REA Group Limited

Good day and thank you for standing by. Welcome to the REA Group Limited Full Year Results 2025 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 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, Head of Investor Relations. 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 REA Group's 2025 full year results presentation. Before we commence, I'd like to acknowledge the traditional owners of countries throughout Australia and recognise their continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures and to Elders past and present. So today you'll hear from REA's CEO, Owen Wilson, and Janelle Hopkins, REA's CFO. Owen will talk to our overarching financial performance and strategic highlights for the full year. He'll then hand over to Janelle to talk to our financial results in more depth. And following this, we'll be happy to take your questions. With that, I will pass it 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're meeting and pay my respects to their elders past and present. This will be my last full year presentation and I'm delighted to share these results today. REA Group has delivered an excellent FY25 result underpinned by double digit yield growth, deepening consumer engagement and the superior value delivered to our customers. Turning to the results from cooperations for the year. Revenue was $1.67 billion, an increase of 15%. EBITDA, excluding associates, was $969 million, an increase of 18%. And NPAT was $564 million, an increase of 23%. The board has determined to pay a final dividend of $1.38 per share, fully franked, together with the interim dividend, This represents a total dividend of $2.48 per share, an increase of 31%. Before we move into our operational highlights, I'd like to touch on the market conditions we operated in this year. Demonstrating the health of the market and vendor confidence, listings remained broadly in line with the very strong prior year. New national buyer listings remained above the seven-year average, while quarterly growth rates reflected significantly varied comparables. I expect the chart on the left to reverse in FY26 as we face strong comparatives in the first quarter and softer comparatives in the fourth. The chart on the right highlights the return to more normalised listing conditions in the last two years. The fluctuating listing volumes reflect the impact of the Royal Commission, the global pandemic and successive interest rate hikes The more normalised market conditions of FY25 supported vendor confidence with buyer listings up 1% on the prior year and just 1% below FY18. The first interest rate cuts in four years accelerated buyer demand to reach peak levels in the second half. In May, we recorded the highest level of inquiry in over three years and inspection interactions also continued to increase. As interest rates fell, price momentum strengthened and extended across the country. National house prices finished FY25 at a new peak, around 5% higher than a year ago. In these positive conditions, we remain focused on the execution of our strategy and we achieved some outstanding highlights. More people turn to our leading platform than ever before with a new Ipsos record of 12.7 million people visiting realestate.com.au in April. Our personalised owner experiences help drive a 55% increase in seller leads and 4.5 million Australian properties are now tracked by their owner on our site. Customers continue to turn to our premium products to differentiate their listings with Premier Plus in Residential, and Elite Plus in commercial, both achieving record depth penetration. In India, we recently announced the divestment of PropTiger, enabling greater focus on the core housing.com business. We also announced our exciting investment in Athena Home Loans, and we established our Cyber City Innovation Hub in India and centralised our support teams in the Philippines. We have a consistent strategy with three simple goals, providing personalized property experiences to engage the largest consumer audience, delivering leading products and services to drive superior value to our customers, and leveraging unparalleled data insights as we expand our core business and build next generation marketplaces. Supporting our growth strategy, we've continued to acquire new capabilities, taking minority stakes in immersive, a 3D visualization platform, and JITI, an AI-powered search platform based in the UK. REA has been investing in AI and machine learning models for over a decade, and our investment has significantly increased in recent years. AI is an enabler that is enhancing the execution of our strategy and accelerating delivery. There are clear opportunities to innovate the way we extract and use data, enhance our products and experiences and to improve operational efficiencies. This slide highlights just a few of the current use cases, some of which I'll refer to over the coming slides. Australians are property obsessed and on realestate.com.au they can find more homes for sale than anywhere else. Australia's number one address in property was recognised as the sixth most valuable Australian brand in the 2025 Kantar Brands ranking. Realestate.com.au delivered record FY25 audiences and we increased our lead over the nearest competitor with 12 million people visiting the platform on average each month. Over half of these visitors use our site only. This means there are more than 6.4 million potential property seekers that can't be reached on a nearest competitor's platform. The size and deep engagement of our audience underpins the value we deliver to our customers. This has consistently strengthened over time, and in the last eight years, our unique monthly audience has more than doubled. Highlighting this strong consumer engagement, our visits lead over the nearest competitor has also significantly increased. Our consumer strategy is centered on converting our large-scale audience to members, and we are pleased to increase our active membership base by 12%. Our personalized property owner experiences nurture deep engagement and are key to driving quality seller leads. Owner experiences help generate around half of all seller leads. Inspections are a pivotal moment in the property journey, and inspection interactions are a key measure of demand. In FY25, we uplifted the inspection experience for both consumers and customers, resulting in a 253% increase in REA inspection registrations in the second half. In September, we launched our AI-driven next generation listings initiative with the aspiration to set a new benchmark in property experiences globally. Since then, we've delivered some of the most impactful enhancements to the listing experience in many years, and there's still more to come. The initial release focused on improved agent branding and image enhancements, and since launch, we've seen a 112% increase in consumers viewing all the images within a listing. Sharing the property journey with others is often a key part of the experience, and our NextGen initiative has supported a 21% year-on-year increase in consumers sharing buy listings. This is a multi-year program of work which will ultimately shift the listing experience from fixed to dynamic and highly personalised. The benefits are already emerging, but the end state of this initiative will drive even deeper consumer engagement. Our research platform, property.com.au, is the number three Australian property website, with 2.1 million people visiting on average each month. In FY25, we launched multiple new experiences