Good morning, everyone, and thanks for joining today's full-year FY 2025 results call for Cettire . My name is Sam Wells from NWR , and I'm pleased to have joining me from the company today, Cettire's Founder and Chief Executive Officer, Dean Mintz, as well as Chief Financial Officer, Tim Hume. Both Dean and Tim will spend some time reviewing the results released to the ASX this morning, including some notable financial and operational highlights throughout the year. Following their comments, we will have some time for questions at the end of the call. We will take written submitted questions via the Q&A function at the bottom of your screen, and we'll endeavour to get to all questions asked, in some cases combining questions on the same or similar topic. Thank you, and I'll now pass it over to Dean.
Thanks, Sam. Good morning, everyone, and thank you for joining Cettire's FY 2025 results briefing. Before we begin, I'd like to remind you of the disclaimer statement in our ASX results presentation. That disclaimer also applies to this investor call. I'm joined today by our CFO, Tim Hume, and together we'll take you through the company's results for the year. FY 2025 was a year of disciplined execution. Our focus was on profitable growth with a clear bias towards profit in what remained a tough luxury market. In an environment of softer global demand and heightened promotional activity, Cettire delivered gross revenue and sales revenue of $975 million and $742 million, respectively, broadly in line with the prior year. From a profitability perspective, adjusted EBITDA was essentially break-even, and delivered margin was 16.1% of sales. Net cash closed at $37 million, and importantly, we remained debt-free.
We had 657,000 active customers, with 68% of revenue from repeat purchases, and our average order value rose to $820. This reflects the continued loyalty of our existing customers. These results reflect our steadfast strategy to prioritize profitability, maintain cash, and strengthen customer loyalty. Turning to slide four, throughout the year, we focused on the core fundamentals of our business to grow market share in a softer market while remaining self-funded. The global luxury sector contracted about 2% in 2024, the first fall in 15 years outside of COVID. Another small decline is expected this year. However, we're seeing some early signs of stabilization. We drove greater engagement with our existing customers and delivered 10% year-on-year growth in revenue and increased average order value from repeat customers. Our continued efforts in growing our supply chain saw us end FY 2025 with record available inventory levels.
Emerging markets were a standout in FY 2025, now representing over 37% of group revenue. Part of this shift was driven by outsized growth in Asia and the Middle East, and we further lent into the opportunity in the Middle East through our launch in Kuwait and Bahrain. We have also invested in capability by strengthening our engineering, commercial, and marketing teams and continuing forward renewal. We finished the year with 657,000 active customers. New customer adds slowed, reflecting lower marketing spend, but we deliberately chose quality over volume, focusing on conversion and engagement. That strategy paid off, with repeat customers driving 68% of sales and their spending increasing. Lifetime value continues to rise, underpinned by both frequency and basket size. This loyalty is a crucial driver of sustainable growth.
Turning to slide seven, this is a chart we have continued to use as it clearly demonstrates the benefits of customer loyalty with their growing share of wallet year on year. We cut marketing spend by 22% year on year, paid acquisition dropped to 7.1% of sales, well below historical levels. While this meant fewer new customers, acquisition costs were lower and traffic quality improved. To stay relevant, we drove targeted promotions. While this strategy did impact delivered margin, it ensured we remained somewhat competitive in a highly promotional environment. We continue to drive greater diversity across our revenue base. Our localization strategy delivered greater geographic diversity, which saw revenue from emerging markets grow 32%, taking their share to 37% of total revenue, while established markets grew 2%. Our largest market, the U.S., has been declining as a percentage of total revenue.
Looking at the entirety of FY 2025, the U.S. was around half of the revenue base, but this decreased to around 40% in May and June. This reflects the significant short-term disruptions caused by the Liberation Day tariff changes. Our supply chain, with hundreds of suppliers, continued to grow strongly over the last 12 months. Engagement levels remain very high as inventory holders and luxury brands seek new routes to market in a weaker demand environment. To support our strategy, we continue to invest in our commercial team to execute our increased level of pipeline opportunities that include luxury brands and third-party inventory holders. Pleasingly, we exited FY 2025 with record levels of available inventory and year-on-year growth in published products by 35%. I'll now hand over to Tim.
Thanks, Dean, and good morning, everybody. Sales revenue was $742 million, broadly stable on the prior year.
Delivered margin was 16.1%, reflecting heavy promotions and higher fulfilment costs from a stronger euro. Marketing investment fell 22% year on year, in line with our focus on profitability, with paid acquisition representing 7.1% of sales revenue and a continued modest brand investment of $6.7 million. Profitability was also impacted by a realized foreign exchange loss of $5.5 million, predominantly felt in the second half. Adjusted EBITDA was $0.3 million, essentially break-even. Moving to the balance sheet, closing cash was $37 million, and we continued to have zero financial debt. While operating cash flow reflected our reduced profitability and the working capital impact of a lower monthly revenue run rate into the year-end, our focus on profitability and attractive working capital cycle continues to support sustainable cash generation. Importantly, we continue to invest in our technology platform to develop further capability and reinforce our competitive advantage.
