• Record 2021 Gross Merchandise Value (“GMV”) of $4.2 billion, up 33% year-over-year and up 98% compared to 2019

• 2021 Revenue increases 35% year-over-year to $2.3 billion

• Q4 2021 GMV and Digital Platform GMV each increase 22% year-over-year to $1.3 billion and $1.1 billion, respectively

• Q4 2021 Revenue increases 23% year-over-year to $666 million

• Q4 2021 Gross Profit Margin of 47.1%; Digital Platform Order Contribution Margin of 32.4%

• Q4 2021 Profit After Tax of $97 million includes $217 million non-cash benefit arising from impact of lower share price on items held at fair value and remeasurements

• Delivers $36 million Adjusted EBITDA in Q4 2021 for positive Adjusted EBITDA for full-year 2021

Farfetch Limited (NYSE: FTCH), the leading global platform for the luxury fashion industry, today reported financial results for the fourth quarter and full year ended December 31, 2021.

José Neves, Farfetch Founder, Chairman and CEO said: “Our fourth quarter results clearly demonstrate the strong momentum behind the Farfetch platform. We exit the year having once again delivered market share capturing GMV growth in 2021 along with our first year of Adjusted EBITDA profitability. This positions Farfetch for an incredible 2022 focused on continuing to lead the online luxury fashion industry, growing faster than the runner-ups, and expanding profitability.

“As we enter a post-pandemic environment, I am proud of the support Farfetch has provided to our partners across the global luxury community during this unprecedented time as we advanced our mission to be the connector between the curators, creators and consumers of the luxury fashion industry. Moreover, we are positioned to emerge stronger than ever, as an industry leader delivering strategic value to brand partners and an unmatched proposition for consumers. And the accelerated digitization of the luxury industry highlights the opportunity to leverage the unique capabilities of the Farfetch platform, to extend our track record of capturing market share while delivering further profitability.”

Elliot Jordan, CFO of Farfetch, said: “I am delighted with our fourth quarter 2021 results which demonstrate strong execution that delivered Digital Platform GMV growth at the high end of our expectations, and improved profitability margins. This completes a milestone year for Farfetch in which we added over $1bn in GMV, growing 33% year-over-year, and achieved our first full-year of profitability at the Adjusted EBITDA level. Our investments continue to deliver significant operating cost leverage and we are well positioned for further market share capture and profitability gains in the year ahead.”

Consolidated Financial Summary and Key Operating Metrics (in $ thousands, except per share data, Average Order Value, Active Consumers or otherwise stated):

1. See “Revisions to Previously Reported Financial Information” in Notes and Disclosures on page 21
2. See “Non-IFRS and Other Financial and Operating Metrics” on page 24 for reconciliations of non-IFRS measures to IFRS measures.

Recent Business Highlights

Digital Platform

• Third-party transactions generated 85% of Digital Platform GMV at a take rate of 30.4% in fourth quarter 2021
• The Farfetch Marketplace continued to offer customers the most extensive selection of in-season luxury fashion on a global platform from over 1,400 sellers, as supply from both multi-brand retailers and e-concession partners continued to increase year-over-year to total stock units of nearly 10 million in fourth quarter 2021
• Generated third consecutive quarter of record media solutions revenue and partnered with brands to launch innovative showcases of their collections to Farfetch Marketplace visitors, including:
  • Balmain X Netflix collaboration coinciding with the release of the movie ‘The Harder They Fall’, leveraging innovation features such as photo-real 3D visuals
  • Burberry outerwear campaign, utilizing Farfetch’s digital fashion capabilities to feature models dressed with digital assets
  • Zegna ‘Working With Words’ film content series in collaboration with Port Magazine, poet Seán Hewitt and musician Azekel
  • Tasaki Atelier high jewelry pearl and colored gemstone collection, available exclusively on the Farfetch Marketplace
• In January 2022, ahead of the planned launch of beauty on the Farfetch Marketplace later in the year, announced the acquisition of cult favorite luxury beauty destination Violet Grey

New Guards

• Launched Tmall Luxury Pavilion storefronts for Off-White, Palm Angels and Ambush in January 2022
• New Guards’ portfolio continued to focus on direct-to-consumer channels while creating culturally relevant collections:
  • Off-White released ‘Off-White x Air Jordan 2 Low’ and capsule collection for lunar new year in January 2022
  • Palm Angels launched ‘8 Moncler Palm Angels’ collaboration and opened a new directly operated store in Las Vegas
  • Heron Preston released its third drop in collaboration with Calvin Klein and launched HERON01, the first fully 3D printed sneaker, in collaboration with technology company Zellerfeld
  • Alanui launched ‘Alanui x The Rolling Stones’ capsule collection dedicated the legendary band in celebration of their 60^th anniversary
• In February 2022, New Guards further expanded its portfolio of brands with the signing of agreements with Authentic Brands Group to become the exclusive partner to curate, create and bring to market Reebok’s luxury collaborations, as well as a core operating partner for the brand across Europe and distributor of premium Reebok products in the United States, Canada, Europe and certain other key markets.