and features, including the first media partnerships on the platform, our first step towards monetisation. Turning to customers, record Premier Plus penetration supported excellent yield growth in our core residential business. Powered by NextGen, Premier Plus is the most comprehensive and highest performing listing product, delivering 20% more inquiries than a Premier listing and selling 12 days faster on average. As part of our commitment to delivering greater choice and flexibility, we introduced new options for Audience Maximizer in our FY26 contract rollout. Starting at just $99, an audience maximizer add-on complements our core product offering and customers have recognized this value with penetration more than doubling in the latest round of contracting. Our highest performance listing solution, Lux, is proving to have broad market appeal and uptake continues to build traction. Demonstrating the significant value offered to customers and their vendors, Lux generates twice the number of views compared to a Premier Plus listing. The value we provide to a vendor is undeniable and the cost of this is a fraction of the total cost of selling a property which typically runs at about 2-3% depending on where you are in the country. This slide highlights the rapid growth in national property prices over the last five years alongside the average cost of advertising on REA relative to the property price. While average national property prices have grown by 8% CAGR since FY20, REA's average take rate has remained relatively steady and over the last two years it is broadly in line with FY20. Our range of subscriptions support customers to grow their business and are designed with choice and flexibility at the core. They range from the cost-effective basic offering through to pro. Pro offers the most advanced solution for customers to elevate their brand, to prospect and generate leads, and to simplify their working day. We recently launched a new short form social media style video called Agent Reels, which is exclusive to Pro customers. Located within an agent's profile, Reels provides customers with an impactful way of introducing themselves to potential sellers. RealCommercial.com.au is Australia's number one place for commercial property. 1.9 million Australians visited the platform on average each month, which is a record three times more people than the nearest competitor. Our top tier commercial product, Elite Plus, achieved record penetration. Supporting customers with more choice, we launched Elite Plus Unlimited in March, which offers unlimited days on site. This aligns to the longer transaction timelines we typically see in commercial campaigns. Turning to financial services. Improved market conditions throughout the year and strong brand activation supported an increase in submission volumes which has flowed through to a pleasing increase in settlements. Continued investment in core broking platforms and product innovation delivered ongoing broker value and supported productivity, which increased 5% across the year. The finance experience on realestate.com.au was enhanced this year with more prominent placement and new features. This uplift supported a 46% increase in realestate.com.au generated broker leads. Turning to our Indian business, the Indian market is the world's fourth largest economy and is backed by strong fundamentals. The housing market is strong and digitisation continues to accelerate. We have streamlined the business, we have a talented team in place to deliver on our app first strategy and our new CEO Praveen Sharma commenced last month. Praveen brings 25 years of experience in technology, digital and advertising including several years at Paytm and Google. On the right you can see the depth of our business in India. Housing.com is well established in the eight tier one cities as well as 20 of the 30 larger Tier 2 cities. Our Indian business delivered strong revenue for the year, primarily driven by the Housing Edge platform. Last month we entered into a binding agreement with NSE listed business Aurum PropTech to divest the PropTiger business in exchange for a 5.5% equity interest in Aurum. This move streamlines our Indian operation and will enable an increased focus in our core Housing.com business. We are firmly committed to our at-first strategy as we know this is the future of the Indian property experience. This focus continues to deliver strong results with Housing.com holding the lead in app downloads with a 56% share. We also remain focused on listing quality and information accuracy. Verified listings are a key component of maintaining and nurturing consumer trust and driving audience. New verified listings on housing.com increased 58% year-on-year. Sustainability is embedded within REA's strategic agenda and we were pleased to make progress toward our goals in FY25. The group's efforts were recognised with an increased MSCI ESG rating of AAA And from a social perspective, we were very pleased with our record high employee engagement score of 89%. The Australian property market remains healthy and we are continuing to invest and innovate. There are clear drivers of our continued growth in FY26 and beyond. Our next-gen listing initiative will continue to drive increasing consumer engagement and value for customers. We've completed another successful round of re-contracting for FY26, supporting record adoption and growth in the penetration of our products. Our financial services business has strong momentum, fueled by investment, integration, and a positive market. The recovery in the developer market is well underway to meet the shortfall in housing construction in recent years. As the market leader in this space, we are well placed to benefit from this recovery. We're excited by the opportunity in our streamlined Indian business where our app first strategy is extending the reach and quality of our audience. And as a business with technology at its core, we're deeply engaged in accelerating our products and experiences with AI. We're doing this while ensuring we have the right structures and talent in place to support speed and enhance delivery. I'd like to share a few comments on the market as we look ahead. Strong underlying fundamentals and expectations of further interest rate cuts this calendar year should continue to support buyer demand and steady national house price growth. These conditions offer a great time to sell and we expect vendors will feel confident in bringing their properties to market. Listings are notoriously hard to predict and we are facing very strong comparables in the first quarter. The softer comparables in the second half, however, should see national listing volumes for the full year broadly in line with the prior year, which would represent a healthy market. In this environment, REA Group is strongly positioned. Our next-gen listings initiative continues to roll out, enhancing the experience of consumers and their engagement with our platform. The value of our premium products will continue to underpin our future growth. As mentioned in our ISX announcement, we're in the very final stages of the appointment of our next CEO, and an announcement is expected soon. As you can understand, I cannot provide any further details today. REA's future is incredibly bright, and it's been an absolute pleasure to lead this business. When I sign off for the last time, I know I'll be leading the group in the hands of a talented and committed executive leadership team and dedicated employees. Over to you, Janelle.

