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MYT Netherlands Parent B.V. (MYTE) Q1 2022 Earnings Call Transcript

By Motley Fool Transcribing – Nov 11, 2021 at 9:00PM

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MYTE earnings call for the period ending September 30, 2021.

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MYT Netherlands Parent B.V. (MYTE 4.37%)
Q1 2022 Earnings Call
Nov 11, 2021, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Greetings, and welcome to the Mytheresa first quarter fiscal 2022 earnings conference call. [Operator instructions] Today's call is being recorded, and we have allotted one hour for prepared remarks and Q&A. It is now my pleasure to introduce your host, Mr. Martin Beer, Mytheresa's chief financial officer.

Thank you. Sir, please begin.

Martin Beer -- Chief Financial Officer

Thank you, operator, and welcome, everyone, to Mytheresa's investor conference call for the first quarter of fiscal year 2022. With me today is our CEO, Michael Kliger. Before we begin, we'd like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations are forward-looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our previous annual report.

Many factors could cause actual results to differ materially. We are in no duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IFRS on this call. You can find reconciliations of these non-IFRS financial measures in our earnings press release, which is available on our investor relations website at

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I will now turn the call over to Michael.

Michael Kliger -- Chief Executive Officer

Thank you, Martin. Also, from my side, a very warm welcome to all of you, and thank you for joining our call today. We will today comment on the results and performance of our first quarter of fiscal year 2022. We are extremely pleased with our results and performance.

We believe they clearly show the fundamental strength and long-term growth potential of our business as we hopefully leave the pandemic behind us. First, we delivered, again, excellent growth and consistent profitability, which is quite unique in our sector. Second, we have delivered growth consistent with the recent quarters, demonstrating that our long-term expansion is based on a fundamental change of consumer behavior that has maybe been accelerated by the pandemic but has still a long runway. Third, our superior business model and excellence in execution was again evidenced by many of our strong performance KPIs and business milestones, while other players continue to struggle.

Let me now comment in more detail on these three key messages for today. First, in the first quarter, we grew our gross merchandise value, GMV, by 29.7% compared to Q1 of fiscal year 2021. This was above our continued long-term guidance of 22% to 25% annual GMV growth. We combine this growth with a gross margin of 49.6% compared to 46.4% in Q1 of fiscal year 2021, driving continued strong profitability.

We believe that our sharp multi-brand luxury customer focus, strong brand partnerships and a focused profit-making business model will allow us to continue scaling and delivering consistent profitability. In our view, this makes Mytheresa quite unique in the sector. Second, our multiyear growth potential is evidenced by the two-year growth rate in GMV of 65.3% in the first quarter of fiscal year 2022 over Q1 of fiscal year 2020. In the last four quarters, we have delivered two-year growth rate and net sales of 58.4% in Q1, of 60.4% in Q2, of 66.1% in Q3 and of 60.5% in Q4 of fiscal year 2021 over the corresponding quarters in fiscal year 2019.

We believe that fundamental drivers for our growth are the changing consumer behavior in luxury shopping and our superior business model. It is estimated by some consulting firms that over 30% of the personal luxury goods spend will be online by 2025. So while the shift of consumer demand to online in luxury has been accelerated by the pandemic, we clearly believe this trend will continue, probably at a slower pace in the post-pandemic world, but it will continue. Third, we believe that we have delivered, again, many significant proof points over the last quarter of our superior business model and our excellence in execution.

As explained before, our business focuses on a highly curated multi-brand offer attuned to the big-spending, wardrobe-building customer segment, which provides us with the best customer base in luxury. We have successfully expanded our LTM active customer base by 35.2% year over year to 705,000. This was, of course, fueled by new customer growth. And we were once more able to reduce our customer acquisition costs, while the repurchase rate of new customer cohorts remain very stable.

