- Total revenues grew 13% to S$39 million in the third quarter 2023, as total revenues ex-Vietnam grew 23%
- Active cost management drove 69% of incremental year over year revenue into Adjusted EBITDA[1]
- Adjusted EBITDA grew to S$5 million in the third quarter 2023, up from S$2 million in the third 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 September 30, 2023. Revenue of S$39 million in the third quarter 2023 increased 13% year over year. Net profit was S$0.3 million in the third quarter and Adjusted EBITDA[3] was S$5 million. This compares to a net loss of S$7 million[4] and Adjusted EBITDA of S$2 million in the third quarter of 2022.
Management Commentary
Hari V. Krishnan, Chief Executive Officer and Managing Director, 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. Our innovative solutions that shipped provided climate risk driven valuation data through DataSense, and holistic homeowner solutions to help home financing and management. Positive customer feedback sets us up well while our multi-pronged strategy should build significant moats for the core business.
We have confidence in the value that PropertyGuru creates for all our stakeholders, but we acknowledge our susceptibility to local economic fluctuations. For instance, the timing of Vietnam's property market stabilization remains uncertain, prompting us to be laser focused on our company-wide investments as we await greater clarity in 2024.
We believe in the fundamental opportunities in our core markets and remain committed to future growth and profitability anchored around our vision to power communities to live, work, and thrive in tomorrow's cities."
Joe Dische, Chief Financial Officer, added "PropertyGuru delivered 13% overall revenue growth in the third quarter despite challenging market conditions in Vietnam. Excluding Vietnam, revenues were up a solid 23%. The reported revenue for Malaysia was adversely impacted by depreciation of the local currency.
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.
We are focused on delivering ongoing improvements in operating leverage through technology, automation, machine learning and prudent cost management. Our objective is to deliver sustained increases in Adjusted EBITDA margin.
A recovery in Vietnam's property market is not expected in 2023. Combined with macro-economic and exchange rate challenges in Malaysia, we are lowering our 2023 revenue outlook to S$148-S$152 million. Through effective expense management, our 2023 Adjusted EBITDA outlook remains unchanged at S$11-S$15 million."
Financial Highlights - Third Quarter 2023
- Total revenue increased 13% year over year to S$39 million in the third quarter.
- Marketplaces revenues increased 13% year over year to S$38 million in the third quarter as continued strength in Singapore helped to offset ongoing challenges in Vietnam.
- Revenue by segment:
- Singapore Marketplaces revenue increased 24% year over year to S$23 million, as the number of agents and the Average Revenue Per Agent ("ARPA") grew in the quarter. Quarterly ARPA was up 23% in the third quarter to S$1,279 as compared to the prior year quarter and the number of agents in Singapore was up over 200 to 16,309 from the second quarter of 2023. The renewal rate was 85% in the quarter.
- Malaysia Marketplaces revenue increased 5% year over year to S$7 million, driven by the ongoing benefit from the Company's dual brand strategy, offset by macro headwinds. Revenue on a Singapore Dollar basis was negatively impacted by depreciation of the Malaysian Ringgit. On a local currency basis, year over year growth was 11%.
- Vietnam Marketplaces revenue decreased 33% year over year to S$4 million, as a reduction in the number of listings was partially offset by an increase in the average revenue per listing ("ARPL"). The number of listings was down 41% to 1.2 million in the third quarter compared to the prior year quarter and ARPL was up 16% to S$3.37 from the third quarter of 2022.
Fintech & Data services revenue increased 23% to S$2 million.
At quarter-end, cash and cash equivalents were S$317 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 September 30, 2023, PropertyGuru continued its Engagement Market Share[5] leadership in Singapore, Vietnam, Malaysia, and Thailand.
Singapore: 83% - 6.2x the closest peer Malaysia: 92% - 12.8x the closest peer
Vietnam: 80% - 4.0x the closest peer Thailand: 51% - 1.7x the closest peer
Full Year 2023 Outlook
Vietnam's property market continues to be affected by government policy interventions that negatively impact consumer sentiment and transaction volumes. In addition, macro-economic issues and currency depreciation have affected the Malaysian business. As a result, the Company now projects full year 2023 revenue to be between S$148 million and S$152 million. Active cost control measures have helped the Company reaffirm full year 2023 Adjusted EBITDA of between S$11 million and S$15 million.
In the short term, Company results may be influenced by several factors outside of its control. These factors include the aforementioned issues in Vietnam and Malaysia as well as property taxation and stamp duty increases in Singapore and a lack of clarity in global fiscal policy stemming from rising interest rates, greater inflationary pressures, and global supply chain complications impacting our customers. Longer-term, the Company remains bullish on its growth trajectory, prospects for improving profitability, and the fundamental opportunity that exists in our core markets.
Conference Call and Webcast Details
The Company will host a conference call and webcast on Tuesday, November 21, 2023, at 7:30 a.m. Eastern Standard Time / 8:30 p.m. Singapore Standard Time to discuss the Company's financial results for the third quarter of 2023 and full year 2023 outlook. The PropertyGuru (NYSE: PGRU) Q3 2023 Earnings call can be accessed by registering at:
https://propertyguru.zoom.us/webinar/register/WN_THHA36STR7SUFfdO3jUFxg
An archived version will be available on the Company's Investor Relations website after the call at https://investors.propertygurugroup.com/news-and-events/events-and-presentations/default.aspx
[1] Calculated as the increase in Adjusted EBITDA in the third quarter 2023 year over year divided by the increase in revenue over the same period.
[2] Based on SimilarWeb data between April 2023 and September 2023.
[3] Included in the S$5 million of adjustments between net income and Adjusted EBITDA in the third quarter of 2023 was a S$6 million depreciation and amortization expense.
[4] Included in the S$9 million of adjustments between net loss and Adjusted EBITDA in the third quarter of 2022 was a S$5 million depreciation and amortization expense.
[5] Based on SimilarWeb data between April 2023 and September 2023.
[6] Based on Google Analytics data between April 2023 and September 2023.
[7] Based on data between July 2023 and September 2023.
[8] Based on data between April 2023 and September 2023.
Source: FAQ Co., Ltd.
