Higher transaction values fuel top-line growth for Redbubble
Redbubble has maintained high levels of top-line growth in line with guidance for FY18, reporting a 30.6 per cent (31.6 per cent on a constant currency basis) increase in gross transaction value to $178.7 million in a trading update on Tuesday.
Revenue was up 28.3 per cent year-on-year (29.8 per cent on a constant currency basis) to $141.2 million and gross profit was up 24.8 per cent year-on-year (25.8 per cent on a constant currency basis) to $48.5 million.
Redbubble booked a $0.5 million loss in operating earnings before interest, tax, depreciation and amortisation, a 75.9 per cent (55.1 per cent on a constant currency basis) improvement year-on-year.
The artisan marketplace said it was pleased with the acceleration of organic growth in its gross transaction value, which was a key factor in reducing the cost of customer acquisition from 9.4 per cent of revenue in the first-half to 8.3 per cent of revenue in the quarter ending 31 March 2018.
While gross profit margins were softer than anticipated, Redbubble said the impact was felt only in January and did not carry forward into February and March.
Higher than expected levels of growth over the holiday season led to higher-than-usual rate of refunds and expedited shipping costs in January. However, reduced fulfiller prices came into effect in January, underpinning confidence in future margins.
Marketplace fundamentals remain strong, with customer numbers increasing by 31.5 per cent year-on-year in the quarter and 37.7 per cent year-to-date to 3.2 million. Around 260,000 artists are selling on the site, while visits to the site have reached 192.8 million so far this year – more than half of which come from mobile.
Redbubble, which aside from Australia also operates in Europe and North America, said it is moving into the final quarter of the year with a high degree of confidence.
It believes it is well positioned to achieve top-line growth rates for the remainder of FY18 consistent with those achieved year-to-date.