Jumia Technologies AG 2026 Q2 Earnings Call

Good morning, everyone. Thank you for joining us today for our second quarter 2026 earnings call. With us today are Sacha Touffé, CEO of Jumia, and Antoine Maillet-Mezeray, 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 obligation 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 20-F as published on February 24, 2026, as well as our other submissions with the SEC.

In addition, on this call, we will refer to certain financial measures not reported in accordance with IFRS. You can find reconciliations 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 will hand over to Francis.

Good morning, everyone, and thank you for joining Jumia's second quarter 2026 earnings call. 2025 was an important year for us as we demonstrated the resilience and scalability of our model. Since taking over as CEO in November 2022, I have consistently emphasized our path to profitability, and Q2 2026 marks our continued execution on that commitment. Over the past few years, Jumia has been building an e-commerce model designed specifically for Africa, adapted to the unique structural, supply, logistical, and consumer realities of our markets. In 2025, we proved that this model delivers scale with improving economics, and Q2 2026 confirms that the flywheel is turning. Q2 is another strong data point and one that demonstrates the resilience of our model. We faced real external headwinds this quarter, supply disruptions in phones and electronics, fuel surcharges, and demand pressure from price declines in certain crops.

Despite this, we delivered sustained growth in orders and quarterly active customers, continued improvement in our unit economics, and a meaningful reduction in adjusted EBITDA losses year-over-year. Importantly, we deliberately chose to protect our margins and unit economics in this uncertain environment rather than chase GMV at the expense of profitability. We cannot say with certainty how long these headwinds will last, but Q2 proved that we have the right fundamentals to navigate this kind of macro uncertainty without losing our path to profitability on an adjusted EBITDA basis. We are confident that our path to Q4 break even is intact. This foundation continued to drive operating momentum in the second quarter. GMV grew 23% year-over-year, adjusted for perimeter effects, even though external headwinds weighed on growth in our higher value categories.

Performance was resilient across our markets, reflecting the continued strengthening of our marketplace fundamentals and efficient execution. Profitability metrics continued to move in the right direction. Adjusted EBITDA loss narrowed meaningfully year-over-year to $8.7 million from $13.6 million in Q2 2025, confirming our path to our Q4 2026 break-even targets. The business continued to absorb higher volumes with improving efficiency while maintaining a disciplined approach to costs. Based on the progress we made in 2025 and the momentum continuing into Q2 2026, we remain confident in achieving our target of adjusted EBITDA and positive cash flow in the fourth quarter of 2026 and delivering full-year profitability on an adjusted EBITDA basis and positive cash flow in 2027.

We are also announcing today a $50 million capital raise anchored by a $25 million investment from the International Finance Corporation, a member of the World Bank Group, also including investments by Axian, one of our largest shareholders, as well as selected new investors. I will come back to the capital raise later in my remarks. The headwinds we anticipated coming into 2026, supply disruptions in memory chips and phones, the disruption of air freight through the Middle East, and rising fuel costs, had a tangible impact on our Q2 results. The impact was felt primarily on GMV in the phones and electronics categories and on our fulfillment costs through fuel surcharges. While supply and fuel prices volatility persists into the early third quarter of 2026, these dynamics do not change our path to profitability.

On the contrary, they proved the resilience of our model. Our model can withstand this environment well. It is locally embedded and sourced predominantly via sea freight. That makes us less exposed than cross-border platforms that depend on air freight. Q2 is proof that this foundation holds even under pressure, notwithstanding its impact on top-line growth. We maintain our confidence in Q4 2026 break even, and we reiterate our adjusted EBITDA guidance for 2026. GMV growth reflected a category mix shift. Fashion, beauty, and home and living performed strongly, driven primarily by our international sellers as well as local marketplaces. These are categories with lower average item value but significantly higher take rates for Jumia than in the phones or electronics categories.

The phones and electronics categories were impacted by supply disruptions caused mostly by memory chips and CPU shortages, especially impacting the supply of entry-level smartphones around $100 in high demand in our markets. Air freight disruptions through the Gulf also temporarily disrupted smartphone supply chains. Supply volatility persists into the early third quarter of 2026, and prices remain elevated versus January and February, with some brands more heavily impacted than others. We also saw a specific slowdown in certain electronic subcategories driven by shortages from particular suppliers of high-value products. On the demand side, growth was also tempered by Ivory Coast, where the decline in cocoa farm gate prices reduced purchasing power, particularly upcountry. Despite all of this, we still delivered 23% GMV growth year-over-year, adjusted for perimeter effects. Gross profit expanded 28%, demonstrating the resilience of our model and the strength of the underlying platform.

