Australian marketplace company Kogan has reported a 49.3% lift in overall gross profit in October 2023, hitting $13.9 million.
Gross sales have also lifted by 2.1% to $66.7 million. Between July and October, gross sales were $255.8 million, down by 4.4%, with gross profit up by 25% to $51.4 million.
Kogan reported higher than planned overheads in October, driven by marketing investments and one-off items.
Meanwhile, platform-based sales (subscriptions, platform and software-based) contributed 63.9% of Kogan.com gross sales and 73.5% of Kogan.com gross profit for FY24 year-to-date.
“This marks a significant milestone as it represents the first instance of year-on-year growth in monthly sales since January 2022,” founder and CEO Ruslan Kogan said. “This month’s result highlights the positive trajectory of the business and may reflect a return to sustainable year-on-year growth.
“Along with this, we continued our strong return to year-on-year growth in profitability.”
The recent uptick in revenue was also driven by Kogan.com’s new advertising platform, which has recorded $34 million in revenue since launching at the end of FY23. November sales to-date were $15 million.
“We knew this project had the potential to become a huge success because our marketplace sellers were asking us for ways to help them grow,” Kogan said. “But, as anybody in business knows, you can only really test whether an idea will be successful once the rubber hits the road.
“While it has only been a few months since launch, the signs are now promising and the organic demand from sellers is starting to translate into revenue.”
Speaking on FY23, Kogan said it was a pivotal year in the history of the business.
“For the first time ever at Kogan.com, the majority of our gross sales and gross profit were generated from our subscription, platform and software based sales — what we refer to as platform-based sales,” Kogan said. “As these sales grow, we can expect a rapid and more dependable growth in the business.
“This is because platform–based sales deliver higher quality recurring, lower risk and higher margin revenue than our traditional inventory-based product divisions.
“This in turn allows us to invest even more in creating the best customer experience and exceptional value for Kogan.com members.
The company also finished FY23 with $65.4 million in cash, and commenced a share buy-back, purchasing over $10 million of shares by June 30, 2023.
“We aligned our inventory levels with current business strategy, which led to a strong recovery in gross margin in the second half of the financial year. This recovery was complemented by ongoing efficiencies in the operations of the business, setting the business up for long term success.”