Stonegate Capital Partners has updated its coverage on NZX Limited (NZSE: NZX), following the company's release of financial results for the second half of fiscal 2026. The announcement comes as NZX navigates a period of macroeconomic uncertainty that has tempered market activity, though the exchange operator's core earnings held steady and its technology-driven segments continued to expand.
For the six months ended December 31, 2025, NZX reported revenue of $67.2 million, operating profit of $17.7 million, and EBITDA of $27.6 million. This compared to Stonegate's estimates of $68.8 million, $16.2 million, and $27.7 million, respectively. While revenue fell short of projections by approximately 2.3%, operating profit exceeded expectations by 9.3%, and EBITDA was broadly in line. The revenue shortfall was primarily attributed to softer market activity, as lingering macroeconomic headwinds dampened trading volumes and capital raising. Stonegate noted that these conditions are expected to improve over time, supporting a recovery in transaction-based revenues.
Despite the top-line miss, NZX's underlying earnings demonstrated resilience, reflecting the benefits of its diversified business model. Notably, the Smart and Wealth Tech segments continued to drive growth, with funds under management (FUM) rising 17.4% and funds under administration (FUA) increasing 23.1% compared to the prior corresponding period. These metrics underscore the scalability of NZX's technology platforms and their ability to attract assets even in a challenging macro environment.
Looking ahead, NZX provided EBITDA guidance for fiscal 2026 in the range of $53.0 million to $58.5 million, signaling management's confidence in sustaining momentum. The midpoint of this range implies a modest increase over the trailing twelve months' EBITDA, suggesting that the company expects a gradual improvement in market conditions and continued growth from its higher-margin technology and data services.
Stonegate's updated coverage highlights NZX's strategic positioning as a diversified exchange and market infrastructure provider. The focus on expanding its wealth and technology offerings has helped reduce reliance on traditional transaction-based revenue streams, providing a buffer against cyclical downturns. As macroeconomic uncertainties abate, NZX is well-placed to benefit from a rebound in capital markets activity, while its recurring revenue from funds administration and smart technology solutions offers a stable base for future growth.
For more details, the full announcement is available at https://www.stonegateinc.com/coverage/NZX.
