Mad Paws Q2 FY25: 328% Cash EBITDA Growth and 16% Marketplace Revenue Rise

• Q2 FY25 Group Cash EBITDA turns positive at $0.3 million, up 328% year-on-year
• Marketplace revenue grows 16% to $2.8 million with 49% EBITDA margin
• Ecommerce revenue slightly down 4%, but up 10% excluding underperforming segments
• Launch of first above-the-line brand campaign backed by $5.25 million investment
• Operating cash flow strong at $1.7 million, cash balance at $4.0 million

Strong Financial Turnaround

Mad Paws Holdings Limited (ASX: MPA) has delivered a significant financial milestone in Q2 FY25, reporting a positive Group Cash EBITDA of $0.3 million, a remarkable 328% increase compared to the prior corresponding period. This turnaround underscores the scalability and improving profitability of its core pet services and ecommerce business model.

The company’s marketplace segment led growth with a 16% increase in operating revenue to $2.8 million and an impressive 49% cash EBITDA margin, reflecting operational leverage and strong customer engagement. Meanwhile, ecommerce revenue experienced a modest 4% decline to $4.9 million, though it grew 10% when excluding the underperforming Waggly and Sash brands, highlighting the impact of strategic portfolio management.

Strategic Brand Investment

Mad Paws is aggressively expanding its brand presence with the launch of its first above-the-line (ATL) campaign, themed around the "Press Paws" concept. This campaign aims to resonate with pet owners by spotlighting the everyday challenges of pet care and positioning Mad Paws as the trusted solution for pet sitting and related services.

Backing this initiative is a $5.25 million investment from Seven West Media, comprising $1.25 million in cash and $4 million in media spend. The campaign will be broadcast across Channel 7’s linear TV and digital platforms, supplemented by targeted paid marketing on Meta, TikTok, Google, and YouTube. Early results show a consistent 14% to 17% weekly growth in gross merchandise value (GMV) since the campaign launch, indicating strong market traction.

Operational Enhancements and Market Position

Operationally, Mad Paws has enhanced customer experience through AI-driven search infrastructure improvements, reducing average search times by 52%, and optimized prescription management and warehouse operations in ecommerce. These efficiencies contributed to ecommerce delivering a second consecutive EBITDA break-even quarter, a 101% year-on-year improvement for H1 FY25.

The company’s ecosystem connects over 1.4 million subscribed pet owners and 60,000 pet sitters and dog walkers, supported by a 70%+ customer repeat rate. This data-rich community underpins Mad Paws’ strategy to cross-sell products and services, build loyalty programs, and expand private label offerings.

Outlook and Strategic Priorities

Looking ahead, Mad Paws is focused on sustaining growth momentum by leveraging its brand campaign, scaling marketplace leadership, and driving cross-sell efficiencies. The company plans to invest nearly half of its brand budget in H2 FY25, aiming to become a household name in the Australian pet care industry.

Additionally, Mad Paws is exploring data commercialisation and international expansion as longer-term growth avenues. With a solid cash position of $4 million and positive operating cash flow of $1.7 million in the quarter, the company appears well-positioned to execute its strategic roadmap.

Bottom Line?

Mad Paws’ Q2 FY25 results mark a pivotal step toward sustained profitability, with its brand campaign set to test the limits of pet market growth.

Questions in the middle?

• How will the ATL brand campaign impact customer acquisition costs and long-term retention?
• What are the prospects and timelines for Mad Paws’ planned international expansion?
• How will the company balance growth investments with maintaining positive cash flow in coming quarters?