Australian-born global marketplace Redbubble Limited has reached a positive underlying cash flow of $700,000 in the first quarter of FY24.
This is up by $16.9 million against the prior corresponding period (PCP) and also up by $5.5 million from the fourth quarter of FY23.
Further positive lifts have also been recorded in its cash balance - now around $40 million - and gross profit after paid acquisition (GPAPA) - up 14% compared to PCP to $26.5 million, with a GPAPA margin of 28%.
Earlier this year, company announced a forensic review of its operations and finances.
Redbubble cited the introduction of artist account tiers on the Redbubble and TeePublic marketplaces - where consumers can buy print-on-demand products based on user-submitted artworks - and a new order routing system for the Redbubble marketplace in the US for the lifts in cash flow and GPAPA.
There were also reductions in the group’s product return rate, as well as a 3% decrease in overall marketing spend for the quarter, with overall operating expenses down by 32% against PCP to $23.3 million.
Its apparel category continued to drive revenue in the first quarter, with Redbubble claiming this was offset by a continued softer performance in more discretionary categories such as artwork and accessories.
Due to the recent upticks, Redbubble has reaffirmed its FY24 guidance, with GPAPA margin expected to be between 23% and 26%, and operating expenditure to hit between $92 million and $100 million.
The group expects trading conditions to remain soft in key markets, particularly the US, in the near term. Redbubble reported it will remain focused on optimising cost of goods sold (COGS), promotions and paid marketing activities to maximise GPAPA.
“The group has had a good start to the financial year,” Redbubble Group CEO and MD Martin Hosking said. “Our ongoing focus on a narrow set of priorities continues to drive margin expansion and absolute GPAPA growth.
“These improvements, combined with our continued focus on cost discipline has enabled the group to achieve positive underlying cash flow this quarter, a particularly strong feat as the first quarter is a seasonally-low revenue period.
“I am now shifting my focus to reinstating profitable revenue growth and am confident that we have the right team and resources in place to achieve this goal.”