REA Group Limited

Good day and thank you for standing by. Welcome to the REA Group Limited Third Quarter Fiscal Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alice Bennett. Please go ahead.

Good morning and welcome everyone. My name is Alice Bennett, Head of Investor Relations, and I'd like to thank you for joining us to discuss REA Group's results for the third quarter ended 31st March 2025. Before we commence, I'd like to acknowledge the traditional owners of country throughout Australia and recognise the continuing connections to lands, waters and communities. We pay our respects to Aboriginal and Torres Strait Islander cultures and to elders past, present and emerging. This morning you'll firstly hear from our CEO, Owen Wilson, who will provide a brief business update. Then Janelle Hopkins, REA's CFO, will talk to the financial highlights for the quarter. Following this, we'll be happy to take your questions. Just as a reminder, our quarterly numbers are top line results only, so we're restricted in the amount of detail we provide. With that, I will pass to Owen to get us started.

Thanks, Alice. I'd like to welcome everyone this morning and also acknowledge the traditional owners of the land on which we are meeting and pay my respects to their elders past and present. REA Group has delivered a strong third quarter result, underpinned by double-digit yield growth. Looking at our results from co-operations for the quarter, revenue was $374 million, an increase of 12%, and EBITDA, excluding associates, was $199 million, also an increase of 12%. Strength in underlying fundamentals coupled with the first interest rate cut in four years supported the health of the market and buyer demand in the quarter. National listings remained in line with the prior year's strong comparables with steady national house price growth supporting vendor confidence. In these positive conditions consumers visited our platforms in record numbers and our customers continued to prioritise our market leading products and services. REA's growth is driven by our clear strategy and our third quarter achievements demonstrate excellent progress towards our strategic goals. To deliver on our purpose of changing the way the world experiences property, we remain focused on engaging the largest consumer audience with our personalised property experiences, delivering superior value to our customers with leading products and services, and leveraging unparalleled data insights as we expand our core business and build next generation marketplaces. Australians can find more listings and more buyers on realestate.com.au than anywhere else. This quarter, more people visited our platform than ever before, including a record 12.6 million visitors in March. We further extended our exclusive audience in the quarter with a monthly average of 6.4 million Australians using our platform and not using our nearest competitor. This means access to this large number of potential buyers, sellers and renters is exclusive to REA customers. Our personalized experiences ensure property obsessed Australians continue to return to our platform with an increased average of 133 million visits each month. And our app first strategy delivered 5.5 times more app visits than our nearest competitor. Our consumer strategy is centered on personalizing our membership experience. Deep personalisation not only unlocks an enhanced consumer experience, it also amplifies the value delivered to customers. Members are proven to be much more likely to perform a high-value action, and our active membership base continues to expand, increasing 6% on the prior year. Realestate.com.au is more than just an advertising platform, and our goal is to support consumers throughout the full property journey. The aspiration of our AI driven next generation listings initiative is to set a new global property experience benchmark. It's aimed at helping consumers understand more about a property and encouraging them to take action sooner. Supporting this, we recently integrated before you buy building test and strata reports. And while it's early days, we're currently seeing more than 400 reports downloaded on average each week and this is continuing to grow. We also integrated NBN availability on all listings at the end of February, providing the most up-to-date information about a product's connectivity. Recent enhancements to the property listing experience have significantly boosted higher value consumer interactions. As we expected, buyer email inquiries declined slightly, but these have been replaced by inspection interactions which are up 12%. These are a much more meaningful buyer action. Our property owner experience helped drive a 50% year-on-year increase in seller leads delivered to our customers during the quarter. The release of an enhanced owner experience in December, which enables owners to more easily update their property's attributes, continues to engage owners with an average of 10,000 properties updated each month since launch. Turning to our customers. Record Premier Plus penetration supported the strong yield growth in our core residential business and our top-tier commercial product, Elite Plus, also achieved record penetration. The uptake of our high-performance listing solution, Lux, continues to gain momentum and deliver significant value to customers and their vendors. Lux generates 71% more high-value consumer actions than a Premier Plus listing. These include saving or sharing a property, booking an inspection, or adding an option or an inspection to plan. During the quarter, we launched our developer high-performance listing solution, Amplify. Amplify is designed to engage high-intent buyers on the homepage and is set to deliver significant value to developers with more project profile views and more buyer leads. As part of our commitment to delivering greater choice and flexibility to customers, we introduced more options into our FY26 contract rollout. We know the highest performing campaigns combine a multi-channel strategy and these new options achieve this in the most cost-effective way. PRO is the most comprehensive subscription in the market with advanced solutions across agency services and agency marketplace. It is designed to support and accelerate business growth for our customers. Customers are seeing significant value in exclusive benefits such as access to our PropTrac powered CMA tool. Pleasingly, some key national agencies have recently signed new enterprise-wide pro partnerships. With the powerful combination of the most comprehensive property comparison data and unparalleled demand data, we believe we have the best CMA in the market. Our latest customer sentiment scores are at record levels, and pleasingly, the gap over domain is at an all-time high. Turning to financial services. With improved market conditions in recent quarters, we're now seeing the increase in submission volumes flow through to an increase in settlements. Investment in the mortgage choice brand and systems, coupled with product innovation, continues to deliver value for our brokers and support productivity. Leads generated from the enhanced realestate.com.au experience were up 45% year on year. Mortgage choice freedom continues to drive white label penetration. Freedom reached an exciting milestone in the quarter with brokers settling more than $2 billion in Freedom loans since the product first launched just under two years ago. Moving to REA India. Our Indian business delivered strong revenue growth in the quarter driven mainly by the Housing Edge platform. Housing.com's performance reflects a competitive environment and a slightly softer market. We remain focused on investment in our app experience and driving our app audience. This is delivering strong results with Housing.com continuing to lead the share of app downloads with 59% of all downloads and app sessions continue to grow rapidly. We know apps are the future of the Indian property experience and we're confident in our App Prime strategy. As we enhance the app experience with new features and technology, we are also prioritising listing quality and information accuracy. Verified listings on the housing.com platform grew steadily in the quarter. This is a strategically important trend and while our focus on verified listings may impact volumes in the short term, We know consumers' value trust and high-quality listings are an essential component of that trust. Before I hand over to Janelle, I'd like to share a few comments on the market as we look ahead. The Australian property market remains healthy with the support of positive fundamentals. As we know, listings are notoriously hard to predict. As we close out FY25, we expect listing growth will moderate against the very strong comparables of last year. This would still represent a healthy market. There are significant global factors currently playing out. And while this may cause some uncertainty, increased expectation of the number and timing of further interest rate cuts is likely to support activity and encourage people to transact in a market underpinned by strong demand. The recent clear result in the federal election is also likely to support confidence. REA is well positioned for a strong finish to the year. Our next-gen listing experience will continue to evolve with some exciting releases set to drive deeper engagement and connection with our consumers and value for our customers. Over to you, Janelle.

