Singapore Market Continues to Drive Growth for PropertyGuru in Q3

November 21, 2023
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The Southeast Asian real estate marketplace operator PropertyGuru has released a report on its results for Q3 of the financial year. Highlights of the NYSE-listed company's performance for the three months ended September 30th included:

  • Total revenues grew 13% year-on-year to S$39 million.
  • Adjusted EBITDA grew to S$5 million in the third quarter, up from S$2 million in the third quarter of 2022.
  • Net profit stood at S$0.3 million.

Speaking on his company's third-quarter performance, CEO Hari V. Krishnan said:

“I am pleased that we delivered another quarter of good performance despite diverse market challenges. In the face of continued macro headwinds in Vietnam and weak economic conditions across Southeast Asia, PropertyGuru produced both double-digit revenue growth and double-digit adjusted EBITDA margin for the second consecutive quarter.

As we transition from 2023 to 2024, we continue to see opportunity despite ongoing global economic uncertainty. Our unwavering commitment to helping people make informed property ownership decisions and assisting businesses in harnessing data and technology for growth and efficiency sets us up well to increase market share and develop categories ahead of the cyclic economic recovery.

We continue to invest in property technology and integrating Generative AI. Pioneering solutions that provide an agent clarity on the leads they are nurturing or a property seeker personalized feeds using GuruPicks have received good customer adoption. Ourinnovative solutions that shipped provided climate risk driven valuation data through DataSense, and holistic homeowner solutions to help home financing
nd management. Positive customer feedback sets us up well while our multi-pronged strategy should build significant moats for the core business."

The company's home market continues to be its biggest growth driver. PropertyGuru's Singapore revenues increased 24% year-on-year to S$23 million at a 77% Adjusted EBITDA margin.

That growth offset the disappointing results from Vietnam where adverse macro-economic factors continue to hamper PropertyGuru's Batdongsan marketplace business which saw a 33% revenue drop compared to the comparison period. The number of listings was down 41% to 1.2 million in the third quarter compared to the comparison period and ARPL was up 16% to S$3.37 as Krishnan admitted that the timing of the market's stabilization remains "uncertain".

Elsewhere Malaysian revenue grew by a modest 4.5% and was affected by the depreciation of the local currency while the company's 'Other Asia' segment which includes Thailand and Indonesia saw a 66% jump in revenue.

PropertyGuru's bet on its financial and data services continues to be a costly one. Although the segment saw revenue increase by 23% to S$1.6 million, it continues to operate at a negative Adjusted EBITDA margin of well over 100%.

For the first time since Q2 of 2022, PropertyGuru registered a net profit for the quarter. PropertyGuru's balance sheet is no longer weighed down by the hefty share listing expenses and already assumed most of the costs associated with pulling out of Indonesia in previous quarters.

Company CFO Joe Dische said that PropertyGuru remains committed to improving profitability and was pleased with the effectiveness of cost-cutting measures which have included shuttering its FastKey business and operations in Indonesia.

"Beyond our double-digit growth this quarter in the face of a challenging environment, we are especially encouraged that our cost control efforts continue to yield measurable results. Our Adjusted EBITDA margin of 13% is a strong improvement from 6% in the third quarter of 2022. This is the second quarter in a row that we achieved a double-digit Adjusted EBITDA margin, with all of our Marketplaces delivering a profit. In addition, both net income in the third quarter and year-to-date cash flow were positive."

As a result of the economic turmoil in Vietnam, the company's 2023 revenue guidance has been revised down slightly to S$148-S$152 million but the Adjusted EBITDA outlook remains the same at S$11-S$15 million.

November 21, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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