DALLAS, TX – August 20, 2026 – NZX Limited (NZSE: NZX) is navigating a transitional period where its growth engines are increasingly powered by its Smart and Wealth Technologies segments, even as its Capital Markets business awaits a normalization in issuance and trading activity, according to a new research update from Stonegate Capital Partners.
The update, which covers NZX’s first half of fiscal 2026 results, suggests that the company’s underlying momentum is improving, with the margin decline seen in the period attributed to transitional costs rather than structural deterioration. Stonegate believes NZX’s 1H26 results modestly improve the setup, with Smart and Wealth Technologies providing growth while Capital Markets awaits normalization.
Key takeaways from the report highlight that Smart and Wealth Technologies are increasingly carrying the growth story. Smart FUM rose 28.5% year-over-year to $18.0 billion, with operating earnings up 11%. Meanwhile, Wealth Technology FUA reached $21.1 billion, and annual recurring revenue (ARR) increased 15% to $13.7 million. Contracted migrations imply that ARR can reach roughly $18.7 million, giving investors better visibility into medium-term recurring growth. This is significant because it underscores the potential for sustained revenue streams from these segments.
The margin pressure observed in 1H26 appears transitional rather than structural. The 140 basis points year-over-year decline in margin to 35.6% was primarily attributed to QuayStreet transition costs and investment, with management expecting improvement in the second half as those costs roll off. This matters because it suggests current profitability understates the earnings potential of the growing Smart and Wealth businesses. The company is also investing in Smart marketing ahead of the Q4 KiwiSaver relaunch, which could further boost growth.
Wealth Technologies provides the clearest medium-term visibility, with contracted migrations supporting ARR toward $18.7 million, though elevated capital expenditure and migration timing remain important factors through 2027. This visibility is crucial for investors seeking predictability in NZX’s earnings stream.
Capital Markets remains the swing factor. 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 this softness, NZX maintained its FY26 EBITDA guidance of $53.0 million to $58.5 million and is tracking toward the midpoint. This guidance provides near-term downside support, leaving a recovery in issuance, trading, and derivatives as incremental upside rather than something required to make the current earnings outlook work.
Stonegate’s update suggests that management is tracking toward the midpoint of FY26 guidance, supporting confidence in the near-term earnings cadence. The full announcement, including downloadable images and more, can be accessed here.
As NZX continues to diversify its revenue streams, the performance of its technology-driven segments will be closely watched. The company’s ability to manage transition costs while investing in growth areas will be key to realizing its full earnings potential.
