Seek Ltd (ASX: SEK) shares were sent tumbling on Wednesday, falling 14% to $13.77 after the jobs platform released its FY26 results. That adds to an already painful 43% decline over 12 months, while the S&P/ASX 200 Index (ASX: XJO) has gained around 4%.
But here's the interesting part: the results weren't exactly disastrous.
So, has the market overreacted?
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Healthy headline numbers
Seek highlighted a rather impressive milestone in its results release: the tech company delivered its sixth consecutive year of double-digit yield growth across Asia-Pacific.
That's no small achievement. Job ad volumes were softer, particularly in Australia and some Asian markets, but stronger yields and continued technology investment helped offset that weakness.
And the headline operating numbers looked pretty healthy. Sales revenue climbed 17% to $1.284 billion, while net revenue increased 10% to $1.199 billion. EBITDA rose 15% to $530 million and adjusted profit jumped 28% to $199 million.
Seek shares also declared a final dividend of 25 cents per share, taking its FY26 payout to a record 52 cents, up 13%. Not exactly a catastrophe.
So why did the tech stock get smashed?
Here's where things get a little messy. Seek reported a $307 million loss from continuing operations and a $371 million loss across total operations.
That sounds ugly. But dig underneath the bonnet and the picture changes considerably. The result included a $201 million net loss from the Seek Growth Fund and $377 million of significant items.
Much of those significant items related to a previously announced $356 million impairment charge against its Zhaopin investment. In other words, investors in Seek shares aren't necessarily looking at a business suddenly haemorrhaging cash.
The bigger issue may be what comes next.
FY27 is where investors got nervous
While Seek delivered solid FY26 growth, its net revenue, EBITDA and adjusted profit all landed at the lower end of its previous guidance ranges.
Then came FY27 guidance. Seek is targeting revenue of $1.21 billion to $1.28 billion and EBITDA of $530 million to $580 million. That's hardly screaming acceleration.
There's also another elephant in the room: artificial intelligence. AI could reshape how job seekers search for employment and how employers find candidates, potentially disrupting traditional online employment platforms.
That uncertainty could be contributing to the market's unusually harsh reaction, with investors rushing to sell their Seek shares.
Has the market overreacted?
Possibly. Seek still has a strong market position, rising yields, solid profitability and a growing dividend. But investors clearly wanted more.
After a 43% fall over the past year, another 14% plunge may look excessive given the underlying operating performance.
However, the market may be pricing in something beyond FY26: slower growth, a softer FY27 outlook and the potential long-term disruption from AI.
