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Redbubble Limited

Software and Services

Owen Humphries | Analyst | Canaccord Genuity (Australia) Ltd. | [email protected] | Australian Equity Research +61.2.9263.2702 21 November 2018

BUY Raising Target Price unchanged PRICE TARGET A$2.25↑ from A$2.20 1Q19 beat (>10%), capital raise and Price (21-Nov) A$1.30 Ticker RBL-ASX transformational acquisition of Teepublic Redbubble (RBL) reported a positive 1Q19a result (GPAPA +11% beat) and completed 52-Week Range (A$): 0.61 - 2.07 Market Cap (A$M): 329 a A$60.6m institutional placement at A$1.50ps to fund the horizontal acquisition of Dividend /Shr (AUc): 0.0 TeePublic (www..com) for US$41m (A$57.7m, $49.3m upfront, $8.4m deferred Dividend Yield (%) : 0.0 until FY21). We reiterate our BUY rating and increase our DCF-based TP to A$2.25 (from Enterprise Value (A$M): 283 A$2.20). Cash (A$M): 46.3 Long-Term Debt (A$M): 0.0 We consider the transaction transformational as it a) scales RBL to being the global leader serving independent artists (FY20 GTV >$450m, gross profit >$130m); b) FYE Jun 2018A 2019E 2020E 2021E spring loads the business into profitability (EBITDA FY19: $6m, FY20: $17m); and c) Sales (A$M) 182.8 274.8↑ 364.9↑ 451.9 bolsters the balance sheet into a strong net cash position (FY19 $32m, FY20 $41m). Previous - 237.6 296.9 - The company reaffirmed its FY19e guidance of constant currency revenue/GPAPA Gross Profit (A$M) 63.9 98.9 130.6 161.9 growth of >30% and opex growth of +19%. Operating EBITDA (excluding TeePublic) is EBITDA (A$M) (3.8) 5.8↑ 16.5↑ 31.6 expected to be in the range of $2m-$4m with FCF <-$2m. Previous - 3.3 10.7 - Earnings revisions: Our FY19, FY20 and FY21 gross profit increases +19%, +26% and Net Income Adj (1.3)↑ 6.3↑ +27%, primarily driven by the integration of Teepublic into our earnings forecasts. (A$M) (6.5) 17.7 Previous - (3.1) 2.4 - • Teepublic is currently the fastest growing on-demand ecommerce marketplace for independent artists and generated FY18 revenue, gross profit and EBITDA of A$35.9m EPS Adj&Dil (3.13) (0.46)↑ 2.3↑ 6.4 (AUc) (FY17 A$26.9m, +33% growth), $14.1m (FY17 $10.5m, +34%) and $4.6m (FY17 Previous - (1.38) 1.1 - $4.0m) respectively. TeePublic's revenue is predominately sourced in the US (85% rev.) Net Debt (Cash) (31)↓ (41)↓ (A$M) (21) (51) with T-shirts (71% rev) the major contributor. TeePublic has experienced stellar revenue Previous - (21) (25) - CAGR since inception in 2013 with growth accelerating in 1Q19 as pro-forma revenue EV/EBITDA (x) (81.1) 51.5 17.5 8.8 and gross profit increased +57% and +65% respectively. 2.2 • The acquisition of Teepublic builds scale across artists, content, products, fulfilment 2 and technology, however we identify a number of synergy benefits through various P&L line items. These include: revenue (expand TeePublic brand into new geographies 1.8 and languages [French, Spanish, German], launch Teepublic app, expand product 1.6 offering to 66 [currently 45], artist content [31k artwork]); COGS (volume discounts from fulfillers as acq. doubles the size of RBL's T-shirt business in the US, fulfiller 1.4 consolidation), marketing (optimised paid search, own category key words) and opex 1.2 (streamlined operations, legal, tech, finance etc.). We expect these to be additive to