Thanks, Owen, and good morning, everyone. REA has delivered an excellent result, with strong yield growth in most of our major businesses in a stable domestic market. From our core operations, revenue increased 15% to $1.67 billion. Operating expenses increased 12% to $704 million. EBITDA, excluding the results from our associates, was $969 million, up 18%. And the group delivered NPATM operations of $564 million, up 23%. The group results and core operations differ from reported statutory results, with a number of one-off items excluded. On slide 43, we provide a summary of the reconciliation between core and statutory results, with the biggest driver of the variance reflecting the sale of the group's investment in Property Guru in the first half. Turning to our Australian residential business and trends in the market. Our residential business had another strong year, with revenue growth of 16%, driven by double-digit yield growth and modest listings growth for both buy and rent. National buyer listings rounded to an increase of 1%, which reflects a tail of two halves. The first half saw listings up 5%, while listings in the second half declined by 4%, reflecting much tougher comps. Across the full year, Melbourne listings declined by 1%, with Sydney and Brisbane up 2%, and Perth increased 10%. Buy yield continues to be the main driver over residential performance, up 14% for the year. 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, largely audience maximiser and lux, and a 1% positive impact from the consolidation of real tear. This was partly offset by a 1% drag from GeoMix. Rent continues to perform well with year-on-year growth largely consistent with our buy revenues. Rent revenue benefited from double-digit yield growth driven by an 8% price rise and increased steps and 4% growth in listings. The following slide shows both the penetration and mix of paid debt listings in the residential business. While it's very early days for LUX, penetration is tracking in line with our expectations. And we continue to see LUX take up across properties of all values, with properties less than $2 million making up nearly half of LUX listings. Commercial and developer revenue increased 10% to $218 million. Commercial revenue increased by 16%, driven by an average 12% price rise, increased debt penetration, and modestly higher listings. Developer revenues were up 5% on prior year. with the growth from increased project commencements, project profile duration, and a price rise from 1 July, tempered by more modest growth in display revenue. Other revenue was up 8% to $89 million, driven largely by campaign agents, which benefited from increased customer numbers. This growth was partly offset by lower prop track revenue, with yields impacted by a competitive market, and broadly flat media display revenues in a soft advertising market. Financial services revenue increased 10% to $81 million. Volume accelerated throughout the year, with settlements growth increasing from 6% in the first half to 14% in the second half. For the full year, submissions were up 15% and settlements increased by 10%. Revenue was also supported by increased penetration of higher margin white label products. And we saw good growth in recruitment, with the total network up 4% to 1,119 brokers. EBITDA growth for financial services increased an impressive 24%, and the full-year EBITDA margin increased 400 basis points to 29%. This reflected strong revenue growth and the benefits of the investments we've made in the business over the last three years. REA India delivered 25% revenue growth. As the chart on the left-hand side shows, this was largely driven by revenue from adjacent services on Housing Edge. which increased 72% due to increased customer acquisition and usage and a price rise. Additional controls that we introduced progressively in the second half had the anticipated effect of slowing volumes, and Housing Edge revenues declined 15% year-on-year in Q4. We would expect a reduction in volumes and revenues to continue into FY26. Housing.com revenue is up 7%, with customer growth from stronger events and improved monetisation in Tier 2 cities. However, we've also seen increased competition in pricing and packaging over the course of the year, which has impacted Housing.com's yields. PropTiger revenues declined by 17% to $14 million and was broadly EBITDA break-even. As Owen mentioned earlier, we've entered into a binding agreement with Aurum PropTech to divest our PropTiger business, and the transaction is expected to close in Q1 FY26. Slide 47 of the appendix provides a breakdown for FY25 India results by segment. India operating costs increased 13%, largely driven by revenue-related costs attached to housing edge, and to a lesser extent, higher marketing spend. This was partly offset by lower employee commissions and incentives. This delivered