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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, and thank you for standing by. Welcome to the REA Group Limited Q1 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would like to hand the conference over to your host today, Alice Bennett, Head of Investor Relations. Please go ahead.
Good morning, and welcome, everyone. My name is Alice Bennett, Head of Investor Relations, and I'd like to thank you for joining us to discuss REA Group's results for the first quarter ended 30th of September 2022. Before we commence, I'd like to acknowledge the traditional owners of the land on which we are hosting our meeting in Melbourne, the Wurundjeri people of the Kulin Nation and pay our respects to the elders past, present and future.
This morning, you'll firstly hear from our CEO, Owen Wilson, who will provide a brief update on the business. Then Janelle Hopkins, REA's CFO, will talk to the financial highlights for the quarter. And following this, we'll be happy to take your questions. Just as a reminder, quarterly numbers are top line results only. So we're restricted by the amount of detail we can provide today. And with that, I'll pass to Owen to get us started.
Thanks, Alice. I'd like to welcome everyone this morning and also acknowledge the traditional owners of the land on which we're meeting and pay my respects to the elders past, present and future. REA's delivered double-digit revenue growth for the quarter ended 30 September. This pleasing result demonstrates the strength of our business and the growing traction of our premium products as a continued driver of our Residential business. Our Indian business also continued its momentum, delivering strong growth in revenue, customers and audience.
Looking at our results from core operations for the quarter, revenue was $305 million, an increase of 16%, and EBITDA, excluding associates, was $174 million, an increase of 11%. Listings were a positive factor in the first quarter with national listings increasing 5% year-on-year, in part reflecting a number of state lockdowns in the prior period. Supply and demand continue to rebalance in the major metropolitan markets, with Sydney listings up 5% year-on-year and Melbourne listings increasing 12%. Combined with our financial performance, REA continues to build momentum behind our key priorities. Our strategic objectives remain consistent and clear: continuing to deliver Australia's largest, most engaged consumer audience, driving the most leads and the best leads to our customers; providing our customers with superior value across property advertising, our Agency Marketplace and Agency Services; and becoming Australia's leading property data, valuations and insights provider.
Focusing on our operational highlights for the quarter. realestate.com.au's audience continued to deliver unparalleled value to our customers. Total average monthly visits were $121.9 million, which is 3.3x more visits than our nearest competitor. An average of 12.4 million Australians visited realestate.com.au each month, continuing our position as Australia's #1 address in property. We're still seeing healthy demand for property. Buyer inquiries averaged $12 million a month across the quarter, with total inquiries up 21% and e-mail inquiries up 48% on pre-pandemic levels. Demand is still there, and we're pleased to be driving this value for our customers. Our goal is to convert our unparalleled audience into members, and we saw 22% growth in active members in the quarter. Members returned to our platforms almost 20x per month on average. Members are also 3x more likely to complete a high-value action, such as tracking a property. This quarter, we achieved a 51% year-on-year increase in active property owner tracks. And we've reached an amazing milestone with more than 1 in 4 properties in the country now tracked by consumers on realestate.com.au.
We know that an inspection is a key property moment for our consumers and our customers. In late August, we launched a new inspection tool called Add to plan, which is designed to help property seekers seamlessly plan their inspection schedule. In September alone, almost 900,000 inspections were added to plan.
Moving to customers. Our goal is to be Australia's first choice for digital property advertising solutions. This year, we launched Premiere+, the most comprehensive advertising property -- product package for Australia's residential market. The customer response from the launch was outstanding, making a healthy contribution to our Q1 revenue growth. Our Agency Marketplace, which connects prospective vendors with our customers, generated 8% growth in seller leads year-on-year despite the softening conditions.
