603.5% is Axos Financial's reported net margin for the twelve months ended June 30. It is an odd number, and it fell from 658.0% even as net income rose 13.3% to $490.4M.
The cleaner headline is growth: revenue climbed 23.5% to $81.3M, operating cash flow rose 13.7% to $557.6M, and diluted earnings per share increased 14.1%. The less tidy part is what Axos did with that cash.
Capital spending jumped from $54.2M to $266.4M, a 391.5% increase. Cash fell from $1.9B to $1.1B. Cash conversion barely moved, from 1.13x to 1.14x, so the business generated more cash alongside earnings, but the investment bill grew much faster than either.
Axos's own annual history makes the change more visible. Revenue had moved from $64.6M in fiscal 2024 to $65.8M in fiscal 2025 before the latest year's jump. The company now has a faster top line, but also a much heavier capital commitment.
Management points to the Verdant acquisition as a major reason the expense base expanded. The company's explanation includes a cost that affects reported profit without being a current cash payment, alongside other costs that do hit the income statement directly:
"For fiscal year 2026, non-interest expense increased $143.0 million, or 24.3%, compared to fiscal year 2025, primarily due to increases of: $51.6 million in depreciation and amortization primarily due to depreciation on equipment under operating leases following the Verdant acquisition; $42.8 million in general and administrative expense reflecting a $21.0 million accrual related to a FINRA arbitration matter, a $7.0 million accrual in the current year for developments in a matter related to the Company’s acquisition of COR Securities in fiscal year 2019 and higher loan and lease servicing expenses following the Verdant acquisition; and $25.1 million in salaries and related costs primarily due to increased headcount and salaries, including the impact of the Verdant acquisition."
Axos Financial, 10-K, Aug. 20, 2026.
Depreciation and amortization is an accounting expense, not a cash outlay. The $266.4M capex figure is the cash-side evidence that the year involved a substantial investment push, while the arbitration and acquisition-related accruals helped reduce reported margins.
The annual report also says lower rates paid on demand and savings deposits partly offset the higher expense load:
"These increases were partially offset by a decrease in interest expense on demand and savings deposits driven by lower rates paid."
Axos Financial, 10-K, Aug. 20, 2026.
That offset matters because it shows the earnings result was not simply a Verdant cost story. Rate-sensitive funding helped, while depreciation, salaries, servicing costs and legal accruals pulled the other way. Net income still increased, but the margin declined by 54.5 percentage points on the company's reported figures.
The balance-sheet question is therefore concrete rather than dramatic: how much of the cash reduction belongs to the current investment cycle, and how much capacity remains after it? Axos does not provide that single answer in the supplied receipts. Cash and capital spending in the next reported period will put the latest trade-off on the same page.
More earnings, more investment, less cash. Banking's oldest arithmetic remains undefeated.
Source: Axos Financial's 2026 Form 10-K and comparable fiscal-year figures.