Jumia(JMIA)2025-05-08 13:30Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $36.3 million, down 26% year over year and down 18% in constant currency, primarily due to lower corporate sales in Egypt and currency devaluation [33][34] - Adjusted EBITDA loss was $15.7 million in Q1 2025 compared to a loss of $4.3 million in Q1 2024, while loss before income tax improved to $16.5 million from $39.6 million year over year [17][39] - Cash burn for the quarter was $23.2 million, including $8 million in working capital, with expectations to significantly reduce cash burn in upcoming quarters [13][40] Business Line Data and Key Metrics Changes - Physical Goods orders grew 21% year over year, with quarterly active customers ordering Physical Goods increasing by 15% year over year, marking the highest growth rates in two years [14][15] - GMV declined 11% year over year, primarily due to currency headwinds and lower corporate sales, but would have grown 10% year over year excluding corporate sales [15][16] - Fulfillment expense per order decreased to $2.07, down 14% year over year, reflecting improved efficiency [10][37] Market Data and Key Metrics Changes - In Q1 2025, Ivory Coast, Nigeria, Kenya, and Egypt represented approximately 26%, 22%, 15%, and 10% of company GMV respectively, with other markets contributing 27% [20] - Nigeria saw Physical Goods orders grow by 22% and GMV increase by 18% year over year, while Kenya experienced a 36% growth in Physical Goods orders [21][22] - Egypt's Physical Goods orders were down 15% year over year, with GMV decreasing 69% in USD, primarily due to a decline in corporate sales [23] Company Strategy and Development Direction - The company aims to reduce losses, drive efficiency, and deliver measurable financial improvements, with a focus on margin expansion and financial discipline [5][6] - A comprehensive restructuring plan was launched in early 2024 to address operational challenges, particularly in Egypt [23] - The company is expanding its logistics platform to monetize its infrastructure beyond the core marketplace, targeting third-party sellers and social commerce merchants [25][60] Management's Comments on Operating Environment and Future Outlook - Management noted that while currency headwinds have impacted profitability, they expect a cleaner year-over-year comparison moving forward as these effects have lapped [16][34] - The company anticipates continued momentum in Q2 2025, with expectations for Physical Goods orders growth in the range of 20% to 25% [43][44] - Management remains confident in achieving profitability by Q4 2026 and full-year profitability in 2027, driven by cost management and volume increases [44][72] Other Important Information - The company has renegotiated or terminated several key software and hosting contracts, expecting significant cost savings starting in the second half of 2025 [11][38] - The liquidity position at the end of Q1 2025 was $110.7 million, with no financial debt, reflecting a strong cash position [40][41] Q&A Session Summary Question: Can you explain the relationship between orders and GMV? - Management clarified that corporate sales, which are high-value orders, significantly impact GMV, leading to a disconnect between orders and GMV [47][48] Question: How should we think about cash use from inventory levels? - Management indicated that increased working capital was primarily used to build up inventories ahead of significant commercial events, and they anticipate lower impacts from working capital in the coming quarters [51][52] Question: Have you seen an uptick in supply from Asia? - Management confirmed an uptick in international vendor sales, particularly from China, and expects this trend to continue as access to supply improves [53][54] Question: How do you plan to approach marketing as fundamentals improve? - Management stated that they are now in a position to be more aggressive with marketing in markets where fundamentals are strong, such as Nigeria [55][56] Question: What is the timeline for the logistics expansion? - Management explained that the logistics network is now stable enough to monetize outside the marketplace, with no negative impact on margins expected [60][62] Question: What is the visibility on 2026 guidance? - Management indicated that they expect to reach breakeven by Q4 2026, driven by growth and cost management efforts [72]