ASX Projects 18-21% Expense Growth and $180-200M Capex for FY27

Rising Costs Reflect Tech Modernisation and ASIC Inquiry Response

ASX Limited (ASX) has updated its financial guidance for FY27, flagging total expense growth of between 18% and 21%. This marks a notable increase from prior expectations and is primarily attributed to the ongoing technology modernisation program, including the rollout of CHESS Release 1 and enterprise cloud platforms, as well as the expanded Accelerate Program responding to the ASIC Inquiry. Operating expenses excluding depreciation are expected to grow between 13% and 16%, reflecting the dual pressures of technology cost inflation and the need to maintain legacy systems during the transition period.

Technology modernisation remains the largest driver of cost increases, with ASX investing heavily to upgrade critical market infrastructure. The company is also channeling funds into customer-driven growth initiatives such as expanding derivatives products and exploring tokenisation opportunities, including collateral mobilisation and tokenised trading models. Organisational efficiency improvements through AI and process automation further contribute to the expense profile.

These developments occur against the backdrop of ASX's commitment to address historical underinvestment highlighted by the ASIC Inquiry, which has pushed the company to accelerate its transformation agenda. The inquiry's final report prompted a reset of the Accelerate Program, with ASX working towards agreement with ASIC and the Reserve Bank of Australia by the end of June 2026. This strategic pivot is consistent with ASX's broader efforts to strengthen its resilience and governance frameworks, as previously outlined in its deep reform and $150M capital charge announcement.

Capex Guidance Increased to Support Expansion and Modernisation

Reflecting the intensifying technology investment, ASX has raised its FY27 capital expenditure guidance to between $180 million and $200 million, up from the previous $160 million to $180 million range. The increase is driven by technology cost inflation and new product development, with FY28 capex guidance set at $170 million to $190 million. The company cautions that inherent delivery risks in the modernisation program may impact these projections.

The elevated capex aligns with ASX’s strategic priorities to modernise its infrastructure and expand its offerings in response to evolving market demands. This includes investments in data and technology platforms, derivatives expansion, and issuer experience enhancements. The increased depreciation and amortisation expense, expected to rise by around 5% in FY27, reflects the capitalisation of these new platforms and the recent move to a new Sydney headquarters.

Dividend Policy Maintained with Lower Payouts to Fund Capital Build

ASX has confirmed its dividend policy remains unchanged, targeting a payout ratio between 75% and 85% of underlying net profit after tax (NPAT). However, the company plans to pay dividends at the bottom end of this range for at least the next two dividends to accumulate an additional $150 million in capital above net tangible assets by 30 June 2027, as part of ASIC Inquiry commitments. This capital buffer is intended to bolster ASX's financial resilience and stewardship of market infrastructure. A discounted dividend reinvestment plan will also be offered during this period.

Earlier in FY26, ASX reported unaudited operating revenue of $1.03 billion to 30 April 2026, up 12.5% year-on-year, supported by strong volumes in interest rate futures, cash market trading, and clearing and settlement services. The company has maintained its FY26 expense and capex guidance, with total expense growth expected between 20% and 23%, including costs related to the ASIC Inquiry and the Commitments Plan.

Sympli Stake Sale and ASIC Proceedings Add Complexity

ASX has agreed to sell its 49% interest in Sympli to its joint venture partner ATI Group for a nominal amount, following the Australian Registrars National Electronic Conveyancing Council’s decision not to proceed with the e-conveyancing interoperability program without government support. This transaction will result in an after-tax loss of approximately $12 million, recognised as a significant item in FY26. Post-sale, ASX will no longer account for Sympli’s operating losses, which were $4.4 million after tax in the first half of FY26, representing 1.7% of underlying NPAT.

Meanwhile, ASIC has commenced legal proceedings against ASX concerning representations made about the previous CHESS replacement project in 2022. The trial is scheduled for 15 June 2026, introducing legal uncertainty that investors will watch closely as it unfolds.

These financial and regulatory developments are unfolding as ASX prepares for leadership transition, with Anthony Attia set to assume the CEO role in September 2026, bringing extensive global exchange experience to guide the company through its ongoing transformation and technology overhaul, as detailed in the Anthony Attia to Lead ASX announcement.