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"•Grew net revenue from $126.0 million in 2018 to $219.3 million in 2020, representing a compound annual growth rate, or CAGR, of 31.9%; •Grew our digital reve
by neom 5y ago
"•Grew net revenue from $126.0 million in 2018 to $219.3 million in 2020, representing a compound annual growth rate, or CAGR, of 31.9%;
•Grew our digital revenue from $113.2 million in 2018 to $194.6 million in 2020, representing a CAGR of 31.1%;
•Grew our store footprint from three in 2018 to 22 in 2020;
•Grew our U.S. and international revenue by $52.5 million and $40.7 million, respectively, from 2018 to 2020, representing a CAGR of 20.8% and 112.4%, respectively;
•Increased gross margin by 454 basis points from 46.9% in 2018 to 51.4% in 2020;
•Generated net losses of $14.5 million and $25.9 million in 2019 and 2020, respectively; and
•Generated adjusted EBITDA of $(1.3) million and $(15.4) million in 2019 and 2020, respectively."
- black6 5y agoHow, as a consumer goods manufacturer, do you continue to lose money? My background is in a different manufacturing sector, beer, but even as a journeyman brewer I was doing COGS analyses and knew exactly how much each bottle/keg cost us for each brew so that we could be profitable.
- deleted 5y ago[deleted]
- BoorishBears 5y agoBecause it's not their money. It's a VC money, and the VCs will let this go on as long as an exit is in sight because they can then extract their money + a hefty premium. Then at that point the money faucet is re-plumbed to the public's money via institutional investors and from there they're free to do the slow decline to penny stock at their own pace
- vlad11 5y agoVC backed company try to grow revenue at all cost, they don't care about profit.
- neom 5y agoBuilding a business to such scale that it can be a public company is an extremely expensive endeavour, continuing that growth till a time such that the business can sustain "market weather" while in the public is even more so. As crazy as it may seem, the bar for a public market business to be considered a "stable" or "safe" investment is very very very high and takes years in the public to build the platform that holds your market share. In near all instances, you have to continue to spend a lot into that sustainability.
- beambot 5y agoHaven't read the S-1, but their gross margins appear pretty solid, so they're probably spending aggressively in SG&A and capex-heavy depreciated assets that will hit COGS over time. Eg growing from 3 stores to 22 in two years probably requires a lot of big upfront expenditures. It's important to look at cashflow statements, P&L, and balance sheet in concert rather than isolation -- especially for larger fast-growing companies.
- rcar 5y agoFrom their S-1, 2020 revenue was $219m. From that, $106m was cost of revenue, $87m went out to SG&A, and $55m for marketing. Presumably if they wanted to hit pure profitability, they could take their foot off the gas on the admin expenses and marketing, but since they're still seeing good growth and seem to be having an easy enough time getting capital, they may as well keep spending on additional growth.
- panda88888 5y agoI haven’t looked at the filing in detail yet, but I would guess expanding their physical store footprint is burning money and the source of loss. They are in the expansion/growth phase so I would not expect profitability until either runway runs out or growth slows.
- perpetualpatzer 5y agoOut of fairness, their gross margin is 51%, so they're covering their COGS comfortably. They're spending a lot on operating stores and advertising, where the input-output math is less clear/predictable. You could also believe that those stores stores will scale up in efficiency as people know that they're there and leave their house post-COVID.
- KoftaBob 5y agoLosing money isn't always due to a company charging less for a product than the direct cost to make it. In the case of startups like this, the loss is often due to the large costs of things like expanding number of stores, expanding manufacturing capacity (it's not always as simple as sending orders to China to make), expanding their logistics system to handle shipping more and more shoes, etc.
- blueblisters 5y agoFor eCommerce ad-driven sales, I would think that ad expenses should be a part of COGS. It's easy to attribute sales to each ad dollar spent, and the impact of reduced ad spending will likely impact revenue, not just growth.
- nappy-doo 5y agoEBITDA in a non-comparison context is meaningless. EBITDA is only useful when you're comparing ownership of two like businesses. What is interest, if not an expense? What is tax, if not an expense? What is depreciation if not an expense? Alright, amortization, yeah, that one could get added back in – I buy that. Whenever someone starts talking about EBITDA, check your wallet.
- swamp40 5y agoWhy can't the comparison context be from one year to the next year?
- ericmay 5y agoBecause your choice isn't "invest or not" but invest relative to other potential investments in the marketplace.
- mbesto 5y agoThe parent comment is right. EBITDA is used for both industry comparison as well as YoY trends. For YoY it's used to try to eliminate "noise".
- ericmay 5y agoYoY trends don't matter in isolation as you're trying to decide to make an investment.
- mbesto 5y ago> YoY trends don't matter in isolation as you're trying to decide to make an investment. What. You 100% can make investing decisions in isolation. I don't think this is what you meant you say, because this makes absolutely no sense at all. If someone comes to me and says "if you give me a dollar today, I'll give you $10 tomorrow" I really don't need to consider anything else. Sure, someone else might say "I'll give you $11 instead", but if the deal is there and I can analyze that the risk of default is minimal, then I can absolutely make that decision in isolation.
- lupire 5y agoWhat is digital revenue? Online sales of physical products, or something else?
- RC_ITR 5y agoNot mentioned: $140mn in Sales and Marketing to generate $110mn in Gross Profit.
- hammock 5y agoIs that unusual?
- ac29 5y agoMaybe not unusual for a young, growing company, but its obviously not sustainable for each dollar in profit to cost more than a dollar in sales/marketing effort. Thats a negative ROI.
- wonnage 5y agoYou're confusing profit and revenue
- gamblor956 5y agoGross profit = the profit from a specific business activity, in this case, sales, when looking solely at sales revenue less the specific costs of generating that revenue (aka COGS). Net profit = the profit from the overall business, taking into account all sources of income and all expenses. Sales and marketing are usually not treated as part of COGS, because they are not a necessary expense (in this context, COGS would include things like materials and production costs).
- RC_ITR 5y agoMany investors think in gross profit terms rather than revenue terms, because gross profit is the actual “cash in” from a given sale. That had become less common because software has famously high gross margins that aren’t necessarily linearly tied to revenue, but allbirds are shoes.
- deleted 5y ago[deleted]
- robbiemitchell 5y agoWhy are the top line numbers shown from 2018 to 2020? If I had to guess, it would be because 2018-2019 showed the most growth while 2019-2020 showed less, and they want to show good % changes.
- ABeeSea 5y agoYou would be correct. On page 18, 2019 revenue was 193M and 2020 was 219M, growth of only 13%.
- farmerstan 5y agoNo. All S1s do it this way for some reason. My wife just worked on an S1 and had a similar comment but she investigated other S1s and saw that was just how it was done.
- neom 5y agoIt's because the gold standard for IPO 8 quartners with sustained growth.
- robbiemitchell 5y agoBut showing two data points doesn't actually demonstrate sustained growth. Showing quarterly or at least annually would get closer. Showing two data points could mask growth in year one and losses in year two.
- tinyhouse 5y agoGood observation. That's not th standard as people here claim. Companies often play such games. Esp to make their IPO look attractive. I went over Squarespace S-1 today who IPOed in May and saw they claim around 70% revenue growth in commerce from 2019 to 2020. Then somewhere in the document you find that they acquired a company in March 2021 but they include their revenue in their 2020 numbers. So the 70% growth is not really organic growth and they don't mention anything about the growth of the acquired company (Tock).