I would now like to hand the conference over to Anthony Wamsteker, Chief Executive Officer. Please go ahead.
Thank you. Thank you everyone for joining, and allow me to add my welcome to that of our host today. I appreciate your interest in the Praemium full year results for FY 2026. At Praemium, we acknowledge the traditional custodians of the country and pay our respect to their elders, past and present. As I usually do, I draw your attention to the disclaimer that has gone out with our presentation today, although I do not intend to read it on this call. Praemium is a next generation investment and wealth management platform trusted by financial advisors, private wealth firms, and high-net-worth investors. Our integrated technology brings together managed accounts, portfolio administration, reporting, and digital client experience, helping advice business scale efficiently and deliver exceptional outcomes.
I will talk a bit more about the importance of getting our strategy and product right, and how that has impacted on our results today and our outlook. I am joined on the call today by Emma Stepcic, our CFO, and also in the room today is our Chief Commercial Officer, Denis Orrock. If I could turn first to the business highlights. Firstly, I want to say that these reflect the three key areas that we have focused on over FY 2026 and going into FY 2027; leading, scaling, and transforming. Leading, we want to lead in our chosen segment. Our high-net-worth solutions are driving that. Spectrum grew 78.2% year on year, and Scope+, our market leading non-custodial solution, grew 30.5%.
We are seeing strong penetration of the broker segment, and we have secured multi-year renewals of our enterprise agreements with key groups, which speaks to the stickiness of these relationships. This allows us to continue to deliver for our shareholders with strong underlying earnings growth and the declaration of a full year dividend payment. Scaling. The revenue growth we are achieving is one part of the scaling equation. We have also done the complex integration work that lets us grow without growing our cost base at the same rate. The OneVue migration is complete, with AUD 3 million of synergies fully embedded in FY 2027. Our technology restructure is also complete, bringing a further AUD 9 million of synergies into FY 2027. We have expanded our key account model to support enterprise growth.
Transforming. We are positioning the business for what comes next. Technotia is progressing well on our platform transformation. Our superannuation administration changes are progressing, and we are building custom integrations to support seamless and personalized high net worth advice. Across those three pillars, we are leading in our segment, scaling efficiently and transforming for the future. Turning to the financial highlights for the year. Emma will take you through this in more detail shortly, but there are a few points I want to call out upfront. On funds, custodial and non-custodial FUA reached AUD 77.9 billion, up 21.1% on FY 2025. Some of you have heard me talk before about the opportunity of being so close to AUD 100 billion gives us as a target, and we made good progress towards that this year.
Platform FUA is up 10.8%, with Spectrum generating strong organic flow and PowerWrap returning to positive net flows. Our market leading Scope+ offering now holds AUD 43.9 billion in FUA, an increase of 30.5%. Our strategic focus on the high net worth segment continues to deliver, with AUD 1.9 billion in platform net flows for the year, which was an increase of 130%. We have delivered underlying EBITDA of AUD 32.1 million, up 14.5% on prior year. That growth reflects the increased operating leverage in the business, with our underlying EBITDA margin lifting to 29.1%. As we scale, more of our revenue is flowing through to the bottom line. Reflecting confidence in the business and its cash generation, we have declared a fully franked final dividend of AUD 0.0125 per share.
That is AUD 6.1 million for the whole business, taking the FY 2026 total to AUD 0.025. Taken together, this is a strong set of results built on a solid structural foundation, growing revenue, expanding margins, rising funds under administration, and a proven commitment to returning value and cash to shareholders. What we have seen is sustained compound growth on the top and bottom line. Revenue has doubled from AUD 55.7 million in FY 2021 to AUD 110.5 million in FY 2026, a five-year compound rate of 14.7% per annum. That is excluding discontinued operations, so it is clean organic momentum. The more important story is on the right. Underlying EBITDA has compounded even faster at 18.1% a year, fr om AUD 14 million to AUD 32 million.
The key takeaway is that earnings have grown faster than revenue, and that gap is operating leverage, which, moving on to the next slide, I will look at a bit further. Three numbers tell the story. Revenue from customers up 5.7%, underlying costs are only up 2.5%, and the mathematical result, underlying EBITDA, up 14.5%. When revenue grows faster than cost, margin expands, and it has. Underlying EBITDA margin is up four percentage points since FY 2024 and now sits at 29.1%. The operating leverage comprises three parts. Technology and automation, including AI-assisted coding, reporting, and QA. Acquisition synergies with AUD 3 million EBITDA uplift from OneVue fully embedded in FY 2027, and a disciplined cost base. Looking ahead, there is a full year of OneVue and Technotia synergies landing in FY 2027.
It is not just how much we have grown, it is the quality of that growth. The growth is being led by our active loyal advisors. Their platform FUA grew 21% over the year. Active advisors now account for 85% of platform FUA, and that group alone contributes AUD 5 billion of FUA growth in FY 2026. A big part of what sits behind those numbers is the expansion of our key account management model, which I mentioned earlier. We have deepened the way we work with our largest groups, moving beyond a traditional service relationship to genuine partnership models embedded across those groups. That means dedicated key account resourcing, joint planning with the licensee, and working alongside their practices on adoption, training and how to use the platform day to day to get the most out of it.
