Ladies and gentlemen, thank you for standing by, and welcome to the SEEK Limited Half-Year Results Call for 2025. At this time, all participants are in a listen-only mode. There will be a question-and-answer session after the presentation, at which time, if you wish to queue for a question, you will need to press star followed by the number one on your telephone keypad and wait for your name to be announced. I will now hand over the call to SEEK Limited CEO, Ian Narev. Please go ahead.
Thank you very much. Good morning, everybody. We are at the SEEK head office here on the lands of the Wurundjeri Woi-wurrung People of the Kulin Nation. I'd like to pay my respects to their elders past, present, and emerging. With me here, as usual, Kendra Banks, Simon Lusted, Dan McKenna, Peter Bithos, and Grant Wright. And we'd like to thank you for joining us for this discussion about our results for the first half of the 2025 financial year. We talk about the highlights on Slide 6 , and the headline for us is we did very well on what we control, and really, if you think about the half in terms of the operational outcomes we were looking at, we grew market share, we grew yield, and we showed demonstrable signs of efficiency.
And all of that, when you look at the foundations for growth, while we were delivering what I think was probably the best half we've had in terms of product quality and velocity. So it was a real balance between achieving demonstrable outcomes and continuing to invest for the future. We acknowledge, and you can see on the financial overview on page seven that in this environment, that still means that revenue is down a bit and profits down a bit. And so you're never going to call that a stellar result for the shareholders. But when we divide this into what we were expecting and what we wanted to deliver, it went really well. You'll see a bit more of the detail as we go through. That ANZ placement share continued to grow. That was both in Australia and New Zealand, which are both at real highs.
We are again the number one in placement share in every Asian market. We've continued, while we have done that, while we have gained share, what is now a multi-year track record in delivering high yield growth. We have really managed total costs well while we've been doing that. You can see when we get to later, the total cost guidance for the financial year is now lower than it was. That resulted in a real high half in terms of free cash flow generation. And as Kendra will talk about a bit later, we also saw the start of what we've been telling you for a while will be coming, which is a progressive return on capital from the fund. The partial sell down of a very good asset at a 19% valuation increase to what it was on the 30th of June.
So there have been a lot of questions about whether the assets are appropriately valued, whether there will be liquidity. And while we're not saying this is a start of something that's going to happen every six months or whatever it is, here is a very demonstrable sign. And given that we don't control the fund through the fund's own choice in the way that it manages the assets. At the same time, the things you don't see probably quite as much of right across the board on the candidate and on the hirer side, the underlying market metrics are very strong. And we're just seeing the benefits of unification show up everywhere in basic product delivery, underpinning very strong work that's happened in our AI capability and just providing flexibility in the cost base.
Page 7 has got the headline numbers, as I said, and Kendra will come back to those. Just before I hand over to Simon, just a couple of points about the condition of the markets, which again you'll have seen, and a few headlines just about our strategic delivery. Volumes clearly are still part of this post-COVID roller coaster that we've been on, and you can see all the relevant stats on Slide 9 . I think our economists described at the end of last year the market in ANZ has been pretty well balanced now between hirers and candidates, and the data will show that. If we have to characterize the market overall, year on year, clearly volumes are still down. Through this half and in our projections into next half, which I'll get to, what we're really seeing is a sort of a slowing of the decline.
So what we're expecting now is that to the extent we get little drops or lifts in volumes, they are really just following normal seasonal fluctuations. The candidate side, monthly unique visitors very strong, that little dip at the end, as usual, very seasonal. And applications per ad, as I've mentioned, sort of growing and really contributing to a very healthy marketplace, healthy balance between our candidates and hirers in ANZ. Asia on page 10 again, the monthly ad volumes and unique hirers, you can see on the top right. I'd really encourage you now to actually look at the footnotes on page 38 because with the amount of stuff going on now in Asia that Peter will talk about a bit now with the freemium experience, etc., it's very important to distinguish between the different types of ads.
I will just say at this point, and Peter can talk about it more, we are in the very early days still of the freemium experiments or rollouts, particularly in the Philippines, Thailand, and Indonesia where they're rolled out, and we will judge the success of that rollout strategy in a couple of years, not now. What we can say unequivocally is relative to the expectations we've got, the first six months post in the Philippines have been very pleasing outcomes with a lot of improvement in marketplace health and pretty good, very manageable impact on revenue, and you can see on page 10, I won't go into it in detail, the key stats in terms of monthly unique visitors and applications per ad.
If I move to Slides 12 and 13 on the strategic focus, the theme's well known to you, growing placements, growing yield, operating leverage on page 12. I know we're going to get questions again about the $2 billion revenue opportunity because as volumes remain relatively low and you will adjust your models, the implied growth rate to get to the rate that the amount we would be in FY28 gets higher, we acknowledge that. We'll obviously keep looking at that, but what we can say is that in terms of the operational and delivery assumptions that underpin that revenue target, we're very pleased with the trajectory. We're also very pleased with the trajectory towards the 50% margins, so the big uncertainty as we look today, as I said, remains the projections in terms of volumes, and we'll keep our eye on that.
