ASX Guides FY25-27 Expenses Mid-Range, Eyes EBITDA Margin Expansion

Steady Progress on Five-Year Strategy

ASX Limited, Australia’s primary securities exchange operator, provided a comprehensive update at its 2025 Investor Forum, highlighting solid momentum in executing its FY28 New Era five-year strategy. As the company approaches the midpoint of this strategic plan, management showcased advancements in key areas such as technology modernization, operational risk management, and customer engagement.

CEO Helen Lofthouse underscored the importance of these developments, particularly the progress in the technology modernization program, which is central to ASX’s future growth ambitions. “We still have a way to go,” Lofthouse acknowledged, pointing to intensified efforts in operational risk and business resilience through the newly established Accelerate Program.

Financial Guidance Reflects Strategic Investments

ASX provided detailed financial guidance for FY25 and FY26, with total expense growth expected to settle around the midpoint of previously announced ranges; 6% to 9% for FY25 and 8% to 11% for FY26. Operating expenses are forecast to grow between 4% and 7% in both years, driven by rising technology costs, including software licenses, and legal expenses related to ongoing regulatory actions.

Capital expenditure remains steady, with guidance narrowed to $170 million to $180 million for FY25 and FY26, and a similar range maintained for FY27. This disciplined capex approach aligns with ASX’s intention to reduce spending beyond FY27 as modernization projects mature.

Operational Highlights and Market Opportunities

Operationally, ASX is nearing a significant milestone with the CHESS replacement project, targeting a go-live for its first release in Q4 FY26. Other initiatives include the final rollout of a Cash Market Trading upgrade to streamline auction processes and an ASX24 platform enhancement aimed at boosting interest rate futures liquidity.

ASX is also innovating in response to market trends, launching environmental futures contracts and Wallumbilla natural gas futures to support the energy transition. Additionally, the new ASX Colo OnDemand infrastructure service offers customers enhanced access to the Australian Liquidity Centre.

Focus on Profitability Metrics

Crucially, ASX is placing renewed emphasis on profitability metrics, with plans to expand its EBITDA margin percentage over the medium term while maintaining an underlying return on equity (ROE) target range of 13.0% to 14.5%. This dual focus reflects a balanced approach to growth and cost management, aiming to deliver sustained shareholder value.

Expense management initiatives are expected to yield annualised savings of approximately $17 million by FY26, with similar targets set for FY27, demonstrating ASX’s commitment to operational efficiency alongside strategic investment.

Overall, ASX’s Investor Forum presentation paints a picture of a company methodically building its foundations for future growth, balancing innovation with prudent financial stewardship.