Can AF Legal Sustain Profit Gains After Record Q1 Performance?
AF Legal Group has reported a record-breaking first quarter for FY26, with revenue soaring 43% year-on-year and profits more than doubling. This strong start reflects strategic growth in legal talent and practice areas ahead of their upcoming AGM.
- Q1 FY26 revenue hits $9.0 million, up 43% year-on-year
- Normalised NPBT rises 116% to $0.782 million
- Fee earners increased by approximately 50% over the past year
- Project Titan costs of $299k incurred, on track for FY26 delivery
- Q2 expected to soften slightly due to seasonal factors but remains above prior year
Record Revenue and Profit Growth
AF Legal Group has kicked off FY26 with a remarkable performance, reporting a record quarterly revenue of $9.0 million for Q1, marking a 43% increase compared to the same period last year. This surge is not only a testament to the firm’s expanding client base but also reflects robust growth across all its practice areas, including contested wills and estates, family law, and the newly acquired criminal law division.
Normalised net profit before tax attributable to owners climbed 116% to $0.782 million, representing a strong 8.7% margin on total revenue. Impressively, this single quarter’s profit accounts for 57% of the entire FY25 profit, underscoring the firm’s accelerating momentum early in the financial year.
Strategic Talent Expansion Driving Growth
The firm’s growth story is closely tied to its significant investment in human capital. Over the past year, AF Legal Group has increased its fee earners by approximately 50%, bolstered by the acquisition of Armstrong Legal and the addition of seven new lawyers in Q1 alone, five of whom are senior associates or above. This talent influx is already contributing to the firm’s expanding workload and revenue streams, with expectations that their impact will grow in subsequent quarters as these lawyers settle fully into their roles.
Project Titan and Operational Outlook
Operationally, the firm continues to invest in Project Titan, a strategic initiative aimed at enhancing its capabilities, which incurred $299,000 in costs during Q1. The project remains on budget and is slated for completion within FY26, signaling ongoing commitment to long-term efficiency and growth.
Looking ahead, while Q2 is anticipated to experience a slight revenue dip due to seasonal factors such as holiday slowdowns and court closures, early indicators from October and November suggest sustained strength above prior year levels. The firm’s ability to attract and retain high-quality legal professionals is expected to underpin continued performance resilience.
Upcoming AGM and Investor Focus
AF Legal Group plans to provide further insights into its financial position, cash flow, and strategic progress at its Annual General Meeting on 27 November 2025. Investors will be keen to hear more about the firm’s balance sheet health and how Project Titan will shape future operations.
Bottom Line?
AF Legal’s strong Q1 sets a high bar, but sustaining momentum through seasonal headwinds will be the true test.
Questions in the middle?
- How will Project Titan impact operational efficiency and profitability once fully implemented?
- Can AF Legal maintain its accelerated lawyer recruitment and retention in a competitive market?
- What are the detailed financial and cash flow implications to be revealed at the upcoming AGM?