HUB24 Limited (HUB) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to HUB24 Limited 2026 Half Year Results Broadcast. [Operator Instructions] I would now like to hand the conference over to Mr. Andrew Alcock, Managing Director. Please go ahead.

Good morning, everyone, and thank you very much for joining us today as we go through our first half '26 results. As an opening statement, we're very proud to deliver what we consider to be an outstanding result with record net inflows in our Platform business, great increases with our earnings and our dividend, certainly, as a business, continuing to focus on how we lead today in our industry and our chosen markets as well as continue to create opportunities for shareholders and customers for the future and building foundations for that future as well. With me today, of course, is Kitrina Shanahan, our Chief Financial Officer, who will also go through our financial results as we go through the presentation this morning. We begin today with updating you on some of our very recent recognition in terms of Investment Trends. Investment Trends will release their report next week, but it has kindly allowed us to today inform you that once again, we are Australia's best platform for the fourth year coming in a row from Investment Trends. And we are once again #1 in managed accounts capability, being 9 out of the last 10 years that we won those 2 awards. On the next slide, I'll outline some further awards that are being published next week from Investment Trends as well. But as we talk to you today, we are Australia's leading platform and certainly having great results and driving strong advocacy in our business with $10.7 billion of net inflows for the half, which is certainly a company record for us and an industry record. #1 for net inflows into our Platform business for 8 consecutive quarters now, #1 in terms of Platform market share gains, which we'll talk about a bit later over the last quarter and the last year. And #1 for net inflows from superannuation member switching, which you're reading about in the press or sometimes called competitive flows. I'm happy to talk about why that's happening. It's very widely reported at the moment and it speaks to a shift in demographics and tailwinds that are supporting our business model and helping Australians take control of their financial future. Taking a further look at our leadership position and most recent awards in terms of our product and service capability. In the first column on the slide, you'll note that I've already mentioned the Best Overall Platform and Best Managed Accounts Functionality Awards from Investment Trends this week. There are 4 other awards as well that we've won this week in that regard being best or #1 in product offering, #1 in decision support tools, #1 for reporting, #1 for best in online business management. So that's 6 awards in arguably the premier research report on our marketplace, having been awarded to us this week, which will be out in the press from Investment Trends next week. On the second column, the Adviser Technology Needs Report, a separate investment trends report, which will get updated in a few months' time. This is the result from last year for FY -- of calendar year '25. In terms of satisfaction from advisers, #1; overall satisfaction, #1 for advocacy. And you can see the list of other first places there on the slide. Moving to other recognition across the industry. As before, you've got the Investment Trends Managed Accounts Report, the Investment Trends SMSF Accountant Report, Adviser Ratings Report, where we won 6 categories of best overall and the Wealth Insights reports, all indicating adviser and customer sentiment for the various businesses in the HUB24 Group, which we're very proud to have those positions, and we certainly continue to work towards keeping those moving forward. Turning to our half year highlights. For our financial results, in terms of revenue for the group, we're up at $245 million or $246 million. That's up 26% on PCP in the Platform, just shy of $200 million for the half, up 30% and Tech Solutions up 10% at $41.9 million or $42 million. But that revenue growth supporting our EBITDA growth of up 35% at total group EBITDA to just under $105 million for the half, 40% increase for the Platform at $93.3 million for the half and Tech Solutions up 2% but $14.1 million for the half. And more on the Tech Solutions result later as Kitrina and I go through the pack. From an NPAT point of view, on the right-hand NPAT is up 80%, a great result at $59.7 million or just under $60 million. We've got a $0.36 interim dividend that we've determined. That's a 50% increase on PCP and underlying EPS diluted at $0.83 or just under $0.83, a 63% improvement. So all heading in the right direction, some fantastic increases from a percentage point of view and from a dollar point of view as well for the first half in '26. And of course, looking at some of the FUA stats on the right-hand side, FUA at $152.3 billion at 31/12, comprised of just under $128 billion in the platform and $24.5 billion in PARS FUA. As at 16th of February, to give you an update of that, our Platform FUA is or was at $129.8 billion for the first roughly 6 weeks of the year, moving up from the $128 billion but it was at 31/12. On to our first half business highlights, which we summarized under 3 key headings. The first one being leadership and growth. As we've talked about, we've had those record inflows, continued recognition in the market. We're very pleased that our Private Invest product that we launched not too long ago is growing and resonating with advisers and currently has about $300 million in that particular product. We've had the largest annual increase in Class accounts since 2020 in the business, and our NowInfinity business is growing faster than system at probably about 1.8x system growth. Under the next heading of executing our strategy, we're very excited to have announced the development of myhub, which is an extension of our ecosystem, integrating leading advice technology solutions, including our own businesses into an overall ecosystem, leveraging off our investment in myprosperity, which, as you know, is a client portal giving access to lots of features and information about client circumstances in a secure way, leveraging that investment to create the myhub ecosystem for advisers and licensees, bringing together a lot of what we've been talking about for some time about our subsidiary businesses and working across the industry to empower better financial futures together. During the half, we launched Engaged fully to the market. There's now 4,700 users using Engage. It is a market-leading customizable interactive reporting tool that absolutely is winning accolades in and of itself. And we also announced that we're developing or expanding our retirement solutions with the launch of a lifetime retirement solution coming up in the next couple of months on the HUB24 platform in conjunction with TAL, which we'll talk about a bit later. And under the third heading, we've absolutely been building out the future for our business. We've been involving and investing in our organization. A couple of changes there. We've consolidated the leadership of our Platform business under one executive, Craig Lawrenson, and bringing together the product functions that were previously in our