More broadly, we believe value-focused platforms are likely to gain market share during periods of rising costs and inflation as consumers prioritize affordability. This is a dynamic we expect to see work in our favor should the current cost environment persist. Usage trends remain strong across our platform. Adjusted for perimeter effects, physical goods orders grew 28% year-over-year, driven by expanding in-country geographic coverage, improved assortment, and sustained consumer demand. Adjusting for perimeter effects, quarterly active customers increased 23% year-over-year, reflecting continued traction in both acquisition and retention. Repeat behavior continued to improve, with 44% of new customers from Q1 2026 making a repeat purchase within 90 days, up from 42% in Q1 2025. Improving platform usage trends reflect the continued progress in our fundamentals: expanding assortment, competitive price points, growing reach of our distribution network, and efficient marketing.

Average order value for physical goods decreased to $34.6 from $36.3 in Q2 2025. This reflects the category mix shift that I have discussed already on this call. Lower average item value, but higher take rates. Nonetheless, orders did not become less profitable. In fact, the gross profit per physical goods order increased to $4.9 in Q2 2026, compared to $4.8 in Q2 2025. Revenue totaled $52 million, up 14% year-over-year, driven by higher usage and improved monetization. First-party sales represented 10.6% of total GMV, compared to 13.1% in Q2 2025. This shift in mix, with marketplace revenue now representing a larger share, is part of the reason why revenue grew 14%, despite GMV adjusted for perimeter effects growing 23%. Turning to profitability. The progress made over the past three years continues to translate into measurable operating leverage.

Cost improvements across general and administrative, technology and content, and fulfillment expense represent long-term and sustainable savings. Commission and take rate increases implemented in mid-January 2026 continued to support gross profit expansion with limited impact on seller growth. This validates our strategy of progressive monetization on the back of greater volumes and better seller experience. We also drove continued growth in higher margin revenue streams. Marketing and advertising revenue rose up 88% year-over-year, and value-added services revenue up 61% year-over-year. Both reflect improved platform monetization. These changes are consistent across markets and reflect stronger marketplace fundamentals. On advertising specifically, that growth was driven by increased marketplace density and continued improvement in our self-serve tools. Seller adoption of Sponsored Products remains at an early stage, with only 26% of sellers currently using retail media advertising, compared to 19% in Q2 2025. So there is meaningful headroom ahead.

We have deliberately kept the return on advertising spend for our sellers relatively high at this stage, prioritizing advertiser activation and building a credible proof point over near-term advertising yield. Greater monetization will be unblocked as seller density keeps improving. Fulfillment cost per physical goods order was $2.04, down 7% year-over-year on a reported basis, or down 4% year-over-year on a constant currency basis. This reflects productivity gains and economies of scale in fulfillment operations, increased call center automation, and improved logistics partner rates. Most fulfillment operating expenses are incurred in local markets and denominated in local currencies. Two items partially offset this improvement in the quarter. Non-recurring termination costs from fulfillment headcount reductions, a one-time item now behind us, and temporary fuel surcharges from local logistics partners following fuel price increases. Despite these effects, the underlying cost trajectory remains favorable.

Looking ahead on fulfillment, we are focused on executing our cost improvement roadmap. This has two main work streams. First, improving staff efficiency in our fulfillment centers through better tools, processes, performance monitoring, and incentives for our agents. Second, reducing friction and inefficiencies for our 3PL partners, including loading time reduction and lowering the opening and operating costs of pickup stations. Both are ongoing, and we expect to see the benefits compound as volumes scale into the second half of the year. Technology and content expense declined 2% year-over-year, reflecting ongoing headcount optimization, automation, platform simplification, and the benefit of renegotiated vendor agreements, including our cloud infrastructure. As a result, adjusted EBITDA loss narrowed by 36% to $8.7 million, down from $13.6 million in Q2 2025. That is a 36% improvement while absorbing real external pressure, a good measure of the operating leverage that we have built.