REA Group Limited (REA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the REA Group Limited Full Year 2026 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alice Bennett, Head of Investor Relations. Please go ahead.

Good morning, and welcome, everyone. My name is Alice Bennett, Head of Investor Relations, and I'd like to thank you for joining REA Group's 2026 Full Year Results Presentation. Before we commence, I'd like to acknowledge the traditional owners of country throughout Australia and recognize the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures and to elders past and present. Today, you'll hear from REA's CEO, Cam McIntyre; and Andrew Cramer, REA's CFO. Cam will talk to our overarching financial performance and strategic highlights for the year. He will then hand over to Andrew to talk to our financial results in more depth. And following this, we'll be happy to take your questions. With that, I'll pass to Cam to get us started.

Thanks, Alice. Good morning, everyone, and welcome to our call. We've had an excellent FY '26 underpinned by a number of things, but in particular, double-digit yield growth. Product development has been moving forward at a great pace, which you'll see is creating tangible opportunities and adding to the value we deliver for our consumers, customers and brokers alike. So let's jump into the detail. Look at the group financial results, core operations for the year saw revenue up 7% on pcp to $1.79 billion. EBITDA, excluding associates, was up 12% on pcp to $1.09 billion, NPAT up 15% to $650 million and free cash flow was strong, too, up 17% to $628 million. The Board has determined to pay a final dividend of $1.73 per share. Together with the interim dividend, this represents a total dividend of $2.97 per share, fully franked, an increase of 20% on pcp. Alongside our operating performance, we maintained a disciplined approach to cost and capital management. We improved operational efficiency, and we returned capital to shareholders through our $200 million share buyback program, reflecting the financial strength and the confidence that we have in the business. We evolved our well-established strategy during the year as well, and we enter our new chapter from a position of strength. Our strategy for the years ahead builds on the success of the past 3 decades and sharpens our focus on unlocking new growth. Our purpose remains clear, and that is to change the way the world experiences property. And as a technology, data and AI, they will transform the industry, we see significant opportunity to deliver even more value for consumers, customers and brokers. Our strategy embraces our evolving landscape, putting trust at the core, underpinned by our strength in deep relationships, unparalleled data and better outcomes for our stakeholders. We're focused on 3 enterprise-wide missions to reinvent property experiences, scale our growth engines and accelerate the organization. We'll dive a little bit more into this strategy on our Investor Day, which we're planning for in October this year. Now before we move into our operational highlights, I'd like to touch on the market conditions at present. As you can see on the chart on the left, listing volumes in the June quarter strengthened against softer comps with strong growth in all capital cities. The chart on the right highlights the return to more normalized market conditions in the last 3 years. The fluctuating listing volumes between FY '19 and FY '23 reflect the impact of the Royal Commission, the pandemic and successive interest rate hikes. The more stable market in FY '26 supported vendor confidence with buyer listings in line with prior year's strong volumes and around 1% below FY '18. On the buyer side, inquiry levels remained strong in FY '26 although the last 3 interest rate rises in the second half, capital gains tax changes and negative gearing changes created some uncertainty, which flowed through to inquiry volumes towards the very end of the financial year. Despite all this, though, properties continued to sell at a relatively typical rate in most capital cities, highlighting some continued strength in underlying demand. Looking at property pricing in the chart on the left of this slide. And as you can see here, prices remain significantly higher than recent years in all capital cities except Melbourne. The softening in buyer inquiry volumes mentioned earlier that we saw in Q4 did begin to impact price growth in the quarter. Looking at the right side of the slide, the rental market remains challenging for tenants with national rents reaching new highs in the June quarter. Rental vacancies have slightly increased, which will support tenants. However, an anticipated decrease in investor demand is likely to put renewed pressure on rents. Just looking at some of our business highlights for the year. And FY '26 was a transformative year where we rapidly extended our AI capability and delivered new experiences and products for our consumers, customers and brokers, which I'll talk to you a little bit more about in a moment. Our personalized and immersive experiences supported a record 12.7 million monthly realestate.com.au visitors and continue to deepen consumer engagement. 