Temple & Webster’s Rapid Growth Raises Questions on Margin Sustainability

Record Revenue and Profit Growth

Temple & Webster Group has delivered a standout FY25 performance, reporting a record revenue of $601 million, a 21% increase compared to the previous year. This growth was accompanied by a 43% jump in EBITDA to $18.8 million, reflecting both top-line momentum and operational leverage. The company’s EBITDA margin improved by 50 basis points to 3.1%, underscoring effective cost management and productivity gains.

Cash flow generation was robust, with free cash flow reaching $38 million and a strong closing cash balance of $144 million, positioning Temple & Webster with a solid financial foundation and no debt. The company’s asset-light, online-focused business model continues to enable competitive pricing and customer savings, driving market share gains.

Market Share Gains and Strategic Progress

Temple & Webster’s share of the Australian furniture and homewares market climbed to a record 2.7%, up 17% year-on-year. This progress is significant in a market estimated at $19 billion, where the company aims to capture approximately 4.2% within the next three to five years. Growth was fueled by strong end-of-financial-year promotions and sustained customer engagement, with active customers increasing 16% and repeat orders rising steadily.

The company’s strategic focus on exclusive products paid dividends, with 45% of FY25 revenue coming from exclusive lines, up from 43% the prior year. Investments in AI and technology have enhanced customer experience and operational efficiency, with 80% of customer support interactions now partially or fully automated. Fixed costs as a percentage of revenue declined to 10.6%, reflecting improved operating leverage.

Expanding Horizons – Home Improvement and International Growth

Beyond its core furniture and homewares business, Temple & Webster’s home improvement segment grew 43% to $42 million, while the trade and commercial division accelerated growth to 23%, driven by demand in holiday and student accommodation sectors. These adjacent growth areas are integral to the company’s broader strategy to build scale and diversify revenue streams.

International expansion is underway with the launch into New Zealand in October 2025. Early results are promising, with over $100,000 in revenue generated within six weeks and multiple repeat customer orders. The New Zealand market offers a similar customer profile and regulatory environment, providing a strategic stepping stone for further international growth.

Outlook and Market Positioning

Temple & Webster remains on track to achieve its mid-term revenue target exceeding $1 billion, supported by ongoing market share gains and growth in new segments. The company reiterated its FY26 EBITDA margin guidance of 3–5%, targeting the midpoint, and highlighted a cash position exceeding $150 million, with an active share buy-back program ready to deploy.

With a clear vision to become Australia’s largest furniture and homewares retailer and a top-of-mind brand, Temple & Webster’s combination of exclusive products, AI-driven customer engagement, and operational efficiency positions it well for sustained growth in a market still underpenetrated by online players.