Domain Fails to Keep Up With REA Group in FY24 Despite 13% Revenue Growth

The Australian real estate portal operator Domain Group has reported that revenue increased by 13% to A$391 million over its 2024 financial year. Notable points from the Sydney-based company's report for the 12 months ended June 30th include:

• Company revenue was up 13% at A$391M while revenue from its core Residential segment was up 19% at A$266M.
• EBITDA was up 26% year-on-year at A$137M and net profit was up 28% at A$49M.
• Domain's Agent Solutions segment saw revenue fall 6% to A$38M.

According to Domain's investor presentation, since 2023 its strategy has been centred on "Executing and Scaling the Marketplace" with the growth of its core listings business key to this. Domain did see a 19% increase in revenue from its core business over FY24 largely thanks to a recovery in the Australian property market as a whole which included a significant listings volume uplift in Q4.

The portal saw an 18% increase in the average revenue per listing (ARPL) over the year and claimed it saw a 10% increase in unique audience growth— a figure which the company claimed outstripped that of its major rival Realestate.com.au.

In his commentary accompanying the results, Domain CEO, Jason Pellegrino was keen to highlight the Audience Boost product which automatically disseminates Domain's listings across social media channels and reportedly accounts for a 30% uplift in views per listing.

Just as the launch of Domain's Platinum Edge product was in 2024, the Audience Boost product will be used to justify the company's "FY25 price review".

Away from its core business, Domain's performance was more mixed. While revenues from third-party advertisers increased 52% over the period and outperformed the broader market, there was slower growth in its new build 'Developer' segment and commercial real estate business.

In its much-touted Agent Solutions segment, which contains productivity and marketing products for agents, the headline figure was a 6% year-on-year revenue decline to A$38M. In addressing the segment's performance, Pellegrino said that the "solid subscription trends across the business" were offset by lower revenues from the company's AIM product, the portal's in-house answer to offsite amplifying services like Flow and Loopaautomate.

As the operator of the number two real estate portal in the Australian market, Domain's results are not always judged on a standalone basis but rather on how they compare to those of the News Corp-backed market leader REA Group. Despite achieving record revenue and profits, Domain's growth was well short of REA Group's for the same period (+23% revenue growth).

In an article published late last week, The Australian Financial Review (which is owned by Domain's majority shareholder, Nine Entertainment) criticized Domain for failing to grow in line with its major competitor and called for the company to be privatised while suggesting that Pellegrino be removed.

At the start of the year, private equity firms TPG and KKR reportedly sounded out Nine Entertainment about a possible acquisition deal. The speculation about the company's future ownership and leadership will likely intensify with the same private equity companies having secured a deal to liquidate their stake in the Southeast Asian portal operator PropertyGuru this week.