Jumia Technologies AG

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the second quarter of 2025. At this time, all participants are in a listen-only mode. And after the management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Ignatius Njoku, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our second quarter 2025 earnings call. With us today are Francis Dufay, CEO of Jumia, and Antoine Maillet-Mezoré, Executive Vice President, Finance and Operations. We would like to remind you that our discussions today will include forward-looking statements. Actual results may differ materially from those indicated in the forward-looking statements. Moreover, these forward-looking statements may speak only to our expectations as of today. We undertake no obligations to publicly update or revise these statements. For a discussion of some of the risk factors that could cause actual results to differ from the forward-looking statements expressed today, please see the risk factors section of our annual report on Form 20F, as published on March 7, 2025, as well as our other submissions with the SEC. In addition, on this call, we will refer to certain financial measures now reported in accordance with IFRS. We can find reconciliation of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings press release, which is available on our investor relations website. With that, I'll hand it over to Francis.

Good morning, everyone, and thank you for joining Jumia's second quarter of 2025 earnings call. We believe that this quarter marks a clear turning point in our journey. We continue to build on the disciplined execution that has defined our transformation over the past two years, with a strong focus on growth and operational efficiency to advance our path towards sustainable profitability. This quarter, we delivered solid growth in physical goods, with orders up 18% and GMV up 10% year over year, excluding the impact of our exits from South Africa and Tunisia. Excluding corporate sales, Physical goods GMV grew by 24%, highlighting the strong underlying consumer demand across our markets. Revenue rose by 25% year-over-year, demonstrating the resilience of our core business. We narrowed our loss before income tax to $16.3 million for the quarter and significantly reduced our cash burn to $12.4 million, driven by higher revenue across multiple streams and disciplined execution. we ran a successful Jimmy anniversary campaign, further strengthening consumer engagement and driving order growth. Strong top-line momentum, enhanced unit economics and disciplined cost management demonstrate our clear progress towards sustainable profitability and position us well on our path to breakeven. Based on Q2 2025 results and the current quarter business trends, we are raising our full year 2025 guidance for loss before income tax to a range of $45 million to $50 million, while maintaining our full-year 2026 targets for loss before income tax of $25 million to $30 million, and reaffirming our target to achieve full-year profitability in 2027. Let's now review our results for the second quarter. We delivered another quarter of solid usage trends, building on the momentum established earlier this year. Adjusted for perimeter effects, physical goods orders grew 18% year-over-year, driven by strong demand, affordability and assortment strategy, expansion to secondary cities, and effective use of efficient marketing channels. As a quick reminder, our core business and strategic priority is physical goods, accounting for 99% of orders and approximately 100% of GMV this quarter. The remainder is made of digital products sold through the dedicated JumiaPay app. As part of our strategic focus on scaling physical goods e-commerce, we have reduced our emphasis on JumiaPay app transactions, which historically contributed high order volumes but minimal revenue. While this shift affected total orders growth in the quarter, physical goods orders remained very strong, reflecting healthy consumer engagement with our core marketplace. Quarterly active customers ordering physical goods increased by 13% year over year. underscoring the positive impact of our customer acquisition and retention efforts. Customer loyalty also continued to improve. 42% of new customers who placed an order in Q1 2025 made a repeat purchase within 90 days, up from 37% in the same period last year. Demand remains strong across key categories, including electronics, phones, home and living, fashion, and beauty. Please note that This quarter also marked the first time we have fully lapped the significant currency devaluations in Egypt and Nigeria, resulting in a cleaner year-over-year comparison and highlighting the underlying strength of our business. Physical goods, GMV, grew 10% year-over-year in reported currency, and when excluding corporate sales, GMV increased by 24%, driven by healthy momentum in our core consumer business, The average order value for physical goods in Q2 2025 stood at $36.3, down from $39.2 in Q2 2024, primarily reflecting the impact of reduced corporate sales in Egypt. We expect to see GMV growth to accelerate in the second half of this year. Revenue for the quarter was $45.6 million, up 25% year-over-year. This growth was driven by increased usage and stronger monetization of our marketplace. Our revenue mix also shifted slightly towards first-party sales this quarter, accounting for 52% of total revenue, supported by strong performance from key partners, including Starlink in Nigeria and Kenya. Advertising revenue was $1.9 million this quarter, accounting for 1% of GMV. we see meaningful upside as we scale this high margin revenue stream. This is a key operational priority, allowing us to increase marketplace monetization. In addition to our Q2 performance, we are sharing early Q3 trends to provide further visibility into our current momentum. In July, and adjusting for perimeter effects, physical goods orders grew approximately 32% year over year, while GMV increased 21%. These results reflect sustained consumer demand and a strong start of the second half, reinforcing our confidence in raising the full year outlook. Now let me provide a brief update on our progress towards profitability. We remain firmly on track to achieve our 2027 strategic goals, driven by decisive actions to build a leaner, more efficient organization. Our structural cost initiatives continue to progress across multiple areas. For example, overall headcount has declined by 5% since the beginning of the year, with just over 2050 employees on payroll as of June, reinforcing our disciplined approach to cost management. Headcount reductions were driven by strict hiring discipline, enabled by operational efficiencies, automation, and business simplification. We expect G&A expenses to decline further in the second half of the year as these organizational changes continue to take effect. In technology, we are executing against our long-term efficiency roadmap. In Q2, we