Temple & Webster Posts $314M Revenue, 4.2% EBITDA Margin in H1 FY25
Temple & Webster has posted a robust 24% revenue increase in H1 FY25, alongside record profitability and market share gains, signaling strong momentum despite economic headwinds.
- Revenue climbs 24% to $314 million in H1 FY25
- EBITDA margin expands to 4.2%, surpassing guidance
- Net profit after tax doubles to $9 million
- Market share hits a record 2.9% in Australian furniture sector
- Free cash flow grows 61% to $32.5 million with no debt
Strong Financial Performance Amid Challenging Conditions
Temple & Webster Group Ltd (ASX: TPW), Australia's leading online furniture and homewares retailer, has delivered a standout half-year performance for the six months ended December 31, 2024. The company reported a 24% increase in revenue to $314 million, driven by growth in both new and repeat customers and higher average order values. This growth comes despite a challenging macroeconomic environment marked by ongoing cost-of-living pressures.
EBITDA rose sharply by 61% to $13.2 million, pushing the EBITDA margin to 4.2%, well above the company’s FY25 guidance range of 1-3%. Net profit after tax doubled to $9 million, underscoring improved operational leverage and cost management.
Market Share and Customer Engagement Reach New Heights
Temple & Webster’s market share in the Australian furniture and homewares market reached an all-time high of 2.9%, reflecting the company’s growing footprint in a competitive sector. Active customers increased by 22% to approximately 1.2 million, with revenue per active customer rising modestly to $470. Exclusive products now account for around 45% of total revenue, highlighting the company’s strategic focus on differentiated offerings.
Operational efficiencies were boosted by the adoption of AI, which now handles over 60% of customer support interactions, resulting in a greater than 50% reduction in customer care costs since H1 FY23. Fixed costs as a percentage of revenue declined to 10.5%, demonstrating scalable cost structures.
Robust Cash Flow and Strong Balance Sheet Position
Free cash flow generation surged 61% to $32.5 million, reinforcing the strength of Temple & Webster’s asset-light, negative working capital business model. The company ended the half with a cash balance of $139 million and zero debt, positioning it well to fund growth initiatives and maintain financial flexibility. The ongoing on-market share buy-back program remains active through June 2025.
Positive Outlook Despite Economic Headwinds
Trading momentum has continued into the second half of FY25, with revenue growth of 16% year-on-year from January 1 to February 10, accelerating to 19% in February alone. Temple & Webster expects this trend to persist, supported by easing comparison growth rates and margin flexibility developed in the first half.
The company reiterated its full-year EBITDA margin guidance of 1-3% and reaffirmed its mid-term ambition to surpass $1 billion in annual revenue. CEO Mark Coulter emphasized the company’s commitment to delivering value and expanding market share despite the broader economic challenges.
Bottom Line?
Temple & Webster’s strong half-year results and robust cash position set the stage for continued growth, but sustaining momentum amid economic uncertainty will be key.
Questions in the middle?
- Can Temple & Webster maintain margin expansion as it scales toward $1 billion revenue?
- How will ongoing macroeconomic pressures impact consumer spending in homewares?
- What role will AI and exclusive products play in driving future profitability?