tech team under that Platform leadership team. We've moved the responsibility for myprosperity to Tim Steele, who looks after Class and NowInfinity. And we've also created a dedicated solutions enterprise team or focus area, thinking about those components in our kit bag that we leverage across our business lines like Engage, like myprosperity, like HUBconnect and our data capabilities. So certainly aligning our executives and our focus areas to build for the future moving forward. We are continuing to invest in new solutions and leverage our technology to drive increased growth and opportunity, whether that be in improving productivity in our operations or product development. Certainly, we're investing further in NowInfinity given it is growing faster than system. In the same way, we turned our attention to Class to renovate and add some extra functionality to that. We're doing that moving forward with NowInfinity. We see it as a key part of our ecosystem and our customer footprint and distribution footprint for the ongoing success of the group. We're continuing to build a strong risk culture now more than ever. It's really important for participants in our industry to understand the privilege and responsibility we have to look after the savings of our customers and their retirement savings and so forth. And HUB24 taking a leadership position on that in terms of how we advocate for positive change to also make sure that Australians get access to quality advice and quality products. So we continue to invest in that for the future of our business. And we, of course, announced the strategic decision to bring inside the group the trusteeship for the HUB24 superannuation fund. We announced that recently, and we're making progress on our DD and moving towards that as we move ahead for the future as well. So how do we measure up over time and how consistent and reliable have our results been? And on this slide here, you can see that we have been consistently delivering growth and profitability. On a revenue sense, we've got a 4-year CAGR of 32% of revenue growth up to that $250-odd million and our UEBITDA up 37% in terms of a CAGR as well. And so great consistent, reliable results there from that perspective. On the FUA chart on the right-hand side, a CAGR of 22% over 4 years with the platform overall with the business reaching $153 billion and the platform itself $127 billion. So reliable, consistent track record of delivering growth and profitability is certainly our focus in running the business to continue to do that to balance investment and growth and make sure that we continue to deliver those consistent results. With regard to market share, as you know, we moved into 6 place in the platform market in the top 10 at September 25, up to 9.3% and moved into 6 place overall. And in terms of the trend of that or the gain over the year, we had the highest market share gain. This is on the right-hand side of the slide of 1.5% market share gain in that 12-month period over the top 10 platforms. That's the highest market share gain of all. Interestingly, underpinning that, there is record industry annual growth as well. So we've increased our -- we've got up one position. We're growing market share faster than our peers in a market that itself is growing at record flows. And that's very much driven by the structural and demographic tailwinds in our industry with intergenerational wealth transfer and retirement and so forth, which we can talk about a little bit later. Today, 34% of advisers in Australia or licensed advisers are using HUB24. That's up from 4 years ago, where only 20% of advisers are using the platform, and it represents about 5,400 advisers. There is a clear opportunity for growth for us in terms of FUA on the platform, net inflows and further growth for further advisers, and the stats are demonstrating our success to date. Over the longer 4-year period, that's grown from -- our platform FUA has grown from a 4.5% market share to a 9.3% market share. So more than double in a 4-year period there as well. And looking at where we've come from shows significant growth, there's so much opportunity to look into the future to see what's happening as well there. And this slide here is outlining the opportunity and our penetration across the adviser base as well. So on the left-hand side, you can see that we've had 92% of our flows for this half from existing advisers. And that statistic obviously is higher at the first half than it is at the end of the year because advisers -- it's from 1 July advisers only had 6 months new advisers to contribute to that. But the message here is that we're increasing our share, getting greater usage from existing advisers in our flow pattern. It's reliable recurring growth. And we said that would happen at some point in time, evidenced by the FUA per adviser being on average at a book level up $24 million from $15 million from 1H FY '22. And so we're glad that we're seeing greater usage. It speaks to the trend of platform monogamy. Some people talk about advisers choosing to advocate for one platform. In terms of the opportunity set, HUB has relationships with 79% of the market, yet only 34% of the market currently using us. That represents a large opportunity to start working with advisers who are attached to licensees that have agreements with us. And over time, we're also seeing a greater penetration. I said 12% of advisers on the platform have more than $50 million of FUA, and we estimate the industry average FUA per adviser to have increased to $85 million. And so in aggregate, in summary, we're increasing our market share. We've been growing our adviser base. we have considerable runway to continue to grow with reliable recurring flows and revenue into the future and a huge opportunity for us, as I said, to continue to grow our business. Taking a quick look at our technology and software businesses in Class, having the highest -- market share, sorry, of 30.3%, fairly stable. We've had the highest level of growth since 2020 in Class in terms of Class accounts. But interestingly, SMSF, since the stats were recorded or reported by the ATO, the highest level of new establishments occurred in quarter 1 of FY '26 according to the ATO records as well. So strong growth there with SMSF establishment and record growth for us in that business as well. NowInfinity has about a 24.7% or 25% market share of the Corporate Messenger and also has a documents business allowing people to set up trust and SMSF. And the number of companies growing or using NowInfinity is 1.8x system growth as well. So certainly pulling its weight in terms of its market share there as well. And moving to myprosperity, the usage is increasing across practices, increasing engagement. The front end of myprosperity for Class is well developed with general release expected in second half '26. And so that business also delivering results, noting that our pivot to focus on the strategic contribution of that business to our ecosystem and how it helps us with myhub and the overall ecosystem that we're building as opposed to solely looking at its own stand-alone growth. It's growing on its own, but it's also further contributing to our strategy, and that's clearly our focus in leveraging that asset moving forward. Kitrina Shanahan will now take us through our first half financial results in some more detail.

