PEXA’s $29.6M Digital Solutions Loss Raises Questions on Strategic Focus

Robust Revenue Growth Amid Strategic Shift

PEXA Group Limited has delivered a solid financial performance for the six months ended 31 December 2025, reporting a 10% increase in revenue to $215.3 million. This growth was underpinned by strong market conditions in Australia, where transaction volumes rose 8% to 2.44 million, and a 2.3% increase in average revenue per transaction driven by CPI-linked pricing adjustments. The International segment, primarily focused on the UK market, also contributed with an 8% revenue uplift, reflecting a recovery in remortgage and sale and purchase transactions.

Profitability and Operational Efficiency

EBITDA from continuing operations rose 19% to $85.8 million, with the margin improving to 39.9%. Net profit after tax from continuing operations was $15.4 million, a significant turnaround from the prior corresponding period’s loss. The company achieved these results while managing cost pressures, including inflationary labour costs and investments in cyber security and new product development. Notably, net interest expense decreased due to lower interest rates and a $25 million debt repayment during the period.

Strategic Exit from Digital Solutions

In a major strategic move, PEXA announced its intention to exit the Digital Solutions segment, classifying the related businesses and investments as held for sale and presenting them as discontinued operations. This segment incurred a net loss of $29.6 million, including a $30.3 million impairment charge. The disposal is expected to complete by the end of the 2026 financial year, allowing PEXA to focus resources on its core Australian Electronic Lodgement Network (ELN) and international expansion.

International Expansion and UK Market Progress

PEXA’s international operations continue to gain traction, particularly in the UK where the company has integrated acquisitions such as Optima Legal Services and Smoove plc to enhance its conveyancing technology and distribution capabilities. A key milestone was achieved with NatWest committing to onboard PEXA’s platform for remortgage transactions by mid-2026, with plans to extend to sale and purchase transactions thereafter. This progress signals growing acceptance of PEXA’s digital property exchange solutions in overseas markets.

Shareholder Returns and Capital Management

The company did not declare a dividend for the half-year, reflecting its focus on reinvestment and strategic repositioning. Capital expenditure was $25.7 million, slightly lower than the prior period, with continued investment in new initiatives balanced against reduced spend on legacy products. PEXA maintains a strong balance sheet with $79.3 million in cash and cash equivalents and continues to manage financial risks prudently, including interest rate exposure and liquidity.

Incentivising Performance Through Share-Based Plans

PEXA detailed its share-based payment plans for executives and employees, including long-term incentive schemes tied to total shareholder return and earnings per share targets. These plans aim to align management incentives with shareholder value creation over multi-year horizons, reflecting confidence in the company’s growth trajectory.