impact insights.
This product is generating interest from both domestic and global participants looking for a more informed view of the Australian debt markets. We also launched ASX Colo On Demand in late June. This is a fully managed infrastructure as a service solution within the Australian liquidity data center. It enables rapid client onboarding and scalability, creating a solution that allows access to ASX's trading and clearing and settlement services without the need for on-premises equipment. We continue to review our equity investment portfolio to ensure it's aligned with our strategy and providing the right return on the resources allocated. We had flagged for some time that we were exploring the sale of our shareholding in Digital Asset, as it was no longer core to our strategy. We completed the sale of our stake in mid-June with a pre-tax gain of $9 million compared to the original acquisition cost.
Before I move to outlook for our businesses, I wanted to talk about the importance of public markets more broadly. A vibrant public market is critical to the Australian economy, powering economic growth, innovation, and wealth creation. You may have seen ASIC's announcement last week that it's considering granting a listing market application to CIBO Australia. We are supportive of competition, and we have a strong value proposition. A recent endorsement of this is Light & Wonders' announcement that it plans to move from a dual listing with NASDAQ to being solely listed on ASX. Our listings business competes with many other local, regional, and global exchanges and continues to offer one of the world's leading listing venues with over 2,000 listed entities. We already compete with Cboe in Australia, both in trading securities and in listing exchange-traded funds.
Moving now to the outlook for our listings business, there was solid momentum in listings activity in the second half of FY 2025. During that period, there were 30 new listings, including the IPOs of Virgin Australia and Infragreen Group, as well as several dual listings, including Southern Cross Gold. Geml ife completed their IPO in July, and there continues to be interest from companies considering a listing in FY 2026. As I just mentioned, market quality is a key focus for us. Net new capital quoted is an important metric to measure the quality of our listings market, as it takes into account delistings, new listings, and secondary raisings. Net new capital quoted was $51.3 billion in the first seven months of calendar year 2025, which was driven by this new listings activity, as well as secondary capital raisings.
Strong cash market activity continued into early FY 2026, with total value for July up by 20% compared to the same month last year. Volumes were primarily driven by expectations of local and global central bank rate cuts, combined with volatility caused by international geopolitical events, and particularly U.S. economic policies. Total futures and options on futures volumes fell 5% in July 2025, compared to the same month last year. Despite this decline, the current rates futures environment remains supportive, with activity across the curve. At the short end, activity is being driven by ongoing speculation about RBA monetary policy settings. At the longer end of the curve, volumes are being driven by domestic debt issuance and global economic dynamics and their impact on central bank rates and currencies.
We have more new data products which are targeted to launch this year, including our new ASX 24 activity product, which went live in July. We expect that additional products will also launch throughout FY 2026 to provide fresh insights into the markets ASX operates. Moving now to guidance. Our response to the ASIC inquiry is expected to increase our FY 2026 operating expenses by between $25 million and $35 million. This has increased our FY 2026 total expenses gross guidance to between 14% and 19% compared to FY 2025. Excluding these additional costs, we expect total expenses growth of between 8% and 11% for our core business. FY 2026 capital expenditure is expected to be between $170 million and $180 million, and between $160 million and $180 million in FY 2027. Our aim is for it to start to reduce.
As our CapEx is primarily to support our technology modernization program, inherent delivery risks in the program may impact this guidance. In terms of key metrics, we're targeting an increase in our EBITDA margin percentage over the medium term from where we are now, despite the additional inquiry response-related operating expenses incurred in FY 2026. Underlying ROE remains a key metric for the organization, as we continue to focus on disciplined cost management and growth opportunities. Thank you, and I'll now invite questions.
Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2. If you are on a speaker phone, please pick up your handset before asking your question. The first question today comes from Julian Briganza at Goldman Sachs. Please go ahead.
Good morning, guys. Thanks so much for taking our questions. Just the first question on the spread benefit on the collateral balances. Can you just elaborate what's driving it firstly? Then secondly, if I just look at it half on half, it looks like you're seeing an increase in the spread, yet still, I think you're sort of saying for FY 2026, about 16 basis points, with the second half, I think, at about 17 basis points. I just want to understand that trajectory, and is there room for further improvement as well, upside risk to this number for FY 2026? Thanks.
