Harmoney Posts $5.7m Cash NPAT, Loan Book Hits $829m in FY25

Robust FY25 Results Exceed Expectations

Harmoney, the consumer-direct online lender operating in Australia and New Zealand, has reported a strong finish to FY25, surpassing its upgraded profit guidance. The company posted a cash net profit after tax (NPAT) of $5.7 million, edging past the $5.5 million target, while achieving a net interest margin (NIM) of 9.3%, comfortably within its 9%-10% target range. The loan book expanded by 9% to $829 million, underpinned by the successful rollout of its Stellare 2.0 platform.

Credit quality improved with credit losses declining to 3.7%, and the cost to income ratio dropped to 19%, reflecting operational efficiencies driven by automation. The company’s cash return on equity (RoE) reached 24% in the fourth quarter, well above the 20% guidance, signaling enhanced profitability and capital efficiency.

Stellare 2.0 – The Engine Behind Growth

The Stellare 2.0 platform has been pivotal in Harmoney’s growth story, boosting new customer originations by 40% in Australia and over 50% in New Zealand. This AI-powered credit assessment and customer acquisition engine has enabled Harmoney to safely extend loans to a broader customer base, particularly smaller loan applications, while maintaining a prime loan book profile.

Notably, the platform’s automation has driven down the cost to income ratio and supported scalable growth without proportional increases in operating expenses. The company’s ability to attract prime customers at low acquisition costs, leveraging partnerships with Google and other digital platforms, has further strengthened its competitive position.

Ambitious FY26 Guidance and Strategic Outlook

Looking ahead, Harmoney has set an ambitious FY26 cash NPAT guidance of $12 million, representing a 111% increase on the prior year. This upgrade from an earlier target of $10 million+ reflects confidence in continued loan book growth to over $900 million, stable net interest margins, and improved risk-adjusted income of approximately 6%.

The company plans to recommence an on-market share buy-back of up to 5% of its share capital, signaling management’s strong conviction in the equity’s value. Strategic priorities include expanding product offerings, particularly in auto finance with a secured vehicle loan product, enhancing customer retention through loyalty programs and mobile app development, and advancing AI-driven personalisation to deepen customer engagement.

Capitalised for Growth Without Equity Raises

Harmoney’s capital structure supports significant growth without the need for equity issuance. With over $23 million in unrestricted cash, $36 million in warehouse equity, and diversified funding from three of Australia’s major banks plus securitisation programs, the company is well-positioned to scale its loan book beyond $1.5 billion. Reinvested profits are expected to fund much of this expansion, highlighting the business’s capital efficiency.

Overall, Harmoney’s FY25 results and FY26 outlook underscore the strength of its technology-driven business model and its ability to deliver profitable growth in a competitive consumer finance market.