Jumia Technologies ((JMIA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Jumia Technologies painted a picture of robust growth and strategic advancements, despite some ongoing challenges. The company reported significant improvements in revenue and a reduction in losses, driven by increased demand and successful campaign execution. Key markets like Nigeria and Kenya showed strong performance, leading to an optimistic outlook with raised full-year guidance. However, challenges persist in Egypt, and there is a noted decline in average order value.
Strong Growth in Physical Goods Orders
Jumia Technologies reported an 18% year-over-year growth in physical goods orders. This growth was attributed to strong demand, affordability, and an effective marketing strategy that resonated well with consumers. The increase in orders underscores the company’s ability to capture market interest and drive sales.
Revenue Increase
The company saw a 25% rise in revenue year-over-year, reaching $45.6 million. This increase was driven by heightened usage and stronger monetization of its marketplace platform, indicating a successful strategy in leveraging its digital ecosystem to boost financial performance.
Improved Cash Burn and Loss Before Income Tax
Jumia made significant strides in financial efficiency, narrowing its loss before income tax to $16.3 million and improving its cash burn to $12.4 million. These improvements reflect the company’s focus on cost management and operational efficiency.
Successful Jumia Anniversary Campaign
The Jumia Anniversary Campaign saw participation from over 38,500 sellers, up from 36,400 in 2024. This increase in participation highlights strong consumer and seller engagement, showcasing the campaign’s success in driving platform activity and sales.
Expansion into Secondary Cities
Orders from secondary cities now account for 59% of total volumes, up from 52% last year. This expansion into secondary markets has unlocked significant growth opportunities, demonstrating Jumia’s strategic focus on broadening its market reach.
Positive Performance in Key Markets
Nigeria and Kenya posted impressive results, with 25% and 38% growth in physical goods orders year-over-year, respectively. These key markets continue to be strongholds for Jumia, contributing significantly to its overall growth narrative.
Raised Full Year Guidance
Jumia raised its full-year guidance for loss before income tax to a range of $45 million to $50 million, reflecting confidence in continued growth for the remainder of the year. The company anticipates sustained momentum in Q3 and Q4, supported by its strategic initiatives.
Decline in Average Order Value
The average order value for physical goods decreased to $36.3 from $39.2, primarily due to reduced corporate sales in Egypt. This decline highlights a challenge in maintaining high order values amidst varying market conditions.
Challenges in Egypt
Physical goods orders in Egypt declined by 6% year-over-year, and GMV fell by 50% in reported currency. However, excluding corporate sales, GMV grew by 6%, indicating potential for recovery if corporate sales stabilize.
Stable Fulfillment Cost per Order
Fulfillment cost per order increased slightly by 1% year-over-year to $2.19. This stability in fulfillment costs suggests ongoing challenges in reducing these expenses further, despite operational improvements.
Forward-Looking Guidance
Jumia’s forward-looking guidance remains optimistic, with expectations for continued growth and improved financial metrics. The company raised its full-year 2025 guidance for loss before income tax and maintained its 2026 targets, aiming for full-year profitability by 2027. This outlook reflects confidence in strategic initiatives and market opportunities.
In summary, Jumia Technologies’ earnings call highlighted a strong growth trajectory with significant improvements in revenue and operational efficiency. While challenges remain, particularly in Egypt, the company’s strategic initiatives and market performance in key regions like Nigeria and Kenya provide a solid foundation for future growth. The raised full-year guidance underscores Jumia’s confidence in its ability to sustain momentum and achieve long-term profitability.