In addition to new customers, we also, again, grew our top customer base, which is a key source of profitable growth, over-proportionally by 41% in the first quarter compared to Q1 of fiscal year 2021. For our best customers, we introduced a new resale service in Q4 of fiscal year 2021, together with Vestiare Collective, that not only allows to support the circular economy, but we can also clearly see the positive spending impact of the additional funds that our customers can generate through simply reselling items to Vestiare Collective and receiving immediate payment in the form of Mytheresa store credit. Customers that have earned store credit through this service exhibit significant higher AOV in their next purchase. One of the key attraction for our wardrobe-building customers is privileged access to exclusive products and prelaunches through our outstanding brand partner relationships.

We were again honored with outstanding support from our brand partners in Q1 of fiscal year 2022. We launched exclusive collections and styles, as well as executed prelaunches with brands such as SAINT LAURENT, Gucci, Loro, Christian Louboutin, Tom Ford, Chloe, and many more. For our top customers, being invited to money-can't-buy experiences is a key benefit to the relationship with Mytheresa. In the first quarter, we were finally able to organize such experiences and top customer events again around the world.

Highlights included a dinner with Givenchy's creative director in Paris, a dinner at the estate of the Della Valle family owning Tod's, and lunch at the private Wolffer estate in The Hamptons, and an event at the TRB Temple in Chengdu. We also demonstrated again, in the first quarter of fiscal year 2022, the quality of our execution. We maintained business continuity across all operations, with a focus on health and well-being of all Mytheresa employees as the top priority. This highly correlates with the very high customer satisfaction, measured internally, with a Net Promoter Score of 83% in Q1 of fiscal year 2022, significantly up compared to Q1 of fiscal year 2021.

The health of our business was also demonstrated by the high full-price share of our sales, driving very robust gross margin. Finally, in the first quarter of fiscal year 2022, we also launched the curator platform model with the first major brand partner. This model for selected brand partner is an evolution of our partnership approach. It gives brand partners full control over the inventory until it is sold by us to the Mytheresa customers, but it is not a marketplace model.

We continue to curate the assortment under the CPM, and the inventory is shipped from our warehouse. There's no dropshipping under the CPM. This ensures that we continue to achieve the high customer satisfaction we enjoy today for our product curation and service excellence. However, the CPM provides us with better access to highly desirable products and in-season replenishment not available to us today.

This will be greatly appreciated by our customers and provides us with top line upside. With all the above, it should come as no surprise that we are very satisfied with our performance in the first quarter of fiscal year 2022 and has full confidence to continue achieving strong results in fiscal year 2022. And now, I hand over to Martin to discuss the financial results in detail.

Martin Beer -- Chief Financial Officer

Thank you, Michael. I will now review the financial results of the fiscal first quarter, July to September 2021, and will provide additional detail on some of the key topics previously mentioned. Unless otherwise stated, all numbers refer to euro. As Michael highlighted, we're very pleased with our performance during the first quarter, above expectations, where we delivered strong gross merchandise value, or GMV, and net sales growth due to robust new customer growth and strong existing customer cohort performance.

With our proven business model, we could scale significantly in the first quarter without any compromise on the quality of our profits. GMV during the quarter was EUR 163.9 million, a 29.7% increase from EUR 126.4 million in the prior year quarter. As you will recall, we made the decision to shift the focus of our top line reporting to GMV or gross merchandise value as an operating measure, which is fully in line with our strategy as it captures the total amount of merchandise that our customers transact on our platform, and it shows the full depth of our customer relationships. We also confirm our full fiscal year guidance of 22% to 25% GMV growth.

Customer engagement and retention continue to track very well as our active customers who shopped with us in the last 12 months grew by 35.2% to 705,000. This underlines our absolute and successful focus on our customers. Mytheresa is uniquely positioned to attract new customers with the highest value and retain the best ones visible in our strong top customer growth. During the first quarter, net sales increased by EUR 31.5 million or 24.9% year over year to EUR 157.8 million.

