Iress's Years-Long Simplification Meets an Indiscriminate AI Sell-Off

A genuine profit upgrade from cost cutting and debt paydown wasn't enough to escape a broader software sector sell-off that fund managers call indiscriminate.

30 Sep 2026 · 3 min read

Iress delivered a genuine profit upgrade after years of simplifying its business through non-core asset sales, cost reduction and debt paydown, only for the stock to fall alongside the broader AI-disruption sell-off in software names, with fund managers arguing the market has failed to distinguish between businesses with genuine competitive moats and those more structurally exposed to AI.

A years-long simplification finally delivers a profit upgrade

SG Hiscock and Company said a profit upgrade was supportive of Iress's share price performance, after several years of simplifying the business, namely selling non-core assets, reducing costs and lowering debt, leaving it holding leading market positions in Trading and Market Data services alongside Wealth Management, with the upgrade delivered by greater operating efficiencies. Spheria Asset Management said the stock fell 9 percent, underperforming the broader market amid a general pullback in technology stocks with no major company-specific news, even as Iress reaffirmed FY25 guidance and outlined a clear target for a sustainable cash EBITDA margin of around 25 percent by the end of FY26, up from an expected 19 percent in FY25. Endeavor Asset Management said it remained pleased with the commencement of the efficiency program targeting that 25 percent cash EBITDA exit run rate, a 5 percentage point margin improvement, welcoming the possibility of renewed corporate interest from private equity according to recent press.

After several years of simplifying the business, namely selling non-core assets, reducing costs and lowering debt, IRE now hold leading market positions in their Trading/Market Data and Wealth Management services.

— SG Hiscock and Company, Monthly Report, December 2025

Strengthening on weakness amid a broader AI-disruption sell-off

Ellerston Capital said it strengthened its Iress position on share price weakness, noting the portfolio owns virtually no other technology or IT names, with Iress the exception given it also delivered a solid earnings beat. Perpetual Asset Management said the stock fell 10.4 percent in May, with broader negative sentiment toward software companies driven by AI disruption concerns weighing on the sector for the year to date, and Iress not immune, though it views the sell-off as indiscriminate, with the market failing to distinguish between businesses with genuine competitive moats and those more structurally exposed to AI. Lennox Capital Partners said Iress fell around 10 percent in the absence of significant company news, as market leadership remained concentrated in AI-linked and resources exposures, leaving steadier financial markets software businesses behind, with its investment case centred on Iress's entrenched market position and the earnings improvement expected as its simplification program matures.

We view this selloff as indiscriminate, with the market failing to distinguish between businesses with genuine competitive moats and those more structurally exposed to AI.

— Perpetual Asset Management, Monthly Report, May 2026

What fund managers say they are watching next is delivery of the targeted 25 percent cash EBITDA exit run rate by end of FY26, whether the AI-disruption sell-off reverses as it has for other misclassified software names, potential renewed private equity interest, and continued market position strength in Trading, Market Data and Wealth Management services.