Iress shares slump on softer first-half earnings
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More news: Software provider Iress was one of the worst performers on the ASX 200 in early trade after reporting a flat first-half profit and lower earnings year over year.
Iress shares were down 7% to $8.74 at 11am AEST, after surging last week on news of takeover interest by investing giants Blackstone and Thoma Bravo.
E&P’s Olivier Coulon called it a "confusing result" after the company changed its segmental reporting without prior notice. He noted that first-half EBITDA was softer than expected and R&D operating expenditure of $5.8 million marked a "material step up".
Coulon also flagged that the departure of deputy CEO Harry Mitchell "is likely to raise some question marks as the investment community had appeared to rate him".
Iress reports no growth in first-half profit, EBITDA dip
The news: Financial services software provider Iress has reported no change in net profit after tax for the first half of 2025 year on year and a fall in adjusted EBITDA.
The numbers: Iress reported net profit after tax of $17.3 million, which is the same as it reported in the first half of 2024. Adjusted EBITDA however fell by $2.6 million year on year to $64.4 million. First-half revenue was 3.1% lower at $299.5 million.
Iress declared an interim dividend of 11 cents per share, where none was declared in the previous comparable period.
This is a miss compared to market consensus estimates, according to Visible Alpha, which had anticipated $24.4 million in net profit and adjusted EBITDA of $65.5 million. Analysts had also expected a dividend of 12.2 cents per share.
The company reaffirmed full-year guidance of adjusted EBITDA between $127 million and $135 million, and underlying profit after tax between $65 million and $73 million.
The context: Iress' group managing director and CEO Marcus Price said the company strengthened its balance sheet during the period, following the sale of its superannuation business, and the planned divestment of its market data subsidiary QuantHouse, on track for completion in the second half of the year.
The company sees "significant opportunities" in emerging cloud and AI technologies to enhance trading experiences and expand its wealth suite, Price noted.
Iress also announced the departure of deputy CEO Harry Mitchell, after a recent review of the company's leadership structure determined that the role was no longer required.
The earnings release provided no further updates on discussions with Blackstone and Thoma Bravo, after the company confirmed on Friday that it is engaging with the US investing firms over a potential acquisition.