Thanks, Owen, and good morning, everyone. REA has delivered a strong result, driven by double-digit revenue growth in our residential, commercial, financial services and India businesses. There are lots of 12s this quarter, Group revenue for the third quarter increased 12% to $374 million. Operating expenses from core operations increased 12% to $176 million. And the group delivered operating EBITDA excluding the results from our associates of $199 million up 12%. Our residential business continued to deliver strong results with revenue growth of 12% driven by double-digit yield growth partly offset by a 3% negative impact from revenue deferral. Q3, national new buyer listings were flat year on year, with Sydney up four and Melbourne listings declining by 3%. The biggest driver of our residential performance was our strong buyer yield, which was up 15% for the quarter. Yield was driven by a 10% average Premier Plus price rise, year on year growth in overall depth and Premier Plus penetration, growth in add-ons, and a 1% positive impact from the consolidation of Realtor and this was partly offset by a 1% negative geomix drag. Our rent business saw continued strong growth with revenue driven by double-digit yield and a 4% growth in listings. Recent commercial and developer trends continued with strong growth in commercial and lower growth in developer revenues. Commercial drivers and revenue growth were again similar to our residential business with double-digit yield growth and modest growth in listings. Developer revenues were up year on year, with a 13% increase in project commencements, longer project duration, and a price rise from 1 July, more than offsetting lower display revenues. Other revenues were flat during the quarter. We saw strong growth from campaign agent, which continued to benefit from higher volumes and greater spend per customer. This growth was partly offset by lower prop track revenue and the declining programmatic display revenues in a soft advertising market. Financial services momentum improved during the quarter with double-digit revenue growth. Revenue was driven by settlements growth of 16% and increased productivity across our broker networks, including our salaried brokers. REA India delivered strong revenue growth in the quarter, up 28% year-on-year. This reflected strong growth in our adjacency services on the Housing Edge platform, with an increased number of rent-pay-on-credit users and a price increase from February 25. It's worth noting that while year-to-date adjacency revenues have been stronger than expected, we will face much tougher comps in the fourth quarter, with growth in the prior year up more than 150%. Housing.com revenues were flat year-on-year, with customer growth offset by pressure on yields in a very competitive market, and PropTiger revenues declined with reduced volume of stock. Turning to operating costs, group core costs were up 12%, and Australia increased by 9%. Excluding the impact of the realtor acquisition, group operating expenses increased 10 and Australian cost by 7. In Australia, this was due to higher employee costs, which reflects salary inflation and higher performance incentives, and increased technology costs due to double-digit supplier price rises. This was partly offset by lower marketing spend, which was down year on year due to the timing of our largest customer event, Ready, which was in March 24, and will be held in August in 2025. India saw operating costs increase by 20%, driven largely by an increase in housing edge . The group's combined share of associates contributed a $6 million loss to the core EBITDA, which compares to $9 million loss in the prior period. MOVE continues to experience very challenging market conditions in the US, resulting in lower lead and transaction volumes. Despite this, Move has been able to deliver revenue growth for the second quarter in a row, up 2%, driven by growth in rentals, seller and new homes. For more information on Move, please see News Corp's Q3 results release. Moving to current trading conditions. Year-on-year growth rates for national residential new-buy listings in the fourth quarter will reflect very strong fire period volumes, particularly for Melbourne and Sydney. As expected, April listings declined, down 11% year-on-year, with Sydney and Melbourne both 16% lower. As well as more difficult comps, this also reflected the timing of Easter and the federal election. Year-to-date listings to April are plus 2%, and for FY25, we anticipate growth of 1% to 2%. Residential buy yield growth is expected to be between 13% and 15% in FY25, with the main swing factor being where GeoMix lands in Q4. We continue to target positive operating draws in FY25. Low double-digit group call cost growth is anticipated with the year-on-year growth rate in Q4 lower due to the phasing of marketing costs and lower anticipated COGs in India. EBITDA losses in India are anticipated to be marginally lower in FY25 compared to FY24. Associates losses in FY25 are anticipated to be modestly higher than the prior year. On a final note, we are very pleased with the performance we've delivered so far this year and our business is in great shape. Comps will get tougher across the remainder of the calendar year however market fundamentals are healthy and we remain focused on improving consumer engagement, providing increased value to our customers and driving growth across our portfolio of assets. Let me pause there. Operator will now open for questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. We ask that you please limit yourself to two questions. One moment while we compile our Q&A roster. Our first question is going to come from the line of Eric Choi with Byron Joy. Your line is open. Please go ahead.