Environmental, Social and Governance (“ESG”)

• In December 2021, acquired Luxclusif, a business-to-business service provider that enables the acquisition, authentication and sale of second-hand luxury goods, with the aim to significantly accelerate our pre-owned platform capabilities

Fourth Quarter and Full Year 2021 Results Summary

Gross Merchandise Value (in thousands):

GMV increased by $232.2 million from $1,057.0 million in fourth quarter 2020 to $1,289.1 million in fourth quarter 2021, representing year-over-year growth of 22.0%. Digital Platform GMV increased by $206.7 million from $939.4 million in fourth quarter 2020 to $1,146.2 million in fourth quarter 2021, representing year-over-year growth of 22.0%. Excluding the impact of changes in foreign exchange rates, Digital Platform GMV would have increased by 22.5%.

GMV growth was driven by our Digital Platform segment performance. Fourth quarter 2021 Digital Platform GMV growth reflects order growth across the Marketplace and an increase in AOV from $626 to $635, which was driven by increases in full-priced item mix and number of items per order, partially offset by a higher mix of lower-priced items.

Brand Platform GMV increased by 12.8% to $117.2 million driven by demand for new collections launched during the quarter, and was impacted by a change in the timing of shipments compared to the prior year, in addition to delays arising from the migration to a new warehouse.

In-Store GMV increased by 88.9% to $25.8 million, driven by additional New Guards brands stores opened in the last twelve months as well as growth from existing stores.

Revenue (in thousands):

Revenue increased by $125.5 million year-over-year from $540.1 million in fourth quarter 2020 to $665.7 million in fourth quarter 2021, representing growth of 23.2%. The increase was primarily driven by 24.5% growth in Digital Platform Revenue to $526.0 million and 12.8% growth in Brand Platform Revenue to $117.2 million.

Digital Platform Services Revenue increased by 24.2% ahead of the 22.0% overall growth in Digital Platform GMV, driven by third-party revenue, which increased 29.4%, reflecting measures implemented to share recent cost increases with our partners.

Third-party revenue growth was offset by slower growth in Digital Platform Services first-party revenue, which includes first-party original, of 16.4%, with strong performance of Browns’ products on the Digital Platform offset by slower growth in first-party original products following a strategic decision to control markdowns.

Digital Platform Fulfilment Revenue represents the pass-through to consumers of delivery and duties charges incurred by our global logistics solutions, net of any Farfetch-funded consumer promotions, subsidized shipping and incentives. Digital Platform Fulfilment Revenue increased 25.7% year-over-year, above Digital Platform GMV growth of 22.0%, as we have been able to pass-through more of these costs to consumers in the current quarter.

Cost of Revenue (in thousands):

Cost of revenue increased by $61.3 million, or 21.1%, year-over-year from $291.0 million in fourth quarter 2020 to $352.3 million in fourth quarter 2021, at a slightly lower rate than revenue growth. The increase was driven by growth in Digital Platform cost of revenue, partially offset by a decrease in Brand Platform cost of revenue.

Digital Platform Services cost of revenue increased at a higher rate than Digital Platform Services Revenue driven by an increase in first party costs of goods sold due to a year-over-year increase in stock clearance activity.

Gross profit (in thousands):

Gross profit increased by $64.2 million, or 25.8%, year-over-year, faster than revenue growth, to $313.4 million in fourth quarter 2021. Gross profit margin increased 95 bps year-over-year to 47.1% from 46.1%, driven by strong margin expansion in Brand Platform, partially offset by a decrease in Digital Platform Gross Profit Margin.

Digital Platform Gross Profit Margin decreased 116 bps to 53.3% in fourth quarter 2021 from 54.4% in fourth quarter 2020, as Digital Platform Services cost of revenue increased at a higher rate than Digital Platform Services Revenue. An increase in Digital Platform third-party gross profit margin was offset by a decrease in first-party gross profit margin primarily due to a lower full-price mix.

