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01/11 11:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a decline in revenue, gross profit, and margins, with increased losses and cash burn, which are negative indicators. Despite a focus on operational efficiency and some positive trends in order growth and supply from Asia, the volatility in corporate sales and macroeconomic challenges, particularly in Egypt, weigh heavily. The Q&A section highlights risks of increased competition and lack of clear guidance on some financial metrics. The overall sentiment leans negative due to these financial struggles and uncertainties.
Revenue $36.3 million, down 26% year-over-year due to lower corporate sales in Egypt and currency devaluation.
Gross Profit $19.9 million, down 36% year-over-year, impacted by currency devaluation and reduction in corporate sales.
Gross Profit Margin 12% of GMV, down from 17% in Q1 2024, affected by macroeconomic headwinds.
Adjusted EBITDA Loss $15.7 million, compared to a loss of $4.3 million in Q1 2024.
Loss Before Income Tax $16.5 million, a 58% decrease year-over-year, primarily due to a decline in gross profits and lower operating expenses.
Cash Burn $23.2 million for the quarter, including $8 million in working capital.
Fulfillment Expense per Order $2.07, down 14% year-over-year, driven by operating leverage and efficiency improvements.
Sales and Advertising Expense $3.1 million, down 17% year-over-year, reflecting a more targeted marketing strategy.
Technology and Content Expense $9.6 million, up 6% year-over-year, expected to decline in future quarters.
G&A Expense $16.1 million, up 5% year-over-year, with staff costs decreasing due to headcount optimization.
Liquidity Position $110.7 million, including $61.6 million in cash and cash equivalents.
Net Cash Flow Used in Operating Activities $21.2 million, including an $8 million working capital impact.
CapEx $0.9 million, compared to $0.2 million in Q1 2024, reflecting infrastructure investments.
Expansion of Jumia Deliveries: Jumia is rolling out Jumia Deliveries, an in-house last-mile logistics platform for third-party sellers and individuals, starting in Nigeria after a successful pilot in Ivory Coast.
Strengthening relationships with international sellers: In Q1, Jumia sourced 2.6 million gross items internationally, a 61% year-over-year increase, particularly from Chinese vendors.
Geographic expansion into underserved regions: Jumia is expanding beyond major cities into upcountry regions, which now represent 58% of total volumes, up from 50% last year.
Cost reduction initiatives: Jumia has launched company-wide initiatives to reduce costs across logistics, fulfillment, technology, and G&A expenses, achieving a 14% reduction in fulfillment expense per order.
Staffing optimization: Jumia reduced its total headcount by about 3% and implemented a restrictive hiring policy to manage costs.
Technology cost savings: Jumia renegotiated or terminated several key software and hosting contracts, targeting significant cost savings starting in the second half of 2025.
Focus on profitability: Jumia aims to reduce losses and improve margins, with a target of achieving profitability by 2027.
Increased guidance for physical goods orders: Jumia raised its physical goods orders growth guidance to 20%-25%, up from 15%-20%.
Currency Headwinds: Currency headwinds continue to affect profitability, particularly impacting GMV and revenue.
Corporate Sales Decline in Egypt: A sharp decrease in corporate sales in Egypt has significantly affected overall GMV and revenue.
Cost Management Challenges: Despite efforts to reduce costs, the company acknowledges that considerable work remains to achieve sustainable cash flow positivity.
Competitive Pressures: Rising competition from local social commerce merchants, full-fledged e-commerce players, and non-resident platforms poses a challenge to market share.
Economic Factors: Global trade tensions and geopolitical uncertainty may shape the broader microenvironment, although the company does not expect material impact on consumer demand.
Supply Chain Issues: The company is focused on improving supply availability, which has been a central pillar of its recent transformation.
Operational Efficiency: While the company has made strides in operational efficiency, it recognizes that ongoing cost control and margin expansion are critical for long-term success.
Cost Reduction Initiatives: Jumia is executing targeted, company-wide initiatives across logistics, fulfillment, technology, and G&A expenses to reduce costs and improve margins.
Logistics Expansion: Jumia is rolling out Jumia Deliveries, an in-house last-mile logistics platform for third-party sellers, enhancing cost efficiency and monetizing logistics infrastructure.
Market Penetration: Jumia is expanding its reach into underserved regions, which now represent 58% of total volumes, aiming for high growth and low-cost customer acquisition.
Supplier Relationships: Strengthening relationships with international sellers, particularly from China, to expand product assortment and improve supply availability.
2025 Loss Before Income Tax Guidance: Updated to a range of $50 million to $55 million, an improvement from the previous range of $65 million to $70 million.
2026 Loss Before Income Tax Guidance: Projected to be in the range of $25 million to $30 million.
Physical Goods Orders Growth Guidance: Increased to 20% to 25% from the previous range of 15% to 20%.
2025 GMV Projection: Projected to be between $795 million and $830 million, a year-over-year increase of 10% to 15%.
Profitability Outlook: On track to achieve breakeven on a loss before income tax basis in Q4 2026 and full-year profitability targeted for 2027.
Shareholder Return Plan: Jumia Technologies AG has not announced any share buyback program or dividend program during the Q1 2025 earnings call. The focus remains on reducing losses and improving operational efficiency.
The earnings call indicates strong growth prospects with revised upward guidance for 2025 and a strategic focus on market expansion and efficiency improvements. Despite some cautious management commentary, the overall sentiment is positive, driven by reduced costs, promising advertising potential, and a strong position in key markets. The Q&A section reinforced these positives with insights into sustainable customer growth and supply chain improvements. While there are some uncertainties, the overall outlook suggests a positive stock price movement.
The earnings call highlights several positive aspects: improved cost efficiency, expansion into underserved regions, strengthened supplier relationships, and increased growth guidance. The Q&A session reveals optimism about growth potential in secondary cities, improved supply chain stability, and profitability in logistics. Despite some unclear responses, the overall sentiment is positive, driven by the raised growth projections and strategic focus on cost control and expansion. The absence of negative catalysts and the company's focus on growth and efficiency suggest a positive stock price movement in the near term.
The earnings call reveals a decline in revenue, gross profit, and margins, with increased losses and cash burn, which are negative indicators. Despite a focus on operational efficiency and some positive trends in order growth and supply from Asia, the volatility in corporate sales and macroeconomic challenges, particularly in Egypt, weigh heavily. The Q&A section highlights risks of increased competition and lack of clear guidance on some financial metrics. The overall sentiment leans negative due to these financial struggles and uncertainties.
The earnings call reveals significant challenges: currency devaluation, declining corporate sales, increased operational costs, and widened losses. Despite some positives like order growth and improved efficiency, the overall financial performance is weak, with revenue, gross profit, and EBITDA all declining. The Q&A section highlights supply challenges and unclear responses from management, further dampening sentiment. Without a share buyback program or strong guidance, the stock is likely to react negatively over the next two weeks.
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