Finally, our Agency Services portfolio, we are continuing to see strong growth in our customer platform Ignite. The self-service platform saw an increase in monthly active users of over 100% year-on-year during the quarter. This growth was driven by a series of new features in both our rental applications product and Connect. The growth in Agency Services demonstrates that our customers are responding well to our strategy. This is centered on the provision of easy-to-use tools and features, combined with unique data and insights at a price point which represents great value. Our property data business, PropTrack, is driving value in our core products and delivering new product growth. PropTrack continued to expand its relationship with major banks during the quarter with all 4 Tier 1 banks utilizing our ABM product. Several PropTrack customers have already committed to our enhanced ABM 3.0, which we released in June. Our Financial Services business continued to expand its network with 54 new brokers joining Mortgage Choice in the quarter. We also announced plans to enhance the Mortgage Choice product offering, partnering with Athena to deliver greater choice to customers. The integration of our mortgage broking business continues and is on track for completion in Q3 of this year.
We're experiencing market headwinds in Financial Services due to rising interest rates and smaller loan sizes. After a period of significant growth, loan commitments across the industry plateaued in Q4 FY '22 and have declined year-on-year in Q1 FY '23. Refinance growth is partially offsetting transaction declines. But overall, we've seen a slowing of settlements in line with the market.
Moving to our international businesses. The momentum in REA India has continued with strong revenue growth of 47% for the quarter. The flagship site, Housing.com, consolidated its position as the #1 property site in India with 42% year-on-year growth in audience. Mobile now makes up approximately 89% of Housing.com's audience. The improved mobile experience, a focus on SEO and targeted marketing contributed to the strength of this audience performance. In Southeast Asia, PropertyGuru recorded a revenue increase of 44% in its June quarter with growth across all markets and business segments. PropertyGuru will publish its Q3 results on 21 November.
Environmental, social and governance agenda is a strong focus for REA, and I'd like to briefly speak about some significant ESG milestones achieved during the quarter. Strengthening our commitment to environmental initiatives, we fully offset our FY '22 carbon footprint. From a social perspective, REA was recognized as the fourth best workplace in Australia by Great Place to Work for the second consecutive year. Our commitment to diversity inclusion was acknowledged with REA recently being named one of Australia's Best Workplaces for Women.
And touching on governance. I'd like to mention our continued focus on and investment in cybersecurity. We are acutely aware of the heightened attention around this issue and the ongoing evolution of the cyber threats against corporations and individuals. We take the security and privacy of personal information very seriously. And as a digital business, this has always been a key focus of REA. In FY '22, we increased our investment in cybersecurity by 40%. And over the past 2 years, we've increased our headcount dedicated to cybersecurity by 60%. We're maintaining this focus in FY '23 and will further increase investment this year, reflecting the changing threat landscape and our commitment to consumer privacy.
Before I hand over to Janelle, I'll make a few comments regarding current market conditions. The rapid rise in interest rates since March has seen house prices reduce from their post-pandemic highs and further increases in rates will no doubt result in further moderation. It is worth noting though, that house prices remain well above pre-pandemic levels. The monthly change in interest rates has also slowed the market as sellers defer decisions to sell and buyers have to constantly reassess their borrowing capacity. Customers are telling us this is slowing the transaction process. While the focus tends to be on prices, it's also clear the property market continues to be supported by strong underlying fundamentals, including record low unemployment, healthy household savings and increasing international migration. These factors will continue to underpin the demand for property. REA remains strongly positioned in this environment. We do not monetize house prices and as sellers seek to differentiate their properties in a softer market, the strength of our audience and the value of our premium products has become increasingly compelling.
I'll now pass over to Janelle, to provide more detail on our financial results.
Thanks, Owen, and good morning, everyone. REA has delivered a solid result for the quarter, driven largely by growth in our Australian Residential business and REA India. Group revenue for the quarter increased 16% to $305 million. Operating expenses from core operations increased 22% to $131 million. The group delivered operating EBITDA excluding the results from our associates of $174 million, up 11%, and EBITDA including the results from our associates of $169 million, up 7%. For our Australian operations, both revenue and operating costs increased 14%.