1 revenue/earnings in the medium term, however our forecasts do not incorporate any synergy benefits at this stage. 0.8 • RBL released a positive 1Q19a quarterly report (+11% GPAPA beat) which Jul-18 Jan-18 Jun-18 Oct-18 Apr-18 demonstrated continued acceleration in GTV (+41%, constant currency [cc] +31%), Feb-18 Sep-18 Mar-18 Dec-17 Nov-18 Aug-18 May-18 RBL gross profit (+43%, cc +34%) and GPAPA (+42%, cc +33%). Growth was aided Source: FactSet by a) successful back to school campaigns in the Northern Hemisphere (wall art, homewares, stickers); b) continued elevated growth in its European markets Priced as of close of business 21 November 2018 (Germany/Spain >+66%, France +96%); and c) an uplift in key categories such as Canaccord Genuity (Australia) Limited has received a fee stickers (+71% growth) and t-shirts (+34% growth, 42% of GTV). Key marketplace as a Joint Lead Manager and Underwriter to the Redbubble metrics remained buoyant with customers (+32% vs. pcp), selling artists (+33%) and Limited capital raising announced on 24 October 2018. website traffic (+29%) all improving during the quarter. Continued on next page...

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX) The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all the companies and securities that are the subject of this report discussed herein. For important information, please see the Important Disclosures beginning on page 7 of this document. This report is intended for [email protected]. Unauthorized publication, disclosure or other distribution is strictly prohibited.

Redbubble Limited Raising Target Price

 Importantly Mobile is rapidly becoming a larger proportion of group GTV (Mobile cont.: 36%, Desktop 64%) and increased +61% in 1Q19 (Desktop +29%). Importantly, mobile conversion rates improved +13% during the period. The growth in RBL’s mobile channel should aid an acceleration in overall group GTV as it becomes a larger source of website traffic.  On the conference call the company highlighted that it has experienced some softness in organic search traffic due to Google changing its algorithms. While expected to be short lived, it may have an impact on organic/unpaid growth (~55% of group GTV) into the seasonal peak retailing period (Oct/Nov). We have factored this into our forecasts with FY19 GTV growth of +31% versus 1Q19 of +42% and paid marketing growth exceeding GTV growth.  Operating leverage is a clear focus for investors given the growth in GPAPA (1Q19 +42%). RBL guided to opex growth materially below revenue growth for the remainder of FY19 (2Q-4Q revenue growth +30%, opex growth +15%). We note RBL’s opex has been relatively stable since 2Q18 (2Q18: $13m, 3Q18: $13m, 4Q18: $15m, 1Q19: $14m).  In our view, the acquisition and associated capital injection shifts the mindset of RBL from managing the business to breakeven to managing it for long term growth. We expect RBL to invest in expanding languages, geographies, products and marketing while also investing in its tech stack to deepen its moat and barriers to new entrants. While we forecast profitable growth over the medium term, we foresee RBL accelerating its growth investment to take advantage of the large and disruptive globally opportunity.  RBL trades at a material discount to its global high growth marketplace peers (EV/GPAPA -80% discount to Etsy [17.5x, RBL 3.5x]) and we expect a multiple re- rating as the company scales into profitability during FY19-FY20. Despite some potential softness following the Google algorithm change, we expect investor sentiment to improve as conviction increases in RBL’s/our FY20 estimates (GTV: >A$450m, gross profit: >$130m, EBITDA ~$17m, [>50% growth], cash balance: >$40m). After incorporating the accretive acquisition and dilution from the equity raise (-19%) into our forecasts, our price target increases to A$2.25ps (previously $2.20ps). Figure 1: Pro-forma Revenue and group EBITDA (fully consolidated for FY17-FY19)

A$m Pro-forma Revenue ($Am) Group EBITDA ($Am) 600 551 CGAu est. 50 CGAu est. Redbubble 43.6 500 111 TeePublic 452 40 31.6 85 400 365 30 440 66 20 16.5 300 290 51 367 219 10 5.8 200 36 299 168 0.3 2.0 27 239 0 115 183 100 71 -3.8 49 141 -10 -6.0 -4.8 28 -8.2 0 -20 FY13A FY14A FY15A FY16A FY17A FY18A FY19E FY20E FY21E FY22E FY13A FY14A FY15A FY16A FY17A FY18A FY19E FY20E FY21E FY22E Source: Company Reports, Canaccord Genuity estimates

