Redbubble posts strong growth

Matthew Elmas

25th Jan 2018

Artisan marketplace Redbubble has advised that strong thanksgiving and Christmas sales has driven growth in revenue, transaction values and earnings for the first half of fiscal 18.

In a trading update on Thursday morning Redbubble said that currency corrected gross transaction value increased by 31.1 per cent to $129.8 million for the six-months ended 31 December, while operating earnings before interest, tax, depreciation and amortisation is up 23 per cent to $2.6 million year-on-year.

Revenue was up 32 per cent on a constant currency basis to $102.3 million, as the aggregate earnings from the 218,000+ active artists on the platform surpassed $100 million since the start of the business in 2006.

Gross profit was up 26.1 per cent to $35.3 million, compared to $23.1 million in cash operating expenses – up 10.5 per cent on a constant currency basis.

Gross profit margin for the first half was 34.5 per cent, slightly lower than the 35.6 per cent booked in FY17, which the company said was due to seasonal differences in product mix, as well as pricing and promotional initiatives.

Redbubble said that volume increases over Christmas will support margin improvements, as supply chain negotiations progress.

Revenue growth was also weighed down relative to gross transaction value due to higher sales taxes in Europe.

“Redbubble continues to build significant momentum on the basis of strong fundamentals: a healthy and vibrant marketplace, strong top line growth, increasing organic growth and profitable customer acquisition, and increasing operating leverage,” the company said.

Marketplace fundamentals remain strong, with customer numbers increasing by 40 per cent year-on-year over the half to 2.35 million and visits to the site up 39.3 per cent year-on-year to 127.5 million – more than half of which came from mobile.

Redbubble, which aside from Australia also operates in Europe and North America, said it will provide further details on key metrics in its half-yearly sales announcement in February.

It believes it is well positioned to achieve top line growth consistent with FY17 through, reaffirming its August guidance that it would move into operating EBITDA profitability late in FY18.