On page 13, just before I head to Simon, what I'll point out that you should look for in the pages that he and then Peter and Kendra speak to in terms of growing placements, growing yield, and operating leverage. We've got a real focus in the coming slides on what was delivered in the half. So these are themes which you can expect to endure for a long period of time. One of the common questions we have from shareholders is just, look, what's the sort of demonstrable proof of your progress under these themes, both in terms of delivery and market impact? And I think what you can see over the coming slides then against each of these themes is very clear delivery in the six months and very clear market impact of each of these things that's come into the market.
With that, I'll hand over to Simon to give you a bit more of a sense of what's going on with placements. Thanks.
On Slide 14, we've got leading placement share now across all markets and the strongest metrics we've seen for some time, as Ian mentioned. In Australia, we've climbed to four times our nearest competitor at a placement share of 35.4%. In Asia, we're back to leading in all markets, and it's underpinned by continued growth in our brand awareness, which has continued to climb to 53%. This is a really pleasing result for us, but not especially surprising because placement shares, of course, are backward-looking metrics. Since we went live with our first unification launch in late calendar 2023, we've been able to observe our on-platform metrics building very nicely. Over that period, our competitive job ad share has been very solid despite the subdued environment.
On the candidate side or the talent side, we've seen really pleasing share strengths and growth in all markets, where Australia has really been the standout, where our monthly visits to SEEK have risen by over 40% in the last two years, which has been really fantastic. On the next page, I'll explain a little bit more about what we're doing to drive placements and where our focus has been for the last few years and will be in the foreseeable future. We're really focused on three core pillars. The first is building out personalized experiences. So this is really about keeping talent connected to the labour market, not only when they're actively looking, but every stage of their career cycle, and really anticipating their needs and preferences and being more proactive and personalized with how we communicate with them.
The second pillar, which we've been talking about for many years now, is better matching, where we want to bring more relevant information into our marketplace, including structured data, unstructured, and behavioral data signals, and we want to leverage advanced AI to connect the right talent with the right hirers, and then finally, we've been investing in marketplace trust. That's about enhancing the integrity and reliability of our marketplaces, making it easier for both hirers and talent to verify claims and credentials, which reduces hiring effort and cost and improves hiring outcomes. If I just take a detour here just to double down on what Ian was saying earlier, roughly a year on, the benefits of unification are showing up everywhere in our product delivery and execution. Our release velocity, the speed at which we and our teams deliver new features or improvements, has accelerated markedly.
Our learning rate, measured by the number and value of experiments we conduct, is significantly up, and our cross-functional collaboration has strengthened the levels I haven't seen in the time I've been at SEEK, which enables faster innovation and more responsive local customer response, and the value of these efforts is really showing up for our customers, and across the bottom here, we've highlighted just a few of the big shifts in our many marketplace metrics over the last few years. We've seen really big positive shifts in how candidates find jobs on our platform. We're growing the number of relevant jobs that we connect them with, and we're improving their ability to help them stand out in ways that matter to hirers. Now I want to focus on the last six months and how we push these things forward.
So on page 16, a little bit of a deep dive into what we mean by personalized recommendations. During the first half of this year, we focused on releasing and improving personalized job discovery experience designed to complement our core search functionality. Specifically, we launched a much more prominent job recommendation feed product across APAC. This materially boosted engagement with recommendations and drove application growth across marketplaces. It's also making it much easier for candidates to monitor the job market more regularly, especially when they're less active. And we're seeing really encouraging signs that it's building habit-forming behaviors. We replaced our old email notification product with one that better matches job seekers' preferences for communication. It keeps them closely connected to the market when they're active, and it reduces the noise when they're not.
We also launched a range of new notifications, such as alerts when a candidate might be a top applicant for a role and reminders that they should reconsider jobs that they showed interest in previously and haven't yet applied to. To support these efforts, we've also released a range of features to simplify and encourage greater login and usage so that more people can benefit from our personalized experiences. The point I make here is, despite only being released in the last six months, the work the team is doing is already showing up in our marketplace metrics, and these are the types of features where the benefits compound one quarter after another. On the next page, I want to share a little bit more about where we've been focused in building better match and search for our candidates.
Thanks to our long-term investment in AI capability and data infrastructure, coupled with the broader benefits of unification, we've been really well placed to leverage new AI advances as they've emerged. Over the last six months, and building on earlier LLM integrations, we actually introduced one of our most significant personalization algorithm upgrades across all APAC markets, which boosted search relevancy by 12%-20% just depending on the market. We see further significant opportunities to improve match quality with AI-driven and personalized user experiences that allow candidates and hirers to better express their preferences and understand the market. And to that end, we've leveraged AI-driven smart suggestions into the mobile search experience to help candidates refine and expand their search criteria. So we've got a picture of that on the left.
And we released our first AI-powered ad writing feature, which is focused on enabling hirers to express their needs and preferences more comprehensively and accurately while still maintaining their authentic voice. As with personalized experiences, the advances we're making in our search and match pillar tend to create compounding benefits. More candidates finding more relevant jobs deepens our understanding of their behavior and preferences and strengthens our ability to provide them even higher quality and more timely matches. And we've also seen that these efforts have helped us grow traffic by better performing in SEO channels, which has been a real highlight in most markets across the region over the last half. And finally, we're focused on building a more trusted connection market. Labour markets can be noisy. Beyond establishing that initial match, candidates and hirers incur significant challenges and costs in determining which claims they can trust.