Thanks, Andrew. So yes, I'll now go through a few slides with the financial results. So here on the first slide, we have a group snapshot with the group revenue at $245.9 million and the group underlying EBITDA of $104.9 million. The Platform segment continues to be the largest driver of growth, representing 81% or close to $200 million of the group's revenue and Tech Solutions revenue of $41.9 million for the half. Platform underlying EBITDA was $93.3 million for the half and Tech Solutions underlying EBITDA was $14.1 million for the half. As Andrew mentioned, advisers using the HUB24 Platform grew to 5,277, which is up 8% or 391 new advisers using the platform since first half '25 or up 180 new advisers using the platform since second half '25. And there's also around about 6,600 financial practices using the Class solutions as at the 31st of December. So then moving to the next slide. Here, we've got the group financial results again with operating revenue up 26% on first half '25 to $245.9 million and operating expenses up 20% on first half '25 to $141 million. The combination of this has delivered a 35% increase in underlying EBITDA for the group to $104.9 million. The underlying EBITDA margin has grown 2.9% on first half '25, growing to 42.7%. And the EBITDA, which includes the share-based payments of $6 million, is up 39% on first half '25, growing to $98.9 million. All of the metrics are looking great. Underlying NPAT is up 60% to $68.3 million and statutory NPAT is up 80% to $59.7 million. And again, as Andrew mentioned, there was a dividend of $0.36 per share for this half, which is up 50% on first half '25. So moving on, we've got the Platform financial results and total funds under administration were $152.3 billion for the half, with $127.9 billion recognized in the custody portfolio and $24.4 billion recognized in the noncustody portfolio. Platform custody net flows were $10.7 billion, and the custody market movements on the FUA was $4.5 billion for the half, and there was $700 million contribution from the noncustody PARS offers. Net flows were up 13% on PCP and total FUA was up 26% on PCP. Platform underlying EBITDA pleasingly grew to 46.7% for the half, which was up 3.5% on first half '25. Okay. Moving on to the next slide. Here, we've got the Platform custody revenue and the custody revenue margin. The custody revenue margin remained consistent with both first half '25 and second half '25 at 32 bps. You can see that on the graph -- the bottom right-hand side of the page, you can see that. There was normal admin fee margin compression in this half with higher average balances and accounts moving into higher tiers or reaching the caps, but this has been offset by a higher contribution from trading and cash contribution into revenue. And so we're very pleased that the margin has been held strong and at 32 bps for the half. And the graph on the right-hand side at the top demonstrates the strong correlation between the custody FUA growth and the revenue growth, which were both around 30% growth on first half '25. Okay. Moving to the next slide, we have Platform underlying EBITDA and margins. So the UEBITDA margins, as I mentioned earlier, of 46.7% are growing in line with our expectations. You can see the bottom graph on the right-hand side. They were up 1.6% on second half '25 and up 3.5% on the first half '25. We're delivering growth in both absolute dollars for underlying EBITDA and also in the underlying EBITDA margins while we're continuing to invest in the Platform enhancements and servicing and delivering on our strategy. And again, pleasingly, the Platform underlying EBITDA CAGR has a 4-year CAGR of 33%. Okay. So now moving to Tech Solutions. As Andrew mentioned, the Class accounts had the strongest growth since 2020. So the Class accounts grew 5% on PCP. NowInfinity documents ordered were up 16%, growing faster than the market to over 231,000 documents ordered in the half. And the companies using the corporate compliance solution grew 10% on first half '25 to over 904,000 companies using those solutions. The combination of these increases have delivered a revenue growth of 10% to just over -- just under $42 million, at $41.9 million for the half. And Platform and the operating expenses grew 15% half-on-half to $27.8 million. Now within the expenses, there were some timing differences in there with extra expenses in the first half. So you can probably expect to see consistent growth half-on-half or consistent expenses rather than growth half-on-half. Underlying EBITDA margin for the Tech Solutions business was 33.8%, which was a decline of 2.6% on PCP or a decline of 0.5% on second half '25 margins. But as I mentioned, there was a bit of timing there in expenses in the Tech Solutions division. Then moving to the next slide, we have group expenses, which are up 16% on first half '25, growing to $172.8 million. And as I mentioned earlier, the group continues to invest for our growth, the largest scale and to deliver on our strategy. The biggest growth in our expenses comes from our employees and our FTE growth, and we're just over 1,000 employees at the moment or at the 31st of December, we were at 1,010 employees, and that was up 128 employees on first half '25 or up 48 FTE on second half '25. Technology and operations continue to be the largest areas where we're investing in our employees and growing the employee base there. You'll see on the bottom left-hand side of this slide that we're reconfirming that we're expecting the group operating expenses to grow between 18% and 20% in full year '26. Okay. So moving to the next slide. We have a walk from our underlying EBITDA of $104.9 million, which again is up 35% on PCP. Taking into account share-based payments, depreciation, interest expense on the borrowings that we have and tax, you have an underlying NPAT of 68.3%, which is up 60% on PCP on first half '25. And statutory NPAT is up 80%. So that NPAT benefited from a lower effective tax rate. This half, we recognized all of the benefits of R&D for this year. So you won't see R&D benefits in the second half tax number. But we also have the normal benefits from the utilization of treasury shares to service our employee share schemes in there as well. So an effective tax rate of 18% this half. Final slide for me, and that's covering our strong cash flows and balance sheet, which is supporting growth in our dividends. So again, fully franked dividend of $0.36 per share, up 50%. We continue to have a very strong balance sheet. We have $27 million of net cash on the balance sheet, which is $57 million in cash, netted of $30 million with borrowings with CBA, which we're expecting to roll into the second half and continue with that debt. Just a couple of metrics here. Group operating cash flow has a full year CAGR of 48% and underlying diluted EPS of 43%. The last thing that I'll mention here, which is on the bottom left-hand side, one of the reasons for the reduction in the cash balances this half compared to either of the previous 2 halves, first half or second half '25 is that in line with regulatory changes, the HUB24 Super Fund operational risk financial requirements also loans increased from $5 million at the 30th of June to $78 million. You'll see normal growth in that going forward. There was a step change this half because of the changes on the 1st of July for regulatory changes. So with that, I'll pass back over to Andrew Alcock to cover off on our strategy and our outlook.