This is in line with our strong GMV growth and the planned slow ramp-up of the CPM business. As planned, for spring/summer '22, and especially fall/winter '22, additional brands will shift from the wholesale model to the CPM. With more clarity now on the agreed season for the model switch, we expect the CPM share for the full fiscal year '22 to be well below the 20% maximum share guidance. For this reason, we increased our net sales guidance for fiscal year '22 to be in the range of EUR 700 million to EUR 720 million.

This equals a 14% to 18% net sales growth compared to fiscal year '21. We expect similar growth rates in fiscal year '23 due to selected brands shifting from the wholesale model to the CPM, after which net sales will be growing again, more in line with GMV yearly growth rates. We were able to grow significantly and with double digits in all regions of the world. The US remains a top growth region, with 49% net sales growth compared to the prior year quarter.

We continue to invest in growing our local team and increasing the number of marketing, as well as PR events. Our total orders shipped in the last 12 months increased by 35.3% to over 1.58 million. Gross profit of EUR 77.3 million was an increase of EUR 18.6 million or 31.8% year over year. The gross profit margin of 49% improved by 260 basis points compared to the prior year period of 46.4%, driven by our continued higher level of full-price sell-through.

This continued strength in our gross profit margin reflects the unique high-end positioning of Mytheresa in the market with our focus on the high-end customer. Shipping and payment costs grew by EUR 5.1 million to EUR 20 million, driven by an increase in total orders shipped. As a percentage of GMV, shipping and payment costs in this quarter marginally increased to 12.2% from 11.7% in the prior year quarter, driven by country mix and a higher share of international sales. During the first quarter, marketing expenses increased to EUR 22.4 million compared to EUR 17.4 million, primarily due to the increase in the number of customers acquired.

As a percentage of GMV, marketing expenses slightly decreased to 13.7% from 13.8% in the prior year period. We were able to again increase performance marketing efficiencies. But as desired, we are now finally able to spend more on events and PR activations. Selling, general and administrative expenses grew by EUR 20.6 million to EUR 36.2 million, predominantly driven by onetime-granted share-based compensation expenses related to the IPO.

We adjusted a net effect of EUR 15.5 million in relation to these onetime-granted share-based compensation expenses as we do not consider them to be indicative of our core operating performance and as they relate to the IPO transaction. With this adjustment, SG&A expenses as a percent of GMV increased modestly to 12.6% from 12.1% due to an increase in insurance and public company costs. Adjusted EBITDA was EUR 14 million as compared to EUR 10.4 million in the prior year quarter. This is a profit increase of 34%.

This growth is driven by robust top line growth and a strong gross profit margin in this quarter. The adjusted EBITDA margin expanded by 60 basis points to 8.9% of sales. We confirm our adjusted EBITDA margin guidance being at the upper half of the long-term range of 7% to 9% on net sales for the full fiscal year. Adjusted EBITDA in this quarter is only adjusted for the onetime-granted share-based compensation mentioned above.

Depreciation and amortization expenses were relatively stable at EUR 2.2 million compared to the prior year period at EUR 2.0 million. Mytheresa achieved this strong increase in profitability also on adjusted operating income level. In the first quarter of fiscal 2022, Mytheresa reported an adjusted operating income of EUR 11.8 million compared to the EUR 8.4 million in the previous year quarter, and thus representing a solid growth of 40.7%. Adjusted net income was at EUR 8.2 million as compared to EUR 5.4 million in the prior year period, and thus representing a solid growth of 51.7%.

We continue to focus on delivering profitable growth, which remains clearly visible in our very simple and transparent P&L, with only one adjustment. EBITDA, adjusted EBITDA, adjusted operating income and adjusted net income are non-IFRS measures. Moving to the cash flow statement. During the three months ended September 30, 2021, operating activities used EUR 19.2 million in cash and cash equivalents, primarily driven by a EUR 17.9 million seasonal increase in inventories.