2 Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 2

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Redbubble Limited Raising Target Price

Figure 2: Financial forecasts for RBL

RedBubble Limited $ 1.30 Profit & Loss ($m) - Jun YE 2017A 2018A 2019F 2020F 2021F Valuation ratios 2017A 2018A 2019F 2020F 2021F Gross Transaction Value 175.4 231.3 343.8 454.5 562.4 EPS (cps) -2.0 -3.1 -0.5 2.3 6.4 Sales Revenue 141.0 182.8 274.8 364.9 451.9 EPS Growth (%) nmf nmf nmf nmf nmf

Gross Profit 50.1 63.9 98.9 130.6 161.9 Enterprise Value ($m) - pro-forma301.4 308.2 297.8 288.3 278.2 Paid marketing -12.2 -16.8 -25.5 -35.1 -42.6 EV/Revenue 2.1 1.7 1.1 0.8 0.6 GPAPA (GP post mkting) 37.9 47.1 73.5 95.5 119.3 EV/Gross Profit 6.0 4.8 3.0 2.2 1.7 Opex -42.7 -50.9 -67.7 -79.1 -87.7 EV/GPAPA 8.0 6.5 4.1 3.0 2.3 EBITDA -4.8 -3.8 5.8 16.5 31.6 EV / EBITDA (x) -62.8 -81.1 51.5 17.5 8.8 D & A -6.5 -7.8 -8.7 -9.3 -9.5 EV / EBIT (x) -26.6 -26.6 -122.7 40.2 12.6 EBIT -11.3 -11.6 -2.4 7.2 22.1 FCF yield (%) -1.9% 0.4% 3.8% 5.7% 9.0% Net Interest Expense 0.5 0.4 0.6 0.8 1.0 DPS (cps) 0.0 0.0 0.0 0.0 0.0 NPBT -10.8 -11.2 -1.8 8.0 23.1 Tax expense 6.7 4.7 0.6 -1.7 -5.4 Balance Sheet ratios 2017A 2018A 2019F 2020F 2021F NPAT (Normalised) -4.2 -6.5 -1.3 6.3 17.7 Net Debt (cash) -27.8 -21.1 -31.5 -40.9 -51.1 Non-recurring -3.6 -3.6 0.0 0.0 0.0 NTA per share ($) 0.12 0.08 0.08 0.11 0.14 NPAT (Reported) -7.8 -10.1 -1.3 6.3 17.7 Price / NTA (x) 10.9 16.7 15.6 12.1 9.4 Shares on issue 208.4 208.4 253.3 253.3 253.3 Gross Profit Margin (%) 35.5% 35.0% 36.0% 35.8% 35.8% EFPOWA (m) 203.7 208.9 275.0 275.0 275.0 GPAPA margin 26.9% 25.8% 26.7% 26.2% 26.4% EBITDA Margin (%) -3.4% -2.1% 2.1% 4.5% 7.0% Interim Analysis 2H16A 1H17A 2H17A 1H18A 2H18A EBIT Margin (%) -8.0% -6.3% -0.9% 2.0% 4.9% GTV 62.6 98.6 76.8 129.8 101.5 NPAT Margin (%) -2.9% -3.6% -0.5% 1.7% 3.9% Revenues 52.3 78.7 62.3 102.3 80.5 Gross Profit 