Frontier Digital Ventures posts fourth consecutive cash flow positive quarter

Leading online marketplace business Frontier Digital Ventures (ASX: FDV) has reported its fourth consecutive quarter of positive operating cash flows.

Founder and chief executive officer Shaun Di Gregorio said the December quarter result highlighted the consistent execution of the company’s strategy and the strength of its online marketplaces model, despite the headwinds experienced in the first half of 2023.

Frontier Digital achieved group operating revenue of $21.7 million and earnings before interest, taxes, depreciation and amortisation of $2.1m in the December quarter.

This was also the sixth consecutive quarter of positive operating cash flow across all geographic regions the group operates in.

The Q4 2023 revenue included a record $14.4m from the company’s 360 Latin American (LATAM) businesses.

This was a 22% increase on the previous corresponding period (pcp), with transactions revenue growing 231% on the pcp.

Mr Di Gregorio said Frontier is entering a new phase of its journey, having delivered long-term revenue and earnings growth as well as, for the first time, full-year positive net operating cash flows.

“The rollout of Iris and multiple offline consumer events provide a foundation for transaction volume growth in 2024,” he said.

Cost base optimisation

Frontier has undertaken significant work over the past year in the areas of cost base optimisation, regional rebranding and operational and product enhancements designed to strengthen the businesses and enhance the long-term equity value of each region.

“Frontier is entering an exciting new phase of the business focused on growing earnings and cash flows, underpinned by sustainable long-term revenue growth.”

Growth is being driven by strong performance in the property vertical with product initiatives such as bundling and memberships expected to drive classifieds recurring revenues.

Sales team productivity

Mr Di Gregorio said the company has a focus on sales team productivity and growing professional users to drive revenue growth as part of its classified growth initiatives.

The company has identified a number of ongoing product initiatives for the classifieds part of the business including product bundling, memberships and plans to increase recurring revenue streams.

All 360 LATAM marketplaces hosted numerous offline events across the property and automotive verticals during the quarter, with these events becoming a growing source of revenue for the region and a significant source of new professional customers.

Additionally, they have been found to provide valuable brand exposure, reinforcing the marketplaces’ leading positions in their respective markets.

Iris gaining momentum

Frontier Digital’s rollout of Iris and multiple offline consumer events provide a strong foundation for transaction volume growth in 2024.

Iris generated around $305,000 in revenue in Q4 2023, increasing 81% on the previous quarter from 31 sales and 159 rental insurance policies.

Launched in December, Iris is now live in all key 360 LATAM markets and has over 12,000 units for sales across 500 projects.