IPH Ltd. (IPH) AI Stock Analysis

Compare

111 Followers

Top Page

IPH Ltd.

(Sydney:IPH)

Select Model

Outperform 75 (OpenAI - 5.2)

Rating:75Outperform

Price Target:

AU$4.50

▲(21.95% Upside)

Action:UpgradedDate:02/20/26

The score is driven primarily by solid financial performance (notably strong cash flow) and attractive valuation (low P/E and high dividend yield). Offsetting factors include mixed technical signals and earnings-call risks tied to ANZ softness and uncertainty around the timing of the Canadian CIPO backlog unwind.

Positive Factors

Strong cash generation

Consistent FCF growth and strong cash conversion provide durable funding for dividends, buybacks, debt reduction and targeted investments. Reliable cash generation cushions earnings volatility from filing cycles and supports capital allocation priorities without relying on external financing.

Market leadership and global footprint

Leading positions across key jurisdictions and a multi‑brand, multi‑jurisdiction platform drive referral flows, cross‑selling and pricing leverage. Geographic diversification reduces single‑market risk and supports durable revenue streams from multinational clients and recurring prosecution work.

Canada turnaround and acquisition synergies

A material operational recovery in Canada and successful integration of acquisitions increased scale, recurring filings and profitability. Canada now contributes over one‑third of group earnings, strengthening the group's revenue base and providing structural growth optionality as filing volumes normalize.

Negative Factors

ANZ revenue and earnings decline

Significant exposure to U.S. PCT originated work has structurally reduced ANZ fee pools and margins. Sustained lower PCT volumes or slow re‑diversification would compress group earnings and weaken a historically important regional profit contributor over the medium term.

Canada CIPO backlog and timing uncertainty

A services‑process backlog at the Canadian patent office delays revenue recognition and makes filing throughput lumpy. Until the backlog reliably unwinds, revenue and cash flow visibility from a key growth market remain impaired, limiting near‑term predictability despite long‑term potential.

Higher tax rate and margin pressure

An elevated effective tax rate combined with declining net margins reduces the proportion of revenue converting to owner earnings. This structural compression limits reinvestment capacity and cash available for distributions, making returns more sensitive to slower revenue or margin headwinds.

IPH Ltd. (IPH) vs. iShares MSCI Australia ETF (EWA)

Market Cap

AU$880.88M

Dividend Yield10.58%

Average Volume (3M)1.66M

Price to Earnings (P/E)12.3

Beta (1Y)0.72

Revenue Growth16.61%

EPS Growth3.07%

CountryAU

Employees1,800

SectorIndustrials

Sector Strength72

IndustrySpecialty Business Services

Share Statistics

EPS (TTM)0.24

Shares Outstanding261,480,650

10 Day Avg. Volume1,349,685

30 Day Avg. Volume1,657,970

Financial Highlights & Ratios

PEG Ratio4.43

Price to Book (P/B)1.74

Price to Sales (P/S)1.73

P/FCF Ratio9.69

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

AU$4.36

Price Target Upside18.16% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

IPH Ltd. Business Overview & Revenue Model

Company DescriptionIPH Limited, together with its subsidiaries, provides intellectual property (IP) services and products in Australia and internationally. It operates through three segments: Intellectual Property Services Australia & New Zealand, Intellectual Property Services Asia, and Adjacent Businesses. The company offers IP services related to the provision of filing, prosecution, enforcement, and management of patents, designs, trademarks, and other IP; and develops autonomous timekeeping software under the subscription license model. It also provides patent attorney, lawyers, support, and data analysis services. The company serves Fortune Global 500 companies, multinationals, public sector research organizations, SMEs, professional services firms, universities, foreign associates, and other corporate and individual clients. IPH Limited was founded in 1887 and is based in Sydney, Australia.

How the Company Makes MoneyIPH generates revenue through several key streams, primarily from its IP services such as patent and trademark filing, prosecution, and maintenance services. The company charges fees for its services, which vary based on the complexity and type of IP being managed. Additionally, IPH earns revenue from its subsidiaries and associated firms that specialize in various aspects of IP management, thus broadening its service offerings and client base. Strategic partnerships with law firms and technology companies enhance its market reach and contribute to its earnings. The firm also benefits from ongoing maintenance fees for existing IP rights, creating a recurring revenue model. Overall, IPH's diversified service portfolio and established relationships in the IP sector are significant factors that support its financial performance.