18.5 28.3 21.8 35.3 28.6 Cash Flow ($m) - Jun YE 2017A 2018A 2019F 2020F 2021F EBIT -6.7 -4.1 -7.2 -1.3 -10.3 Operating EBITDA -4.8 -3.8 5.8 16.5 31.6 EBIT margin (%) -12.7% -5.3% -11.5% -1.2% -12.8% - Interest & Tax Paid 0.6 0.9 1.2 -0.9 -4.3 +/- change in Work. Cap. -0.2 5.2 5.9 3.9 2.9 Assumptions 2017A 2018A 2019F 2020F 2021F - other 0.0 0.0 0.0 0.0 0.0 Group Operating Cashflow -4.4 2.3 12.9 19.4 30.1 Revenue Growth 23.1% 29.6% 50.3% 32.8% 23.8% - Capex (PPE) -1.7 -0.9 -0.5 -0.5 -0.5 GP Margins 35.5% 35.0% 36.0% 35.8% 35.8% - Capex (Intangibles) -7.2 -8.4 -9.6 -9.5 -11.0 GPAPA marigns 26.9% 25.8% 26.7% 26.2% 26.4% - Aquisitions/divestments 0.0 0.0 -47.6 0.0 -8.4 Opex growth nmf 19% 33% 17% 11% Free Cashflow -13.3 -6.9 -44.8 9.4 10.2 Take-rate (GP/GTV) 28.6% 27.6% 28.8% 28.7% 28.8% - Ord Dividends 0.0 0.0 0.0 0.0 0.0 - Equity /other -0.1 1.1 55.2 0.0 0.0 Divisional Net Cashflow -13.4 -5.8 10.4 9.4 10.2 Teepublic 0.0 0.0 40.8 75.7 98.4 Cash at beginning of period 42.0 27.8 21.2 31.6 41.1 Redbubble 175.4 231.3 303.0 378.8 464.0 +/- borrowings / other -0.8 -0.7 0.0 0.0 0.0 GTV 175.4 231.3 343.8 454.5 562.4 Cash at end of period 27.8 21.2 31.6 41.1 51.2 Teepublic 0.0 0.0 13.9 25.9 33.6 Balance Sheet - Jun YE 2017A 2018A 2019F 2020F 2021F Redbubble 50.1 63.9 85.0 104.7 128.3 Cash 27.8 21.2 31.6 41.1 51.2 Gross profit 50.1 63.9 98.9 130.6 161.9 Debtors 0.7 1.0 1.5 2.0 2.5 PPE 2.1 3.6 4.1 4.6 5.1 Board of Directors/Substantial shareholders Intangibles 8.9 10.5 59.0 59.2 69.1 Board of Directors Shareholding % Other assets 11.9 17.5 17.5 17.5 17.5 Richard Cawsey 11.7 6% Total Assets 51.5 53.9 113.8 124.4 145.5 Grant Murdoch 0.1 0% Borrowings 0.0 0.1 0.1 0.1 0.1 Gregory Lockwood (Piton Capital) 6.5 3% Trade Creditors 12.9 19.5 26.0 30.3 33.7 Jennifer MacDonald 0.0 0% Other Liabilities 4.9 7.5 7.5 7.5 7.5 Anne Ward 0.0 0% Total Liabilities 17.8 27.2 33.6 38.0 41.3 Hugh Williams 0.0 0%

