Running its own race

研报英文原文证据摘录

Running its own race

Macquarie Equity Research IRESS

Key risks to investment thesis

• AI uncertainty and disruption. Iress’s competitive moat rests on deep client

embeddedness in Xplan and its trading/data systems, however these platforms were not

built AI-native, and therefore are exposed to significant potential AI disruption. AI-native

competitors could erode Iress’s switching-cost advantage and pricing power faster than

management's planned modernisation program takes to complete. Whilst not a near- term

risk, this does provide downside exposure for IRE over medium term.

• Execution risk on delivery of remaining cost out program. At FY25 result, ~60% of

targetted business efficiency program was completed with ~$17m costs removed. This

leaves ~40% that management still need to deliver on, with the targetted exit run rate for

FY26 ~$29-32m total cost out. Any delay or issue in completing remainder of cost out

program poses risk to margins and earnings in near and medium term as the business also

requires re-investment into modernisation of technology stack.

• Industry growth constriction on organic growth. APAC Wealth specifically is exposed to

potential headwind from industry consolidation of advice licensees and superannuation

funds. Client attrition and any further reduction in adviser levels would result in revenue

pressure.

• Growth-quality concerns. A significant portion of revenue growth is being driven by

price increases rather than new client wins, with business segments relying on client

embeddedness into platform to drive price based top line growth rather than organic

growth via new customer wins. Inability to successfully expand customer base over the

medium term results in potential top line growth risks as pricing headroom is finite.

• FX headwinds.