The Marley Spoon AG (ASX: MMM) share price has jumped higher this morning following the release of its third quarter update.
At the time of writing the global subscription-based meal kit provider's shares are up 14.5% to 43.5 cents.
How did Marley Spoon perform in the third quarter?
During the third quarter Marley Spoon recorded revenue of €33.1 million, which was a 38% increase compared to the prior corresponding period.
This was driven by a 70% increase in Australia on the back of strong growth in both the Marley Spoon and Dinnerly brands. A 32% increase in revenue in the United States also contributed strongly.
Year to date revenue is now up 49% compared to the prior corresponding period. Both the US and Australian segments have achieved growth of over 50% year to date excluding FX impacts.
Another positive was Marley Spoon's improvement in its operating profitability during the quarter.
Marley Spoon recorded an operating EBITDA loss of ~€10 million, compared to an operating EBITDA loss of ~€12 million a year earlier. The lower loss was driven by higher revenue and contribution margins, while its marketing spend was flat at €10 million year on year.
Financing.
The company finished the period with cash and equivalents of €7.9 million. In light of this and its loss-making operations, it revealed that it is finalising senior secured debt funding.
The release explains that a reputable Silicon Valley based venture debt lender has in principle agreed to provide Marley Spoon with senior secured debt funding of ~A$22 million (US$15 million). But should this fall through, it advised it will seek alternative funding.
Guidance.
Calendar year 2019 revenue is expected to be up 35% to 40% year on year. However, its full year contribution margin is expected to be at the lower end of the previously guided range.
Looking further ahead, management continues to target positive operating EBITDA by the end of calendar year 2020.
Marley Spoon CEO, Fabian Siegel, said: "We have proven our business model in Australia and are seeing improvements towards positive operating EBITDA, attractive unit economics, high incremental margins and a growing subscription base on a global basis."
"We see significant opportunities for growth and have invested in our manufacturing capabilities globally in order to ensure that we have the right foundation to support continued expansion and customisation. We are looking forward to raising this important new debt funding for Marley Spoon. This significant funding aims to bring on board a reputable, long-term oriented debt provider to support us on our path to profitability," he concluded.
