Good morning, everyone, and thank you for joining us for the Kogan Group's FY 2025 results presentation. It's a pleasure to be here with David Shafer, our CFO, COO, and Executive Director, to share the results of what has been a strong year for the group, driven by the remarkable growth of Kogan.com. This year, we significantly grew our customer base, scaled our platform businesses, strengthened our core product offering, and converted that momentum into stronger cash flow. We welcomed 915,000 additional active customers, bringing the group total to 3.5 million, up 35% year-on-year. This strong customer growth benefited our revenue streams: platform-based sales revenue increased 24% to over $111 million, and Kogan.com products revenue grew 15% to over $258 million. At the same time, we increased free cash flow by 40% to over $32 million.
These are not just key highlights, they demonstrate the power of our business model: efficient, diversified, scalable, and resilient in any environment. Now that we've looked at the key highlights for the year, I want to take a moment to step back and remind you of the business model that underpins our performance. At its core, the Kogan Group is underpinned by two powerful strategies working together. The first is our product division. Here, we sell a wide range of goods, both exclusive brands and third-party products, at incredibly competitive prices. What makes this possible is our direct-to-consumer model, where we source directly from manufacturers, cutting out unnecessary steps in the supply chain and passing those savings onto our customers. The aim is not to maximize margin, but to attract and retain customers by consistently delivering outstanding value.
The second is our platform-based sales, where we leverage that customer base through our marketplaces, loyalty programs, verticals, and advertising. These businesses are capital-light, scalable, and deliver recurring revenue at an attractive margin. The formula is simple but powerful: outstanding value draws customers in, customer loyalty keeps them engaged, and our platform-based model generates recurring revenue with attractive margins. This approach has underpinned Kogan.com's growth since its early years, evolving over time but always anchored in delivering outstanding value to customers. It remains the key to our future growth and financial strength. As we reviewed our performance heading into the year, it became clear that the best way to consistently grow our earnings was to grow our customer base, and the best way to do this was through increased investment in marketing. From the second quarter, we deliberately increased our investment, focusing on high-return channels and value-conscious customers.
This wasn't just about investing more, it was about spending smarter. By targeting the right audiences and leading into channels with proven ROI, we strengthened our brand presence, extended our reach, and have set the business up for sustained growth. The results speak for themselves: Kogan.com active customers grew by more than 48% year-on-year, climbing to over 2.8 million at the end of FY 2025. That's almost 1 million additional customers choosing to buy from Kogan.com in a single year. This isn't just a short-term uplift. By reinvesting in our core asset, our customer base, we're ensuring that our platform continues to scale, generating recurring revenue at attractive margin streams that drive long-term value. With that, I'll hand over to David, who will take you through the financial results in detail, including revenue performance, cost management, and cash flow for the year.
Thank you, Ruslan, and good morning, everyone. It's great to be with you today to walk through the group's FY 2025 financial results in more detail. As Ruslan highlighted, this was a strong year overall, underpinned by the performance of Kogan.com. At the same time, we also faced challenges in Mighty Ape, which we'll touch on as we go through the results. Slide 7 shows the group's results split between Kogan.com and Mighty Ape. Kogan.com, the group's primary business unit, is the larger of our two reporting segments. It operates a products division, verticals, marketplace, the Kogan FIRST loyalty program, and an advertising platform operating under well-known brands, including Kogan.com, Dick Smith, Matt Blatt, and Brosa. Mighty Ape is headquartered in New Zealand and joined the group in December 2020.
Mighty Ape offers a broad range of retail products, and in recent years, we've expanded its offering by rolling out a number of verticals and a marketplace under the brand. When we look at the group's results, the story is clear: Kogan.com was the driver of performance in FY 2025. Gross sales at Kogan.com grew 20% to $794 million. Gross profit increased 21% to $156 million, and adjusted EBITDA increased 13% to just under $37 million. By contrast, Mighty Ape fell short of expectations. Gross sales declined 7% to $137 million, with gross profit down 15% to almost $34 million, and adjusted EBITDA was a small loss. These results primarily reflect the impacts resulting from the migration onto the new Kogan platform in October 2024, which caused operational challenges during the most critical sales period and into the second half of FY 2025. More on this later.