That's why we've been investing in digitizing real-world trust and bringing it onto our platform through our secure credential wallet. Over the past six months, we rebranded Certsy to SEEK Pass and launched it in all APAC markets. We also introduced a range of deeper integrations to display relevant trust signals across the full SEEK experience, especially in our Talent Search product. We've also been enabling new credentials, the most significant of which has been a new feature that lets candidates validate their current workplace by submitting their company email address for verification, and in the digital identity space, we've broadened our support to Malaysia and the Philippines, and we've recently announced a partnership with Singapore, which will help us to provide identity and work rights and other credentials in that market as well.
While it's still early in Asia, we've exceeded 8 million verified credentials across APAC, and we believe we're well placed to be the leaders in enhancing the speed and security of matching, reducing fraudulent claims, and improving overall transparency and efficiency in the hiring process. This, as Ian said, has been a particularly pleasing six months for us. It's the first full six months without any hangover of unification, and internally, I haven't felt more excitement and more energy around the delivery teams in any time I've been at SEEK. So thank you, and now to you, Peter.
Yeah. Well, continuing that theme and building on what Ian and Simon said earlier, one of the big product and commercial initiatives of the last six months was freemium. We'd invite questions as we get into question time. But over the last six months, we've launched freemium in Philippines and Thailand, and in January, we also launched it in Indonesia. Just a reminder of why freemium is there and why it is a multi-year journey to kind of get the most out of the strategy. So for hirers, it provides the ability, first and foremost, to post all of their ads on SEEK, no matter their budget. So that's including free. So ads they would have otherwise posted on Facebook or social media gives us an opportunity to provide free access to SEEK's AI platform.
That allows hirers to get better ROI and, in turn, allows us to gain share from offline unstructured channels, be it online or word of mouth, and therefore penetrate far more hirers than we would be previously able to do. In the long term, then, that translates to growing revenue, and we set out the journey in earnest in a post-unification world over the last six months. The results since that have been encouraging, if not promising. We've seen in the Philippines, which is the market that's been there the longest, over a 30% uplift in total ads. 40% of free ads are coming from new hirers who we didn't have on the platform prior to launch. We believe we're sitting at now about a two percentage point increase in placement share in the last six months.
And the revenue line has probably recovered faster than expected, so less than 12 months. It's now sitting at pre-freemium levels, and that's supported by yield increases and upgrade activity. And I'll talk about yield more broadly in the next slide. So we're off to a good start. We've got other Asian markets coming, and this will be a topic of conversation, I think, through the next two or three result cycles as we see the full effects play in. But we've achieved everything I think we set out to try to achieve in the first six months. All that, with what Simon said and our freemium efforts and others, contribute to really great yield performance. This is something that, at SEEK in general, we've been pretty proud of our ability to show this time and time again.
This half continues that journey, so you can see the multi-year journey on the bottom. In this particular half, we've leveraged variable pricing, and that's been a continuing journey. Freemium has played a role in Asia and then continued adoption, particularly focusing on freemium and new ad types. The yield performance of SEEK continues, and we continue to be highly confident of continuing that journey in the halves to come. Just a little bit more on how product and yield interplay, and we know a few investors are curious about that. Yield is not only price increases. Yield is a combination of how we deliver a whole bunch of value to product, and it expresses itself in higher prices where it matters and where there is high ROI to the customer. Slide 21 is a really good example of that.
So this is the ad carousel, what hirers see in all the freemium markets. And you can see a range of ads from Lite all the way up to Premium, including our mid-tier ad, which was launched across APAC in the first half as well. And you can also see now indications of the performance that you're getting from each of the ads. And so you can set the higher expectation, and the hirers can judge the ROI and the best ad for them. All of that interaction and all of that has been delivered over the last six months expresses itself in our ability to lean into price where it matters to the customer and where ROI is highest. And you can see that in the Asia yield results.
Part of the contribution of the Asia yield results is the fact that in freemium markets, for the ads that remain paid, we're able to be a little bit more pricing to value because the Lite ad is there, and we don't risk losing the ad to competitors. So that's a really first attempt at explaining the interplay between everything Simon does and everything that my team does to drive yield end to end, and in essence, then, you could see all of the product interactions on the next slide, page 22, coming to play. So there's upgrade pathways being lit up, more opportunities for hirers to change their ad and get better performance, and enhancements like an urgent hiring tag. All of this delivered over the last six to nine months. Last on operating leverage before I hand over to Kendra.
Everything that Simon talked about that I just went through, all of the new value, which is probably in my time in SEEK, the most new value in any six months I certainly have seen. All of that was delivered at essentially the same operating cost of the business, and it was delivered in all eight markets, which is something we were never able to do, so you can see the OpEx results that we were able to do, basically in line with forecast and flat overall, and CapEx is down 29% and reflect back on everything that Simon and myself just talked about in terms of value add for the customer, so this is what we tried to do in Unification, and we have a very strong half showing what we can do now post-Unification.
So to talk a little bit more about the financials, I'm going to hand over to Kendra.
Thank you, Peter, and hello, everyone. I'll start on Slide 25, which presents an overview of the financial results for the first half of FY25. Our revenue of AUD 536 million was down 4% on the prior period due to lower job ad volumes, and I'll break that down a bit more on the next page. As Peter just highlighted, we are pleased with our cost control in the period. Operating expenses were flat on last year, but total expenditure was down 6% when we account for the 29% reduction in CapEx. Included in these numbers is a shift of AUD 5 million in the half from CapEx to OpEx . As we flagged at the AGM, and I'm sure we'll talk a bit more about, following unification, we've reviewed the activities our people spend their time working on to ensure we're capitalizing the correct amount.
