Mighty Ape Challenges Temper Kogan.com’s Margin Expansion Ambitions

Strong Growth and Margin Expansion

Kogan.com Ltd has delivered a solid financial performance for the full year ended June 30, 2025, marked by a 15.1% increase in gross sales to $930.9 million and a 6.2% rise in revenue to $488.1 million. The company’s gross profit climbed 12.7% to $189.9 million, with gross margins expanding by 2.3 percentage points to 38.9%. These results reflect Kogan.com’s continued ability to attract and retain a growing customer base while improving operational efficiency.

The adjusted EBITDA reached $36.8 million, representing a 7.5% margin, a notable achievement given the $46.3 million non-cash goodwill impairment related to the Mighty Ape acquisition. Despite this accounting charge, Kogan.com remains cash positive with $42.1 million on hand and no debt, underscoring a strong balance sheet position.

Customer Base and Platform Sales Drive Momentum

The company’s active customer base expanded impressively by 35.1% to over 3.5 million, with Kogan.com itself growing 48.3% to 2.8 million active customers. This growth was fueled by targeted investments in high-return marketing channels, which deepened engagement with its tech-savvy, value-conscious audience.

Platform-based sales revenue surged 24.4% to $111.9 million, benefiting from a capital-light, high-margin model that Kogan.com is scaling aggressively. The rollout of this model to Mighty Ape, including the launch of the Mighty Ape Marketplace and enhancements to its PRIMATE loyalty program, signals new revenue streams with promising long-term potential.

Mighty Ape Reset and Recovery

Mighty Ape faced headwinds during FY25, including the impact of a platform migration and challenging market conditions in New Zealand. These factors contributed to a goodwill write-down and a decline in sales in the most recent trading update. However, the company reports that marketing efficiency has returned to pre-migration levels, and operational improvements are underway to optimise product range and inventory mix. Management remains confident in Mighty Ape’s recovery trajectory in FY26.

Strategic Outlook and Profitability Ambitions

CEO Ruslan Kogan emphasised the unique business model that combines low-margin product sales with high-margin platform-based revenues. The company aspires to lift overall adjusted EBITDA margins to between 8% and 12% in the medium term, driven by platform sales margins of 50-55% and improved product division profitability. Long-term ambitions include platform margins exceeding 65% and product margins reaching breakeven, potentially pushing group EBITDA margins above 20%.

The final dividend of 7.0 cents per share, partially franked at 68.6%, reflects the company’s commitment to returning value to shareholders despite the goodwill impairment limiting franking credits.