At a group level, gross sales grew 15% to $931 million, and gross profit increased 13% to almost $190 million. Adjusted EBITDA was $36.8 million, down 8%. This result was delivered entirely off the back of Kogan.com, with the challenges at Mighty Ape clearly weighing on the overall group performance. We will take you through the initiatives to turn around Mighty Ape's performance shortly. When we look at the breakdown of gross profit across the group, what stands out is the strength, quality, and diversification of the earnings. Almost two-thirds of gross profit comes from exclusive products and services that can't be directly replicated by our competitors. These include our loyalty programs, our exclusive brands, our verticals, and our advertising platform.
During excess stock and optimizing inventory ahead of the FY 2026 peak season, we're confident this will be fully resolved by the end of the first half, positioning Mighty Ape for normalized performance from December. This slide shows the outcome of our decision to reinvest in customer growth in FY 2025. Marketing is one of our biggest discretionary levers, and this year we used it deliberately to accelerate growth in our most valuable asset: our customer base and brand. Seeing the financial impact of that decision play out in real time is critical for understanding the group's performance. You can see the shaded bars for our customer base, with the red segments highlighting net incremental growth each month. Once we lifted our marketing investment, customer acquisition accelerated immediately and continued through the rest of the year. By June 2025, Kogan.com had 2.8 million active customers. Importantly, this wasn't about chasing volume.
Every additional customer strengthens our ecosystem, whether through marketplace, verticals, or our loyalty programs. More customers make us a more attractive partner to sellers and partners, which in turn provides us with a broader and more desirable customer offering. That creates a multiplier effect: more customers, deeper engagement, and stronger recurring revenue. Turning to the balance sheet and cash flows, the group is in a solid financial position. We closed FY 2025 with $42.1 million in cash and no debt. Importantly, free cash flow increased by 40% year-on-year to $32.4 million, driven by the significant growth across the Kogan.com revenue streams and increased cash flow from the Mighty Ape inventory optimization. On capital management, we returned $11.1 million to shareholders through the ongoing share buyback, and we lifted dividends, paying $0.145 per share during the year. We did recognize a $46.3 million goodwill impairment related to the Mighty Ape acquisition.
This is a one-off, non-cash write-down that does not impact the group's cash generation or ability to fund growth and capital returns going forward. Importantly, we remain confident that Mighty Ape will return to profitability as operational improvements take effect, and we see the write-down as a reflection of short-term performance rather than a change in our long-term belief in the brand or business. Overall, the balance sheet remains strong, we have generally healthy cash flows, and we continue to invest in ways to deliver value to shareholders. If you're looking for all the details of our financial statements, you will find all the details in the annexes. With that, I'll hand back to Ruslan to deliver our business update.
Thanks, David. I'll now take you through our business update, which delves into the many highlights we've achieved in the year. This slide highlights why Kogan.com holds such a unique position in the Australian and New Zealand retail market. Our customers are value-driven and tech-savvy. They know how to compare products, they know how to find the best deals, and they care about function and quality over brand names. High-status labels don't drive their choices; real value does. Our customers are not bargain hunters looking for the cheapest option; they're value-conscious consumers who want the best deal without compromising on quality. This aligns exactly with our purpose: helping customers live their best lives by delivering remarkable value by delivering outstanding value across thousands of products. What's really significant is everything to the right: our platform-based sales. This includes our marketplaces, verticals, loyalty programs, and advertising platform.
Together, these now represent almost 60% of the group's gross sales in FY 2025. Why is that so important? These businesses are capital-light and scalable. They generate recurring revenue streams from our loyal customer base that grow faster and generate more attractive margins than traditional retail alone. While our products division attracts customers, it's the platform-based sales that really power the long-term value of the group. That combination is what makes our model unique and why we're so well-positioned for sustainable growth. Here you can see the performance of our platform-based sales over the last three years. Growth has been consistent and compounding. In FY 2025, revenue grew by 24% to $111.9 million. What's exciting is that this trajectory is only just beginning. In FY 2024, we launched Mighty Mobile, and in FY 2025, we introduced the Mighty Ape Marketplace and significantly enhanced the PRIMATE loyalty program.
