Halo Technologies saw quarterly revenue fall to $3.10 million due to Middle East tensions impacting brokerage income, while cutting UK costs and refocusing on Australian B2B growth. A $2.5 million capital raise and R&D tax refund are planned to support expansion.
- Q3 revenue declined 19% to $3.10 million
- UK operations transition reduces costs
- Domestic B2B adviser base expands
- $2.5 million capital raise targeted in Q3
- R&D tax refund of $1.7 million expected
Revenue Impacted by Geopolitical Turmoil
Halo Technologies Holdings Ltd (ASX:HAL) reported a 19% drop in operating revenue to $3.10 million for the quarter ended 31 March 2026, primarily due to a sharp decline in brokerage income. The company attributed this to heightened equity market volatility triggered by the war in the Middle East starting late February, which dampened trading activity. However, management noted a material recovery in trading volumes and revenue during April, despite ongoing geopolitical uncertainty.
Brokerage revenue, a key contributor to Halo's topline, was hit hardest by the regional conflict, underscoring the sensitivity of fintech brokerage services to external shocks. This marks a reversal from the prior quarter's $3.84 million revenue, which had already faced seasonal pressures.
UK Business Model Shift Cuts Operating Costs
Halo's group operating costs declined materially this quarter, reflecting the near completion of its strategic pivot in the UK towards a capital-light, B2B-only model announced in November 2025. This transition, which involves shedding direct-to-consumer operations in favour of technology partnerships, has reduced overheads and aligned with the company’s broader cost discipline measures. Australian operating costs remained broadly stable as the company balanced cost control with growth initiatives.
This strategic realignment builds on earlier moves to reshape the UK business and expand product offerings, including the launch of Managed Funds in Australia, which aim to engage traditional financial planners and diversify revenue streams. The UK shift was previously detailed in Halo's FY25 results and operational updates, highlighting a sustained focus on scalable B2B channels capital-light UK model.
Domestic B2B Expansion and Adviser Growth
Domestically, Halo is accelerating growth by onboarding new B2B advice groups and advisers, a critical step towards increasing client accounts and funds under management (FUM). Early indications are positive, with new client accounts already opened and senior staff engagement suggesting sustained momentum. Post-quarter, the company has bolstered its sales and customer service teams to support a growing prospect database and convert subscription clients who have signed up but not yet activated accounts.
This expansion aligns with Halo’s strategy to deepen its Australian footprint and capitalise on its managed funds launch, which broadens its product suite for financial planners. Engagement with Asia-Pacific partners remains active despite global market volatility, reflecting ongoing efforts to diversify geographically and grow the B2B client base Managed Funds launch.
Cash Flow and Funding Outlook
Cash flow from operating activities was negative $1.55 million for the quarter, with cash and equivalents at $1.67 million as of 31 March 2026. Capital expenditure was modest, focused on intangible assets. Related party payments, primarily trading costs to entities connected to directors and major shareholders, amounted to $2.18 million.
To bolster its balance sheet, Halo plans a $2.5 million capital raise in the September 2026 quarter, complemented by an expected $1.7 million R&D tax incentive refund in the June quarter. Together with improved operating cash flows expected from the recovering brokerage activity and domestic growth, the company’s board believes these measures will support ongoing operations and strategic objectives.
While the recent geopolitical headwinds have tested Halo’s revenue streams, the company’s multi-pronged approach; cost discipline, UK model transition, domestic B2B expansion, and capital raising; positions it to navigate the uncertain environment ahead.
Bottom Line?
Halo’s near-term prospects hinge on successful capital raising and sustained recovery in brokerage revenue amid ongoing geopolitical risks.
Questions in the middle?
- How will ongoing Middle East tensions affect Halo’s brokerage revenue in coming quarters?
- Can Halo convert its growing domestic adviser base into meaningful FUM inflows quickly?
- What are the risks and timelines associated with the planned $2.5 million capital raise?