Hey, Owen, Janelle and Alice. Two questions. Got it. Okay. So the first one, just on listings, I guess to get to the top end of the 1% to 2% FY25 guide, i.e. the 2%, you probably need May and June to grow 3% in aggregate. So I'm just wondering, you know, has the election deferred certain listings out into May or are you seeing anything else that gives you confidence in that outcome? And then maybe just the second one on buy yield. It looks like buy yield accelerated one to two percentage points in the third quarter versus the second quarter, but geomix stayed negative. So something else has accelerated. I'm particularly interested if that was AMAX or where AMAX sits today, just because when we're doing work on FY26, we're all trying to work out the potential delta when the new subscription and AMAX bundles. So yeah, if you could comment on the accelerants and AMAX, that would be helpful.

Thanks Eric. I'll take the listings question and Janelle will talk to yield. Looking at listings for May and June, listings for the year to date end of April were up 2% and so that guidance of 1% to 2% for the full year implies sort of flat to get to the 2% or moderately down if you're going to get down to the 1%. May has started quite healthily, particularly in the capital cities. And I think that's probably just a sort of rebound of the things that were deferred across that holiday period of Easter, Anzac Day, and then into the election. So it's very hard to call it just based on the small sample size we've got for May to date. But so far it looks good, and mainly in the capital cities. But I think that's just a hangover from that downtime. So our guidance assumes flat at the top end or marginally down for May and June. Reminder that they are very strong comps.

