OFX Group Earnings Call Highlights Mixed Outlook

OFX Group Ltd. ((AU:OFX)) has held its Q4 earnings call. Read on for the main highlights of the call.

OFX Group’s latest earnings call painted a mixed picture, as management balanced solid strategic progress with a much softer financial outcome. Executives highlighted successful delivery of the OFX 2.0 platform, stronger product uptake and a robust cash position, yet acknowledged weak trading revenues, sharply lower profitability and rising costs that now make the recovery path heavily dependent on better market conditions.

OFX 2.0 Migration Delivered On Schedule

OFX reported that its major OFX 2.0 migration is largely complete, with more than 90% of corporate clients and key markets now on the new client platform. The company completed launches across Canada, the EMEA region, Australia, the U.S. with a partner bank and New Zealand, underscoring that the program was executed on time and within budget.

Corporate Client Base Scales On New Platform

Management highlighted that active corporate clients on the new platform have risen to over 23,000, representing roughly a 70% increase versus the first half. They stressed that this expansion showcases the scalability of OFX 2.0, as costs have grown at a much slower pace than transactions and client numbers.

Multiproduct Adoption Gains Momentum

OFX is seeing early signs that its strategy to deepen client relationships is working, with multiproduct adoption climbing to 8.4% in the fourth quarter from 4.5% in the third. In Australia, multiproduct penetration reached 13%, and 27% of new clients in the final quarter were already using more than one product.

New Trading Clients Trend Higher

Despite weaker revenue, the group reported encouraging growth in new trading clients, which increased by 8% in FY26 compared with FY25. April new trading clients were up around 20% year-on-year, with May trending even stronger, suggesting improved go-to-market execution is starting to bear fruit.

Technology And Product Delivery Accelerate

The company underscored a dramatic improvement in technology delivery, moving from roughly 26 software releases per year to more than 200 deployments per week across 18 squads. Management said adoption of AI tools is boosting internal productivity, speeding feature releases and automating client onboarding.

Non-FX Revenue And Wallet Balances Expand

Non-FX revenue has almost tripled over the past four quarters, albeit from a low base, finishing the year at about $1.8 million. OFX also noted growth in card, subscription and “Pay by Card” income, while client wallet balances reached around $233 million and generated roughly $1 million in fourth-quarter interest revenue.

Balance Sheet Remains A Key Strength

The group emphasized its financial resilience, ending the year with net cash of $71.6 million and net available cash of about $49.6 million after collateral. Operating cash conversion exceeded 100%, with underlying EBITDA of $25.2 million translating into $26.7 million of cash from operations.

Investment Spend Lower Than Guided

OFX spent less than planned against its FY26 investment guidance of $16–24 million in operating expenditure and around $5 million in capital expenditure. Management attributed the underspend to more efficient delivery of the roadmap and lower short-term performance-based incentives.

Top-Line Revenue And NOI Under Pressure

Fee and trading income slipped 8.1% to $203.9 million, while Net Operating Income fell 8.5% year-on-year to $196.6 million. Executives pointed to macro uncertainty, lower transaction volumes and a shift toward lower-margin same-currency and spot transactions as the main drivers of the decline.

Profitability Drops To Near Break-Even

Profitability weakened significantly, with underlying EBITDA falling to $25.2 million from $57.7 million, a decline of more than 56%. Underlying net profit after tax fell to $2.3 million and the company reported a small statutory loss of $0.4 million as investment spending and softer trading weighed on the bottom line.

Consumer Segment Suffers From Low Volatility

The consumer business was a notable weak spot, as revenue fell 13.8% year-on-year amid fewer active clients and much lower currency market volatility. Management said this environment curbed trading activity and reduced opportunities to generate spread income from retail customers.

Corporate Activity And Hedging Volumes Decline

Overall corporate active clients fell by about 2,000, or roughly 7%, during FY26, largely due to discontinued portfolios and online seller migrations. The corporate forward book shrank by around 15% as clients pulled back from hedging, further softening revenue from more profitable forward contracts.

Transaction Values, Volatility And Turnover Weigh On Growth

Average transaction values declined just over 4% versus the prior year and remain below the long-term average, reflecting smaller ticket sizes. Measured volatility is about half the level seen two years ago, contributing to a roughly 6.4% drop in turnover and an overall revenue decrease of just under 10%.

Costs And Bad Debts Move Higher

Operating expenses climbed 9.1% to $171.5 million, or 6.5% when excluding bad debts, reflecting increased investment in technology, marketing and sales. Bad and doubtful debts rose to $6.3 million, including phishing-related losses in the second half, adding further pressure to margins at a time of weaker revenue.

Medium-Term Targets Intact But Timing Unclear

Management reaffirmed its medium-term ambitions of 15% Net Operating Income growth and an underlying EBITDA margin around 30%, but declined to tie these to a fixed FY28 deadline. They stressed that achieving these goals depends heavily on an economic recovery, improved volatility and renewed client appetite for forward hedging.

Guidance Points To FY27 Operating Leverage

Looking ahead, OFX expects to return to positive operating leverage in FY27, targeting around 15% NOI growth and roughly 30% underlying EBITDA margins over the medium term. Near-term plans assume growth in corporate active clients, stabilization of consumer revenue, continued mid-teens enterprise growth and broadly flat operating expenses, with cost increases largely limited to inflation and modestly higher incentives.

OFX’s earnings call ultimately portrayed a company in transition, with a modernized platform, rising product adoption and ample cash providing a solid strategic base. Yet softer revenue, weaker profitability and higher costs underscore that investors will need evidence of improving client activity and market conditions before the full benefits of OFX 2.0 are reflected in the numbers.