Stonegate Capital Partners has updated its coverage on NZX Limited (NZSE: NZX), providing insights into the company's first-half 2026 results. The report highlights that NZX's Smart and Wealth Technologies divisions are increasingly driving growth, while the Capital Markets segment awaits a recovery in issuance and trading activities.
According to Stonegate, NZX's Smart FUM (Funds Under Management) increased by 28.5% year-over-year to $18.0 billion, with operating earnings up 11%. Wealth Technology FUA (Funds Under Administration) reached $21.1 billion, and ARR (Annual Recurring Revenue) grew 15% to $13.7 million. Contracted migrations suggest that ARR could reach approximately $18.7 million, providing investors with better visibility into medium-term recurring growth.
The report notes a 140 basis point year-over-year decline in margin to 35.6%, which Stonegate attributes primarily to QuayStreet transition costs and investment. The firm believes this pressure is transitional rather than structural, with management expecting improvement in the second half of 2026 as these costs roll off. This is significant because it suggests that current profitability understates the earnings potential of the growing Smart and Wealth businesses.
In the Capital Markets segment, primary issuance and trading activity remain subdued. However, management is observing more early-stage listing interest and several IPO candidates waiting for better market conditions. Despite this softness, NZX has maintained its FY26 EBITDA guidance of $53.0 million to $58.5 million and is tracking toward the midpoint. This provides near-term downside support, with a recovery in issuance, trading, and derivatives serving as incremental upside rather than a requirement to meet current earnings expectations.
Stonegate's update emphasizes that Wealth Technologies offers the clearest medium-term visibility, driven by contracted migrations supporting ARR growth. However, elevated capital expenditures and migration timing remain important factors through 2027. The firm also notes that management's tracking toward the midpoint of FY26 guidance supports confidence in the near-term earnings cadence.
For more details, the full announcement is available at Stonegate's website. This update reflects Stonegate's role as a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies.