It is also leveraging our research partnership with CoreData, whom we are very grateful and thankful for what they have done, and providing practice development and education for the advisors and planners in our active gr oups. That approach is doing two things for us. It is lifting engagement and usage within advisors, and we already have, which is exactly what the 21% uplift in active advisor FUA reflects. It is giving us much stronger platform for enterprise growth, because when we are embedded in the group level, expansion happens across the whole network rather than one advisor at a time. This tells us two things. First, advisor churn is low. Advisors are staying, and they are using us more. Second, the FUA underneath is high quality, which means that platform revenue it generates is high quality and recurring.
This is the engine that produced the operating leverage you saw earlier. Growth built on active, engaged advisors and real partnerships with the groups they sit in. That is the durable growth we aim for and the foundation on which we will build over coming years. It does not happen by accident. It rests on a genuine competitive advantage. A deeply embedded platform built on foundations that competitors are still striving to replicate. The starting point is that we were purpose-built for this, and I am grateful to my predecessors for the legacy they have left. Praemium was built on non-custodial administration from day one. For us, non-custody is the foundation of the high-net-worth platform. It is not a bolt-on feature retrofitted to a custody business.
Our custody solutions are intentionally integrated on top of that foundation so the client gets a single seaml ess experience rather than two systems stitched together. That is more than 25 years of high-net-worth expertise built into the platform, and it is very difficult to replicate quickly. This advantage shows up in four concrete ways. First, our revenue streams are resilient. On one side, we have a scalable platform. On the other, we have flat fee administration through Scope and Scope+, anchored in long-term advisors relationship. So we have got growth and stability in the same book. Secondly, our relationships are deep and high value. 8% of those top 20 clients hold multiple products. Third, we integrate genuinely sophisticated solutions. This reflects a deep understanding of the high-net-worth segment and the breadth to actually meet what those advisors need.
Our alternatives capability, for example, is in-house, not outsourced or a generic offer stretched to fit the market. Fourth, where we choose to focus, we win. We are ranked number one for data and integration and number one for sophisticated client offer, and we have won a number of tenders in the high-net-worth segment in recent years. The quality of that growth does not happen by accident. An area where we are seeing considerable growth and future opportunity is the stockbroking segment. It's a segment where we've had long-term clients and partly where we're leading this market, and the opportunity is still early, despite the fact that we've been involved with the market for the full 25 years of our history. We've got relationships with 65% of Australia's stockbroking firms.
We've secured multi-year renewals with two key broking firms, and we're early in the onboarding of Bell Potter and Morgans. On that basis, we see our serviceable market as two or three times where we sit today. That is just with current opportunities. The broader opportunity is even more significant. Our recent research suggests that the demand signals are very clear. 49% of brokers expect advice-led models to take share from transactional broking, and 79% say half or more of their clients are high net worth, some ultra-high net worth, with the largest portfolios well abov e AUD 6 million. There's a sizable pool of assets in play. AUD 3.5 trillion sits in CHESS holdings held by a segment actively looking to move into recurring revenue streams.
That takes the total addressable market to well over 10 times our position today, even if we only cash up a little more than 10% of the total market opportunity. Pulling the stockbroking picture together, we already lead the segment. The structural shift toward advice-led high net worth models is running in our favor, and the firms we've won are only beginning to bring that high net worth floor across. The uplift ahead of us comes from clients we've already secured, not just from wins we still need to make. Stepping back to the results as a whole, a strong year built on years of consistent high-quality growth underpinned by a genuine competitive advantage that is difficult to replicate with substantial runway still ahead of us in the segments in which we are choosing to compete.
This slide speaks to something we think is important, and we've continued to develop and improve the platform for advisors today. At the same time, it's building towards our future. These two things are happening in parallel, not one at the expense of the other. On the immediate delivery side, we've made a series of improvements that expand capability and strengthen the client experience. Administration is simpler, enhanced digital signatures, cash management, and streamlined account processes are taking friction out of the day-to-day for advice and investors. Investment access is broader, with our Clearstream, Vestima, and margin lending integrations opening up new investment options. Data and reporting are better, with enhanced reporting tools and stronger integrations. A number of XBDI 4.3 integrations have been completed, and Xplan 4.3 is the most crucial one helping advisors to work more efficiently.
We've ad ded more support and transparency with expanded self-serve training and support around Division 296 and other budget changes. Alongside all of that, our technology transformation for the future is led by our Technotia team, and it's well underway. We're building the core architecture and modernizing the user experience. That's the foundation for faster innovation, greater scalability, and improved performance in the years ahead. The message is continuity and ambition together. Keep delivering tangible improvements advisors need now while laying the groundwork for what the platform will become in the future. I'll now hand over to Emma, who's going to take you through the financial results in more detail. Thanks, Emma.
