Raiz Invest delivers 270% underlying EBITDA growth in 1H FY26
Raiz Invest (ASX: RZI) has reported Raiz Invest 1H FY26 results showing underlying EBITDA surged 270% to $2.6 million, with revenue up 24% to $14.4 million. The fintech platform has now transitioned to structural profitability, reaffirming FY26 earnings guidance of $4.5 million to $5.5 million underlying EBITDA.
Active customers reached 336,048, up 5.7% year-on-year, while funds under management (FUM) grew 29% to $2.1 billion. The underlying EBITDA margin improved to 18%, up from 6% in the prior corresponding period, reflecting operating leverage as the platform scales.
The company reported operating cash flow of $2.4 million, up 51%, and free cash flow of $1 million, with a cash position of $14 million and no debt. Net inflows increased 30% to $138 million.
| Metric | 1H FY26 | 1H FY25 | Change |
|---|---|---|---|
| Revenue | $14.4m | $11.6m | 24% |
| Underlying EBITDA | $2.6m | $0.7m | 270% |
| UEBITDA Margin | 18% | 6% | +12% |
| Active Customers | 336,048 | 317,995 | 5.7% |
| FUM | $2.1bn | $1.6bn | 29% |
| Net Inflows | $138m | $106m | 30% |
| Operating Cash Flow | $2.4m | $1.6m | 51% |
| Cash Position | $14m | $12m | 17% |
The 270% EBITDA growth with improving margins demonstrates that operating leverage is now delivering tangible results as the platform scales. The cash conversion ratio of 91% validates that underlying EBITDA is translating into actual cash generation.
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What is underlying EBITDA and why does it matter for growth companies?
Underlying EBITDA is a measure of operating profitability before accounting adjustments. It strips out non-cash items like depreciation, share-based payments, and one-off costs to reveal the core earnings power of the business.
For growth companies transitioning from investment phase to profitability, underlying EBITDA is often the first indicator that the business model is working before statutory profits emerge. In Raiz’s case, the 270% growth in underlying EBITDA shows the core business is now generating real operating profit.
The company’s cash conversion ratio of 91% validates that the underlying EBITDA figure is translating into actual cash. Operating expenses increased by only 8% while revenue grew 24%, demonstrating positive operating leverage. The underlying EBITDA margin of 18% (up from 6%) indicates improving profitability per dollar of revenue.
Revenue per user grows 16% as customers adopt premium products
Annual Revenue Per User (ARPU) grew to $86.45, up 16.4% year-on-year, driven by four key factors. The company has achieved a three-year compound annual growth rate in ARPU of 13.9%.
The four primary drivers of ARPU growth were:
- Fee increase effective August 2025
- Growth in higher-revenue products (Raiz Plus and Raiz Super)
- Strong inflows increasing account balances and FUM-based fees
- Higher trading volumes with increased net inflows and more portfolios per customer
Active portfolios are growing faster than active customers (up 17% over 18 months), indicating deepening customer engagement. Active portfolios per customer increased from 1.2 in June 2024 to 1.4 in January 2026. This reflects strong uptake of new products including Raiz Kids and Raiz Jars.
| Metric | Current | Previous | Growth |
|---|---|---|---|
| ARPU | $86.45 | $74.29 | 16.4% |
| ARPU 3-Year CAGR | 13.9% | – | |
| Portfolios per Customer | 1.4 | 1.2 | 17% |
| FUM CAGR | 25.9% | – | |
Rising ARPU demonstrates pricing power and product cross-sell success, meaning Raiz can grow revenue from its existing customer base without proportionally increasing acquisition costs.
Product roadmap targets new revenue streams in FY27
The company has outlined three major product launches planned over the next 12 months:
- Instant Payments (Q4 FY26): Enhanced user experience with faster, real-time trading capabilities
- Direct ASX Trading (Q1 FY27): Single HIN infrastructure development underway, enabling direct ownership and greater flexibility
- US-Listed Equities (Q2 FY27): Direct access for customers to invest in US-listed markets from within the Raiz platform
These initiatives aim to diversify transaction revenue and attract new customers. AI-driven customer experience enhancements are also in development for 2026, including AI-enabled digital onboarding, AI-enhanced Raiz Rewards, and an AI-personalised coach.
Direct ASX and US equities trading could unlock higher-value customer segments and transaction fees, expanding the total addressable market beyond micro-investing.
Cash flow positive with $14m balance sheet strength
Operating cash flow reached $2.4 million, up 51%, with free cash flow of $1 million (compared to $71,000 in 1H FY25). The cash position of $14 million materially exceeds regulatory capital requirements with no interest-bearing debt.
Development costs (capex) declined 12% to $1.3 million, down from $1.5 million in the prior corresponding period. The company recognised a $2.7 million deferred tax asset in respect of accumulated tax losses, reflecting management’s assessment that it is now probable that certain accumulated tax losses will be recovered through future taxable profits.
| Cash Flow Item | 1H FY26 | 1H FY25 | Change |
|---|---|---|---|
| Operating Cash Flow | $2.4m | $1.6m | 51% |
| Free Cash Flow | $1.05m | $71k | 1,376% |
| Cash Position | $14m | $12m | 16% |
| DTA Recognised | $2.7m | – | – |
Management has reaffirmed FY26 underlying EBITDA guidance in the range of $4.5 million to $5.5 million, based on continued growth in active customers, FUM and net inflows, assuming no material changes in current market conditions.
FY26 Earnings Guidance
UEBITDA in the range of $4.5m – $5.5m
The company is self-funding growth with positive free cash flow and has runway to execute its product roadmap without requiring capital raises.
Industry recognition validates platform positioning
The fintech platform has received several industry awards during the period:
- 2025 Canstar Innovation Excellence Award for Raiz Plus Portfolios
- CNBC World’s Top Fintech Companies 2025
- Finalist in 2025 Fintech Australia’s Finnies Awards for Excellence in Wealth Management
These awards provide third-party validation of the platform’s competitive positioning and may support customer acquisition and partnership development.
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Investment thesis centres on profitable scalability
The Raiz Invest 1H FY26 results demonstrate three pillars of the investment case: profitable operations, a scalable digital platform, and funded growth. With 339,000 active customers in a total addressable market of 10.2 million Australian investors, the company has significant runway for customer growth.
The company serves 1.3 million online investors from a total Australian investor base of 10.2 million, with 7.7 million investors holding listed investments. Strategic partnerships include State Street Investment Management and KFC, supporting distribution and market presence.
With structural profitability achieved and a clear product roadmap targeting instant payments, direct ASX trading, and US-listed equities, the focus shifts to execution and scaling within a large addressable market. The FY26 guidance of $4.5 million to $5.5 million underlying EBITDA positions management expectations for continued profitability growth through the remainder of the financial year.
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