Articore Group Limited

I am in our Melbourne office and joining us live from our New York office is Article Group CEO and Managing Director Vivek Kumar and Group CFO Derek Ruhl. Vivek and Derek will provide an overview of our FY26 results shortly and we will then open it up for questions. If you would like to ask a question, please submit it in the chat box which will be sent directly to me. I will relay it during the Q&A session. The key information in today's call is contained in the ASX announcement and investor presentation released to the market this morning. I would like to call your attention to the safe harbour statement in our ASX release regarding forward-looking information. That safe harbour statement also applies to this webcast. This session is being recorded and a transcript will be released to the ASX. I will now hand you over to Vivek.

Thank you, Virginia, and thank you all for joining us today. FY26 was a transformative year for Articore. We delivered EBIT of 10.3 million slightly above the top end of our guidance range and a 20.1 million turnaround year on year. Margin expansion has been meaningful and sustainable. Gross Profit and Gross Profit After Paid Acquisition both grew for the year, driven by supply chain efficiencies, pricing, paid marketing effectiveness, and the new artist account fee structure that enhance market base dynamics. Gross Profit margin reached a record 49.6%, up 400 basis points, and GPAPA margin improved to 28.6%, up 210 basis points. We also strengthened the balance sheet materially, with underlying cash flow of $10.1 million and a closing cash balance of $40.5 million, giving us the flexibility to invest in future growth. This slide highlights the structural nature of the improvement over time. We have seen a consistent increase in our margin profile since FY23, as the group prioritized improving margins and restoring profits. We have reduced operating expenses every year since FY23, with OPEX falling from a peak of $129 million to $85 million this year, a 34% reduction. This has been achieved while continuing to invest in growth, including building Dashery from Roundup and acquiring Frente Waring. Together, margin expansion and sustained cost discipline have driven the turnaround in EBIT you can see on this slide. 2026 was the first year Articor generated a positive EBIT outside of the pandemic-trived spike in FY21. The significant turnaround to profitability compared to all those years in the past. This reflects a sustainable and structural change in our business, in our margins and cost structure. We are confident that we can build on this momentum to ultimately deliver profitable revenue growth with strong cash generation. Before turning to the details behind these results, I'd like to provide an overview of the business today. Articore today owns and operates two established, high-margin, capital-like digital marketplaces, Redbubble and TeePublic, alongside two high-growth businesses, Dashree and Frankie Beric. The flywheel remains central to our investment pieces. Creators upload designs to our marketplaces, customers purchase products printed on-demand by third-party wholesalers, and we charge service fees to provide tools and support for creators. Because creators only earn when they sell, the group benefits from an asset-like, accurate business model. Greater volume drives fulfillment scale, efficiencies that lower internet costs and expands margins. And stronger margins allow us to reinvest in customer acquisition and further accelerate the flywheel. When this flywheel gains momentum, engendered compounding benefits for creators, customers, and shareholders alike. Building and sustaining that momentum towards profitable growth remains our core priority. Supporting that live-in are four structural competitive advantages. First, scale of content. Over 75 million designs with more than 10,000 added daily, creating one of the largest and most dynamic catalogs of unique user-generated content in the world. Second, fulfillment scale. A diversified global network of third-party sites allowing us to flex volume, optimize cost, and maintain efficient delivery for over 20 million units shipped in FY26. Third, Network FX. We have more than 3 million creators selling across the group. As more creators and customers participate, the platform becomes increasingly attractive to both sides. And fourth, Operational Leverage. A global team of around 200 people, generating approximately 1.8 million in revenue per employee. Together, these advantages make the model defensible, scalable, and increasingly efficient as Walden grows within a global print-on-demand market that itself is growing quickly from around US$11 billion in 2025 to a projected US$58 billion by 2033, a 23.6% compound annual growth rate. Looking across our two established marketplaces, Ford delivered structural margin gains this year. T-Public remains a strong contributor to the group with consistent growth since it was acquired in 2018. The trend continued this year. T-Public grew marketplace revenue 2.8% in constant currency with gross profit up 10.9% in constant currency. driven by pricing and promotional optimization and ongoing supply chain efficiencies. This included more favorable costs on blanks, a shift towards more cost-effective third-party wholesalers, and onboarding a new shipping carrier, which increased competition to offset driving U.S. shipping costs. Resolves improvements to unit economics largely offset software marketplace revenue. The business delivered a record 75.2% quarterly gross profit margin in the fourth quarter, reflecting the new order's economy structure and continuous supply chain efficiencies. Turning now to our high growth businesses, starting with Frankly Wearing. In April 2016, we completed the acquisition of Frankly Wearing, an Indian-based print-on-demand marketplace. This acquisition advances our technology consolidation and establishes a global capability center to drive operating efficiencies across the group. The acquisition opens access to the Indian print and demand market worth more than US $1 billion and growing around 25% annually. Since we acquired it just a few months ago, Frankly Wedding has delivered year-on-year triple-digit marketplace revenue growth. Incubation is progressing well. India-based teams are already providing engineering and other functional support across the group. And we are targeting hiring more than 30 employees by the end of FY27. Dashree is an emerging storefront platform for creators who want to monetize their existing audiences. FY26 marked Dashree's first full financial year and the early signs are encouraging. The platform generated 4 million on GPS gross profit sales, 2.4 million of NPR at a GBAPA margin of 36.5%, significantly above our established marketplaces as creators bring their own demand. What excites us most is that the number of creators have already passed $100,000 in gross sales in their first year alone, a strong signal of much higher lifetime value potential. Our current target customer profile is creators with 100,000 to 1 million followers, a segment we have cemented around 4 million creators globally. We are currently working with Shopify to launch an integrated offering to specifically broaden the target market to creators with millions of followers who have existing Shopify storefronts. AI is now embedded across the article flywheel, and we are continuing to expand into new use cases. On the creative side, our approval workflows are 100% AI-powered, which reduces manual review and improves both speed and consistency. On the customer side, our service is powered 100% by AI algorithms, combining vector search and machine learning, ranking, to improve relevance, discovery, and conversion. AI also underpins our marketing, from content creation through to campaign optimization. And across operations, AI is helping the business run more efficiently. with approximately 80% of customer contacts touched by AI-powered chat, speeding up query resolution. We have also taken a significant step into AI commerce, launching an early advertising initiative that opened AI's ChatGPT for the public. Buying behavior is shifting from searching to asking, and we were already seeing revenue growth from AI sources, including ChatGPT, Gemini, Plot, and others, even before this launch. We see this becoming a growing revenue stream for the group. Our vision is to be the leading destination for customers to discover and buy unique, design-first products driven by a global creator ecosystem built upon passion and the profits. We'll pursue this through three growth drivers, which focus on customers, creators, and high-growth businesses. For customers, we will strengthen our competitive mode through content differentiation, build high-impact customer acquisition and retention engines, and elevate the customer experience through AI-driven discovery and personalization. For creators, we are focused on generating higher-value outcomes through incremental monetization opportunities. And we will continue to invest in our new high-growth businesses, including Dash Free and CountryWearing, leveraging our strategic assets and existing capabilities. Underpinning all key growth drivers is a single, unified platform. This slide sets up the specific initiatives we are prioritizing in FI27 to unlock each of these key core drivers. For customers, we are focused on three areas. Acquiring and elevating pop culture, license, and fan content. Improving search, discovery, and merchandising across both marketplaces. And building personalization opportunities that let customers express their identity and fandom. For creators, we are looking to increase theater earnings and incentivize value-adding behavior. Simplify the peer experience, including enabling designs to be uploaded once and used across multiple platforms, and continue to refine the artist account fee structure. For our high growth businesses, we are expanding new revenue streams such as on-site advertising, adding new features and integrations to Dashly, including Shopify, and leveraging group expertise and capabilities to accelerate franchise earnings growth. We have already made good progress working towards operating on a single platform, which we will build on in FI27. We are leveraging unified marketing technology across the group, integrating order management and fulfillment systems, and consolidating our content uploader. Together, these initiatives are designed to build on the structural gains we made in FI26 and support the group's return to profitable growth. I'll now hand it over to Derek to take you through the numbers and more details.

