The REA Group Ltd (ASX: REA) share price has jumped 8.6% higher this morning after the company released its FY25 results.
At the time of writing, the ASX 200 share is changing hands at $258.37 a piece. The recent uptick means REA's share price is now 36.52% higher for the year.
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REA's FY25 Results
- Revenue up 15% to $1.673 billion
- Operating expenses up 12% to $704 million
- EBITDA up 18% to $969 million
- Net profit after tax up 23% to $564 million
- Full-year dividends per share up 31% to $2.48 fully franked
What happened
For FY25, to 30 June, REA Group financial highlights from core operations include revenue growth of 15% to $1,673 million, of which $1.544 billion (up 14%) was REA Australia revenue and a further $129 million (up 25%) was REA India revenue.
The real estate advertising business also reported a robust 23% increase in net profit after tax (NPAT) of $564 million and an increase in EBITDA (excluding associates) of 18% to $969 million.
The Board has determined to pay a final dividend of $1.38 per share fully franked, an increase of 35% from FY24, reflecting strong cash generation in FY25 and sale proceeds from PropertyGuru.
The dividends are eligible to shareholders on the register by 29 August, and payable on 12 September.
Australia and Group operating costs increased by 12%. Excluding the impact of the Realtair acquisition, Group operating costs were up 11% and Australian expenses increased 10%.
Australian cost growth was predominantly driven by higher employee costs, reflecting strategic investment and higher performance-related incentives, technology costs due to price rises and greater data usage, consumer marketing, and COGS from Audience Maximiser's strong performance.
India operating costs increased by 13%, primarily driven by revenue-related costs attached to Housing Edge's Pay on Credit offering and higher marketing spend, partly offset by lower performance-related incentives.
Management commentary on the results
REA's Group Chief Executive Officer, Owen Wilson, said increased property buyer activity, combined with the first interest rate cuts in four years, has accelerated the number of enquiries on its site to a three-year high over the past quarter.
REA notes that property market conditions remain healthy, with strong employment and expectations of further interest rate cuts likely to continue to support buyer demand and vendor confidence.
The company expects national residential Buy listing volumes to be broadly in line with last year's healthy market. Q1 listings are expected to be lower due to very strong comparables, with July listing volumes down 8% year-on-year, Sydney decreasing by 5%, and Melbourne by 9%.
The Group continues to target double-digit residential Buy yield growth, including a 7% national average Premiere+ price rise, reflecting the additional value delivered to customers.
High single-digit group core operating cost growth is anticipated (excluding PropTiger), driven primarily by continued strategic investment and COGS attached to strong expected growth in Audience Maximiser.
The announcement also notes that EBITDA losses in India will be impacted by lower expected Housing Edge revenues. Contributions from combined associates' losses are expected to improve modestly compared to the prior year.
"Australian property fundamentals remain strong, and expectations of further interest rate cuts are supporting buyer demand and steady house price growth. These are favourable conditions for sellers to bring their properties to market. Our increasing investment in talent, technology, and improved consumer experiences, positions REA Group for continued growth in FY26," Wilson said.
