Key Highlights

• Netwealth Group (ASX:NWL) reported results for the year to 30 June 2026 on 26 August 2026.

• Total income rose 20.6 per cent to $391.1 million.

• EBITDA rose 18.0 per cent to $192.9 million, a Margin of 49.1 per cent.

• Net profit after tax, excluding First Guardian expenses, was a record $135.4 million, up 16.2 per cent.

How is Netwealth (ASX:NWL) growing its platform while absorbing the cost of the First Guardian matter? The answer from its FY26 results is that client money kept flowing onto the platform at a healthy pace, lifting income and Underlying Profit to records, while a one-off compensation charge sat outside the headline Earnings figure.

Netwealth Group (ASX:NWL) reported results for the year to 30 June 2026 on 26 August 2026. Figures below are in Australian dollars.

The central development: record underlying profit, with a caveat

Total income rose 20.6 per cent to $391.1 million. EBITDA rose 18.0 per cent to $192.9 million, a margin of 49.1 per cent. Net profit after tax, excluding First Guardian expenses, was a record $135.4 million, up 16.2 per cent.

That qualifier matters. Netwealth reported First Guardian costs of $74 million after tax, made up of a $71 million compensation charge for affected members and $3 million of legal and professional fees.

The background is a court finding. Netwealth agreed to compensate affected members in full, and payments to investors began in January.

What Netwealth does and how it earns revenue

Netwealth operates an Investment and Superannuation platform used mainly by financial advisers and their clients. Revenue is largely driven by funds under administration, or FUA, because fees are typically charged as a proportion of Assets and supplemented by account-based and transaction fees.

FUA reached $135.7 billion, up 20.3 per cent. Client accounts rose 12.4 per cent to 182,276, and revenue per account rose 6.7 per cent. Managed accounts, in which advisers delegate portfolio construction to model portfolios, grew faster: funds under management in that product rose 27.9 per cent to $34.6 billion.

FUA growth comes from two sources: net inflows from new and existing clients, and market movements. Net flows for FY26 were $15.4 billion, as reported in the company's July 2026 quarterly update. Market gains or falls can therefore change reported FUA and revenue independently of client behaviour.

Dividend and Capital allocation

The full-year Dividend rose 9.1 per cent to 42.0 cents per share, including a fully franked final dividend of 21.0 cents. That increase was smaller than the rise in underlying profit. Franking credits attached to the dividend depend on the company paying Australian tax. The company stepped up spending on technology, artificial intelligence, product development and operational headcount during the year, which helps explain why EBITDA margin is guided lower for FY27.

Strategy: Morgan Stanley, HIN and the Dx30 goal

Two developments stand out. Netwealth launched Individual HIN, a new offering.

Management's longer-term ambition, known as Dx30, is to double FUA over four years.

Outlook for FY27

Netwealth is targeting FUA net flows of $18 billion to $20 billion in FY27, up to 30 per cent above FY26, and an EBITDA margin of about 47 per cent. A lower margin reflects higher investment spending, so the company is effectively choosing growth in capability over maximum short-term profitability. As with any guidance, the targets are management's expectations and may not be met.

Sector conditions and competitive position

Australian Wealth platforms compete on features, service to advisers, pricing and reputation. Netwealth competes with larger rivals such as Hub24, Macquarie and Amp North, and the sector is consolidating around technology-heavy providers with broad managed-account capability.

Regulatory scrutiny of the advice and platform sector has intensified following high-profile collapses, including First Guardian. Platforms are now expected to demonstrate more encouraging Due Diligence over the products they make available, which may raise compliance costs and could shape adviser choices. Netwealth's own experience shows that the reputational and financial costs can be material.

Adviser behaviour also shapes flows, because most platform Business is written through advisers rather than directly with consumers. Changes in adviser licensing standards or education requirements can therefore affect the size of the addressable market over time.

Material risks

The first risk is regulatory and legal.

The second is market sensitivity. Because revenue depends on FUA, weaker markets could reduce income even if flows remain steady. The third is competition: rivals are also targeting adviser and institutional clients, and pricing pressure is a persistent possibility.

Migrating clients is operationally complex, and the pace at which assets move is uncertain. Finally, investing in technology and artificial intelligence is expected to improve efficiency over time, but benefits may take longer to appear than costs.

What to watch next

The next quarterly funds-under-administration update, normally released in the weeks after each quarter ends, is the first checkpoint for FY27 flows against the $18 billion to $20 billion target.

A balanced view

Netwealth's results show a platform business with encouraging underlying growth, expanding client numbers and a clear strategy. They also show how a regulatory and legal matter can cut into reported profit even when operations perform well. Both sides of that picture deserve attention.