a 20% improvement in core India EBITDA loss to $28 million. Looking into FY26, we expect EBITDA losses to widen, although remain below FY23 peak losses, reflecting our expectation for the Q4 decline in housing edge volumes and revenues to continue into FY26. On the next slide is our core operating JAWS. In Australia, JAWS were open 2%, with revenue growth of 14%, and core operating cost growth of 12%. Australia operating cost growth reflected a number of key factors. The largest driver was employee costs impacted by wage inflation, increased headcount driven by investment in strategic initiatives and higher incentives given the strong performance for the year. This was followed by technology costs which increased double digit driven by price rises and greater data usage, higher marketing costs which were elevated in the first half, with our consumer campaign launched during the Paris Olympics, and COGS, which related to the strong growth in Audience Maximiser. Group JAWS were opened by 3%, with revenues growing 15% and OPEX by 12%. Moving to our strategic investments. Total losses from equity-accounted investments for the year was $26 million, in line with the prior year. MOVE's contribution was a loss of $19 million, a $2 million improvement on the prior year. MOVE's revenue was up 1%. Macroeconomic conditions in the US remain challenged, resulting in lower transaction volumes and a 9% decline in leads. However, this has been offset by revenue growth in seller, new home, and rentals. For more information on MOVE, please refer to the News Corp results release. Losses from other associates increased to $7 million from $5 million in the prior period, reflecting the new investment in Athena Home Loans and increased investment in aerialytics. Over the last five years, REA has consistently invested to drive better consumer experiences and deliver more value to customers, with Australian capex increasing from 73 million in FY20 to 126 million in FY25, a compound growth of over 14% per annum. In FY25, this investment was focused on a number of new products and experiences across all lines of business. Some areas of spend included creating immersive consumer experiences through the NextGen listings program and investment in AI with GenAI property highlights and natural language search. Investment in our subscription offerings, enhancing existing products such as Audience Maximizer and Lux, and bringing to market new products such as Amplify in the developer space. And as always, supporting platforms and technology to enable future growth and speed to market. Cap extra revenue was 8% in FY25, and we anticipate a rate within our 7% to 9% target range in FY26. FY26 depreciation and amortization is expected to be in the range of $143 to $152 million. Turning to our cash position, we ended the year with a strong closing cash balance of $429 million. The group delivered operating cash flows of $675 million. This, along with 278 net proceeds from the sale of Property Guru, allowed us to continue to invest in the business organically and through M&A, deliver strong shareholder returns in the form of increased dividends, and to pay down debt with the remaining $209 million of our external debt facilities repaid in December 24. Our balance sheet is incredibly healthy, providing flexibility for future growth ambitions should the right opportunities arise. Finally, on the FY26 outlook, we expect national residential listing volumes to be broadly in line with last year's healthy market. Q1 listings are expected to be lower year-on-year due to very strong comparables. July listings were down 8%, with Sydney decreasing by 5% and Melbourne by 9%. The group continues to target double-digit residential buy-year growth, including a 7% national average Premier Plus price rise. We note that consistent with prior years, geomix can be a positive or negative swing factor to our yield outcome. We're targeting positive operating jaws and anticipate high single-digit group operating cost growth, excluding PropTiger. This will be driven by continued strategic investment and COGS related to strong growth in audience maximiser. EBITDA losses in India will be impacted by lower expected housing edge revenues, and associates' losses are expected to modestly improve compared to the prior year. On a final note, after an excellent FY25, we're excited about 2026. While comps will be more challenging, our strategy is clear, and we will continue to focus on enhancing our consumer experiences, delivering additional value for our customers, and driving yield opportunities across all of our businesses. Our balance sheet provides substantial flexibility, and we will, as always, remain focused on investing prudently across Australian and Indian businesses to drive growth for FY26 and beyond. I'll stop here. Operator, can we please open the lines for questions?

