Farfetch Q4 revenues surge by 54.6 percent
1 Mar 2019
Farfetch Limited, for its fourth quarter, reported GMV increase of 155.8 million dollars to 466.5 million dollars, representing year-over-year growth of 50.1 percent, while platform GMV increased by 155.2 million dollars to 462.2 million dollars, representing growth of 50.6 percent. Revenue for the quarter increased by 69.1 million dollars or 54.6 percent to 195.5 million dollars driven by higher platform services revenue. Platform services revenue increased by 67.1 million dollars or 67.9 percent, reflecting increased platform GMV, with higher growth in first-party as compared to third-party GMV, third-party take rate remained relatively flat year-over-year.
“By all measures, 2018 was a blockbuster year for Farfetch,” said José Neves, Farfetch Founder, CEO and Co-Chair in a statement, adding, "We continued to lead the online personal luxury goods market, growing GMV 55 percent for the year – more than twice as fast as the industry."
Review of Farfetch’s performance
The company said, the increases in GMV and platform GMV were primarily driven by a 57.5 percent increase in number of orders from 600,100 in fourth quarter 2017 to 945,200 in fourth quarter 2018, which primarily resulted from a 44.6 percent growth in active consumers to 1.4 million, and an increase in transactions per active consumer. These factors were partially offset by the 4.9 percent decrease in AOV to 637.3 dollars, reflecting the foreign currency translation impact of the US dollar appreciation over the past year, as well as increased investments in customers, which resulted in a lower level of fulfilment revenue relative to platform GMV.
"I am thrilled with our record GMV performance and the growth of Farfetch during 2018, which exceeded expectations. Our increasing scale has enabled us to leverage our efficiencies and lean into our customer proposition with new initiatives such as our Access loyalty program, to boost the lifetime value of our customers and enhance long-term shareholder value," added Elliot Jordan, CFO of Farfetch.
Adjusted EBITDA was negative 14.6 million dollars for fourth quarter, improving by 8.8 million dollars or 37.7 percent, compared to the same period in 2017. Adjusted EBITDA margin improved from negative 22.8 in fourth quarter 2017 to negative 8.6 percent in the same period of 2018. Loss after tax decreased by 44.9 million dollars or 81.9 percent to 9.9 million dollars driven by a year-over-year decrease in the operating loss from 34.3 million dollars to 24.6 million dollars combined with unrealized foreign exchange gains from the revaluation of receivables and payables in fourth quarter 2018.
Farfetch expects to report strong GMV growth in Q1 and FY19
For the first quarter of 2019, Farfetch expects platform GMV to grow approximately 40 percent year-over-year, and adjusted EBITDA margin is to be approximately negative 22 percent to negative 24 percent, prior to any benefit from the adoption of IFRS 16 which became effective on January 1, 2019.
For full year 2019, Platform GMV is expected to grow approximately 40 percent. The company expects to continue to make investments to grow the business, including for its recent acquisitions, while also leveraging costs, and estimates full year 2019 adjusted EBITDA margin of approximately negative 18 percent to negative 19 percent, prior to any benefit from the adoption of IFRS 16.