Kogan (ASX:KGN) clocks 43% EBIT jump as Mighty Ape margin finally cracks 37%

Operating leverage at the core business and a turnaround quarter at Mighty Ape reframe the FY26 earnings trajectory

Kogan.com (ASX:KGN) just delivered the kind of trading update that quietly answers the question investors have been asking since the post-pandemic hangover began. Can this business grow the top line, expand margin and turn around its New Zealand acquisition at the same time? The 10 months to 30 April 2026 say yes, with caveats worth paying attention to.

Kogan.com, the flagship division, lifted Gross Sales 18.2% and Adjusted EBIT 43.2%. Group Adjusted EBITDA margin landed at 8.6%, towards the upper end of FY26 guidance. That is real operating leverage, not a one-off cost-cut bounce.

The more interesting line sits inside Mighty Ape. Gross Margin in the four months to 30 April expanded 8.4 percentage points to 37.8%, and Adjusted EBITDA losses shrank by 52.8%. The capital-light pivot the company has been promising for two years now has actual numbers behind it.

For a stock that gave back almost all of its pandemic gains and lost most of the trust it built with founder share sales, this update matters. The thesis is no longer about whether Kogan can survive the post-Covid normalisation. It is about how much earnings power sits inside a leaner platform model.

Kogan.com is where the operating leverage actually lives

Strip out Mighty Ape and the core Kogan.com business is now running at an 11.5% Adjusted EBITDA margin, up 1.2 percentage points on the prior corresponding period. Revenue grew 18.1% while Gross Profit grew 19.5%, meaning unit economics improved even as the top line accelerated. That is the textbook definition of operating leverage.

Active Customers at Kogan.com climbed 9% to drive most of the Group customer growth. The Platform-based Sales model, where Kogan acts as the marketplace rather than holding the inventory, continues to take a bigger share of the mix. Each Platform sale carries a higher gross margin and lower working capital intensity than a traditional retail sale.

The four-month snapshot to 30 April is where the story sharpens. Adjusted EBIT in that window grew 119.6% on the prior corresponding period. Kogan.com is now scaling earnings faster than revenue, and that is the metric a re-rating gets built on.

Mighty Ape is shrinking on purpose, and the margin tells you it is working

Mighty Ape’s headline numbers look ugly. Gross Sales down 14.2%, Revenue down 28.8%. On their own those figures would be alarming. In context they are the deliberate output of removing non-performing categories and routing private label through the Mighty Ape Marketplace instead.

The proof is in the Gross Margin line. It expanded 8.4pp to 37.8% in the most recent four months, and EBITDA losses halved. Kogan is trading revenue it did not want for margin it actually keeps. We think the next test is whether Mighty Ape can hit breakeven inside FY27 without further revenue compression.

The skeptical read is that a shrinking business is rarely a good business, regardless of margin optics. The constructive read is that the Group margin at 41.0% versus 39.1% a year ago shows the mix shift is genuinely accretive at the consolidated level.

Why the Group revenue number understates what is happening

Group Revenue grew only 6.0% while Group Gross Sales grew 13.2%. That gap is the Platform shift in action. Platform-based Sales are reported on a net commission basis rather than gross, so revenue understates the underlying transaction activity flowing through the system.

This is the same accounting effect that flattered eBay and Amazon’s marketplace economics for years. It also means traditional revenue-multiple valuations applied to Kogan will increasingly miss the point. Gross Profit, not Revenue, is the right scaling metric, and that grew 11.1% Group-wide and 19.5% at Kogan.com.

The Investors Takeaway for Kogan.com

Kogan has delivered the cleanest trading update it has produced since the pandemic distortion ended. The combination of double-digit Gross Profit growth at the core business, expanding margin, and a Mighty Ape turnaround that is no longer hypothetical adds up to a credibly different investment story than the one we wrote about last year on stocksdownunder.

The watch items from here are whether the Mighty Ape margin holds through a full trading cycle including the seasonal weak months, and whether Active Customer growth at the core business can sustain at high single digits without lifting marketing spend disproportionately. If both hold, the FY27 earnings setup looks materially stronger than current consensus appears to price.