PGRU - Earnings call 3 2023 | Propertyguru Group LTD

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Gary Thomas Dvorchak

Thank you for standing by, and welcome to the PropertyGuru Group Third Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, today's program will be recorded. If anyone objects, please disconnect now.

Now let me introduce Nat Otis, VP of Investor Relations. Mr. ahead. go please Otis,

Nathaniel Otis

good Conference to Call. and Quarter Group's XXXX Earnings evening. morning PropertyGuru Welcome Third Good

On CEO and and call Managing the today Director; Joe are Dische, Hari Krishnan, CFO.

a get few we started, Before reminders.

the the results our that found our are in Investors Firstly, earnings of section available can release be website. in

a Investors today's our section with Replay website. webcast be also recorded. being will Secondly, of available is along transcript on the

factors. but the not results we'll These limited to statements cause our Thirdly, statements, and filings to be promises future for forward-looking actual earnings refer regarding involve uncertainties SEC neither and are for including, expectations and risk business. risk making statements our results guarantees information that more materially. Please release to, nor vary and may regarding

on and will call not are except expectations, them update statements measures. company to contain required the by Fourthly, Forward-looking as non-IFRS financial obliged based law. is also this current

measures metric, earnings most of reconciliation the directly to a release. IFRS comparable press non-IFRS For our see financial please

Lastly, all let to Singapore otherwise dollar Hari. call unless in turn the me references over are stated. With that, dollars

Hari Vembakkam Krishnan

robust the third consecutive joining another of our Vietnam has uncertainties a and and backdrop today revenue and for demonstrated earnings challenges adjusted in double-digit effective period market a uncertain testament Malaysia. This of conditions XXXX recognize and property margins. predicting growth to the the you for is growth slow economic call. our execution trends. weakened market Thank against resiliency focused conference investments and consumer of us with quarter confidence EBITDA in We quarter double-digit PropertyGuru second in

confident customers consumers and creating on remains property value focus, Our our for and helping make decisions. them however,

business ourselves results strategy, execute to stabilize. of the operating when markets and to positioning We stakeholders value all will delivering that to underscore capitalize continue our our

of property due the as we buyers. new interest from demand speed of to some adoption rates for and our for in with business seeing living highlights quarter, me moderates challenges, are the our decision-making products, impacting Singapore. In the through even are Singapore, cost this of starting you steady walk Let of rising which

subsectors positive decrease of observed preliminary in while Our with Singapore Trade supply performing real results top construction past in trend economy XX% transaction a Singapore demand construction over third and month. The the the index of indicator estate the remained according the services showed quarters, quarter. the activities coming both last the a sustained consistent Industry the for several by quarters. is quarter level a and second were Ministry and activity the Continuing to from released GDP previous quarter,

to quarter, index highlight a quarter, market. our Finally, stability. highest measures to the market the the Malaysia, interest and maintained buying. consumer it that demand, reduction property its supply from interest implemented government, In factors by demand is witnessed inflation. healthy lack second rates increase of Malaysian saw a The important still X.X% led a to more to Interestingly, in decline wage compared X% experienced These XXXX. a a has price sales slowdown attributed index to property even the cooling the rates in quarter despite primarily collectively due entered since as the Singaporean higher various previous the consumer

in In desire faced the remain to challenges, response, is in strategies significant and currency further country. to and growth for from currency X% Malaysia local challenges of exploring XXXX prospects the our to GDP Malaysia's depreciation. optimism Additionally, success range fundamental the and stimulate the proactively mitigate government PropertyGuru these to about strong Despite iProperty long-term housing the the volatility. both brands due X%

limited and near-term market as defining confidence boost are the stimulate remains market our to government's offerings and the build showing to Vietnam, out unchanged near-term efforts continue impact. We issues. In of navigate immediate the consumer will market suite outlook

week, the accessibility alike. importance for government the Vietnamese and individuals enhance to in businesses last credit lowering interest rates However, of XXXX highlighted

to to is growth we signs Additionally, from QX GDP inflation growth to focus X% Vietnam actively are of resources keeping for are committed check. these anticipation achieve encouraging, the did our XXXX of to GDP evolving as in accelerate Early government strategy the while XXXX. At market QX in X.X% also PropertyGuru, adapting in conditions.