We ended the quarter in a strong financial position, with cash and cash equivalents of EUR 55.7 million and total unused availability under the revolving credit facilities of EUR 90 million as of September 30, 2021. Mytheresa has no liabilities to banks, an equity ratio of about 75% and, for its size, solid cash position. For the full fiscal year '22, we expect a positive free cash flow and, therefore, target to a positive operating and free cash flow conversion. This underlines our superior capital-light model.

We expect a positive free cash flow for the full fiscal year despite our continuous investments in our IT and infrastructure. As we discussed last quarter, and as Michael touched on earlier, we continue to be very excited about our curated platform model, or CPM. Our CPM is neither an e-concession model nor a marketplace. It combines the best elements of 1P and 3P models to truly customer focused and unique Mytheresa hybrid model.

In the first quarter of fiscal 2022, we've already seen some ramp-up of this Curated Platform Model. As we're just starting and have contractual confidentiality agreements in place, we are not disclosing the CPM share of GMV and not the level of the platform fee. As stated before, we expect the CPM share in our business for the full fiscal year 2022 to be well below 20% of our total platform revenues. And in the medium term, we expect the share to be not higher than 35%.

We expect the CPM share to gradually increase over time, but Mytheresa expects for the majority of the luxury brands to continue to operate under the wholesale business model as it fits perfectly the needs of the majority of our luxury brands. CPM integrates Mytheresa with the brand partners' direct retail operations and provides access to products at scale and maintain our customer value proposition. The key value-driving characteristics of the CPM are: continued product curation by Mytheresa, continued content creation by Mytheresa, financial inventory ownership by the brand partner, inventory sitting in the Mytheresa warehouse until return and off-season and regular in-season replenishments. The CPM enables Mytheresa to continue to do what it does best: unique curation, engaging marketing content and superior customer service.

The strategic partnership provides the upside potential on the top line due to in-season replenishment and access to exclusive products without any inventory aging risk. The unit economics under the CPM are very similar to the unit economics under the wholesale model. In addition, the curated platform model provides us with an even better capital efficiency. We only pay for the merchandise after we sold the item.

I will now turn the call back over to Michael for his concluding remarks.

Michael Kliger -- Chief Executive Officer

Thank you, Martin. We are very pleased with the strong first quarter earnings results. We see ourselves perfectly positioned to take advantage of the ongoing shift to online in luxury spend, the continued consolidation and brand distribution and the global expansion opportunities. Even more importantly, we continue to see ourselves also perfectly positioned to take advantage of the long-term opportunities in the market, where multi-brand digital platforms will continue to gain share.

And with that, I'd like to ask the operator to open up for your questions.

Questions & Answers:


[Operator instructions] Your first question comes from the line of Kimberly Greenberger from Morgan Stanley. Your line is open. Please ask your question.

Kimberly Greenberger -- Morgan Stanley -- Analyst

Great. Thank you so much. Very, very nice print this morning. In terms of the longer-term outlook on online luxury spending, Michael, I think you mentioned that we've seen a very accelerated shift to luxury online shopping through the pandemic.

You expect continued strong growth post pandemic, but perhaps at a slower rate. Can you just talk about your long-term outlook? And then I have a follow-up on your revenue this quarter and this year.

Michael Kliger -- Chief Executive Officer

Thanks, Kimberly. Yes, you summarized it very well. We are very optimistic on the long-term online share, and thus, overall market growth for us. The pandemic has accelerated it.

Thus, we were some quarters way above our long-term growth of 22% to 25%. And we have reiterated a couple of times that while there has been an acceleration moving into the post-pandemic world, as you could argue, are we already in it or still sort of moving into it, the only thing we expect is probably a slower rate than what we've seen before, more in line with what we always expected, 22% to 25%. But there were some questions in the past, whether there would even be a contraction as people would walk back to the stores. We didn't expect that, and we also don't see that.

And the momentum that we have shown in the top line in this first quarter, in our view, strongly confirms our view that it may slow down, but I will not take anything away from the huge long-term growth potential.

