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The “flywheel effect” has blown in favour of both online marketplace Redbubble (ASX: RBL) and the company’s independent artists in FY21, resulting in record marketplace revenue for the period.
Announced today, the company also reported record artist revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) in FY21 as the company crept closer to 10 million unique customers.
“The Redbubble marketplaces are flywheel businesses, where improving one side creates positive, reinforcing impacts on the other sides of the marketplace,” newly appointed CEO Michael Ilczynski said.
“In simple terms, the content that artists sell attracts customers, and as more customers purchase that enables the fulfilment network to scale, lowering costs, and that’s attracting additional customers.
“Increasing customers further creates more artist revenue, encouraging new artists to the platform to add more content, thus attracting more customers. And the cycle continues.”
In FY21, marketplace revenue was $553 million (up 58 per cent), and EBITDA rose by 930 per cent from $5.1 million last year to $52.7 million this year.
The company is also profitable now, reporting a net profit after tax of $31 million compared to a $9 million loss in FY20.
Artists were big winners this year, earning a record $104 million across the Redbubble platforms which include Redbubble.com and TeePublic.com.
“This is an incredibly important milestone as it took Redbubble 11 years to achieve more than $100 million in total cumulative artist earnings,” Ilczynski told an investor call.
“Whereas over the course of the financial year, this was achieved in just under 12 months.
“Artist activation and engagement remains a core growth pillar for Redbubble and we are committed to growing and optimising the library of unique content available on the platform.”
During the financial year, key marketplace metrics showed strong growth, with selling artists rising by 54 per cent to 728,000, and unique customers up 40 per cent to 9.5 million.
More than half of the company’s sales now originate from mobile platforms, and 14 per cent from apps.
Looking forward, the company expects FY22 marketplace revenue to be slightly above this years’, with growth to particularly ramp up in the second half of next financial year.
“The business remains confident and excited about the medium to longer-term opportunity to grow strongly and extend Redbubble’s global market leadership as the largest marketplace for independent artists,” Redbubble said.
No dividends were paid or declared since the start of the FY21 financial year, and the company’s board says it does not expect to pay a dividend in the short to medium term given opportunities available to invest in growth initiatives.
Shares in RBL are down 8.17 per cent to $2.81 per share at 10.19am AEST.
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