Our designed measures growth the product implementation discounting. strategy dynamic country the a to pricing a like and of and transformation include enhance sales revenue restructuring recent initiatives customer strategy. is new through appointment of innovative and This manager, service reduced team drive

demographic, important as has generative operational infrastructure the to of utilizing an it's and and significant poised adoption in increasing economy GuruPicks, our enduring to an actively PropertyGuru Lastly, Vietnam's investments recognize benefit team use to enhance introduced efficiency. Central to These emerging youthful property that strategy machine writing. the and personalized urbanization, a from stature base our of manufacturing Last at employs been include we prospects. long-term while increase of quarter, engineers and constantly to of over productivity economic continuously with Internally, global by This code innovating value is remarkable Southeast landscape AI is XX% engineering listings machine enhance learning We GitHub its for copilot for stakeholders Asia, the improve copilot designed technology. learning. leveraging feed individual a changing algorithms. to of output. our and create alternative country's approach navigate the

early machine consumer agents property aiding effective refinement saw further significantly creating in rates PropertyGuru's we description click-through powers following quarter, learning benefits generator, listings. increased algorithm more This the listing of as relevancy. Furthermore,

with agents in half nearly contact. active in quarter. lead had We XX% for have By last engaged advancements made the Singapore it direct third with lead the utilizing management end management of of also over lead introduced Singapore quarter,

approval to service. July, or IPA fintech. we our In Moving launched in-principle

is insights supply intelligence agents our as capabilities all their DataSense. help will part September, system, subscriptions documents. property launch, additional them market and trends. has Also to consumers Once X option forms simple people their of while form we provide provides a We consumers available an data we country giving transaction a demand launched the fill digital our process. Singaporean experience by in to foreign of in testament bank-agnostic provide directly foreign that their as is PropertyGuru. the that In and and helps data that sending analytics key pre been type value, effectively a in trends bank, Finance. In finished, online product significant developer strides. select AgentNet our from the to on also into window DataSense the CRM a as origin. rolled now modules governmental of opportunity with service proprietary self-serve this first This are chosen digital users an solution The for our effect, upload preferred demand smart demand approval tool and a helps by complete and In institutional This modules asking IPA information we before mortgage enables and customers the and buyers check well with necessary to developments, out are agents the quarter, institution. made platform, has of investor combined mortgage detailed agents And property and software and the online XX% it upsell for. are efficiently customers This exciting since solutions PropertyGuru other market as strengthen to business its our financial marketplace its application agent more module. into

solid along launches for This strides in quarter and progress our adoption leverage and segments, an operating growth. increase showcasing various group, marked solid business product with revenue significant in

Malaysia, While future. challenges optimism our and performance been the we quarter faced has Vietnam this in for the overall fueling encouraging,

resiliently navigating pride in me by conclude through our emphasizing Let market conditions. variable

regions fastest-growing are of We positioned and the well decade is expected what in the beyond. over be to next one

continue vision through to are to walk Joe in work believe now the to our call power communities to anchored our financials. fundamental We over live, and markets future thrive core our the committed and cities. I to opportunities growth profitability around to tomorrow in you will in hand and

Jolyon Michael Dische

Thanks, Hari.

the are as number PropertyGuru revenue quarter markets. million despite results pleased grew with to $XX in a challenging XX% our core We conditions of this

positive positive addition net year-to-date. net adjusted the growth double-digit quarter revenue we as EBITDA and to were margin, as double-digit flow cash In well income in

to continues was a last and Vietnam, of Excluding headwinds, macro confidence XX% solid consumer third which quarter year. face from the up revenue

of us to leveraging outstanding as While look cost continues deliver to positive quarter, active this the automation management top well consistently for we as line as was our clearly results again and technology grow a EBITDA. adjusted

in Our million million from adjusted more the quarter EBITDA year with than $X XX%. our margin prior to to grew $X from X% doubling

our an eye in approach hire will current profitable steadfast conditions both are opportunity. uncertainty and to We focus with market future while investments navigating our and selectively to and growth

adjusted in markets. In EBITDA our EBITDA while I and marketplaces underscoring revenue rate XX% up effectively add our the in X% core each margin. in see cost grew this of of revenue quarter, balancing Singapore, was increased also one year $XX prior to in the were quarter, for revenue As result, XX%. incremental a million, from including had the $XX XX%, up revenue and to Vietnam, [venue] we that positive value only would resulting adjusted EBITDA conversion expenses with an a adjusted almost our million each our in XX% we of overall quarter,

a now agent XX,XXX Our agents quarter, rate have of and again over customer we this with XX%. grew base renewal

agent prior quarter Our the up ARPA, almost quarterly revenue or was from per to average $X,XXX. XX% year