IPH Ltd. Earnings Call Summary

Earnings Call Date:Feb 19, 2026

(Q2-2026)

% Change Since: |

Next Earnings Date:Aug 26, 2026

Earnings Call Sentiment Positive

The call presented a predominantly positive operational and financial picture: group revenue and underlying EBITDA grew, statutory profit rose double‑digits, cash conversion remained strong and management increased dividends while reducing net debt. Canada delivered a standout turnaround and Asia returned to growth, driven by higher filings and case transfers. However, material near‑term headwinds persist—ANZ earnings were down due to lower U.S. PCT volumes, the CIPO backlog in Canada has not yet cleared (creating delayed revenue), and tax and FX translation effects compressed some metrics. Management’s cost discipline, balance sheet strength, AI adoption and successful acquisitions mitigate these risks and support confidence in medium‑term recovery.

Q2-2026 Updates

Positive Updates

Group Revenue Growth

Total revenue of $363.9 million, up 6.5% year‑on‑year, driven by incremental contribution from the Bereskin & Parr acquisition and organic growth in Canada and Asia.

Underlying EBITDA and Profit Improvements

Underlying EBITDA increased 6.6% to $107.1 million. Statutory net profit after tax rose 10.5%, and underlying NPATA increased 2.6% to $62.6 million.

Strong Cash Generation and Dividend

Gross operating cash flow to EBITDA conversion of 101% with free cash flow up 32%. Interim dividend increased 11.8% to $0.19 per share (20% franked) and represents a payout ratio of 81% of cash adjusted NPAT.

Canada: Major Turnaround and Scale

Canada delivered a strong turnaround: like‑for‑like underlying EBITDA up 18.9% and like‑for‑like revenue up 7.3%. Canada now accounts for over one‑third of group earnings; annualized run rate based on H1: ~$323 million revenue and EBITDA >$83 million, with annualized patent filings >10,000. Acquisition synergies from Bereskin & Parr achieved.

Asia Returning to Growth

Asia like‑for‑like revenue +3.5% and underlying EBITDA +1.5%. Filings ex Singapore up 7.3%. Strong country-level gains: Hong Kong patent filings +37%, Vietnam +21%, Philippines +26%, Brunei +57% (low base). Over 2,200 case transfers into Asia (1,500+ trademarks, 500+ patents, 200 designs).

Market Leadership and Network Strength

Company maintains #1 patent group positions in Australia, Canada, Singapore and New Zealand; #1 filer in Indonesia. Global scale (7 brands, ~1,700 employees across ~26 IP jurisdictions) supports resilience and cross-jurisdiction referrals.

Client Referrals and Case Transfers

Nearly 1,200 cumulative client referrals between IPH Canada and Asia since 2022; referral volume almost doubled in the last 12 months. Recent wins include ~100 patent case transfers to Southeast Asia/China/Australia and ~500 patent case transfer into ANZ in recent months.

Cost Discipline and Corporate Savings

Corporate costs reduced by $2.5 million in H1, underlying EBITDA margin lifted modestly (+0.1 percentage points). FY'25 cost realignment and ongoing discipline contributed to improved margins.

Balance Sheet and Capital Management

Net debt reduced by 6.5% (~$27 million) to a leverage ratio of 1.8x (down from 1.9x) within target up to 2x. Group refinanced $210 million of syndicated debt on improved pricing; undrawn facilities of $111 million. Announced on‑market buyback program (up to 12.2 million shares).

Operational Efficiency and Technology Adoption

Low capex (H1 $1.5 million vs prior $6.1 million). Active embedding of AI and automation across patent drafting, prosecution and administrative workflows to streamline operations and reduce costs.