NET ASSETS 33.6 26.7 80.2 86.5 104.2 Martin Hosking 47.9 23% Source: Company Reports, Canaccord Genuity estimates

3 Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 3

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Redbubble Limited Raising Target Price

Figure 3: Accelerating GTV growth

% A$m RBL Quarterly GTV (A$m) RBL Quarterly GTV growth (%) 90.0 84.2 120% 108% 80.0 99% 100% 70.0 62.5 64.1 82% 78% 60.0 80% 73% 51.8 52.6 71% 48.9 50.0 45.6 60% 56% 38.238.7 40.0 36.1 46% 47% 47% 32.3 40% 41% 30.3 28.8 30.3 30.0 40% 35% 36% 23.00 32% 20.6 20.6 25% 26% 21% 22% 20.0 14.5 18% 20% 11.3 12.3 13.213.3 20% 9.1 10.0 5.9 7.4

0.0 0%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 4Q18 1Q19 3Q18* Source: Company Reports, Canaccord Genuity estimates

Figure 4: Consolidation strengthens position in US market and should aid synergy benefits from fulfillers

Source: Company Reports, Canaccord Genuity estimates

Figure 5: Key metrics across both businesses

Source: Company Reports, Canaccord Genuity estimates

4 Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 4

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Redbubble Limited Raising Target Price

Figure 6: Pro-forma revenue, gross profit and EBITDA accretion (offset by -19% share dilution)

RedBubble Teepublic Combined Entity (pro-forma) Accretion Profit & Loss ($m) - Jun YE 2018A 2019F 2020F 2021F Profit & Loss ($m) - Jun YE 2017A 2018A 2019F 2020F 2021F Profit & Loss ($m) - Jun YE 2018A 2019F 2020F 2021F FY19 FY20 FY21

Gross Transaction Value 231.3 303.0 378.8 464.0 Gross Transaction Value 31.1 41.4 58.2 75.7 98.4 Gross Transaction Value 272.7 361.2 454.5 562.4 Sales Revenue 182.8 239.5 299.2 366.5 Sales Revenue 26.9 35.9 50.5 65.7 85.3 Sales Revenue 218.7 290.0 364.9 451.9 21.1% 21.9% 23.3%

Gross Profit 63.9 85.0 104.7 128.3 Gross Profit 10.5 14.1 19.9 25.9 33.6 Gross Profit 78.0 104.9 130.6 161.9 23.4% 24.7% 26.2% Paid marketing -16.8 -22.7 -29.5 -35.4 Paid marketing -1.9 -2.7 -4.0 -5.6 -7.3 Paid marketing -19.5 -26.7 -35.1 -42.6 GPAPA 47.1 62.3 75.2 92.9 GPAPA 8.6 11.4 15.9 20.3 26.4 GPAPA 58.5 78.2 95.5 119.3 25.5% 27.0% 28.4% Opex -50.9 -60.3 -67.8 -74.8 Opex -4.7 -6.9 -9.8 -11.3 -13.0 Opex -57.8 -70.1 -79.1 -87.7 EBITDA -3.8 2.0 7.5 18.1 EBITDA 3.9 4.6 6.1 9.0 13.4 EBITDA 0.8 8.1 16.5 31.6 304.5% 121.0% 74.0% D & A -7.8 -8.0 -8.0 -8.0 D & A -0.6 -0.8 -1.0 -1.3 -1.5 D & A -8.6 -9.0 -9.3 -9.5 EBIT -11.6 -6.0 -0.5 10.1 EBIT 3.3 3.8 5.1 7.7 11.9 EBIT -7.8 -0.9 7.2 22.1 Net Interest Expense 0.4 0.6 0.8 1.0 Net Interest Expense 0.4 0.6 0.8 1.0 NPBT -11.2 -5.4 0.3 11.2 NPBT -11.2 -5.4 0.3 11.2 Tax expense 4.7 1.4 -0.1 -2.8 Tax expense 4.7 1.4 -0.1 -2.8 NPAT (Normalised) -6.5 -4.1 0.2 8.4 NPAT (Normalised) -6.5 -4.1 0.2 8.4 Non-recurring -3.6 0.0 0.0 0.0 Non-recurring -3.6 0.0 0.0 0.0 NPAT (Reported) -10.1 -4.1 0.2 8.4 NPAT (Reported) -10.1 -4.1 0.2 8.4

Margin profile Gross Profit Margin (%) 35.0% 35.5% 35.0% 35.0% Gross Profit Margin (%) 39.0% 39.3% 39.4% 39.4% 39.4% Gross Profit Margin (%) 35.7% 36.2% 35.8% 35.8% GPAPA margin 25.8% 26.0% 25.1% 25.3% GPAPA margin 32.0% 31.8% 31.5% 30.9% 30.9% GPAPA margin 26.7% 27.0% 26.2% 26.4% EBITDA Margin (%) -2.1% 0.8% 2.5% 4.9% EBITDA Margin (%) 14.5% 12.8% 12.1% 13.7% 15.7% EBITDA Margin (%) 0.4% 2.8% 4.5% 7.0% EBIT Margin (%) -6.3% -2.5% -0.2% 2.8% EBIT Margin (%) -3.6% -0.3% 2.0% 4.9% NPAT Margin (%) -3.6% -1.7% 0.1% 2.3% NPAT Margin (%) -3.0% -1.4% 0.1% 1.9%

