Jumia Technologies AG (JMIA) Q2 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's Results Conference Call for the Second Quarter of 2026. [Operator Instructions] I would now like to turn the call over to Ricardo Pinho, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our second quarter 2026 earnings call. With us today are Francis Dufay, 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 '22, I have consistently emphasized our path to profitability, and Q2 '26 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 '26 confirmed 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 improvements 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 can't 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 breakeven 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 continue to move in the right direction. Adjusted EBITDA loss narrowed meaningfully year-over-year to $8.7 million from $13.6 million in Q2 '25, confirming our path to our Q4 '26 breakeven target. The business continued to absorb higher volumes with improving efficiency while maintaining a disciplined approach to costs. Based on the progress we made in '25 and the momentum continuing into Q2 '26, we remain confident in achieving our target of adjusted EBITDA and positive cash flow in the fourth quarter of '26 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 Axion, 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 '26, 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 airfreight. Q2 is proof that this foundation holds even under pressure, notwithstanding its impact on top line growth. We maintain our confidence in Q4 '26 breakeven and we reiterate our adjusted EBITDA guidance for '26. GMV growth reflected a category mix shift. Fashion, Beauty and Home & 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 '26 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 at country. 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 remained 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 continues to improve with 44% of new customers from Q1 '26 making a repeat purchase within 90 days, up from 42% in Q1 '25. 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 '25. 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 '26 compared to $4.8 in Q2 '25. 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 '25. 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%. Now turning to profitability. The progress made over the past 3 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 '26 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 '25. 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 unlocked 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, nonrecurring termination costs from fulfillment headcount reductions, a onetime 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 2 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 '25. That is a 36% improvement while absorbing real external pressure, a good measure of the operating leverage that we have built. Loss before income tax was $10.9 million, a 33% improvement year-over-year or 34% on a constant currency basis, reflecting higher gross profit and improved operating performance. Quarterly cash burn was $14.3 million in Q2 '26 compared to $15.3 million in Q1 '26 and $12.4 million decrease in liquidity in Q2 '25. The year-over-year increase reflects an improvement in operating loss that was more than offset by a shift in working capital contribution. Turning to the operational highlights and execution at the country level. Q2 '26 demonstrated continued execution strength across most of our markets despite a challenging external environment. International sourcing continued to scale with 5.8 million gross items sourced internationally in the second quarter, up 96% year-over-year, adjusted for perimeter effects. This reflects the continued scaling of our Chinese seller base as well as growing volumes from our supply base for affordable fashion in Turkey. We maintained marketing efficiency with CRM, paid online and SEO channels, supporting customer acquisition at attractive unit economics. Marketplace dynamics remain strong. The number of quarterly active sellers grew 20% year-over-year versus Q2 '25, reflecting improved vendor experience, continued investment in vendor technology and the attractiveness of our platform economics. Growing total volumes and competitive take rates continue to make Jumia a compelling channel for sellers across our markets. Increased marketplace density is a key driver for us to keep on improving our customer value proposition and grow our retail advertising revenue. Operationally, we continue to extend our reach beyond major urban centers. Orders from upcountry regions accounted for 61% of total volumes, up from 59% in the prior quarter, both adjusted for perimeter effects. These regions are delivering strong growth while benefiting from a cost structure that scales efficiently with volume. In secondary cities, we are addressing clear customer pain points, including limited product availability and elevated prices from local traders. As a result, our value proposition continues to resonate strongly, driving both adoption and repeat purchase. I would now like to give you some detail on some of the countries in which we operate. Nigeria delivered a strong quarter. Physical goods GMV increased 36% year-over-year. Sustained growth was driven by a broad range of categories with Home & Living performing particularly strongly alongside continued traction from upcountry expansion. Nigeria was impacted by smartphone supply shortages in the quarter and by specific supply disruptions in other electronic subcategories. We continue to scale our logistics capacity ahead of Q4 and are progressing the expansion of our pickup station network into the north of the country, which requires no meaningful CapEx investment. Consumer demand remains strong. We see significant long-term growth potential in this market. Kenya delivered a solid quarter with physical goods GMV up 23% year-over-year. Kenya continued to demonstrate healthy growth driven by strong supply fundamentals and efficient marketing execution. As in other markets, GMV growth was softened by the smartphone supply disruption in the quarter. Kenya remains a relatively underpenetrated market with significant upcountry opportunity, and our Q3 priority is to expand our delivery network to dozens of new cities ahead of the year-end season. Ivory Coast's performance held close to flat