Kimberly Greenberger -- Morgan Stanley -- Analyst

OK. Great. And that takes me to my follow-up. And so, that sort of expectation longer term, the 22% to 25% growth in online luxury goods spend, aligned very nicely with your medium-term revenue and GMV growth targets.

So that makes a ton of sense, and I know you laid it out very well on slide 21. I just wanted to make sure I understood the sort of path between here and the medium term that you talked about today. So it sounds like current year fiscal '22 and fiscal '23, revenue growth through this period of CPM adoption would run in that 14% to 18% range before reaccelerating. I just want to make sure I understand that correctly.

And is there a -- do you have visibility in terms of the rate of adoption in CPM when you only have the group of brands identified for that shift? Ultimately, over the next two years, how many brands do you contemplate might be on that CPM model?

Michael Kliger -- Chief Executive Officer

Yeah. Thanks for that question because, indeed, this -- it may require some clarification. I mean, as we transition some of our business, I mean, we always stated that even after full rollout, we don't expect more than 35% of the total transacted volume platform to be in the CPM. But as we now start, there is, of course, a transition period.

And thus, the sales growth, for technical reasons, will slow down as on the CPM. We don't book the transaction -- the transacted gross merchandise value as revenue, but the transacted fee or the charge platform fee. And for this, the business continues to grow fully in line with the 22% to 25%, but the revenues we book are technically lower because we switch from merchandise value being booked to fees being booked. And we expect that the 35%, which is the max we project today, will take us into fiscal year '24.

We have a group of brands identified. As Martin explained in his remarks today, we have now also better clarity on -- in which season they will switch to this model. I mean, at the moment, we have just one major brand. As you can see, the difference between GMV and net sales in this quarter is still quite small.

And as it gradually moves into it, we will -- we don't expect even this year to have more than -- close to the 20%. But once this transition period is over, net sales and GMV sales will be in lockstep again. And so, after that, which we expect for the transition period to be well-progressed in the fiscal year '24, we come back to our long-term expected 22% to 25% GMV. But what we want to stress is the value creation of Mytheresa, the inherent value of our business is, of course, the customer relationship.

And the customer relationship, in terms of depths and strength, is best captured by the amount of money they transact on our platform. So while I fully understand as an accounting measure, net sales remains quite important, I think, to understand the importance of our business in terms of market share, in terms of brand relationships. You have to look at GMV, and the GMV growth you see clearly indicates we have taken massive market share over the last 12 months.

Kimberly Greenberger -- Morgan Stanley -- Analyst

Absolutely. Very clear. Thank you.


Your next question comes from the line of Matthew Boss from J.P. Morgan. Your line is open. Please ask your question.

Matthew Boss -- J.P. Morgan -- Analyst

Great. Thanks. So Michael, as we think about category recovery by region exiting the pandemic, could you speak to the curve you're seeing in Europe, Asia and the US, and specifically, any changes that you're seeing in the assortment tied to broader reopening activity and just what it means for your model?

Michael Kliger -- Chief Executive Officer

I'll try my best. This is partly forecasting and predictions, but I can tell you what we see today. So what we see today is not a steep curve in Asia, but that has more to do with the fact there was not a real recovery needed because, ever since last year kind of summer, they were in a control mode. So the recovery curve is not as steep as we see in other regions, but the contraction was also never as steep, Because the steepest curve, we see in the US Ever since late spring, consumers in the US have really rebounded in terms of spending.

The curve in Europe is not as steep. And of course, in Europe, you have still some significant variations between regions or countries, so to speak. In terms of categories across the globe, it is, of course, categories that have suffered due to the lack of occasions. So vacations, swimwear, ski wear, going out in terms of gowns, heels, clutches, going back to office in terms of jackets, in terms of loafers, so these are the categories that are recovering, in a sense, those rebounding.

Whereas the categories that have been "benefited" from the pandemic, which were more mixed, flats, sneakers, cashmere, are taking a pause. We believe this is not a long-term change of behavior. This is something that has to do with pent-up demand. And so, things will come back in more balance.

