REA Group Ltd FY26 First Take: Better cost guide to offset volume/geo-mix drag

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

06 August 2026

REA Group Ltd

Overweight

FY26 First Take: Better cost guide to offset volume/geomix drag

JPM Key takeaways: REA reported a solid FY26 result, with core (excl. India)

EBITDA a slight beat to JPMe (+1%) driven by a better cost outcome, likely on the

pull-back on investment through the year in the face of a softening volume outlook.

The focus will be on the FY27 guide, where mid-single-digit core cost guide comes

in below JPMe (+7%) as an offset to lower volumes (to be flat to down low single

digits) and geo-mix, with controllable yield still running in the low double digit

range. In our view, REA is keeping costs well managed against a highly uncertain

outlook, and again guiding to group margin expansion should be positively

received by the market.

Positives: 1) Slight beat driven by cost management. REA’s FY26 EBITDA

was a slight beat to JPMe, driven by a better than expected opex outcome. To

us, this implies management has a good handle on costs, and can manage the

cost-base against changes in the volume/yield environment through the year.

2) Solid core opex guide. Core opex will increase mid-single-digits in FY27,

offsetting softer volume. 3) Controllable yield remains double-digits.

Controllable residential buy yield (excl. geo-mix) guidance will be lowdouble-digits, consistent with FY26 (JPMe 12%).

Negatives: 1) July listings imply geo-mix headwind. Sydney/Melbourne

combined listings volume declined -16% vs. Bris/Adelaide/Perth combined

+13% in July implying a significant geo-mix headwind for yield should this

continue through FY27. 2) Revenue deferrals weigh on FY26 yield. Revenue

deferrals driven by the timing of listings in 4Q were a -1% drag on yield.

Outlook/guidance: 1) Listings flat to down low single digits, incl. July listings

-2%, 2) Group operating margin expansion, 3) Low double digit controllable

yield (excl. geo-mix), 4) opex (excl. M&A) mid single digit growth, 5) losses

from associates to improve y/y.

Likely changes to consensus: Up on better than expected cost guide.

REA.AX, REA AU

Price (05 Aug 26):A$166.32

Price Target (Dec-26):A$200.00

Australia

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