Thanks, Julian. Andrew, do you want to?
Yeah, thanks, Julian. I think from memory, Julian, we published 15 basis points in the first half, 16 on average for the full year. It has been extending slightly. We've taken advantage of some opportunities still at the short end of the curve. You'd probably understand that our weighted average of the portfolio is relatively short, but there have been opportunities that we've taken advantage of over the last six to 12 months. It's difficult to forecast fully into the future, but our best guidance at this stage is to guide to around these levels, around 16 basis points going into FY 2026. It really just depends on those opportunities persisting into that period of time.
OK, no, that's clear. Just the second question on the annual listings fees, which didn't seem to show much growth in the second half, 25% versus the PCP. Feels like you're saying you put through some pricing, got some market cap benefits, but that was offset by lower revenue recognition on the initial and secondary listings. Can you maybe just on that last piece articulate your forward view of where this kind of bottoms out in terms of initial and secondary listings, how much more pressure we can expect to see on the amortization of that? Just your perspective on that, thanks.
Julian, the thing I look to is sort of the net capital added to the market, and that's been positive, really strong performance in the last six months. That's a good indicator of the trend in initial and secondary fees, that amortization profile increasing into the future. It does depend on the rate of roll-off, and in the charts today, you can see that roll-off profile. You can follow from our monthly market activity report the net capital that is coming to the market. Hopefully, that assists you in modeling that forward, but it has been a strong last six months.
OK, no, that's clear. The last question in terms of simply losses from here, any comments around FY 2026? It seems to be pretty stable, around $5 million, $5.6 million and a half. Just any comments around whether we'd see a benefit into FY 2026 from more cost control on that business? Thanks.
We haven't guided specifically, Julian, but I would note that the business did take further action to restructure in the last six months. That will reduce slightly the cost base going into FY 2026.
OK, great. Thanks so much for that.
Thank you. Your next question comes from Andrei Stadnik at Morgan Stanley. Please go ahead.
Good morning, Andrew. Helen, can I ask my first question around just the dividend and how you're thinking about the dividend sustainability in the sense of the cash position reduced by almost $150 million year-on-year, given disconnects between cash expenditure and accrual expenditure? How are you thinking about the dividend payout sustainability going forward?
That is a matter for the Board to consider each period, Andrei. At this stage, we have signaled that that is the current dividend payout policy, 80% - 90%, 85% determined for the last couple of years. If I think about going forward, sort of modeling out profitability, we've signaled the increasing amortization or depreciation profile, which is a non-cash component of our profit outcome. If you sort of model that forward, that gives you sort of positive cash coming out of the business.
Thank you. Can I ask about cost? I appreciate it's sort of a tough one, but something many investors are thinking about is just the cost outlook into FY 2027, particularly given additional impulse in FY 2026 on what should be one-off from the broad range in ASIC inquiry. How are you thinking then in terms of cost into FY 2027? Do you think that $30 million should entirely fall away, or should investors be thinking there are prospects of maybe additional operational risk management spend that might need to arise heading into FY 2027?
I'll field that one initially. The range that we've given of $25 million- $35 million that we expect to spend on the ASIC inquiry response, we believe that's specific to this year. We've obviously got a transformational strategy in place. We've talked about the Accelerate program and the importance of that in driving our operational risk and resilience uplift. That was work already underway that we also talked about at the investor forum. We don't give guidance for FY 2027, as you know, but the $25 million- $35 million is a piece we expect to be specific. Beyond that, it's very difficult at this stage to, it's certainly not appropriate for me to prejudge what the outcome of the inquiry might be.
Thank you. If I can ask a third final question, just in terms of the markets business, if issuers' revenues were up just over 10% year-on-year, or volumes were up almost 20%, is that a combination of mix shift, or is there some pricing as well to see what's kind of driving that gap between revenues up 10%, volumes up almost 20%?
Yeah, definitely some mixed shift. Also, with the increased volumes, you've got increased volume rebates. We had slower performance in our commodities business, in the futures, in the derivatives part of the business, which is typically a higher price point, and big growth in the rates part, which is the lower price point part. That's the mixed shift. With rates growing so significantly, you've got the impact of volume rebates there. The pricing, and particularly the rebates, is certainly an area that the business actively looks at to make sure that those are set appropriately to try and drive the right market quality. Those were the dynamics that we saw in FY 2025.