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 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 Burr and Joey. Your line is open. Please go ahead.

Hi. Morning, guys, and I'll keep it professional, but good final result, Owen. um just the first question on on why rea is confident enough to provide double digit yield growth so early um i like last year you guys did 14 and you didn't guide to double digit initially this year i thought the mass was suggesting around about 12 given you got like seven percent price maybe you get fired from other things like subscriptions and other dips so that that confidence in double digits does it suggest um I guess confidence that there's no geomix headwinds or maybe the uptake of your new sub packages are tracking tracking better um can I classify this question as one B which is still a still a pricing question but there's a lot of concern around fy27 in particular and I don't share that view so I just wanted to confirm double digit yield and positive jaws remains the long-term Target and on 27 specifically like if we think about all the bottom up drivers you haven't had a new product drop in a while. AMAX penetration could still lift. And if you look at that 7%, that's a low watermark based on the last three years. So logically you put that all together. There's kind of says there's no reason FY27 can't be another double digit year. Um, and then cheekily, my second question just on India, I have to ask about that given, um, people are wondering how you're going to balance sort of audience growth and profitability. Um, I think you guys were previously targeting 2x audience multiplier, but it's kind of dropped to one now. And so you're obviously guiding for higher India losses next year. Is that all housing edge or is there anything on extra marketing or reinvestment in there? Thank you so much.

Thanks, Eric. A bit to unpack there. Look, in terms of the current year and why we've guided to double digits, It is because we are confident. You know, we've got a 7% price rise that's embedded. We know we've got increased depth penetration. I talked about in the re-contracting, we've over-doubled, and I say over, at the penetration in audience maximiser. Lux is getting great traction and we expect the penetration of Lux to continue to tick up. You know, we've always said that was a slow burn and that is the case. But, you know, Penetration will be higher in 2026 than it was in 2025. And you couple that with everything else that's going on. We can't predict geomix, but as we sit here today, we can't see any reason why it's going to be a significant drag or a significant plus. So we feel very confident in that guidance to double-digit in 2026. And then when you go back to 27, again, our long-term guidance hasn't changed. We've always priced to value. We know we've got more value to deliver to customers and consumers, and therefore we feel we're entitled to price accordingly. Also, we will continue our guidance with positive jaws. It's what we always target. And I touched on some of the things that drive efficiencies within the organisation, such as our Cyber City platform. So we've gone through 70 staff in Cyber City in June. We'll continue to expand our operation there. That is a lower-cost environment for us to do things. But also with our new tech structure, that will increase flow and velocity through the organisation. It means we can do more with the same cost. And so the sort of upward pressure on cost while we're increasing our investment just isn't there with these efficiencies. And, of course, overlay that with AI which is making kind of everything that we do more efficient. So very confident on positive JAWS going forward and also that double-digit guidance. In India, the number one, don't think that's just web. We can't measure app audiences in India. We are very confident that on the things we can measure, such as sessions and downloads, we are the clear number one in app in India. And unfortunately, like we do in Australia, we can't combine app audience and web audience. So... We are deliberately focused and unapologetically focused on app because that will be the future. We are hopeful at some stage in the coming years we'll be able to measure independently app audience of us and the competitors to prove that we're ahead. And in terms of losses, what you're going to see there is primarily the Housing Edge product coming down. We've put some more controls in place to just de-risk people who are using that, make sure we've got KYC in place, those sorts of things. It creates a bit of friction. It'll deliberately bring down the volume, but it still remains a healthy, profitable revenue flow, and so we like it, but we expect that just to come down a bit in volume. Long-term, though, our focus hasn't changed. We want to be number one in India. It's the primary focus, and we feel confident with the renewed focus on housing.com with the sale of PropTiger, plus the great new team we've got in place there. We're very excited. Thanks, Owen.

Thank you. One moment for our next question. Our next question will come from the line of Kane Hannon with Goldman. Your line is open. Please go ahead.

Morning, guys. Maybe just on yield again as well. Look, I appreciate you obviously had that double-digit yield growth out there in reiterating it to Eric just then. But I mean, if I think about FI27, you know, with a new competitor making a lot of noise, the ACCC investigation and sort of where that gets to a new CEO running the business. I mean, if you're trying to run this business for the long term, would it make sense to do, you know, a significant price increase into FI27? And is that obviously reflecting the product drops that might be coming in the year ahead? And then just secondly... Just audience momentum at property.com. I mean, that's making some pretty serious inroads on the number two. Just talk about how the strategy for that portal is evolving, as well as what optionality it is giving you as competition potentially steps up over the next 12 months.

