Jumia(JMIA)2025-05-08 13:32Financial 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 [19][36]. - Adjusted EBITDA loss was $15.7 million, 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 [19][41]. - 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 [14][41]. 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 [15][16]. - GMV declined 11% year over year, primarily due to currency headwinds and lower corporate sales, but excluding corporate sales, GMV would have grown 10% year over year [16][19]. - Fulfillment expense per order decreased to $2.07, down 14% year over year, reflecting improved efficiency [39][11]. 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% [22]. - 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 [23][24]. - Egypt's Physical Goods orders were down 15% year over year, with GMV decreasing 69% in USD and 54% in constant currency due to a decline in corporate sales [25][26]. 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 [6][7]. - Jumia is expanding its logistics platform to monetize its infrastructure beyond the core marketplace, targeting third-party sellers and social commerce merchants [28][62]. - The company is also focused on cost management and operational discipline, with structural cost savings and margin expansion as core priorities for 2025 [43]. Management's Comments on Operating Environment and Future Outlook - Management noted that while currency headwinds have impacted profitability, they expect to see improved supply availability from Asian manufacturers, which could benefit the business [32][56]. - The company is on track to achieve profitability on a loss before income tax basis in Q4 2026, with full-year profitability targeted for 2027 [9][45]. - Management expressed confidence in the strategy direction and the path towards profitability, emphasizing the importance of operational discipline and cost management [33][43]. Other Important Information - The company has implemented a highly restrictive hiring policy and reduced total headcount by about 3% since the beginning of the year [11]. - Jumia remains debt-free, with liquidity at $110.7 million, including cash and cash equivalents [42][43]. - The company is seeing strong demand in key categories such as electronics, fashion, and home goods, indicating robust consumer engagement [15][16]. Q&A Session Summary Question: Can you explain the relationship between orders and GMV, particularly regarding corporate sales? - Management clarified that corporate sales are typically high-value orders that significantly impact GMV, leading to a disconnect between healthy order trends and declining GMV due to corporate sales weakness [49][50]. Question: How should we think about cash use from inventory levels necessary to fulfill growth? - Management indicated that a significant part of cash burn was due to increased working capital for inventory buildup ahead of major campaigns, but they expect lower working capital impact in the coming quarters [54]. Question: Have you seen an uptick in supply from Asia, and is that related to the raised physical order guidance? - Management confirmed an uptick in international vendor sales, particularly from China, contributing to the raised guidance for physical orders [55][56]. Question: What is the monetization strategy for the Jumia delivery business? - The delivery business is designed to be higher margin and lower volume compared to marketplace revenue, with profitability from day one due to well-known variable costs [90][92]. Question: What is the current status of customer growth and profitability in key markets? - Management reported a 15% year-over-year growth in active customers, with Nigeria and Ivory Coast showing strong acceleration, while profitability varies across markets [95].