Thank you.
Thank you. Your next question comes from Ed Henning at CLSA. Please go ahead.
Hi, thanks for taking my questions. I've got a couple, unsurprising. I'll start on costs and a bit more on the outlook there. You touched on before you're hoping that $25 million- $30 million is a one-off. If you think about the review, and potentially you've been through a few of these, you talked about you're investing in your technology and your pathway's kind of set there. What do you see the risks coming out of the review? Is it just about increasing the pace of the technology, or is it more people, or is it more ASIC regulation, which they've then got the chargeback model? I'm just trying to think about the unknowns going forward, potentially on the risk for costs as a first question, please.
I think if you're, first of all, it's worth looking at the scope of the inquiry. It's looking at our frameworks and practices around governance, capability, and risk management. That gives you a sense of the brief. Those are certainly areas that we're already very focused on as part of the Accelerate programme. The challenge, I suppose, in your question is it's not really appropriate for me to preempt the outcome of an inquiry that's at this stage in quite an early stage. We certainly expect that they'll take a good look at the work that we've already got in plan and consider whether that's the right work. It's hard to say what their conclusions will be when they announce their report in March.
Thank you. Just to follow on costs, the operating expense growth at 4% - 7%, same as last year, that's well above inflation. How can you get this down to run around inflation, or is it just too hard with the vendor costs continuing to push this up, and you're kind of beholden to them? You're going to run above inflation, kind of looking forward as how we should think about it.
You've correctly identified the technology costs as an area where we typically have seen well above inflation growth. Of course, that is a significant area of spend for us. That is a component of it. The work we're doing on the Accelerate programme is also a key component of that. There are various areas that go into that cost growth. Equally, we do continue to focus on our cost optimisation programme. We've obviously talked for a couple of years now about the results that we have there, and we're also prioritising what we're doing very carefully.
Do you think with this cost optimisation programme, you can continue to potentially get more savings coming through? The cost growth continues to kind of ratchet up, and you've talked about higher D&A again coming through, which I understand why. Is it becoming more and more important to try and get that cost growth down for the time ?
I think being cost-conscious about how we run our business and looking for efficiencies in that is just part of running a good business. You can expect it to continue to be a focus. In some areas, it also aligns with the work that we are looking at around managing risks and more effective controls, right? As we drive automation in some areas, that has multiple benefits. I think the opportunities will continue for us to be able to focus on cost in some areas. I also go back to the prioritization point, right? We need to choose carefully where we're focusing our time and effort.
Just one last question on the annual listing fees. You touched today in your presentation that potentially CRB might be getting a license or the ASIC is reviewing that. When they came into the trading market, fees significantly dropped, or just before they came in from you guys. Can you talk about how you're seeing risk in this? Can a company shift away from giving you annual listing fees and how we should think about potential competition coming into that space?
Sorry, just to clarify, you're talking about competition in corporate listings specifically?
Yep.
Yes.
The annual listing fees, yes.
Yes, got it. OK. I think the thing to bear in mind with our listed market is it's already an intensely competitive market for us. Because any company that wants to list, or even any company that wants to raise capital, has a choice about how to do that. They've got a choice of different exchanges already in Australia, in the region, globally. Of course, they've got a choice of public and private markets as well. I think that's just an important context to consider, that our pricing and our value proposition is within an already very competitive market.
Thank you.
Thank you. Your next question comes from Nigel Pittaway at Citi. Please go ahead.
Morning, guys. Just first of all, sorry, another question on costs, but just on the $25 million- $35 million, with the inquiry not finishing till March 2026, why is that enough? Are there any risks to it? Just in terms of the timing of incurrence, is it a relatively straight line between now and March, or is there a sort of front-loaded or back-loaded component to that?
Thanks, Nigel. It is obviously a fairly wide range we've given, and that does reflect some uncertainties. We've never done one of these before, so there are some uncertainties in that. That said, we have set up the ASX secretariat and the various areas of support that we need to do that. There are parts of it which are already known and on track, and other pieces that are less certain. In terms of when we incur those costs, there's obviously an intensive period in the first half of the year, but the report will be delivered at the end of March. We're certainly expecting that we'll have some follow-up work to do after that in terms of our response to the report. At this stage, lots of intensive activity this half, but we do expect it to carry on at a reasonable level throughout the year.
