Gumtree Reports 6% Revenue Drop but Doubles EBITDA in Classifieds

• Sale of Capital Markets business completed for $6.8 million
• Group revenue declined 6% to $74.4 million amid soft advertising market
• EBITDA from continuing Classifieds operations rose to $6.0 million
• Significant $13.6 million loss recorded on Capital Markets divestment
• Strategic focus on Classifieds with new transactional products and partnerships

A Strategic Shift in Focus

Gumtree Australia Markets Limited has marked a pivotal moment in its corporate journey by divesting its Capital Markets division as of 30 June 2025. This move aligns with the company’s renewed focus on its Classifieds segment, which includes the well-established brands Gumtree, Carsguide, and Autotrader. Together, these platforms form one of Australia’s largest online marketplace ecosystems, reaching 1 in 5 Australians monthly.

The sale of the Capital Markets business, which encompassed investor communities and digital investor relations services, was completed for an enterprise value of $6.8 million on a cash and debt-free basis. While this divestment resulted in a substantial loss of $13.6 million, it has allowed Gumtree to streamline operations and concentrate resources on its core classifieds operations.

Financial Performance Amid Market Challenges

Despite a 6% decline in total revenues to $74.4 million, primarily due to a softening advertising market, Gumtree’s EBITDA from continuing operations rose significantly to $6.0 million, up from $3.1 million the previous year. The Classifieds segment, led by Gumtree itself, delivered an EBITDA of $9.3 million, reflecting strong operational leverage and growth in key verticals such as Motors, Pets, Jobs, and Real Estate.

The company also made meaningful progress in deleveraging, repaying $5.2 million of its loan facility with the Commonwealth Bank of Australia and reducing debt further through the Capital Markets divestiture. Cash receipts from customers remained robust at over $93 million, underscoring the resilience of Gumtree’s marketplace model.

Innovation and Partnerships Drive Growth

Gumtree’s strategic roadmap is gaining momentum with the rollout of new transactional offerings, including the launch of Gumtree Pay, which enhances the platform’s ability to facilitate secure and seamless transactions. The company plans to introduce additional features such as shipping integrations and buyer protection services, aiming to deepen user engagement and monetisation.

Partnerships are also central to Gumtree’s growth strategy. The November 2024 alliance with the Homely Group dramatically expanded real estate listings on Gumtree from around 11,000 to approximately 200,000 nationwide. Furthermore, a memorandum of understanding signed in May 2025 with New Zealand’s NZME signals Gumtree’s ambition to enter and compete in the lucrative automotive marketplace across the Tasman.

Governance and Outlook

Governance changes during the year included the appointment of independent director John O’Loghlen, bringing fresh strategic and financial expertise to the board, while two directors resigned. The company’s leadership remains focused on executing its transformation and capitalising on identified revenue and cost-saving opportunities.

Looking ahead, management expects FY26 to broadly mirror FY25’s performance excluding one-off costs, with improved profitability anticipated. The company’s commitment to innovation, operational efficiency, and strategic partnerships positions it well to navigate the evolving digital marketplace landscape.

Bottom Line?

Gumtree’s decisive exit from Capital Markets and renewed classifieds focus set the stage for a leaner, growth-oriented future.

Questions in the middle?

• How will Gumtree monetise new transactional features like shipping and buyer protection?
• What impact will the NZME partnership have on Gumtree’s expansion in New Zealand?
• Can Gumtree sustain EBITDA growth amid ongoing advertising market softness?