But what we also always believed, even before pre-pandemic, that there is, and continues to be, a shift away from pure streetwear styles, as described by hoodies, caps, jumpers, sneakers, track suits, to a more dress style. And that we saw even before the breakout of the pandemic. And that, we believe, is an ongoing trend, more fashion trend than anything related to economic situations or lifestyles. And we feel we can benefit from this because we were never positioned strongly on streetwear style.

We were always more positioned both in womenswear and menswear in a more dressed, more mature, more timeless luxury positioning.

Matthew Boss -- J.P. Morgan -- Analyst

Great. And then, just as a follow-up. How best to think about the multiyear margin implications from the scaling of your CPM model? More so, how do you see this model evolution? Should we think about it as accretive to your 7% to 9% EBITDA margin target over time?

Michael Kliger -- Chief Executive Officer

So as we look at the CPM model, and that's what is both built into our guidance and in our expectation, that the CPM has a different sort of gross margin logic, but also some different cost implications in terms of marketing and SG&A. So in the end, unit economics under the CPM are very similar to unit economics on the wholesale, even though sales that you book are differently. So we continue to commit and guide toward 7% to 9% for this season -- for this fiscal year to the upper half. There is always room for improvement and potential.

But as there is a gradual introduction of CPM, and not overnight, we will continually update our guidance as we see how the model unfolds. So for us, it is strategically accretive because of the replenishment opportunities, because of the access to products, and operationally, it is awash, in that sense, financially -- sorry, not operationally, but financially.

Matthew Boss -- J.P. Morgan -- Analyst

Great. Best of luck.


[Operator instructions] Your next question comes from the line of Oliver Chen from Cowen and Company. Your line is open. Please ask your question.

Kimberly Hong -- Cowen and Company -- Analyst

Hi. Good morning. Thank you for taking our question. This is Kimberly Hong on for Oliver.

Just two questions on CPM. One, how much interest are you getting from new brands that are currently not working with Mytheresa? Especially with new brand acquisition, are they more likely to come through the -- to the CPM model or through wholesale? And then just on the tech adoption and the software that has to do with the in-stock levels and integrating the inventory levels for real-time inventory read, how much capex is there needed and how is that adoption and integration going on the brand side?

Michael Kliger -- Chief Executive Officer

Thank you. I mean, let me start with your -- with the second question you asked. So we are already successfully live with one major brand. So in terms of fundamental IT development, it is done.

Of course, every time you onboard another brand, there are always nuances, there are always specifics that you need to adapt, but that is incremental technology and IT development. So in terms of being able to run the model, we are already able to run the model, as evidenced by already we have a major brand running on the CPM. On the first part, that is more speculation. We believe the CPM offers for brands a quite interesting alternative to traditional wholesale, with some specific advantages for them.

And thus, we believe strongly that offering an alternative model or an additional model makes us even more attractive to brand partners and hopefully will allow us to attract brands that we don't carry today. But this is pure speculation at this stage.

Kimberly Hong -- Cowen and Company -- Analyst

Got it. If I can just ask one more on shipping and payment expenses. In the near term, how are you thinking about that line given the inflationary environment and the supply chain delays, especially with your carriers? And then in the long term, are there any automation opportunities to leverage that line item?

Michael Kliger -- Chief Executive Officer

So the view we have on shipping and payment and also in marketing is we will be facing cost pressures as in the past. We will be facing efficiency requirements as in the past. So we are convinced that we will be capable, as we have done in the past, to manage these cost lines to be very stable as it's a core element of our economic model. And automation, in terms of data management, data processing, automation also in terms of material goods flow, is certainly one element of it, but the biggest opportunity for savings is, we think, closer integration, closer data exchange.

And there's still a lot of paperwork involved in the whole process of getting a good shipped, getting a good through customs. And there is massive, still, efficiency gains to be made. So fully recognize there are cost pressures out there. We see them.