Looking to our Residential business. National listings ended Q1 up 5%, with Melbourne up 12% and Sydney up 5%. July and August showed strong year-on-year growth, benefiting from lockdowns in the prior period, while listings in September declined, reflecting more challenging year-on-year comparables and the impact of the National Day of Mourning and AFL Grand Final public holidays. Australian Residential revenue increased strongly for the quarter with the key drivers of buyer revenues being the 6% price rise from 1st of July, the introduction of Premiere+, increased depth and Premiere penetration and 5% national listings growth. Rent revenue also increased but at a slower pace with the benefits of a 5% price rise and increased depth penetration, partially offset by a 1% decline in listings in a supply-constrained environment.
Turning to Commercial and Developer. Revenues increased with growth in Commercial, partially offset by lower Developer revenues. Commercial revenue growth was due to continued depth penetration and benefit from the 1st of July price rise. The developer market, however, remains challenged, impacted by rising construction costs and supply chain-related project delays. Revenues had a small benefit from a price rise on new projects from the 1st of September, and project commencements were up 14% year-on-year in the quarter due to lockdowns in the prior period. However, this was more than offset by the flow on impact of slower project commencements in FY '22 and overall developer caution on commencing new projects. Media, Data & Other revenues were up modestly for the quarter. We saw growth in all revenue streams, except for Developer display, which is the biggest contributor to this revenue line. Some developers have been reducing or delaying the display spend in the current environment.
Financial Services revenue declined in the quarter linked to the slowdown in residential market activity. Settlements for the quarter were down year-on-year, though we are cycling record numbers in the prior year. The ABS has reported a 6% year-on-year drop in loan commitments during Q1, which is likely to flow through to subdued settlements over the coming quarters. REA India's momentum continued during the quarter. Revenue increased 47%, driven by Housing.com's property advertising business, but also by Housing Edge, which saw strong volume growth in adjacency products such as Rent Pay.
Turning to operating costs. Australia had 14% growth in the quarter. Employee costs were driven by salary inflation and headcount as we continued to invest to deliver strategic initiatives and increased marketing and travel costs, which have returned to more pre-COVID normalized levels. The year-on-year growth rate was also impacted by lower costs last year, resulting from lockdowns and the deferral of some spend due to COVID uncertainty. In India, in line with previous guidance, we continue to invest in both people and marketing to capitalize on recent momentum and cement and grow our audience position. Strong growth in adjacency services on the Housing Edge platform also resulted in growth in revenue-related costs. Overall, group operating costs increased 22%.
The group's combined share of associates contributed a $5 million loss to core EBITDA, which compares to a $1 million gain in the prior period. This largely reflects lower contributions for Move. U.S. housing market has been impacted by the current challenging macroeconomic environment with higher interest rates and inflation impacting demand. The market downturn resulted in a 32% year-on-year decline in lead volumes to Move and lower transaction volumes. While this was partly offset by improved yield and higher home prices, Move's revenues declined by 6% in Q1. Move also saw higher employee and marketing costs as we continued to reinvest to drive core business and expand into adjacencies. For more information on Move, please refer to News Corp. Moving to current trading conditions. National residential buy listings in October were down 18% year-on-year, with Sydney listings declining 31% and Melbourne down 29%. This reflects the rush of listings we saw in October last year as lockdowns ended. Growth rates for the remainder of the year will be impacted by strong prior period listing volumes, which were particularly high in Q2 and Q4. Despite lower listings, we anticipate double-digit revenue by yield growth in FY '23, driven by an average national 6% price rise, the benefit from our rollout of Premiere+ and continued growth in depth and Premiere penetration. The group continued to target full year positive operating jaws for Australia in FY '23. Australian operating cost growth is expected to be mid- to high single digits, reflecting the continued inflationary impact of salaries and investment to deliver on our strategic growth objectives. Given the current listings environment, we are naturally being prudent on costs and therefore, Australian cost growth is more likely to come in towards the lower end of guidance. It's also important to note that growth rates will vary between quarters, given operating expenses in the first half of last year were slowed or deferred due to cover uncertain environment. This meant that the costs are more heavily weighted to the second half and the fourth quarter in particular.
