Araxi (AXX) H1 2026 earnings summary

Executive summary

• Rebranded as Araxi Group, marking a new chapter with a debt-free balance sheet and cash exceeding R303 million at period end.

• Payments division delivered strong results, with revenue up 23.2% and EBITDA up 33.1% year-on-year, driven by terminal sales and license fee growth.

• Software division's performance was impacted by prior year multi-year license recognition and restructuring costs of about R10 million, but underlying EBITDA improved to R16.9 million.

• Normalised EPS and HEPS grew by 59% and 58% respectively, reflecting robust underlying group performance after adjusting for one-off items.

• Dividend of 4.50 cents per share declared, consistent with prior year and covered 1.5x by internal cash flow.

Financial highlights

• Group revenue increased 2.3% year-on-year to R652.9 million; EBITDA up 0.4% to R150.1 million, with margin stable at 23.0%.

• Payments terminal estate grew 15% to 446,000 units; annuity income up 21.8%; license fees and related services up 86.4% year-on-year.

• Operating cash flow improved to R89.5 million from R11.3 million; cash available for reinvestment at period end was R303.4 million.

• Gross margin contracted by 210bps to 47.4% due to prior year’s one-off license recognition and restatements.

• Profit after tax was R91.0 million, up 22.1% from the prior year as reported.

Outlook and guidance

• Positive outlook for H2 2026, with continued investment in organic and acquisitive growth, supported by strong pipelines and significant orders.

• Software division expected to benefit from annual cost savings of R35–R40 million and a strengthening sales pipeline.

• New innovations and solution sets in LayUp and Halo Dot anticipated to drive growth, with international expansion a focus.

• Economic climate remains challenging, but management is confident in delivering on growth strategy, amplified by AI initiatives.