All are in the early stages, but they represent significant opportunities to accelerate growth in the years ahead. While the past three years have delivered strong, consistent growth, we're only just getting started. Kogan Marketplace, where third-party sellers advertise and sell their goods through our platform, delivered a strong rebound in FY 2025, with revenue up 34% to $29.4 million. The recovery was driven by two factors: increased marketing investment, which accelerated customer acquisition, and our continued focus on supporting top-performing sellers. By working closely with our seller base, we've improved product availability, broadened the range, and enhanced the overall customer experience. Marketplace is one of our most scalable models: no inventory risk, minimal capital, and it expands naturally as our customer base grows. FY 2025 not only marked a return to growth but also strengthened the foundations for future expansion.
This division is set to remain a key contributor to group performance. Kogan FIRST has once again delivered a standout performance. Revenue grew 17.5% year-on-year to $51.3 million. What makes the program so powerful is the loyalty it fosters. Around 90% of subscribers are on annual plans, which speaks to the level of engagement and trust our customers have in the program. These members are not just loyal; they're our most valuable customers. In FY 2025, Kogan FIRST subscribers drove close to half of our product gross sales, showing just how central this program has become to the group's success. This year, we also launched Kogan FIRST Max, a new premium tier of membership designed to give our most loyal customers even more value and benefits. It's still early days, but the enhanced features are already driving deeper engagement and encouraging members to spend more across the Kogan ecosystem.
Now, let's turn to the Kogan verticals, which delivered a record year of revenue in FY 2025. As you can see, the division grew 14.4% year-on-year to $22.9 million. Importantly, this growth was broad-based across all key verticals. Kogan Mobile grew 7%, continuing to provide great value in a very competitive market. Kogan Money grew strongly at 47%, led by our credit card business. Kogan Internet delivered 10% growth, and Kogan Energy surged 359% as it offered the best utilities pricing for most of the year. The performance of Kogan verticals demonstrates the power of extending our brand into categories that deliver recurring revenue and high engagement. These businesses not only diversify our earnings but also deepen customer loyalty, embedding Kogan further into our customers' daily lives.
Many of these verticals also integrate with Kogan FIRST, with complimentary memberships offered to Kogan Energy and Kogan Money credit card customers and additional benefits for Kogan Mobile subscribers. Kogan products delivered a strong result in FY 2025, marking a return to revenue growth and the second consecutive year of gross profit growth. Revenue increased more than 15% to $258 million, while gross profit increased nearly 23% to $48 million. We saw gross margin expand by over a percentage point, driven by better buying, stronger negotiations with suppliers, and disciplined inventory management. More than 72% of revenue is now coming from our exclusive brands, which gives us control over price, quality, and margin expansion. We're also seeing strong momentum in higher value categories such as home and living, appliances, and consumer electronics. Our average transaction value is now $159, up 7% year-on-year and nearly double compared to two years ago.
That demonstrates our customers are not just shopping for low-cost items but making meaningful, higher-value purchases with us. FY 2025 marks a turning point for Kogan products, and we are confident it will continue to deliver strong and profitable growth from here. This slide brings us back to the strategy I outlined earlier in this presentation. Our dual focus is on driving growth in platform-based sales while bringing the products division to break even. In FY 2025, platform-based sales delivered adjusted margins of around 50%, while group product sales were loss-making at roughly - 4%. Operating costs were allocated between the two streams based on directly attributable expenses and management estimates. The group adjusted margin for the year was 7.5%.
In the medium term, we aim to increase platform-based sales adjusted margins to 50% - 55% through operational leverage from revenue growth and a relatively fixed cost base, and progressively improve the products division from a - 4% adjusted margin towards break-even. That combination has the potential to increase group adjusted margins into the 8% - 12% range. Longer term, we aspire to drive platform-based sales beyond 65% adjusted margins, with products at break-even. Together, that would drive group adjusted margins above 20%. Put simply, keep growing our capital-light platform-based businesses with attractive margins, bring products to break-even, and in doing so, deliver significant financial performance at the group level. Moving on from FY 2025, I'm pleased to provide a July trading update. As in the past year, we will not be providing earnings guidance. Our priorities in FY 2026 include completing the turnaround of Mighty Ape.