over the course of the quarter. Physical goods GMV was down 1% year-over-year, reflecting a very slow quarter. Ivory Coast faced headwinds on both the demand and supply sides. On the demand side, the cocoa farm gate price decline, down nearly 60% from early '26, disrupted the sale of the March and April small harvest and reduced purchasing power for upcountry farmers and cooperatives. This had a visible impact on the upcountry markets. On the supply side, continued disruption in electronic supply, combined with broad tax reforms disrupting the whole vendor base as the retail sector adjusts, creating additional friction. These headwinds were concentrated in high-value, lower-margin categories, so they weighed more heavily on GMV than on the underlying business. Quarterly active customers grew 5% year-over-year and quarterly active sellers grew 33% year-over-year, reflecting the marketplace that kept expanding its customer and seller base through a difficult quarter. Egypt's performance this year confirms sustained recovery. Physical goods GMV grew 45% year-over-year, excluding corporate sales, which were still present in Q2 '25, but have since been deprioritized. Physical goods GMV grew 50% year-over-year, confirming the growth turnaround in the Egyptian market. This is being driven by the local marketplace even as competition in the online space remains more intense than in our other markets. We are executing our playbook, extending more affordable assortment across key categories, growing our logistics network into smaller underserved cities, building our JForce agent network and leveraging both our digital and offline marketing channels. The vast majority of Egyptian households are in the lower middle income segment. And the Jumia model, which has proven itself across Africa, is well suited to serve this population. We see a large underpenetrated opportunity and meaningful runway for growth. Ghana delivered a strong second quarter with physical goods GMV increasing 77%, driven by upcountry expansion, a scaling local marketplace and strong supply from international sellers. Ghana was also impacted by smartphone supply disruptions. Our primary focus is to continue scaling our logistics capabilities ahead of Q4 as we prepare to further expand our city coverage and improve customer experience and cost efficiency. Our other markets portfolio collectively delivered 3% physical goods GMV growth with notable country level headwinds in Uganda and Senegal. In Q2, 2 external developments had a tangible impact on our business. Both developments were global in nature. And if anything, they reinforce the case for our model, a locally embedded seafreight-based platform is structurally better positioned to absorb this kind of disruption. First, memory chips and CPU price increases. The supply disruption in entry-level smartphones affected our phones category across most markets. We also saw a specific slowdown in other electronic subcategories driven by shortages from particular suppliers of high average item value products. Supply disruption persists in the early third quarter of 2026 and prices remain elevated versus early '26 levels. We continue to mitigate the concentration risk by diversifying our supplier base. This diversification work is central to the resilience of our supply chain, and Q2 is proof of that with our bottom line holding up despite the disruption. Second, the war in the Middle East. Broader oil market dynamics drove significant fuel price increases across our markets in Q2. Our local logistics partners passed this through as surcharges, which had a tangible negative impact on our Q2 fulfillment costs. While fuel prices remain volatile, fuel surcharges were lowered in a number of markets starting in early July, though they remain in place elsewhere, and we continue to monitor fuel costs closely. Our pickup station network limits this exposure, and it keeps growing. 75% of our shipped packages are fulfilled through pickup stations rather than door delivery in Q2 '26, up from 71% in Q2 '25, both adjusted for perimeter effects. We are pleased to welcome the IFC as a new shareholder and partner, stepping in to help us grow our platform and drive impact across the continent. This is an important milestone for Jumia as it reflects positively on our credibility towards institutional investors and underscores our ability to drive social impact. In addition, new investments from existing shareholders is a strong sign of their confidence in our strategy and the long-term potential of e-commerce in Africa. We also welcome selected new investors with strong reputation. A meaningfully stronger balance sheet will derisk our path to profitability and reduce our financing risk in a volatile macro environment. It will also enable targeted resource allocation to boost platform usage and improve efficiency in '26, '27. We currently intend to use the net proceeds to support our next phase of growth, enhance efficiency across our core African markets and strengthen our integrated marketplace and logistics network. For instance, we plan to gradually increase our working capital over the third quarter of '26 in order to capture attractive supply opportunities and make targeted investments in our fulfillment operations to further reduce unit costs and give ourselves more flexibility to drive growth in '27, including through the marketing level. Capital alone is not what differentiates us. We believe that our deepest competitive moat is our understanding of the idiosyncrasies of African commerce, fragmented addressing, cash dominant payments and last mile terrain that off-the-shelf playbooks cannot solve. Years of operating through these realities have built a logistics and fulfillment network that would be difficult, time-consuming and costly for any new entrants to replicate. We are committed to delivering the trajectory to breakeven by chasing more scale in a disciplined way, improving operational execution and further streamlining our fixed cost base. While we are currently navigating an uncertain international environment, we believe that our business fundamentals, which were rebuilt from '22 to '25, mostly in tougher times than this, are strong and resilient. We do expect some temporary disruptions, but it does not change our midterm adjusted EBITDA targets or our belief in Jumia's long-term opportunity for growth. With that, I will now turn the call over to Antoine to walk you through the financials in more detail.