Cheers. Thanks, Cain. Look, I'll reiterate around, you know, beyond FY26 pricing, we always price to value. And you can see that chart that we put in in terms of the percentage of the cost to advertise on realestate.com.au as a percentage of the house price, it hasn't moved. I can tell you privately we also look at a percentage of our take of the marketing schedule and that's been pretty consistent over recent years as well, which shows that marketing schedules are increasing. We will continue to price to value and we have plans to continually increase the value we give to customers and the value we give to consumers. We've got some great plans in the pipeline. I'm obviously not going to tell you what they are for competitive reasons. But, you know, that price to value is not going to change regardless of what the competition does.

And so... Just a reminder, we talk about yield growth, not price. So, again, it can be made up of multiple things. If you think about Lux, we've talked about Lux at substantially higher price points, but it's super early days. You can see it's just a very thin line on that penetration chart. We see that will give us long-term runway for yield growth into multiple years.

And if you think about early in 26 or the 27 year, we're going to be sitting in a year, pick the number of cuts, is it 50 basis points, 75, 100 basis points? In a lower rate environment, it just creates much more fertile ground as well. So we stick by that double-digit yield guidance and feel very confident about it.

Awesome. And maybe if you want to touch on the audience.

Sorry, I forgot your second question, Kane. We're very, very pleased with how that's going. I mean, we hit, we quoted, I think, 2.1. That's the average. We actually got to 2.7 at one stage. And we are making great ground on the number two with that site. So at the moment, you know, it has been a research site. We have been using it as a test site for certain things. Again, we have plans going forward where how we might monetize that and differentiate the experience. It gives us great optionality, you know, to have an audience like that. A reminder that the stats are quite compelling in the number of actual buyers, people who are actively buying who go to that site. So it's a high intent audience on property.com.au because it's a research site. So it creates great optionality and that increase in audiences with very limited marketing. You know, if we start to market that brand, you know, it will take off because it's such a great site. So I'll leave it there, but it does create exciting optionality for us and there are plans in place. Awesome. Thanks, Jeff.

Thank you. One moment for our next question. Our next question will come from the line of Angel Rakowski with E&P. Your line is open. Please go ahead.

Hi Owen, hi Janelle. My first question is around the OPEX guidance into FY26. I wonder if you can talk about whether you're assuming any sort of change in the competitive environment in 26 in setting that OPEX guidance. I mean, I know there's a lot of conjecture in the market as to what domain does, but do you assume any sort of step up in domain marketing spend from current levels that you've had to factor in? And is there a risk that you may need to spend more once the cost acquisition completes? And as part of that answer, I wonder if you're able to quantify the extent to which the higher AMAX penetration is driving higher costs through the higher COGS. If you can give us sort of a specific number, I think that would be helpful. and I might just wait for the answer to that one and I've got a second one as well.

Thanks, Encho. Look, we've known that domain change and ownership was coming. We've known for a long time. I think you've heard me say we presented to our board in the middle of last year around COSAR coming to the Australian market. We know their playbook. We know what they've done in the US. We know what they've done in the UK. You can assume that our cost guidance absolutely has factored in their entry to the market and everything we think they might do including a significant increase in marketing. So that's already factored in to the cost guidance that we've given and the mix of that cost guidance has been planned accordingly. So we feel confident we've got the right cost level and we've got the right mix to respond to what we anticipate that they're going to do. In terms of the impact of audience maximiser uplift on cost, that is also a factor, particularly in Australia, in that cost growth. If you strip out COGS, it does reduce that number significantly. But so COGS is a great cost. We'll take as much of that as we can. I don't know if you want to add anything specifically to that.

When we talk about the cost guidance, we've got it's a high single digit for the group. It's high single digit for Australia and a little bit lower, mid to high for India. If you back out that impact of COGS, probably more around the mid to high for Australia. So it is adding a few percent to the cost growth. But as Alan said, we're pretty pleased about that sort of cost growth because it's a healthy margin product.

OK, great. And so my second question, I mean, this has obviously been... This has been a topic of discussion with a lot of people. It's the ACCC investigation that's been in the press and you've obviously had to issue a release on it. Can you give us any colour on what the scope is of that ACCC investigation? I'm asking because there's just so much conjecture around it. So I think additional colour would be useful and how you think about the expected timing to resolution. And I mean, you've already spoken about the value which you deliver and it's not just price increases. But I mean, is there a risk that you need to be more mindful in the future not to increase prices particularly aggressively?