For REA India, in line with our previous guidance, we will increase investment to cement our #1 audience position and improve the customer and consumer proposition with FY '23 EBITDA losses expected to widen. Total group operating costs are expected to increase high single digits to low double digits, which compares to our previous guidance for low double-digits growth.
On a final note, while rapidly rising interest rates are having a short-term impact on the market, we will continue to focus on delivering great value to our customers and our consumers while prudently managing our cost base.
I will pause there. Operator, we will now open for questions.
[Operator Instructions] One moment will compile the Q&A roster. Our first question comes from the line of Lucy Huang with UBS.
I've got 3. Firstly, in terms of Premiere+ take up, are you able to give us some color on the penetration rate or attachment rate of this product? Or any color as to which areas or cities where we are seeing stronger take up? And then just secondly, in terms of your guidance for FY '23, around double-digit yield growth. Are you expecting the majority of the Fin growth aside from price increases to come from Premiere+ or depth penetration? Just wondering what the mix is or contribution you're expecting from the different components? And then just lastly on finance, are we seeing some steady momentum in refinancing activity? I think you had mentioned last time that we could see some refinancing activity given rates arising and fixed loans are coming off. So just wondering if we're seeing that momentum starting to come through yet?
I might take 1 and 3, Lucy, and ask Janelle to take 2. Premiere+, the sign-ups occurred prior to 30 June to that product. And so we're seeing that the penetration of that product in line with the signups that we got in Q4. We don't disclose, obviously, the rate of penetration, but it is fairly even across the country and higher in the capital cities. In terms of -- Janelle will take the yield question, I'll take the Fin Services one. We are seeing -- the rate of refinance is a lot higher than it's been previously. And that's a combination of fixed rates rolling off, but also just the rising interest rate environment is causing people to look at where they're lending from. Our estimate is that the peak rollover fixed rate doesn't occur until April, May next year. And so I think we'll see a lot of refinancing there. What you are seeing though is some people coming off -- and it is a small part of the market. Some people are coming off fixed rates and they just can't move. They are in a situation where they either don't meet the serviceability requirements of other lenders or the collateral as well. So they're kind of stuck where they are. But overall, what is really impacting the market is that, as we said in the speaker notes, the transaction volumes have shrunk as interest rates have gone up, and there are less transactions in the market.
And thanks, Lucy, on your question around double-digit yield growth. Yes, we have reiterated our guidance for a double-digit yield growth. And we expect that to come from a combination of the benefit of price as well as stronger growth coming from the uptake of Premiere+ as well as continued growth in Premiere and overall depth penetration.
Thank you. And one moment for our next question. And our next question comes from the line of Eric Choi with Barrenjoey.
Maybe I'll go one by one. On the cost guidance, Janelle, you mentioned Australia is going to come in at the bottom end. Just wanted to clarify, has the Indian cost guidance changed within group cost guidance as well?
No, we haven't made any changes to Indian cost guidance at the moment. We're really pleased with revenue growth in India, and we've continued to invest as we planned. For Australian cost guidance, we're really just being prudent in the current market. We have the levers that we can pull to reduce costs should we need to. So we're just flagging that we're being prudent at the moment.
That makes sense. And kind of good segue into that change cost guidance. It probably implies you're reducing costs by probably $10 million to $15 million versus where you were before. So is that just purely in response to the lower like listings outlook? So you're sort of managing lower cost to whatever delta you think the listings outlook is now? That makes sense?
Yes. I'll take that one, Eric. Not so much the outlook because, I mean, the outlook, it's very hard to predict listings. We're sitting here at the moment and our view of listings for the year hasn't really changed a lot from what we said at the full year results, in that we said Q1 will be up. And I think the reality is that Q1 was not up as much as we thought it would be given the lockdowns last year. And October has come in fairly low, and we would expect similar sort of listings into November. So in this short-term kind of listings environment, we're just being very prudent on costs. And we've said so many times, we can flex up and flex down just by slowing hiring, et cetera. And that's what we're doing. As we get better visibility as to what's going to happen in the second half, then we can flex in either direction as required. So that's what you're seeing in that guidance. We've already -- given what we were seeing from -- through July, August, September and into October, we've already started to do that flexing. And that's what you're seeing in that revised guidance.