Thank you, Anthony. Turning now to the financial results. FY 2026 was a strong year for underlying performance. Revenue increased 5.7% to AUD 110.5 million, while underlying EBITDA increased 14.5% to AUD 32.1 million. The underlying EBITDA margin increased 223 basis points to 29.1%. The headline is that revenue growth continues to outpace expense growth, demonstrating the operating leverage in the business. Platform revenue increased 6.3% to AUD 88.9 million, and portfolio services revenue increased 3.4% to AUD 21.6 million, which we'll go through in a later slide. Underlying operating expenses increased only 2.5%, with OneVue synergies and technology savings partly offsetting investment in growth and capability. We also revised the presentation of certain revenue items.
The changes increased reported revenue by AUD 2.1 million in FY 2026 and AUD 1.4 million in FY 2025, with no impact on EBITDA or cash flow. More details can be found in the appendix. Statutory NPAT was AUD 6.5 million, and on the next slide, I'll take you through the bridge from underlying EBITDA to statutory profit. This slide sets out the difference between the strong underlying operating results and statutory NPAT. Starting with underlying EBITDA of AUD 32.1 million, underlying NPAT increased 22.9% and AUD 15.4 million, despite higher amortization of development assets brought into us e during late FY 2025 and into early FY 2026. Statutory results were affected by acquisition, integration, and transformation activity undertaken during the year.
This included OneVue transition costs, the Technotia acquisition and incentive arrangements, technology restructuring costs, and the write-off of software assets under development as we transition to a new technology platform. These items were partly offset by the release of the OneVue earn-out provision. The tax expense was also impacted during the year when we identified a historical income tax shortfall following the review of the income tax treatment of certain expenses incurred in connection with Praemium's role as a responsible entity. Further details on this have been provided in the appendix. After these adjustments, statutory NPAT was AUD 6.5 million, compared with the restated AUD 11.9 million in FY 2025. Before looking at revenue growth in detail, this slide outlines the quality and diversity of the two complementary revenue engines in the business.
Platform revenue represents around 80% of group revenue and includes Spectrum, SMA, PowerWrap, and Super. Its primary drivers are adviser and FUA growth through market performance and net flows, transaction volume, and cash holdings. This gives us a scalable growth engine that benefits from adviser expansion and stronger markets, where revenue varies with market levels and activity. Portfolio services represents around 20% of group revenue through Scope and Scope+. It is largely a flat fee per portfolio model, driven by the number of portfolios we administer and the complexity of the portfolio. As a result, it is more insulated from market movements and provides a stable recurring revenue base anchored in long-term adviser relationships. The combination matters.
We have a platform revenue engine that can scale with markets, adviser growth and flows, together with a portfolio administration base that provides resilience through market cycles. That balance supports both growth and earnings quality. It is also important to point out how this supports Praemium's integrated high net worth proposition. Advisers can use our non-custody administration, custody platforms, reporting, and digital capabilities together rather than as disconnected services. This strengthens client relationships and gives us multiple avenues to grow mark et share. Looking at revenue over time, the group has delivered sustainable compound growth. Reported revenue increased 5.7% to AUD 110.5 million in FY 2026. Underlying revenue growth was 9.3% when excluding the AUD 3.8 million impact of the planned OneVue adviser exits. Since FY 2021, revenue from continuing operations has grown at a compound annual rate of 14.7%.
Platform revenue has been the principal driver, increasing 129% over that period, while portfolio services revenue has increased 29%. The key takeaway is consistent long-term revenue growth supported by both scalable platform revenue and recurring administration revenue. Platform revenue increased 10.8%, excluding the impact of OneVue adviser exits, supported by higher FUA, strong net flows, and cont inued Spectrum growth. The platform revenue margin was 27 basis points in FY 2026 compared to 29 basis points in FY 2025. This movement principally reflects this. As you can see, average FUA per portfolio has increased as a result of a higher portion of accounts capped under the administration fee model. Along with that, a greater proportion of growth is coming from large enterprise clients, which can have different pricing structures.
This is not driven by a change in underlying demand, and we expect to see the margin stabilize into FY 2027. Spectrum margins remain below the platform average as early adopters have comparatively large account balances. As adoption broadens and average balances normalize, we expect the margin to increase over time. The key takeaway is that platform revenue growth remains strong. Margin will move with customer mix and account balances, but higher FUA, strong flows, and continued adviser adoption provide a solid foundation for future revenue growth. Moving to the primary driver of platform revenue, platform FUA reached AUD 34 billion at 30th of June, up 10.8% on FY 2025. Spectrum was a key contributor, with FUA increasing over 78% year on year. Since launch in October 2024, Spectrum has attracted AUD 2.3 billion of new business growth inflows.
The OneVue transition is now fully complete, with FUA moved across to Spectrum, SMA, and Scope. That shifts OneVue from a transition program to performance and value realization. Net flows were AUD 1.9 billion, up 130% on FY 2025, with Spectrum delivering strong flows and PowerWrap returning to positive net flow. Market movements added a further AUD 1.4 billion to FUA. Stepping back from the annual movement, Platform FUA has grown at a five-year compound annual rate of 13%. This reflects the resilience of the core platform, the acceleration in Spectrum, and our sustained focus on the high net worth adviser segment. The quality of this outcome is as important as the headline growth. The planned OneVue exits are now substantially behind us.
