Smartgroup delivers record H1 2026 revenue of $179.5m as customer base tops 518,000
In its H1 2026 investor presentation covering the half-year ended 30 June 2026, Smartgroup Corporation (ASX: SIQ) reported record revenue of $179.5m, up 13% on the prior corresponding period. Operating EBITDA rose 16% to $73.8m, while net profit after tax adjusted for non-operating items (NPATA) grew 11% to $42.4m.
Management declared a fully franked interim dividend of 21.5 cents per share, up 10%, alongside a return on equity of 31%.
The salary packaging and novated leasing specialist positioned itself as the #1 player in salary packaging and novated leasing, based on publicly available customer numbers, as its active customer base surpassed 518,000.
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H1 2026 financial highlights at a glance
The headline financials showed broad-based growth across revenue, earnings and margins for the half-year period.
| Metric | H1 2026 | H1 2025 | Change |
|---|---|---|---|
| Revenue | $179.5m | $159.1m | +13% |
| Operating EBITDA | $73.8m | $63.6m | +16% |
| NPATA | $42.4m | $38.1m | +11% |
| EBITDA margin | 41% | 40% | +1ppt |
| Interim dividend | 21.5cps | — | +10% |
| Return on equity | 31% | — | stable |
Operational metrics underscored the growth across all key product lines:
- 518,000 active customers, up 34,000 (+7%)
- 91,600 novated leases under management, up 11,600 (+15%)
- 36,200 fleet-managed vehicles, up 3,800 (+12%)
- Record leasing settlements, up 17%
The interim dividend carries a record date of 9 September 2026 and a payment date of 23 September 2026.
Record leasing momentum and the surge in EV demand
The standout operational story was record leasing settlements, driven by accelerating demand for battery electric vehicles (BEVs). BEV new-vehicle orders grew 162% and now represent 68% of new-vehicle orders in H1 2026. Over the same period, plug-in hybrid (PHEV) and internal combustion engine (ICE) orders declined 39% and 29% respectively.
Management attributed part of the shift to policy dynamics. From 1 April 2025, the Discount Policy ceased applying to PHEVs, and the decline in ICE demand was more than offset by demand for BEVs.
The company reported pipeline future revenue of $22.5m at the end of June 2026, up from $9.8m in December 2025, while the average delivery timeframe improved to 29 days. Direct yield grew 2%, which management noted was within the expected range, reflecting a more competitive market environment and reduced aftermarket attachment rates.
Why novated leasing and EV incentives matter
Novated leasing is a salary-packaging arrangement that allows an employee to pay for a vehicle and its running costs from pre-tax income, reducing their taxable salary. The Electric Car Discount Policy makes eligible electric vehicles more affordable by removing certain tax charges, lowering the effective cost to the employee.
For investors, these incentives represent a structural tailwind. As more employees opt for novated leases on eligible EVs, Smartgroup builds a larger base of recurring, high-retention revenue tied to long-term client contracts, supporting the durability of its earnings.
Strategic priorities — building a scalable single-brand platform
Management provided an update on the Strategic Priorities first announced in February 2024, centred on efficiency and consolidation. The company reported 1,837 customers per operations FTE, an increase of 19% on the prior corresponding period and up from 1,645 in CY25, tracking toward its target state for CY28.
Brand rationalisation continued from 8 legacy brands in CY23 toward a single “Smart” brand, with 85% of compute now in cloud infrastructure, up from 45% in CY25, targeting 100%. Contact centres were reduced from 7 to 4.
H1 2026 delivery milestones included the new Smart mobile app, an enhanced rewards platform, a comprehensive AI, data and automation programme, the ‘It Pays to be Smart’ brand campaign, and an expanded partnership with Volkswagen Financial Services.
The four Strategic Priorities guiding the business are:
- Customer-focused, digital and efficient salary packaging offering
- Leadership in Novated Leasing via EVs
- Innovation of propositions to meet growing customer needs
- Targeted investment in fleet capabilities
These efficiency gains and platform consolidation underpin the company’s margin expansion thesis, with scale benefits expected to flow through as the transformation programme progresses.
Cash generation, balance sheet strength and shareholder returns
Smartgroup highlighted the capital-light nature of its model, reporting cash conversion of 120% of NPATA and net cash from operating activities of $50.8m. The balance sheet remained lightly geared, with leverage of just 0.2x, net corporate debt of $35.4m, and cash of $46.1m.
On capital returns, the company noted the up to $20m buy-back announced in May 2026, alongside a dividend policy targeting a payout of 60–70% of NPATA. Since its IPO in mid-2014, Smartgroup has paid approximately $649m in fully franked dividends to shareholders.
Return on equity has climbed steadily, reaching 31% in H1 2026, up from 24% in 2022, reflecting the improving profitability of the scalable platform.
Strategic positioning
Under Managing Director and CEO Scott Wharton, management framed the results as evidence of disciplined execution against the Strategic Priorities, combining strong organic growth with high cash generation and consistent shareholder returns.
Outlook — targeting mid-40s EBITDA margin in 2027
Looking ahead, management pointed to supportive conditions continuing into CY 2026. Second-half-to-date new lease vehicle orders and settlements increased on the prior corresponding period, with direct yield remaining within the expected range.
The Electric Car Discount Policy review outcome was noted as supportive of ongoing novated leasing demand. Software capex is expected to be approximately $13–15m in 2026.
Over the medium term, management is targeting a mid-40s EBITDA margin during 2027, with further opportunities to elevate performance beyond that point. Management also flagged uncertainty from the broader economic environment and consumer sentiment.
The presentation reinforced an investment case built on recurring revenue, market leadership in salary packaging and novated leasing, a structural EV tailwind, and disciplined capital returns to shareholders.
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