This shift has no impact on our total cost or on the prioritization of work in our teams. It is purely accounting. Our focus as a management team remains on the total cost base to make sure we're getting the best from every dollar we spend. We've prioritized our investments this year across both CapEx and OpEx , and because of this, free cash flow has nearly doubled despite EBITDA being down 9%. Our adjusted profit was down 28% to AUD 77 million. This adjusted result excludes the impact on our financials of the SEEK Growth Fund. Once you include the valuation uplift from the fund, we reported a statutory profit of AUD 140 million on our continuing operations. On the strength of the free cash flow, Board today announced an interim dividend of AUD 0.24 per share.
That represents 100% of our dividend policy formula of cash profit less CapEx , and that's 26% higher than last year. On Slide 26, we dive into the building blocks of revenue. ANZ was down 4% on the prior period and Asia down 3%. In both cases, the revenue decline was due to the macro-driven volumes in both geographies, with some additional impact from non-job ad revenue in Asia. Recently, we offset most of this impact with the yield levers that Peter talked to you earlier. Yield growth is tracking higher than we originally anticipated across all markets, 10% up in ANZ and 19% up in Asia, mostly driven by variable pricing, but underpinned by the product mix, stability in depth penetration, and stability in the customer mix. In Asia, the comparatives will get a bit harder in the second half, so that 19% yield growth stat should soften somewhat.
Slide 27 shows the drivers of adjusted NPAT down 28%, and as you can see from the red bars, that's really just lower revenue and higher D&A. D&A stepped up as we expected following the completion of Unification last year. This was somewhat offset by a reduction in tax expense in the half. Looking briefly on Slide 28, where we outline the free cash flow, as we said before, the highlight here was an increase of 93% to AUD 82 million, driven by the significant reduction in CapEx on last year and good performance with cash conversion at 91%. On Slide 29, we take a look at our debt position. Our net leverage ratio was 2.3 times. Our target is for net leverage to be below 2.5, and we are also well within our bank covenant ratios with sufficient headroom.
During this half, we refinanced three of our debt facilities, and we're really pleased with the outcomes of this refinance. We extended the weighted average tenor of our debt from three years to nearly five years and optimized our currency mix away from the US dollar. Moving on to the SEEK Growth Fund now on Slide 30. Pleasingly, the portfolio valuation increased by 5% in this period. The uplift was driven by strong performance in the fund's HR SaaS portfolio. As announced this morning and as Ian explained, the fund is selling part of its stake in Employment Hero at a 19% premium to the fund's valuation of Employment Hero as reported six months ago. This transaction value is now built into the fund's valuation as reported here for the 31st of December and provides clear support for the overall portfolio valuation.
The fund's four largest businesses account for 79% of the total value. They all remain well capitalized. If you'd like to see further detail on those four, they are in the appendix. Slide 31, we present our capital management framework. This framework is slightly revised from the last time you saw it, with a new callout for liquidity from the fund. As you know, this is expected to be a bigger factor for us in the coming years, with the liquidity window opening up in 2026. Before this, we do expect AUD 79 million cash proceeds from the fund, likely to settle in a few weeks' time following the sale of the Employment Hero stake. In accordance with our capital management approach as presented on this page, we first look at strategic long-term investments.
At this time, given our cash flows covering our accelerated product development, the proceeds will be used to reduce drawn debt and strengthen our balance sheet. In the coming years, if there's a material amount of cash returned from the fund, the Board will balance these investment and balance sheet priorities with cash returns to shareholders. Finally, before I hand back to Ian, on Slide 32, we reiterate our commitment to the many aspects of sustainability at SEEK. Our primary focus remains our work to prevent exploitative recruitment practices on all of our platforms. And we've made meaningful progress here, again supported by unification. Our platform has enhanced our ability to detect and mitigate hiring risks across APAC, standardizing controls, letting us leverage technology and AI even better.
We'll continue to strengthen our screening and monitoring of job ads and hirers and to keep improving our response to reports of unethical behavior. That's it. Back to you, Ian, to take us through the outlook.
Thank you, Kendra and team. Quickly on page 34 and 35, I think you can read most of this yourselves. This is the outlook for the remainder of this financial year. You can see in the first bullet point, as I mentioned earlier, we think the decline in job ad volumes in Australia has begun to stabilize, which means the second half is still down year on year, but month on month starts to stabilize other than seasonal fluctuations. Labour markets probably showing some signs of improvement in Malaysia and some of the emerging markets in Asia. We know this is a time of a lot of volatility. We've already been asked today about the impact of some of the U.S. policies, etc., and obviously, we can only make our best estimate there. New Zealand and Hong Kong conditions we expect remain cyclically low.
I want to just emphasize that particularly in New Zealand, the market share, the placement share performance has been really strong. So the market's been a bit weaker, but the delivery has been excellent. We give a range of revenue guidance, and it's important that you understand that's a range. We also know that many of you look for the midpoint, and the midpoint of revenue guidance is unchanged. Now, I do think it's important to remember that six months ago, I think a number of people asked us why we were being so conservative with our revenue outlook. We said we weren't. The outlook has proved to be pretty much on the money, and we're retaining it for the second half. In terms of total expenditure, that's down.
