Raiz Invest has reported its transition to profitability in the half-year ended 31 December 2025, with net profit after tax of $3.52 million compared to a loss of $1.1 million in the prior corresponding period. The result marks a structural shift for the fintech platform, driven by revenue growth of 23.9% to $14.4 million and Underlying EBITDA growth of 270% to $2.6 million.
Brendan Malone, Managing Director and CEO
“Raiz has a highly scalable platform and the business has now transitioned into structural profitability, a major operating milestone.”
Raiz delivers first-half profit as platform hits structural profitability milestone
Raiz Invest achieves profitability following its 1H FY26 results, reporting NPAT of $3.52 million against a prior period loss of $1.1 million. The result includes a $2.7 million income tax benefit from the recognition of deferred tax assets, reflecting management’s confidence that accumulated tax losses will be recovered through future taxable profits.
Underlying EBITDA increased 270% to $2.6 million (1H FY25: $706,000), demonstrating positive operating leverage as revenue growth of 23.9% outpaced operating expense growth of 8%. Management reaffirmed FY26 guidance of $4.5 million to $5.5 million in Underlying EBITDA, assuming no material change in market conditions and continued cost discipline.
The transition to structural profitability de-risks the business model and validates the subscription-based platform economics. Unlike one-off profitability events, structural profitability indicates the business generates recurring profit at its current scale, with incremental revenue expected to flow largely to the bottom line as fixed costs are covered.
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Revenue climbs 24% to $14.4 million on pricing power and product mix shift
Revenue reached $14.4 million in 1H FY26, up 23.9% from $11.6 million in the prior corresponding period. Growth was driven by a 5.7% increase in Active Customers to 336,048 and a 16.4% increase in annualised revenue per user (ARPU) to $86.45 (from $74.29).
Maintenance fees increased 26.3% to $9 million, now representing 63% of total revenue. The August 2025 fee increase of $1 per month for both Regular and Plus Plans contributed to margin expansion, while a higher proportion of new customers selecting the Plus Plan supported revenue growth.
| Metric | 1H FY26 | 1H FY25 | Change |
|---|---|---|---|
| Revenue | $14.4 million | $11.6 million | +23.9% |
| ARPU | $86.45 | $74.29 | +16.4% |
| Active Customers | 336,048 | 317,995 | +5.7% |
| FUM | $2.1 billion | $1.6 billion | +28.5% |
| Underlying EBITDA | $2.6 million | $706,000 | +270% |
ARPU growth of 16.4% significantly outpaced Active Customer growth of 5.7%, indicating Raiz is extracting more value per customer. This is a key driver of operating leverage, as the platform scales revenue without proportional increases in fixed costs.
Higher-margin Plus Plan accelerates customer value
Plus Plan portfolios grew 33.6% during the period, with over 38% of new customers now choosing Plus as their first plan. This shift toward higher-margin products is a structural tailwind for ARPU expansion.
- Kids portfolios increased 29.2%
- Super Fund customers grew 17.4%
- The new Lite Plan attracted over 3,150 users, primarily from new sign-ups
The product mix shift toward Plus, Kids and Super products creates longer-duration customer relationships and higher recurring revenue per account.
FUM surges 29% to $2.1 billion with record net inflows
Funds Under Management reached $2.1 billion as at 31 December 2025, up 28.5% from $1.6 billion in the prior corresponding period. FUM growth was driven by net inflows of $138 million (1H FY25: $106 million) and positive market movements.
- Super FUM grew 31.1% to $434.2 million
- Plus FUM increased 50% to $369.4 million
- Kids FUM rose 65% to $100 million
Account fees, which are directly linked to FUM, increased 26.3% during the period. FUM growth compounds fee revenue and demonstrates customer stickiness, as Super and Kids products create long-term engagement with the platform.
What does structural profitability mean for a fintech platform?
Structural profitability refers to a business model that generates recurring profit at its current scale, rather than relying on one-off gains or cost reductions. For subscription-based fintechs like Raiz, it means the platform has reached a point where ongoing revenue consistently exceeds operating expenses.
This differs from operational profitability or breakeven results, which may depend on temporary factors. Structural profitability implies sustainable margins as the company grows, with incremental revenue dropping largely to the bottom line once fixed costs are covered.
The recognition of $2.7 million in deferred tax assets signals management’s confidence in sustained future profits. Tax authorities only permit this treatment when future taxable income is probable, not speculative.
For investors, structural profitability reduces capital risk and creates optionality for future capital returns or reinvestment into growth initiatives. It validates that the business model works at scale and can support expansion without requiring additional equity funding.
Cash generation strengthens with $2.4 million operating cash flow
Operating cash flow increased 51.4% to $2.36 million (1H FY25: $1.56 million), driven by improvements in underlying profitability. Free cash flow reached $1.05 million compared to $70,000 in the prior corresponding period.
Cash conversion stood at 90.5% of Underlying EBITDA, indicating high-quality earnings. The company held $14 million in cash as at 31 December 2025, up 16% from $12 million in the prior period.
Strong cash conversion validates the quality of reported earnings and provides balance sheet flexibility for mergers and acquisitions or product investment. The positive cash generation profile supports the company’s stated intent to assess targeted M&A opportunities.
2026 product roadmap targets new revenue streams
Raiz is expanding beyond subscription revenue to introduce transaction-based revenue streams. The company plans to launch three key initiatives in 2026:
- US-listed equities: Direct access to investing in the US market
- Direct ASX trading: Infrastructure development to enable single HIN trading for greater flexibility and direct ownership
- Instant payments: Enhanced user experience with faster, real-time trading capabilities
The strategic partnership with State Street Investment Management was expanded through a joint marketing campaign to promote the ASX-listed SPY ETF. Raiz is working with State Street on a combined product roadmap, including retirement products.
New partnerships have been established to extend distribution reach:
- KFC: Financial education and literacy programme delivered to all KFC employees through the Raiz App
- Year13: Investing and financial education partnership with one of Australia’s largest youth platforms, reaching 2 million people online annually
Transaction-based revenue diversifies earnings and increases revenue per customer interaction. Strategic partnerships extend distribution reach into employee benefit programmes and youth education channels.
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Management reaffirms FY26 guidance as positive momentum continues
Management reaffirmed FY26 Underlying EBITDA guidance of $4.5 million to $5.5 million, assuming no material change in market conditions, continued cost discipline, and growth in Active Customers, FUM and net inflows.
Operating expenses increased 8% to $11.8 million while revenue grew 23.9%, demonstrating positive operating leverage (known as “positive jaws” in banking terminology). This margin expansion runway supports the pathway to the upper end of guidance.
Brendan Malone, Managing Director and CEO
“With positive momentum and a clear strategic direction, we remain firmly on track to deliver FY26 UEBITDA in the range of $4.5m to $5.5m.”
The guidance reaffirmation provides near-term earnings visibility for investors. The company’s focus on AI-driven customer experience enhancements and active assessment of M&A opportunities positions the platform for continued growth while maintaining cost discipline.
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