OFX launches strategic review amid increasing inbound interest
OFX Group (ASX: OFX) has commenced a formal OFX Group Strategic Review to explore organic and inorganic opportunities seeking to maximise shareholder value, including the potential for a sale of the company. The cross-border payments specialist has appointed Goldman Sachs Australia as its financial adviser to support the Board and management team in assessing value creation under various strategic options.
The Board’s decision to formalise the review follows an increasing level of inbound inorganic interest from industry participants. The company believes its long-term value is not reflected in the current share price, citing its robust global operating infrastructure, strong cash generation capability, and growth prospects through execution of its 2.0 strategy. The review will be conducted efficiently to minimise operational distraction from continued platform transformation activities. There is no certainty the Strategic Review will lead to any particular transaction or outcome.
What is a strategic review and why it matters for OFX shareholders
A strategic review is a formal process undertaken by a company’s board to evaluate all available options for maximising shareholder value. These options typically include pursuing organic growth strategies, forming strategic partnerships, merging with another entity, or selling the business entirely. The process involves engaging external advisers, such as investment banks, to assess the company’s market position and potential transaction scenarios against a continuation of the current strategy.
For OFX shareholders, the commencement of this review signals the Board is actively exploring alternatives rather than maintaining the status quo. Importantly, strategic reviews do not guarantee any specific outcome. The company has explicitly stated there is no certainty the process will result in a transaction. However, the appointment of a tier-one financial adviser and the formalisation of inbound interest indicate serious intent to evaluate how best to unlock value that management believes is not currently reflected in the share price.
3Q FY26 trading performance reflects macro headwinds
OFX’s third quarter trading results for the period ending 31 December 2025 reflected ongoing macroeconomic pressures affecting the global foreign exchange industry. Net Operating Income (NOI) declined 4.0% quarter-on-quarter and 11.7% compared to the prior corresponding period, reaching $48.1m. The company attributed the weakness to persistently weak business confidence and historically low FX volatility levels, which reduced client trading activity across the platform.
The quarter was further impacted by temporary disruption from the bulk of existing client migrations to the New Client Platform (NCP), which took place in October and November 2025. This transition activity temporarily affected transaction volumes as some clients delayed trading during the migration process. December 2025 saw a marked improvement in activity levels, with trading patterns returning to more normal conditions. CEO Skander Malcolm noted Corporate New Transacting Clients (NTCs), excluding OLS, remained up 8.7% year-to-date versus the prior corresponding period.
| Metric | 3Q26 | vs 2Q26 | vs PCP |
|---|---|---|---|
| Net Operating Income | $48.1m | (4.0)% | (11.7)% |
| Corporate Revenue | $29.4m | (6.0)% | (11.5)% |
| Active Clients (LTM) | 30,700 | (1.9)% | (5.8)% |
| Cross Currency ATVs | $27,700 | +1.3% | (9.1)% |
Corporate cross-currency Average Transaction Values (ATVs) increased 1.3% quarter-on-quarter but remained 9.1% below the prior year. Management noted these ATVs remain well below their long-term mean, suggesting the current environment represents a cyclical trough rather than structural deterioration. High-Value Consumer revenue totalled $14.1m, down 3.2% quarter-on-quarter, while Enterprise revenue was $3.1m, down 9.3% quarter-on-quarter but up 6.3% year-on-year.
Non-FX revenue emerges as growth driver
The standout performer in the quarter was non-FX revenue, which surged 44.0% quarter-on-quarter to $0.5m. This growth was driven predominantly by clients on the New Client Platform for 90 days or more adopting additional products beyond traditional foreign exchange services. The company reported non-FX revenue growing at an average of more than 19% month-on-month through 3Q26, representing an encouraging lead indicator for future earnings diversification.
Cards revenue increased 67.4% quarter-on-quarter, while Pay by Card revenue grew 56.0% versus the prior quarter. The Pay by Card performance reflected growth in clients funding wallets through Visa and Mastercard, as well as the return to full operations of the new vendor supporting American Express. Wallet balances continued to grow at a healthy rate during the quarter, supporting a 5.1% increase in interest income quarter-on-quarter. Management described the engagement from clients who have been on the platform for 90 days or more as encouraging for future product adoption rates.