Thank you, Francis, and thank you, everyone, for joining us today. I will now walk you through our financial performance for the second quarter. Starting with revenue. Second quarter revenue reached $52 million, up 14% year-over-year or up 15% on a constant currency basis. This reflects strong volume growth, partly moderated by a higher share of third-party sales related to first-party sales as third-party transactions generate commission income rather than full sales revenue. Marketplace revenue for the second quarter totaled $28.8 million, up 34% year-over-year and up 36% on a constant currency basis. Third-party sales were $23.5 million, up 26% year-over-year or up 29% on a constant currency basis. Growth was driven by solid performance in the marketplace, including healthy usage trends and higher effective take rates. Marketing and advertising revenue was $3.5 million, up 88% year-over-year or up 87% on a constant currency basis. This reflects continued growth in sponsored products and increased seller adoption of retail media advertising, which reached 26% of sellers in the second quarter of 2026 compared to 19% in the second quarter of 2025. We have maintained a relatively high return on advertising spend for our sellers by prioritizing long-term user activation over near-term monetization. With advertising revenue currently representing 1.6% of GMV, we see meaningful upside potential as sellers density increases. Value-added services revenue was $1.9 million, up 61% year-over-year or up 66% on a constant currency basis, reflecting growth in warehousing fees. This growth was supported by higher volumes flowing through our storage infrastructure, largely attributable to demand from Chinese sellers together with improved monetization of our warehousing services. Revenue from third-party sales was $22.8 million, down 3% year-over-year or down 4% year-over-year on a constant currency basis, impacted by supply and demand headwinds in higher value electronic items alongside the strong pace of marketplace growth. We generally undertake first-party activity in an opportunistic manner to complement the breadth of the product assortment on our platform, its scale will naturally vary with market conditions. Shifts in the relative proportion of first-party and third-party sales trigger variations in revenue as we record the full sales price as revenue for first-party sales and only a percentage of the sales price commission for third-party sales, both net of returns and VAT. While we track revenue, we recognize that the relative proportion of first-party and third-party sales can impact its interpretation. Accordingly, we utilize gross profit alongside revenue to steer our operations. Turning to gross profit. Second quarter gross profit was $30.7 million, up 28% year-over-year or up 31% year-over-year on a constant currency basis. Gross profit margin as a percentage of GMV increased by 92 bps to 14.2% for the quarter compared to 13.3% in the second quarter of 2025, reflecting continued progress in the marketplace monetization. As we enter 2026, we implemented broad-based increases in commissions across most countries, leveraging the scale and improved service levels we have built with sellers. In Q1 2026, gross profit margin was 13.9% of GMV. In Q2, we maintained and slightly improved that level to 14.2% despite a more challenging external environment. Two factors converge here. First, the supply headwinds were concentrated in phones and electronics, our lowest margin categories. That meant the top line impact of the disruption was larger than the gross profit impact. Second, we deliberately choose to protect our margins and unit economics rather than compensate for lower GMV by discounting or sacrificing take rates. Marketing and advertising revenue up 88% and value-added services revenue up 61% also contributed to the take rate increase year-over-year. We expect those trends to continue supporting gross profit growth going forward. Now moving to expenses. We continue to see the benefits of our cost initiatives in the second quarter with additional improvements expected to materialize over the coming quarters. Fulfillment expense for the second quarter was $12.7 million, up 18% year-over-year and up 21% in constant currency, primarily due to higher volumes. Fulfillment expense per physical goods order was $2.04, down 7% year-over-year 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 despite temporary fuel surcharges from our logistics partner and nonrecurring termination costs in the quarter. Sales and advertising expense was $5.5 million for the second quarter, up 33% year-over-year, both in reported and constant currency. We view this increase