Negative Updates

ANZ Revenue and Earnings Decline

ANZ like‑for‑like revenue down 6.1% and underlying EBITDA down 10.6%, reflecting disproportionate exposure to a decline in U.S. PCT filings. Australian patent market decreased 12.9% for the half with IPH filings down 5.4% (normalized excluding self‑filed applications: IPH -4.8% vs market +1.9%).

CIPO Backlog and Timing Uncertainty

Canada continues to face a backlog at the Canadian Intellectual Property Office (CIPO) following a July 2024 systems upgrade; no meaningful clearance yet. The backlog represents delayed revenue (timing of unwind uncertain; management hopes for calendar 2026 but not confirmed).

Higher Effective Tax Rate Post‑Acquisition

Underlying effective tax rate increased from 20.4% to 26.2% following Canadian acquisition activity, and management expects this normalized (higher) rate going forward based on geographic earnings mix.

Margin Pressure in ANZ and Employee Costs

Margin reduction in ANZ tempered group margin gains. Employee benefits expense increased 6.8%, primarily reflecting acquisition impact, though offset partially by cost reduction programs.

Singapore Market Weakness and Client Concentration

Singapore patent filing market declined by 8.6% (YTD to Nov); IPH filings down 13.9% (noting one large client materially reduced filings—normalized IPH decline ~10%). Client concentration risks persist in some markets.

Foreign Exchange and Translation Impacts

Group recorded a net FX loss of $0.2 million (vs prior $1.3 million gain). Foreign currency translation reserve fell $14.1 million; intangible assets reduced ~$19.1 million due to FX translation—these moves compressed some balance sheet metrics.

Non‑Underlying and Transformation Costs

H1 non‑underlying expenses (net of tax) were $2.8 million related to transformation projects and IT implementation, signaling ongoing investment and one‑off costs despite being lower than prior period ($4.8 million).

Risk from Self‑Filed / AI‑Generated Applications

Surge in self‑filed/AI‑generated provisional applications in Australia may reduce upfront filing revenue pools for firms that target those low‑margin volumes. Management views this as limited immediate threat to IPH’s secondary‑market focus but flags it as an industry risk.

Timing and Exposure Risks in ANZ and US Filings

Significant exposure remains to U.S. origin filings (estimated ~30–35% of Australian market for IPH). Recovery depends on U.S. PCT trends and successful re‑diversification into Europe, Japan, Korea and China—outcomes uncertain.

Company Guidance

Management guided that FY‑26 priorities are to leverage Canada’s integrated platform to capture the expected (timing uncertain but anticipated in calendar 2026) unwind of the CIPO backlog, to capitalise on Asia’s return to growth and >2,200 recent case transfers (including ~1,500 trademarks, ~500 patents, ~200 designs), and to re‑target ANZ business development away from U.S. PCTs toward Western Europe, Japan, South Korea and Chinese incoming filings. They reiterated a focus on operational efficiencies and AI automation (corporate costs down $2.5m in H1) after delivering H1 revenue $363.9m (+6.5%), underlying EBITDA $107.1m (+6.6%), underlying NPATA $62.6m (+2.6%), like‑for‑like revenue +0.7% and like‑for‑like EBITDA +3.2% (margin +0.7ppt); segment metrics included Canada like‑for‑like EBITDA +18.9% (margin +2.6ppt), Asia filings ex‑Singapore +7.3% (Asia LFL revenue +3.5%, EBITDA +1.5%), and ANZ LFL revenue −6.1% / EBITDA −10.6% (Australian market −12.9%, IPH −5.4% or −4.8% excl. self‑filed AI provisionals). Balance‑sheet/capital guidance: cash conversion 101%, free cash flow +32%, interim dividend +11.8% to $0.19 (franked 20%, payout 81% of cash‑adjusted NPAT), net debt −6.5%, leverage 1.8x (target ≤2x), $111m undrawn facilities, $210m refinanced facility, and an on‑market buyback up to 12.2m shares.

IPH Ltd. Financial Statement Overview

Summary

Solid fundamentals supported by strong cash generation (free cash flow growth 10.82%, good cash conversion) and steady revenue growth, offset by modest profitability/margin erosion and remaining leverage risk despite improvement.

