PEXA Group (ASX:PXA) reported a strong first half of FY2026, citing double-digit revenue growth, expanding margins and higher cash generation, as management pointed to record Australian transaction volumes and disciplined cost control as key drivers. The company’s 1H26 results briefing covered performance for the six months ended December 31, 2025, and included updates on the U.K. rollout, the paused interoperability program in Australia, and portfolio changes following a strategic review of its digital solutions segment.
Revenue growth and margin expansion
Chief Executive Officer and Group Managing Director Russell Cohen said the group delivered “an exceptionally strong first half,” with revenue up 10% versus 1H25 and EBITDA up 19%. EBITDA margin expanded more than three percentage points to 39.9% from 36.8%, which management attributed to “strong revenue growth and disciplined cost management.”
On a core basis (excluding discontinued operations and significant items), Warrell said the group delivered EBITDA of $85.8 million and core NPAT of $20.8 million, up from $10.9 million in the prior corresponding period. Statutory NPAT from continuing operations was AUD 15.4 million, with earnings per share of AUD 0.087, according to Cohen.
Australia: record volumes, cost discipline, and regulatory focus
Management highlighted record operational activity on the Australian exchange. Cohen said an all-time daily transaction record was set on December 19, 2025, with 41,000 transactions processed and AUD 15.1 billion in settlement value, exceeding a previous high from 2024 by 14%. He added that five of the 10 highest daily settlement values in PEXA’s history occurred in December 2025.
Warrell said Australian revenue growth of 10% was driven by record transaction volumes, and noted several market factors discussed on the call:
- Transfer growth of 7%, which Warrell linked to relative interest rate stability and government support measures such as a “5% Deposit Scheme for first home buyers.”
- Refinance transactions up 14%, reflecting increased lender competition, with double-digit growth in all states and territories “bar one.”
- A regulator-approved price increase of 2.4% effective July 1, 2025.
Management also flagged moderation in activity early in the second half. Warrell said that with almost two months of 2H26 completed, the company was “seeing signs of transfer and refinance growth moderating to more traditional growth rates,” with the impact of a recent cash rate increase “likely to be felt in the coming months.”
On investment, Cohen said Australia CapEx was $17 million in the half, including platform infrastructure improvements, building out the company’s AML product, and coverage expansion initiatives including Northern Territory (initiated in August 2025) and expanded coverage in Western Australia and Tasmania.
Interoperability: company says ARNECC reports weaken the case
Cohen and management spent significant time discussing the paused interoperability program in Australia and two independently authored reports commissioned by ARNECC—the Cost Benefit Analysis and the Functional Requirements Review—released in December. Cohen said that when read together, the reports “confirm” PEXA’s position that there is no compelling case to continue with interoperability and argued that the objectives “can no longer be delivered in their initial form.”
He quoted the Functional Requirements Review as stating, “There is no guarantee that successful implementation of an interoperable system will result in an increase in competition,” and that implementation would be “technically complex,” “not be elegant,” and require “initial and ongoing regulatory oversight.” Cohen also cited workshops referenced in the report that identified potential reductions in workspace functionality that could lead to a “5%-10% drop in successful on-day settlement.”
On economics, Cohen said the Cost Benefit Analysis indicated a maximum projected financial benefit of interoperability of $16 million over 20 years, and contrasted that with an economic impact report he said showed PEXA’s digitization delivered $2.4 billion in productivity savings over the past decade.
In Q&A, Cohen said interoperability remains “a policy of ARNECC and a legislative priority for two state governments,” and noted that his competitor “has been quite vocal on interoperability.” He also said PEXA was not aware of additional comments from the ACCC on the topic.
U.K.: NatWest progress, lender engagement, and policy tailwinds
In international operations, management said performance reflected recovering market conditions in the U.K. Cohen stated the company saw growth in sale and purchase and remortgage completion volumes, with revenue growth outpacing operating expenditure and improving segment margins.
On NatWest, Cohen said the remortgage implementation commenced during the period. Earlier in the presentation, he said NatWest implementation was expected to be finalized “slightly ahead of schedule in April,” though he later reiterated that the NatWest remortgage implementation remains on track for delivery in the fourth quarter of FY2026, with sale and purchase to follow. He described NatWest as a key proof point for scaling in the U.K. and said engagement with Tier One lenders has accelerated following NatWest’s commitment.
Warrell noted international growth was impacted by the loss of a low-margin search contract, which lowered revenue but was “largely offset within cost of sales,” and also cited an AUD 1.5 million foreign exchange tailwind. Excluding those impacts, she said higher average fees and market growth drove international revenues up almost 14% and gross margin up 20%. She added that market penetration was broadly flat for sale and purchase while falling marginally for remortgages.
Management also discussed U.K. conveyancer engagement following national roadshows in September and October. Cohen said the events were well attended, “oversubscribed in some cases,” and that the company is moving interested conveyancers through a funnel that includes compliance and registration requirements due to FCA regulation. He said the company is not providing numbers on sign-ups, and expects conveyancer interest to increase materially after NatWest goes live.
Portfolio actions, PEXA Clear, capital management, and guidance commentary
The company said it completed a strategic review of the digital solutions segment and decided to exit its majority-owned businesses and several minority stakes. Warrell said the segment has been classified as held for sale and presented as discontinued operations, inclusive of related impairments. Discontinued operations recorded a loss after tax of AUD 29.6 million in the half, “largely as a result of impairments taken against these assets.” Significant items totaled AUD 7.7 million, driven by redundancy and restructuring costs and divestment-related costs.
Warrell said the operating model changes are expected to deliver more than AUD 10 million in annual cash savings, with AUD 4.7 million delivered in the half.
Management also highlighted the launch of its AML solution, PEXA Clear, ahead of the July 1, 2026 compliance deadline. In Q&A, Cohen said PEXA Clear has already launched, and that the company expects early sales and marketing costs to show up in the second half, with revenue uplift expected next year. Management said it is not providing revenue guidance or quantified opportunity sizing for PEXA Clear, though Cohen described it as a per-transaction pricing model and positioned it as tailored to property industry compliance requirements.
On cash flow and balance sheet, Cohen said the Australian exchange supported a 25% increase in group free cash flow versus 1H25, while Warrell reported free cash flow of AUD 40.2 million (49.9% conversion), up from AUD 32.2 million. The group repaid AUD 25 million in debt during the half, reducing the net debt to EBITDA ratio to 1.4x from 2x, according to Cohen and Warrell. The board decided not to recommence the buyback program, with cash flow priorities including reinvestment, debt reduction and growth investment.
On guidance, management said it had uplifted FY2026 expectations for group EBITDA margin and group core NPAT, while reducing CapEx guidance to AUD 50 million to AUD 55 million to reflect discontinued operations and cost discipline. In Q&A, Cohen said the company expects a normal seasonal revenue drop in the second half, alongside higher expenses tied to the PEXA Clear launch and additional U.K. headcount, and said performance was “closer to the top end” of guidance.
About PEXA Group (ASX:PXA)
PEXA Group Limited operates a digital property settlements platform in Australia. The company operates through three segments: PEXA Exchange, PEXA International, and PEXA Digital Growth. It operates electronic lodgement network, a cloud-based platform that enables the lodgement and settlement of property transactions through an integrated digital platform, as well as facilitates the collaboration between customers across the property ecosystem to enable the transfer and settlement of transactions in real property.