You will note in the financial statements that we have decided to conservatively reclassify a portion of our VAT receivable to non-current, reflecting the latest view of the Italian government's refund timetable. As there have been questions regarding Cettire's sustainable cash generation, I wanted to take a moment to reiterate the foundations of our business model, particularly that provide resilience in challenging periods. We have an uncompromising strategy to remain self-funded with zero financial debt. We have a capital-light business model with low fixed cost structure and a high degree of automation. We have very adaptable operating settings, flexible in delivering profitable revenue growth through the cycle, and we have a balance sheet and cash generation that gives us flexibility to adapt to market challenges and opportunities. These foundations have been in place since day one and will continue to underpin everything we do in the future.
Moving on to the outlook and trading update. This year has started off reasonably well year to date, with gross revenues up low single digits percent and emerging markets up double digits percent. July, which is essentially a seasonally quiet month, delivered positive adjusted EBITDA, and we have seen trading momentum improve throughout July and August. However, in the short term, there continues to be uncertainty within the global luxury market, with performance varying significantly across geographies. Our largest market, the U.S., has exhibited volatility throughout calendar year 2025, in particular in the June quarter. Year-on-year growth rates in the U.S. have materially improved in July and August month to date.
However, the changes to the U.S. de minimis rules effective from the 29th of August , as in today, could result in significant market disruption, and it is uncertain whether the improving trend Cettire has experienced in the U.S. throughout July and August will continue. Looking forward, our priorities are to grow our customer base, balance profitability and growth while staying self-funded, and embed the enhancements we made throughout the year. I'll now hand you back to Dean.
Thanks, Tim. Before we conclude, I'd like to give you a snapshot of what is happening across the global luxury market. As I said earlier, in CY 2024, the personal luxury goods market declined 2%, which was the first contraction in 15 years, excluding COVID. That slowdown was driven by macroeconomic headwinds, shifting customer preferences, and a deteriorating value proposition. According to Bain, the outlook for the rest of 2025 will continue to be challenging, but the long-term fundamentals of the sector remain robust. In closing, we have a large, loyal customer base that continues to grow in value.
We have access to one of the world's largest online inventories of luxury goods. We have a capital-light, self-funded model built for profitable growth, and we have the ability to continue to invest in our proprietary technology stack and exceptional team. With these foundations, Cettire is well positioned to navigate near-term challenges and deliver long-term profitable growth. On that note, I'll hand back to Sam.
Great, thanks very much, Dean and Tim. Just as a reminder, the audience can post written submitted questions via the Q&A function at the bottom of your screen. There are a few questions. Just firstly on de minimis, the rule changes going through today. What exactly are you doing to mitigate this?
Sure, I'll take that one, Tim. I think there's a couple of things to know. We're going to remain very nimble and respond to the changes, which have been quite rapid over the past few months. We anticipate to pass through the relevant duties as price increases to the customers, and that's what we'll be doing as an initial step.
Great, thank you. Just on inventory, what specific achievements in supply chain engagement led to the record inventory at the FY 2025 exit, and how are discussions with brands directly given the operating environment you discussed?
I think our commercial team has been expanding over the past year, and we've developed considerably more strength in that area. I think at the same time, given where the state of the market is and the challenges the whole supply chain is dealing with, we can really see that all members of the supply chain are looking to leverage Cettire if they can, and we've had a lot of traction directly with many of the biggest luxury brand owners.
Great, thank you. Your cash balance at the end of August, sorry, your cash balance at the end of the year was $37 million. Any update on where it stands today or the sort of general outlook on cash?
Thanks, Sam. I'll take that one. Look, we haven't disclosed the cash balance as of today, but I think as we've flagged over time, we have a degree of seasonality in our business, and cash tends to ramp from where we are in the year up until December when we've been through the peak sale period, and then we have a secondary peak around the May and June timeframe. I think this year I would not expect there to be much difference compared to what we've seen historically from a seasonality perspective, but I think the other important things for investors to note here are that we've seen a strong revenue performance sequentially through July and August off the back of a very challenging Q4, and the business is trading profitably at the moment.
Okay, great. Just to follow up on that, there has been some speculation around capital raising. Any comments you'd like to make there?
I think we have a capital-light business, we have a lean fixed cost structure. We're operating profitably, as I said, and we have no plans to raise equity.
Okay, great. There are a couple of questions just on the logistics headlines around shipments in Australia post shipments from Europe stopping. Is there any mitigation strategy in that regard?
We have no disruptions, and we have multiple freight carriers if we need to leverage off that.
Okay, great, thank you. What has changed in the process with the Italian VAT refunds that you've had to make the non-current reclassification for, Tim?
Nothing's changed per se. I think this is purely down to timing. Just to recap, we have significant input VAT receivables in the business. This relates to product purchases and service purchases that we make in Europe. The Italian government process, you know, a lot of our business is in Italy. The Italian government process for refunds can be prolonged. In some cases, it can take six to twelve months to receive a refund of VAT. I think we're simply trying to be conservative here in classifying a portion of that receivable as non-current.
