Pinned straw:
Discl: Held IRL 9.64%
SUMMARY
- There is strong momentum and continued growth
- Stripping out the First Guardian impact, this was a strong half for NWL, coming off the back of a strong FY25 - revenue jumped YoY +24.71% and HoH +14.63% - the market clearly liked it
- EBITDA grew +23.95% YoY and +13.20% HoH, above trend, with EBITDA margin sustaining at 49.9%
- First Guardian resolution looks well progressed and should be behind the company - compensations were made, NWL took on only $70m debt instead of the full $100m
- 1HFY26 dividend rose from 17.5c to 21.0c, a 20% increase, despite the First Guardian impact
- No huge AI-eating-NWL concerns - AI is an enabler for NWL - the platform workflows are the workflows of Financial Intermediaries, there is tight regulatory requirements to comply with, data is kept closed
- Continued relentless focus on innovation to evolve and add products
- Based on current run rate and EBITDA margin, guidance for FY26 around Net FUA Flows and EBITDA margin should be met
- Stripping out the First Guardian impact, this was a very strong above trend revenue jump YoY +24.71% and HoH +14.63%
- Operating Expenses kept pace, increasing +25.48% YoY and 16.09% HoH, above trend
- Majority of this investment was in additional 127 headcount, a 19.1% increase, with empoyee benefits expense increasing $13.2m or 24.8%
- Technology-related expenditure to strengthen operational capacity and support longer-term growth opportunities
- EBITDA grew +23.95% YoY and +13.20% HoH, above trend, with EBITDA marging sustaining at 49.9%
- Cash flow conversion ratio was a strong 99.7%, but slightly short of 2HFY2025’s 103%
The increase in Financial Intermediaries and the number of accounts that they bring continue to impress.
This slide on its own was good info but was only meaningful when I graphed the Revenue Segments - Ancillary Fees growth has been accelerating.
AI, OF COURSE
I did not worry about AI eating NWL - it IS (1) the workflows of the advisers (2) data for a customer is closed and tightly regulated (2) heavily regulated system of record, but good to see management thinkig through the implications as you would expect.
Market share as of September 2025.
NWL is taking market share from both retail platforms and industry funds, as member balances grow and investors seek tailored advice specific to their needs. Can't remember this coming up before.
OPERATING LEVERAGE
Noticeable change from the language used in 2HFY25 “Operating leverage delivered in FY25”. No issues with this as these investments are resulting in the increase of revenue and broadening of the revenue segments.
Majority of this investment was in additional 127 headcount, a 19.1% increase, with empoyee benefits expense increasing $13.2m or 24.8%
FIRST GUARDIAN UPDATE
Feels like we are seeing the back of this issue.
OUTLOOK
- No change to guidance
- FY25 FUA Net Flows = $15.7b, at 1HFY26, FUA Net Flows = $8.24b
- Run rate against FUA Net Flows and EBITDA margin guidance is looking positive and should be achievable
I thought the NWL result also showed just how strong HUB is and today they're also out with a pretty good report.
Disc: Hold both NWL and HUB
This was a good NWL article & 10 min interview with Matt Heinz on LiveWire, immediately after the results presentation. Short and sharp and more business focused away from the focus on the results.
Very happy shareholder!
2 points that I thought I knew but only really fully crystallised for me from the interview:
1. 90% of inflows every year, actually come from existing customers - advisors who have been on the platform for >12M, only 10% of inflows come from new advisor accounts. I have seen the slide, thought I understood it, but this point really hit home now. This happens as new advisors progressively transition their customers into NWL and consolidate their backbooks.
2. Where Growth Will Come From
Again, not new, but it came across very clearly in the interview. 3 market segments:
Platform Market: Very large, currently $1.2tn and growing organically 10% - share of this is increasing - 1% increase in Sept 2025, meaningful
Industry Funds - seeing a very recent shift in Net fund inflow - NWL has been a huge benefactor, major tailwinds from a benefactor perspective pushing more and more Australians to have more complex advice needs, pushing them to move from an Industry fund to a platform like NWL, people want all their finances managed with one provider ie super, non-super, trusts etc, NWL is well set to offer this advice support. Super system is look to grow to $6tn by 2030
Broking - soft launch of individual broker and HIN offering, unlocks a TAM of ~$600b
OTHER COMMENTARY
Use of AI
- Meh, stock standard, old-school AI stuff - feels like a cautious approach if they are only just about rolling out their first chatbot.
- This is actually a good thing. In the Economist BossClass series on AI, a cautious approach in areas that give immediate bang for the buck without exposing the business to unnecessary risk, is a really sound approach to take, instead of big bang, ghee whiz rollout of leading edge stuff that could cause immense grief.
What to Expect in the Next 6-12M
- More of the same
- First Guardian compensation has allowed NWL to start CY2026 with a fresh start and to capitalise on the good work done in the last 6-12M