Thank you. I'll try and do this fairly quickly, given, as you'd expect, everything in terms of our strategy statement is very consistent with our previous updates and our strategy last November. So I'll spend some time on that quickly, but allows sufficient time for questions as well. So as a headline, the HUB24 Group is creating value through both leading today and creating tomorrow. On the left-hand side, look, we've got strong growth outlook in existing established businesses that are leaders in their field that have existing growth trajectories and earnings growth that are a great opportunity for us and shareholders with market leadership and opportunity to grow further market share in those businesses being the Platform, Class and NowInfinity. In addition to that, we're seeking to create additional shareholder value through technology and data solutions and our focus on strategic development in building solutions that leverage our group capabilities to drive efficiencies for our customer base, financial professionals, clients and so forth. Technologies such as myhub, HUBconnect, our client portals and Engage and leveraging our unique capability to safely enable industry transformation enhancing our group footprint to deliver more products to more customers and strengthening our customer relationships. Together, those 2 strategies are those focused about growing the established businesses and creating new shareholder value. Those pillars create their own growth and their own value, but they also support the growth of each other with growth synergies in addition to what they can do on their own. So at the heart of our strategy, that's the 2 pillars there. In terms of looking at the market we're in, the structure and demographic tailwinds are continuing and they're becoming more favorable. On the left-hand side there, we have a superannuation system that is now 30, 35 years old. We're seeing that many more people are moving to retirement with larger nest eggs than they've had previously. Many more people are seeking to put extra money into superannuation as they approach retirement because it's becoming real. And the success of our system is now becoming real and playing through in terms of our population and their needs. And so it in itself is driving a focus on superannuation. It's driving a focus on transition to retirement into generational wealth transfer, which in itself is driving a demand for advice and help in doing that. And so we're playing our role to do that and to meet those needs. But those demographic trends are underpinning the growth of our business and the growth of the sector to actually achieve what we set out to do 30, 35 years ago when Australia implemented mandatory superannuation. And we're seeing those trends play out now with a growing platform industry, with a growing advice industry and lots of demand for technology to support that. So very, very strong structural tailwinds. In the middle of the slide, the industry dynamics remain largely unchanged from the last time we chatted. Certainly, there's uncertainty about ownership and strategy of institutionally owned platforms. Advisers continue to consolidate and move away and move into their unaligned business models away from large institutions. The complexity and compliance and data issues remain the same. The demand and need for safe, reliable solutions remains the same. Interestingly, emerging technologies and very topical at the moment, have the potential to close the gap and help with those demand gap issues and make the industry far more productive. And so they're creating opportunities to enhance efficiency and drive greater advocacy for solutions such as HUB24 in combination with great advice. And so we see significant market opportunity as 81% of industry inflows are captured by 2 platforms over the last year, with 47% of the industry inflows coming to HUB24 and advisers are choosing to use fewer platforms with some research suggesting that now 36% of advisers indicate they will prefer to use a single platform moving forward, up from only 13% taking that position in 2021. Part of that being the scope and breadth of platforms, which we'll talk about in a couple of slides as well. We remain focused on our 4 pillars of leading today, our strategic pillars, lead today, create tomorrow, build together and collaborate with the industry very much an open architecture. Participants wanting to work with all parts of the value chain and government and regulators to collaborate and being future-ready, making sure we invest in our people and our capabilities to continue that growth. In the middle of the slide, you can see myhub in the middle of our business model there with the various parts of our business around that and how we intend to build that and are building that into an ecosystem to become the best provider of integrated platform, tech and data solutions, all aiming to deal with industry needs or problems or challenges, which is enhancing productivity for financial professionals who are helping customers with one way of doing business and access to market-leading solutions, single view of wealth efficiency in terms of access to an ecosystem and ecosystem partners. You might think App Store or other technology players hooking into our infrastructure, flexibility and insights for businesses and customers to meet needs across the customer life cycle. To take that one step further, we talked about in November about the build of myhub, which is the manifestation of that strategy and bringing together all of those ingredients into a single partner portal. There will be progressive rollouts with first releases being piloted in the first half of FY '27, featuring AI and human intelligence, driving productivity gains, a single point of access to HUB24 business models and external partner applications, all working together underpinned by quality data, improving client engagement, security, efficiency and building an ecosystem. And so we're working on that very rapidly and focused on, as I said earlier, some of the way we've reorganized our business. We're not just talking about this conceptually. We've made real investments in technology and data businesses, businesses that are required to underpin the real creation of value and the ability to actually leverage that value to solve some industry problems and create some opportunities and improve our competitive advantage. Moving back to some of the coverage of our platforms. As I said earlier, the increase in advisers intending to use one platform. Platforms today will certainly HUB24 does far more than we used to do. We're actually covering the range of needs from different life stages from those who are starting out to those who are downsizing across different market segments being the mass market, mass affluent or high-net-worth and ultra-high net worth customers. And so as a platform, we have solutions that cater for all those needs from simple solutions with simple needs through complex solutions through income retirement streams, retirement income streams and into generational wealth transfer. And so as such, our platform creates a single solution for advisers and advice practices to deal with multiple client segments in a seamless transition across those life stages and across those product opportunities, hence, driving advocacy and market share growth that you're seeing in our results to date. We're well progressed, as I said, on the launching of a new retirement solution in conjunction with TAL. As we sit here today, 68% of Australians say they're worried about outliving their retirement settings. So their superannuation won't make it as long as they will make it. And 3.6 million Australians expected to transition to retirement over the next 20 years. So we are expanding our retirement offerings on the platform. We've got a few already. You can have account-based pensions, lifetime annuities with Challenger, guaranteed income for life with Allianz and soon to have a lifetime retirement solution with TAL. This solution meets the requirements of Innovative Lifetime Retirement Solutions, which provides concessions or benefits to members based on their time of entry into the product range in terms of how their balance and so forth is dealt with in deeming rates and tests in terms of asset and drawdown ratios moving forward and designed absolutely to encourage self-funded retirement. So we're building that in combination with talent. It will be launched in the next couple of months, providing income for life, managing that longevity risk and giving advisers an option to supplement what they already do to help with sequencing risk and longevity risk and accessing concessional Centerlink treatment. So stay tuned for more about that as we move forward. Just an example of how our strategy is bringing together product development to solve those problems and solutions. Moving ahead, we all understand there's been concerns recently in investor markets regarding the transformative risk of AI, and we choose to see it as an opportunity and what that means in terms of who will win and who will lose in the marketplace. And to reiterate our position today, we absolutely see significant opportunities for our business and for our client base from the leveraging of AI inside our business. In fact, it's not new to us. We've been doing this for over 8 years. We have a strong track record of that. We've got a whole lot of people engagement activities focused in our business, and we're uniquely positioned to continue to capitalize on that. The opportunities that arise are industry productivity and growth, as I said, to fix the underinvestment in Australia in wealth advice technology to make it easier for advisers to see more clients, help more Australians, hopefully driving advocacy to our Platform business. Best-in-class solutions delivering new products and new solutions. We have a number of those in the market already, advice fee consent, virtual mailroom, HUBconnect licensee is providing help with data and insights for compliance and licensing management for licenses. These are products we have in the marketplace. Myhub will be another example of that. As I said, it's not new to HUB24. We're certainly leveraging these technologies across our business and across the infrastructure and the components that we already own in our stable. They also have the potential to increase productivity as everyone knows and drive efficiency, help with proactive servicing, i.e., we're doing bulk coding in our business. We do automated testing of some of our development. We need to make sure there's humans in the loop for that. We're certainly driving efficiency, and you've seen that in our staffing ratios in terms of servicing ratios. We're using AI prompts for our call center staff to do proactive servicing and to monitor the quality of our calls and interactions with customers. These are things that are resident in our business already that stand us in good stead to win and continue to leverage opportunities in our space. To sum it up into our competitive advantage, HUB24 is an established tech leader. It's what we do. We have demonstrated value creation for customers and shareholders previously, whether it be the launch of managed accounts, mobile technology and the work we've already done with AI and machine learning. We operate in a licensed complex regulated environment built on trust, very hard to disrupt that business model, very much needs to be precise and deterministic, not hallucinogenic and so forth. So we operate in that environment very much. And we are a respected industry leader with deep client relationships, a growing footprint and expertise and 300 data integrations across our business. As I said, it's not new for us. We've got a strong track record, delivering commercialized solutions. We've got champions in our business. We develop our own AI champions in our innovation lab and disperse them across other teams in the business, all underpinned by some cost-effective proprietary technology. The debate about the cost, the compute cost of AI seems to be lost in the last few days as well and the efficiency of models that you can build in-house with proprietary tech to lower that cost. I think I've probably said enough, we have a focus on human-in-loop solutions as well. We sit on market-leading infrastructure that's very hard to disrupt. That is actually required for AI business models to thrive and SaaS models to thrive, sitting on data, scale, custody and so forth. And so our own approach actually fosters the development of SaaS solutions that can sit in our ecosystem infrastructure to solve problems for our clients and increase the opportunity for ourselves. So I just wanted to comment about that. There's been lots of talk about. The market has been very bearish. Our belief is we stand to gain from this. We're certainly working in that direction, and we think we have a unique position to capitalize on the benefits this technology can give to our customers and our shareholders. Finally, as we move ahead, we've updated our guidance for financial year '27. Given the strong flows and the great tailwinds and the success of our strategy and operations, we've increased our full guidance statement for FY '27, up from $148 billion to $162 billion -- sorry, up to now being $160 billion as a low watermark. That's a $12 billion increase 6 months after we first gave this guidance. So it's a range of $160 billion to $170 billion of FUA in custody by 30 June FY '27, largely comprised of our continuing net flow momentum. The majority of our MDA FUA from Xplore, we expect to retain. We advised the market previously, we were migrating that business. That will happen in the next couple of months, and we think we'll retain the bulk of that and a range of market growth assumptions, all underpinning our confidence that we're going to do better than we thought we'd do 6 months ago. We're delighted to have the opportunity. We're certainly going to work hard to make sure we land it. In terms of the rest of the slide, similar comments, as always, our outlooks are very positive, leveraging structural growing markets, strong demand from new and existing customers, our current market position, our financial strength and balance sheet and cash flows, our scalable operations, our EBITDA margin expansion and our unique group capabilities, combined with our technology leadership to unlock further value as we move ahead. So thank you very much for your time and attention this morning. Happy to open it up for questions for Kitrina and myself.

