Mad Paws : Quarterly Activity Report and Appendix 4C

ASX Announcement

Mad Paws Holdings Limited (ASX:MPA)

13 April 2022

March 2022 Quarterly Update and Appendix 4C

Mad Paws Holdings Limited is pleased to provide its Appendix 4C cash flow and activity report for the quarter ending 31 March 2022.

Highlights (excluding pro-forma adjustments for Pet Chemist acquisition unless stated)

• ● Group Gross Merchandising Value and Customers

  • o Q3 FY22 LTM Group GMV of $19.4 million up from $9.2 million in Q3 FY21

  • o Q3 FY22 Group GMV of $6.3 million up 76% on Q3 FY21

  • o March 22 Marketplace GMV was a record high of $2.3 million exceeding the usual December seasonal peak while reducing CAC by 31% vs pcp

  • o Over 148,000 paying pet customers and over 35,000 pet sitters on the platform

• ● Total Revenue Growth - Service + Subscription + eCommerce

  • o YTD (July to March 22) Unaudited Operating Revenue $5.5 million +200% vs pcp

  • o Q3 FY22 Unaudited Operating Revenue of $2.1 million + 162% vs pcp

  • o Group pro-forma (for the inclusion of Pet Chemist) YTD March 22 Unaudited Revenue of $10.9 million, an increase of 91% to pcp

• ● Subscription Revenues

  • o YTD (July to March 22) Unaudited Operating Revenue $2.3 million +759% vs pcp

  • o Q3 FY22 Unaudited Operating Revenue of $0.8 million + 418% vs pcp

• ● E-Commerce Revenues

  • o YTD (July to March 22) Unaudited Operating Revenue $0.8 million with no comparative

  • o Q3 FY22 Unaudited Operating Revenue of $0.3 million with no comparative

• ● Cash at the end of the quarter of $11.6 million

June Quarter Outlook

• ● Positive outlook for 2H FY22 revenue growth with continued resurgence of the marketplace and the integration of the recent Pet Chemist acquisition

• ● Q4 started with 2 consecutive record weeks for the marketplace - GMV is up 92% compared to the prior corresponding period, with Easter, ANZAC day and summer European holiday season to boost bookings

• ● With the acquisition of Pet Chemist we are looking to onboard the business and execute on our integration plan, accelerating their growth by focusing on cross-sales between Mad Paws and Pet Chemist as well as using our internal marketing expertise

• ● With the tailwinds from the pet market as well travel returning to pre-COVID levels we believe we have significant growth ahead of us and with $7.0 million in adjusted cash we are in a great position to execute on our growth strategy

Justus Hammer, Co-Founder & CEO commented, "The Q3 results demonstrate Mad Paws is delivering on its substantial opportunity in the Australian pet market. Revenue increased by 162% in Q3 FY22 vs the pcp.

"Our momentum is driven by the ongoing rebound in Marketplace, good growth in subscription fees and new complementary e-commerce revenues.

"The Group's LTM GMV more than doubled to $19.4 million in Q3 vs pcp, and has achieved a record all-time high in March 2022, exceeding the usual December seasonal peak.

"With new customer acquisition, consistent customer repeat rates, higher booking values and an improving take rate, our largest business is performing well. We saw growth in all verticals, highlighting the success of our strategy in acquiring pet customers and increasing our share of wallet.

"Subscription revenues stepped up, increasing by 418% in Q3 FY22. Waggly, acquired in June 2021, reported a 69% lift in subscription revenues vs the pcp. Our new e-commerce businesses Waggly Shop and Sash Beds, acquired in Q2, are building scale and now account for 14% of the group's total income.

"Q4 has started strongly with two consecutive record weeks for the Marketplace. We expect this resurgence to continue with the peak Easter holiday season and ongoing recovery in travel volumes.

"We completed the Pet Chemist acquisition on 1st April 2022 and are delighted to welcome the team to Mad Paws. Highlighting the uplift in scale across the enlarged group, pro forma YTD March 22 unaudited revenues were $10.9 million, up +91% on the pcp.

"We are executing on our integration plan, accelerating growth by focusing on cross-sales between Mad Paws and Pet Chemist as well as leveraging our internal marketing expertise.

"With the proceeds from our recent successful capital raise we are well placed to continue to deliver on our substantial potential in the large Australian pet market."

Key performance metrics for Q3 FY22

Group metrics

Group Bookings/transactions in 000s

53

55

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Bookings/transactions increased 69% on the prior corresponding quarter, with growth from subscription, ecommerce and marketplace verticals.

Group Gross Merchandise Value (GMV¹) in $ millions

6.1

6.3

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

1GMV is a non-IFRS measure, it represents the total value of transactions processed by All Mad Paws businesses, on a cash basis, before deducting pet service provider payments, cancellations and refunds, chargebacks, discount's and GST.

Group GMV increased by 76%, or $2.7 million, to $6.3 million with growth coming across all verticals and demonstrates the success of our strategy in acquiring pet customers and increasing our share of wallet. Q3 LTM GMV was $19.4 million up from $9.2 million in Q3 FY21.

Group New customers in 000s

15.9

15.8

15.6

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

New customers increased 83% in Q3 FY22 vs Q3 FY21 with consistent customer acquisition quarter on quarter. We are encouraged by these results as Q3 is usually a seasonally lower customer acquisition period. In addition, the Group continues to see improvements in our performance marketing CAC which has decreased 31% compared to Q3 FY21.

Group Operating Revenue (unaudited) in 000s

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Revenue increased 162% from $0.8 million to $2.1 million in Q3 FY22, reflecting our entry into complementary revenue streams as well as the continued strong rebound in Marketplace revenues. Marketplace revenues were $1.0 million in Q3 FY22 an increase of 52% vs Q3 FY21 reflecting the strong new customer acquisition, consistent customer repeat rates, higher booking values and improving take rate. With the timing of the Easter holiday being later in April in FY22, Q3 FY22 marketplace revenues have been affected by this shift with this benefit rolling through into Q4 FY22. Subscription revenues grew by 418% to $0.8 million for Q3 FY22 reflecting the contribution from the Waggly acquisition in June 2021 as well subscriber growth in Dinner Bowl over the last 12 months. The Waggly subscription business has performed well since acquisition with Q2 FY22 subscription revenue increasing by 69% compared to Q3 FY21 (period prior to Mad Paws ownership).

Ecommerce revenues from the Waggly shop and the Sash Beds acquisition total $0.3 million in Q3 FY22 and now represent 14% of overall operating revenue.

Marketplace GMV in $ millions

4.9

5.0

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Total Subscribers in 000s

4.9

5.0

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Subscription ARR in $ millions

3.4

3.5

0.7

0.2

0.4

Q1 2021

Q2 2021

Q3 2021

Q4 2021

3.2

2.4

Q12022

Q2 2022

Q3 2022

Total subscribers increased 3% on a quarter-on-quarter basis with 133 net subscriber additions in the period. Q3 is traditionally a lower customer acquisition period for Waggly, our toys and treats subscription business, furthermore we slowed customer acquisition in Dinner bowl as we transition from our Sydney operations to a larger scale cooking facilities in Melbourne, situated near to our distribution centre. We expect our kitchen facility to be fully operational mid-way through Q4 FY22.

As a result of these effects ARR was flat quarter on quarter increase 5% to $3.5 million.