Job board Seek (ASX: SEK) today reported revenue from continuing operations fell by 6% on a constant currency basis in its half year report.

The decline was driven by lower job ad volumes, partially offset by increased job ad yield across ANZ (Australia and New Zealand) and Asia.

The EBITDA decline of 11% was driven by lower revenue with operating expenses in line with the prior period. Adjusted profit declined by 24% due to the reduction in EBITDA.

“Seek CEO and managing director, Ian Narev said, “From a financial perspective, the expected reduction in volumes from all-time highs in the post-Covid rebound period impacted APAC revenue and profit.”

“In the ANZ business, total volumes were similar to FY19 levels, albeit with a changed customer mix,” Narev said. “Dynamic pricing responded to continued growth in wages and applications per job ad, leading to a 13% rise in yield in the period.”

Narev continued, “The Asia business saw similar paid ad volume declines. However, revenue was up slightly on a reported currency basis due to yield growth of 32%. Some of this gain came from the trend of lower yielding basic ads contributing more to volume declines than higher yielding ads that started in H2 23.”

Revenue for continuing operations was broken down as follows.

Within ANZ, the revenue decline was driven by a 20% decline in job ad volumes partially offset by a 13% increase in job ad yield. Job ad volumes have continued to slow since reaching record levels in March 2022.

In Asia, revenue was driven by a 32% increase in paid job ad yield and favourable exchange rate movements, partially offset by a 26% decline in job ad volumes. Job ad volumes declined due to weaker economic conditions.

In Brasil Online, the new commercial model introduced in FY2022 (candidate paid only to freemium) resulted in improved financial performance.

In OCC, revenue grew 5% due to yield growth and increased online channel adoption.

Platform support includes JobAdder which is a talent acquisition suite that simplifies the hiring process for recruiter and corporate talent acquisition teams. Platform support also includes other businesses including Jora and Certsy that complement and/or have synergies with the core operating businesses. Revenue growth was driven by JobAdder’s acquisition of new customers and price increases.

In H1 FY2023, the results of the Seek Growth Fund were included in discontinued operations.

Narev said, “Volumes slowed slightly more than the usual seasonal trend in the last two months of the 2023 calendar year. It is too early to judge the extent to which this trend will continue post the slowdown for the summer period in ANZ and the Lunar New Year in our Asian markets. We have assumed that absolute ad volumes continue at this lower level throughout the second half, and therefore forecast that our full year revenue will be at the bottom-end of original guidance.”

“Against that revenue outlook, our forecast expenditure for the year will also be at the bottom end of previous guidance,” Narev said. “We believe this achieves the right balance of continuing to invest for the future and responding to the uncertain revenue environment. Yield growth in this result is another example of the benefits of maintaining long-term investment. Particularly now with the unified platform, we remain committed to the AUD 2 billion (USD 1.3 billion) revenue opportunity outlined in our strategy presentation from April 2023, and will continue to invest in the themes and initiatives highlighted in our strategy presentation last year. At the same time, we will moderate discretionary expenditure to reflect the current operating environment.”

Narev concluded, “The net effect of the lower end of revenue guidance and the lower end of expense guidance is slightly lowered EBITDA and NPAT (net profit after tax) guidance for FY24.”

FY24 guidance (excluding the Fund and significant items):

• Revenue of approximately AUD 1.15 billion to AUD 1.21 billion (USD 749.1 million to USD 788.2 million)
• Operating expenses of approximately AUD 670 million (USD 436.4 million)
• EBITDA of approximately AUD 490 million to AUD 530 million (USD 319.2 million to USD 345.2 million)
• Adjusted NPAT of approximately AUD 190 million to AUD 220 million (USD 123.7 million to USD 143.3 million)

Seek shares closed today at AUD 25.62 (USD 16.71), down 4.55% on the day and 5.46% below its 52-week high of AUD 27.10 (USD 17.67), set on 12 February 2024. The company has a market cap of AUD 9.27 billion (USD 6.04 billion).