OFX 2.0 strategy execution progressing on track
The company’s platform transformation strategy continued to advance during the quarter, with 71.1% of global Corporate active clients successfully migrated onto the New Client Platform as at 31 December 2025. In major markets, the migration rate reached 79% of Corporate active clients. The company remains on track to complete migration across all major markets by the end of FY26, reducing execution risk as the transformation programme nears completion.
Active clients on the NCP reached 22,700 during the quarter, representing a 65.5% increase versus the prior quarter. This acceleration reflects the migration activity undertaken in October and November 2025. Early signals from clients on the NCP for 90 days or more show increased product adoption, supporting management’s thesis that the new platform will drive revenue per client growth as user familiarity increases.
Product delivery achievements in the quarter included:
- Launch of in-product marketing capabilities to drive feature discovery and cross-sell additional services within user workflows
- Completion of global accounting system integration with 2-way synchronisation for Xero in Europe and QuickBooks in Australia
- Implementation of enhanced payment controls to further combat fraud and improve security
Balance sheet strength supports strategic optionality
OFX maintained a robust financial position throughout the quarter, with Net Cash Held increasing to $79.8m, up $4.3m from 2Q26. After deducting collateral and bank guarantees, Net Available Cash totalled $54.4m, representing a $7.3m increase quarter-on-quarter. The company continues to exercise disciplined cost management while maintaining investment in platform development and client acquisition activities.
A limited number of discrete loss events were recorded in the quarter, with further mitigating controls subsequently implemented. Management expects losses in 2H26 to be lower than those recorded in 1H26. The strong cash generation and balance sheet position provide the company with flexibility to continue organic investment in the 2.0 strategy while simultaneously supporting the Strategic Review process and any potential transaction outcome.
CFO departure and FY26 outlook
OFX announced Chief Financial Officer Selena Verth will depart the company after more than 8 years in the role. Ms Verth will remain with OFX until 30 June 2026 to support the continued execution of the 2.0 strategy, participate in the Strategic Review process, and ensure an effective handover to her successor. An executive search for a new CFO has commenced.
Skander Malcolm, CEO and Managing Director
“Selena has played an instrumental role in the transformation of OFX over the last 8 years. This has included enhancing our financial controls and discipline, building a strong global finance function, and playing a leading role in acquiring and integrating the acquisitions of Firma and Paytron. She has been a terrific partner and colleague, and a deeply respected member of the Global Executive Team.”
The six-month transition period provides continuity during a critical phase for the company, with Ms Verth’s involvement in both the Strategic Review and 2.0 strategy execution ensuring minimal operational disruption. Her tenure has encompassed significant corporate development activity, including the Firma and Paytron acquisitions, as well as the foundation work for the current platform transformation programme.
Given 3Q26 trading performance, OFX expects 2H26 NOI to be lower than the prior corresponding period. The company will continue to provide quarterly performance updates alongside half-year and full-year results announcements. Management attributed the softer outlook primarily to the continuation of weak macroeconomic conditions and historically low FX volatility, both of which are external factors beyond the company’s control.
Investment case at a glance
The OFX Group Strategic Review creates multiple catalysts for shareholders while the company’s operational transformation continues to progress:
- Strategic review with Goldman Sachs could unlock value through a sale or alternative transaction, with the Board believing current share price does not reflect long-term value
- OFX 2.0 platform migration nearing completion across all major markets, with 71.1% of global Corporate active clients successfully transitioned as at 31 December 2025
- Non-FX revenue growing strongly at an average of more than 19% month-on-month as clients on the New Client Platform for 90+ days adopt additional products
- $54.4m Net Available Cash provides balance sheet strength to support organic investment or strategic transaction execution
- Macro headwinds appear temporary, with cross-currency ATVs remaining well below long-term mean, suggesting potential mean reversion upside as business confidence and FX volatility normalise
The combination of near-term strategic catalyst potential alongside medium-term earnings recovery prospects positions OFX at an inflection point. The formalisation of the Strategic Review provides clarity on the Board’s approach to value maximisation, while the maturing 2.0 platform transformation offers organic growth optionality should the company continue as an independent entity.
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