I mean, Andrew, anything you'd add to that?
Yeah, I think maybe Nigel weighted a little bit to the first half, but you know, the exact percentage is difficult to guide on.
Yeah, fair enough. OK, thank you. OK, and then maybe just also honing in a bit on sort of a subject that's already been asked to a degree on the derivatives yield. It did seem to fall from $1.37 to $1.31 first half to second half. I guess the question is, do you think an element of that is maxed out? Would the rebate component largely have maxed out, so unlikely to fall as much moving forward, or is that not an appropriate conclusion?
I don't have a definitive answer to that question, Nigel. I would say that, you know, taking a look at those rebate structures and making sure that they're shaped in the right place to make sure that we're supporting market quality and driving the right liquidity is certainly a focus area for the team. I can't give you a definitive answer on whether that's the absolute limit.
Right, OK. Maybe going the other way, on information services, obviously, you've got around about 10% growth this year. It's roughly in line with the five-year CAGR. Given sort of interest now in data and new products and demand for data, is it reasonable to expect that business to be able to grow at more than that double-digit rate if we look forward rather than back?
Certainly, we do think there's further growth opportunity in data. As you'd have seen from the presentation, I was talking about some of the data products that we have already launched during FY 2025, and there's further work we're doing. We certainly think that that's a key area of opportunity. Clearly, when you launch new products, sometimes those can take a little while to get to maturity, but it continues to be an area of investment and focus for our growth strategy, yeah.
OK, no suggestion that it necessarily can grow faster moving forward than it has done in the recent past?
I guess at this stage, we don't guide to a sort of business-specific growth target.
All right. Maybe just finally, the issue of services revenue does seem to have come down second half versus first half. I know in the first half, you were flagging that subscription revenue declines are a bit of a drag on that line. Are we to presume that that's sort of become even more of a drag second half, and does that continue moving forward?
I don't have all of the detail to hand there, but one of the dynamics that's quite interesting in issuers' services is we're pushing hard for people to shift to e-statements and working very closely with the industry on that. In terms of that, that does play into the dynamics in the business profile as well, because the shift to e-statements reduces revenue from hard copy statements going out, but it also reduces the cost line from those hard copy statements going out. We think it's very beneficial for the market to shift largely to e-statements. That is one component that will have an impact on the top line revenue, but also on the costs.
OK, thank you.
Thank you. Once again, if you would like to ask a question, please register by pressing *1 on your phone. Our next question comes from Siddharth Parameswaran from JPMorgan. Please go ahead.
Good afternoon. I had a couple of questions. One, firstly, on expenses. Just a very large increase that we saw in technology costs in 2025 versus 2024. I think you're flagging that that's a big driver of the cost increases into 2026 as well, despite your efficiency program. A lot of this year, you're actually attributing to software costs and cost of projects. I was just wondering if you could give us some idea around licensing costs and whether, given that we are getting new systems in a few areas, I was just wondering, should we expect that after 2026, we have more of a run rate on these licensing costs, or as further components are turned on, should we expect significant growth again?
Yeah, I might grab that question. Thank you. Basically, it's been driven by software licensing costs going up, and that's tied to sort of headcount increases across the business. As more people come into the organization, that sort of leads to increase in those license fees, as well as some sort of cost pressures in the license fee per unit cost as well. We're also transitioning to more cloud-based usage of technology more broadly in our organization, and that's a key driver also. In terms of run rates, we don't guide beyond FY 2026, but we are probably transitioning that technology cost to a more normal level as we broadly transform the organization.
OK. Just related to that, I think you're guiding to CapEx coming down, and I presume some of these big tech investments coming down. Should we assume that headcount related to that will come down as well, and maybe some of these licensing fees might come down from post 2027?
Yeah, that's a key assumption that is tied to the CapEx spend. We do capitalize headcount costs in building some of those major projects. As those major projects get completed, you'd expect to see that reduction also. That's a couple of years away, Sid.
Sorry, just to clarify, you would expect to see a reduction in some of the technology costs as well, some of these software-related costs in there. That's what you're saying?
No, specifically the CapEx profile. We've called out an expected decline, but that includes headcount that's been capitalized into those projects.