Malaysian growth quarter, X% had the increased margin prior Prime another of good largest new million actually in adjusted million $X the well the deliver quarter and offerings, fluctuations. The categories -- revenue purchased the basis, depreciated percentage most currency credits prime Credit of expense EBITDA our us helped listing. customers strength. rates currency place higher $X our million, since $X our expensive our credits in quarter, had quarter. was subscription adoption headwinds as agents our offer. X% EBITDA revenue and despite Also adoption amount the and XX% adjusted increased in reflecting In services as The addition, was On $X value quarter. from local the to increased on we Ringgit up a In and is and product Malaysia, up X record from we macro our of outstanding a we the third year million year-on-year. products of greater in from management

the from anticipate to government XXXX. The as As adjusted help margin into to anticorruption continue the from prior quarter the EBITDA we in combat to these XX% year from XXXX listings. Adjusted main issues of quarter third credit driver we with Listing the down this down a and XX% we listings from number with activity XXXX. XX% third on X% depressed in revenue of as and the we Hari activity quarter inflation as is EBITDA the second proactive increase ARPL Vietnam quarter, following mentioned, slightly the move focus helped or and Consumer measures headwinds. per sentiment partially quarter adjusted in X% margin. ForEx the currency remains improving which positive alleviate XX% in in by grew listing XX% was a revenue us a market EBITDA EBITDA year-on-year our will even reduction giving navigate of tightened to offset adjusted quarter, government average

year-on-year loss companies of consumer alike a Finally, investment application was as Fintech revenue adjusted process $X million. making of more of mortgage us decisions are confident Services data-driven and up out areas help for much was suite while and sustained financing Data also a to friendly. and the make combined we property-related and businesses individuals EBITDA build innovative XX% products These

macroeconomic bringing financial once in headwinds Southeast understand forefront their to the to value Asia market-changing be further at future of solutions continue subside. data this transforming and and region We

ended the sheet, the X and cash $XXX for net in a the On first of we positive with XXXX. months cash quarter flow million balance

are and the account $XXX into for taking remainder slow $XXX XXXX and recovery a Vietnam year XXXX revenue macro to million between revising full uncertainty our Malaysia. in million We of outlook in

our and remain we despite We between very Southeast pleased near-term adjusted cost control double-digit market million positive are adjusted our well and with deliver and both be ability EBITDA EBITDA in double-digit efforts recovery property of as margin. conditions, we full are $XX However, continue long-term as for another our million maintaining core quarter on year Vietnam of outlook Asian Southeast XXXX marketplaces to and our as challenging in $XX conclusion, growth prospects the to Malaysia Asia. In ownership demographics effective.

leveraging term, to we management investments focused Longer market-changing products and importance and businesses consistent results. the expense while targeted prudent control automation, learning Our efforts create machine of continuing property these to seekers for and to like cost continue technology our for customers growth call would hard deliver with understand for innovative over yield turn sustained for ready and our we're improvement commitment all work adjusted margin. I will EBITDA Gurus and in first to Operator, questions. to for ongoing and PropertyGuru the support. thank thank question. their I their now measurable our

Operator

question Jones from going to Joe. JMP be first Nick Okay. is with Securities. Our Thanks, [Operator Instructions]

Nicholas Jones

I or guidance, we expecting decel to the as as think top we're kind look trends guess, inform that I of of growth. And growth big to kind of follow-up year-over-year start persistence I we some into in might about does how line with a the like year, Great. next next of a year? seeing, costs. what how guess then updated Maybe on macro industry these should the look have

Hari Vembakkam Krishnan

in XX% seeing the number referenced coming the Thanks, Nick. of Singapore in growth know Listen, market, I core the by continues well. think services much I quarter-over-quarter increase to as real I turn, think markets more our if supplies and the listings market each of Singapore More take the sectors. we perform in and online. construction I rental QX. fact, We're estate in as

good come online. high moderated continue from driven of have But very which of they you recall. So was constraint, in that's good -- to moderated. a mind, a supply supply if a the much Transactions keep indication amount have frothy by

So such. are understandable. a to good conditions, that's longer people consumers say, for need little Decision marketplace and economic overall, time But more continues times doing as more Singapore to the obviously there the market research, spend look for compete I'd their agency healthy. that's given

think I Singapore. term, and short concerns even So no concerns the term, no in actually medium the in for

reality, high, supply prices supply that's wage you're price Malaysia, to online is the things. affordability lot a and dropping the by there's of new demand a asking a of the the booked in as already and in though, they the I to because pretty inflation mark result, be a land, seeing is they've mentioned, online bit of is but cost lack tend In more And of happening up. coming disconnect challenged there but turn as projects. where it inflation But come

bit in So I short a think there challenge of to medium-term little is a Malaysia.