Retained advisor relationships remain strong, and the platform enters FY 2027 with continued new business and momentum. Turning to non-custody portfolio services, Praemium remains the market leader in this segment. Scope+ FUA increased 30.5% to AUD 43.9 billion, while Scope+ portfolios increased 33.7% to approximately 12,800. Momentum strengthened through the second half, with FUA up 15.7% and portfolios up 19.6% since December. We signed 11 new client firms during FY 2026, and onboarding efficiency remains a key priority so that co ntracted opportunities convert to revenue more quickly. Scope portfolio is reduced to approximately 56,500, primarily reflecting the managed client exits and a contract expiry. This was partly offset by portfolios onboarded during the year. From a financial perspective, the most important point is the continued mix shift towards Scope+.
Portfolio services revenue increased 3.4% in FY 2026 despite the Scope reduction, and the June annualized revenue run rate reached AUD 23.2 million following second half awarding. We enter FY 2027 with a strong pipeline, including continued engagement across the stockbroking segment. This slide brings together the operating leverage and synergy story. Underlying EBITDA increased 14.5% to AUD 32.1 million, while underlying operating expenses increased only 2.5%. As a result, the underlying EBITDA margin expanded by 223 basis points to 29.1%, with the second half margin reaching 32%. For OneVue, we achieved AUD 4.5 million of cost synergies in FY 2026. These were offset by AUD 3.8 million of revenue reductions from planned advisor exits, producing a net FY 2026 EBITDA uplift of AUD 700,000.
With the migration completed and the retained business continuing to grow, the expected EBITDA uplift increases to approximately AUD 3 million in FY 2027. The technology restructure is expected to deliver approximately AUD 9 million of annualized savings, comprising around AUD 7 million of operating expense savings and AUD 2 million of CapEx savings, of which FY 2026 included approximately AUD 2.6 million of operating expense savings and half a million of CapEx savings. Together with technology and automation, these actions establish a lower growth cost base and improve the conversion of revenue growth into earnings and cash flow. Finally, turning to cash flow. Reported free cash flow was AUD 2.4 million in FY 2026, affected by a concentrated period of one-off transition, restructuring, acquisition, and technology investments.
The principal items were AUD 2.6 million of OneVue transition and restructure costs, AUD 3.6 million of redundancy costs for the technology restructure, AUD 5.4 million of pre-acquisition technology investment with Technotia, and AUD 3.1 million of Technotia acquisition and incentive costs, partly offset by half a million of cash acquired in the acquisition. Adjusting for these items, underlying free cash flow was AUD 16.6 million, demonstrating continued underlying cash generation wit hout the elevated one-off activity. There are clear tailwinds into FY 2027. OneVue is fully integrated. The technology restructure reduces operating costs and internal development CapEx, and improved onboarding should accelerate revenue conversion. FY 2026 was an investment and transition year from a cash flow perspective. We enter FY 2027 with the major technology restructuring and integration actions complete, fewer one-off cash costs, and underlying earnings momentum.
This positions the business for improved reported cash conversion and continued shareholder return. That completes the financial results. I will now hand back to Anthony to take you through strategy and outlook.
Thanks, Emma. Thanks to all you and your team for all you have done getting us to the results today. If I could turn to the strategy and outlook. Before I get to our own strategy, I do want to frame the market that we are operating in because the forces here are working for us and not against us. We are the number one platform in the segments that matter most to us. Data and integration for non-custody functionality and the sophisticated client offer for the proposition most suited to high net worth. The high net worth market is enormous, around AUD 4.4 trillion in investable assets in Australia. It is underserved, roughly 8,000 advisors short of the true demand. On top of that, three tailwinds are compounding.
The demand and growth for alternatives is increasing as high net worth look for new sources of alpha and diversification. We are seeing that in our own platform with growth in alternatives of 12% year-on-year. In fact, we run the market's largest alternatives platform at 11% of total FUM. I have talked about the broker segment. There is a AUD 3.5 trillion book of CHESS holdings, and all the broker firms are looking at ways to move that to revenue-generating models, recurring fee models. Finally, we have got a AUD 4.5 trillion superannuation market, and self-managed super funds are set to grow further with the locked-in growth of compulsory superannuation. How do we capture the opportunity of these unbelievable market tailwinds? There are four ways.
First, we deepen our penetration of the high net worth advisor segment via a strong and active sales pipeline and by lifting the share of wallet with the advisors who are already using our platform through the relationship management model that we have recently introduced and are now improving. Second, we simplify. This year is when our technology transformation lands. We are leveraging the Technotia and OneVue integrations, making onboarding materially more efficient and simplifying the operating model underneath. Third way is to differentiate. We intend to continue leading in servicing sophisticated high net worth, and indeed, ultra-high net worth clients, expand our non-custody capabilities, offer integrated wealth management, and build a more competitive superannuation offering. Fourth, all this has to improve returns, operating leverage, cost discipline, capturing acquisition synergies, and growing cash margins faster than expenses.
