How Is REA Group’s AI Push Fueling Its 15% Revenue Surge in FY25?

Robust Financial Performance

REA Group Ltd (ASX, REA) delivered an impressive FY25 financial performance, reporting a 15% increase in revenue to $1.673 billion and a 23% rise in net profit after tax to $564 million. This growth underscores the company’s strong foothold in Australia’s property advertising market and its expanding footprint in financial services and international operations.

The company’s EBITDA margin remained healthy at 58%, reflecting operational efficiency despite increased investments in technology and marketing. REA’s strong cash position, with a closing balance of $429 million and full repayment of debt in December 2024, provides a solid foundation for continued strategic investment.

Australian Market Leadership and Innovation

REA’s core Australian business showed resilience and growth, with residential buy listings holding steady and a record penetration of its premium advertising product, Premiere+. The company reported a 14% increase in Australian revenue, driven by a 10% price rise in Premiere+ listings and increased depth penetration across all states.

Consumer engagement soared with 6.4 million exclusive monthly visitors to realestate.com.au, four times the visits of its nearest competitor. The rollout of Next Gen Listings and AI-powered features such as GenAI property highlights and natural language search are enhancing user experience and driving higher quality leads for customers.

Financial Services and Strategic Growth Areas

REA’s financial services arm, including Mortgage Choice and Athena Home Loans, contributed significantly to revenue growth with a 10% increase in settlements and a 24% rise in EBITDA. The integration of Mortgage Choice Freedom and white-label expansion are key drivers of this momentum.

In commercial and developer segments, revenue grew by 10%, supported by CampaignAgent’s strong customer acquisition and product innovation. The company’s focus on customer platforms like Ignite and Pro subscriptions is enhancing agent productivity and market reach.

India Operations and Strategic Refocus

REA India posted a 25% revenue increase to $129 million, driven by growth in Housing.com and its Housing Edge adjacency products. However, EBITDA losses narrowed to $28 million amid increased marketing and operational costs. The planned divestment of PropTiger, expected to complete in Q1 FY26, will allow REA to concentrate on scaling Housing.com with an app-first strategy in India’s rapidly digitising property market.

Despite competitive pressures, REA India continues to innovate with app enhancements and AI features, maintaining strong audience growth and market share in Tier 1 and Tier 2 cities.

Outlook and Strategic Priorities

Looking ahead to FY26, REA expects residential buy listings to remain broadly stable, with a targeted 7% price increase for Premiere+ listings. The company anticipates high single-digit operating cost growth, driven by ongoing strategic investments and increased costs associated with Audience Maximiser.

REA remains committed to positive operating jaws and continued innovation in AI and marketplace technology. The divestment of PropTiger and focus on core Australian and Indian markets position the group for sustainable growth amid evolving market conditions.