The negative reaction to Kogan Ltd’s (ASX:KGN) May 2025 business update on Tuesday could have been summarised in one line:
“Notwithstanding the significant marketing investment at Kogan.com and the ongoing technical challenges at Mighty Ape, it was able to deliver Group Adjusted EBITDA Margins of 5%.”
That 5% margin figure, one could be forgiven for thinking, mightn’t be enough to rouse an investor’s excitement.
Then there was the fact Kogan’s group revenue declined -0.7% vs pcp and adjusted earnings before tax are down nearly -64% vs pcp. That’s even as gross sales ‘growth’ hit 20%.
The effect on Kogan’s share price was obvious. According to Cboe live pricing, shares were down -8% at 10.15am AEST to $4.12/sh.
The big issue hitting Kogan in recent times has been its ‘Mighty Ape’ website upgrade debacle. Mighty Ape, for those out of the loop, is just another online shopping platform that Kogan owns, lots of video games, lots of books, things like that.
In February this year, the third CEO of Mighty Ape quit their job amidst the website upgrade.
“Mighty Ape continued to be impacted by technical challenges following the website platform upgrade announced in February 2025, which affected sales … the team progressively resolved several stability issues,” Kogan wrote.
“Early signs of recovery are evident, with Gross Sales showing positive momentum driven by the Mighty Ape Marketplace scaling rapidly since launch.”
On top of margins, shareholders may be punishing the stock for not sorting this out sooner.
KGN last traded at $4.12.
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