Can I go one step further then, Owen? I guess before we -- and no one knows, I appreciate that, but we were thinking low to mid-single-digit volume declines before. What's your best guess for '23 now?
Your guess is as good as mine for '23, Eric. It's fair to say, as I sit here now, what's changed from when we were talking in August, I think Q1 came in a bit lower than we thought. And definitely October was lower than we would have anticipated, given it is meant to be spring and it's meant to be one of the best parts of the selling season. I think there's a few things at play here. I mean one is as I mentioned earlier, the rapid rise in interest rates. Every time there's a rate change, it slows the market. Our customers are telling it slows and it gets just causes vendors to pause and think, and that causes buyers to kind of reiterate how much they've got to spend.
I work on the theory that listings are never lost. They're either brought forward or they're deferred. And I think what we're seeing at the moment is deferral of listings until things become a little bit clearer for both sides of the transaction. I have a view that when it becomes clear that we're either at or near the top of the interest rate kind of cycle that we're in at the moment, I think that's going to open up the market considerably. And if we are seeing deferrals from October, November and already customers are telling us they've got vendors ready to go in February. Now that just seems strange that they just don't want to go now. But Q3 could be better than we think. Q4, we're absolutely predicting will be down given the high volume of transactions last year. So overall, it's just really hard to predict. And so that's why we're being cautious on our costs.
Just a final one on -- a follow-up on Premiere+. You'll go around to probably third quarter of FY '23. Can I just clarify, if when you sign up the second wave, when do those financial contributions come in? Do they come in third quarter, fourth quarter this year? Or we go into FY '24 before we get those financial contributions?
No, I would imagine it will be Q1 FY '24.
Thank you. And one moment for our next question. Our next question comes from the line of Kane Hannan with Goldman Sachs.
Surprised to send News Corp out to you on technology this morning. I got 3 as well. Financial Services, you did have a pretty soft performance in the second half last year. Just talk about how the margins tracking sort of this quarter, this half. I know you can't be specific, but just given the settlements are coming off, how that all plays together. And I suppose, expectations around when we might be able to get that back into the 30s from a margin perspective.
Secondly, just you did previously speak to the single-digit associate contribution loss in the full year, given what's happening in North America and Move. Any sort of changes to those expectations? And then lastly, I suppose it's probably a harder question to answer. Given you're not offering those new Premiere+ subscriptions at this time, but we do have a lot of uncertainty out there in the market. Do you think the agents who have signed up and had that unlimited time on market feature potentially taking share or outperforming sort of peer agents who didn't sign up to Premiere+? And we're sort of seeing that dynamic play out in the market? Cheers.
Thanks, Kane. I'll take the first 2, and Owen will take the third. So on Financial Services, yes, clearly, we're not giving EBITDA margin view for the first quarter or the half. But if you think longer term, the benefits we expect to get from cost savings coming through the Financial Services business as we finish the integration, I think, will support our margin improvement over time. Short term, the impact of what's going on in the market will impact the revenue performance for what we're expecting to be, at least this half and into the second half of the year.
But we are doing things to offset some of those market declines, things like continuing to recruit new brokers, 54 new brokers for the first quarter, slightly on 154 for last year. So we're seeing new brokers join. We have our salaried brokers in market where we're keeping 100% of the margin. We're continuing to work on productivity initiatives for our brokers. So that's -- we think that will help. But we are still absolutely targeting that 30% margin over the medium term.
And then on Move, we haven't changed our view on the overall single-digit loss for associates for the full year. I think like we've talked about in phasing for Q1 for the Australian business, that's consistent with what we're seeing in Move as well.
