Mad Paws Q3 FY25: Marketplace EBITDA Up 32%, Group Revenue Down 6%

Marketplace Growth Defies Seasonal Challenges

Mad Paws Holding Limited (ASX: MPA), Australia’s leading online pet ecosystem, has delivered a compelling performance in its March 2025 quarter, highlighted by a 22% year-on-year increase in Gross Merchandise Value (GMV) across March and April. This growth was achieved despite a calendar shift that deferred bookings from March into April due to the Easter long weekend and school holidays in Queensland and Victoria.

The marketplace segment, which connects pet owners with sitters and other services, saw operating revenue rise 5% year-on-year, with Cash EBITDA climbing 32% to $0.7 million, representing a strong 36% margin. This resilience underscores the operational strength of Mad Paws’ core business, even as group operating revenue declined 6% to $6.1 million, weighed down by ecommerce challenges.

Marketing and User Experience Drive Momentum

Central to this growth was the successful launch of Phase 3 of the “Press Paws” above-the-line marketing campaign, strategically timed to coincide with peak pet care demand during Easter and school holidays. The campaign lifted site sessions by 10% in Q3 and 16% during the March-April window, while brand awareness increased by 5 percentage points, validating the long-term brand-building strategy.

Operational enhancements also contributed, including the introduction of seasonal pricing allowing sitters to increase rates by an average of 14% during high-demand periods, and platform improvements that reduced friction in the booking funnel. These changes boosted conversion rates and average booking values, supporting higher volumes of both new and repeat customers.

Ecommerce Segment Faces Headwinds Amid Strategic Shift

The ecommerce division experienced a 10% decline in revenue to $4.2 million, impacted by the strategic repositioning of brands such as Waggly and Sash, increased competition, and external disruptions including Cyclone Alfred. However, excluding Waggly and Sash, ecommerce revenue was flat, with growth in medication orders and the AutoShip subscription program partially offsetting declines.

Automation initiatives in prescription processing and customer service improved operational efficiency, with medication orders rising 10.6% and AutoShip sales up 24.3% year-on-year. These efforts position the ecommerce business for a more sustainable growth trajectory despite short-term challenges.

Cash Flow and Financial Position

Mad Paws reported a negative operating cash flow of $1.8 million for the quarter, primarily due to seasonal timing of sitter payments following the December peak booking period. Importantly, the company returned to positive operating cash flow in March and April 2025, signaling improving liquidity. The group ended the quarter with $1.7 million in cash and no unused financing facilities, having repaid $0.2 million in debt during the period.

The company continues to engage with Highbury Partnership Pty Ltd as its financial adviser to explore expressions of interest from third parties, aiming to maximise shareholder value. While no definitive proposals have emerged, this strategic review adds an additional dimension to Mad Paws’ growth outlook.

Looking Ahead

Mad Paws is focused on sustaining momentum through further optimisation of its marketplace platform, including a faster, mobile-first booking funnel and expanded marketing channels leveraging increased brand awareness. The ecommerce division aims to enhance customer retention and operational efficiency, particularly in prescription management and subscription services.

With forward bookings for May already showing positive signs, the company is well positioned to capitalise on the growing Australian pet market, which is estimated at $30 billion. The combination of strategic marketing, operational improvements, and financial discipline suggests Mad Paws is navigating its seasonal and competitive challenges with agility.