The ongoing inventory issues mean that trading is expected to be challenging until December, with a return to better trading in the latter half of FY 2026. We expect to maintain the strong contribution from our platform-based sales. We plan to further optimize our operations and drive operating leverage, and continue to drive strong performance of our Kogan products and marketplaces. For the month of July, Kogan.com continued its strong performance, with gross sales of $70.4 million, up 32%, and revenue of $32.7 million, up 11.4%. As flagged throughout, Mighty Ape continues to work through its inventory optimization, with gross sales of $10.3 million, down 3.5%, and revenue of $8.6 million, down 20.9%. We expect group adjusted margins to be in the range of 6%- 9% for FY 2026, progressively improving in the second half as the Mighty Ape recovery is completed.
Before I close, I'd like to turn to shareholder returns. The board has declared a final dividend of $0.07 per share, partially franked. Together with the fully franked interim dividend paid in April, this brings total dividends for FY 2025 to $0.14 per share. The final dividend is partially franked due to losses recorded in Kogan Australia, driven by the Mighty Ape goodwill impairment. This reduced available franking credits within the group, lowering the franking level that could be applied. That said, the decision to maintain a consistent dividend demonstrates our strong cash generation and solid balance sheet. We remain committed to rewarding our shareholders, and the dividend reinvestment plan will again be available, with shares issued at a 2.5% discount to the market price. This concludes our presentation. At Kogan.com, we're always finding smarter ways to drive efficiency, and today's presentation is no exception.
We've used AI to record our voices for today's presentation, a small example of how we're embedding technology across the business to save time, work smarter, and deliver more value for both customers and shareholders. On behalf of the board and our team, thank you all for your interest in Kogan.com today. We look forward to meeting with many of our shareholders over the coming weeks. For those of you who have any questions or are interested in hearing more, please stay with us for the Q&A.
Thank you, Ruslan and David, for that presentation. A quick reminder that research analysts are welcome to ask questions of David and Ruslan through the Q&A function. At the moment, I have questions from two analysts. We might start with a question for David from Ed Woodgate.
Oh, hi, David. Hi, Steve. Thanks for taking the questions. Can you hear me okay, David?
I can. Thanks, Ed.
All right. Awesome. I appreciate the update and thanks for putting out the medium-term and long-term aspirations. I think that's quite helpful for analysts, particularly given that you were understandably looking to reinvest in revenue, which seems to be like the right strategy. I just want to understand, you put out what the FY 2025 platform-based margins were, and within the 2026 guidance range of 69%, is there anything you can talk to about how the platform-based margins would look? Do you expect them to go down or go up? Just noting that you're probably going to be reinvesting a lot of marketing dollars into the.
Thanks for the question, Ed. In FY 2026, we've for the first time released some forward-looking ranges of our blended overall adjusted EBITDA. You'll be aware that we've never done that before. That obviously is driven by the combination of margin and overall business size between the platform-based part of the business and the product part of the business. We've flagged that we expect margins to improve over FY 2026, and the reason for that is that we're starting off the year still working through some of the inventory issues in Mighty Ape, and we're ending the year with pretty high confidence that we will have worked through those issues in the lead-up to Christmas. We are expecting a positive performance for Mighty Ape in the second half of the year, which will improve overall blended adjusted EBITDA margins for the group.
In terms of the platform-based sales margins themselves, as you'll be aware, gross profit margins are almost 100% on all of our platform-based sales, and the operating costs are fairly split between the businesses based on work. It's really only the marketing lever that influences the adjusted EBITDA margin on a variable basis for platform-based sales. We believe as Kogan FIRST continues to grow, that we'll be able to get better adjusted EBITDA margins in platform-based sales as we become progressively a bit less reliant on paid marketing.
Okay, makes sense. Maybe just as a follow-up, if we think about the trading update, placing say gross sales up strongly for Kogan.com and the revenue up as well, would you characterize that you're relatively happy with the return on marketing dollars that you've had for the start of the year? Is there any sort of trends you can talk to in relation to that?
Yeah, we're very happy with the top-line performance of Kogan.com. Obviously, growing gross sales, which is the amount of dollars going through our online cash register, 32% up year-on-year, which would make us one of the fastest growing retailers in Australia at scale. That's an incredible top-line result for Kogan.com, obviously weighed upon by the performance of Mighty Ape. In terms of marketing levers, it's working. You can see the ROI that we're getting in one of the charts that we provided. Active customers are up to 2.8 million. You'll be aware that that's a reversal from the last couple of years. We're very confident in that, in the performance of our marketing. You might be aware that we're also experimenting with a few new marketing channels this year. We used to be almost exclusively a Google-based marketing business.