Underpinning all of that, we are targeting measurable improvement in client net promoter scores, employee engagement, and our risk and governance capabilities. This slide sets out the technology transformation, which is fundamental to what we are doing at the moment. Stronger foundations, a sharper experience, and faster delivery, and why it underpins earning growth. Starting with the foundations, the architecture transformation is cleaning up the code and database and rebuilding the underlying platform, which gives us better accuracy and speed, and importantly, faster time to market for everything we build from here. On top of that, we are rebuilding the experience. The interface rebuild brings streamlined workflows, built-in task monitors, intuitive dashboards, compliance enhancements, and an improved view of total wealth for advisors. The trading experience is intuitive and automated across managed funds and alternative assets.
Digital onboarding is faster and easier with automated ID verification. Across the user experience, we are developing greater efficiency and transparency, an AI-enhanced support center, and client-tested enhancements backed by a structured training program. Importantly, our own assessment has been confirmed by the recently commissioned independent technical review. It has confirmed our new platform is fit for purpose with genuine engineering strengths and a sound underlying design. Full platform transition is expected over the next 12 to 18 months. That underpins our expectations of continued margin expansion, additional productivity benefits, and aggressive scaling of the business. This is the engine behind the operating leverage story, a platform built to facilitate client wins and revenue growth without growing costs at the same rate. That is how we see our entry into FY 2027.
We are carrying strong operational and financial momentum into the new year. It is an outstanding start. The OneVue and Technotia synergies are now flowing through to earnings. We are building real momentum in new business wins and enterprise onboarding. Beneath all of it, the technology transformation is what makes this scalable and sustainable. It lets earnings grow without costs growing at the same rate. If there are three things to take away today, they are the same three we opened with: leading, scaling, and transforming. We lead in the high net worth segment, and we are extending that position in stockbroking while the opportunity is still in its infancy. The integration work is done and the synergies are flowing, so growth is increasingly translating into margin and earnings rather than costs.
The technology transformation is rebuilding the foundation, and that is what allows us to keep compounding well beyond financial year 2027. We have strong momentum today and a business built to keep growing from here. With that, I will pause and open up for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Nick McGarrigle with Barrenjoey. Please go ahead.
Hi, team. Thanks for taking the questions. Can you just clarify, looking into the pipeline over the next three years, obviously, you have acquired systems that give you a strong replacement for some of the things that you had and better infrastructure. Just how do you think about the pipeline in terms of product development, what the new architecture gives you in terms of ability to ramp things up in terms of functionality going forward?
Thanks, Nick. I see the biggest area of investment right at the minute, other than transitioning to new platforms, as the Super offering. While we've got a platform Super offering, and we've certainly got many self-managed super funds using the platform, we feel that's probably the major area where there's further development opportunity, and we're focused a lot on that transformation. Other than that, the thing that's obvious to everyone in every industry is how much the power of technology today allows you to do a lot of things that you couldn't have dreamed of doing a few years ago, and the pace of change with those things is very rapid.
A lot of what we're doing is taking the incredible capabilities we've got in technology now, particularly with the acquisition of Technotia and the merger with our technology function, and saying, "What do we need?" But more importantly, what do our clients need to fully capture the opportunities provided by that platform? So that's working with our clients directly. And I'm very grateful to those clients who have been willing to help us pilot some of the new functionality that we've already built, and say, "Right, what does it do to help us run the business better, but what would it do to help you expand your ability to service the market?" Because without any exaggeration, if every advisor suddenly could double or triple the number of clients that they can manage, there'd still be a shortage of advisors.
We're trying to work out with our clients how to utilize our capabilities and the capabilities in technology generally to expand our offer. And that's why the integration is so important. Some of the developments will be advisors themselves building out their functionality because AI is a very powerful technology, but it's very accessible. And so the integration with what we're building becomes critical to thinking not just how can we do what we do today better, but what does the advisor of the future look like? What does their technology infrastructure and technology stack look like?
Cool. Thank you. Maybe a question for Emma, just around the revenue margin on the platform side. I think you reported there 27 bps for FY 2026, but just how to think about the exit rate or what might that have looked like in June and the compression year-on-year, I presume, largely driven by higher age balances into Spectrum, but just some unpacking on the revenue margin.
Yeah. The margin in and of itself is an annualized margin, as you see. It would have been impacted through the year with the market movements that we saw through Q3 heavily dragging on tour and revenue. Coming out the back end of the year, we were seeing some improvements in the margin. As I said, we do have those large account balances, particularly in Spectrum with the early adopters. We do anticipate as time goes on and we broaden that adoption base to a wider set of advisors and investors, that we would see those account sizes trend down over time, which would have a positive upward trend on the margin at the same time.
Okay, thanks. Then in terms of the underlying OpEx run rate into next year, I think you've given us the slide for that, but maybe just to reinforce how to read slide 23 in terms of the full year OpEx, just thinking of the FY27, I guess, on the pro forma or whatever that, the black bar there that you've got in terms of costs coming up.
Yeah. The waterfall that we've provided on slide 23 really talks to the costs that we had coming out of FY26 of AUD 78.3 million. We will have cost reductions of about AUD 6 million sitting on top of that coming into an FY27 run rate, which will then obviously be impacted by inflationary outcomes into FY27. But we do have further synergies from OneVue and the technology restructure that will impact into FY27. What we do see is that 32% margin that we see on the left-hand side of the page for H2 2026, maintaining and then trending upwards into FY27 from those synergies that we'll see come through.