that, slow We we're in I consumer both then market. the referenced, from continues recovery growth accordingly. to are is QX is with that's little PropertyGuru itself, iProperty, growth second. market between Vietnam it a Joe you seeing I to to as outlook, a navigate when But in will still to obviously, continue over I'll both share at investments about what government's of year. That economies look in in QX. a sort strong will our let expectations make that it conviction high be calibrating in reflected the X% obviously and and the in very And fastest-growing and over little somewhere think about it But and very is of terms we GDP one world. X.X% talk it The next X% improved in line official X% of Joe

that. is driven jobs, of So the all and that think I by creation of urbanization

affordability have to so And They're going and cuts they're increase the going rate such. to back thesis, to interest thing. about talking fix to central that

not Maybe clearly certain it's kick to a question to didn't that happen I'll see there we're little parts XXXX. to going to later it's but if projecting going Joe year, into of -- answer. are So it happen this I

Jolyon Michael Dische

I Hari. revenue, Thanks, Yes. we're mean about year. just think think look bullish I to I broadly, next pretty at

this think where to then we've had we've pretty year. market I as had solid good we're performance and continuing recovery, challenges some mentioned, some going sort Hari where performance see of

So we're feeling very positive.

reacted a expect of our revenue this this see been to the seen business we've a EBITDA, slightly year, motto, been good I in focused again is I of those think from grow cost year to on done into selective sort which has think conversion quarter, really job. overall. fact, well side, and into far sort would next so excellent, hiring good very There's we And margins and more investment, challenging environment. has incremental

in continue in the will data, stage to we invest et early However, in businesses cetera. FinTech,

improving continued overall, So from there, see total on But business think Thailand. focus margins. leverage I and also investment we you'll in improving the

Nicholas Jones

it's the follow up to Great. side, And the evidenced maybe cost on guide. in

kind maybe profitability. AI a investments philosophically, about may able reserve are And which macro particularly the to generative hot how preserving Proptech To thinking in be very extent been of of machine and learning, about industry build and How your the philosophically worsen. is you You've markets conditions are of kind within of margins the investments of in topic to the in? thinking the universe. types and making you're today kind competitive these you kind that moat

Hari Vembakkam Krishnan

you're learning. continue of I of are product productivity. team think going generative are are seeing it's to machine great is AI as engineering improving investing we using performance, improving I and referenced, question, a XX% fact GitHub quality, code Nick. in The both consumer engineers seeing copilot, products, that you're They improving in

there's an through. think high we cycle fundamentally, course, not it, as is a though, in growth. of are that markets financial gone through. So that This we're is well. element cycle in economic going to first But have we are which I This the

So based familiar so company in business to on we these I this will with navigate it that. think knowing calibrate how this is

your to that now, So sectors, get it those see some investments think right would calibrate in we significantly the benefit. longer to point, we if some seeing a investments time accordingly. were of to for But take reason, aren't then worse those I

And AI generative in and learning. things throttle we're like not going machine so investments to

Operator

going is [ question Nelson Chang with to next Our from come ] Citi.

Unknown Analyst

quarter. solid a on Congrats

question industry first into regarding is my So year. next the recovery

So I will early next some signs half? coming sites would and time signs part Is those in industry more digest expect And discussed when the we for year? just it to these overhangs see take different of it into wonder of first be likely just in management industry recovery. to the year? Or later

Hari Vembakkam Krishnan

Nelson. question, the for Thanks

sooner. the perhaps one a Vietnam, is And encouraging the talk into think half we've where back. are in frankly, come that year is and that the to it government market seen about through what Vietnam. at trend in It's I to we a XXXX we QX. to second see and we're confidence growth we real But will It's of longer actual hope center all the you're to the rates recovery accelerate and up. do for referencing GDP anticipate talking closer great interest year expect the it And that already hear middle take the think a I of to full line we see dropping little further. looking

our online it's XXXX. with So much projecting that's very line in encouraging, and -- sorry, what for very they're

So encouraging. that's very

when supply between is Malaysia, price price But encouraging. asking a think good coming willingness there it the to consumers. I pay is and online comes disconnection the for to