Brand Platform Gross Profit Margin increased 918 bps year-over-year to 59.1% driven by a higher sell-through of Off-White products, non-recurring discounts received from vendors, and elimination of Palm Angels royalty costs from Brand Platform cost of revenue, following the acquisition of 60% of the outstanding equity interests of Palm Angels S.r.l (“Palm Angels”) the owner of the Palm Angels trademark.

Selling, general and administrative expenses by type (in thousands):

Demand generation expense increased $22.7 million year-over-year to $90.0 million in fourth quarter 2021 and increased as a percentage of Digital Platform Service Revenue from 19.4% to 20.9%. This was driven by our investment in acquiring and engaging customers in paid channels, including our redistribution of spend as we continue to implement measures in response to the impact of Apple's recent iOS privacy measures, which exhibited higher unit costs, on average.

Technology expense primarily relates to maintenance and operations of our platform features and services, as well as software, hosting and infrastructure expenses, which includes three globally distributed data centers, including one in Shanghai, which support the processing of our growing base of transactions. Technology expense increased by $0.9 million, or 3.1%, in fourth quarter 2021 year-over-year driven by an increase in technology staff headcount and software and hosting costs to support growth.

Fourth quarter 2021 technology expense continued to scale as a percentage of Adjusted Revenue, decreasing from 6.4% to 5.4% year-over-year as we continue to leverage our existing infrastructure and organization.

Our total investment in technology, which includes investments in longer term development projects which are treated as capital items, was 11.3% of Adjusted Revenue in fourth quarter 2021, as compared to 12.2% in fourth quarter 2020.

Depreciation and amortization expense increased by $9.5 million, or 15.9%, year-over-year from $60.1 million in fourth quarter 2020 to $69.7 million in fourth quarter 2021. Amortization expense increased principally due to increased technology investments, where qualifying technology development costs are capitalized and amortized over their useful lives. Depreciation expense increased primarily as a result of new stores and office leases entered into within the last twelve months.

Share-based payments decreased by $71.8 million, or (59.3)% year-over-year in fourth quarter 2021 due to the decreased cost of employment related taxes and cash-settled awards, primarily as a result of the share price movement, partially offset by grants of equity-settled awards, including the performance-based restricted share unit ("PSU") award granted to the Company's Founder, Chairman and CEO, José Neves in May 2021.

General and administrative expense increased by $14.9 million, or 10.5%, year-over-year in fourth quarter 2021, reflecting investments made to support longer-term strategic initiatives including brand campaigns.

General and administrative expense decreased as a percentage of Adjusted Revenue to 27.4% compared to 30.5% in fourth quarter 2020 as we continued to leverage our operations base to efficiently grow Adjusted Revenue.

(Losses)/gains on items held at fair value and remeasurements (in thousands):

The $157.9 million of fair value gains on embedded derivative liabilities in fourth quarter 2021 were primarily driven by the decrease in our share price during the period. The fair value gains on embedded derivative liabilities in fourth quarter 2021 is comprised of the following revaluation gains on our convertible senior notes: (i) $22.4 million fair value gains related to $250 million 5.00% notes due 2025 (the “February 2020 Notes”); (ii) $92.1 million fair value gains related to $400 million 3.75% notes due 2027 (the “April 2020 Notes”); and, (iii) $43.4 million fair value gains related to $600 million 0.00% notes due 2030 (the “November 2020 Notes”). These notes have provided strong liquidity to fund ongoing capital needs and invest in various growth initiatives.

The $1,890.6 million of fair value losses on embedded derivative liabilities in fourth quarter 2020 were primarily driven by the increase in our share price during the period. The fair value losses on embedded derivatives in fourth quarter 2020 were comprised of $749.0 million fair value revaluation losses related to the February 2020 Notes; $869.1 million fair value revaluation losses related to the April 2020 Notes; and $272.5 million fair value losses related to the November 2020 Notes.

The $59.0 million of remeasurement gains on put and call option liabilities in fourth quarter 2021 related to $61.1 million gains on the put and call option resulting from the November 2020 strategic agreement with Alibaba Group Holding Limited (“Alibaba Group”) and Compagnie Financiere Richemont SA (“Richemont”), $7.2 million remeasurement gains in connection with Chalhoub Group’s put option over their non-controlling interest in Farfetch International Limited, and $0.7 million gains on the put and call option over the non-controlling interest in Alanui S.r.l., partially offset by $10.0 million losses on the put and call option that New Guards holds over the acquisition of the remaining 40% share capital in Palm Angels.

The $166.7 million of remeasurement losses in fourth quarter 2020 primarily related to the remeasurement losses in connection with the Chalhoub Group’s put option over the non-controlling interest in Farfetch International Limited.