And on yield, Eric, there is a bit of rounding involved here. We did see GeoMix be only 1% in Q3 versus Q2 it rounded to 2%. So that's really the key change between Q3 and Q2 overall yield growth. So that's really the only difference. But again, audience, Maximizer, super pleased with how that product has gone in Q3. It's continued to track very well and we've continued to see record penetration of that product.

Awesome. Thanks, guys.

Thank you. Thank you. One moment for our next question. Our next question is going to come from the line of Encho Raczkowski with E&P. Your line is open. Please go ahead.

Morning, Owen. Morning, Janelle.

My first question is on on OPEX and I mean you've given us some very good colour around the phasing of costs and obviously there was high phasing towards that quarter. Is it fair to assume OPEX growth in sort of in the mid-single digits in Q4 or is that being too optimistic? I just appreciate you've maintained your full year guidance but there can be a range within that.

Yeah look Enso we have maintained our full year guidance absolutely. We are anticipating Q4 costs to be lower than Q3. It's also a mix. So in Australia, we're anticipating Q4 costs to be marginally lower than we saw in Q3. In Q4, we're anticipating our India costs to be substantially lower, predominantly in relation to our expectation around volumes of housing edge coming down. So there'll be lower revenue, but also lower COGS. But we're still holding to the full year expectation of overall low double-digit cost growth.

Okay, got it. Thank you. My second question may be a bit of a left-field question, but are you able to comment on the level of employee engagement that you're seeing at the moment across the group, across the company? The reason why I ask this is I wonder if you see it as a risk that if CoStar acquired a domain, they'll look to hire from your talent pool. They may look to poach some of your employees, particularly in the sales team. And how do you think your position to ensure key employees don't leave and is there potential upward pressure to the cost base if that's the case? Thank you.

Please to report and show that our engagement scores, I think it was a record high. It's only a couple of months ago that we did our annual engagement survey. We also do monthly pulse checks of our engagement across our employee base. So sitting at a record high for the time that we've been doing engagement scores, this is over a decade, I think is a very pleasing place to be. We also have just ranked in the great places to work for tech companies in Australia and quite a high ranking compared to some of the other names in the market. So we're pretty confident our staff enjoy working at REA.

Okay, and do you, I mean, just as the second part of that question, do you see it as a risk factor given CoStar, if CoStar enter the market, either of you, I appreciate your comments, that people are engaged, which is clearly encouraging, but is there some pressure that could come into your cost base?

I think that risk has always been in the market. And, Joe, you know, we're seeing, we have such a great employment brand, we are such a kind of icon company in this sort of sector, and I'll call it the digital sector, not just in property. And so, you know, it's the nature of the market that we're in that, you know, any of the names that you can mention, you know, car sales, zero, you name it, we're all seen as a target for staff poaching. And so, you know, we regularly take staff from each other. It's just a factor of the market we're in. I don't think that's going to change going forward. Okay, got it. Thanks, Owen.

Thank you, and one moment for our next question. Our next question is going to come from the line of Kane Hannon with Goldman. Your line is open. Please go ahead.

Hey, guys. Just if I think about the feedback you've had on the recent pricing discussions, let's say we assume CoStar does ultimately acquire domain. Owen, I mean, to put yourself in the shoes of your successor, first year in the job, what are some of the factors you'd think about sort of pricing, you know, for the next year in that situation?

So, so far, we're about halfway through our sort of pricing. Oh, sorry, Kane. Sorry, we've gone... Okay, and we're halfway through our pricing discussions and so far, you know, it's been a very positive and productive conversation and we're seeing, you know, a good uptake of our products. You know, when you think about pricing over the recent times, Domain has largely copied our price increases and gone alongside us. I can't speculate on what they might do on price. You know, anything that, you know, Coastal might think of doing this market, I would say, has already been tried by Domain at some stage.

Yeah, that makes sense. And then secondly, M&A, I mean, obviously there was some press recently around potentially a second interest in Rightmove, but I suppose more recently there was some out suggesting that Zoopla might be up for sale in the UK. Just a reminder to how you think about global M&A, I suppose, you know, looking at number ones versus number twos, and I suppose if we can't make Rightmove work over time, I mean, would Zoopla be something of interest?

