Australia's main securities exchange operator, ASX Ltd, warned investors that costs for the 2026 fiscal year will be materially higher than its previous outlook, even as it recorded a small increase in first-half underlying profit. The firm revised its total expense guidance to a 20%-23% rise for the year, up from an earlier 14%-19% range, citing a cluster of operational and regulatory costs.
Shares of ASX fell on the disclosure, sliding as much as 2.6% to A$53.92 during the session, adding to a 6.2% decline in the prior trading day. That movement contrasted with a 0.5% gain in the broader benchmark index.
First-half results
For the six months ended December 31, ASX reported an underlying net profit after tax of A$263.6 million, up from A$253.7 million a year earlier. The firm attributed the improvement in part to stronger trading volumes. However, cost pressures were prominent in the report: total expenses rose 20% to A$264.3 million.
What is driving the cost jump
Management pointed to several specific drivers underpinning the higher cost base. These include expenses tied to an ongoing regulatory probe and corporate watchdog inquiry, continued transformation spending, and elevated costs from ageing assets. The company also recorded intangible asset write-offs. ASX said it would absorb costs related to system outages and has committed an A$1 million credit disbursement to settlement participants through rebates following a CHESS batch settlement failure in late-2024.
ASX has experienced a series of operational issues that have drawn increased regulatory attention, including a name mix-up in August 2025 and an announcements-platform outage in December. The exchange is also facing competition from Cboe Global Markets and a comprehensive Australian Securities and Investments Commission review of its governance and operational risk management, with a final ASIC report due by March 31, 2026.
Costs associated with the ASIC inquiry are expected to reach the top end of an A$25 million–A$35 million range, according to the company.
Capital return and payout
ASX declared a fully franked interim dividend of 101.8 Australian cents per share, an 8.5% decline from a year earlier. The payout ratio stands at 75%, at the bottom end of the company’s updated guidance range.
Leadership change
The results and the upgraded cost outlook coincided with the announcement that CEO Helen Lofthouse plans to leave the company. The leadership change follows intensified scrutiny after the late-2024 CHESS failure and the string of more recent operational glitches.
($1 = 1.4043 Australian dollars)