Impairment losses on tangible and intangible assets (in thousands):

Impairment losses of $11.8 million on intangible assets in fourth quarter 2021 are related to a reduction in the carrying value of a small intangible brand asset associated with New Guards brand portfolio.

The impairment charge of $36.3 million on intangible assets and $0.7 million on tangible assets in fourth quarter 2020 is primarily comprised of a $30.5 million charge related to a reduction in the carrying value of one of the smaller intangible brand assets within New Guards portfolio, as well as a $0.7 million reduction in the carrying value of the corporate right-of-use assets associated with that same brand. The remaining $5.8 million impairment charge on intangible assets related to the closure of our direct consumer-facing channels on JD.com and the associated intangible asset held for the Farfetch Level 1 access button.

Profit / (loss) After Tax

Profit after tax increased by $2,360.5 million year-over-year from a loss of $(2,263.6) million to a profit of $96.9 million in fourth quarter 2021. The increase was primarily driven by gains on items held at fair value and remeasurements, which increased $2,274.3 million year-over-year.

EPS and Diluted EPS

Fourth quarter 2021 basic EPS was $0.27 and diluted EPS was $(0.23). Diluted EPS assumes a full conversion of the convertible notes into shares, and that the settlement of the Chalhoub liability and Farfetch China Holdings Ltd (“Farfetch China”) liability held on the statement of financial position at December 31, 2021 would have been in shares, with both transactions occurring at the beginning of the fourth quarter, 2021. As such, diluted EPS excludes the gains on items held at fair value and interest costs related to the Chalhoub liability, Farfetch China liability and the convertible notes, net of any applicable tax, while including all outstanding equity instruments that have a dilutive impact.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA improved by $25.7 million to $36.1 million in fourth quarter 2021 as a result of our growth, improved gross profit margins, and scaling of the operating cost base. Adjusted EBITDA Margin improved from 2.2% to 6.3% year-over-year, primarily reflecting declines in both general and administrative expenses and in technology expense as percentage of Adjusted Revenue.

Liquidity

At December 31, 2021, cash and cash equivalents were $1,363.1 million, a decrease of $210.3 million compared to $1,573.4 million at December 31, 2020. The decrease in cash and cash equivalents was primarily related to funding working capital, cash payments for business acquisitions, and $100 million short-term variable Net Asset Value investments. This was partially offset by $500 million cash proceeds related to the investment in Farfetch China by Alibaba Group and Richemont in August 2021.

Post Balance Sheet Events

On February 1, 2022, the Group completed the acquisition of Violet Grey Inc., a luxury beauty online retailer, for consideration of approximately $44.4 million, subject to customary completion accounts price adjustments, comprised of $43.5 million in cash and $0.9 million in Farfetch shares based on the Farfetch share price as at the acquisition date. The share consideration includes service conditions in respect of certain members of the Violet Grey Inc. management team remaining with the Group after the acquisition.

On February 22, 2022, New Guards Group entered into a commercial agreement with Authentic Brands Group LLC for the distribution rights of Reebok footwear and apparel ranges within certain countries in the European region. The agreement becomes effective upon the completed transfer of ownership of the Reebok brand to ABG, which is expected to close in the first quarter. As part of the arrangement, the Group is committed to minimum royalty payments of approximately $374 million (€329.9 million) over the 11 year life of the agreement.

Outlook

The following forward-looking statements reflect Farfetch’s expectations as of February 24, 2022.

For Full Year 2022:

• Digital Platform GMV growth of 28% to 32% year-over-year
• Brand Platform GMV growth of 20% to 25% year-over-year
• Adjusted EBITDA margin of 1% to 2%

Uncertainties resulting from the COVID-19 pandemic and the evolving nature of the situation, could have material impacts on our future performance and projections. Factors involving COVID-19 that could potentially impact our future performance include, among others:

• disruptions to our operations, fulfilment network, and shipments
• weakened consumer sentiment and discretionary income arising from various macro-economic conditions
• increased costs to support our operations
• slowing e-commerce consumer activity as vaccinations gain acceptance and populations resume to pre-pandemic activities and lifestyles

Conference Call Information

Farfetch Limited will host a conference call today, February 24, 2022, at 4:30 p.m. Eastern Time to discuss the Company’s results as well as expectations about Farfetch’s business. Listeners may access the live conference call via audio webcast at http://farfetchinvestors.com, where listeners can also access Farfetch’s earnings press release and slide presentation. Following the call, a replay of the webcast will be available at the same website for at least 30 days.