The FTSE 250 firm experienced a strong increase in demand as people were forced to stay home during European lockdowns.
READ: AO World forecasts revenue jump in first half as pandemic accelerates shift to online shopping
The retailer’s founder and chief executive John Roberts said that online is now the dominant channel for customers and manufacturers and the company’s market has “changed as a result, forever”.
Growth rates increased from the second to the third quarter after resolving capacity constraints.
As a result, the full integration of AO Mobile was delayed to next year to focus on fulfilling demand in the core retail channel.
The gross margin of the mobile channel was hit by a change in customer behaviour, with increased cashback redemption rates and cancellation of contracts.
Meanwhile, recycling operations are now back to normal levels of operation and consistently at full capacity after they were temporarily scaled back during the first lockdown, although prices have been volatile since March.
The German business has made “considerable” progress and is forecast to be profitable from financial year 2022.
In the six months to September 30, the washing machine and laptop seller swung to an £18mln profit before tax from a £6mln loss last year, while revenue shot up 58% to £100mln. Net debt was cut by 75% to £20mln.
"AO has seen a permanent upshift in its market position, online penetration rates have increased and AO will end the year with a materially stronger active customer base, underpinning future growth," analysts at Peel Hunt noted.
"While there is no roadmap for further European expansion, AO appears much more determined to deliver well-thought-out and costed European growth, while also focusing on the huge German opportunity in the short term."
Shares succumbed to profit-taking and lost 5% to 397p on Tuesday morning.
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