Red Bubble Annual Report 2022

CEO’s Review I am delighted to be presenting my second annual review as CEO of Redbubble Limited. The Redbubble and TeePublic businesses are unique 3-sided marketplaces operating at a remarkable level of scale. The marketplaces produce a genuine “flywheel” effect, where improvements to one side generates value to the other two. The marketplaces start with the Artists, their content and the products they choose to sell. Tens of millions of Artists’ designs create billions of Individual Product Listings on our marketplaces, attracting millions of customers. As customers make purchases, this creates fulfilment delivered financial results largely in line with expectations, demonstrating that the business has continued to operate at a much larger scale than pre COVID-19. In summary, at the Group level, Gross Transaction Value across the marketplaces was $630 million for the year, down 10% year on year and 12% on a constant currency basis, Marketplace Revenue was $483 million, down 13% year on year and 14% on a constant currency basis and NPAT was ($25 million) compared to $31 million in FY2021. We are particularly proud that Artist revenue of $91 million was earned by a record high 809,000 selling artists across the two marketplaces, demonstrating the significant impact the Group is deliving for the community of creative Artists who use our platforms to design and sell products and connect with their customers. It should be noted that the Group’s year on year growth rates were materially impacted by the $55 million of mask sales that occurred in FY2021. Mask sales in FY2022 were $10 million. On an underlying basis (excluding both mask sales and statutory delivery date adjustments to revenue), underlying Marketplace Revenue for FY2022 was down 2.6% from the prior year. Viewed across the longer term, Marketplace Revenue has grown at 38% since FY2020. In FY2022, the Group continued its focus on 4 key strategic themes and 2 key enablers: 1. Artist acquisition and engagement 2. User acquisition and transaction optimisation 3. Customer understanding, loyalty and brand building 4. Product range and third party fulfilment network 5. Business enablement 6. Risk mitigation This reflects our disciplined approach to investing to drive sustainable growth for the medium and long term. During the year, we invested significantly in additional people to boost our internal capacity and capability. Our employee base is geographically distributed (Primarily San Francisco, Melbourne, New York and Berlin) and subject to talent markets within those geographies. Ongoing COVID-19 impacts have resulted in talent pools being constrained and competition for individuals has been high. This has meant a slower build up of capacity than initially forecast, however we enter FY2023 with a large proportion of hiring complete. In FY2022, we have hired more than 100 new staff and contractors into the Redbubble business which has significantly boosted our capacity, particularly within the product and engineering teams. This is especially important as these teams are focused on improving our technical foundations. A key strategic priority for the Group was to ensure we extended the market leadership we had established through the significant increase in both artists and customers in FY2021. To this end, the Group invested substantially in both the artist and customer experiences to improve loyalty and retention and to ensure long-term growth. I am pleased to report that in FY2022 artist uploads continued to grow from the prior year baseline. In addition, customers who made their first transaction during FY2020 or FY2021 have demonstrated the same repeat behaviour as cohorts that made their first transaction in FY2019. This was reflected in strong overall customer retention across both marketplaces in FY2022 with 46% of Marketplace Revenue from repeat purchases. Investments into the physical product experience continued, with caps, desk mats and mouse pads added to the Redbubble marketplace. In addition, Redbubble introduced a Pets category in May 2022, the first new category launched in over 6 years. This is an important step, as new physical products open up new customer segments for artists as well as provide additional annuity income streams for artists over time. The third party fulfilment network continued to perform strongly even with the headwinds of continued COVID-19 restrictions, sourcing constraints and inflationary pressures. Both marketplaces were able to extend last order by delivery dates in the 2021 holiday season by 4-6 days, and work with the third party fulfillment network to reduce production (order to ship) times. Given the uncertain macroeconomic environment, it is important to have a sound balance sheet that is capable of both weathering near term headwinds and taking advantage of opportunities as they arise. The Group held $89 million in cash as at 30 June 2022, and has no debt on the balance sheet. A portion of these cash reserves are being used to fund our internal investments, with the remaining cash balance both providing a working capital buffer and important operational flexibility. Overall, the Group’s outcomes demonstrate continued resilience across all three sides of the marketplaces. Longer term shareholders will recall that in April 2021, I shared our mediumterm aspirations. We remain committed to these aspirations that represent a step-change in business scale and artist impact through growth of our key topline metrics of Gross Transaction Value to $1.5 billion p.a., Marketplace Revenue to $1.25 billion p.a. and Artist Revenue to $250 million p.a. I look forward to reporting on progress in the coming years. I would like to close by thanking the staff at Redbubble and TeePublic for their commitment and dedication and Anne and the Board for their ongoing support. Michael Ilczynski Chief Executive Officer The easing of COVID restrictions meant that the Board was able to meet in person with the full Executive team in Melbourne in May. This was a very valuable session that helped to further align the Board and executive team on our vision and strategy. During the year, the macro environment in which our marketplaces operate was one of uncertainty and volatility exacerbated by supply chain disruptions, increased inflationary pressures impacting consumer spending and exogenous shocks such as the war in Ukraine. Notwithstanding the operating environmental challenges, the Group efficiencies, lowering costs and attracting more customers. More customers incentivises Artists to add even more designs, and the flywheel starts over. As you will be aware, the COVID-19 pandemic continued to challenge us all in FY2022. However, the easing of COVID restrictions meant that our employees were able to return to our offices enabling greater in person communication on a regular basis. In March, I was pleased to be able to travel and meet our US-based executives and other staff in person for the first time. I came away from those meetings even more impressed by the skill and resilience of our team and their commitment to the Redbubble purpose. 11 Redbubble – Annual Report 2022 10 Redbubble – Annual Report 2022

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