Growth Revenue 29.6% 31.0% 25.0% 22.5% Revenue growth 33.5% 40.7% 30.0% 30.0% Revenue growth 55.1% 32.6% 25.8% 23.8% Gross profit 27.5% 33.0% 23.2% 22.5% Gross profit growth 34.3% 41.1% 30.0% 30.0% Gross profit growth 55.7% 34.5% 24.5% 24.0% GPAPA 24.4% 32.3% 20.7% 23.5% GPAPA growth 32.6% 39.5% 27.6% 30.0% GPAPA growth 54.4% 33.7% 22.1% 24.9% Opex 19.2% 18.5% 12.4% 10.3% Opex growth 46.8% 42.0% 15.0% 15.0% Opex growth 35.4% 21.3% 12.7% 11.0% Source: Company reports, Canaccord Genuity estimates

5 Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 5

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Redbubble Limited Raising Target Price

Figure 7: Peer analysis – valuation remains undemanding

Enterprise Revenue EV/Revenue EV/Gross proft Revenue Growth Company Price Market Cap Value FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 Freelancer $0.83 $378 $346 51 57 67 6.9 6.8 6.1 5.2 7.8 6.9 5.9 1% 12% 17% Etsy $43.21 $5,205 $4,901 598 776 939 11.1 8.2 6.3 5.2 12.4 9.6 7.9 36% 30% 21% Shutterstock $37.10 $1,300 $1,093 627 692 762 2.0 1.7 1.6 1.4 3.0 2.7 2.5 12% 10% 10% $47.67 $1,602 $2,614 1,998 2,229 2,314 2.2 1.3 1.2 1.1 2.7 2.4 2.4 68% 12% 4% Stamps.com Inc $155.22 $2,810 $2,813 577 703 6.0 4.9 4.0 6.1 5.0 23% 22% ASOS $47.08 $3,947 $3,904 2,417 2,968 3,599 2.0 1.6 1.3 1.1 3.2 2.6 2.2 26% 23% 21% Boohoo.com $1.89 $2,196 $2,041 580 835 1,085 6.9 3.5 2.4 1.9 6.4 4.5 3.4 97% 44% 30% Webjet $11.82 $1,419 $1,358 291 397 520 5.8 4.7 3.4 2.6 7.8 5.7 4.4 24% 37% 31% Seek $17.68 $6,194 $7,123 1,310 1,514 1,693 6.8 5.4 4.7 4.2 9.0 7.8 7.0 25% 16% 12% REA Group $72.19 $9,508 $9,825 867 923 1,037 14.6 11.3 10.6 9.5 14.5 13.6 12.1 29% 6% 12% Carsales.com.au $11.23 $2,737 $3,127 444 502 546 8.4 7.0 6.2 5.7 8.5 7.6 6.9 19% 13% 9% Redbubble $1.30 $329 $300 183 275 365 2.1 1.6 1.1 0.8 4.7 3.0 2.3 30% 50% 33% Average 6.2 4.9 4.1 3.5 7.2 6.0 5.2 Average (excl. REA) 5.5 4.3 3.5 2.9 6.5 5.3