All right, cool. Then I think your contemporary platforms that have reported already made some commentary around the first seven, now probably for you guys, eight weeks of the year in terms of just flow momentum, obvious things that are a bit challenged in terms of some uncertainty around tax environments and tax structures and things. Do you see similar trends to that which has been reported by HUB24 and Netwealth?
Nick, I note what they said, and you know me, I don't like to get into flow reporting more often than quarterly. I'm happy with that cycle. I'm not going to disagree with their observations in the market. Of course, that's a reality. But we've entered FY27, coming out of FY26 with momentum that we were happy with. Not totally happy. We'd always like it to be faster. But nothing's happened to cause us great concern about the prospects for continuing to grow the business strongly over the next few years.
All right. Thanks.
Thanks, Nick.
Your next question comes from Tom Tweedie with MA Moelis Australia. Please go ahead.
Good morning, team. Thanks for taking my questions. Just firstly, a follow-up on Nick's question to revenue margins going forward. You called out a return to normal, and I just want to unpack that a little bit. When you say return to normal, we don't have a huge amount of full year data since you repriced SMA. So I'm trying to get a sense of where do you mean by what's normal on an annualized basis, and then what sort of timing should we expect for those balances to come down and then return the revenue margin to this normal state?
Look, it's a good question. What we would expect to see is FY 2027 to continue around that 27 basis point for the majority of the year and then start to trend up towards and into FY 2028 as those account sizes start to normalize through the back end of the year, particularly with where we can use our platform technology development to work into other segments.
Thanks. That's thoughtful. Just wanted to touch on depreciation, amortization, and tax obviously had a fair bit of influence on the underlying NPAT result. Is this a new sort of level of depreciation and amortization schedules and, or going forward, how we think about that given the internal capitalizations or what sort of cadence should we expect there?
Yeah. So we did have a higher depreciation, as you'll note. A large part of that AUD 5.8 million, was related to a one-off write-off of depreciation for the old platform development that hadn't been put into use. Where we see depreciation going forward through FY 2027, we will do some advanced acceleration of depreciation for the legacy platform. But going forward, once the legacy platform is fully depreciated, we would expect depreciation to come down given the level of investment that we're working through. With the new Technotia and technology platform is based on that lower cost base after the AUD 9 million savings through the year.
Perfect. Thanks. Just one final one. With the new technology or the new Super platform you are planning on launching in FY 2027, I just recall when we launched the new Spectrum platform, we had a slightly elevated marketing and launch cost for a half or a fuller period. I just wanted to see whether we should expect any sort of one-off temporary step change with cost launching that new platform and whether that should be second half skewed or how we think about that.
Yeah, that is a good pick-up, and I would expect that we will make an investment in the launch. We were very happy with the way that the launch events around Spectrum went, and we think that certainly helped the momentum hitting the market pretty hard. This is every bit as exciting for us as the launch of Spectrum. So I would expect that there will be some elevation, but I do not expect it would be any more than what we had in terms of the elevated marketing spend around Spectrum. We learned a lot from that. That was very well managed, in my view, by our team. So we have got some good lessons about another big event for the advisor community.
Great. Thanks for taking my questions.
Thanks, Tom.
Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Lafitani Sotiriou with MST Financial. Please go ahead.
Good morning, and thank you for the opportunity to ask some questions. Can I first kick off on the portfolio services revenue and the components that led to the anemic growth? You have quite a few big transitions coming through. When can we expect that to step up in a more meaningful way? Can you just remind us where the Asgard revenue, has that rolled off yet or is that still in the mix?
The portfolio services revenue, as we have noted in the presentation, a lot of that revenue is coming on the back end of the year. We do have a run rate coming out of 2026 that is much higher than the 2026 revenue presented. What that does reflect is the onboarding of portfolios in the latter part of the year. We see onboardings related to some key client wins that we had. Then we do, yes, have the contract expiry for the Asgard. There is still revenue ongoing in respect of that contract. We expect that revenue to continue in the first half of FY 2027 and then taper off from there.
Can you just quantify how much that is?
I know that would be nice for people, but we've never quantified the exact size of the Asgard, in part out of respect for the commercial sensitivity of the relationship for them as well as for us. But the reality is some of it's come off and it's coming off in a gradual way. It's rolling off over the balance of the year, over the balance of FY27.
Sorry. I think some of your predecessors have quantified it. It's in the millions, like AUD 3 million, AUD 4 million odd. You guys may not have, but it has been disclosed in the past. It seems like it's going to take away a lot of the underlying growth that you're achieving elsewhere in the business, in the portfolio services.
No, I don't think so. We've got a pretty bullish outlook for the overall services part of our business. When any predecessors may have disclosed it, which I'm not aware of, but I don't dispute that they could have. Whatever the revenue was at the time they disclosed it's been diminishing over time. The enterprise nature of that relationship means they've been able to gradually negotiate a lower and lower price over time. So definitely, and we've said this in past presentations, the headwinds that we've got on portfolio services, a couple of accounts that were going to roll off, Asgard was one, and there was another one, were going to be more than offset by the wins. We're still of that view.