And then on Premiere+, that I can tell you the agents who are on Premiere+ are delighted that they're on it, particularly in this market. And it's the various features they like. I think the unlimited Premiere is a very powerful selling tool to nervous vendors in this market. So that's getting a lot of traction and seen as a great advantage. The bump is very popular. And they're getting very strategic around when they're using the bump. And the coming soon is popular, but I think the sole element of it is something they like because I meant it looks like -- it goes to momentum in the market, that if you can be telling a lot of prospective vendors that you're outselling, that's a very powerful message. So I have no doubt that customers who aren't on this product are going to be lining up at our front door in Q3 next year to all sign it up.
Thank you. And one moment for our next question. Our next question comes from the line of Darren Leung with Macquarie.
Just one question for me, please. It looks like on some of the data that the debt penetration piece is actually declining quarter-on-quarter. I appreciate it's still up year-on-year and your sort of outlook comment through FY '23 suggests they will still be up year-on-year. But any sort of color you can provide around the change quarter-on-quarter and in particular, just how you're thinking about it is seasonally and how it reflects the market going forward, please?
One of the things you see in depth numbers, and we obviously don't disclose the numbers in particular at a quarter, but you do see an impact from geo mix. And so if you've got Sydney, Melbourne moving around versus the rest of the country, that will have an element. Overall, for the year, we are calling increased depth penetration.
And one moment for our next question. And our next question comes from the line of Siraj Ahmed with Citi.
The last 3 years -- well, then I'll ask them one by one. Just first one, Owen, in terms of the debt, the yield outlook for double digit. Have you seen any weakness on that? I know the price [ rise ] is locked in, Premiere+ is also locked in. But incrementally, given listings are weak, have you seen any weakness in the outlook?
No. Look, we are, as we said, displaying double-digit yield growth. We have seen increased Premiere and depth penetration in all states in Q1 and even slight, as I mentioned, there is a negative -- a little bit of a negative impact from geo mix. But in spite of that, we also saw it in October. So we're still calling up FY '23.
Great. Second thing, and this is -- might be a bit too early, but thinking about FY '24. Owen at the Investor Day, you had said that price increases, a minimum of 6% is what you're thinking. Given the start has been a bit weaker, any sort of change to that thought process that you can put the price increases through?
It's very early to be talking about FY '24 price. But we do plan our price increases over multi years. What I would guide you to is incredible value we're building into our products and into the value we drive to our customers through increased buyer leads. That's some of those buyer lead numbers I quoted are remarkable. So we're absolutely confident that we're driving increased value, which will underpin, I think, a very healthy price change into FY '24. So there's no -- I haven't changed my view on that.
In terms of where we might be in the cycle going into FY '24, we could be heading towards some really good conditions. If you look at all the economic forecasts that are out there, they're all saying that interest rates should peak in the second half of this financial year. I have a strong view that once we're clearly at the peak, the market will really rebound. And so we'll have a few things at our back going into FY '24. We might have peaked in interest rates, and what you will see is we'll be cycling over these really low listing numbers, particularly in October, for example, in September. And so this time next year, we'll be talking about listings growth off a really low base.
Sure. And just lastly, in terms of the cost towards the lower end, where have you really lowered your cost? Is it less hiring? Or is it advertising? I need to get some color on that.
Siraj, so where we've started to look at as -- is the speed of replacing of vacancies at the moment. So we always have a certain number of vacancies. So we are just trying to slow down some of that recruitment.
Thank you. And one moment for our next question. Our next question comes from the line of Entcho Raykovski with Crédit Suisse.
I've got a question around Premiere+. I'm hoping you can answer this. Just interested in the sort of benefit to revenue growth, which Premiere+ delivered in the quarter. I appreciate you're not disclosing penetration, but sort of any rough guidance, if you could give us an idea of what contributed to the revenue growth now for the group or maybe to [ measure ] depth that would be quite useful.
Entcho, it's almost impossible to give you a precise number because you recall that Premiere+ has got a fixed price increase depending on the geography. And then depending on the zones within the geographies, the yield up was very, very different. So you'd have to map out every listing by geography to get a number. It's a healthy contribution, but it's not a number we have a precise accurate measure of, and it's not one we disclose.