Now we're experimenting a little bit with Meta advertising, which is having some decent ROI as well. All of that has weighed into the fact that we're growing 32% in gross sales in Australia or in Kogan.com year-on-year, which is a result we're very happy with.
Maybe the last one for me, look, we've worked on both Farmers Clothes and Catch and MyDeal. Are you seeing any, is there anything you can point to other than obviously the strong trading numbers that you're taking? Any share that they had in the market? Is it, yeah, that easy?
I mean, only one of those two names has formally ceased trading. The other one I think is still pending. What I would say is that we're speaking to our sellers. It's no secret that many of our sellers also sell on other marketplace platforms. As we become one of the largest sellers in the Australian market, we've become increasingly more important as an avenue through which our sellers access millions of consumers. It has had a big sort of improvement in the working relationship with sellers. We've become progressively more important. We're doing better deals with our sellers, and we're increasingly a more vital channel for them. It does make a difference in that regard.
Okay, thanks, David.
Thank you, Ed. We have a question from online. That is one for you, David. It's a question in relation to Mighty Ape and whether or not EBITDA will continue to remain negative in the first half. Tied to that is, will the guidance range of 6%- 9% EBITDA margin apply in the first half of FY 2026?
We do expect Mighty Ape's EBITDA performance to continue to be negative or challenged for the next few months. We are working towards getting through all of those issues in the lead-up to Christmas. We're targeting a reversal potentially by the end of this half and certainly into next half. We believe the range of 6%- 9% is applicable through the year, but progressively improving over the year. We would expect the second half to be at the upper end of that range. While we work through some of these Mighty Ape issues, it'll start somewhere south of that.
Okay, and a follow-up question. Has Kogan.com benefited at all from the closure of Catch?
Ruslan, I'll pass to you on that one.
Yeah, look, Catch and Kogan were two very close competitors since that business was founded in 2006. We were founded a few months apart. There was certainly, while they had, you know, quite different specializations, a big overlap, especially on the marketplace front and the marketplace sellers that we both had listed. There's no doubt that a competitor who you've gone toe to toe with for the better part of 20 years disappearing has a positive impact on the business. Obviously, them disappearing, there's a few others that are about to, or at least one other major one about to disappear in various other market factors that we're pretty happy with and is a bit of a tailwind.
Okay, thank you, Rus. We might go to another live question. Owen Humphries, go ahead with your question.
Thanks, team. I am confirming that I'm speaking to the real David Shafer and Ruslan Kogan here.
That is confirmed.
Just in your margin guidance, you said 6%- 9% with medium-term ambitions of 8%- 12% going higher over time. Can you just talk through the lower number through this period? Is that the delta there is around marketing for you guys?
Yes, the primary driver of the delta as to why we're projecting 6%- 9% this financial year growing into 8%- 12% over the medium term is the fact that we're still weighed down by the performance of Mighty Ape. Mighty Ape, if you'll recall, did about $8 million of EBITDA in FY 2024. That's essentially zero in FY 2025 and obviously starting off FY 2026 in a negative way. If we back out that performance, then we're already at the top end of the range for just Kogan.com. If you exclude Mighty Ape's performance, we're already at the top end of that range. We're asking for a grace period over the next few months while we work through the Mighty Ape issues and effectively implement all of the learning that we have from Kogan.com into Mighty Ape. I'm getting some background noise. Is that from you? Someone put it on mute.
Owen, can you put it on mute? Anyway, essentially we're working through Mighty Ape issues as we improve EBITDA over the course of the year. Kogan.com is already performing with a strong EBITDA, and we expect Kogan.com to maintain its level of EBITDA or slightly improve over the year.
Just talk through the active customer growth was super strong, like about 900,000 active customers in the last kind of eight months. Kogan FIRST, that's nearly 50% growth in active customers. Kogan FIRST only grew by, I call it, 20%. Just talking through, I know there was historically, there's been a strong correlation between active customer growth and Kogan FIRST members. Is there a disparity between the conversion rates now between those two items?
A lot of them are all there.