[Operator Instructions] The first question comes from the line of James Bisinella with Unified Capital Partners.

Congrats on the result, Andrew and Kitrina. Just a couple from me. Just firstly on the revenue margin. Are you able to provide maybe some color or a bit of a split in terms of that 1 bps half-on-half increase flagged from cash and trading? How much of it was, in fact, cash versus trading?

We don't give out the details between cash and trading. But what I would say is that the -- we have in the analyst and investor pack, sort of say that the cash as a percentage of FUA has generally been between the 6.5% and 7%, depending on which quarter you're picking. But trading has also been very resilient this half.

Okay. Excellent. So I think ASX trading volumes were up 25% in the half, and I think they're up 54% in January. So I think it's probably safe to say that will remain strong. But in terms of where cash balances are sitting at the moment to start the year versus PCP, can you give a rough trend on that?

Yes. So in our analyst and investor pack, we give you cash as a percentage of FUA for that half. And the trend has been, first half ' 25 was 7%, second half '25 was 6.7%, first half '26 was 7%. In the first half, you generally get a bit of an uptick because you've got dividends and distributions being paid out in cash from the tax year-end. And so coming out of 31st of December, in line with normal trend, it's obviously ticked down below that 7%.

Okay. Excellent. And just last one, apologies if you covered it earlier. In terms of the FUA increase to start the year of $1.9 billion, just a rough split assuming sort of market movement is pretty flat, is that $1.9 billion or increase about the net flow number to start the year?

Yes, that is the right way to think about it. Markets are pretty flat for us.

Great. And then just a follow-on in terms of -- I think last year, that number was $1.5 billion, so that's up sort of 25%. And then the second half of the quarter, excluding large migrations, you did $2.1 billion. So just in terms of typical seasonality over the quarter, sort of thinking about Jan, Feb, March, is there any reason to think that seasonality won't hold this year?

No, not yet. I mean every day is different, James. Your analysis in the first paragraph of your report is pretty accurate in terms of how you got the 25% and so forth. We think momentum will continue.

Next question comes from the line of Tharan Jeyathasan with JPMorgan.

Tharan Jeyathasan, JPMorgan. Just the first question, following up on the revenue margins. Just wondering if there were any other offsets other than cash and trading. For example, did you see a greater proportion of higher fee earning lower balances come on? And just any color you can provide on how we should be thinking about the second half if -- under normal market conditions, if volatility wasn't elevated, for example?

So no, there's nothing unusual. The shape of the portfolio for the custody FUA hasn't materially moved. We have seen an increase into IDPS from a net flow perspective. So there would be some higher balances in there. But once you hit the higher balances, you're more hitting into your higher tiers in your cap. So there's nothing particularly unusual that would be driving a shift in that revenue margin. If you're looking into the second half, the commentary that I always give is that under normal market conditions and with our elevated trading or cash balances, you can expect anywhere around that sort of half a bit of margin compression coming from tiering and capping.

Okay. That's super helpful. I have a second question. You touched on some AI-related efficiencies that are starting to come through. So just interested in what you're expecting to see in FY '27 and how you're thinking about these efficiency benefits in terms of preference between allowing for EBITDA margin expansion versus reinvestment?

At the outset, we're very much focused on investment in our business. We're not focused on cost out as such. Whilst we do get those benefits, we do get more productivity. To be clear, we're not chasing a cost-out strategy with AI, although those benefits are there once they're proven and implemented, we do that incrementally across our business. And we need to be very, very careful given we're running financial systems with infrastructure and people [indiscernible]. So our focus strategically is we are going for growth. We're investing in new technologies and new productivity and new features and benefits. So where AI generally is giving us a benefit in our tech team, we're allowing ourselves to do more in that regard, where it's giving us a benefit in our operations and customer servicing team that's coming through in some of our operating ratios. Is that a fair comment, Kit? And did you want to add to that? So Kitrina?

No. I think actually as Andrew has mentioned, we -- the one -- the benefit is that with the operating leverage that we're delivering, all of these technologies and solutions that help us to remove some of the manual work and focus people on the more interesting stuff and the value add actually means that we can manage our -- there's extra leverage in there in the operating expenses and how much we can invest.

Over time, we would sensibly look to increase productivity and/or lower costs over time in a sensible measured controlled way over time. I think that's a position we would take forward in that regard. That would be our approach to that.

Understand. And maybe just a final question regarding the internalization of the trustee function. I was just hoping for some color around the cost implications of this perhaps relative to your current outsourcing costs and when you expect this to emerge?

Look, our view is it will be roughly neutral. It could actually be cost advantageous for us until we've gone through the process and implemented the target operating model. But to give you an indication, we currently pay roughly somebody has reported about $5 million in fees to the trustee. That's a large amount of funding, if you like, for us to bring it in-house. We think there'll be some synergies in-house and some increased costs. So our planning is it's probably not going to turn the dial in the short term in any way, and we'll let you know if that's any different down the track.

And just maybe just to follow up on that. Would there be a period where you're doubling up on costs as you're building up that internal function?

Look, not necessarily, a lot of the functions of the trustee are outsourced to us anyway. It's the governance and the overlap on that. Yes, there might be a buildup in expense as we put a team in place prior to taking control. But I think that would be a significant hit for us. Kitrina, you thought about that?

Yes, we have thought about that. And there may be a few roles where we would uplift it, but we're not expecting a large change.

[Operator Instructions] Next question comes from the line of Elizabeth Miliatis with Macquarie.

First one is just around the platform margin. Obviously, a really good result this half again. And just looking back over the last couple of years, we've seen that ratchet up from about 40% in first half '24 to now almost 47% in this half. How -- you have talked previously around that margin expanding continuously. But in terms of the progression, any sort of color on how that might progress would be very much appreciated.