OK, fair enough. Just another question on the CapEx. With the guidance that you have given, I think you do mention that if there's any delays or anything, those CapEx timeframes and profiles could change. I was just wondering, are there any buffers built in, or is this sort of, you know, if you hit your projects timeframes, that's the profile that you're guided to is what we'll get?
Yeah, we do publish a range, and I suppose you can think about that as buffers perhaps. The key point is that a lot of these changes are also impacting our customers, and there are change impacts that need to be thought of more broadly across the industry. That's the key call out there, that things may change as a result of some small changes in the portfolio. The technology roadmap provides sort of a view of those logical windows when we think those implementations will be completed, though.
OK, thank you. Just a final question from me. Just the new pricing approach for clearing and settlement from 1 July . I was just keen to know if you've had any feedback from stakeholders or regulators on your new approach.
Look, the approach has been consulted on. It was actually last year when we did the consultation on the new approach. We got lots of feedback. We've done a lot of work with the industry, making sure that we fully understand people's feedback, making a number of adjustments to the policy to reflect people's feedback. It's also gone through some of our formal stakeholder committees, the business committee and the advisory group for cash market clearing and settlement. Those groups also include our regulators observing too. There's certainly been a lot of engagement and focus on it.
I would say it's been a really valuable process where we've been very appreciative to our customers and other stakeholders for the time they've taken to work with us on that, because I think that we made quite a bit of change from the original version, and I think all to the better, so that we've got something that there's broad comfort with now.
Since you announced the program, any new feedback, or is it similar?
No, I think by the time we got to announcing it, people were probably a little bit bored of talking about it.
OK, great. Thank you.
Thank you. Your next question comes from Freya Kong at BofA. Please go ahead.
Hi, thanks for taking the questions, Helen and Andrew. On the ASX Accelerate program, can I check how much of the cash OpEx uplift in FY 2026 relates specifically to this?
Oh, Freya, look, we don't break that out specifically, I'm afraid.
OK, but then I guess how should we think about the costs associated with the project, which I think you said might run for five years or is tied to the five-year strategy? Is it just a review so far, and does it incorporate potential resilience uplift investment that might come from it?
It's really looking at increasing the pace of some of the key parts of the work in our strategy. I think that's kind of the way to think about it, and really adding regular risk planning, delivery expertise to support execution of those changes, and making sure that those are really well embedded through the organization, through effective change programs, and really making sure we've got the right capabilities in place too. Think of it as a sort of a wrap-around some of the things that were already in our plan and strategy, rather than necessarily a completely separate set of things in their own right. Does that answer your question, though, Freya?
Yeah, that's really helpful. I guess has anything, since it's kicked off, has anything come up that would add to your existing plans?
I'd say nothing material at this stage, but we are actively looking at the scope and making sure that we continue to consider what those key priorities are that we should be focused on. It's possible that there could be changes in the future.
Okay, great. Thank you. On the new pricing policy as well, I think you said there were some changes that were going to happen from FY 2026. Are there any quantifiable impacts we can expect?
I think the key thing from the point of view of making sure it's reflected in your models is that we've said there's no fee changes expected for the next couple of years. From a point of view of fees to customers, they'll be the same. The new pricing model does replace the rebate structure that was previously in place for those services.
Okay, thank you. I guess conceptually, how should we think about the replacement of the rebate? Would it generally lead to less volatility and steady growth in the revenues?
The revenue growth is obviously very linked to market activity. The way that the pricing model works is that it's sort of a building block method, as it's known. It's kind of commonly used for infrastructure-type services. There is public information on our website that sort of explains a bit more about the pricing model if you'd like to dig through it any further. Essentially, the building block method looks at the costs that are allocated to the business and then has an agreed target return that we can generate. There's a comparison of what revenues were actually generated based on that fee schedule versus what's the allowed revenue, if you like. There are mechanisms for adjusting up or down as appropriate.
Thank you. It sounds like margin protection. All right, thank you very much.
Thank you. That does conclude our question and answer session for today. I'd like to hand back now to Helen Lofthouse for some closing remarks. Thank you.
Thank you everyone for your questions today. This concludes our FY 2025 results presentation. Thank you very much for joining us.
Thank you.