How Is ASX Navigating Growth and Regulatory Pressure in 1H26?

Strong Financial Performance

ASX Limited has reported a solid financial performance for the first half of 2026, with operating revenue rising 11.2% to $602.8 million. This growth was broadly supported by increased activity across its core segments – listings, markets, technology & data, and securities & payments. Underlying net profit after tax (NPAT) increased by 3.9% to $263.6 million, reflecting both higher revenues and a stable underlying return on equity of 13.5%.

The company’s markets segment benefited from heightened trading volumes, particularly in interest rate futures and cash market trading, while its listings business saw momentum with 62 new listings and a notable increase in international listings compared to the prior period. Technology and data services also contributed to growth, driven by demand for market data and infrastructure services.

Responding to Regulatory Scrutiny

ASX continues to address the implications of the ASIC Inquiry, which has been a critical focus since the interim report was published in December 2025. The company has committed to a strategic reset of its Accelerate program, aimed at enhancing governance, risk management, and operational resilience. This reset includes adding a governance and independence workstream and ensuring all non-executive directors on clearing and settlement facility boards are independent.

ASX has pledged to accumulate an additional $150 million in capital above its net tangible asset base by June 2027, as part of its commitments to ASIC. This capital buffer is intended to provide greater financial strength while the company works through the inquiry’s recommendations and milestones.

Technology Modernisation and Capital Investment

Technology modernization remains a cornerstone of ASX’s strategy, with the CHESS replacement project targeting a go-live in 2029. The first release, focused on cash market clearing, is scheduled for April 2026 and is currently undergoing production dress rehearsals. The company is investing heavily in cloud services, data platforms, and partnerships with global technology leaders such as NASDAQ and TCS to deliver a future-ready market infrastructure.

Capital expenditure guidance for FY26 is set between $170 million and $180 million, reflecting ongoing investments in technology and infrastructure. ASX also provided FY27 CAPEX guidance in a similar range, though it cautioned that inherent delivery risks in the modernization program could impact these estimates.

Dividend and Expense Outlook

ASX declared an interim dividend of 101.8 cents per share, down 8.5% from the prior corresponding period, reflecting a lower payout ratio within the targeted 75-85% range. The company expects to maintain the dividend payout at the lower end of this range for at least the next three dividends, supported by a discounted dividend reinvestment plan.

Operating expenses increased by 20% year-on-year, largely due to costs associated with the ASIC Inquiry and investments in key programs such as Accelerate. Excluding inquiry-related expenses, expense growth was 12.1%. ASX reiterated its FY26 expense growth guidance of 20-23%, including inquiry costs, and 13-15% excluding them.

Looking Ahead

ASX’s outlook remains positive, buoyed by strong momentum in listings activity and supportive market conditions for interest rate futures. The company is focused on delivering on its regulatory commitments, advancing its technology transformation, and maintaining financial discipline to support sustainable growth and shareholder returns.