I honestly don't understand the strategy of buying number two or number four. I just don't get it. I haven't seen a market anywhere in the world where a weaker number two or a weaker number four or a weaker number three has overtaken the leadership position. So I couldn't see how that could be ever of interest to us. Yeah, that's good. Thanks, guys.

Thank you. One moment for our next question. Our next question comes from the line of Roger Samuel with Jefferies. Your line is open. Please go ahead.

Oh, hi, Monty. My first question is on your cost. As you look towards FY26 and beyond, what would you consider as a sustainable rate of cost growth for the group, considering that you may have a potentially more emboldened a competitor and also you need to continue to reinvest in product development and in marketing as well. And also the second question is on audience maximizer. Given that you're bundling this product with your customer subscriptions and looks like you're pushing this product even more into the market, should we expect some margin dilution in your Australian business?

Thanks, Roger. In terms of investment, I'll just remind everyone that we spend about 7% to 9% of revenue on our CapEx or product innovation. And then there's expenditure within the OpEx that's also related to product innovation. So it runs at something around about $200 million per annum on product innovation investment. And that has increased every year, year on year, as our revenue increases. And we are not going to stop doing that. We out-invest our competitor on multiple levels. So we'll continue to do that and we are going to focus on delivering increased value to our consumers and to our customers and that's always been the premise for our revenue proposition. In terms of marketing, that type of thing, again, if you look at... I would direct you to the other markets that Coastal operates in. They have spent a fortune on marketing. I think they outspend... right move in the UK four times on marketing, and yet their audience has not moved. They're still the number three after two years of marketing investment, and their audience is flatlined. If you look at homes.com in the US, it's reported they spent a billion dollars US on marketing last year, and they've still got a flatlined audience, and they're still the number four. And in their own numbers for this latest quarter result, their unique audience fell 5% having spent that year. their revenue fell about 5%, and they wouldn't quote their customer numbers, but they talked about churn, so I'm pretty sure that's down as well. So again, we're very confident in our levels of marketing. We do increase it year on year. We are in a very privileged position. We've got such strong brand awareness in the Australian market, and we do have a team that punches way above its weight and gives huge value for the dollars that we spend. So we'll keep doing that, and we're very confident in our position. On the Amex?

Look, on audience maximizer, we see that social is becoming an increasingly valuable part of the overall marketing schedule, so we want to make sure we're part of that. But we don't expect that to have any substantial impact on our margin at all.

Okay, great. Thank you.

Thank you. And one moment for our next question. Our next question comes from the line of Suraj Ahmed with Citigroup, your line is open. Please go ahead.

Thanks. Owen, you made some comments on the take-up for next year based on the price increases in packaging. Can you touch on specifically what you're seeing? Is it because subscription price increased, but I think if they take up AMAX and LUX, it's lower. So are you actually seeing that all AMAX products that are getting taken up?

What I will comment on, and I'll preface this by saying, look, we're not even quite halfway through the pricing discussion process. But what we are seeing, with the new flexibility and options we've put into our contracts, that it is going to enable more customers to take more AMACs going forward. So that's really encouraging. I mentioned in my speaking notes earlier We're seeing very healthy uptake of Pro and a couple of large franchise groups have taken enterprise-wide contracts, which is again very pleasing. And I think it's a proof point on the value that's being delivered through Pro, particularly in terms of the quality of our CMA tool. And we're seeing CMA usage continue to tick up month on month on month. But not only that, the seller leads. If you're an agent elevate, you're getting more seller leads than your competitor. And we're increasing the volume of seller leads we're putting out. It's a very high value product, Pro, and the market is starting to realize that and starting to buy it increasingly.

Got it. Second one, Janelle, I know this is a difficult one. I mean, deferrals negative three in this quarter. Given your guidance for volumes in May, June expectations, is it fair to assume that some of the deferrals comes back in the fourth quarter?

You're right, it's such a hard one. We'll absolutely get that benefit of the deferral into Q4. But the net impact for the Q4 on revenue will depend on what happens on May 2 and how strong that is and how much of that upside then gets deferred into 26. It's always hard with deferral. It's just a timing issue, but it just can play around a little bit with the numbers. So we will see some benefit into Q4. How much of that holds versus getting deferred into Q1 would really depend.

