Why Seek shares should be in your portfolio

If you've hunted for a job online, chances are you've used SEEK (ASX: SEK). It's the go-to platform to search for job openings in Australia and New Zealand, with a growing presence across Asia.

SEEK generates revenue from employers who pay to list vacancies, along with premium upgrades that make these job ads more visible. Two levers drive its revenue: the number of ads posted, and revenue per ad.

Over the past year, the number of ads softened as hiring cooled, but SEEK proved its pricing power by lifting the average dollars it earns per listing. This was driven by more customers choosing higher-value ad tiers, and highlights SEEK's resilient business model, even when the job markets weakens, it can still grow revenue by moving clients into premium products.

Its latest full-year result broadly in line with market expectations. Revenue edged up to $1.097 billion, underlying EBITDA was $459 million, and adjusted profit came in at $155 million. Importantly for income-seekers, the full-year dividend rose to 46 cents per share.

What stood out to me was the second half of FY25. Even with job ad volumes still down, the company grew earnings and finished the year with stronger pricing momentum in Australia and New Zealand (ANZ). While several brokers described it as a "solid" or "in line" result, I think the bigger story is the resilience in the face of softer macro conditions.

When the economy re-accelerates, hiring demands are usually one of the first places you see it.

That shows up on SEEK as more job ads, and because the platform's costs are largely fixed (product, tech and sales), each extra ad is highly profitable.

Management's FY26 guidance already implies operating jaws of about 4% (roughly 10% revenue growth versus around 6% cost growth), which is classic operating leverage. If volumes run even a little better than "flat", more of those incremental dollars should drop straight to earnings. That's why brokers see a meaningful step up, with the guidance midpoint pointing to around 15% EBITDA growth (with upside to the top end if momentum holds).

Pricing power adds a second engine. SEEK exited FY25 with mid-teens yield growth in ANZ as customers adopted the newer advanced ad tier and depth products. In an upswing, employers are competing harder for candidates, so they lean into those premium placements, which lifts the dollars-per-ad on top of higher ad counts.

Asia is also better placed than a year ago. Paid ad yield rose 18% and placement share climbed to around 26%, giving the region more torque if labour markets firm. Put simply, SEEK doesn't need a boom to grow. A garden-variety recovery should be enough to compound yield and volumes together.

Management deserves credit for steering the business through a softer hiring cycle while still investing in technology and international expansion. SEEK has long been recognised as one of Australia's most innovative digital platforms, and its ability to evolve its product suite and monetisation model keeps it well ahead of competitors. The leadership team's discipline in balancing reinvestment with shareholder returns (including a higher dividend) underlines their confidence in the outlook.

At around 30 times forward earnings, SEEK isn't "cheap", but quality rarely is. With strong pricing, structural tailwinds, and operating leverage under proven management, SEEK justifies this premium. For investors seeking exposure to Australia's employment cycle through a market leader with strong growth optionality, SEEK is a buy.

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