SEEK Faces Market Uncertainty While Betting on Operating Leverage and Expansion
SEEK Limited reported modest revenue growth in FY2025 driven by double-digit yield increases and strategic product innovation, alongside a 31% rise in fully franked dividends. The company’s FY2026 guidance signals confidence despite ongoing market uncertainties.
- 1% net revenue growth driven by double-digit yield increases
- Operating costs reduced by 2%, delivering operating leverage
- Adjusted profit down 13% due to higher amortisation and lower EBITDA
- 31% increase in fully franked dividend to 46 cents per share
- Full acquisition of Sidekicker expands SEEK into contingent labour market
Strategic Gains Amid Market Headwinds
SEEK Limited’s FY2025 results reveal a company navigating a challenging labour market with a clear strategic focus on growth and efficiency. Despite a slight 1% increase in net revenue to $1.09 billion, the standout driver was double-digit yield growth, reflecting successful product innovation and upgraded advertising tiers. This yield growth helped offset weaker job ad volumes and the early impacts of SEEK’s freemium model rollout in Asia.
Operating Leverage and Cost Discipline
SEEK demonstrated operating leverage by reducing total expenditure by 2%, even as operating expenses edged up 3%. Capital expenditure was cut sharply by 19%, reflecting the completion of the company’s unification project last year. This disciplined cost management underpinned a 7% increase in EBITDA less capital expenditure, although adjusted profit fell 13% to $155 million due to higher amortisation and lower EBITDA.
Dividend and Growth Fund Contributions
Investors were rewarded with a 31% increase in the fully franked dividend, now at 46 cents per share, reflecting strong free cash flow growth of 41%. Reported profit rose to $238 million, bolstered by a 7% uplift in the SEEK Growth Fund portfolio, which includes strategic HR SaaS assets. This fund’s performance highlights SEEK’s broader investment strategy beyond its core job advertising business.
Expansion into Contingent Labour Market
In a notable strategic move, SEEK completed the full acquisition of Sidekicker, gaining full control of the contingent labour platform. This positions SEEK to tap into the $1.1 billion contingent labour market in Australia and New Zealand, leveraging its brand and distribution channels to accelerate growth in this expanding segment.
Outlook and Market Conditions
Looking ahead, SEEK projects net revenue growth of 5% to 15% and EBITDA growth of up to 20% in FY2026, with adjusted profit expected to rise by up to 32%. CEO Ian Narev acknowledged ongoing economic uncertainties across Asia-Pacific but expressed confidence in SEEK’s strategic pillars, placement share growth, yield enhancement, and operating leverage. The company is shifting its reporting focus to these controllable metrics, reflecting a pragmatic approach amid volatile market volumes.
Bottom Line?
SEEK’s disciplined execution and strategic expansion set the stage for growth, but market uncertainties will test its resilience in FY2026.
Questions in the middle?
- How will SEEK’s freemium model impact paid ad volumes and revenue long term?
- What synergies and growth can SEEK unlock through its full ownership of Sidekicker?
- Can SEEK sustain double-digit yield growth amid ongoing macroeconomic headwinds?
