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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 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.
Physical goods GMV Grew by 26% year-over-year in reported currency and 37% excluding corporate sales. The growth was driven by strong customer demand, improved product offering, increased marketing efficiency, and expansion into secondary cities.
Average order value for physical goods Decreased to $35 from $38 year-over-year, mainly due to reduced corporate sales in Egypt.
Revenue Reached $45.6 million, up 25% year-over-year. Growth was driven by strong consumer demand and ongoing execution.
Fulfillment cost per order Decreased 22% year-over-year to $1.86, driven by structural efficiencies across the logistics network.
Technology and content expenses Decreased by 10% year-over-year due to automation, platform optimization, and improved vendor terms.
Adjusted EBITDA loss Improved to $14 million compared to $17 million in the same quarter last year, reflecting operating leverage and cost discipline.
Loss before income tax Was $17.7 million, a 1% decrease year-over-year or 8% decline on a constant currency basis.
Cash used in operating activities Declined year-over-year to $12.4 million, reflecting prudent capital management.
Orders from upcountry regions Represented 60% of total volumes, up from 54% year-over-year, driven by expansion into secondary cities and rural regions.
International seller partnerships Sourced 3.4 million growth items, a 52% year-over-year increase, allowing for a broader selection at competitive prices.
Nigeria's physical goods GMV Increased by 43% year-over-year, driven by upcountry expansion and recovery from macroeconomic challenges.
Kenya's physical goods GMV Increased by 38% year-over-year, driven by upcountry expansion and operational efficiencies.
Ivory Coast's physical goods GMV Increased by 22% year-over-year, demonstrating market share gains.
Egypt's physical goods GMV Decreased by 23% year-over-year due to reduced corporate sales, but excluding corporate sales, it grew by 44%.
Ghana's physical goods GMV Increased by 157% year-over-year, driven by upcountry expansion and a broader product assortment.
Gross profit Was $23.8 million, up 4% year-over-year, but gross profit margin declined to 12% from 14% due to reduced corporate sales in Egypt and currency depreciation in Ghana.
Physical goods GMV: Grew by 26% year-over-year, adjusting for perimeter effects, and by 37% excluding corporate sales. This reflects strong customer demand and improved product offerings.
New retail advertising platform: Launched in Q2 2025, it continues to scale across the seller base, representing a high-margin revenue opportunity with advertising revenue at 1% of GMV.
Upcountry expansion: Orders from upcountry regions represented 60% of total volumes, up from 54% in the same quarter last year. This expansion is unlocking opportunities beyond major urban centers.
International seller partnerships: Sourced 3.4 million items from international sellers, a 52% year-over-year increase, allowing for broader selection and competitive pricing.
Fulfillment cost per order: Decreased 22% year-over-year to $1.86, driven by structural efficiencies in the logistics network.
Technology and content expenses: Decreased by 10% year-over-year due to automation, platform optimization, and improved vendor terms.
Headcount reduction: Total headcount declined by 7% since December 2024, reflecting a leaner organization.
Focus on physical goods: Phasing out non-core digital transactions to streamline operations and enhance efficiency.
Profitability goals: Committed to achieving full-year profitability by 2027, with breakeven targeted for Q4 2026.
Macroeconomic and Currency Challenges: Nigeria faced macroeconomic and currency challenges in 2024, which could impact future performance despite current recovery.
Reduced Corporate Sales in Egypt: Corporate sales in Egypt declined significantly, affecting GMV and revenue growth.
Currency Depreciation in Ghana: Currency depreciation in Ghana negatively impacted reported revenue and gross profit.
Marketing and Advertising Revenue Decline: Marketing and advertising revenue decreased due to lower spending from large sellers, impacting monetization efforts.
Competitive Pressures: Global entrants pulling back in some markets like Nigeria, but competition remains a factor in other regions.
Operational Costs: Despite cost reductions, fulfillment and G&A expenses remain significant, posing challenges to profitability.
Supply Chain and Logistics: Expansion into secondary cities and rural areas increases logistical complexity and costs.
Economic Uncertainty: Economic conditions in key markets like Egypt and Ghana remain volatile, posing risks to growth and profitability.
Physical goods order growth: Expected to be in the 25% to 27% range for 2025.
GMV (Gross Merchandise Value) growth: Projected to grow between 15% and 17% year-over-year for 2025.
Loss before income tax (2025): Anticipated to be approximately negative $55 million to $50 million.
Loss before income tax (2026): Targeted to be in the range of negative $25 million to $30 million, reflecting continued improvement.
Profitability goal: Strategic goal to achieve breakeven on a loss before income tax basis in the fourth quarter of 2026 and deliver full year profitability in 2027.
The selected topic was not discussed during the call.
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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