Harmoney (HMY) Q3 2025 TU earnings summary

Financial performance and guidance

• Upgraded FY25 Cash NPAT guidance to $5.5 million, with a 14% cash return on equity YTD and a 20% run rate targeted for Q4.

• FY26 targets remain at over $10 million Cash NPAT and 25%+ cash return on equity, driven by full Stellare 2.0 rollout.

• Loan book reached $798 million, up 5% YoY, with Australian growth offsetting a 6% contraction in New Zealand.

• Net interest margin improved to 9.1%, with new lending margins above 10% and credit losses down to 3.8%.

• Cost-to-income ratio reduced to 18%, reflecting automation and scalability.

Capital management and funding

• Capital efficiency allows 96% of the loan book to be funded by borrowings, with over $25 million in cash reserves.

• Cash reserves can support loan book growth to $1.2 billion without new equity; profits are reinvested for further growth.

• Announced an on-market share buyback of up to 5% of shares, commencing 13 May 2025 and ending by 29 April 2026.

• Plans to repay some corporate debt post-buyback, with $7.5 million of undrawn debt cancelled and substantial cash retained for growth.

• Funding lines are diversified across three major Australian banks and an established ABS program, renewed at staggered intervals.

Business model and platform

• Stellare 2.0 platform drives origination, automation, and customer retention, with over 10,000 new applicants monthly.

• Embedded value in the loan book estimated at $120 million, including $70 million risk-adjusted income.

• AI-driven customer acquisition targets prime borrowers, supporting high margins and low cost-to-income.

• Repeat customers are a significant growth driver, with 140% returning for additional lending at near zero cost.

• Platform enables scalability with minimal cost increases, supported by a team focused on engineering, data science, and product innovation.