The Marley Spoon AG (ASX: MMM) share price is on the move on Friday morning.
At the time of writing, the subscription-based meal kit provider's shares are surging 11% higher to $2.80.
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Why is the Marley Spoon share price surging higher?
Investors have been buying the company's shares following the release of its first quarter update after the market close on Thursday.
That update revealed that Marley Spoon's strong growth continued during the quarter, resulting in an upgrade to its full year guidance.
According to the release, for the three months ended 31 March, Marley Spoon reported an 81% increase in revenue to 77.4 million euros. This was driven by growth across all regions.
How did its businesses perform?
In the United States, revenue increased 82% thanks to continued demand across both its Martha Stewart & Marley Spoon and Dinnerly brands. Pleasingly, the company delivered a breakeven operating result in the lucrative market.
In Australia, Marley Spoon reported a 65% increase in revenue and also achieved a breakeven operating result.
And in Europe, revenue grew 108% over the prior corresponding period. However, it reported an operating loss of 1 million euros in the region for the period.
Overall, Marley Spoon recorded an operating loss of 5.7 million for the quarter. However, this was driven largely by its seasonal marketing investment.
Pleasingly, the company recorded positive operating cash flow of 5.3 million, leaving it with a cash balance at 38.4 million euros at the end of the period.
Outlook
Following its strong start to the year, management has upgraded its guidance for FY 2021. It is now expecting revenue to increase between 30% and 35% year on year. This compares to previous guidance of 25% to 30%. It continues to expect its contribution margin to be between 30% and 31%.
Marley Spoon's CEO, Fabian Siegel, said: "We are pleased with this strong start to the year across all our regions. We delivered a record quarter in terms of new customer acquisitions, subscriber numbers and absolute revenue, demonstrating an ability to deliver strong growth during both pandemic-related lockdowns and as markets reopen. We also overcame some operational challenges, notably weather-related headwinds from the floods in Australia and winter storms across the US and Europe."
"User behavior across the regions has mostly normalized to its pre-COVID state. While COVID19 brought forward the structural shift online, the penetration rate of online grocery is still in its infancy. The dramatic growth we have seen across all e-commerce verticals in 2020 has created some temporary operational challenges in logistics, labor and supply chain infrastructure in the industry. As the consumer switch to online shopping in our categories continues, and as our team grows, we will be focused on managing these operational challenges while we continue to build further scale in our large addressable markets and deliver ongoing growth through strengthening our direct-to-consumer brands."
Following today's gain, the Marley Spoon share price is now up 145% over the last 12 months.
