Stonegate Capital Partners has updated its coverage on NZX Limited (NZSE: NZX), providing insights into the company's 1H26 results and future outlook. The report suggests that NZX's 1H26 results modestly improve the setup, with Smart and Wealth Technologies driving growth while Capital Markets awaits normalization in issuance and trading.
Key takeaways from the announcement indicate that Smart and Wealth Technologies are increasingly carrying the growth story. Smart FUM rose 28.5% year-over-year to $18.0B, with operating earnings up 11%. Wealth Technology FUA reached $21.1B, and ARR increased 15% to $13.7M. Contracted migrations imply ARR can reach roughly $18.7M, providing investors with better visibility into medium-term recurring growth.
The margin pressure appears transitional rather than structural. The 140 basis points year-over-year decline in margin to 35.6% was attributed primarily to QuayStreet transition costs and investment, with management expecting improvement in 2H26 as those costs roll off. This matters because it suggests current profitability understates the earnings potential of the growing Smart and Wealth businesses.
Capital Markets remains the swing factor, while guidance provides near-term downside support. Primary issuance and trading activity remain subdued, although management is seeing more early-stage listing interest and several IPO candidates waiting for better conditions. Despite that softness, NZX maintained FY26 EBITDA guidance of $53.0M-$58.5M and is tracking toward the midpoint, leaving a recovery in issuance, trading and derivatives as incremental upside rather than something required to make the current earnings outlook work.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Its affiliate, Stonegate Capital Markets (member FINRA), provides a full spectrum of investment banking services for public and private companies.
