Jumia Technologies AG Q3 FY2024 earnings call

• Q3 marked progress in strengthening business fundamentals, including logistics network improvements and warehouse consolidations, though causing temporary disruptions.
• Quarterly active customers grew 1% year-over-year to 2 million, and repurchase rate improved. Orders totaled 5.9 million, up 4% year-over-year, driven by 5% growth in physical goods orders.
• GMV grew 29% in constant currency but was down 1% in reported currency due to currency devaluations. Revenue was flat q/q but down 13% y/y.
• Strategic priorities include focusing on Africa, improving cash efficiency, and building customer value proposition. Investments in consumer value proposition, vendor technology, customer acquisition, logistics network, and supplier base.
• Exited South Africa and Tunisia due to resource allocation; these markets had unique challenges compared to other incumbent markets.
• Enhanced tech across areas to improve customer experience, and focused on upcountry expansion with 54% of orders from outside major cities.

Revenue for Jumia in Q3 '24 was $36.4 million, down 13% year-over-year but up 9% in constant currency. Marketplace revenue was $20.6 million, up 7% year-over-year and 37% in constant currency, driven by commissions from third-party corporate sales in Egypt. First-party sales were $15.5 million, down 29% year-over-year and 14% in constant currency. Gross profit was $22.9 million, up 3% year-over-year or 30% in constant currency. Fulfillment expenses were $10.3 million, up 5% year-over-year and 22% in constant currency, impacted by warehouse consolidations. Sales and advertising expenses were $4.4 million, flat year-over-year but up 34% in constant currency. Technology and content expense was $9.7 million, flat year-over-year. G&A expense (excluding share-based comp) was $17.6 million, up 14% year-over-year and 26% in constant currency. Adjusted EBITDA loss was $17 million in Q3 '24, up from $14.8 million in Q3 '23. Loss before income tax was $17.8 million, an improvement from the prior year.

• Reaffirmed full-year 2024 guidance, aiming to reduce cash utilization compared to 2023.
• Projected increase in orders and GMV in 2024 excluding potential FX impact.
• Black Friday sale starting Nov 1, with preparations in place to capitalize on the event.

Q: There's a big delta between GMV growth and order growth. What's the driver?

A: It's due to a shift in mix towards higher average item value categories like fashion, beauty, etc., and inflation in countries causing higher product prices.

Q: On order growth, what's needed for bigger acceleration?

A: Growth will come from consistent delivery on fundamental projects like improving supply, upcountry expansion, and efficient marketing.

Q: Talk about exit of South Africa and Tunisia.

A: South Africa is a mature market with tough competition; Tunisia had tough local dynamics. Resource allocation led to exiting these markets to focus on higher potential areas.

Q: On EBITDA, talk about driving losses down.

A: Profitability will come from top-line revenue growth and further efficiency improvements through innovation, scale, and new processes.