Smartgroup Reports 8% Revenue Growth and Digital Push in Q1 2026

Strong Q1 Growth Driven by Novated Leasing and Digital Innovation

Smartgroup Corporation Ltd (ASX:SIQ) kicked off 2026 with impressive momentum, posting an 8% increase in average monthly revenue compared to the same period last year. The standout metric was a 22% jump in novated leasing orders excluding refinanced vehicles, underscoring robust demand in a key growth segment. Total novated leasing settlements, including refinanced vehicles, also rose 7%, signaling sustained customer appetite for Smartgroup’s fleet solutions.

These gains build on the company’s trajectory following a record 2025, where revenue surged 46% to $329.3 million and customer numbers expanded across all business lines. The company’s strategic focus on digital transformation is now bearing fruit, with the recent launch of a new mobile app designed to enhance customer experience through intuitive dashboards, easy claiming, and budget tracking features. Early feedback on the app has been positive, supporting Smartgroup’s ambition to deliver a seamless, self-service platform.

Smartgroup’s CEO Scott Wharton highlighted the disciplined execution of strategic priorities, noting that the Group retained all major clients and secured new ones during the quarter. The company’s investment in automation and AI is also ramping up, with initiatives including AI-enabled chatbots for 24/7 service, internal AI agents for rapid information access, and large-scale AI call analysis to improve customer insights and operational efficiency. These efforts aim to underpin scalable growth while controlling costs.

Electric Vehicle Demand Supported by Government Policy and Market Dynamics

Electric vehicles (EVs) continue to play a pivotal role in Smartgroup’s novated leasing growth. In Q1 2026, battery electric vehicles (BEVs) accounted for 59% of new vehicle orders, while internal combustion engine vehicles made up 36% and plug-in hybrid EVs 5%. Notably, 80% of BEV orders were priced below $75,000, reflecting the affordability trend among Smartgroup’s predominantly mid-market customers.

The company welcomed the Australian Government’s reaffirmation of the Electric Car Discount Policy, which has been instrumental in enabling workers such as nurses, teachers, and not-for-profit employees to transition to EVs and reduce living costs. Wharton emphasized that policy certainty is crucial for maintaining EV uptake and encouraging investment from manufacturers and charging infrastructure providers. Elevated fuel prices are also strengthening the economic case for EVs, further supporting demand.

Vehicle delivery times have improved significantly, with the average order-to-delivery timeframe for Smartgroup’s top 30 makes and models dropping to 24 days in Q1 2026, down from 31 days at the end of 2025. This enhanced supply chain efficiency supports the growing pipeline of future revenue, which stood at approximately $16.8 million at the end of March 2026, up from $9.8 million in December 2025.

Financial Outlook and Strategic Investment for Sustainable Growth

Smartgroup is maintaining a disciplined approach to capital expenditure, with an expected spend of $11-13 million on technology and digital initiatives in 2026. This investment aligns with the company’s multi-phase strategic roadmap, which includes scaling its digital platform, consolidating brands, and leveraging AI to drive operational efficiency.

Looking ahead, Smartgroup is targeting EBITDA margins in the mid-40s during 2027, reflecting confidence in its scalable, capital-light business model. The company remains vigilant to macroeconomic risks such as inflation, interest rates, and consumer confidence but believes its diversified product offering and strategic investments provide resilience. There are also opportunities beyond 2027 to further elevate performance through sustained innovation and market expansion.

Smartgroup’s ongoing focus on expanding its customer base and product uptake is evident in the consistent growth of eligible employees and active customers, building on gains reported in prior periods. This momentum complements the broader trend of digital and EV leasing adoption, as seen in the company’s record 2025 results and strategic advances reported earlier this year.

With novated leasing orders surging and digital tools gaining traction, Smartgroup’s ability to navigate a dynamic market while enhancing customer experience will be critical to sustaining growth and margin expansion in the years ahead.