Mighty Ape’s Struggles Cast Shadow Over Kogan.com’s Strong FY25 Results
Kogan.com reported robust FY25 growth driven by its diversified business model, while Mighty Ape in New Zealand embarks on a recovery plan aiming for profitability in FY26. The group’s strong cash flow and governance upgrades underpin confidence in future expansion.
- Kogan.com serves 3.5 million customers, up 35% year-on-year
- Platform-based Sales revenue grows 24% to $111.9 million
- Kogan Products division revenue rises 15% to $258.1 million
- Mighty Ape underperforms but targets profitability in second half FY26
- Group free cash flow increases 40% to $32.4 million, enabling dividends and share buy-backs
Strong Customer Growth and Diversified Revenue Streams
Kogan.com has marked a significant milestone in FY25 by serving 3.5 million customers across Australia and New Zealand, a 35% increase from the previous year. This surge reflects the company’s commitment to delivering value, convenience, and a trusted shopping experience. The growth is underpinned by a diversified business model that balances its Products division with high-margin, capital-light Platform-based Sales.
The Platform-based Sales segment, which includes Marketplaces, Loyalty Programs, Verticals, and Advertising, generated $111.9 million in revenue, up 24% year-on-year. These recurring revenue streams are central to Kogan’s strategy of building a resilient and scalable business that can sustain profitability and reinvestment.
Product Focus and Operational Discipline
The Products division, concentrating on core categories such as TVs, consumer electronics, furniture, and appliances, recorded $258.1 million in revenue, growing 15%. This growth follows a rationalisation of the product offering, emphasizing customer-led selection and disciplined inventory management. The division’s improved gross margins signal effective buying strategies and operational efficiency.
Mighty Ape’s Recovery Path
In contrast, Mighty Ape, Kogan’s New Zealand subsidiary, faced challenges in FY25, performing below expectations and recording a loss. The company has implemented operational changes including inventory right-sizing and team integration, with encouraging signs of improvement. Management anticipates a return to profitability in the second half of FY26, a critical milestone for the group’s overall performance.
Financial Strength and Governance Enhancements
The group’s free cash flow increased by 40% to $32.4 million, highlighting the efficiency and resilience of its operating model. This strong cash generation supports ongoing investments, dividend payments, and an active share buy-back program, reflecting disciplined capital management. Additionally, the appointment of three new independent non-executive directors strengthens corporate governance and oversight, aligning with shareholder interests.
Sustainability and Future Outlook
Kogan continues to lead in sustainability initiatives, reducing packaging waste and maintaining a paperless office for nearly two decades. These efforts complement its customer-centric approach by balancing environmental responsibility with value delivery. Looking ahead, the company’s FY26 trading update shows continued strong performance from Kogan.com, with group adjusted EBITDA within guidance and expectations for further margin improvement as Mighty Ape recovers.
Bottom Line?
Kogan.com’s robust growth and strategic discipline set the stage for a potential turnaround at Mighty Ape, with investors watching closely for sustained profitability and margin expansion.
Questions in the middle?
- How quickly can Mighty Ape return to sustained profitability beyond FY26?
- What impact will reduced marketing spend have on customer growth in FY26?
- How will new governance appointments influence strategic decisions and shareholder returns?