We absolutely have a philosophy of balancing our growth and our scale and the operating leverage that we know that we have embedded in the portfolio versus the amount that we invest. And we've talked before about when we're doing budgeting and forecasting, we always take all of those factors into account and also the underlying EBITDA margin expansion and growth. We always take all of those factors into account when we're setting forecast or budget. So all I can say at the moment officially is that we're absolutely intending to continue to expand those underlying EBITDA margins, particularly in the Platform segment. And you should still continue to see expansion year-on-year, so full year '26 versus full year '25. Absolutely, you should continue to see margin expansion, but we're not in a position where we would actually give guidance as to what that might size look like.

And we're not focused on maximizing those jaws in the short term, given the view to invest given we've had record-breaking flows, given we think the opportunity set is greater and we're building myhub, we're certainly focused on creating long-term value in that regard. So you saw 300 bps increase in one of the previous periods. You won't see that in the short term, but you will see underlying ongoing expansion.

Okay. Got it. And then just second question is just around the FUA target upgrade for '27. Was -- what underpinned the upgrade? Was it mostly a view around flows or on markets? Have you got a bit more conviction on one or both of those factors?

It's definitely more conviction around net flows and the pipeline that we're seeing. We don't tend to second guess the market. When we do our scenario planning, we obviously have multiple market scenarios in there, but the baseline assumption is always a normal market growth of circa that 5%-ish.

Next question comes from the line of Nick McGarrigle with Barrenjoey.

I just had a question around myhub. How are you going in terms of getting that in front of advisers and any early feedback from them as to how it works when it's integrated into HUB, particularly? And then as an extension to that question, maybe kind of how we should think about the commercial model of that software and business moving forward?

No in front of advisers yet, certainly concept and design stuff, certainly advocacy and some large groups saying I want to jump in and jumping in the context that we're yet to work through the commercial model depending on the customer group. If it's a large national licensee, it might be different to a smaller practice. So no color as yet on that, Nick, and deliberately so as we work through that value proposition and how we can help those groups. There are people involved in the design process. There is a team building. But as yet, we'll be actually showing -- once we've got that, we'll start showing it in the next -- in first half of '27 is the goal. So no feedback on what people have seen yet, but feedback on what we're trying to build.

Okay. Great. Am I allowed 2 questions? Or was -- there a comment on an operator, I can only ask 1.

Did you have a follow-up question?

Yes. Okay. Follow-up question. I guess that product is designed to help drive adviser efficiency and improve the average number of accounts they can run and all that kind of stuff. How do you think about the proposition of a HUB for advisers looking to go after industry fund members? You've obviously done well winning competitive rollovers from the industry. So how do you think about that in your kind of innovation development pipeline for advisers?

Look, it's no different. We've always -- there's nothing new to see here. Advisers have always helped people. Generally, people seek advice in their late 40s, early 50s as they approach retirement. The difference here is a demographic trend. So we've always been designing products for different target markets and different client sets. I think there is more of them because more people are retiring with big nest eggs and they need advice. And so our product range and services already speaks to that. We've got HUB24 Discover for simpler needs. And in some cases, HUB24 Discover is cheaper than some industry funds for certain balances. So we do think about the needs of advice with the customer groups and different segments all the time. We're not changing our approach on that. We're certainly not focused on particularly competing with other superannuation funds. We're focused on helping Australians achieve their goals through advice. And that means if you select to HUB24, we're getting the job right. So I just think there's more of that going to come in this market, Nick. And so we think part of that is we're bringing the trustee in-house. We think we have a very strong position and a strong role to play for that and advocating for great retirement solutions. The retirement solution offer is another example of us speaking to those kinds of customers as well, those who need certainty who can't use typical bucket strategies or allocated pension strategies for longevity risk. It's across the board in our holistic view as opposed to a single target initiative. Sorry, that doesn't quite cut the question, but that's the -- correct.

Next question comes from the line of Lafitani Sotiriou with MST Financial.

First one is really a follow-up on the AI-related questions. Now of course, I understand you've been working on it for over -- and using it for over 8 years. But in the last 3 to 6 months, it definitely has changed. The landscape has changed. And so when you talk to potentially running faster, can we expect things like time lines around myhub and other product rollouts to accelerate or to be brought forward? And just looking at the cost side, when you said sensible and reasonable and controlled way looking at the costs, is that a little jab at what Praemium is doing slashing 1/3 of their cost base using AI? And what are your thoughts on that?

Well, I'll leave it to Praemium to discuss what they're doing. I just don't think from our perspective, where we are in the marketplace, we want to be controllable safe. I don't think slashing a cost base is actually necessarily good for business certainty and continuity, but that's a comment in general. And there's a lot of noise about what these technologies will deliver, yet we've seen others suggest it hasn't quite been there yet. So we absolutely are delivering those benefits. You should expect to see development velocities increase. In fact, behind the scenes, a lot of the work we're building on myhub is leveraging those kinds of technologies. There's a team based on doing that. And so our goal is to leverage the AI technology to increase our competitive advantage and do things faster in the way that others are, but we're doing it in the context of having deep industry experience and massive infrastructure that's hard to disrupt. We see ourselves a benefactor. So yes, you should expect us to see us build things faster. Certainly, though, with care and regard to what's at stake here, and you'll see incremental cost benefit, we don't want to approach that in a reckless fashion.

Got it. And just my follow-up with what Netwealth is doing with the high net wealth and individual HIN and what Praemium's offering is and what you guys have rolled out. Just for the benefit of us all, could you articulate what is your competitive advantage with the sort of noncustody/high net wealth versus the other 2 offerings?

I don't have detail of what Netwealth is actually planning on doing as yet. I can certainly say that we already allow customers and/or brokers to trade with individual brokers across the marketplace and settle that back. We have deep heritage in noncustody administration. We have that linked to our platform products and offering. So I really can't see that much of a difference in what's being talked about in the marketplace today, the details of it aren't there. So having said that, we look after billions of dollars of noncustody in industrial strength, noncustody tech stacks. We're integrating those together. We have the private invest offering that is also targeted at that marketplace with different rules and different legal structures. And so we work very closely with brokers. We have a strong relationship with existing stock brokers. And in fact, some of our largest platform clients are stock brokers because we understand their business model. So we have a deep capability in that space, and I think we are a market leader. And I think our offerings are superior in many regards, and we wait to see the details of what Netwealth are talking about.

Next question comes from the line of Blake Dowsett with Jarden Group.

Congrats for a great result. Just a question on adviser new additions versus adviser density, I guess you'd call it. You kind of note 5,200 advisers using the HUB platform, but that new adviser growth is obviously mechanically going to start slowing down given a hard cap on the number of advisers out there. So maybe if you can just talk to your strategy of growing out adviser density as you take your FUA per adviser up from its $24 million up to closer to industry average. And on top of that, where do you think you can go to on an FUA per adviser basis, given your skew to more high net worth?