5.2 million unique properties are now tracked by their owners on our platform. We also achieved record Premiere+ penetration in residential and recorded Elite Plus depth penetration in commercial at record levels as well. And finally, last month, we announced the sale of our remaining Indian business, Housing.com to Aurum PropTech. Aurum has strong capability and local market knowledge, making it well placed to build on the foundations the Indian team have established over time. Taking a closer look at our audience levels and high-quality engagement. More people than ever visited our flagship site in FY '26, a record 12.7 million people visited the platform each month. That's 5.2 million more than our nearest competitor. The real value in our large-scale audience lies in the deep engagement with our consumers. The size of our audience has continued to grow over the last 2 years and key engagement metrics have also strengthened. The quality of the realestate.com.au experience and the strength of our brand ensures Australians continually return to our platform. Consumers spend more time on our platform than any other property site. And across the year, we achieved a record 146 million average monthly visits. Some of the key sources of our competitive advantage include the size of our audience, our data, which fuels our AI experiences and firmly positions REA as a leading beneficiary of artificial intelligence. REA has the largest and most engaged property audience in the country. Our unique consumer intent and behavioral data that feeds into each of the proprietary data sets we have is highlighted on this slide. Everyone can see our listings, but only REA can see what's underneath. Our compounding data sets include unmatched consumer intent and behavior, rich property records, the deepest listing and transaction outcomes, the most comprehensive agent workflow and performance data and unique finance and affordability data. Turning to our consumer experience highlights and our goal to convert our market-leading audience into members remains. Members are more likely to take a high-value action, enhancing the value delivered to our customers. New AI-powered features, immersive experiences, plus rich data and content enhanced the membership experience in FY '26 and supported a 14% growth in our membership base on pcp. Powered by our proprietary data, the new AI Assistant experience enables members to ask us anything about property during their search. Search on our platform evolved throughout the year from natural language to conversational and now the AI Assistant has the power to support people right through the property journey. Consumers can discover properties, check affordability, evaluate, compare and take action. Members share more about their property objectives with this intelligent search experience, and these insights enable us to better meet their needs. It's now available to all members with over 20% of sessions converting to a high-value action, such as saving or sharing a listing. Ultimately, the AI Assistant experience will support the delivery of more valuable leads to our customers. Property seekers are increasingly seeking more immersive and informative search experiences. Our visualization strategy is designed to deeply engage consumers in our content. The upload of iGUIDE 3D tours is accelerating with around 180 cameras now in market. The feedback from customers continues to be positive, particularly around the superior experience with near zero load time for iGUIDE onto our platform. Turning now to customers. And the social media style video hub on our app home screen evolved in July to include listing videos. This is a powerful and high-exposure engagement feature for Premiere+ and Luxe listings, and it was a key component of our FY '27 recontracting. The hub has been a driver in accelerating native video views with over 2.9 million video hub views since the feature launched in November. Our audience extension offering, Audience Maximizer, puts listings in front of active buyers wherever they browse online. Penetration more than doubled on pcp with customers recognizing the value in our click-based packages and price points and the new features such as automated video content. And on the right, uptake in our high-performance listing solution, Luxe, continues to accelerate. Immersive content features, improved homepage targeting and new packages all underpinned increasing penetration. Looking at highlights from our customer platforms and services. In the fourth quarter, we commenced the rollout of