HUB24 Limited

The Business

HUB24 operates a wealth management platform that lets financial advisers hold, trade and report on client investments in one place, earning fees on the funds under administration (FUA) that sit on the platform. Platform revenue, roughly 81% of the $501 million total, scales with FUA and the basis points charged on it. A smaller Tech Solutions arm (17% of revenue) sells software to advisers who don't use the full platform. Unlike institutional incumbents, HUB24 was purpose-built for independent advisers, which explains why it keeps taking share from the older, bank-owned platforms.

Recent Performance

Revenue grew 23% in FY26 to $501 million, on top of 24% growth the year before, so this is not a single easy-base year: HUB24 has compounded above 20% for multiple years running. Net inflows have ranked first in the market for ten consecutive quarters. The share price has run hard alongside this performance, and at current levels the market is effectively requiring sustained outperformance across growth, margin and interest rate assumptions all at once.

Outlook

Revenue growth is set to decelerate from 23% to around 12% in the next financial year and toward 10% further out, as the FUA base gets larger and each additional dollar of inflow moves the needle less. EBITDA margin is expected to peak near 40% before drifting back slightly as competition and fee compression bite. The tax rate is also set to normalise from an unusually low level toward the standard corporate rate, which alone will trim free cash flow conversion meaningfully over the next two years, a headwind the market may be underweighting given how much of the recent earnings beat came from this temporary effect.

Key Risks

The dominant risk is the discount rate itself. If Australian bond yields stay elevated rather than normalising toward levels the current share price appears to assume, the gap between price and underlying business value persists regardless of how well the platform executes operationally. This is a macro risk rather than a business risk, and it will not resolve through better inflow numbers or margin performance alone.

Cash management fees carry direct exposure to RBA policy: every rate cut removes revenue from this line with no offsetting cost reduction, since the cost base does not shrink alongside it. Platform revenue margin is also compressing gradually, roughly a basis point a year, as larger client accounts move into lower fee tiers with FUA growth. This is a structural, ongoing effect rather than a one-off adjustment, and FUA growth needs to keep outrunning it for revenue to compound at recent rates.

What to Watch

The thesis-defining event is the run of RBA rate decisions through late 2026 and early 2027, which will show whether bond yields are settling at a new, lower level or staying elevated.

• Q4 2026-Q1 2027 RBA rate decisions — a sustained move toward cuts would support a lower discount rate assumption in the market and could re-rate the stock.
• Feb 2027 1HFY27 results — FUA trajectory against management's stated target and early signs of margin direction.

Company Description

HUB24 runs a wealth management platform for financial advisers, generating the bulk of its revenue (roughly 81%, or $407 million of $501 million in FY26) from fees on funds under administration held on the platform. Tech Solutions, built around the Class and NowInfinity acquisitions, sells compliance and administration software to advisers and accountants (around $84 million, 17% of revenue). A small Corporate segment ($10 million) includes treasury and other minor activities. The platform business is the growth engine; Tech Solutions provides a complementary, stickier revenue stream tied to the same adviser base.

Where the Growth Is

Platform FUA growth, driven by specialist platforms taking share from institutional incumbents, is the story. HUB24 holds 9.9% market share and rising, having ranked first for net inflows for ten consecutive quarters. Specialist platforms as a category have grown from 3% to 23% of the market over the past decade, with further runway toward 35-40%. If FUA growth continues to run ahead of the trajectory assumed in current forecasts, it represents the clearest upside lever in the business.

Competitive Position

The platform's advantage rests on switching costs rather than pricing. Over 300 data integrations connect HUB24 to custodians, fund managers and reporting tools, and 83% of new inflows come from advisers already using the platform rather than new client wins. Once an adviser's workflow is built around the platform, moving to a competitor means rebuilding that infrastructure, a genuine deterrent. The advantage is widening, not eroding: market share is rising, and the platform has ranked first on adviser satisfaction surveys for four consecutive years. The main competitive threat is Netwealth, running a similar model at even higher margins (47% versus HUB24's 42%), and the two firms currently benefit jointly from institutional outflows rather than competing head-on for the same clients.

Management & Capital Discipline

Management has run a disciplined capital program over the past five years: roughly $56 million a year in treasury share purchases offsets dilution from staff incentive schemes, dividends have grown alongside earnings on a 46-50% payout ratio, and the Class acquisition was integrated without major disruption. A loan to the wealth adviser sector (ORFR) earns 10%, a reasonable use of surplus capital. One honest tension worth flagging: management continues to signal "increasing profitability" ahead, while our own modelling assumes margins compress from current peaks as competition intensifies, a disagreement management has not yet addressed publicly.

Financial Position

HUB24 holds a net cash position and has no meaningful debt. Free cash flow has consistently covered both the growing dividend and the annual treasury share buyback, with headroom to spare. The business would comfortably absorb a market downturn: it holds no leveraged assets, and free cash flow stays positive across every scenario we modelled, including the bear case.