Kendra mentioned, and this is probably the only important part to understand in how the guidance works. We are going to be spending less than we thought this year despite the delivery you've heard about. Within that compositionally, because as Kendra mentioned, we've been looking at our capitalization policies, there's about a AUD 10 million swing in the year money coming out of CapEx into OpEx . So what does that mean? Total expenditure guidance is down, but because that impacts EBITDA and profit, you can see for those of you again interested in the middle of the range, to the extent the middle of the range has dropped a bit in EBITDA and adjusted profit, that is exactly that AUD 10 million. Otherwise, on the OpEx side, we're expecting to spend exactly what we had anticipated. So just to reaffirm on page 35, you can see the key assumptions.
Midpoint revenue guidance unchanged. Total expenditure guidance better, and that movement in the midpoint of EBITDA and adjusted profit for the reasons I've talked about. I'll stop there, and we can go through to Q&A.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Eric Choi from Barrenjoey. Your line is now open.
Hi, good morning, guys. Thanks for the question. Could I please ask one on job volumes, one on operating leverage, and then one on the growth fund? Maybe I'll just do them all at once as well. So on volumes, I think guidance might imply like flattish to maybe slightly down ANZ volume declines from here, at least on a month-on-month basis. But you guys put out the SEEK labour report last year. It sort of suggests Australia's back at mid-cycle, and NZ volumes are probably well below history. So I just go, there's no structural reason for volumes to dip further from here. But then on the flip side, if you get rate cuts this arvo or if the NZ macro improves, that's probably upside to volume.
So my long-winded first question is, is there a little bit of option or positive option value, if you like, on ANZ macro performing better than guidance? Should I do the second question? And third, just on operating leverage, that's the second question. So your CapEx and cost basis is obviously lower than expected because Unification is coming through. So I just wanted to confirm we can grow off this lower cost base going forward, i.e., your new cost profile is actually permanently lower than what you guys previously thought at the end of today. And then maybe the more important part is that SEEK will still stick to cost growth being below revenue growth going forward, i.e., positive jaws, even despite that lower cost base that you have today. And sorry, last one.
Just on the growth fund, it looks like the growth fund managers might be looking at more options to meet future liquidity events. So can I just confirm in practice that means the growth fund's got a two-year window during 2026 to 2028 to return circa 400 million bucks to SEEK, and that $79 million from Employment Hero today technically is not in that window and so technically doesn't count towards that 400 million? Thank you so much.
Permanently no, I've written that down. Thank you for that. Let me just speak very quickly on volumes in here to Peter, just specifically on the interest rate thing because you've seen this. I mean, let's see what happens this afternoon. As you know, to the extent there's a cut, it's predicated on the fact that it will build a bit of confidence on both the consumer and the business side, and that would generally be good for job ad volumes, but it doesn't sort of happen overnight, so yes, if we get into a rate cutting cycle in Australia, will it be moderately positive to our underlying assumptions? Possibly, but we wouldn't expect suddenly at 2:35 P.M. this afternoon we see a lift. By the end of the year, we might start seeing a bit of upward momentum.
Let me go to Peter on that and then to Kendra on the operating leverage, and I'll come back on the fund.
Yeah, on the bias in the question off the back of that, we tried very hard to call it as we see it, and we don't see it any better than anybody else. So all of our forecasts are based on the unemployment and economic forecasts for the trailing six months. To the extent that the RBA changes, if the economy changes, and then the forecasts change, we'll update our models accordingly. But our models are built off of what has been published over the last six months. That does indicate a flat to maybe potentially slightly declining volume for ANZ, Australia in particular. And that's just how the models work. To the extent that what Ian had mentioned and what you mentioned, the economy changes, well, we'll update the models accordingly.
Great. Thanks, Eric. And to your question around the cost base, I think we'd stick to what we said around the way we're looking at cost going forward. So the savings we've made are genuine savings, and we don't expect that those sort of bounce back or were worn off. We will continue to see cost growth. We're talking about mid- to high single-digit cost growth, but from this base. And we do reinforce our commitment to operating leverage that we'll do our best to have cost growing below revenue. Obviously, as the cycle bounces up and down, it may not be possible in every one reporting period, but certainly that's our commitment around operating leverage.
And then finally, back on the fund, Eric, it's a really important question. There are two real headline thoughts that are important for everyone to remember. Number one is that our main goal is to maximize the long-term value of the assets in the fund. And number two is we do not control the fund. So the decision to sell down a partial stake in Employment Hero was a decision we think was very good management by the manager, but that's not anything to do with sort of pressure put on us. That's their decision. So come back to your question related to page 31, and again to remind people, because we don't control the fund, we can't and wouldn't demand that assets are liquidated.
What we did is create an ability for us to ask for liquidity during that period and for the funds carry to be predicated on it delivering, and that's in that time period. Clearly, if we believe that it's in the best interest of us as investors to demand a bit less than that, we would. So this isn't a note that we have said we need to get back over a period of time, but it's an option we've created for ourselves. The most important thing I would take out of what we've seen in the last couple of weeks in this announcement. It's important because we get a lot of questions on it. This is a fund operating very well. It's got an asset and invested in that it really believes in.
