Earnings Results:
- Q4 revenue was $75.8M, up 0.5% YoY and beating guidance
- Full year revenue was $298.2M, up 0.6% YoY
- Q4 adjusted EBITDA of $11.2M (14.8% margin), up from $7.1M (9.4% margin) in Q4 FY22
- Full year adjusted EBITDA of $26.9M (9% margin), up significantly from $6.7M (2.3% margin) in FY22
- Ending active subscribers of 125,954, down 0.6% YoY
- Free cash flow improved to -$70.3M in FY23 from -$92M in FY22
Future Guidance:
- FY24 revenue expected to grow 1-6% vs FY23
- FY24 adjusted EBITDA margin expected to be 15-16%
- Expects to achieve free cash flow breakeven in FY24
- Q1 FY24 revenue guided to $73-75M with 7-8% adjusted EBITDA margins
Themes and Trends:
- Improved customer experience driving higher retention, NPS up 20 points in Q4
- Reduced reliance on CapEx through “Share by RTR” revenue share model with brands
- Resale business growing and improving cash flow and customer loyalty
- Launching new marketing efforts to widen customer funnel and reinvigorate brand
- Focused on product innovation to increase conversion and retention
- Sees opportunity in new high-margin advertising and resale businesses
Market Conditions:
- Not seeing any negative macro impacts, loyalty and resale business growing
- Believe they provide value to price-conscious customers and brands in current environment
Sentiment: The overall sentiment from management is very positive and optimistic. They are excited about returning to growth in FY24 while achieving free cash flow breakeven. The improved customer metrics, restructuring of the cost base and debt, and shift to an asset-light inventory model give them confidence in their outlook despite macro uncertainty. Multiple growth drivers are highlighted including resale, product innovation, and new marketing initiatives.