our new agentic chat capability in our self-service Ignite platform called Campaign Assist. The feature combines consumer intent and PropTrack-powered AVM data to provide customers with strategic recommendations to boost the performance of a listing. Enhanced brand exposure and access to exclusive products and tools underpin the value of our top-tier Pro subscription. Agency groups continue to recognize this with several customer groups signing enterprise-wide Pro agreements in FY '26. The total number of customers with a Pro subscription also more than doubled on the prior year. Underpinning the value for all our customers is access to our Ignite platform and monthly active users increased 17% on pcp. Our commercial platform delivered record audience with 2.9 million Australians visiting our platform on average each month. The experiences, features and engaging content supported audience growth, including points of interest maps on listings, new demographic data and the integration of iGUIDE. Our top-tier commercial product, Elite Plus, achieved record penetration and the value of Ignite continued to increase. Almost 90% of commercial agencies have been onboarded to Ignite, and we saw 109% pcp growth in monthly active users. Turning to Financial Services and product innovation and brand investment supported good revenue growth here. Enhancements in our finance experience on our platform supported the delivery of quality leads to Mortgage Choice brokers with settlements from REA leads up 30% on pcp. Continued investment in our core broking platforms and in AI training and tools delivered greater value too, with 50% of our brokers now using AI agents to efficiently automate processes. In June, we acquired a 70% interest in commercial finance brokerage Simplicity, diversifying our financial services business. REA is an AI prime organization. And in FY '26, we introduced a coordinated approach to expanding AI tools and scaling agent augmented teams that we're calling Flow Lab. Flow Lab experimentation is reengineering product delivery at REA and is supporting the expansion of our suite of AI tools and platforms that optimize return on investment. Utilizing agentic AI throughout product development end-to-end, we're able to validate what works and what doesn't within hours. Previously, this would take weeks or months. The initial trial within our Realtair business accelerated speed with the agentic-first team delivering planned work 2.6x faster. We think this is just the start. And in FY '27, we'll continue to scale this experiment with our agent-augmented team model across our tech workforce. Rewiring our engineering teams through Flow Lab is beginning to release capacity of our people and will enable us to reinvest in our highest value growth priorities. It supports faster time to market, capacity to invest in emerging revenue streams while opening opportunities to invest in new TAMs and providing more flex in our cost base. Looking at some of our international highlights, and we announced the acquisition of a controlling stake in Canadian-based Planitar Inc., the maker of iGUIDE. That was last October. In FY '26, iGUIDE grew locally in local currency revenues by 26% with growth in its residential, construction and commercial markets. In the U.S. market, REA has a 20% interest in Move, operator of realtor.com. Realtor is rapidly scaling its AI-first consumer experience as well. Its new conversational tool is proving highly engaging for serious buyers with consumers treating the product as a trusted adviser rather than just a traditional search tool. Move revenues increased 11% and its equity accounted loss of $14 million reflected a $5 million improvement on prior year. Before I hand over to Andrew, I'd like to share a few comments on the market as we look ahead. Market fundamentals remain solid, and we can see consumers are still there closely monitoring the market through our traffic and engagement. Interest rates, however, are the biggest factor contributing to current market uncertainty at the moment. It's likely that we're at or near the peak of the interest rate cycle, we believe, but the most recent rate rises, along with the federal government budget tax changes have impacted buyer sentiment in recent months. In listings, Sydney and Melbourne led new listings volumes in FY '26, but we're starting to see Brisbane, Perth and Adelaide outperform. The market is still recalibrating post budget, but once the dust settles and interest rates stabilize, we expect consumer confidence to improve and buyers to become more active, particularly looking towards H2. And finally, REA has entered the new financial year with a healthy balance sheet, strong product pipeline, sustained strength in our core business and a talented team doing an excellent job. And with that, I'll now hand over to Mr. Cramer to take us through the financials in more detail.

