Full Year 2025 Netwealth Group Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simon Fitzgerald - Jefferies LLC - Analyst : Great. Thanks for taking my questions. Matt, just when we look at the operating leverage, 150 basis points expansion there is obviously very good. We can see that total income grew 27% versus expense growth at 23%. I'm just interested to know or at least explore with you how you look at the sort of intersection of growth and margin versus investment. I'm just interested to know like you could have done even better with that EBITDA margin expansion by timing some of those costs, therefore. And as Hayden pointed out earlier, there was a bit of a pull forward there. So interested to know your sort of thoughts on how you manage that?

Question: Simon Fitzgerald - Jefferies LLC - Analyst : And then I just want to explore a little bit about the revenue composition on slide 25. Obviously, those admin fees coming down, but particularly the ancillary fees, including the cash charges on the cash accounts and transaction fees, presumably, that type of revenue just falls straight through to EBITDA, it doesn't have a margin attachment costs attached to it like, say, the admin fee does. Could you sort of talk to me about that?

Question: Simon Fitzgerald - Jefferies LLC - Analyst : And just one more question here, Matt. You talked about reducing reliance on third-party systems and building an internal core system. Is this going to be a replacement of what was previously the [acuity] system?

Question: Simon Fitzgerald - Jefferies LLC - Analyst : Yeah, good. All right, thank you.

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Thank you. Morning, Matt. Morning, Hayden. Do you mind if I just reconfirm your reply to Nick earlier, that was 45% of the uplift is flows or market?

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Thank you. Moving on to the reinvestment around the guidance. So Hayden, that looks of round about $190 million expected for OpEx this year, if I've got that right, maybe a bit better if it chugs along?

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Good. The other bit around, I suppose, the outlook, you've called out obviously, what OpEx is expected to be in absence of any potential impact from Sheridan First Guardian -- now I know Asia is doing the investigation to yourselves on the trustee side and obviously don't want to put you any cutter in that. But -- there's various layers of the situation from the RE to certain licensees and adviser groups and trustee and platforms. So I suppose it would be helpful. Can you provide us your view on the situation any help potentially around probability of any liability impact to net wealth? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2025 / 11:15PM, NWL.AX - Full Year 2025 Netwealth Group Ltd Earnings Call

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Yeah. And perhaps lastly, just on the flow environment since you've obviously started the year extremely well. You've got another major incumbent peer looking to do a forced migration in the next sort of 6 to 12 months from one platform to another. As a insight, this as well as the sort of healthy back book and the organic market activity you're seeing underpinning the flow outlook that you've provided. I think for the first time in a few years at least in our way with guidance as (inaudible)

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Cool. All right, well, thanks, Matt. Thanks, Hayden.

Question: Cameron Halkett - Wilsons Advisory and Stockbroking Ltd - Analyst : Yeah, will do.

Question: Siraj Ahmed - Citigroup - Analyst : Morning, can you hear me okay? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2025 / 11:15PM, NWL.AX - Full Year 2025 Netwealth Group Ltd Earnings Call

Question: Siraj Ahmed - Citigroup - Analyst : Hi. I have three questions. Just first one, Matt, I'm a bit confused with guidance, right? You think similar to FY25, I mean you've had a pretty strong start. It seems like it's like double what you had last year. I think last year, the same term was $1.2 billion. Can you maybe give some color on why you think it will be similar to FY25, right? Thanks.

Question: Siraj Ahmed - Citigroup - Analyst : Okay. So just clarifying, not -- there's no like big outflow is something that you're concerned about. It's just that giving a bit of conservatism, who knows what rest of the year does. Is that right?

Question: Siraj Ahmed - Citigroup - Analyst : Got it. Second one, just on that -- on the cost guidance, right, just following up on First Guardian, Matt and Hayden. Just -- I mean, what sort of cost you're saying excluding that, what sort of costs are you sort of could come through? Because it does look like you are investing in the competence and that's not meaningful. Just want to be clear on what you think it could come through. Is there some penalty or something that potentially could happen? Or is there something else in there? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2025 / 11:15PM, NWL.AX - Full Year 2025 Netwealth Group Ltd Earnings Call

Question: Siraj Ahmed - Citigroup - Analyst : Yeah. Got it. That's helpful. Just last one. In terms of -- I mean pretty very strong adviser additions for the second half, right? And you had pretty good client growth in the fourth quarter as well. Just -- I think, Matt, you mentioned this is that sort of a mid-market offering or the mass market offering is actually starting to rise. Is that what's driving it? And second part to it, in your similar floor outlook, et cetera, I mean, you're launching the new private wealth offering, you have the new broker offering. I'm guessing that's not baked into your flow outlook. That's potential upset that comes through.

Question: Siraj Ahmed - Citigroup - Analyst : Okay. And just the adviser adds and stuff. Is that the traction that you're getting in that sort of mass settling (multiple speakers) --

Question: Siraj Ahmed - Citigroup - Analyst : Okay. Very helpful. Thank you.

Question: Tharan Jeyathasan - JPMorgan Chase & Co - Analyst : Hey guys, thanks very much for taking my questions. Firstly, just on revenue margins. You only saw about 50 basis points of revenue margin compression year on year. I think you described there being some offset from transaction and ancillary fee contribution growing in the period from elevated volatility and things like that. Can you help us understand to what degree do you think these improvements will be continuing into FY26. Just wanted for a year on how we should be thinking about revenue margins into '26?

Question: Tharan Jeyathasan - JPMorgan Chase & Co - Analyst : Yeah. I understand. That's helpful. Thank you. Just maybe a second question on your EBITDA margin expectation. I think you quoted in your guidance that you're expecting that to be or you're targeting for that to be better than 50%. I just want to understand on a longer-term basis, how you guys are thinking about that trending over the next 10 years. Can we expect that to book above 55% maybe? Or how are you guys thinking about that number over the medium term?

Question: Tharan Jeyathasan - JPMorgan Chase & Co - Analyst : I understand. That's clear. Thank you for that. And just the last question, an easy one. Just on your net flows expectations, you're saying not to materially differ from '25. I just want to understand, is that on a dollar basis? Or should we be thinking about that as a percentage of opening FUA?

Question: Tharan Jeyathasan - JPMorgan Chase & Co - Analyst : Okay, yeah. Thanks very much.

Question: Lara Tufegdzic - BofA Global Research - Analyst : Hi. Thanks for taking my question. I just had a quick thing strategically on Retirement Solutions. A lot of your peers have been invest -- (technical difficulty)

Question: Lara Tufegdzic - BofA Global Research - Analyst : Hi. Sorry, am I able to hear me?

Question: Lara Tufegdzic - BofA Global Research - Analyst : Great. Sorry, I'm not sure what happened. I was just wondering strategically on Retirement Solutions, if you have any plans here and how the focus is here, especially considering a lot of your peers are investing heavily in this area? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 20, 2025 / 11:15PM, NWL.AX - Full Year 2025 Netwealth Group Ltd Earnings Call

Question: Lara Tufegdzic - BofA Global Research - Analyst : Okay, perfect. Thanks. That's all for me.