All right.

Thank you.

Thank you. And one moment for our next question. Our next question is going to come from the line of Tom Beadle with Jordan. Your line is open. Please go ahead.

Good morning, everyone. Thank you for the opportunity to ask questions. I've got two as well. Just firstly on developer, I thought that modest revenue growth comment in the release was interesting just in the context of that 13% increase in project commencements. We've obviously had a couple of good quarters now, albeit off a low base. But how might we think about this improvement in commencements in terms of how that flows through to future periods? Is this potentially a sign that developer revenues could start to accelerate over the next few quarters? Second question, it's a bit related to Roger's, just around CoStar. You know, if they are to take... control of domain you've obviously got the benefit of seeing how their competitive behavior has impacted move if at all but my question is what can you learn from moves experience in terms of your competitive response if they are to take control of domain thanks tom uh on developer you're right it feels like we are seeing green shoots in the developer market in terms of the number of projects that are

the starting commencements, and it feels like the conditions are finally there for that sort of pent-up demand in that space to reverse. I think we may have hit an inflection point. I'm just loathe. I've been loathe to call it after four years of downs in this space, or five years probably. But if you think of what drives developments, a big one is interest rates. They have to fund the project while they're building it. And You know, we've had our first rate cut. You know, whether we get another two, three, four, some are calling five. I don't buy that. But any amount of cuts from here makes it easier for developers to bring projects out of the ground. We're also seeing the moderation in building materials cost. That seems to be flowing through. The only one that probably hasn't 100% corrected to where they'd like it is availability and cost of labour. But, again, I think that's the rate of increase there is and the availability is getting better. So at some stage, that is going to become a tailwind for us. There is no doubt about that. When, it's hard to call, but it feels like we've inflected, which is really pleasing. Look, in terms of our response to CoStar, we've watched them move as competes with them through homes.com in the US. Their playbook around what I would call wasting a lot of money on marketing for no discernible movement in their audience is there and I assume that they will probably try something like that in the Australian market. Honestly, our approach to CoStar coming in, it just doesn't change the competitive dynamic market in that the way we deliver value to consumers and the way we deliver value to customers is not going to change. And you've heard us speak for years and years and years that we underpin our revenue growth by continuing to deliver increased value to both sides of the market can keep growing our audience, keep growing that engagement, keep growing the leads, which then underpins the value we've given our consumers. And we have a very robust strategy to keep doing that in FY26 and well beyond that. And quite frankly, that's the best defense is just to build a better and better product and drive more value.

Great. Thank you.

Thank you. And one moment for our next question. Our next question is going to come from the line of Sir Harsh Singh with Bank of America. Your line is open. Please go ahead.

Hi, Owen. Thank you. Just two questions from my side. One, if I just look at the price increases that you're discussing with your customers for next year, it looks like you've gone a little bit softer on debt price increases and a little bit harder or ramped up subscription costs a little bit more with extra add-ons. Can you talk about the thinking on that as in increasing the subscription cost? Do you think you have more room to do that over the coming years or is it just a one-time thing because you're going to put through AMA bundles and age and elevate with the higher subscription cost? So that was my first question. The second question is, I saw that REA India CEO resigned a few weeks back. Any thoughts on India market strategically? Could that prompt a rethink in how you're going about India, or is it just going to be status quo? Thank you.

