A revamped mobile app and more convenient application process helped pet services business Mad Paws (ASX: MPA) almost double the number of approved sitters on its marketplace in the December quarter, as the group edges closer to break-even performance with 33,000 new customers added in the space of three months.
In its second consecutive quarter of positive operating cashflow, sitting at $1 million, the group has reported operating revenues of $7.6 million which represents a year-on-year rise of 15 per cent.
The percentage growth in sales would be greater still at 21 per cent if it weren't for closed dinner bowl product lines.
Mad Paws' e-commerce division still accounts for the lion's share of revenue at $5.2 million, but the marketplace segment is seeing faster growth and much higher margins.
Marketplace operating revenue grew by 31 per cent year-on-year to reach $2.5 million, which can be partly attributed to efforts in the six months prior to improve the app and lift the supply of available sitters.
A redesign of the mobile app was launched in October across Apple and Android platforms alongside a streamlined sitter application process which led to a 90 per cent quarter-on-quarter jump in the number of approved sitters.
This surge is aided by the fact the December quarter tends to be a busier period, but the supply of sitters was still 77 higher year-on-year.
And from a profitability standpoint as the company works towards EBITDA breakeven territory, the cost per approved sitter dropped substantially and aided a 42 per cent earnings margin for the fast-growing marketplace.
CEO Justus Hammer highlights the result as a record quarter for the group with multiple highlights, also including a $10 million gross merchandise value (GMV) for the marketplace.
"We are now well positioned to start 2024, on the back of a record month, record revenue and record group EBITDA in December 2023," says Hammer, who co-founded the business in 2014 with Alexis Soulopoulos and Jan Pacas.
"Our marketplace vertical has again outperformed expectations with year-on-year revenue growth for the quarter of 31 per cent.
This is a result of the tireless work of our product and tech team working on improving our customers' experience and not only connecting more owners with sitters, but doing so more and more efficiently."
Hammer says that achieving a record number of customers and sitters with a very low cost per acquisition shows the marketplace can be scaled efficiently on both sides.
"We remain confident in delivering long term shareholder value as the pet sector continues to be very active - with the recent Woolworths investment into Petstock and the proposed US$2.3 billion acquisition by Blackstone of our largest comparable, Rover, Inc."
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