expanded AI implementation across key operational processes and successfully renegotiated major vendor agreements, such as our new AWS contract, effective May 1, 2025. These actions are expected to drive improved efficiency in technology spend over the coming quarters. In fulfillment, cost per order increased 1% year-over-year to $2.19, down 5% year-over-year on a constant currency basis. We remain focused on reducing fulfillment unit costs through ongoing initiatives to improve warehouse staff productivity and consumer support operations. Our narrowed adjusted EBITDA loss of $13.6 million and improved loss before income tax of $16.3 million compared to previous year were primarily driven by higher revenue growth across multiple streams. The structural efficiency initiatives are positioned to provide additional operational leverage as they reach full implementation in future periods. Cash burn improved significantly quarter-on-quarter. with net cash used in operating activities declining to negative $12.7 million for the quarter. This includes $4.1 million of positive working capital contribution. Importantly, we achieved 18% growth in physical goods orders year over year while reducing our working capital requirements. While working capital may fluctuate in future quarters, we remain confident that our current cash position is sufficient to reach profitability without needing to raise additional capital. A key driver of our growth this quarter was Jumia's 13th anniversary campaign. Held from May 5th to June 30th across all nine countries, the event featured compelling deals across essential products as well as interactive localized content including games, videos, and offline marketing activities. Over 38,500 sellers participated up from 36,400 in 2024, a testament to the growing confidence that both customers and sellers place in Jumia and to the strength of our commercial execution. On the supply side, we deepened our relationship with international sellers, particularly from China, to further expand our assortment at competitive prices. In Q2, we sold 2.9 million gross items from international sellers accounting for a 36% year-over-year increase adjusted for perimeter effects. We also continued to penetrate underserved upcountry regions outside of the main urban centers, unlocking significant growth opportunities. Orders from these areas now represent 59% of total volumes, up from 52% in the same quarter last year, adjusted for perimeter effects. This expansion strategy continues to deliver high-growth, low-cost customer acquisition with minimal fixed-cost investments. Let me now provide some country-level execution highlights. Nigeria posted impressive results, with physical goods orders rising 25% year-over-year and GMV up 36% year-over-year. This performance reflects robust customer demand, supported by an expanded assortment across three categories, deeper reach into secondary cities, and continued fulfillment optimization. As our largest market opportunity, we remain focused on increasing penetration and scaling profitability in Nigeria. Kenya also performed strongly, with physical goods orders up 38% year-over-year, while GMV increased 31% in reported currency. Growth was broad-based across categories, driven by upcountry expansion and strengthened vendor partnerships. Kenya remains a high potential market for profitable growth, where we believe that we can build a much bigger scale. Ivory Coast delivered solid performance, with physical goods orders growing 9% year-over-year and GMV increasing 11% in reporting currency. As a more mature market, Ivory Coast continues to grow at a more moderate pace as we focus on maximizing the value of our scale. We are actively leveraging our position in the market to deepen engagement and enhance monetization. Egypt showed encouraging signs of recovery. While physical goods orders declined 6% year-over-year and GMV fell 50% in reporting currency, excluding corporate sales, GMV grew 6% year-over-year, reflecting progress in the core consumer business. Orders are trending positively quarter after quarter, supported by stronger execution and improved fundamentals. Notably, adoption of Buy Now, Pay Later, BNPL, accelerated in Q2, boosting both conversion rates and average order value. Although the macro environment remains difficult, these improvements give us confidence in Egypt's near-term return to growth and long-term contribution to the portfolio. Our order markets portfolio continued to perform well. Collectively, the remaining countries where we operate delivered 27% GMV growth and a 19% increase in physical goods orders. Ghana was a standout, with GMV up 110% year-over-year, underscoring the strength of our execution and the relevance of our value proposition. These results highlight our ability to serve Africa's budget-conscious customers while driving sustainable growth across a diverse geographic footprint. Now let me provide an update on Jumia Delivery, our logistics platform as a service for third-party sellers. which leverages our last-mind infrastructure to serve vendors outside our marketplace while adding scale to our ecosystem. The service is now live in Ivory Coast, Nigeria, Ghana, and Kenya, targeting social commerce vendors and individual customers with our competitive advantages of wide coverage, affordable pricing, and high reliability. Now turning to the competitive landscape, we continue to observe similar dynamics as last quarter, with some moderation in activity from international e-commerce platforms in Nigeria. Importantly, we are seeing increased scrutiny and awareness from local governments regarding the practices of these platforms, particularly following the recent US decision to eliminate the de minimis loophole. This regulatory shift creates a favorable opportunity for local players like Jumia to further strengthen our market leadership position. We're also expanding our public affairs effort this quarter. Our objectives are to help establish and improve local regulatory frameworks for e-commerce marketplace and communicate the benefits of domestic e-commerce platforms for economic development in contrast to international platforms. Recent highlights include the Prime Minister inaugurating our new warehouse in Egypt, the Minister of Trade inaugurating our new warehouse in Ivory Coast, and high-level meetings in Ghana to strengthen strategic partnerships. Our extensive local presence enables us to engage effectively with government authorities and support the development of sustainable e-commerce ecosystems across Africa. In closing, we believe we remain well positioned on our path to profitability. We will continue focusing on sustainable growth initiatives, operational efficiency improvements, and cost reduction. We remain confident in our strategic roadmap and deeply committed to creating long-term value for our customers, partners, and shareholders. I will now turn the call over to Antoine for review of our financials.