So And healthy. demand that to And needs is but Singapore very more supply, more I pricing is be to market into as harder bridged. seeing between that supply that's XXXX. a a It's broken, well to referenced, as healthy as but to and evident, honest. It's continues you little volume, now. I think be call, online, transactions construction. not in rental coming fundamentally be listings disconnection more is a for there transaction going bit that's are speed There slowdown a

at world the to going you is going it's be when -- overall, economic So the listen, group overall, look through slowdown. an

these see that. green But some investments growing in we we faster, can cost So come being should we and younger as strong the controls also the the on subject investment regions highest are shoots measures, we of have those by increase the confidence having in. that world. Southeast our calibrating we accordingly. of one are do It believe to Asia We economies, recover

economy high conviction as medium we the profitability that can drive and return pretty to then in with profitability the So growth short recovers. to term

Jolyon Michael Dische

add. And sorry, to just

obviously, different Vietnam model the there. I is side, think just our on business

when bounced seen we've things what historically, have So is back.

well. in quite no activity because a bounce as seen therefore, do of see you there's You've quickly subscriptions, and, revenue back sort

in that and sort where August up of December about So impacted during revenue. XXXX we We that bounce big number the of saw listings really obviously sort And directly a back. by saw lifted COVID, between Xx.

get I impacted when you'll does always back -- it there's think Hari's business point, the some because it's and -- But in a I other to start also. that and think Vietnam downturn to unlike confidence we challenging back the turn, is see in, So once the it markets bounce model subscriptions. where revenue quickly once a

Unknown Analyst

in very market second my That's to landscape. And our competitive position Asian then I is just helpful. question the market. in Southeast leading the addition want regarding

of wondering to platform potential if into Asian trying that from see Southeast penetrate market. market some entrants any Just new the threat new style the especially you nice

potential So going see landscape are in to competitive the change year? into you any next that

Hari Vembakkam Krishnan

XX is cetera. down. And think year, venture has listen, the pace the I every honest unfortunately, economic there of harder it's we've are slowed And enter new property to are The entrants about think for who years. sector, some, new in truth also, there And financing et and space. I been that shut companies the down given conditions, around secure

little has of entrants been a business recovers, a innovative short So models. the the will economy do I slowdown We that term. come, think there bit more as anticipate in more

to them continue opportunities We track to there's see there. interesting if

was As you in might services that in adjacency work saw recall, start-up an an Sendhelper. in interesting we doing home

years, with we number a of And after them decided partnering to that acquire business. obviously for

the we indications to see terms of what's some I to deeper our think PropertyGuru experience as that would and our marketplace with data for investments with as core threats relationship wave comes have everything. we of and continue generative us But happening. AI going don't direct of in to generative these in sector, commensurate in AI, now, to ready we'll ensure customers strong business see it our right the consumers growth particular, businesses of be into with and are to of anything. discovery that deeper in But So of into that becomes sort well. consistent investments, the made consumers when next track have

a space. fully are to will that there threat, innovative and interesting continue be names or that this anticipate companies brands specific any big seeing not term, short So but enter

Unknown Analyst

regarding cash is last position. my then the And question

and in your allocation, cash So and view next year position rich share generating also into flow cash of Can management with terms ability. return investment? on use shareholder positive cash our capital of

Jolyon Michael Dische

question. the for thanks Yes, Sure.

the is towards sort flows, of we M&A, and -- we what money. the the is raised business when have store set more for positive which entering there As listed cash we out we funds the aware, you're

we've think a corp I We've team. done acquisitions. potential built of strong a of at looking work lot dev sort very

focus we play at kind is Our of the where moment.

X put focus home So services, Fintech, of data, sort it areas.

development the within markets operate finding we challenge I in. core found think the of we businesses guess, sort is I more,

is Our purchase are businesses we've of markets. offer to preference larger to to find core in quite easy that And sort found those really returns. greater it our challenging and probably transact

search, that So a and in we are market it our opportunities, alignment and more has of interesting. obviously perform we've should markets interesting obviously of looking markets said challenging. as more and before, and changes. the and of I been And I public broadening to I found But some areas those People we're terms are the widely think across that's now, of would It's sort a also perhaps makes proceed. the of the still like. add valuation behind the any report been to which those number region we'll starting in sort sort the mean back sort easier transaction. much of see of pricing in private moderating to we certainly

Operator

Seeing Hari to questions, finish. hand [Operator Instructions]. to back Okay. we'll it more no

Hari Vembakkam Krishnan

so for quarter. in us you for to call, I'd speaking another this Bye-bye. joining again you Thank like look to conference soon and forward everyone thank we much. to

Propertyguru (PGRU) 21 Nov 232023 Q3 Earnings call transcript