SEEK Ltd reported a 4% decline in revenue for its Australia and New Zealand (ANZ) segment to A$416 million, reflecting a 14% drop in job advertisement volumes. This was partially offset by a 10% increase in average yield, driven by variable pricing and greater adoption of depth products.
In Australia, job ad volumes fell 12%, though the rate of decline slowed compared to the prior corresponding period. New Zealand saw a steeper decline, with volumes down 26%.
The news saw Seek shares fall 0.7% by midday to $24.06.
"SEEK delivered a mixed set of results, with revenue falling 4% to A$536.2 million as job ad volumes declined across its key markets," eToro market analyst Farhan Badami said.
"Despite the softer job market, the company managed to offset weaker market volumes through smart pricing strategies helping them achieve double-digit yield growth. The bright spot was free cash flow which surged 93% to A$81.8 million, allowing SEEK to boost its interim dividend by 26%.
“The company's efficiency drive is bearing fruit following the completion of its 'Platform Unification' project bringing down total expenses by 6%.
"SEEK has maintained its dominant position in Australia and New Zealand while regaining market leadership in key Asian markets like Singapore and the Philippines.
"A notable bright spot was the performance of its 'Growth Fund' which saw a 5% increase in valuation and is set to generate around A$79 million from a partial sale of its Employment Hero stake.
“The outlook suggests SEEK isn't out of the woods yet. While Australian volumes are stabilising and some Asian markets could see growth, New Zealand and Hong Kong remain challenging. Revenue guidance of A$1.06-1.10 billion was maintained but profit forecasts were tweaked lower.
“SEEK's stock is up just over 7% this year and investors shouldn't overlook its potential. With a stronger market position and a more efficient cost structure, SEEK is in a good spot to benefit when hiring activity rebounds.
"However, a meaningful recovery will likely depend on improvements in the job market and the company's strategic priorities of placements, yield and operating leverage will be crucial in navigating these market conditions."
Premium product adoption grows
Revenue in SEEK’s Asia segment declined by 3% to A$120 million due to a 14% drop in paid ad volumes. Hong Kong experienced the largest decline in volumes.
However, average yield across Asia increased by 19%, supported by variable pricing and higher adoption of premium ad products enabled by SEEK’s Platform Unification.
The company's new freemium model, now operational in the Philippines, Thailand and Indonesia, delivered stronger-than-expected results, with increased ad scale and revenue impact.
Platform unification boosts efficiency
Total (EPA:TTEF) expenditure declined by 6%, driven by stable operating expenses and a 29% reduction in capital expenditure following the completion of SEEK’s Platform Unification in FY2024. The platform upgrade enabled faster product releases across the Asia-Pacific region, supporting growth in placements and yield.
Among the latest product innovations are a mid-tier ad product to help hirers optimise budgets, new ad enhancements for better candidate targeting and seamless free-to-paid ad upgrades. Initiatives aimed at delivering more relevant job recommendations also yielded positive results.
Strong HR SaaS performance
SEEK’s investment fund saw a 5% valuation increase during the period, bringing total growth to 30% since its inception. The uplift was driven by transaction activity in the human resources software-as-a-service (HR SaaS) sector, including the planned partial sell-down of Employment Hero and foreign exchange gains.
HR SaaS assets continued to perform strongly, delivering look-through revenue growth of 23%, supporting overall portfolio revenue growth of 9% despite broader economic challenges.
Dividend and FY2025 guidance
SEEK’s board declared an interim dividend of 24 cents per share, fully franked, representing 100% of cash profit less capital expenditure. This marks a 26% increase from the prior period. The dividend will have a record date of March 19, 2025, and will be paid on April 2, 2025.
For FY2025, SEEK expects revenue of A$1.06 billion to A$1.10 billion, total expenditure of A$750 million to A$770 million and earnings before interest, taxes, depreciation and amortisation (EBITDA) between A$440 million and A$470 million. Adjusted profit is forecast to range from A$135 million to A$160 million.
Further details on SEEK’s outlook and key assumptions are available in the company’s H1 FY2025 results presentation lodged with the ASX on February 18, 2025.