Thank you, Cam, and good morning, everyone. REA has delivered excellent full year results. With a focus on controlling the controllables, we've been able to drive value to our customers, double-digit yield growth, a heightened focus on cost management and a renewed discipline around capital allocation. Taken together, this has seen REA delivered strong double-digit EPS growth despite flat listings across the year. It has also seen us exit REA India and the resultant improvement in EPS and free cash flow. From our core operations, revenue increased 7% to $1.79 billion. EBITDA, excluding associates of $1.09 billion, was up 12%. NPAT of $650 million, was up 15%. EPS of $4.93, was up 15%. And free cash flow of $628 million, was up 17%. As CFO, it is pleasing to see those prior corresponding period growth rates increase as we move from revenue to EBITDA and down to NPAT and free cash flow. With the July announcement of the sale of Housing.com, India is now treated as a discontinued business. If we look at the performance of fiscal '26 on a continuing business basis, then revenue and EBITDA increased 12%, NPAT and EPS 14% and free cash flow 18%. Pleasingly, REA has delivered EPS growth through the cycle with an EPS CAGR of 12% over the last 4 years, despite fiscal '23 being one of the worst cyclical downturns we have experienced in Australia. Slide 25 outlines both our core financial results, which include India and our results on a continuing business basis with India excluded. Slide 26 provides a summary of the reconciliation between the core and statutory results with several one-off items excluded. The most material adjustments are the $111 million write-down of REA India in fiscal '26 and the $117 million impairment reversal on the divestiture of PropertyGuru in fiscal '25. Turning to Slide 27. Our Australian residential business had another strong year, delivering 12% revenue growth. National buy listings were flat across fiscal '26 with growth rates improving each quarter as comparables became easier. The flat outcome was marginally better than our anticipated range of negative 1% to negative 3%, reflecting a stronger-than-expected fourth quarter. As a result, we've seen revenue deferrals of 1% into Q1 fiscal '27. While Sydney and Melbourne outperformed the broader market in fiscal '26, up 3% and 4%, respectively, pleasingly, we saw a recovery in other markets during the fourth quarter. Brisbane, Perth and Adelaide were up a combined 17%, while Melbourne and Sydney were up 8%. Buy yield was strong, up 13% and in line with our guidance. This was driven by a 7% average Premiere+ price rise, growth in add-ons, AMAX in particular, but also Luxe, increased subscription revenues and increased depth penetration. Geo mix had a neutral impact across the full year, resulting in controllable yield being in line with reported buyer yield at 13%. However, as is often the case, geo mix was volatile during the year, with Q1 neutral, Q2 up 2%, Q3 up 1%. And in Q4, we saw geo mix turn negative as markets like Brisbane and Perth recovered and outpaced Melbourne and Sydney. Geo mix was down 2% in Q4. The following slide shows both the penetration and mix of paid listings in the residential business, together with the penetration of the Audience Maximizer and Luxe add-ons. Pleasingly, we saw continued growth in overall depth penetration and continued tiering up to Premiere+. Performance of our social media product, Audience Maximizer, was also very strong with the introduction of new tiers and bundles resulting in penetration more than doubling in fiscal '26. While it is still early days for Luxe, we've seen penetration more than triple, and we continue to see Luxe taken up across properties of all values. Around 70% of Luxe listings today are on properties with a value of less than $3 million. And of those, more than 15% on properties with a value below the $1 million mark. Commercial and New Homes revenue growth almost hit double digits for the full year, delivering 9% revenue growth on the prior corresponding period up to $238 million of combined revenue. Commercial revenue increased by 10%, with yield growth driven by an average 7% price rise and increased depth penetration. Listings were also a positive driver, up 2% for the year. Pleasingly, we saw growth in all major asset classes, including office, industrial and retail. New Homes revenue was up 9% on the prior corresponding period, driven by a 6% increase in project profile volumes, growth in average yield and higher display revenues. Financial Services led by Anthony Waldron and his talented team has had an excellent year with revenue up 11% to $114 million and EBITDA increasing 20% year-over-year. Mortgage Choice revenues were up 10%, benefiting from a 13% increase in settlements, partially offset by higher broker payout rates. PropTrack revenues grew 13% through new customer data contracts. The Financial Services segment also benefited from 1 month of Simplicity, the commercial broking business we acquired in June 2026. Turning now to our margin. The