Jumia(JMIA) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue reached $57.3 million in Q2 2022, up 42% year-over-year and 56% on a constant currency basis [28] - Adjusted EBITDA loss was $57.2 million in Q2 2022, showing a year-on-year reduction of 37% [53] - GMV reached $271 million, up 21% year-over-year and 34% on a constant currency basis [20] Business Line Data and Key Metrics Changes - First-party revenue increased by over 90% year-on-year, driven by strong momentum in FMCG and grocery sub-categories [29] - Marketplace revenue grew 17% year-on-year, the fastest growth rate in the past seven quarters [30] - JumiaPay TPV increased by 31% year-over-year and 45% on a constant currency basis [24] Market Data and Key Metrics Changes - Quarterly active consumers reached 3.4 million, up 25% [19] - Orders reached 10.3 million, up 35% [19] - Average order values stood at $26.3 in Q2 [23] Company Strategy and Development Direction - The company aims to achieve breakeven and has outlined a path to profitability focusing on usage growth, monetization acceleration, and cost efficiency [6][9] - The strategic focus includes maintaining robust usage growth and accelerating gross profit growth while driving cost discipline [11][57] - The company plans to leverage its logistics platform and expand JumiaPay services to third-party merchants starting in 2023 [26][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment but expressed confidence in the company's ability to navigate it due to competitive advantages [75][78] - The company expects to maintain GMV growth in excess of 15% for the full year in USD terms despite macro pressures [9] - Management anticipates a reduction in adjusted EBITDA losses on a year-on-year basis starting in H2 2022 [53][59] Other Important Information - The company has reduced its full-year CapEx guidance from $15 million to $25 million to $10 million to $15 million [54] - Sales and advertising expenses were lower than expected at $41 million for H1 2022, compared to guidance of $50 million to $55 million [48] Q&A Session Summary Question: Comments on gross profits and incentives - Management indicated that guidance on gross profit after fulfillment is challenging due to inflation impacts but aims to expand gross profit [67][68] Question: Sustainability of marketing revenue increases - Management believes advertising revenues will grow significantly in the midterm, despite some fluctuations [69] Question: Consumer base impact from macro conditions - Management noted that consumers are under pressure from inflation, but the company is well-positioned to maintain growth [75][78] Question: JumiaPay monetization potential - Management highlighted ongoing pilot programs for JumiaPay in Nigeria and Egypt, with expectations for future revenue contributions [82][84] Question: CapEx guidance reduction - Management clarified that the reduction in CapEx guidance is not permanent and reflects flexibility in investment decisions [88]