PropertyGuru Reports Second Quarter 2023 Results

Revenues of S$37 Million and Adjusted EBITDA of S$5 MillionTotal revenues grew 12% to S$37 million in the second quarter of 2023, as total revenues ex-Vietnam grew 22%Active cost management drove 113% of incremental year over year revenue into Adjusted EBITDA[1]Adjusted EBITDA grew to S$5 million in the second quarter 2023, up from S$0.3 million in the second quarter of 2022 PropertyGuru Group Limited (NYSE: PGRU) ("PropertyGuru" or the "Company"), Southeast Asia's leading[2], property technology ("PropTech") company, today announced financial results for the quarter ended June 30, 2023. Revenue of S$37 million in the second quarter of 2023 increased 12% year over year. Net loss was S$6 million in the second quarter and Adjusted EBITDA[3] was positive S$5 million. This compares to net income of S$4 million and Adjusted EBITDA[4] of positive S$0.3 million in the second quarter of 2022. Management Commentary Hari V. Krishnan, Chief Executive Officer and Managing Director, said "PropertyGuru delivered a good quarter of double-digit revenue growth and a double-digit Adjusted EBITDA margin, standing firm in a Southeast Asian economy wrestling with inflation and rising interest rates. This was the result of focused investments and execution despite ongoing macro challenges in Vietnam, where last year's government interventions in the property market continue to impact consumer sentiment and transaction volumes. Our focus on leveraging generative AI has bolstered our market-leading products while driving improvements in code quality and engineering productivity. In June, we launched GuruPicks, an automated and personalised feed of property listings based on machine learning algorithms, and upgraded our AI image moderation engine to continue to enhance listing quality. Earlier this week, we made strategic decisions to phase out our Indonesia marketplace business, Rumah.com, and sunset one of our SaaS products, FastKey. We regularly review our progress as a business and take necessary steps to optimize our resources. These actions align with our time-tested approach to focus our investments on businesses with strong unit economics that have shown the potential to achieve scalable growth. We acknowledge the impact of these decisions on our valued teams. I would like to extend my heartfelt gratitude to the impacted Gurus for their contributions to the Group and wish them the very best in their future endeavors." Joe Dische, Chief Financial Officer, added "In the second quarter, our overall business performed well even as we managed through a slower than expected recovery in Vietnam. Excluding Vietnam, revenues grew a solid 22%. Adjusted EBITDA of S$5 million this quarter meaningfully increased from the second quarter of 2022, as we benefited from both good operating leverage and cost management. This resulted in both revenues and Adjusted EBITDA increasing by S$4 million when compared to the second quarter of 2022. I would also note that we have seen some recent positives signs from Vietnam, as the government has begun lowering interest rates and is working to improve the accessibility of credit for both consumers and developers. Despite the current macro-economic conditions in Southeast Asia, we remain focused on delivering sustained, profitable growth as we leverage our market leading solutions. We will prudently manage discretionary spending and target value-additive investment opportunities. In this regard, our recent actions related to the Indonesia marketplace and FastKey will help us better prioritize our resources and investments and are not expected to have a material impact on our 2023 outlook. Of note, we have taken S$8 million in one-time impairment and restructuring costs this quarter related to these actions." Financial Highlights - Second Quarter 2023 Total revenue increased 12% year over year to S$37 million in the second quarter.Marketplaces revenues increased 11% year over year to S$35 million in the second quarter as continued strength in Singapore and improved yield in Malaysia helped counterbalance temporary challenges in the Vietnam market.Revenue by segment:Singapore Marketplaces revenue increased 25% year over year to S$22 million, as the number of overall agents and the Average Revenue Per Agent ("ARPA") grew in the quarter. Quarterly ARPA was up 25% in the second quarter to S$1,256 as compared to the prior year quarter and the number of overall agents in Singapore was up over 300 to 16,095 from the first quarter of 2023. The renewal rate was 82% in the quarter.Malaysia Marketplaces revenue increased 12% year over year to S$7 million, as the Company continues to benefit from iProperty and PropertyGuru Malaysia's combined market strength.Vietnam Marketplaces revenue decreased 27% year over year to S$5 million, as a reduction in the number of listings was partially offset by an increase in average revenue per listing ("ARPL"). Previous efforts to restrict the availability of real estate-related credit continue to temporarily impact property transaction activity in Vietnam. The number of listings was down 46% to 1.29 million in the second quarter compared to the prior year quarter. ARPL was S$86, up 36% from the second quarter of 2022.Fintech & Data services revenue increased 47% to S$1.5 million.At quarter-end, cash and cash equivalents were S$302 million. Information regarding our operating segments is presented below. It is noted that in 2023 the Company is no longer removing the ongoing cost of being a listed entity when calculating Adjusted EBITDA. As such the 2022 comparatives have been restated. Strong Category Leadership Drives Long-Term Growth Opportunities As of June 30, 2023, PropertyGuru continued its Engagement Market Share[5] leadership in Singapore, Vietnam, Malaysia, and Thailand. Singapore: 82% - 5.9x the closest peer