The asset is 19% above what it was in June when a lot of you were asking about whether the carrying values are inflated. It's stayed in there, but it's done what good investors do, which is take some money off the table on the way through, and that's entirely of its own volition. And we will continue to support a fund management team that makes decisions of that quality. When all that adds up, yep, I would expect over the next couple of years, we'll start seeing a bit of a succession of events like these, but we won't hold the fund to a specific timetable of a week or a month because we want to make sure they keep doing the good job they're doing.
That's clear. Thanks, Ian. Thanks, Kendra. Thanks, Peter.
Your next question comes from the line of Entcho Raykovski from E&P. Your line is now open.
Hi, Ian. Hi, everyone. My first question is on the 10% yield growth at SEEK ANZ in the first half. Are you able to provide us with the broad split of price gaps and new products, which have contributed to this number? And I'm particularly interested in the trajectory into the second half because if we look at the pace of the price increases you put through under the dynamic pricing model, we should presumably expect a much better number in the second half relative to the first half. So if you could provide us with the split and then your expectations around second half trajectory, that would be great. And then I've got a couple of others, but I might hold off until after I hear the answers.
Yeah, I'll start off, and then Kendra and Simon can add to it. So to the comment of trying to break out product and price, I'll take the moment to say that there's an interplay between the two that I want to be really explicit about, which is product builds, and as Simon talked about, a whole bunch of new features and new products that drive higher ROI on any given placement. What we try to do is express that through price. We are very strongly confident, sorry for the double intensifier, that we've added a lot of additional value to each individual hire in the marketplace. You can see it in the statistics on the candidate side, and you can see it in the statistics on the hire side. That expresses itself in the last six months through the price, through largely price.
There is a little bit of depth improvement in mix largely. SME mix is remaining very strong, but the vast majority was price backed up by product innovation.
Just for the expectations for the second half, the H2, we did talk about high single-digit yield growth across APAC, and you'll see on our Outlook page now we have said ANZ double-digit growth in yield for the full year.
Okay, great, but I mean, it feels like it will be tough to lean to the double digits post 10%. I mean, I'm just conscious that the price increase has really ramped up as the half progressed.
Product innovation and price. And yes, I'm relatively comfortable with that trajectory.
Okay, great. And then just on placement share, I mean, I thought that was a great number, sitting at over 35% for SEEK ANZ, really the biggest uplift that I've seen half on half. And it looks like some of that placement share growth has come from offline channels. Are you able to talk to what are the competitive dynamics which have driven this and linking it into price? Does it give you greater confidence in your ability to flex pricing even further from here?
Maybe I'll take that one. If you think about, we're also very pleased with the placement share rise. There's a few drivers. As markets soften just a little bit, we do get tailwinds. There is a bit of a cycle element there, particularly if you're the number one player with the strongest brands. There is some element of that. As I spoke to earlier, another driver of the placement and a major one is our product innovation. And we think that that has, on our numbers, taken some from offline, but we've also, you can see in what we've reported here, taken share. In terms of value headroom, Peter kind of talked to that in his last question. We see a lot of long-term value headroom. We see opportunity to grow value headroom further, and that's reflected in what we're sharing around sustainability of yield growth and so on.
I'll just add one couple of quick points. Number one, as we always say, these are surveys, and they can go up and down a bit, but to the point Simon importantly made earlier, there are a bunch of market metrics which are supporting this, and therefore it wasn't surprising. I think the thing, if I link your two questions, I would really encourage people to look at the bottom left of Slide 14 and the bottom left of Slide 20 together, and what that's showing you is steady strength in placement share and steady growth in yield, and that's before, at the early stages of what we consider to be the value add time. That's showing the potential.
The other thing I would remind people, if you remember what we were saying two years ago, we were saying we're starting to feel good about delivering on unification, but there's been a major opportunity cost in terms of innovation, and we are really concerned about where we might be in the year post-unification. Well, we're a year post-unification, and market share's gone up everywhere. Now, we're already in the next half, and we've got to keep the momentum going and keep repeating it, but it's a very strong statement that we can see post-unification market share's going up, yield is going up, and the best part of the innovation is still to come.
Okay, great. And just the final one, hopefully quite a quick one. The CapEx reduction, even after you've reclassified some spend into OpEx, what has driven that? Is it greater efficiency in some of that capital spend? Is it some fewer projects being pursued? Sort of what are the broad drivers?
It's really all of the above. We've been really conscious of prioritizing our spend to the areas we think will drive the best growth and return, and so it's really across all of those levers you've spoken to.
Okay, great. Thank you.
Your next question comes from the line of Tom Beadle from Jarden. Your line is now open.
Hi, thanks for the opportunity to ask questions. I've got three as well. Just firstly, in Australia, could you just talk to what you're seeing in volumes just by advertiser category or industry, just where there's strength and softness? And I'm particularly interested just in the performance of volumes in the market versus non-market sectors, just given we've obviously seen significant growth in non-market employment, which I'm assuming that you're seeing in your volumes. Second question is just on Asia. I'm trying to reconcile your revenue just to your volume and yield results to total revenue on Slide 26. So it looks like there's about a 5% drag outside of volume and yield. So my question is, how much of that is job ad mix?
You can see your Classic ad mix has increased, but is there anything else like geographic mix or non-job ad related revenues that we need to think about there? Just my final question is around D&A guidance. You've obviously increased that slightly. Could you just talk to why that has gone up, just given your CapEx guidance has fallen? And just with CapEx below D&A this year, should we expect D&A to fall in future years? Thanks.
