PEXA reports $406.9 million revenue and 12% EBITDA growth for FY26

PEXA's Financial Turnaround and Growth

After a challenging prior year, PEXA Group Limited (ASX:PXA) has posted a marked turnaround in FY26, with group revenue climbing 7.2% to $406.9 million and EBITDA rising 12% to $151.7 million. The company swung back to profitability, reporting $19.2 million net profit after tax from continuing operations, a significant improvement over the $65.6 million loss in FY25.

The Australian Exchange remains the backbone of PEXA’s operations, facilitating over $1 trillion in property settlements annually and maintaining a 90% market penetration. Transaction volumes grew strongly in the first half of FY26, supported by record activity in December 2025, though volumes softened in the final quarter amid macroeconomic headwinds.

UK Progress and New Product Launches

Internationally, PEXA advanced its UK strategy with the successful early delivery of NatWest’s digital remortgage platform in March 2026, three months ahead of schedule. This milestone demonstrated PEXA's ability to deploy complex digital infrastructure in one of the world's largest property markets. While UK revenues grew modestly by 1% (or 12% excluding foreign exchange and contract cessation impacts), EBITDA remained negative at $(41.1) million, reflecting continued investment in scaling the business and supporting NatWest’s rollout.

In Australia, PEXA launched PEXA Clear, a purpose-built anti-money laundering and counter-terrorism financing (AML/CTF) compliance platform, expanding its addressable market to real estate agents and property developers. Early adoption has been encouraging, positioning PEXA to capitalize on evolving regulatory requirements effective from 1 July 2026.

Regulatory Challenges Cast Shadow Over Pricing

Regulatory developments dominated the year, with the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) deciding not to proceed with the Interoperability Program, providing clarity but also reinforcing the status quo. More consequentially, the Independent Pricing and Regulatory Tribunal (IPART) released a draft report proposing a 20% reduction in PEXA Exchange’s regulated fees from FY28, with annual CPI increases thereafter.

PEXA has lodged detailed objections to IPART’s methodology, arguing the proposed fee cut undervalues the critical infrastructure, ignores long-term investment needs, and could jeopardize platform resilience and innovation. The company advocates for maintaining annual CPI increases to support sustainable pricing and ongoing investment. The final IPART report is expected later in 2026, with ARNECC to decide on implementation.

This regulatory uncertainty has already been factored into PEXA’s impairment assessments, with a probability-weighted FY28 fee reduction of 13.2% used for valuation purposes, though this does not represent management’s endorsement of the cut.

Capital Management and Operational Efficiency

PEXA’s disciplined execution has yielded $19.2 million in cost savings during FY26, offsetting inflationary pressures and enabling continued investment in cyber security, platform resilience, and growth initiatives. Free cash flow rose 39% to $93.5 million, supporting $92.4 million in debt repayments and reducing leverage to a net debt to EBITDA ratio of 1.0x from 1.8x in FY25.

Capital expenditure was $51.6 million, focused on enhancing the Australian Exchange and developing PEXA Clear. The company also plans a capital-light pilot program in New Zealand to test market demand before committing to significant investment.

Governance and ESG Commitments

The Board saw changes with the retirement of Helen Silver and appointments of John Hooper and Janelle Hopkins, enhancing governance with expertise in banking, digital transformation, and customer-focused businesses.

PEXA continues to prioritize ESG, with a comprehensive sustainability report detailing net zero Scope 1 and 2 emissions, ongoing Scope 3 emissions management, and social impact initiatives such as partnerships with Homes for Homes and Simon on the Streets to support affordable housing and vulnerable communities in Australia and the UK.

Customer satisfaction remains high at 89% in Australia and 93% for UK legal services, underscoring PEXA’s commitment to reliable, secure, and user-friendly digital property transactions.

Looking Ahead: Navigating Uncertainty and Growth

PEXA enters FY27 with cautious optimism. The company expects Australian property transaction volumes to moderate due to macroeconomic pressures and recent tax changes, which will likely weigh on revenue and margins. Guidance for FY27 projects group revenue between $385 million and $415 million, EBITDA margin between 31.5% and 33.5%, and net profit after tax ranging from $5 million to $20 million.

Strategic priorities include maintaining the Australian Exchange’s resilience and security, expanding PEXA Clear adoption, progressing the New Zealand pilot, and accelerating UK platform adoption with a focus on launching Sale & Purchase capability with NatWest by late 3Q27.

The final outcome of IPART’s pricing review remains a material uncertainty, with significant implications for PEXA’s capacity to invest and innovate. How regulators balance affordability with infrastructure sustainability will be pivotal for Australia’s digital property ecosystem and PEXA’s future trajectory.

Investors and observers will be watching closely as PEXA navigates this regulatory crossroad while leveraging its digital infrastructure leadership in Australia and the UK.

PEXA’s regulatory pricing challenge highlights the stakes involved in maintaining a viable fee structure for critical digital infrastructure.