Okay. Got you. And then maybe if I can ask a question on listings. I know already discussed a lot, but you probably have -- I appreciate the outlook -- your guess might be as good as ours. But in terms of what you're seeing so far within spring, are you seeing any bump in listings at all into spring coming out of winter? Or is it basically flat? And I mean if it's flat, that seems pretty dramatic, albeit probably just temporary. And I guess what's driving that? Is it just the challenging market environment?
Yes. So I've got a bit of a theory on this one. So we are seeing a bump. October is higher than September. And I suspect November might be higher than October. And there's a few things driving that. One is -- and this is very geographically specific. But the Melbourne Carnival weekend was as early as it ever can be, with the Cup there being November 1. So effectively, that weekend of disruption came into October from November.
The second thing is -- and it's very hard to determine whether it's a factor or not, but I honestly think the weather has played a part. When it's been pouring with rain nonstop across the Eastern Seaboard of Australia, I don't think there's any coincidence that the Eastern Seaboard numbers were particularly weak. It's very hard to sort of get people to come and do the photography, you don't want open inspections. When it's -- the outlook is for rain, I do think there's sort of a psychological impact of whether you're going to sell your house in that. So whether that's a reality or not, we'll never measure. And as I said earlier, the extent that the listings are very low, I do think it's deferral. I think the reasons why people buy and sell property have not gone away. And it's just a matter of when they come to market, not if. So it will happen, whether it deferred into Q3 or the deferred into December, hard to predict.
Okay. Great. And then maybe just a couple on Developer. I think you've recently put through a price increase for project profiles. Can you confirm the quantum and how that's being taken by developers? And then secondly, are you seeing any shifting of spend by developers of their spend away from media and into project profiles given that price?
So the price increase was effective on 1 September. It is double-digit price increase. It's the first price increase on this product for over 5 years. And the reason being the market has been soft for quite some time, and we're very cognizant of that. But the reality is we've built so much value into the product, we had to bring the price up. And we flagged that with our customers quite a long time ago, so there's been no discernible change in spending behavior. They've known this is coming for a while. I think they're fully accepting of the fact that it's been so long, it was overdue. So we're seeing no negative impact to that price increase.
One moment for our next question. Our next question comes from the line of Paul Mason with E&P.
Just 2 for me. So the first one is just in relation to your guidance and Audience Maximiser. I think last year, you guys saw in the second half, if my memory is serving correct, a bit of an uptick because revenues were going so strongly from Audience Maximiser and you have some social media costs that you then have to carry as a result of that product. And so I was wondering in terms of your sort of commentary around sort of being a bit more conservative on costs this year, whether any shifts around in the volumes of Audience Maximiser are actually affecting that? Or whether that could actually be a further tailwind depending on how prolific that product is for the rest of the year? The second one was just maybe some general comments around your intentions, around your strategic projects like property.com.au and whether that spend is still full steam ahead? Or whether you've sort of pumped the brakes on that because of the environment as well?
Look, there's no -- the movement in the cost guidance is it's not really Audience Maximiser related. That's traveling at or about the volumes we saw in the second half. So it's not really having an impact on our costs. So that's not what you're hearing in that kind of slight change to guidance. And there's been no slowdown in PCA. We're delighted with the rate of development of that site. We're adding new data sets to the properties each month. I encourage everyone to go and have to look at it. It is actually -- it's a really good site, and it's still early days. So no, we're not going to slow that one down. We're pretty excited about it, actually.
Thank you. And I'm showing no further questions at this time. And I would like to turn the conference back over to Owen Wilson for any further remarks.
Look, thanks, everyone, for joining the call today. We're incredibly pleased with our Q1 result and our start to the financial year, and I look forward to seeing you in the coming weeks and months. Thanks, everyone.
This concludes today's conference. Thank you for participating. You may now disconnect. Everyone, have a great day.