This is not about prices. I mean, you know, putting your prices up is not illegal in Australia. And I remind everyone that all customers have got choice. This is not a compulsory purchase. You can purchase any level of product, any level of subscription. And, you know, that's the fact. I'll reiterate my comments that, you know, with this review underway, we remain confident on our guidance to double digit. We price to value and we're going to continue to do that. In terms of the details of the matter, look, I can't talk to the details. I don't think we're going to hear anything for a very long time. They don't have a set timeframe on which to respond. We've given them everything they've asked for. So we'll just sit back and just wait for them to run their process now.

Okay, great. Thanks, Owen, and all the best for life after REA. Thanks, Encho.

I think I might see you at some stage. Maybe.

Thank you. And one moment for our next question. Our next question will come from the line of Roger Samuel with Jefferies. Your line is open. Please go ahead.

Hi, everyone. My first question is, on your FR26 guidance for the volume of listings, how do you frame your listings outlook? I mean, have you considered... just in terms of the rate cuts and how many rate cuts are you expecting?

In terms of that guidance, as I've said, listings are very, very hard to predict. And so I can almost guarantee that I'll be wrong on what we've said. So when we think about listings, we think about a few things. One is obviously rates. Look, our view is probably not as bullish on rate cuts as the rest of the market is. We think it's probably two, and anything north of that will be a bonus. We also look at things like demand. We have the most comprehensive view of demand in the country, both in terms of views of listings, sharing of listings, inquiries, interactions. Demand is very, very strong at the moment. So when you've got a high demand market, you've got rising prices, and not crazy rises, but healthy house prices. it's very fertile ground for housing turnover. And so provided demand doesn't become too hot and the stock drops, that can be an inhibitor of listings. It's a very, very healthy environment. Now we've just come out of a very healthy year, so we think it will probably be even slightly more healthy in 26 because it's a lower interest rate environment, but our best guidance is for flat. That's how we've come up with that flat guidance.

Okay. And also my second question is just on the chart on slide 19, which is very helpful, the average cost to advertise on REA relative to the sale price is around 0.2%. Any sense of how much consumers are spending on the total marketing spend relative to the sale price?

Yeah, look, it varies. across the country, you took an average, we talk about sort of 0.8 to 1%, a little bit lower than that. In some places it's lower. So even at, pick a number, even at sort of 60, 75 basis points, as a percentage of the marketing schedule, that means we're pretty low. So on either of those measures, people talk about the runway in our business, that 20 basis points, And sort of the 60, 75, 80 basis points on the marketing schedule means we've got a long runway. Got it. Thank you. And particularly given we provide most of the value when you're selling a house.

Thank you. One moment as we move on to our next question. Our next question comes from the line of Suraj Ahmed with Citi. Your line is open. Please go ahead.

Morning, Owen. Morning, Jenna. Just the first one, just in terms of next year's yield expectations, Owen, can you just talk to the recontracting? It sounds like based on the AMAX penetration, most agents have sort of gone with taking the AMAX and the LUX tier. Is that what's happened? So if that's the case, I mean, could next year's yield growth be similar to this year, 14%? I know there's a 3% headwind from the price increase, but do you have more AMAX penetration, more LUX penetration?

We're guided to double digit. It's a lower price than the prior year, but we're confident that the other impacts to yield will be good. As I said, AMAX penetration is more than doubled. Now, a lot of customers have taken that lower entry AMAX level at the $99 level, but again, it's still good penetration. It shows that customers do value the product. Lux penetration, as I said, will be slow burn, but we expect that to slowly uptick across the course of the year. Now, whether we do any specials in the market at any point in the year, that's to be seen. And then across all levels, we're seeing the small upticks in total depth as well. So it all adds up to that confidence in that double-digit yield. I won't go give any more guidance than that? Because then there's other factors that we just can't predict like geomix.

Got it. Second one, just thinking about 27 and beyond, right? I mean, two parts to this. First thing, if you look at that sort of depth tiers, it's getting a bit busy, right? Five of them right now. Should we be thinking that sort of compresses? Maybe Lux becomes an actual tier, not an add-on. And do you reckon this next-gen listing experience starts getting monetized in a different way from 27 or is that too early? Thanks.

Look, in terms of the tiers, you're right, Lux is an add-on. It's not a tier. I'm not going to speculate on what we might do there. We're always looking to simplify our products for customers. So if there's a view amongst the customers that simplification will be well-received, then that's always an option for us. In terms of the next-gen listings... The real monetization there comes through the deeper engagement and the more leads. So what we're finding with NextGen, as I said, consumers are engaging with our listings more and more, and we are getting better attribution of our leads through to the customers, which obviously underpins value, which obviously underpins revenue growth. That's the way to think about NextGen. Thank you.

Thank you, and one moment for our next question. Our next question will come from the line of Nick Basil with CLSA. Your line is open. Please go ahead.