Thank you for the question. The strategy is not different to what we've been doing previously. We have been growing that adviser density or penetration for many years, and we articulate that in our pack every half. You are right that at some point in time, with the trajectory of new adviser growth change, and we've said for some time, even in the last couple of years where it's actually gone up remarkably that it will level off and will move around. So our strategy is to have solutions across the value -- across different client segments and life stages as we spoke about earlier in the pack. It's about leveraging those relationships with great service. It's about building technology features that help create productivity. All of the things we talked about strategically lead to that increase in share of wallet from advisers and it led to, as you've seen, the flows running at $10.7 billion for the half. So I can unpack that further. We have teams of people focused on individual relationships and how we help advisers do more. We have teams that help advisers transition clients from incumbent solutions to ours on a best interest basis if it makes sense. So we have handholding services to actually accelerate that transition over. In terms of what -- and so we've been doing that for some time and seeing that results. In terms of what's possible, well, as we said in the pack, we've got a stat there about how you've got above $50 million. We've got advisers with $100 million on the platform. And so you could have easily said before, if you did the math, the market used to say if advisers use 2.2 platforms, can you get 50% of their book. Now 50% of their book, if you take $85 million is $42.5 million and we're at $24 million. There's a long growth trajectory there. Is it unreasonable you can get 50% of the book? Not at all. And we've got people with more than 50% of their book. So hard to know. There's a shift going on. But given the coverage of client needs, I don't understand why you can't get more than 50% of an adviser's book moving forward and even higher and there's evidence of that in our book as well. So there is consolidation occurring to 2 or 3 players. We intend to be a winner in that regard.

I appreciate that. And just a very quick follow-up, just in respect to some competitor disruption, particularly with the incumbents. Is there an opportunity to really attack share here? And is there potentially an opportunity to spend some of that excess margin on sales and distribution to go after that short-term potential?

We certainly look all the time at our investment in sales and distribution and marketing and go-to-market onboarding. We, in some cases, deliberately spend that on client executives that sit in our operations team, building stronger relationships on the servicing side as well as on the sales side. We have increased investment in sales and BDMs on the ground. And we've certainly got a stronger and growing pipeline from incumbent competitors. That does take time to translate, but there certainly is signs of growth from others who may not be on the boil or dropped the ball in terms of their service proposition. We haven't seen a lot of that flow through in the half. We've seen some of that, but we think there's an ongoing opportunity, and we are investing in the right way to take advantage of that or maximize our opportunity. And we'll continue to look at whether we need to invest in more salespeople to do that.

Next question comes from the line of Siraj Ahmed with Citi.

Just first one, Kitrina, just following up your comment on increased confidence driving the FY '27 full upgrade. Can you maybe just touch on the building blocks for all that, right? Is it like we just discussed, is it because Macquarie is -- you expect more flows? Or is it the super transition that you continue to see? Just keen to hear that because this year is very strong, and you're obviously guiding to a similar year next year. So would love to hear more about that.

Yes. So to be very frank, it's obviously a very tricky time to be forecasting out because the momentum everybody would have seen here in the first half was significant -- has been significant. And so just that continued as that we adjust to something more normal. But what we're seeing and when we look at the pipeline, a very base case assumption if you're assuming a 5% market means you can back solve, but if you're going to get sort of somewhere in the middle of the range, you're anywhere around the $18 billion to $20 billion of net flows in '26 and '27. Now that's a base case. We've obviously got net flows that could be lower than that or we've got net flows that could be higher than that, and we've got market assumptions above or below the 5%. But if you're looking for the -- what would be your absolute base case assumptions that would get you somewhere in the middle, it is around that 5% market and anywhere around the 18% to 20% or so of net flows.

Yes. And just confirming, there's no sort of large transition that you've sort of assumed in that rate, like we have seen in the last few years?

That's right. There would be no large transition at the moment. Obviously, we've spoken before about there's always the odd ones coming along with conversations happening. But we haven't assumed any large transitions in there, although you could say at the upper end of the range, there's room for there to be a large transition in there, but we haven't assumed it in the base case. And the other thing we did put a note on the slide with the full guidance that we are expecting to retain a large part of the MDA portfolio. We've announced that we have a new arrangement with Lonsec on that, and we're expecting to retain a large amount of that on the platform.

Got it. And just a quick second thing. In terms of employee hiring, I mean you added what, close to 50 this half. Just keen to hear what the plan is for the next -- for the second half, if you could?

Yes. So the hiring in the second half, if we're going to hit anywhere between 18% to 20% expense growth, as we've mentioned, for the full year. Then the hiring could be up to 100 FTE, but it all depends on the market, the capability, the quality, et cetera. And so I sort of put the 100 out there saying that's a rough idea as to what sort of hiring numbers would there be, but that could be plus or minus 20 either way depending on the hiring market.

Next question comes from the line of Anthony Hoo with Ord Minnett.

Just a question on your dividend payout ratio. You've maintained 40% to 60%. Just wondering, have you given any sort of consideration about raising this payout ratio given the strong cash flows?

It's absolutely a question that we get every half and particularly around the full year as well. We have -- and you can see it in the pack, we have a target payout ratio of 40% to 60%. And as cash flows do grow, we do -- we've got this 84% correlation of underlying EBITDA to operating cash flows. So I think it's a reasonable expectation to assume that it's going to grow, but I certainly wouldn't -- we wouldn't be giving any guidance on that.

As I said, part of the drive was that was some of the changes to the offer, the operating risk reserve in superannuation and that needing to pop up from reg reasons, which took some of the cash there. So that's a timing thing. That's a one-off increase. And my comment would be the Board is actively considering what our payout ratio would be in the future, although wanting to make sure we have flexibility for M&A and other activities as well.

Yes. Okay. And then just a follow-up. On the platform revenue margin, there's been a lot of discussion already around the cash management fee and trading activity. Just wanted to check, was that all purely volume driven and there was no change to your rate cards?

Correct. That's exactly right.

Next question comes from the line of Simon Fitzgerald with Jefferies.

I think that slide on Page 11, really a powerful slide showing the amount of FUM that comes from those existing relationships. I just want to make certain that I understand the dynamic there. I believe financial adviser needs to sit in front of their clients, get consent to be able to change over to a new platform. Firstly, is that the correct assumption to make that they need a new statement of advice or something like that?

Absolutely. You can't do a product selection without a statement of advice and recommendation to clients in all circumstances. So hence, it takes 5 to 6 years for you to get a share of an adviser's book where they meet those requirements. It's a long period. It's not an instant move.