There are inflationary pressures, but also very strong conviction that, as in the past, we will manage those with continued scale and efficiency.

Kimberly Hong -- Cowen and Company -- Analyst

Got it. Thank you so much.


Your next question comes from the line of Michael Binetti from Credit Suisse. Your line is open. Please ask your question.

Rick Patel -- Credit Suisse -- Analyst

Thanks. Good morning. This is Rick Patel on for Michael. Can you help us better understand the drivers for the revenue guidance increase? How should we think about what's embedded in terms of higher demand versus what you expected 90 days ago versus the potential impact that CPM might be having in the coming quarters? And as far as your guidance for EBITDA goes, that is intact.

I know it's a fairly wide range, but can you help us think about the puts and takes there in light of the higher revenue expectations?

Michael Kliger -- Chief Executive Officer

I mean the change in net sales is more kind of a technical, so I hand it over to Martin because he's also well positioned to comment on the EBITDA expectations.

Martin Beer -- Chief Financial Officer

Yeah, sure. Happy to do so. Exactly. I mean, the driver for the net sales increase in guidance is a pure technical, with the CPM ramp-up and now knowing when the brands will ship for seasons being a bit later, and that's why the net sales increases to EUR 700 million to EUR 720 million.

And the EBITDA, adjusted EBITDA margin guidance, at the upper half of the range of 7% to 9%. We think it's quite unique, it's quite good and it's quite narrow, and obviously, it relates to the higher net sales guidance.

Rick Patel -- Credit Suisse -- Analyst

Great. And can you also help us think about the outlook for marketing? How should we be thinking about the potential for leverage there? And now that you have more visibility on CPM, what are the puts and takes on that line?

Martin Beer -- Chief Financial Officer

On the marketing cost, as we stated, always, we want to reinvest the continued performance marketing efficiencies into more brand-building activities, into more PR events in a post-pandemic world. And therefore, we guide more toward a stable marketing cost ratio, and that includes also CPM.

Michael Kliger -- Chief Executive Officer

I mean, I think the best way to think about it is, medium term, high growth rates, 22% to 25%. Medium-term, we will manage cost pressures. We will take advantage of reinvestment opportunities, of cost savings, so that the EBITDA margin will be well within -- is within the 7% to 9%. Because as we have done over the last couple of months, we want to continue to grow and take market share.

There is inherent leverage in our model as new customer acquisition becomes less important for the overall growth number. And that will come, at some point, of course, because the base continues to grow and grow. And the importance of new customers to drive the growth will relatively become smaller, but we don't see that point at the moment. There's so much business to be grabbed outside off our current base, and we want to grab it at the moment.

Rick Patel -- Credit Suisse -- Analyst

That's helpful. Thank you.


[Operator instructions] Your next question comes from the line of Geoffroy De Mendez from Bank of America. Your line is open. Please ask your question.

Geoffroy De Mendez -- Bank of America Merrill Lynch -- Analyst

Hi there. Thanks for taking my question. I just have one for me, please. Can you just comment a little bit on any change of trends that you've seen in the last few weeks versus Q1 fiscal year 2022 and if you're seeing acceleration, slowdown? Any comments on trading would be interesting.

Michael Kliger -- Chief Executive Officer

I mean the best way to describe is that we see continued good momentum. Details will follow as we don't give any updated guidance by quarter. But we are very pleased with the Q1 as we see continued good momentum in our business.

Geoffroy De Mendez -- Bank of America Merrill Lynch -- Analyst

OK, thanks.


[Operator signoff]

Duration: 47 minutes

Call participants:

Martin Beer -- Chief Financial Officer

Michael Kliger -- Chief Executive Officer

Kimberly Greenberger -- Morgan Stanley -- Analyst

Matthew Boss -- J.P. Morgan -- Analyst

Kimberly Hong -- Cowen and Company -- Analyst

Rick Patel -- Credit Suisse -- Analyst

Geoffroy De Mendez -- Bank of America Merrill Lynch -- Analyst

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