slide highlights the continuous improvement in Australia's operating EBITDA margin over the last 4 years with our margin increasing to close to 66% in fiscal '26. This has been driven by double-digit revenue growth in Australia, up 11% this year and a deceleration of cost growth to 7%, reflecting tighter cost management in the second half of the year. The differential between Australian revenue and Australian cost CAGRs or jaws, is as wide as it has been at these revenue growth rates since 2021. We will continue to invest in the business as top line revenue growth is paramount, but we will continue to be disciplined in relation to costs. Australia's 7% operating cost growth included double-digit growth in cost of goods sold, in marketing and in technology, offset by moderation in labor cost growth. Labor cost growth slowed to 3% across the full year, with typical wage inflation offset by a modest reduction in headcount and the ongoing structural shift to utilize our centers of excellence in Manila and Cyber City, India. The increase in COGS reflected a more than doubling in penetration of our Audience Maximizer social media add-on. Higher marketing costs were in part due to the timing of Ready25, which was not in the prior year and the investment made in our new Australian Open sponsorship. As expected, technology costs increased due to price rises and investment in AI. Excluding COGS, Australian operating costs increased only 5%. REA has had a strong and consistent track record of investment in product development to drive better consumer experiences and deliver more value to our customers. In fiscal '26, this investment included a number of new products and experiences across all lines of business with a focus on AI, video and platform health. CapEx to revenue in Australia was 7.6% in fiscal '26, and we anticipate fiscal '27 to again be within our stated 7% to 9% target range. Turning to Slide 34 and our cash position. We ended the year with a cash balance of $366 million. The group delivered free cash flow of $628 million, up 17%. This allowed us to continue to invest in the business, both organically and inorganically and to deliver strong shareholder returns with $546 million returned to shareholders during the year, comprising of REA's inaugural share buyback of $200 million with stock bought back at a volume-weighted average price of $159 and $346 million returned via dividends paid during the year. We are also pleased to announce an increase in our final dividend by 25% to bring our full year dividend to $2.97, an increase of 20% for the full year. Pleasingly, the growth in dividends outpaced the growth in EPS as we increased returns to shareholders in the form of a higher dividend payout ratio. Our balance sheet is incredibly healthy, and we believe we are balancing nicely returning capital to our shareholders while also maintaining flexibility and optionality for future growth opportunities. Finally, turning to the outlook for fiscal '27. Owing to higher-than-expected listings in Q4 fiscal '26, new national buyer listings are anticipated to be flat to down low single digits in fiscal '27. July listings were 2% lower on the prior corresponding period, but in line with the 8-year average. Combined Melbourne and Sydney listings declined by 16%, while Brisbane, Perth and Adelaide increased by 13%. The group anticipates controllable residential buy yield growth, excluding the impact of geographical mix in the low double digits, driven by an 8% Premiere+ price rise and growth in add-ons. As is often the case, geo mix across the full year will be the main swing factor on where reported fiscal '27 buy yield ultimately lands. We will continue to target operational margin expansion. Excluding the iGUIDE and Simplicity acquisitions ex M&A, operating costs are expected to increase mid-single digits for both Australia and the group. Group operating costs, including M&A, are expected to increase mid- to high single digits in fiscal '27 on a continuing business basis, excluding India, off a base of $609 million in fiscal '26. Contributions from associates are expected to improve modestly compared to the prior corresponding period. In closing, I wanted to reiterate how pleased we are with these results. The results are a product of the thoughtfulness, the focus, the discipline and the hard work of a very strong team at REA. For the second year in a row, REA has delivered strong double-digit EPS growth in a broadly flat listings environment. Rest assured, we will continue to execute our strategy. We'll continue to focus on controlling the controllables, and we will continue to invest prudently for the long term. I trust you all got a sense earlier from Cam on just how excited we all are by the new opportunities we see leveraging AI to enhance the experiences of our consumers, our customers, our brokers and our employees. We are really looking forward to taking you through all these things in more detail during our Investor Day in October. Operator, could we please open the line for any questions?