Well, I'll take the first one on market versus non-market. So there in Australia, I presume you're thinking mostly about government healthcare, etc. Healthcare has been very strong in the last couple of years. And we've already seen with state governments pulling back on their budgets, we've already seen some drop in healthcare volume starting to come through. I think there's a lot of conversation about the next government, what's going to happen with government ad volumes. It's important to our business. It's relatively small. We would do see other sectors that would be growing, particularly if there's a rate cut, to counterbalance that. So it's important, but it's not a real swing factor in our outlook for the second half.
On Asia, thanks for the question. The short answer is it's all in non-job ad revenue. So the vast majority of that delta that you're calling out represents, during unification, we lost some legacy products, non-job ad products, largely in the branding spaces, and you see that flowing through year on year. I'm working with Simon and Simon's teams right now to kind of enhance what the APAC platform has so that we can lean into that in the next couple of halves, but that's the explanation right there.
Yeah. And then finally on D&A, so D&A is we're fully run-rating post-unification now. So we did flag that D&A would be going up post-unification. It's just very slightly tweaked up since the last time we looked at it, but nothing too material. Moving forward, I mean, we do have some time to cycle through unification now through the D&A line still to come. Obviously, after a few periods now that CapEx is a bit lower, they'll start to ease.
Great. Thank you.
Your next question comes from the line of Kane Hannan from Goldman. Your line is now open.
Good morning, guys. I said three all on the fund, actually. Just given you've got the wording in the presentation around further liquidity, explicitly including that, is it reasonable to interpret that you will ask for liquidity in the fund if assets aren't sold down on their own accord? Can we commit to '26?
Per what I said before, the number one question is going to be what makes sense for long-term value. So we ultimately see ourselves as getting a lot of liquidity for the fund. At the time that we set up the fund, we felt like that window was probably going to be about right. I think we still roughly feel that way. Nothing's really changed. Markets went through a bit of a weak patch. So it's reasonable to assume we'll be interested in liquidity, but we'll have an ongoing dialogue with the manager as to what we think the implications for the long-term value are. I mean, to give you an example on just employment here, I mean, if this sort of opportunity was in the pipeline and it made sense to wait three months, we'd always wait three months. So it's that sort of thing.
I think in general, the trend is towards gaining liquidity, but at any given period of time, we just want to make sure we're doing what makes sense for us as long-term investors.
Yeah, that makes sense. And in terms of, I suppose, the mechanics of that liquidity, if you do make the decision to seek liquidity and the fund isn't transacting, just remind us how you land on the pricing of the units in the fund. I mean, is that related to the carrying value? Just anything you can share there that would be helpful?
Yeah, I mean, basically, there are all sorts of different ways over time that the fund might choose to return capital. But broadly speaking, we've got a percentage of amounts in the fund that contributes to a carrying value in any given period of time. When an asset is either liquidated or partially liquidated, there are decisions that are going to be made on is that paid out as a dividend, are units canceled, one of those sorts of things. So the capital planning for that will be pretty dependent on where the fund is at and what makes sense at the time. Again, we will make sure we are maintaining a dialogue with the fund, including this one, just to make sure we do that in a way that makes sense for everybody.
Yeah, that's helpful. And then just, I suppose, the shift to disclosing value from the top four assets relative to you've been doing the top five. Just share what percentage of the fund the top four assets were back in June or sort of what the top five are worth now.
There's not much change. The majority of the value has always been in the top four assets. There was a little bit in the future. We've just chosen to move to the top four. We've always disclosed a little bit of extra color on the top four. So that's the only reason we've shifted in this period.
Yeah, awesome. Thanks very much, guys.
Your next question comes from the line of Nick Basile from CLSA. Your line is now open.
Morning, Ian and team. Just two questions from me. Just the first one on the placement share. Obviously, it's seeing some solid improvement year on year. Just curious, what sort of areas are you seeing higher placement win rates? Is it a particular type of salary range, whether it be higher or lower than the sort of median salaries across Asia and Australia? And then second question.
Yeah, I can.
Oh, well, please go ahead.
Yeah, sorry. Second question on CapEx. Just interested to hear your thoughts on how we should think about that longer term, especially if you do hit the AUD 2 billion by FY28. Is that going to require an acceleration in CapEx or how should we think about sort of the run rate going on a more medium-term basis?
Yeah, just. I'll take the first on placement. First of all, we do look at the sub-sectors of where we get placement at the market level. Pleasingly, the placement gains were relatively spread out and across the board. Not that we don't have pockets here or there that we want to kind of push harder on, but the gains that you are seeing are not driven by one segment. It is very broad-based.
Thanks. On the CapEx question and how to think about that long-term, as we've said, we really think about our total cost base, not the CapEx and OpEx split, given that we have teams of people, and depending on what they're working on day in, day out, that can change between CapEx and OpEx . So we very much think about the total. So that goes into our thinking around operating leverage and that high single-digit cost growth as a likely maximum. We'll be continuing to weight investment more towards areas where we can grow the business, where we can grow placement share, where we can grow yield, where we can grow into other potential adjacencies. That may mean that CapEx growth is slightly higher than OpEx in the future, but I think you can think about it in terms of our total cost commitments.