positively. We are scaling high ROI marketing investments on the back of stronger product fundamentals, improved quality of service and higher platform reliability. This drives not only top line growth, but also better unit economics as higher volumes and improved customer retention contribute directly to operating leverage and margin improvement. Technology and content expense was $9 million for the second quarter, representing a decrease of 2% year-over-year or a decrease of 3% on a constant currency basis, driven primarily by continued headcount optimization and savings from renegotiated seller contracts. Second quarter G&A expense, excluding share-based compensation expense, was $15.2 million, down 5% year-over-year and down 4% on a constant currency basis. The year-over-year decrease was primarily driven by staff costs with general and administrative expense, excluding share-based compensation expense, which decreased by 7% to $7.8 million, driven mainly by a 10% reduction in headcount versus the second quarter of 2025. The second quarter of 2026 included a tax expense of $0.9 million compared to a $1.3 million tax benefit recognized in the second quarter of 2025. We continue to streamline the organization. The total headcount has declined by 11% since March 31, 2026, with just over 1,770 employees on payroll as of June 30, 2026. At the end of the fourth quarter of 2022, when current leadership was installed, we had 4,318 employees. We delivered on our commitment to reduce headcount by at least 200 full-time employees in 1 quarter ahead of the 2-quarter time line we had indicated. AI-driven automation across each of our operations, finance support functions and technology teams, including in relation to cybersecurity and code quality workflows is enabling us to drive further headcount efficiency, and we expect to continue reducing headcount going forward. Importantly, AI is also helping us solve problems on the ground. In logistics, it improves routing and reduces fake deliveries. In customer service, it enables faster resolution with fewer agents. And in seller operations, it streamlines onboarding and compliance monitoring. Two examples illustrate the impact. Content quality control previously performed manually on a sample basis is now automated, expanding coverage from a sample to the full catalog at a fraction of the team and cost. Service level agreement monitoring and customer orders, previously a manual sample review performed retrospectively now runs automatically across more than 40,000 daily orders in every 60 seconds, enabling us to intervene before customer premise are missed. Beyond cost reduction, this is improving the quality of service we deliver to customers and sellers. Turning to profitability. Adjusted EBITDA for the quarter was negative $8.7 million, a 36% improvement year-over-year or 35% on a constant currency basis. Loss before income tax was $10.9 million, a 33% improvement year-over-year or 34% on a constant currency basis, reflecting higher gross profit and improved operating performance. Turning to the balance sheet and cash flow. We ended the second quarter with a liquidity position of $48.3 million, including $47.4 million in cash and cash equivalents and $0.9 million in term deposits and other financial assets. Our liquidity position decreased by $14.3 million in Q2 2026 compared to a decrease of $12.4 million in Q2 2025, reflecting continued improvement in operating loss that was more than offset by working capital dynamics in the quarter. Net cash flow used in operating activities was $11.8 million in the second quarter of 2026 compared to a net cash used in operating activities of $12.7 million in the second quarter of 2025. The result includes a cash outflow related to an increase in working cap of $3 million in the second quarter of 2026 compared to cash inflow related to a decrease in working cap of $4.1 million in the second quarter of 2025. Despite this working capital dynamics, net cash used in operating activities nonetheless improved year-over-year, reflecting the continued strengthening of our marketplace flywheel. In summary, we delivered another quarter of solid execution and strong top line growth while continuing to improve cost efficiency. Progress on structural cost reductions, automation and cash discipline reinforces our confidence in meeting our near-term objectives and moving closer to profitability on an adjusted EBITDA basis. Looking ahead, we remain focused on operational discipline, margin expansion and prudent and informed capital allocation, positioning Jumia for sustainable growth and long-term value creation. I now turn the call back over to Francis for a discussion of our updated guidance.

