Redbubble shares have plunged after the print-on-demand online marketplace saw a drop in active customers and said its operating expenses could rise as much as 31 per cent.
The Melbourne company reported on Wednesday that revenue dropped 14 per cent to $483 million in the 12 months to June 30, compared to the prior year on a constant currency basis.
The company reported a $24.6 million net loss, compared to a $31.2 million net profit in 2021/22. Cash in the bank declined 10 per cent to $98.7 million.
"Given our bottom line outcome, we are not at all satisfied with our result for the year," Redbubble CEO Michael Ilczynski told analysts.
"But we are encouraged by the improvement in momentum that we see, the quality and capability of the people we have added to the group through the investments we've made and the genuine uniqueness of the scale and potential of our marketplaces."
Active members on the online marketplace dropped seven per cent to 14.4 million after COVID-19 lockdowns ended.
The number of artists selling on Redbubble.com and TeePublic.com did rise 19 per cent to a record 809,000.
The two platforms serve as a marketplace for user-generated art that's printed on clothing, phone cases, wall art, stickers, pet products, masks and more.
Redbubble forecast that it would spend $135 million to $145 million in operating expenses in 2022/23, up from $110 million the year before.
The company also forecast it would spend $14 million to $18 million more on wages this fiscal year, in part because it has approved adding 18 new roles.
It's also accelerating its spending on brand awareness, which is forecast to rise from $1.1 million in 2021/22 to around $8 million to $12 million in 2022/23.
RBC Capital Markets analyst Wei-Weng Chen noted that Redbubble also pushed out several medium-term aspiration targets from 2024 to 2026/27.
Mr Ilczynski said that as a print-on-demand company that does not hold inventory, Redbubble has been able to remain relatively insulated from the global supply chain issues. Days to ship decreased by 28 per cent in the second half.
He said that Redbubble and TeePublic were "large-scale, difficult to replicate three-sided marketplaces" that enable artists to sell to millions of consumers with no risk to them.
At 2.39pm AEST, Redbubble shares were down 34.8 per cent to a one-month low of 97.5. Its shares are down 70 per cent for 2022 so far after declining by 40.7 per cent in 2021.