Thanks. Both good questions. Look, in terms of our pricing, we always talk to yield, and we've always got a target of double-digit yield growth. And you recall part of that is price and part of that is obviously mix. We have gone out with a single-digit price rise this year, and again, deliberately, after two years of very healthy double-digit price increases. And again, we've done that because of what else we're putting in the market around our other products that drive yield. Lux is a great example of that. In terms of the subs, this is the first time we've adjusted our subs prices for about 10 years. And yet we've been delivering significant value into that sub-sign. Ignite in particular is an incredible high-value ad offering for agents to manage their listings, to manage their inquiries, to manage their inspections. And we haven't priced for that at all in the last 10 years. And you recall also when we launched Pro, we deliberately put that in what I'll call an entry-level price. Now, the value that we are delivering that is just getting higher and higher, particularly with the volume of seller leads that are going to Pro customers. and so we've adjusted that price accordingly. But we've also changed the packages to give our customers greater flexibility and greater choice. It is something that they value, and so we've changed the construct across the whole portfolio of product offering to give them value and choice and flexibility, and so they can choose their own adventure with our product. So we're very pleased with the construct that's gone out. As I said, the feedback from customers so far is fantastic, quite positive. In terms of Dhruv's move in India, that doesn't change our view of the Indian market. It is an exciting market if you take a long-term view of the Indian economy and the Indian property sector. It's an undeniable prize to go after. Dhruv's been in that business for a very long time. He founded PropTiger. It's time for him to do something different. He's going to go off and probably start again in terms of founding another business, not in this space, obviously. And he goes with our good wishes. And again, the nature of the guy is he doesn't have an end date. He's going to stick with us until we've found his replacement. We've actually had a bit of a refresh in the team there. We've got a brand new CTO in the business, which is a fantastic talent. And so we're very excited about India, albeit it is a very competitive market because everyone else wants the prize as well.

That's great, Irwin. Thank you. Just to follow up on subscription costs, do you think you can flex it higher over the coming years? Because when I compare your subscription costs to some other classifiers like even car sales, I think $800 a month for pro is not that high for the value you are delivering in terms of seller leads and agent elevate, etc., etc. So is this going to be a slight change in pricing strategy which is going to continue beyond the 526? Any color on that? I know it's early days.

No, you're right. Even at the current price, it's exceptional value. I mean, you only need a couple of converted seller leads and you're effectively paying for the product. I'm not going to speculate on future price changes, though. It wouldn't be wise for me to do that.

Thank you.

Thank you. And one moment for our next question. Our next question comes from the line of Nick Beville with CLSA. Your line is open. Please go ahead.

Morning, team. Thanks very much for the opportunity. The first question is if you can just comment a little bit about the mobile app strategy and the growth in your membership numbers. I think it was up 6%. just trying to understand how important that is to your dominance versus the nearest competitor and does that help you drive more efficient marketing spend, even if, I think, as others have alluded to, CoStar, you know, were to spend a lot of marketing in this market or in other markets. And the second question is on REA's M&A strategy. I think it was mentioned that from Owen's perspective, it's only the number one marketplace models that are attractive investments. So just curious, I guess in a scenario where CoStar's marketing spend did drive the results they are seeking, would that increase the attractiveness of looking for more assets offshore to bulk up the group's cash flow and marketing firepower? Yeah, I guess I'm sort of interested in general how we should think about your M&A strategy. Thanks. Thanks, Nick.

In terms of app and audience, I'll remind everyone that most of our audience is organic. It's not paid audience. And so it's not like we go out and pay for the 12 million people who come to our site. They come there organically because they know where to get the best experience and they know that they need to go to see more properties. So the membership strategy is important for two reasons. One is if we know who a consumer is, we can better personalise the site. We can remember what they did last time on the site and the time before that and the time before that. And using AI, we can predict what they're likely to do next and create really rich, engaging experiences. And that's why we'd like every user to be a member, which effectively means they're logged in and we know who they are because we can give them a better experience through that. It also helps us drive better value to the customers. And so, again, knowing... who the consumer is, we can provide richer information through to the customers and, again, give that consumer a better experience when they interact with our customers. So it's kind of a win-win strategy and we're very pleased with the growth in our membership, but we're not done there. I think I've covered the marketing. I don't think anything that co-started here around marketing will change our M&A strategy at all. As I said, look, we've observed... what they've done with marketing in other markets, and it just really hasn't driven their audience numbers at all, independently measured. I mean, they have internal measures which say it's higher, but, you know, if you look at the independent measures, there's no movement. And so, look, our strategy around M&A hasn't changed. You know, we would, ideally, if we were going into a new market, we'd want the number one. Or if it was the number one, we'd want to be very confident you could get to number one. And similarly in Australia, you know, we look at sort of small... smaller investments because ultimately it's got to be driving our strategy and it's more obviously in a non-portal space given our position in the market.

Thank you.

Thank you and I'm showing no further questions at this time and I would like to hand the conference back over to Owen Wilson for closing remarks.

Thanks, everyone, for your time today. We are delighted with the result we delivered for Q3, and we're on track for a strong finish to the year, and I look forward to seeing you all at our year-end results announcement in August. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.