CIPO Delays Test IPH’s Growth as Canadian Integration Progresses

Robust Growth Fueled by Strategic Acquisitions

IPH Limited closed FY25 with a notable 16.5% increase in revenue, reaching $710.3 million. This growth was primarily driven by acquisitions in Canada, including the integration of Bereskin & Parr, which contributed nine months of earnings in the fiscal year. The company also benefited from full-year contributions of Ridout & Maybee and Robic, acquired in prior periods. These moves have expanded IPH’s footprint in a key secondary intellectual property market, positioning it well for future growth.

Earnings and Dividends Climb Despite Margin Pressures

Underlying EBITDA rose 6% to $207.2 million, while underlying net profit after tax and amortisation (NPATA) increased 7% to $120.6 million. However, the EBITDA margin contracted by 2.9 percentage points, reflecting the lower-margin profile of the Canadian acquisitions and ongoing workflow disruptions at the Canadian Intellectual Property Office (CIPO). Statutory net profit after tax grew 13% to $68.8 million. The board declared a total dividend of 36.5 cents per share, up 4%, underscoring a commitment to delivering shareholder returns amid a dynamic operating environment.

Mixed Market Dynamics Across Regions

In Australia and New Zealand, IPH achieved organic revenue growth despite a 1.7% decline in the overall patent market and a 9% drop in IPH’s own filings, largely due to reduced US-originating applications. Notably, IPH’s market share among higher-value international filers remained stable, supported by an 18% increase in Chinese patent filings inbound to Australia.

Asia emerged as a strong growth engine, with IPH’s patent filings up 16.5% year-on-year, driven by double-digit increases in countries such as Indonesia, Malaysia, Thailand, Vietnam, and the Philippines. Singapore filings also returned to growth, outperforming the broader market.

Canada faced persistent delays at CIPO, impacting patent revenue and workflow. However, processing times improved in the latter part of FY25, with backlog reduction underway and expectations for normalization in FY26. The integration of Bereskin & Parr into Smart & Biggar was completed, with synergy benefits anticipated to accelerate in the coming year.

Operational Efficiencies and Technology Investments

IPH undertook a corporate restructure to empower member firms and enhance risk management, targeting annualised cost savings of $8 million to $10 million from FY26. The company is embedding artificial intelligence across core operations; from patent drafting to administrative tasks; to streamline workflows and reduce costs. Investments in technology and operational improvements aim to boost efficiency and client outcomes, supporting sustainable growth.

Strong Balance Sheet and Capital Management

Net debt stood at $356.3 million with a leverage ratio of 1.9 times underlying EBITDA, comfortably within the company’s 2.0x target. The balance sheet retains flexibility for further investments in technology and operational enhancements. IPH also completed a $74.2 million share buy-back during the year and raised $122.9 million in capital in August 2024, reflecting active capital management to support growth and shareholder returns.

Sustainability and Diversity Initiatives

Beyond financials, IPH advanced its sustainability agenda with improved governance, cybersecurity, and environmental impact measurement. The company launched a refreshed Diversity, Equity, and Inclusion policy, progressed gender equity targets, and endorsed a Reconciliation Action Plan. Employee development was supported through global learning systems and mental health training, reinforcing a culture of continuous improvement.

Looking Ahead, FY26 Priorities

For FY26, IPH plans to accelerate its transformation program to drive efficiency and commercial results across member firms. Continued investment in technology and operational improvements will underpin growth, particularly as the Canadian market recovers from CIPO delays. The company aims to leverage its scale in Canada, build on Asian filing momentum, and sustain organic growth in ANZ, with targeted business development in Western Europe, Japan, South Korea, and China. Cost structure streamlining and operational efficiency remain key focus areas to enhance profitability.