Thanks, Vivek, and hello to everyone joining us today. FY26 was a strong year of execution, which stated that margins kept a tight rein on costs and meaningfully strengthened the balance sheet. Starting with the P&L, as Vivek had highlighted, the group delivered record margins this year. Both gross profit and gross profit after paid acquisition grew in absolute value, offsetting a decline in NPR. Fulfiller pricing was a key driver of our record margin improvement this year. We negotiated pricing based on combined volume from Redbubble and TeePublic and directed more volume to fulfillers to offer better pricing. Offering expenses declined 6.9% to $85 million, reflecting continued discipline across the cost base, including a reduction in employment, web hosting, and software costs. Depreciation and amortization declined 57.8% year-on-year following the streamlined capitalization approach we introduced towards the end of FY25, which federal lines reported EBIT with underlying cash flow. All this closed for EBIT of $10.3 million for the year, up from a loss of $9.8 million in FY25. It's worth noting that the U.S. dollar declined 4.8% against the Australian dollar year-on-year, but this had limited impact at the Ether level at 72% of the group's revenue and 75% of its costs, a denominator in USD providing an embedded operational hedge. The VAC has taken you through a substantial improvement in margins across both marketplaces. What's clear from the results is a divergence in top-line performance T-Public's marketplace revenue continued to grow up 2.8% in constant currency, while Redbubble's marketplace revenue declined 11.1% in constant currency. Those substantial margins expansion largely offset the top-to-top line. Returning Group NPR to possible growth remains a key priority. The big hotline, the key initiatives we're investing in drive that outcome, center around the three pillars. Customers, creators, and high-growth businesses. Our cash position and balance sheet improved significantly this year, providing financial flexibility. Underlying cash flow improved from $0.6 million in FY25 to $10.1 million this year, and our closing cash balance grew 42% to $40.5 million, up from $28.4 million. We achieved this while returning capital to shareholders buying back more than 2 million shares during the year and without compromising investment in Dashery or the frankly wearing acquisition. One clear sign of the financial improvement shows up in returns on shareholder capital. The return on equity turned from negative 22.8% in FY25 to positive 21.8% in FY26. The group enters FY27 in a strong position to return to profitable growth. Its core marketplace business is profitable and generating cash, has renewed focus on cost discipline, and is investing in two high-growth businesses, Ashery and Franklyware. For FY27, the group expects to build on the structural change to its performance delivered in FY26. We're guiding to a G proper margin of 27% to 30%, further step down on operating expenses to $79 million to $85 million and an operating EBITDA of $17 million to $23 million. Thank you for joining us today. We will now open up the webcast to questions. If you have a question, please add it in the checkbox and Virginia will relay it on your behalf.