REA Group Ltd (ASX: REA) shares are on the move on Friday morning.
At the time of writing, the ASX 200 stock is down 4% to $239.50.
This follows the release of the property listings company's third quarter update before the market open.
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ASX 200 stock down on quarterly update
For the three months ended 31 March, REA Group reported a 12% increase in revenue to $374 million. This was driven by double-digit revenue growth across Residential, Commercial, Financial Services and India.
In respect to Residential revenue, it was up 12% for the quarter. Whilst national listings were flat, Buy revenue growth was driven by a 15% yield increase, partially offset by a 3% negative impact from revenue deferral.
This means that for the first nine months of FY 2025, revenue is now up 18% year on year to $1,247 million. This is a slower growth rate to what was achieved in the first half, which could explain some of the selling today.
A key driver of growth in FY 2025 has been REA Group's domination of its market. Its flagship site realestate.com.au reached record audiences during the quarter, with its lead over the nearest competitor extending to 5.5 million people.
Also growing at a strong rate was its EBITDA (excluding associates), which increased by 12% to $199 million during the third quarter. This brings its ETBIDA growth for the nine months to $734 million, which is an increase of 19% over the prior corresponding period.
The ASX 200 stock's free cash came in 19% higher at $132 million for the three months and 21% to $389 million for the nine months.
Commenting on the quarter, REA Group CEO, Owen Wilson, commented:
REA delivered a strong third quarter result underpinned by double-digit yield growth as we continued to drive increased value for customers across our premium products. The first interest rate cut in 4 years, combined with expectations of more to come, spurred buyer demand and supported house price growth across the country. These conditions encouraged sellers to bring properties to market with listings matching the very strong levels of this time last year.
Outlook
The ASX 200 stock continues to target positive operating jaws in FY 2025. Low double-digit group core operating cost growth is anticipated, with the year on year growth in the fourth quarter lower due to the phasing of marketing costs and lower anticipated costs in India.
Mr Wilson commented:
The Australian property market continues to be supported by strength in the underlying fundamentals. Expectations of further rate cuts should support buyer demand, and this demand, coupled with steady house prices should underpin seller confidence. Our personalisation strategy is driving our record audience and as its rollout continues it will further underpin deep consumer engagement and the value we deliver to our customers and their vendors.