Thank you, Antoine. Let me now turn to our expectations for 2026. Our focus for 2026 remains delivering profitable growth through the fourth quarter of '26 by scaling usage, improving operational efficiency and continuing to reduce cash burn. Usage growth is the clearest evidence that our fundamentals remain intact. Physical goods orders grew by 28% and quarterly active customers grew by 23% year-over-year in the second quarter, both adjusted for perimeter effects. Gross profit grew by 28% year-over-year, reflecting continued progress in marketplace monetization. Importantly, we deliberately chose to protect our margins and unit economics this quarter rather than chase GMV at the expense of profitability. With continued cost discipline, our adjusted EBITDA loss narrowed by 36% year-over-year. We have updated our GMV growth target for '26 given the volatility and uncertainty surrounding the market for higher-value categories. Our adjusted EBITDA and cash flow targets remain unchanged. Reaching them does not require pursuing GMV growth at any cost. We will keep prioritizing healthy usage growth and sales growth in lower value but higher-margin categories. Based on current trends, we are updating our full year 2023 guidance. For the full year '26, we anticipate GMV to grow between 20% and 30% year-over-year, adjusted for perimeter effects. On profitability, we expect adjusted EBITDA to be in the range of negative $25 million to negative $30 million. We confirm our strategic goal to achieve breakeven on an adjusted EBITDA basis and positive cash flow in the fourth quarter of '26 and to deliver full year profitability on an adjusted EBITDA basis and positive cash flow in 2027. Looking specifically at the third quarter, GMV is projected to grow between 15% and 25% year-over-year adjusted for perimeter effects. Thank you for your attention. We'll now be happy to take your questions.

Your first question for today is from Brad Erickson with RBC Capital Markets.

So I guess 2 for me. So you've got the supply chain headwinds, you got the cocoa pricing in Ivory Coast and then the Middle East affecting fulfillment costs. Can you kind of run through what sort of your duration assumptions you've embedded in your guidance? I realize they're all kind of generally out of your control, but just curious what you've embedded in the outlook regarding each of those? And then secondarily, on the capital raise, can you just expand a bit on kind of why now? And how much of this was kind of a necessity to really hit your expectations for Q4 versus just kind of fortifying the balance sheet a bit more.

Brad, thanks for your questions. So first question, on the headwinds, so we -- I mean, you've noticed all the careful language we've used today about headwinds. And I think it's consistent with what we described in the -- when we released the first quarter as well to give everyone plenty of understanding of what was happening. You've seen in our guidance that we're keeping a fairly broad range, and that's on purpose, right, both for the third quarter and for the whole year because, well, there are a lot of those factors we can't really make strong assumptions on when it will end. We believe it will normalize over time. But when it comes to fuel prices, I have very little control over that, as you can imagine. And we have to pay a surcharge so our local partners don't run out of business. And when it comes to -- I think the major headwind on the top line, which is supply of electronics. So mostly entry-level smartphones and somehow computing and some smart TVs. So anything that uses memory chips that are in short supply at the moment, it's really hard to put -- to set a time line for that. We saw some improvement after May. So June was better. We still see clear headwinds in the third quarter now. It's really hard to say when it's going to improve significantly. And I mean, it's obviously not in our control. So that's why on purpose, we're giving pretty broad range on GMV growth. But looking at the bright side here, I mean, our gross profit does not track GMV one for one, as you've noticed. And we remain highly confident in our ability to deliver on the bottom line. Our model is resilient and can adapt to a specific external shock in a given category on one specific line of cost like fuel. And in spite of those external events, we're able to maintain a pretty -- a fairly tight range and the same range on the EBITDA because the model is adapting, and we have all the usage take rate and efficiency engines that are still working. To your second question about the raise, why now? And what's the point kind of? I think -- so I've said a dozen times in the past, we don't need cash to make it to breakeven, and that hasn't changed, right? What hasn't changed as well is that the plan -- I mean, the plan is not changing, clearly. The absolute focus is profitability in Q4 and full year '27 cash and adjusted EBITDA breakeven as well. Why we're doing this raise now? I think the big trigger is clearly the opportunity to onboard the IFC, the International Finance