We're still definitely of the view that the offsets of the wi ns and the revenue uplift from the wins in our services business more than offset the two significant losses that were both, again, they were losses that were coming because two competitors who were using our portfolio services solution Scope felt that they could build that themselves and do better. Asgard are the latest. There was one before them. The one before them I don't think that's been a particularly happy experience for their clients. We don't yet know how well it will work out for Panorama as they build out. As I said earlier, it's not easy. It's 25 years of IP has gone into building that Scope and now Scope+. So it's not as easy as people think.
Nevertheless, to your point about it's in no way likely to see a reduction in the service revenue. On the contrary, we would expect the service revenue can grow. Service revenue doesn't, as we've said, have the same tailwind of mark et uplift automatically driving revenue growth.
Yeah, got it. Understood. Point taken. Can I just move on to the Technotia CEO resignation within six months? A bit of a surprise. Can you just talk us through what happened th ere and why, and is the technology going according to plan?
Taking the second one first. Technotia is absolutely going according to plan. We're delighted. We commissioned an independent review at the time we made changes in the Technotia management, and we're very happy with how that technical review has gone and the insight that's given us. In large part, it confirms the roadmap that we're working to in terms of the transition. So we couldn't be happier with the work that we're doing on the technology front. Obviously, we're the beneficiaries of some great opportunities that are provided in the way technology can be delivered now, thanks to developments globally about how well AI and machine learning are progressing your ability to deliver technology and develop technology.
In terms of the structure, when we did the original negotiations, there was a sense that some of the team and the two key architects behind the system were likely to want to move on once they'd built the core engine for Praemium and do other things. We structured the deal in that way. As we reached the point where we were able to say, "Right, you've delivered the core. We would like to talk to you about what happens next." There's two parts to that. One part is for you to hand over to the rest of the team, the other 35 odd people in the team, so that we can manage it and develop it going forward. The second part is what you do next. What else do you move on to?
When we did the business, there were conversations about a range of things, some which were very heavily focused on financial services and building out opportunities there, and others were less so. Thi ngs like data centers and medical research were some of the things that they were interested in. As it turned out, the span of interest was more than we wanted to invest capital in. We want to invest capital in financial services. We had tested the market somewhat. We had talked to a number of our shareholders about if we gradually expanded what we offer, given the capabilities to these people, what is your appetite for that. We suspected we knew the answer, but the resounding view came back, "We do not want you to expand outside financial services.
The business has failed before for expanding too far outside its remit, so we would rather you stuck to your knitting." In those conversations, we said, "Right, we do not have the appetite for capital allocation to things outside financial services," and that is what led to the renegotiated arrangements. As part of that, Daniel, who had stepped into an executive director role, had been in that role to do both the things I mentioned. One, to help the transition into the Praemium world, but secondly, to expand the opportunities and look for commercial opportunities in the broader range of areas that those principals could deliver.
With the transition now well underway, we do not need Daniel other than for the next six months of his notice period to help with the Praemium-related activities and for the external and non-Praemium growth opportunities, we are letting those go. Daniel's role is no longer required, and we bring the business into the current traditional management structure that we have got.
Yeah, I g et that, but it just seems odd that to go with the fanfare and putting the appointment in place now to have a CEO walk away within six months does seem odd, despite all of what you just said. Can I move on to the one-off cost. There is quite a lot in the second half, including that AUD 5.8 million write-down for software. Can you give us a little bit more color on what features were built that you now no longer decided to go ahead with and why. Can you give us an idea on what level of one-off cost we can expect going forward. Is it going to be elevated for a little while. Because there is a lot of stuff that you are doing that seems out of sync. Thanks.
Taking your first part of the question, one of the challenges we had with the technology and why we brought Technotia in is that we felt that our development cycle was slower than it should be. We were not getting the full bang for our buck. The AUD 5.9 million, which is on an accelerated depreciation schedule, some imme diately written off and some depreciated more rapidly, reflects the fact that there are elements that we have built that we will decommission earlier than the original depreciation schedule would have allowed, which was typically over about three years. But going forward, we expect that if we invest another AUD 5.9 million, we will get a lot more for that AUD 5.9 million.
Some of the constraints and some of the tech debt that we are working with go away once we transition to the new platforms. We can get a lot more bang for our buck going forward. As for what we do going forward, we are clearly going to invest in our platform transition from the current platform to the platform that we have built. But a large part of that expenditure will come from the existing team. It should not be lost on anyone that we have not only reduced the size of our tech team, but th ey are developing a new platform and they are running an existing platform. That team will do a lot of the heavy lifting. Having said that, to the extent that we feel we need independence, we have done that with the review.
We said we will go outside and get an independent third-party assessment from a world-leading technology advice firm, and there could be further investment like that. We have not yet quantified it, but it is certainly not causing us any concerns or thoughts, "Oh my God, we underestimated what we have got in front of us." On the contrary, we think we have estimated pretty accurately, and we are talking confidently about strong tailwinds on the cash flow side.
Yeah, not quite sure I understood that, but thank you.
Your next question comes from Warren Jeffries with Canaccord Genuity. Please go ahead.