Other high growth global marketplaces Facebook $132.4 $380,576 $339,440 55,366 68,839 83,451 8.3 6.1 4.9 4.1 7.1 5.7 4.7 36% 24% 21% Twitter $31.1 $23,567 $20,318 3,001 3,396 3,841 8.3 6.8 6.0 5.3 10.5 9.2 8.2 23% 13% 13% Netflix $267.0 $116,426 $121,695 15,816 19,914 24,434 10.4 7.7 6.1 5.0 22.3 17.7 14.4 35% 26% 23% Amazon $1,495 $731,233 $748,687 232,378 280,743 332,080 4.2 3.2 2.7 2.3 8.7 7.2 6.1 31% 21% 18% Alibaba Group (USD) $146.0 $375,450 $332,129 39,129 54,818 75,059 14.7 8.5 6.1 4.4 10.1 7.2 5.3 73% 40% 37% eBay $28.2 $27,113 $31,523 10,736 11,304 12,252 3.3 2.9 2.8 2.6 3.8 3.6 3.4 12% 5% 8% Wayfair $84.6 $7,639 $7,651 6,730 8,840 11,073 1.6 1.1 0.9 0.7 4.6 3.5 2.8 43% 31% 25% Grubhub $78.5 $7,122 $7,107 1,008 1,329 1,708 10.4 7.1 5.3 4.2 11.5 8.7 6.8 48% 32% 29% Average (excl. RB) 6.8 4.8 3.8 3.1 8.7 6.9 5.7 Source: CapitalIQ, Canaccord Genuity estimates

2 Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 6

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Redbubble Limited Raising Target Price

Appendix: Important Disclosures

Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Sector Coverage Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoring analysts of the report.

Investment Recommendation Date and time of first dissemination: November 21, 2018, 15:16 ET Date and time of production: November 21, 2018, 15:16 ET Target Price / Valuation Methodology: Redbubble Limited - RBL Our price target has been derived using a DCF methodology. Risks to achieving Target Price / Valuation: Redbubble Limited - RBL Attracting and retaining independent artists; attracting and converting customers; a shift in customer trend; and action of competitors or substitute offerings.

Distribution of Ratings: Global Stock Ratings (as of 11/21/18) Rating Coverage Universe IB Clients # % % Buy 561 63.68% 46.70% Hold 202 22.93% 30.20% Sell 9 1.02% 33.33% Speculative Buy 109 12.37% 66.97% 881* 100.0% *Total includes stocks that are Under Review

Canaccord Genuity Ratings System BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months. HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months. SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months. NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer. “Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the relevant issuer. Risk Qualifier SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss. 12-Month Recommendation History (as of date same as the Global Stock Ratings table) A list of all the recommendations on any issuer under coverage that was disseminated during the preceding 12-month period may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures- mar.canaccordgenuity.com/EN/Pages/default.aspx

Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 7 This report is intended for [email protected]. Unauthorized publication, disclosure or other distribution is strictly prohibited.

Redbubble Limited Raising Target Price

Required Company-Specific Disclosures (as of date of this publication) Redbubble Limited currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Redbubble Limited. In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Redbubble Limited . Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Redbubble Limited in the next three months. The primary analyst, a member of primary analyst's household, or any individual directly involved in the preparation of this research, has a long position in the shares or derivatives, or has any other financial interest in Redbubble Limited, the value of which increases as the value of the underlying equity increases.

Redbubble Limited Rating History as of 11/19/2018 I:B:AUD2.59 B:AUD2.59 B:AUD2.52 B:AUD1.40 H:AUD1.00 H:AUD1.00 SB:AUD1.20 B:AUD1.20 B:AUD1.50 B:AUD2.00 B:AUD2.00 05/30/2016 08/02/2016 08/25/2016 01/30/2017 02/26/2017 07/24/2017 08/27/2017 10/26/2017 12/06/2017 01/28/2018 04/25/2018 AUD3.00

AUD2.50

AUD2.00

AUD1.50

AUD1.00

AUD0.50 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18

B:AUD2.20 07/24/2018

Closing Price Price Target

Buy (B); Speculative Buy (SB); Sell (S); Hold (H); Suspended (SU); Under Review (UR); Restricted (RE); Not Rated (NR)

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Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 8 This report is intended for [email protected]. Unauthorized publication, disclosure or other distribution is strictly prohibited.

Redbubble Limited Raising Target Price

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Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 9 This report is intended for [email protected]. Unauthorized publication, disclosure or other distribution is strictly prohibited.

Redbubble Limited Raising Target Price

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Buy unchanged Target Price A$2.25 from A$2.20 | 21 November 2018 Software and Services 10