Okay, great, thank you. You mentioned your year-on-year growth rates in the U.S. have materially improved through July and August. Has this been a result of improved conditions, or have you stepped up marketing spend there?
I think if anything, our marketing costs have gone down versus where we exited fiscal year 2025. We're seeing very strong returns on that marketing spend. If you rewind several months to April, where there was a lot of market disruption across all of our markets, frankly, off the back of the Liberation Day announcements, the markets other than the U.S. recovered relatively quickly from that. The U.S. recovery took a bit longer. The performance in July and August is much stronger than the performance that we had April through June in terms of the year-on-year growth rate.
Great, thank you. There's a couple of questions on the board and the executive compensation updates today. Would you like to just comment on each of those, please?
Dean, would you like me to go, or would you like to go? I'm happy to go. I think the first thing is on the board. We've had a process of board renewal, which has been ongoing now for the best part of 12 months. We've added some very experienced directors to our board, each of whom has been a very important stakeholder in discussions at the boardroom over the last 6 to 12 months. We've also had a change in the Chair of the business, and that transition has been very smooth, and Stephen's performed a very impactful role today. Unfortunately, Daniel has made a decision to step down from the board today, and as he's made clear, this is so that he can devote all of his time and focus to his current executive role.
On the matter of executive comp, executive compensation at Cettire has not been reviewed in five years. Five years ago, we were a business with $23 million of revenue, and given the growth in the scale and complexity of our business, we've grown from $23 million to $742 million in revenue in that timeframe. Given the growth in scale and complexity, the board performed a benchmarking exercise, and the remuneration outcomes reflect that benchmarking exercise. I think the other point of note here is that we have a very small executive team. Both of the executives within Cettire perform a lot of roles, and I think if you take a view on compensation overall for the company relative to others of this scale, I suspect we would benchmark okay.
Great, thank you. What is the level of marketing and advertising expenses planned for FY 2026 relative to revenue? Any trends in customer acquisition that you can talk to, please?
I think we've been, the general posture towards the market at the moment is it remains, the market remains competitive and promotion-driven. From a fundamentals perspective, that hasn't changed. Our approach in the last 12 months has been, you know, when the market is very responsive to promotions, we have been more conservative in our marketing spend because it's harder to generate an ROI. I think that level, that degree of caution remains in our approach. If I look at the year to date, we have been sort of run rating our spend a little bit below where we were at in FY 2025. I don't think it's appropriate to give precise guidance on where we will land for the year. As we've talked in the past, we've talked about marketing in the 8%- 10% range.
I don't know that it makes sense for us to be at the top end of that range in the current market. We will continue to be conservative on this front. If the market shows signs of improvement, we're certainly prepared to lean into that if the economics support it.
Great. Just to follow up on the Italian receivables, how quickly did you historically get paid?
Yeah, it varies, Sam. It really varies on timing of recovery. Some come through very quickly, some take more time. We have receivables in many markets around the world. The Italian piece, we're really reliant on the Italian government's processing time.
Great, thank you. There's a couple of questions just on OpEx more broadly and intangibles. You've identified $5 million of OpEx savings that you've previously discussed. How are they tracking, first of all?
Sure. Look, what we're seeing is, you know, we have the variable costs that we've flagged predominantly relate to our merchant fees and some optimizations that we've implemented there, and also with our freight costs. I think we should see some improvements in merchant fees throughout as relative to sales throughout fiscal year 2026. On the fulfilment cost side, we have sort of delivered local currency unit cost improvements, but the swing factor there will be what happens in the foreign exchange markets. Those of you who follow those markets will know that the euro has appreciated significantly over the last three months or so. Where we ultimately land on the fulfilment cost side will be a function of the unit costs as well as the foreign exchange. On the fixed cost side, we're working through multiple potential further savings.
I don't know necessarily that that will translate into lower fixed costs relative to sales through the year. Certainly, the right way in which we believe the right way to approach the volatility in the market at the moment is to be as efficient as we can be across every cost line in the business.
Maybe just as a follow-up there, what's the sort of level of anticipated intangible spend for FY 2026?
That's not something we've provided guidance on. What I would say is that our technology platform is absolutely at the core of our differentiation. It enables us to operate with a very lean cost structure and scale quickly. It is a key enabling element of our business, and we'll continue to invest there to support the continued growth in the business.
Okay, maybe just time for one more question. You've called out some impressive or some turnaround performance in terms of the emerging markets. Is there any particular countries that you can elaborate on in that respect?
I think that parts of Asia have been very strong, excluding China, which is still very early. We're hopeful that will become more meaningful in the near future. The Middle East has been doing pretty well.
Okay, great, thank you. I think that's all the time we have for questions. Please feel free to send through any questions that might not have been answered to me directly at sam@nwrcommunications.com.au, and we'll endeavor to get back to you. With that, that concludes today's FY 2025 Cettire earnings call. Thanks for joining, and have a great day. Goodbye.