I guess I was on the same thing there with Daniel departing. I guess kno wing the timeline might have been within 12 months, I probably suspected that the appointment may not have needed to have been made myself. I guess just where the outlook is for that Technotia business and given the founders have come and gone, Daniel has been there 10 years and been a good board member moving on. How do you see Technotia now operating within the business? Is it just part of the technology team, or is it a Technotia brand in there still that will operate somewhat a step aside?
Thanks, Warren. The team is integrated with our tech team. With AUD 9 million cash coming out of the business, not all OpEx, we've talked a little bit about some of that is CapEx, less CapEx, and some of that is less OpEx. For a shareholder who's interested in the cash generation, the merger of Technotia has taken AUD 9 million costs out of our business from the pre-Technotia levels. That in itself is a very significant return on investment, and that alone would justify the acquisition and the work that we've done with Technotia. In a financial sense, let alone the opportunity it creates by a stronger technology stack going forward and better technology architecture, which is what we've got. We're very happy with it.
When we did it, and again, in very simple terms, when we bought the business, we knew that there was a couple of individuals, in particular, who would, once they'd completed the tech build for Praemium, look for other things. They're builders. They're not managers, they're builders. They're very good builders. Extraordinary is what they've built for us. But we always knew they would build other things. There were two ways that could go. One is we could say, "Let's build other stuff in financial services," and the other was, "Let's find other things that you'll build if you've lost interest in financial services. If you find other things, it's possible we will want to invest in those." We lo oked at what we might do. But there wasn't great appetite for that.
There wasn't great appetite for saying, "Look, Praemium's now got technical capability that is rare, and it should capitalize on that by investing in things like data centers or medical research." We accept that. We thought that was a possibility. So when we bought it, we thought they might do more work in financial services, or they might do outside. If they do outside, we might be able to find ways to fund that, set up some funds or something like that. In the end, their preference was work outside financial services, and our preference was not to find a way to invest in it. So we've said, "What you've delivered is already huge for us," and we take that and we move forward.
The Technotia business, in addition to building an incredible system that's been verified by our independent report, has brought together a team of outstanding individuals, both previous Praemium employees and people who have come in through the Technotia acquisition. We've got an outstanding team. I'm very grateful to the quality of that team. So, absolutely what we want to do is we want to capture the value that that team now brings, that Technotia and Praemium together, and we haven't killed off the brand. We've still got a Technotia brand. But we want to continue to be seen as an employer of choice for highly capable technical people. We still believe that people make the difference, and that if you can get the most capable tech people, you'll continue to win for years in the future.
Whilst AI is incredibly powerful, we still think that the top developers and scientists working with AI will produce better results. So we want to continue to nurture that environment as an employer of choice. So we're very happy with that. We're very happy with the team we've got now, and we're very happy with the recruitment that we've been able to do, bringing talented developers into a world where they know they're going to be embraced and knowing they're going to have the intellectual challenge of working with other people who are just as highly skilled and capable as they are.
Well, thank you for that. Just maybe one frame just to crystallize the synergies to come through. So, AUD 3 million annualized for OneVue, AUD 700,000 last year. So we're looking for another AUD 2.3 million this year, another AUD 4.4 million from the technology benefits. So AUD 7.7 million is sort of a starting point. It was at AUD 7.7 million before the impact of inflation and other things that might pare it back in an absolute sense.
Yeah, I think that is the tailwinds we talk about, in addition to we are growing as well. Obviously, if we continue to grow revenue, if we can continue to make sure that that revenue growth has positive jaws, and we have got some tailwinds of some synergies that have only been partly reflected in FY 2026, and you get a full year run rate in FY 2027, it is not lost on us what that does to the models. People will invariably come to us and say, "Oh, these are the numbers I got." We do not give guidance, but we are covered by a lot of analysts, including you, Warren.
We do keep an eye on consensus and make sure that we are not about to deliver surprises in a few months' time, when we do a half year result, for example.
All right. We are comfortable with the 7.7 probably drops in next year, and there is a bit of play around that to get the consensus.
Yeah. As I say, we will not know the updated consensus following this result for a while, but hopefully, we will not be surprised and thinking, "Oh, my God, what have we got to deliver to meet consensus?" Hopefully, we will say, "If we keep doing what we are doing, we will be able to meet it.
All right. Thanks, Anthony.
Thank you, Warren.
That is all the time we have for questions today. I will now hand back to Anthony Wamsteker for closing remarks.
Thank you once again. Again, I do want to say thank you to everyone who has joined the call and for your interest in the company. We are very happy not only to have some great shareholders, but also to be covered by some very good investment analysts in the market. It does allow us to think about how we are running the business and think about why people are ask ing the questions they ask. We always benefit from having an active shareholder and analyst community. We talk about the three major stakeholder groups of shareholders, clients, and employees. Certainly, the interaction we have with analysts and shareholders always gives us food for thought about other things we might think about.
There has never been a better time to be open-minded and challenged about the way you are running a business because the opportunity is wonderful right at the moment. Thank you again for your interest. I hope you enjoy the day and look forward to interacting with you in the coming months and with our AGM in the not-too-distant future.
That does conclude our conference for today. Thank you for participating. You may now disconnect.