Redbubble losses slow as growth surges

Online personalised print marketplace Redbubble sees its EBITDA loss at $8.1m, which is 24.8 per cent better that year’s result of $10.7m, and its revenue of $141m up 23 per cent from $114.6m up 30 per cent on constant currency basis.

Martin Hosking, CEO at Redbubble says, “At a time when many companies, including consumer retail businesses and even some e-commerce, are struggling to find growth, Redbubble is showing top-line and gross profit growth over 30 per cent on a constant currency basis.

“Based on current trends, and as we previously stated, we expect top-line growth through FY18 to be comparable to that achieved on a constant currency basis during FY17, and that we will move into EBITDA profitability late in FY18.”

Redbubble was founded by three friends in Melbourne ten years ago. It is an inline portal that allows designers to upload their work, then enables consumers to choose designs for personalised items such as t-shirts and pillow cases, and then organises the print and delivery of the items.

[Related: Redbubble revenue and profit soars]

Hosking says, “Redbubble’s growth is being driven by the global trend towards what is now understood as on demand retail, the creation or significant customisation of products for individual customers at the time of order –this has been the core of the Redbubble marketplace for 10 years. With 93 per cent of our revenues generated offshore, the future growth of Redbubble is limited only by our continued ability to execute.

“The results released reflects both the potential and the positive underlying fundamentals of the Redbubble business. Redbubble is a growing and healthy marketplace with strong growth in customers, artists and fulfilment capacity. Its gross profit margin 35 per cent up from 34 per cent, its gross profit after paid acquisition of $37.9m up 20.8 per cent from $31.3m and its net loss after tax is $7.6m, significantly improved on the loss of $19.8m previous year and its full year gross profit reach $50.1m, up 28.5 per cent from $39m.

“The business is scaling well. Redbubble’s margins have increased markedly from 34 per cent to 35.6 per cent year on year and we continue to acquire customers profitably with customer acquisition costs well under industry norms, at 8.7 per cent of total revenue for the year. We are continuing to invest in growth initiatives.

"These investments are having a material impact and allowing us to seize the opportunity before us. Operating leverage is, nevertheless, clearly evident with operating expenditure growth – 17.3 per cent on a constant currency basis, significantly less than revenue or gross profit after paid acquisition growth, both over 30 per cent."

Over the past year, Redbubble says it has added 19 team members taking the number of global team members to 201.

For FY17 Redbubble had four strategic initiatives: find your thing, helping users discover the most relevant content, mitigate piracy and create a platform for content partnerships; deeper relationships where Redbubble is building customer loyalty through personalised mobile experience for its members; global acquisition by increasing customer acquisition at low cost through efficient investment in high growth paid marketing channels and new markets; and scalability, efficient scaling of Redbubble’s platform.

Redbubble says over the next year it will remain focused on investing in its core marketplace business and continue with the progress on its four strategic initiatives. 

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