[Operator Instructions] Our first question is going to come from the line of Entcho Raykovski with E&P.

My first question is just around the guidance. And I suppose the one element that you haven't specifically guided on, of course, I'm going to pick on it, is the potential geo mix impact into FY '27. And I appreciate there's probably only so much visibility you've got, but are you able to give us any color on how you're thinking about it in your budgets? I guess if we look at the recent periods, it was most pronounced in FY '23 at minus 5%. I guess I'm interested in whether you think it could be as bad as that number or whether you think it will be a more moderate negative impact perhaps. I've got a couple of others, but I might wait for the answer to that one first.

Thanks, Entcho. I'll take that one. You're right, it is difficult to forecast geographical mix, and Cam and I have been focused on providing guidance around the things that we can control. So controlling the controllables. As it relates to geo mix, your memory is correct. In fiscal '23, we had it down negative 5%. But '24, it was plus 3%, fiscal '25, plus 1% and last year was flat. And even in the year that we just had, it bounced around, started at 0%, plus 2%, plus 1% and then finished the year at negative 2%. So I guess the key takeaway, it is volatile. And it's not something that we have a great sense about at this stage, and we'll kind of see how the fiscal '27 year plays out.

Okay. Got it. And then on the OpEx side, you've reaffirmed the targets for operational margin expansion. I suppose if I think about the delta between revenue and OpEx growth, do you see that as limited in any way? I'm just conscious that in the past, the company had talked about a 1% to 3% difference between revenue growth and OpEx growth. In your mind, does that still hold? You obviously did a bit better than in FY '26, but just how you're thinking about that delta between those numbers?

Yes. It's a good question, Entcho. So you're right, in fiscal '26, the differential was 4 percentage points, and it's as wide as it has been at that revenue growth level since fiscal '21. So really, really, really happy how the business took on that approach to cost in fiscal '26. And our guidance for fiscal '27 is as low on cost as it ever has been mid-single digits when you strip out India and the impacts of M&A. We feel very comfortable being able to make that guidance to market. We have levers at our disposal. The offshore centers of excellence we have in Manila and Cyber City, India, give us optionality as does Flow Lab, which Cam talked to you a little bit about, and we look forward to talking about more at our Investor Day, that also gives us the option to go faster, which we're doing, and that's really the focus. But as needed, that could also allow us to drop some efficiency to the bottom line. So we feel very comfortable with the commitment to operational margin expansion.

Just a final one. From a capital management point of view, so you haven't reloaded the buyback. Can you talk to the rationale for that? I mean I know you talked about optionality, but obviously, you've got a pretty good cash balance. And you also have a substantial franking credit balance. I think it's over $1.1 billion at the moment. So maybe can you comment on whether the Board has considered a special dividend as an option?

Sure, Entcho. And you're right. I mean the buyback was new for us. So that was our inaugural buyback. We're really happy with the execution. We bought back $200 million of stock at around $159. So it was very well done. And you would have noticed in the release this morning that we increased the final dividend by 25%. So the payout ratio is up at 60%. So we felt like with that combination of things, we're returning just under $550 million of cash to shareholders in the year. The balance sheet is pristine. It's really healthy. We're proud of where that sits, and we think it gives us a great deal of optionality. The franking credit question is an interesting one, too. You're right, we have north of $1 billion of franking credits. I mean there's a slight nuance to the buyback given the low paid-in capital that we have at REA owing to the heritage of the company. When we buy back stock beyond that level, we have to stream for every dollar we buy back $0.429 of those franking credits get streamed to the ATO and don't get returned to shareholders. So it's something we're mindful when we think about the buyback, and it absolutely makes franked dividends probably comparatively more attractive, all things considered.

