• Adjusted IEA: Up 25.2% to $132.8 million.
• Underlying Earnings Per Share: Increased by 72.4% to $0.34 per share.
• Leverage Ratio: Reduced from 2.5 times to 1.
• Operating Margin Expansion: Expanded by 501 basis points.
• EPAT: Increased by 192% to $30.1 million.
• Final Dividend: Reinstated at $0.10 per share, 25% franked.
• Revenue: Down 3.4% overall; up 4% on a continuing business level.
• Operating Costs: Down 9%, with headcount reduced by 15% to approximately 1,500.
• Free Cash Flow: Improved notably, with net debt reduced by over $200 million.
• UK Business Growth: Adjusted EBITDA up by more than 170%.
• Trading and Global Market Data Business: Up 38% in adjusted EBITDA.
• APAC Wealth Business: Adjusted EBITDA up 13% despite revenue challenges.
• 2025 Guidance for EPAT: Expected to be between $54 to $62 million, representing an 80 to 106% increase.
• 2025 Guidance for Adjusted IEA: Expected growth of 6 to 12% on the continuing business.

• Warning! GuruFocus has detected 6 Warning Signs with ASX:IRE.

Release Date: February 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• IRESS Ltd (ASX:IRE) delivered record financial results for FY24, with adjusted IEA up 25.2% to $132.8 million.
• The company reinstated a final dividend of $0.10 per share, reflecting confidence in its financial position.
• Operating leverage improved significantly, with a margin expansion of 501 basis points.
• The UK business showed strong growth, contributing significantly to the company's overall performance.
• IRESS Ltd (ASX:IRE) has successfully reduced its leverage ratio from 2.5 times to 1, strengthening its balance sheet.

Negative Points

• Revenue was down 3.4% due to divestments, although it grew by 4% on a continuing business level.
• The APEC wealth business faced revenue challenges due to structural changes in the Australian wealth market.
• Operating costs remain a focus, with a 15% reduction in headcount over the year.
• The company faces ongoing challenges in the superannuation business, with variability in cost and revenue.
• There are concerns about the impact of pricing increases on customer sentiment, particularly in the trading and market data side.

Q & A Highlights

Q: Can you elaborate on the revenue and cost inputs for the 2025 guidance and the underlying drivers of those assumptions? A: Cameron Williamson, Group CFO, explained that revenue guidance is expected to be similar to 2024, with a slight increase. They anticipate 4-5% revenue growth and 3-5% cost growth, with some cost contraction in certain areas. Investments will be made to drive new revenue streams, leading to margin expansion.

Q: Does the guidance for 2025 include final transformation and M&A-related costs? A: Yes, the guidance includes assumptions about the completion of transactions and the end of the transformation program, as confirmed by Cameron Williamson.

Q: What are the reinvestment priorities for cost savings, given the focus on cost reduction and business reinvestment? A: Marcus Price, CEO, highlighted that the primary investment focus is on the trading platform's single open project. Additionally, significant investments are being made in wealth platforms, particularly in the UK, and in data and AI strategies, in partnership with AWS and others.

Q: How is the UK business performing, and what initiatives are being implemented there? A: Harry Mitchell, Group Executive - Wealth & UK, noted that the UK market is experiencing positive growth, leveraging their data migration capabilities. They are co-designing future tech stacks with customers, which could be applied to the Australian market as businesses reconfigure.

Q: Can you provide an update on divestment plans and the timing of asset sales, particularly regarding the superannuation business? A: Marcus Price stated that the Qantas process is ongoing, with more information expected in the first quarter. The superannuation business is more complex, with external factors affecting timing, but a mid-year closure is anticipated.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.