Is PEXA Group (ASX:PXA) on the Cusp of a Turnaround?

PEXA Group (ASX:PXA) has long been a bellwether for digital transformation in Australia’s real estate sector. Yet, its FY2025 results—a 16% revenue increase to AU$393.6 million but a net loss of AU$76.1 million—have sparked debate about its path to profitability [2]. The company’s ability to balance rising costs with revenue growth will determine whether it can achieve breakeven and deliver on analyst projections of a AU$27 million net profit in 2026 [3].

Revenue Growth: A Foundation for Recovery

PEXA’s FY2025 revenue growth was driven by a 16% year-on-year increase in transaction volumes and the completion of its national rollout [1]. This expansion underscores the company’s strategic focus on capturing market share in a sector increasingly reliant on digital solutions. However, revenue alone is insufficient to offset losses without disciplined cost management.

Operating Costs: A Delicate Tightrope

Despite the revenue surge, PEXA’s operating expenses rose to AU$192.5 million in FY2025, a 2% increase on a pro-forma basis [1]. While this growth is modest compared to the 16% revenue jump, it highlights the challenge of scaling operations efficiently. The company attributes the expense rise to investments in operational efficiencies and ongoing cost-control measures [1]. Notably, operating costs grew by only 1% in the first half of FY2025, excluding specific items, suggesting progress in managing overheads [2].

Net Loss: A Stark Reminder of Challenges

The AU$76.1 million net loss in FY2025—a 322% widening from the previous year—reflects the gap between revenue growth and cost containment [2]. This loss contrasts with Q2 FY2025 results, where the company reported a profit of AU$313.8 million in revenue, demonstrating the volatility of its financial performance [1]. The key question remains: Can PEXA reduce its operating margin pressure while sustaining top-line growth?

Analyst Projections: A Glimpse of Optimism

Analysts remain cautiously optimistic, forecasting a net profit of AU$27 million for 2026 [3]. This projection hinges on two critical factors: (1) continued transaction volume growth, which has historically driven revenue, and (2) successful cost optimization. PEXA’s FY2025 annual report emphasizes its focus on “operational efficiencies,” a strategy that could narrow the gap between revenue and expenses [1].

The Breakeven Equation: Feasible or Fanciful?

Achieving breakeven requires PEXA to maintain its revenue momentum while further tightening cost controls. The company’s 2% operating expense growth in FY2025, coupled with a 16% revenue increase, suggests a path where margins could improve. However, the AU$76.1 million loss underscores the urgency of accelerating this process. If PEXA can reduce operating expenses by 5–7% annually while sustaining revenue growth, breakeven could be achievable by 2026.

Conclusion: A Turnaround in the Making?

PEXA Group’s FY2025 results present a mixed picture: strong revenue growth but unsustainable losses. The company’s ability to leverage its national rollout and digital infrastructure to drive efficiencies will be pivotal. Analysts’ 2026 profit projections are plausible if PEXA executes its cost-control strategy effectively. For investors, the coming quarters will test whether this digital real estate leader can transform its financial trajectory—or if the path to breakeven remains elusive.

**Source:[1] PEXA Group FY25 Results Announcement [https://www.listcorp.com/asx/pxa/pexa-group-limited/news/pexa-group-fy25-results-announcement-3235275.html][2] PEXA Group Full Year 2025 Earnings: Misses Expectations [https://simplywall.st/stocks/au/real-estate-management-and-development/asx-pxa/pexa-group-shares/news/pexa-group-full-year-2025-earnings-misses-expectations][3] Analysts Expect PEXA Group Limited (ASX:PXA) To ... [https://finance.yahoo.com/news/analysts-expect-pexa-group-limited-210649953.html]