The only other thing I'd add on there is the management team. We feel very energized by the productivity opportunities we've got in the business and Grant Wright here. I just might get Grant to speak for 30 seconds just on how we're now thinking about AI inside the business. To be honest, we're not the sort of company that puts slides and slides about what we could do with AI in the business at the moment because we're experimenting and we want to show delivery. But if anything, I would feel even more confident about the ability to achieve the operating leverage with that revenue target than we did even six months ago. But Grant, you might just want to give an example or two.
Y eah, so we're really coming at it in two ways.
One is to just get AI tools safely in the hand of every seeker and then encourage experimentation, but experimentation and use of those tools with a focus on process. So working with the senior leadership team with AI to then say, "Do we need to do the process? If so, to what standard?" And then how do we do that as efficiently as possible with AI? So we're not just adding tools, but we're adding tools and capability and process efficiency. And then we're coming top down on a couple of the bigger, more transformational opportunities like in P&T's space, like in product and tech, where there are opportunities to really shift the way we work. That's very early, but we're working through that and pretty excited about it.
Thanks. But just to clarify, maybe on the CapEx side and the way you're looking at both CapEx and OpEx, should we be applying the commentary you've provided around OpEx in terms of operating leverage being the target, albeit through a particular period, you may not see that across free cash flow as well? Is that the way you interpret what you've just provided in terms of CapEx?
The way to think about it is both. Whichever way you look at it, whether it's OpEx , CapEx , or total cost, we would expect the way we think about operating leverage, and we talked about, is to say the relativity of total cost to revenue growth. But underneath that, I would be very surprised if we couldn't consistently deliver the same kind of leverage on both the OpEx and the CapEx line.
Okay. Thanks.
Your next question comes from the line of Roger Samuel from Jefferies. Your line is now open.
Oh, hi, Ian, well . Two questions for me, please. First one on the expectation for yield growth going forward, because we heard in the past that the variable pricing model has made the business somewhat counter-cyclical. So if we are seeing a turnaround in job ad volume, so let's say it turns positive in FY26, do you think that will compress the yield growth somewhat? Or do you think it's more nuanced than that? It depends on the applications per ad or perhaps the monthly unique visitors as well. Second question is on the uptake of the Depth product. I understand that the mid-tier performance ad is only used by job ads posted outside the applicant tracking system. So when can we expect to see the full rollout to all channels? Thanks.
Yeah. Yeah, thanks. I'll take that. So in terms of expectation for yield growth, just on your countercyclical point, we'd love to sit here and say we're countercyclical. We've countered the cycle, but that is empirically not true. What you can say is we've been able to buffer the cycle quite a lot. If you look at the job ad volume declines relative to revenue performance, the revenue performance is far more cushioned rather than the volume declines. And that is testament to the product and the marketplace that we've built over the years. So we're getting better every cycle, but we're far from being immune to the cycle at this point in time. In terms of long-term, we have very high confidence that through the cycle in our long-term guidance, for example, at ANZ of high single digit, we are not wavering from that. I don't know.
It's hard to guess cycles and what drives it. There's everything from GFC to COVID. So having said that, we have a pretty long track record now of through the cycle and over multiple years in multiple markets driving yield, and we see no reason to kind of waver from that. On the uptake of mid-tier in the ATS channels, we're working on that in the next six to nine months.
Okay. So that should drive yield growth going forward as well then. Do you expect that to be quite material, or is it quite minimal?
Yeah. So the way we describe our experience with mid-tier ad to date is in and of itself, it hasn't been an isolated yield driver, but it allows hirers to spread their choice and allows us more confidence to lean into yield overall because hirers are happy with the distribution of choices that they have for different types of roles.
Okay. Got it. Thank you.
Your next question comes from the line of Fraser McLeish from MST Marquee. Your line is now open.
Great. Thanks. Just one from me. I just wanted to ask Simon to give a bit of an update on outcome-based pricing because it looks like you've moved away from sort of trying some of these more qualitative things to maybe back to sort of straight number of applications. Do you think that's kind of too hard over time? Is it proving to be a bit too hard to use some of those more qualitative metrics? Thanks.
Great question. Thank you for asking that. So we're as committed as ever to outcome pricing, but it does give me the opportunity to give a bit of color about the work we've been doing. In terms of our ability to predict a high-quality, high-fit applicant, if anything, that's improved. But in the last half in particular, we ran a series of experiments around ad products that were structured around cost per qualified app. And it was very hard to drive understanding across what is a very large, SME customer base. And it conflicts a little bit with our other ad products. And so we've recommitted to the existing ad ladder. And we think that cost per app type functionality will show up in things like performance guarantees and so on, which our customers find easier to understand and easier to compare to other products.
So we've got the same objectives. Our capability to do it is, if anything, improved over the half. But what we were probably too optimistic on was our ability to communicate a complex product construct. So that's why you see us stretching out the ad ladder. And I think in the coming halves, you'll see each of those tiers of the ad ladder improve and get more differentiated on a range of factors, including our ability to deliver a really certain number of applicants. I hope that helps.
Yeah. Great. Thank you.
That's great. Well, thank you all very much. I know we'll be seeing many of you at various meetings over the next few days. Thank you very much for your interest. As always, feel free to call Dan McKenna at any time of day or night with any follow-up queries. And thanks a lot for your interest. Much appreciated.
Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now.