Smartgroup Posts 8% Revenue Growth and Records 491,000 Salary Packaging Customers

Strong Financial Growth and Customer Expansion

Smartgroup Corporation Limited (ASX:SIQ) delivered a solid financial performance for 2025, with revenue climbing 8% to $329.3 million and EBITDA rising 14% to $135.3 million. Net Profit After Tax and Amortisation (NPATA) increased 11% to $80.2 million, reflecting the scalability of its capital-light business model and disciplined cost management. The company also reported record customer numbers, including 491,000 active salary packaging customers and 85,300 novated leases under management, underscoring its market-leading position across employee services and fleet solutions.

These results come amid a backdrop of strategic digital investments and operational efficiencies that have improved customer engagement and streamlined processes. Over the past two years, Smartgroup has grown its eligible customer base by 14%, with a 9% relative improvement in customer uptake and a 13% increase in product uptake, driving organic growth from within its existing client base. This momentum was further supported by new client wins in key sectors such as health, education, and government, including Monash Health and Grampians Health, as well as inclusion on the Transport for NSW leasing panel.

EV Leasing Leadership and Policy Support

The company has positioned itself at the forefront of Australia's electric vehicle (EV) transition, leveraging the Federal Government’s Electric Car Discount Policy, which has boosted EV sales from under 2% to around 15% of new vehicle sales in just three years. Smartgroup’s novated leasing platform has simplified EV ownership, making it more accessible to everyday Australians, particularly workers in sectors like health and education.

The recent government review confirmed the policy’s effectiveness and extended it through April 2027, providing Smartgroup with policy certainty to sustain growth in its EV leasing business. This regulatory backdrop, combined with rising fuel prices, has strengthened the economic case for EV adoption among consumers, a trend reflected in Smartgroup’s Q1 2026 trading update showing a 22% year-on-year increase in new lease vehicle orders and a reduction in vehicle delivery times to 24 days for top models.

Digital Transformation and AI-Driven Efficiency

Smartgroup continues to invest heavily in digital transformation as part of its three-phase strategic roadmap. The recent launch of the new Smart app is designed to enhance customer engagement and self-service, featuring an intuitive dashboard, easy claiming, and budget tracking. The app has received positive early feedback and is expected to drive further uptake of the company’s benefits offerings.

Alongside customer-facing innovations, Smartgroup is expanding its AI, data, and automation capabilities internally. Initiatives include AI-enabled 24/7 digital servicing to reduce call volumes, an internal AI agent for rapid product information access, and large-scale AI analysis of over 200,000 customer calls to refine service quality and customer experience. These efforts have contributed to a 16% improvement in customers handled per operations team member and are expected to underpin ongoing efficiency gains and margin expansion.

Capital Management and Shareholder Returns

Following the sale of the majority of its self-funded fleet portfolio to Volkswagen Financial Services Australia, Smartgroup announced an on-market share buy-back of up to $20 million, funded from existing cash reserves and proceeds from the sale. This move aligns with the company’s capital-light fleet strategy and disciplined capital allocation framework, aimed at returning excess capital to shareholders while maintaining flexibility for growth investments.

The Board declared fully franked dividends totaling 53 cents per share for 2025, representing 90% of NPATA, continuing a consistent track record of shareholder returns with approximately $649 million paid in fully franked dividends since the company’s 2014 IPO. The company also targets mid-40s EBITDA margins by 2027, supported by ongoing investments in automation and technology.

Outlook Amid Macroeconomic Uncertainty

Smartgroup remains cautiously optimistic despite inflationary pressures and higher interest rates that could impact consumer confidence. Its capital-light model, diversified client base, and strong recurring revenues provide resilience. The company is actively expanding novated leasing distribution partnerships, recently signing with Hyundai Capital, Jaecoo, and Chery, while continuing to grow its fleet management offering through external funding.

With a strengthened balance sheet and a clear strategic roadmap focused on digital innovation, operational scalability, and product innovation, Smartgroup is well-positioned to sustain profitable growth and enhance shareholder value in a dynamically evolving market.

These developments build on the company’s recent digital push in Q1 2026 and follow its earlier record 2025 growth and ESG vision, reinforcing Smartgroup’s role in driving Australia’s employee benefits and EV leasing sectors forward.