Income Statement

Positive

IPH Ltd. has demonstrated consistent revenue growth, with a 4.82% increase in the latest year. The gross profit margin remains strong at 100%, indicating effective cost management. However, the net profit margin has slightly decreased to 9.74%, suggesting increased expenses or other financial pressures. EBIT and EBITDA margins have also declined, pointing to potential operational challenges.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved to 0.67, reflecting better leverage management. Return on equity is stable at 9.84%, indicating efficient use of equity. The equity ratio is healthy, suggesting a solid financial foundation. However, the overall leverage remains a concern, which could pose risks if not managed carefully.

Cash Flow

Positive

IPH Ltd. has shown a robust free cash flow growth of 10.82%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.31, indicating good cash conversion. The free cash flow to net income ratio of 0.94 suggests efficient cash utilization. These metrics reflect a strong cash flow position, supporting future investments and debt servicing.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	728.50M	706.20M	605.60M	482.87M	374.33M	359.68M
Gross Profit	489.30M	706.20M	389.80M	315.77M	250.92M	243.29M
EBITDA	194.60M	187.10M	179.60M	159.16M	115.99M	113.33M
Net Income	72.70M	68.80M	60.80M	64.54M	52.56M	53.60M
Balance Sheet
Total Assets	1.28B	1.35B	1.31B	1.20B	688.42M	674.69M
Cash, Cash Equivalents and Short-Term Investments	49.00M	59.00M	75.50M	103.27M	88.40M	71.15M
Total Debt	474.30M	469.70M	491.80M	441.29M	161.22M	159.39M
Total Liabilities	605.60M	651.10M	679.10M	619.50M	258.71M	247.90M
Stockholders Equity	678.80M	699.40M	634.30M	577.13M	429.71M	426.79M
Cash Flow
Free Cash Flow	140.30M	125.80M	120.90M	84.90M	87.69M	86.47M
Operating Cash Flow	143.80M	133.70M	131.90M	91.79M	94.88M	92.65M
Investing Cash Flow	-14.50M	-70.40M	-140.60M	-281.56M	-12.18M	-10.84M
Financing Cash Flow	-172.90M	-83.10M	-11.30M	199.46M	-68.68M	-93.55M

IPH Ltd. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.69

Price Trends

50DMA

3.57

Positive

100DMA

3.58

Positive

200DMA

4.09

Negative

Market Momentum

MACD

-0.02

Negative

RSI

54.90

Neutral

STOCH

50.22

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:IPH, the sentiment is Positive. The current price of 3.69 is above the 20-day moving average (MA) of 3.61, above the 50-day MA of 3.57, and below the 200-day MA of 4.09, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 54.90 is Neutral, neither overbought nor oversold. The STOCH value of 50.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:IPH.

IPH Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIQ	79 Outperform	AU$1.15B	13.91	31.30%	5.51%	11.64%	18.08%
CUP	76 Outperform	AU$165.90M	18.54	8.06%	4.11%	27.05%	520.93%
IPH	75 Outperform	AU$880.88M	12.26	10.32%	10.58%	16.61%	3.07%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KPG	59 Neutral	AU$325.98M	107.78	13.37%	0.11%	24.47%	21.28%

* Industrials Sector Average

Performance Comparison

AU:IPH

IPH Ltd.

3.69

-0.84

-18.47%

AU:SIQ

Smartgroup Corporation Ltd

8.67

1.29

17.48%

AU:CUP

Countplus Limited

1.01

0.28

39.20%

AU:KPG

Kelly Partners Group Holdings Ltd.

7.15

-6.13

-46.16%

IPH Ltd. Corporate Events

IPH Sets Date for Release of 2026 Half-Year Financial Results

Jan 18, 2026

IPH Limited has announced that it will release its half-year financial results for the period ended 31 December 2025 on 19 February 2026, followed by a webcast analyst and shareholder briefing the same morning, with a recording to be made available on the company’s website. The advance notice underscores IPH’s ongoing engagement with the market and its investor base, providing stakeholders with clarity on the timing of key financial disclosures and an opportunity to hear management’s commentary on the company’s performance and outlook.