Temple & Webster reported a record half-year revenue of $314 million for H1 FY25, up 24% year-on-year, driven by strong customer growth and improved margins. The company remains on track to exceed $1 billion in annual revenue within the next few years.
- Record H1 FY25 revenue of $314 million, up 24% year-on-year
- EBITDA surged 76% to $13.2 million, with margin expansion to 4.2%
- Market share in Australian furniture and homewares grew to 2.9%
- Strong free cash flow generation of $33 million supports growth plans
- On track to achieve mid-term goal of $1 billion+ annual revenue
Robust Revenue Growth and Market Share Gains
Temple & Webster has delivered a standout performance in the first half of fiscal 2025, reporting a record revenue of $314 million, representing a 24% increase compared to the prior corresponding period. This growth was fueled by both new and repeat customers, alongside higher average order values, underscoring the company’s successful customer acquisition and retention strategies.
The company’s share of the Australian furniture and homewares market expanded to a record 2.9%, a 23% increase year-on-year, reflecting Temple & Webster’s growing dominance in a sector undergoing a significant shift from offline to online retailing.
Margin Expansion and Strong Cash Flow
Temple & Webster’s EBITDA rose sharply by 76% to $13.2 million, lifting the EBITDA margin by 126 basis points to 4.2%. This margin improvement was supported by a mix shift towards higher-margin exclusive and private label products, as well as operational efficiencies driven by AI and automation investments.
Free cash flow generation was robust at $33 million, highlighting the strength of the company’s asset-light and negative working capital business model. The company’s cash balance increased to $139 million, providing a solid financial foundation to pursue organic growth and potential acquisitions.
Strategic Focus on Brand, Exclusivity, and Technology
Temple & Webster continues to invest in brand building, dedicating approximately 10% of its marketing spend to brand channels in H1 FY25, with plans to increase this in the second half. This investment is already yielding results, with branded search traffic up 24% year-on-year.
The company’s strategy to grow revenue from exclusive products is gaining traction, with exclusives accounting for 45% of total revenue, up from 37% the previous year. This focus enhances customer loyalty and differentiates Temple & Webster from competitors.
Technology remains a key enabler, with AI handling over 60% of customer support interactions and contributing to a significant reduction in customer care costs. AI-driven pricing improvements have also boosted revenue per visit and delivered margin enhancements.
Growth Beyond Core Categories
Temple & Webster’s home improvement segment is the fastest growing category, achieving 41% revenue growth to $20 million in H1 FY25. This expansion taps into a $17 billion market with low online penetration, positioning the company to capture further market share through private label and exclusive offerings.
The trade and commercial segment also showed resilience, growing 10% despite macroeconomic headwinds, indicating diversified revenue streams beyond the core B2C furniture and homewares business.
Outlook and Market Positioning
Trading momentum has continued into the second half of FY25, with revenue growth of 16% year-on-year from January to early February, accelerating to 19% in early February alone. Temple & Webster reiterated its EBITDA margin guidance of 1-3% for FY25 and remains firmly on track to surpass $1 billion in annual revenue within the next three to five years.
The company’s strong balance sheet, debt-free status, and significant cash reserves provide flexibility to navigate market challenges and capitalize on growth opportunities, including potential mergers and acquisitions.
Bottom Line?
Temple & Webster’s disciplined growth and strategic investments position it well to capitalize on the evolving online furniture market and deliver sustained shareholder value.
Questions in the middle?
- How will Temple & Webster balance increased brand marketing spend with margin targets in FY25 and beyond?
- What inorganic growth opportunities might the company pursue to accelerate its $1 billion revenue goal?
- How resilient is Temple & Webster’s growth amid ongoing cost-of-living pressures and competitive dynamics?