Historically, there were periods when our active customers were actually trending down and Kogan FIRST were trending up. They are quite different measurements. One is taking how many very, very loyal customers you have, which is what Kogan FIRST would typically be. The other one is those that have transacted throughout the year. You become an active customer if you've done at least one transaction in the last 12 months. Typically, that's an indicator of top of funnel activity. How many customers are you exposing the business to? How many customers are you showing your products to? How many customers are you enticing to start transacting with Kogan? Kogan FIRST activity often happens once a customer is more familiar with the business and is planning to do a few purchases from Kogan.
It is quite an important part of our strategy, and part of the increased marketing expenditure is to win more customers and expose more customers to how the business operates and what value we provide with our products. I'd add also on top of that, the very important thing that we discussed in the presentation today, even though it was my AI discussing it, but I fully back what was discussed, being that we've got this wonderful opportunity with the business whereby because our subscription revenue is so meaningful and growing, our products business can essentially operate at break-even or even at a small loss, fully costed. It gives us the opportunity to have unbeatable deals.
You literally take our 55-in 4K TV that's got all the Google AI smarts and everything and try to find an equivalent TV anywhere in the world for anywhere near the Kogan FIRST price, and you won't be able to. That is enabling us to have a lot of confidence in our ecosystem and increase that marketing spend to bring more people in because as they get exposed to the value that Kogan FIRST customers get, that virtuous cycle can begin.
Last question from me, and I guess it's an important one for an online business. Amazon made the decision to exit Google Performance Marketing in July. It's one of the primary customer acquisition channels for you, but we haven't seen any data points on that. Can you just talk us through what you're seeing one month post that initiative by Amazon? Are you seeing any changes in your cost per click or customer acquisition channels?
Yeah, so for those familiar with how Google CPC works, it is a competitive marketplace, meaning that advertisers put in their bids of what they're willing to pay to bring people in for certain clicks or their CPA targets, and then Google basically runs in the background a maximum EV calculation for them and shows the ads that will generate the maximum expected value. When a huge advertiser or publisher in that space disappears, simple economics dictate that you will see reduced competition, meaning you will see reduced price. That's exactly what's happened. We've seen a significant drop in CPC, but that's it. It's a great time to advertise. That said, you know, who knows how permanent, you know that Amazon and Google are going head-to-head in various arenas. Who knows how permanent that change is?
It is a positive change for someone like us, but like you said, it's only happened about a month ago.
Yeah, a good one. I'll have this bit for me, looking forward to another year of growth. Well done.
Thanks, Owen. I see that there's a couple of questions that have come through the chat. Steve, will you ask those or I can?
I'm happy to take the first one from Arian. Thanks for your question, Arian. The question is, in July 2025, gross sales grew by 26% while revenue grew only 3%. What happened? For the rest of FY 2026, should we assume a similar relationship between revenue and gross sales? Just to recap, gross sales reflects the consumer transactional dollars that come through our business. That means the amount the customer pays in parts of our business, like the Kogan Marketplace. That's the full transaction amount and Kogan Mobile, whereas revenue reflects only our take rate or commission. It's a smaller level, particularly for the Marketplace and Kogan Mobile. The biggest year-on-year difference in July was the launch of the Marketplace in Mighty Ape. A year ago, there was no Marketplace in Mighty Ape in July, but there was in July 2025. That's the biggest driver.
All the other parts of the business existed year-on-year, albeit that Mighty Mobile was much bigger this year than it was last year. The trajectory of growth of the platform-based sales being higher than revenue, obviously revenue went down in Mighty Ape, so that's product-based sales and inventory is driving a sort of wedge in those two reporting lines. The second question from Arian is, do the comments imply Mighty Ape EBITDA will continue to remain negative in the first half of 2026? I've answered that in the sense that we are expecting it to be challenging for the next few months, but hoping to reverse that in the lead-up to Christmas. Will first-half margins still be in line with the 6% - 9% guidance range? That's the third question from Arian, and the answer is yes.
We believe we'll be within that range over the year, progressively improving towards the second half of the year.
David, Ari has actually raised his hand. I was wondering if we could see if he has any further questions.
Let's do that.
Ari, go ahead.
Hi guys, can you hear me?
Yes, we can.
Sorry for the end, but the rest of the FY 2026 is pretty basically gap. Should we assume a similar set of value then? We should have a sales relationship. For FY 2026, for our sales growth, 10% revenue. Great. That's three months yet based on that set of value that we spoke to, or will the gap narrow progressively? It's a pretty weak one, I was just trying to make sure.
