NEW YORK- Blue Apron (NYSE: APRN) today announced financial results for the second quarter (2Q23) ended June 30, 2023.
Second Quarter 2023 Highlights
Net revenue of $106.2 million, a decrease of 6.1% sequentially and 14.5% year-over-year, largely driven by a one-time $10.0 million bulk sale to an enterprise customer recognized in the second quarter of 2022 (2Q22) and deliberate reduction in marketing spend
Record customer engagement metrics, due in part to a price increase implemented in 2Q23
Average Order Value of $75.66, an increase of 12.7% year-over-year and 7.7% sequentially
Average Revenue per Customer of $397, an increase of 21.3% year-over-year and 14.8% sequentially
Debt-free with cash and cash equivalents of approximately $30.0 million as of June 30, 2023
Inclusive of the one-time, non-cash loss on the FreshRealm transaction of $48.6 million, net loss of $61.9 million in 2Q23, compared to a net loss of $23.3 million in 2Q22
Excluding the one-time, non-cash charge, net loss was $13.3 million in 2Q23
Adjusted EBITDA loss of $2.6 million, a $13.6 million year-over-year improvement, reflecting the third consecutive quarter of efficiencies
Reduced net cash used in operating activities by 72% year-over-year and 46% sequentially
Completed transition to asset-light model with transaction value up to $50.0 million
Linda Findley, Blue Apron's President and Chief Executive Officer, commented, 'We are confident we have sufficient capital from operations to achieve our adjusted EBITDA profitability goal and to continue to move the business forward following the FreshRealm transaction. While the outsized net loss for the quarter was due to the one-time, non-cash charge associated with the transfer of our operational infrastructure, it does not account for the full financial incentives from FreshRealm and planned cost savings. We see this transaction as financially beneficial for the Company starting in 2024 with a lower fixed cost base, a stronger balance sheet and new revenue opportunities, including the introduction of a new product line expected in the first half of next year.
'In parallel to closing the FreshRealm transaction in June, we continued to execute our plans for achieving long-term, profitable growth, and I am encouraged by our accomplishments to date. Through strong cost management and disciplined operational efficiency, we reduced our year-over-year operating cash burn by over 70%, while significantly reducing our adjusted EBITDA loss to $2.6 million. Our progress also contributed to solid margin expansion with variable margin of 37.9% in the quarter, our strongest margin performance since 2020. We anticipate continued improvement in year-over-year cash burn reduction with normal seasonality, and we expect to achieve adjusted EBITDA profitability in the second quarter of 2024.
'In addition to the significant reduction in cash burn driving us towards profitability, marketing efficiency also improved and is contributing to profitable growth. In the second quarter, payback periods reached levels far below our one-year target. Cost per acquisition improved by 30% in the quarter, while conversion rates improved 25% year-over-year and average weekly retention was the strongest it's been in five quarters. We believe these continued improvements will allow us to return to top line growth in 2024.'
Effect of FreshRealm Transaction on Blue Apron's Business
On June 9, 2023, the Company closed the strategic transaction with FreshRealm, valued at up to $50.0 million. Under the definitive agreements, Blue Apron sold its operational infrastructure to FreshRealm, including equipment, know-how and related personnel, and concurrently executed subleases for its fulfillment centers, and a 10-year production and fulfillment agreement under which FreshRealm will be the exclusive supplier of the Company's meal kits. On the same day, the Company and FreshRealm also entered into license agreements, under which the Company licensed to FreshRealm certain rights regarding the ability to use the Blue Apron brand in certain retail channels and the right to use certain Blue Apron software.
Blue Apron received approximately $23.6 million of net cash proceeds on the FreshRealm transaction's closing, and is eligible to receive up to $25.0 million in additional value upon the achievement of certain milestones, including (i) a $3.5 million note payable by FreshRealm to the Company which is subject to offset for certain indemnification obligations; (ii) a $4.0 million contingent cash payment, including $3.0 million if, as of September 30, 2023, Blue Apron has achieved certain financial and cost-savings milestones and is in compliance with its obligations under the transition services agreement relating to the transaction, and $1.0 million if Blue Apron has achieved additional financial and cost-savings milestones and also remains in compliance with its obligations under the transition services agreement as of December 31, 2023; and (iii) up to an additional $17.5 million in volume-based rebates in the future on meal kits ordered by customers and new product initiatives above specified thresholds, as well as the achievement of certain financial targets by the Company.
Except for the one-time, non-cash loss on the sale referred to above and costs incurred directly attributable to the FreshRealm transaction, the transaction did not have a material impact on the Company's operating results for the three and six months ended June 30, 2023.
Key Customer Metrics
Key customer metrics in the table below reflect the Company's product initiatives and targeted marketing investments and reductions, the seasonality of the Company's business, and other operating trends.
See full release at: https://investors.blueapron.com/press-releases/2023/08-09-2023-113029394
Muriel Lussier
Blue Apron
muriel.lussier@blueapron.com
BLUE APRON HOLDINGS A