The news: Iress posted a profit in the first half of fiscal 2024 as the financial software provider reinstated a full-year dividend in March 2025.
The numbers: Iress reported a net profit after tax of $17.3 million compared to a net loss after tax of $139.8 million in the first half of fiscal 2023.
Adjusted EBITDA increased 52% year-over-year to $67 million, while revenue decreased 2.6% to $309 million. Iress noted that excluding the businesses divested in the last 12 months, revenue was up 4% year-over-year.
At the same time, operating expenses decreased 10% to $242 million, which the company said reflects the ongoing implementation of Iress’s strategy to reset the Group’s cost base and improve operating leverage.
Iress increased its fiscal 2024 guidance to $126 million to $132 million, a 9% increase from previous guidance. The company expects to declare a full-year dividend in March 2025.
The context: Iress said its transformation is resulting in a “stronger and more streamlined” business with improved financial returns. The increase in revenue was driven by the introduction of a revised pricing framework and investments in strengthening the sales and account management capabilities of the business units.
A strong improvement in the UK business under new leadership also led to higher earnings, it said, as did the extension of contract renewals with several wealthy clients worth $84 million for the next five years.
During the half year, Iress sold its UK mortgage business for $167 million. The sale was completed on August 1. Iress also sold its platform and pulse businesses. All proceeds were used to pay down debt and enable a greater focus on core competencies.
According to Olivier Coulon, analyst at E&P Capital, adjusted EBITDA was at the upper end of the latest forecast, but with higher excluded costs than expected. He noted that the increase in guidance for fiscal 2024 was “positive, although expected” and that the upper end of the new range was “broadly in line” with E&P’s existing guidance.
What they said: Marcus Price, CEO and Managing Director of Iress, said: “Intense cost-cutting measures have resulted in operating leverage: our adjusted EBITDA margin increased by 760 basis points to 21.7% and adjusted EBITDA increased by 52% compared to PCP.”
“By selling non-strategic assets, including our UK mortgages, early in the second half, we significantly strengthened our balance sheet, which is now within our target range of 1.2x leverage,” he said.