For those that couldn't hear the audio, the follow-up was, should we expect a similar gap between gross sales and revenue for the remainder of the financial year? The response to that is that the best indicator of the gap is really the Kogan.com gap rather than the overall blended group gap. In Kogan.com, we grew 32.5% in July in gross sales and 11.5% growth in revenue. That obviously implies that we're growing faster in Marketplace and some other platform-based sales than our inventory-based sales, which are still growing healthily, but not as fast. The reason why that's a better indicator of how things will occur over the broader group is that we expect Mighty Ape to recover towards the second half. Right now in Mighty Ape, you've got a situation where gross sales is relatively healthy. It's flat, but it's relatively healthy.
That includes quite a bit of Marketplace sales that didn't exist a year ago, whereas revenue driven by inventory-based sales has declined year on year. We expect that to eventually peter out in terms of the decline and to start to improve. There is a repair going on within the Mighty Ape part of the business. Therefore, if you're looking to how things should look second half once that repair has taken place, the better place to look is at Kogan's year-on-year results.
Thanks very much, mate.
Thanks, Ari.
Thanks, Harry. The next question we had was one from Tim Piper in relation to FIRST Max. The question was, do you have any initial thoughts around subscriber numbers or uptake, and what type of fee premium are you charging?
Yeah, so Kogan FIRST Max is $49 a month, and it's been very popular so far, especially with people or big users of our platform and people who want to get the full benefits of Kogan FIRST. We don't disclose our Kogan FIRST subscriber numbers, nor do we do it for FIRST Max in particular as well. We have designed this platform or program to be for your heavy users who want to be part of ongoing purchases, and they've got additional benefits like vouchers and various other promotional benefits across our site. It's going to be a key theme across our business, segmenting our Kogan FIRST customers and providing them different options based on maybe you're a business customer who has a certain purchasing profile or a very regular purchasing customer and so on. This is something that is part of our strategy.
Thank you. Another follow-up question from Tim. Any additional detail you can give on the marketing spend and how it trended through FY 2025 and into FY 2026?
I don't know specifically what Tim's asked there, but there's a slide where we disclose our marketing over time as a portion of our sales and what the strategy looks like. Obviously, you spend more during the key promotional periods, but we've got that coming up with Black Friday and Boxing Day and so on. As I mentioned to Owen's question as well, one of the biggest advertisers on Google, which is a competitive bidding platform, has disappeared. It's creating quite a favorable environment, and we assess that as a business internally against our strategy on an ongoing basis.
Okay, I think we have just one more question in the chat. A reminder, if you have any final questions, please raise your hand if you're a research analyst. This question is related to Kogan verticals, and it's a question around the commission rate. Do you get upfront commissions, or do you get a trail or a combination of both?
For Kogan Mobile, we take a commission of every dollar spent. That includes every dollar, whether it's in the first year or the 10th year. It's a 10-year-old business now, Kogan Mobile, and some of our customers have been around for 10 years. It's a percentage of revenue. For some of the other verticals, it's a little bit different. For Kogan Money, for instance, there's a bit more of an upfront, but there is always, in respect of all of them, an ongoing proportion of the overall economics for the life of the customer. It's not just upfront in any of them. All of them have some arrangement in relation to the ongoing economics for the life of the customer because we want to treat these customers as our customers over their lifetime.
I'd just add to that as well. I saw that question mentioned Kogan Energy specifically as well. It would be remiss of me not to mention the fact that, as everyone knows, there is a lot of talk of a cost of living crisis out there, and energy being a big contributor to that. Anybody who is not a Kogan FIRST customer and on Kogan Energy is paying too much for their electricity. If you're in, upload your bill into the various checkers on even the government websites. If you're in Victoria, New South Wales, or Queensland, if you're not on Kogan Energy, you're paying too much. There's an easy way to lower the cost of living crisis.
Thank you, Ruslan and David. We might call time there asking questions. Thank you very much, everybody, for your time today.
I can see a couple of hands up as well from Chami and Weiweng. Okay, Chami, would you like to go ahead with your call?
Thank you very much. Bertan, Ruslan, David, thanks for taking my question as well. Maybe just on the long-term margins, if you could talk to the drivers then, specifically since Ruslan started talking about some of the AI examples, has there been any further work on AI done into the cost side? Also, is that reflective or somewhat reflective in long-term margins? Thank you.