Our next question will be from the line of Eric Choi with Barrenjoey.

Could I please ask 3 as well? Maybe one on guidance, one on kind of product and new monetization levers and maybe just a follow-up on cost. So just the first one, if I look at FY '27, relative to the $650 million NPAT that you guys did in FY '26, consensus is only assuming that grows around 11% to, say, $720 million next year. But I think with all the information you've given us today, it suggests it should be more like 19% to 20% NPAT growth into FY '27. And I just wanted to check the very, very simple logic with you because if you look at your Australian business, it grew EBITDA by $130 million in FY '26. And then into FY '27, there's going to be puts and takes in Australia. Listings might be a bit worse, but your cost is better as well. So like conceivably, the Australian business could grow $130 million of EBITDA again, which is kind of $90 million post tax. And so that would be 14% NPAT growth just from Australia already. And then we know India is kind of like 5% to 6% NPAT accretive. And then you said other associates are also going to improve a bit. You add all that up, very simple bridge, you're getting 19% to 20% NPAT growth to $770 million plus next year. Should I -- sorry, should I pause there?

Yes, why don't you pause there because there's a little bit in that to unpack, Eric. Maybe if I work my way bottom up, you're right, we've guided to associate losses improving. India is -- will be a discontinued operation. So I get stripped out of the historical period as well as fiscal '27 going forward. So you have to look at the statutory accounts to see the jump that you're describing. You won't see it in our continuing ops disclosures, but I think that your math is about right on the benefits. That was a drag on EBITDA and free cash flow and having that out of the business will give us that uplift on NPAT. That's fair. Using '26 as a base, I won't comment on your $130 million of EBITDA. But in relation to the outlook, listings were flat in fiscal '26. And I guess we're probably owing to the fast finish to fiscal '26, we're guiding fiscal '27 to be flat and down a little bit. On yield, we finished at 13% for fiscal '26. We're guiding to low double digits there. So you're right that it's sort of in a similar ballpark. And on costs, we are guiding to be a little bit tighter. So I think your logic makes good sense, but I'm not going to comment on your math and the output, but I think your assumptions are sound.

Awesome. Second one I promise is less convoluted. Just on product and potential new monetization levers, maybe second half '27, maybe in FY '28. But like Scout24 in May, they launched agentic OS. You've sort of announced AI Assistant and Campaign Agent today and some of that's going to go into your Ignite product. So my question was, could these be levers to drive either, a, higher subscription revenue growth? Or b, could you use those as incentives to drive, say, Luxe or AMAX uptake in exchange for subscription discounts going forward?

Yes. Thanks, Eric. I'm happy to take that question. Look, we're really happy with the Campaign Assist product. We think it's a great product that puts a fantastic tool in the hands of our customers using our PropTrack and AMV data. I mean, clearly, it gives customers the opportunity to upsell or manage campaign performance throughout a campaign and provide the opportunity to engage vendors at different points in time. So it's very early days with it. In terms of the value that it adds in terms of subs and so on, I think that's too early to call from our perspective. We're just happy to have it out there, happy to have it in the hands of our customers and see how it performs, and we'll continue to tweak and evolve it, but we're very excited about it.

And then last one, maybe for you, Cam, or Andrew. Just a follow-up on costs. I think, Andrew, you were sort of intimating jaws is higher than history, but that probably reflects, say, a greater structural focus on efficiencies, and it's not just a cyclical response. So I just wanted to confirm that. But if that's the case, is the inference also if listings in FY '27 are worse than, say, your flat to low single-digit declines, then presumably, you also take that cost guidance or there's scope to take that cost guidance lower as well?

