HUB24’s Margin Expansion Faces Test Amid Platform Fee Tiering and Market Shifts

Strong Financial Momentum

HUB24 Limited has reported a compelling set of results for the half-year ended 31 December 2024, underscoring its accelerating growth trajectory in the Australian wealth management sector. The Group’s operating revenue surged 25% to $195.2 million, driven primarily by a 29% increase in platform revenue to $154.2 million. This growth was underpinned by a 36% rise in platform funds under administration (FUA) to $98.9 billion, reflecting both strong market performance and record net inflows.

Underlying EBITDA rose sharply by 41% to $77.6 million, with the Group’s margin expanding to 39.8%, a notable improvement from 35.1% in the prior corresponding period. This margin expansion highlights HUB24’s scalable operating model and the benefits of its ongoing investments in automation and technology.

Record Net Inflows and Adviser Growth

Net inflows reached a record $9.5 billion for the half, including $1.5 billion from large migrations such as the Equity Trustees transition. This inflow momentum was supported by HUB24’s strong customer relationships and product innovation, which continue to attract both new and existing advisers. The number of active advisers using the HUB24 platform increased 14% to 4,886, now representing 31% of the total Australian adviser market. This adviser growth is critical, as the average FUA per adviser has more than doubled since 2019, reaching $20 million.

HUB24’s expanding footprint is bolstered by 84 new distribution agreements signed in 1HFY25, providing access to 77% of the adviser market. The company’s strategy to deepen adviser engagement and increase platform usage is expected to sustain strong inflows and FUA growth going forward.

Tech Solutions Segment Gains Traction

Beyond the core platform, HUB24’s Tech Solutions segment, comprising Class and HUBconnect, delivered a 9% revenue increase to $38 million. Class continues to grow its SMSF administration software accounts, now servicing around 210,000 accounts, maintaining its position as the second-largest SMSF software provider in Australia. Meanwhile, NowInfinity expanded its corporate compliance customer base, administering over 818,000 companies.

These technology offerings complement HUB24’s platform business by providing integrated solutions that enhance adviser productivity and client service, reinforcing the Group’s ecosystem approach.

Industry Recognition and Strategic Outlook

HUB24’s market leadership is reflected in multiple industry accolades, including being named Australia’s Best Platform Overall for the third consecutive year by Investment Trends. The Group’s commitment to innovation is evident in recent product launches such as the pilot of a new client portal powered by myprosperity and the Engage reporting tool, which leverage advanced data integration and AI capabilities.

Strategically, HUB24 is well positioned to capitalize on structural growth drivers in the Australian wealth management industry, including the expanding superannuation system, increasing demand for financial advice, and the shift towards specialist platforms. The Group’s integrated platform and technology ecosystem aims to address unmet advice needs by improving accessibility, reducing costs, and enhancing client outcomes.

Financial Strength and Capital Management

HUB24 maintains a strong balance sheet with net cash and equivalents of $73.1 million and generated operating cash flows of $66.5 million, up 89% year-on-year. The Board declared a fully franked interim dividend of 24.0 cents per share, a 30% increase over the prior year, reflecting confidence in the Group’s ongoing profitability and cash generation.

Looking ahead, HUB24 targets platform FUA growth to $123 billion–$135 billion by FY26, supported by continued net inflows, large migrations, and market appreciation. The Group also plans to leverage its unique capabilities to expand into new markets and deepen customer relationships, driving sustainable shareholder value.