NZX Limited Reports Strong First-Half 2025 Performance Despite Slight Revenue Shortfall

Stonegate Capital Partners has updated its coverage on NZX Limited (NZSE: NZX) following the company's first-half 2025 financial results. NZX reported revenue of $61.7 million, operating profit of $11.6 million, and EBITDA of $24.1 million for the period, falling slightly below analyst estimates of $64.1 million, $13.6 million, and $25.0 million respectively. The variance was primarily attributed to macroeconomic uncertainty, though Stonegate expects partial recovery in the second half as conditions stabilize.

The capital markets segment demonstrated exceptional performance with capital raised and listed totaling $11.9 billion, representing an 87.8% year-over-year increase. A significant portion of this growth stemmed from the Fonterra Co-Op Group transfer valued at $4.8 billion. Total value traded showed robust growth, increasing 31.4% year-over-year to $21.8 billion. The company continues focusing on liquidity building through initiatives like index futures introduction, following self-match preventions and NZX Dark implementations. Information services revenue reached $10.0 million, up from $9.3 million in the first half of 2024.

Smart, formerly known as Smartshares, ended the half with funds under management (FUM) of $14.0 billion, a 3.8% increase from the second half of 2024. Growth was driven by positive net cash flows and market returns despite macroeconomic challenges. The company continued its rebranding efforts, with the new brand rolling out to remaining products over the coming year. Operational maturity improved through fund structure streamlining and system upgrades.

Wealth Technology emerged as a standout performer, closing the half with $17.6 billion in funds under administration (FUA), an 8.6% increase from fiscal year 2024. Growth was fueled by $1.3 billion in new client migrations and $0.1 billion in market returns. The platform expanded significantly, onboarding three new clients to reach 35 active clients total, while winning four additional new clients during the period. Annual recurring revenue from external clients grew 32.9% year-over-year to $11.9 million, with pipeline potential ARR reaching $13.9 million.

NZX maintained a solid financial position with $14.2 million in cash and declared a fully imputed interim dividend of $0.03, unchanged from the previous year. Capital expenditures remained elevated due to continued investment in Smart and Wealth Technologies, particularly for client migration and system enhancements. The company reiterated its 2025 EBITDA guidance range of $49.0 million to $54.0 million, reflecting strong performance across core segments and a stabilizing macroeconomic environment.