Yes. Thanks, Eric. As it relates to fiscal '26, we're really happy with the cost controls and the way the business approached cost. What was probably a little unexpected was how well the business finished from a listings perspective. So that probably widened the jaws a little bit towards the end of fiscal '26. We're competing to open jaws or operational margin expansion, we're calling it, and we've guided the market to low or to mid-single-digit cost growth lower than what it has been historically. And I think as Entcho and I discussed a little bit earlier, we have some levers at our disposal that gives us confidence in that if listings are down, then we can adjust costs accordingly. But what I would say, and it's really important, is that growing and investing in that top line is paramount for this business. And so what we won't do is short term the business or do anything that impacts product development or things that will grow the top line in managing costs. I want to be really clear on that.

Our next question will come from the line of Roger Samuel with Jefferies Australia.

Just 2 questions from me. First one, can you remind us how long can the Premiere+ listing last on the website or the app? And if the property is not sold, then can the customer relist this and how much do they have to pay for it?

Thanks, Roger. I'll do that question. So look, I mean, a Premiere+ listing has unlimited days on site. And if the property fails to sell and then we do offer customers the opportunity to pull the listing down and then relist it at a later date up to 3 months post that. But I guess the crucial thing to note here is that this will only be -- only count as one listing, if that's the crux of your question.

Yes, that's right. And when they relisted, is there a fee that they have to pay? My understanding is that discount...

Not if it's the same agent. If it goes to a different agent down the track, then it's discounted by 50%.

Okay. And my second question is just on the appetite for more depth listings or the add-on product, given that it's getting more and more difficult to sell the property. Are you seeing any increased uptake in the last few months? You mentioned about the slowdown in the buyer inquiry towards the end of the June quarter.

Yes. I guess I've been around these platforms for a long time. And what you tend to see when things get a little bit more challenging, depth becomes a real opportunity for vendors to stand out. So intuitively, I guess we believe that while the market might be a little bit more challenged, it does provide us with more opportunity to sell more depth. So I guess that's a little bit of a tailwind.

Our next question comes from the line of Sriharsh Singh with Bank of America.

A couple of questions from me on yield. First, on the FY '27 guidance of low double-digit yield growth. So besides price increase, which of the add-on products will contribute the most to yield growth in your view between AMAX, Luxe and Pro subscriptions? Or is there something else which could be contributing a little bit on the margin? Second question, just thinking slightly -- or another way to ask you about the geo mix, the potential geo mix impact into FY '27. Look, based on our tracking and some data, Sydney and Melbourne listings are up 12% to 15% versus long-term average. So my question is, if Sydney and Melbourne listings were to normalize towards the long-term average, what kind of a geo mix drag would that entail?

I think that's one for me, Sriharsh. So firstly, on the yield, the fiscal '27, the 8% Premiere+ price rise is the largest contributor to the yield. And then add-ons, just like fiscal '26 are the next most material contributor, but the mix is different. So whereas last year it was AMAX and then a little Luxe, this coming fiscal year, Luxe will be a much larger contributor to yield than AMAX, but AMAX will still be a positive contributor, too. We'll probably get a little bit from penetration perhaps too, but that will be much less material. And we didn't put the subscription price up for our agent community. And so that will be a less material contributor, albeit we will see a gradual uptick of the Pro subscription too, which will help a little. As it relates to geo, it's a really interesting question and something we're doing thinking about, too. So it's not just the Sydney and Melbourne relativity. It's not as simple as that, Sriharsh. So it depends on the communities within those markets and then the pricing within those cities. And then it also depends on for the rest of Australia when we compare them, the cities to Melbourne and Sydney. If Brisbane is a large contributor, that's generally a positive given the pricing in that city compared to, say, rural Australia. So there's a few different elements at play there. To be specific in answering your question, if listings in Melbourne and Sydney did come back towards historical averages, we would see an element of negative yield from geo mix, but that could well be offset by uptick in other cities like Brisbane, as I mentioned.

Super clear. If I can sneak in one more. Is LLM traffic as a share of total traffic for you? Is that rising? Or is it also flattening out for you over the last 6 months?