Yes. Okay. Understood. So does that mean there's sort of longer term, there's actually some physical constraints about the size of inflows that you can get just in the sense that it takes these sort of dynamics? And is there anything technology-wise that you can introduce to sort of speed up that process maybe or to assist?

Certainly, we have a business enablement team, as I said earlier, that actually helps with that process and works with advisers and looking through their data in their book to see if there are opportunities where clients could benefit from a change in platform. Sometimes the drivers for that are not just price -- sorry, they're never just price. They're about investment universe, they're about technology. They're about customer service proposition. They're about a whole range of factors, even your retirement income stream products. So we continually invest in technology and product and kit to have our value proposition resonate from a value perspective in an enhanced way for customers all the time. Hence, the launch of Discover opens us up to a part of the market we didn't have access to before, where all of a sudden, there's a good basis of advice to move to HUB in the same way a private investor offer does that for high net worth clients. So our overall approach is to resonate with broader parts of the market and to do that. So does that mean there's constraints as to what you can get? Well, those constraints might be a constraint today, they might not be in the future, how you look at it. Some of the other reasons for not moving, though, is if you've got an embedded insurance policy and you change superannuation funds and you've got a health condition, you shouldn't do that. You have to think about tax and crystallization as you move as well. So those things are both potentially constraints to inflows, but they certainly support retention for a business that's actually got a broad proposition actually is a benefit because you actually resonate. It's harder for others to move. The other last thing is important. If you're going to pay $1,000 or $2,000 or even more for an adviser to move to actually give you advice and move you from platform, there's a barrier there. The cost to move is quite significant in the value proposition. So you won't incur that for a client for a $50 difference in overall platform fees. You need to look at the holistic picture.

That's very helpful. And sorry, just one more. Just in terms of that 92%, just given you have seen a fair bit of transitions in the last sort of few years and some larger ones at that. Is there much concentration in that -- sort of massive probably should be...

It's across the book. And some of Kitrina's answer on earlier questions, you've got lower balance accounts and higher balance accounts across the book, balancing out the overall impact on the book shape and how much revenue margin you get from different cohorts. It's representative of a big broad distribution footprint across multiple client segments. There's nothing concentrated in there at all.

Next question comes from the line of Olivier Coulon, E&P Financial Group.

Just going back to that cash and trading revenue phenomenal outcome. Is there anything structural in the trading that you've done this half or enabled this half that's allowed you to lift that revenue generation from a given amount of trading volumes? Or is it really actual market volumes and client growth that's driven the trading outcome?

Not remarkably so. We do actually have an experienced trading team. We do have an ancillary service in there where we can actually do bespoke trading or manage trades into the market where there's large rebalances and so forth, which we can earn a slightly additional piece of revenue on, but not remarkably shifting that. It's incremental potentially. There might also be some lower cost or procurement benefits from the third-party pay away in that number as well in terms of the net result, but there's nothing remarkably structural. It's incremental. It's following market behavior as well. So the quantity is actually going to be representative of what's going on in the market.

Okay. I appreciate that. Yes, it does sound like you've actually negotiated better deals with some of your kind of counterparty trading, for instance, offshore trading.

Marginally, yes. And I recall that as we grow, our ability to net off trading -- the price of trading to customers versus our cost in the marketplace because anything trades actually over years has generally eked out a bit more. That benefit is in our size of scale as well.

Yes. No, I get it. I appreciate that. All right. And then just the reduction in the Platform and Tech Solutions fees versus, I think it was the second half last year, about $3 million. What drove that?

We're picking that up from the analyst and investor pack and the Platform segment. Yes. And so we're always -- with our scale, we're always negotiating with suppliers, extending contracts, et cetera. So just on a per unit basis, as we get bigger, we generally get better negotiations with suppliers. And so what I would say there is that the first half '26, you can assume that to be like a normal baseline going forward, but -- and it is driven from things like the contracts and the negotiations.

Next question comes from the line of Hayden Nicholson with Bell Potter.

Yes. My question has been answered. I tried to cancel the -- hop back in the queue.

Next question comes from the line of Freya Kong with Bank of America.

Sort of linked to Simon's question, but there's a gap between your FUA per adviser of $24 million versus the industry average of $85 million, and you said it can take up to 6 years for the benefits of new relationships to be delivered. Given you've got a pretty strong adviser book already, what's the time frame you might expect for your average FUA per adviser to converge with the industry average?

Look, it happens over time. I'd say the best answer is 5 to 6 years from when they start or it depends what their view is if there are still advisers who do use 2 platforms who might have different solutions. But it has been moving up quite dramatically. We used to report the number being far lower than the $24 million. I don't really have an answer. The fact that you've got increasing usage is potentially accelerating or decreasing that time frame. So it's new for us to see 92% of flows for that half coming through. So -- but it is gradually over time.

And it will be distorted by the fact that our adviser base is continuously growing, the new cohorts will always have a much lower balance. So...

That's been a drag on it as well. If you do by cohorting, we're showing the difference.

Yes, it'd be interesting to see that analysis. Is there anything unique about your adviser cohort that means that average for might differ materially from the industry average? They might be younger, for example.

Possibly. We started as a managed accounts tech player where you've got people who understood that proposition. So you could argue that previously we had a younger or a more tech-savvy focused set of advisers. I think we're fairly representative of the entire industry and the industry shifted a bit. So we might have had that legacy. I think that's lessening and we're more broad-based. We're more -- we're very much seen as a leading wrap platform, which would mean we'd have a cohort similar to the market. You've got the potential that you've got some more mature advisers who have been in the industry for decades, maybe attached to institutions not having moved who will leave the industry over time. That could sway that and say our demographic is different, but it will very soon approximate the industry average.

[Operator Instructions] We have a question that is from the line of Nick McGarrigle with Barrenjoey.

You obviously didn't spend a whole lot on development CapEx in the half year, which I guess is a good sign in terms of the underlying EBITDA was. Maybe just a comment around intentions on capitalized development moving forward and...

Yes, happy to take that one, Nick. So yes, it was lower. CapEx was definitely lower in the half, particularly in the Platform segment. My comment there would be, look, year-on-year, I wouldn't be expecting it to go down. It's more of a timing difference purely because -- we only capitalize technology development, we don't capitalize any other costs. And so there's an element of -- with some of the strategic work that we've been doing, the phasing as to when are we scoping and specking out work versus actually doing development work. That's probably the largest driver as to why you might see a bit of a drop down in first half '26, and you can expect to see it pick up again in second half '26.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Alcock for closing remarks.

Thank you very much, everyone, for coming on today and allowing us to talk about HUB24 and the great results we've got. And thank you for your interest and wonderful questions. We wish you all the best, and we'll see many of you as we go through a roadshow in the next week or so. Thanks very much.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.