Morning, team. Thanks. Just two questions from me. The first one on the AI and the next-gen listings and I guess how that might relate to your M&A strategy, like how you're thinking about investing in AI, whether it be on your own balance sheet and free cash flow versus acquiring other businesses, I think. you were active recently. And then the second one is just on the Lux listing product. You talked about the performance of the ad versus your other tiers. I think you made mention of some comments around the penetration in people with homes of less than 2 million. So just interested in, I guess, how quickly that can scale to the rest of the customers on on plans or those going to market. Thanks.

On AI and M&A, we have made a couple of investments in the last 12 months around this sort of capability with Immersive and JITI. And we'll continue to look at whether we buy capability into the company or we develop it organically. AI is being used in every part of the organisation. I mean, literally every part of the organization, and particularly on the product side. So it is an enabler on so many fronts. And so whether we do it through M&A or not, it depends on the use case. On Lux, the stat I mentioned that you get double the views on Lux than you do on a Premier listing. So it's very compelling. Now, it is an expensive product. It's about 90% more expensive than a Premier product. but I think the performance and the proof points we've now got will back up that penetration increase. And you're right, the great thing about this, because of the way it's priced, obviously by the pricing zones, is that it stacks up at almost any price point and it is being bought right across the spectrum. This is not a high-end, expensive luxury product. It's for every type of list. If you want your property to stand out in your suburb, you buy Luxe. because you are going to get double those views. So it's becoming a more compelling sell in the living room for an agent, and that's why we're pretty confident that penetration will tick up. But it will be a slow burn. It's expensive, and there can be some pushback on that, but at the moment, those who are using it are really pleased with the performance. Okay, thanks very much.

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

Good morning. Thank you for the opportunity. Just two questions from me. First one's a follow-up from Siraj's question. Just want to run some logic by you on yield. I see that chart on slide 18, which shows that it looks like AMAC's contracts might be, say, two and a half to three times higher than FY25. So if If I look at your buy yield in FY25 at 14%, that obviously includes a small amount of geomix, say 1%. So logically, yield growth was, say, 5 percentage points more than the pure price increase. So is it fair to assume that with this significant increase in AMAX, plus, say, a bit of LUX, DEPS might make a bigger contribution to yield growth in FY26 than FY25? Second question is just around commercial and developer. Just can you clarify what the price increases were for FY26 and just how should we be thinking about developer in 26? Obviously, you mentioned, Owen, that the recovery is well underway there. We've hit an inflection point in project commencement. How might that flow through to developer revenues over the next year? Thanks.

I'll take a year one. So when we talk about the 14% yield, you're right, there was the 1% drag for geomix, but there was also a 1% uplift from the combination of real care. So 14% is the right growth rate when you take out those one-offs, and that is the 10% plus the increase in depth. Now, as you can see on the penetration chart, we will see less benefit from just general depth uptake, but we will see more benefit from some of those add-on products. Again, I don't want to get drawn into overall size, but we're confident around that double-digit yield, noting the fact that there has been that strong take-up in audience maximiser. As Owen said, though, some of it is at that lower price point. So whilst it's been good penetration, the overall yield impact, whilst positive, might not be quite as high as the overall penetration impact. But still, we're very confident in that double-digit yield target. And developer. Commercial. Commercial and developer. So developer hasn't had a price rise for this year. Commercial was put through 11%... Sorry, 7% increase in price for commercial for this FY26. And, you know, we are confident in the runway we've got around developer with the benefit we've got, the flow-through of the price rise from developer continuing to flow through. That occurs throughout the year as contracts get... rolled over, but also we've now seen three quarters of overall project commencements in developer being positive. So I think the momentum is starting to turn, and we have seen duration continue to hold in this environment. So we are optimistic about the developer runway for growth into 26.

Great. Thank you.

Thank you, and one moment for our next question. And our last question is going to come from the line of Frazier McLeish with MST McCree. Your line is open. Please go ahead.

Great, thank you. Yeah, just a basic one on the, you've got pretty reasonable cash balance now that's going to continue to grow. The payouts still, you know, fairway below earnings. You know, what's your sort of strategy for that cash growing going forward? Should we expect to see an increase in the payout ratio? Thanks.

Look, we have increased our payout ratio this year, reflecting that cash balance. And we've always said in the absence of any investment opportunities, then we will look to pass that out to shareholders over time. So, you know, on balance, you know, in the absence of some M&A, then you can expect that ratio to be higher than it has been historically. Well, thanks, everyone. Appreciate it.

Thank you. And I would now like to hand the conference back over to Owen Wilson for closing remarks.

Well, thanks, everyone, for joining us today. Great set of results from our perspective. Look forward to seeing many of you in the coming days. Thank you.

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