Why Did Kogan.com Slash $46.3M Off Mighty Ape’s Value?

Goodwill Impairment Reflects Operational Challenges

Kogan.com Ltd has announced a one-off, non-cash goodwill impairment of $46.3 million related to its acquisition of Mighty Ape, the New Zealand-based e-commerce platform it acquired in December 2020. This accounting adjustment follows the company’s annual impairment testing and signals a reassessment of the value attributed to the acquisition amid ongoing operational headwinds.

The impairment stems primarily from a combination of weaker-than-expected trading performance and a slower recovery than anticipated from platform technology challenges. These challenges originated from a website upgrade completed in October 2024, which disrupted the user experience and delayed the business’s return to growth momentum.

Market Conditions Compound Recovery Difficulties

Adding to the technology-related setbacks, the broader retail environment in New Zealand has been notably tough, marked by subdued consumer confidence. This macroeconomic backdrop has further constrained Mighty Ape’s ability to rebound quickly, prompting Kogan.com’s board to take a conservative stance on the goodwill valuation.

Despite these setbacks, the board maintains confidence in Mighty Ape’s brand strength and long-term prospects. They anticipate a return to positive trading performance in the second half of the 2026 financial year, suggesting that the impairment is a prudent accounting measure rather than a reflection of fundamental business failure.

Financial Impact and Forward Outlook

Importantly, the goodwill write-down is a non-cash charge and will not impact Kogan.com’s Adjusted EBITDA, preserving the company’s operational earnings profile. Investors can expect further details on the impairment and its implications in the upcoming FY25 financial report, scheduled for release on 25 August 2025.

This development invites a closer look at how Kogan.com will navigate the recovery of its Mighty Ape business amid ongoing market challenges. The impairment highlights the risks inherent in digital platform upgrades and the sensitivity of retail operations to consumer sentiment in regional markets.