Yeah, on the efficiency side, AI is providing a lot of 1% in the business. Like you would have heard at the start of our presentation, the first half hour, while it may have sounded as good as David and I do, it was not us. It was completely AI-generated voice doing our presentations for us, which meant there was an extra half an hour that David and I could spend on something else. Similarly, across the business, AI is helping everything from data analysis to product sourcing recommendations to trend analysis to marketing to listing creations to imagery to photography. In our engineering team, using the various tools, a lot of the code is now, you know, vibe coding and written by AI, which is then checked over by engineers before going into production.
It is making everyone 1, 2, 3, 5, 10, even 100% more efficient in some cases. It is a real boost to productivity across the business. The trend there is only heading in one direction, and it's getting better and better. You have seen the way that our top line moves compared to how our expenses or people costs move. You can see there's a lot of efficiency that we're getting in our business because AI tools are helping skill up team members, make them more productive, make them more efficient, and do more interesting work. It's been really good. In terms of a trend, in terms of margins, you have seen the growth of our non-inventory part of our business, our platform-based sales. That's been a trend that we've been talking about now for many years. That is a trend that continues.
As that continues, we should continue to see a long-term improvement in the margins of the business.
Thank you very much for that, Ruslan. Maybe a question on June materiality as well. Quite a big period for the business. I think, as you said, the customer number looks really strong ending the year there. Anything to call out on how the customer has been responding, given that gross sales look pretty strong there as well? Maybe thinking about how customers would respond, I mean, those customers who you acquired would respond over FY 2026 as well. Any call outs here?
Yeah, our customer numbers look strong. Our sales numbers look strong. It's a real testament to our team and the business model we've designed that continues to win significant market share. We believe that we have created a brilliant customer-centric online business model whereby our products business can essentially function at break-even because we generate so much cash and profitability from the platform-based sales of our business. That enables us to give unbeatable value to our customers, which keeps them coming back and purchasing more and staying members and interacting with more divisions. We think that in that environment where that's what our business is doing, winning customers and exposing more and more customers to our brand and how our business works is a very sound decision. That's part of the strategy of our business.
Thank you very much.
Thanks, Chami. The next question comes from Wei weng. Go ahead with your question, please.
Just a couple from me. When Catch went under, I think Ruslan, you put it out there on LinkedIn that you guys tried to maybe acquire them. Was there any interest on your end in buying MyDeal? Was it ever shown to you?
No, look, you could probably guess as to why Catch wasn't interested in selling. You know, it wouldn't look great to their, it's a rounding error for them, and it wouldn't look great to their management after taking what was a very sizable business and turning it into nothing. I'm sure similar dynamics are at play with MyDeal.
Oh, good. I was just wondering if there were any benefits that you guys have seen at all when talking to some of your suppliers in China from the U.S.-China tariffs.
Yeah, look, it's an area with a lot of uncertainty. As I'm sure you've seen, it can change from tweet to tweet. Initially, with all the tariffs, we became better friends with all of our suppliers because if they start suspecting that their volume to the U.S. goes down, their production capacity remains the same, their CapEx remains the same, they need more volume and customers. It's been good for us in the sense of becoming more and more important to the manufacturing partners that we deal with. The general tone is one of uncertainty from a lot of manufacturing partners recently. That also works to our benefit because we've been placing orders day in, day out for nearly 20 years. They can get a bit of certainty from their Kogan relationship. Uncertainty in other relationships is good for strong relationships.
Yeah, cool. Maybe just last one, one for Dave. I know you said that your impairment is kind of a short-term view on Mighty Ape and not a long-term comment on your expectations. Does that mean if we see a recovery as you expect, you might unwind the impairment at some point in the future?
Thanks for the question. I don't think that that is possible under the accounting standards. I think once it's written down, that's it. It's a one-and-done type write-down. There's no possibility of writing that back on in the future.
Cool, thanks.
Thank you very much, Wei weng. I think that brings us to our last question. Thank you very much for your attendance today. Thanks, Rus and David, for taking investors through today's presentation. There will be some meetings with institutional investors next week. If you'd like to reach out, if you'd like to be part of that. Otherwise, thank you all for your attendance.
Thanks all.
Thanks, everyone.
See ya.