Corporation. The IFC is one of the most reliable and the best names you can get on your cap table when you operate like us as a listed company in Africa. They bring with them credibility in the eyes of other institutions. They run very, very deep due diligence on the ground with the teams, and it shows that our model can support that kind of scrutiny. And they invest as a partner. I mean their mandate is to develop private sector in Africa. They invest as a partner. We're going to drive impact together on a number of topics. And it's also going to help us get better access, better understanding from local regulators and public institutions. So in our position, getting the IFC was something important. And so that's what's driving the timing. We're adding to the raise selected current investors like Axiom and new investors with pretty strong names and strong reputation. And so we also chose not to go for crazy amounts, right? I think the $50 million amount really -- I mean, it is useful for us. It strengthens the balance sheet, but we also try to be mindful of dilution for our shareholders. In addition to the IFC trigger, if I may say, we're obviously operating now in an international environment that is a lot more volatile than when we drafted our budget 6 months ago -- I mean, late '25. And I think everyone will appreciate that strengthening the balance sheet in that environment does make sense. And we will have ways to use a bit of extra cash in very specific targeted initiatives in the coming months and quarters.

Your next question is from Jack Halper with Cantor Fitzgerald.

This is Cameron on for Zack. Just 2 quick ones for me. First, on the guidance, you lowered the GMV outlook but held adjusted EBITDA targets. Could you just talk about some of the areas of the business where you're seeing the strongest growth right now and how this may be supporting profitability targets in the back half and into '27? And then on advertising, you continue to see some nice acceleration with increasing advertiser adoption. Can you just talk a little bit about the product roadmap from here? What are the key drivers to continue expanding penetration? And where do you see advertising reaching as a percent of GMV in the long run?

Yes. Thanks, Zach. So to your first question, so we indeed lower -- I mean, we adjusted our GMV outlook for the whole year, and we gave a range of 15% to 25% growth next quarter. But we stick to our profitability targets, as you mentioned, on an adjusted EBITDA basis because we see resilience in the model in many other aspects, right? So as we mentioned, our GMV is impacted by external headwinds, mostly the supply of affordable smartphones and some electronic suppliers. But on the other hand, when you look at volumes and gross profit, we have very strong support from other categories that are lower value categories, so they don't support the GMV really well, but they have great impact on gross profit. I'm talking home living, fashion, beauty, accessories, kids and so on. So lower value categories, but where take rate is significantly higher than in smartphones. I mean, typically for smartphones, the take rate will be between 4% and 6%. We are obviously many times higher than this in the categories I've just mentioned. And that's really supporting our increase in gross profit as a percentage of GMV. You've seen that this quarter, we're above 14% of GMV. It's about 1 point increase versus last year, which is significant. And that's really -- I mean, these categories are really helping us drive improved monetization and take rate on top of the increases in commissions that we've passed earlier in the year. Of course, advertising is also strongly supporting with very significant growth versus last year, but I'll come back to that when I answer your question. And then when you look at the rest of the P&L, I think -- I mean, what's obvious is that we are and we remain absolutely manacle about cost efficiency. So we keep on reducing unit costs in fulfillment, minus 7% year-over-year per order in spite of the additional fuel surcharges in spite of that and in spite of termination costs that are in the cost base for this quarter for Q2 as part of our headcount reduction plan. So that's still working, and we keep on working and getting more savings on fulfillment, both from warehouse efficiency and from deliveries and logistics. And then obviously, we've been working really hard on the fixed costs. So we create some buffer so that our model can absorb external shocks whatever happens. So we -- you see the improvement in tech costs. Antoine mentioned the improvement -- I mean, the slight improvement in G&A year-over-year in spite of positive tax impact that we had last year and that is not recurring this year. So the actual improvement in removing this one-off effect is pretty significant. And for example, I mean, we have already over-delivered on our target to reduce headcount by 10%, and we've front-loaded as much as we could in the second quarter so that we get the full benefits without the termination costs at the end of the year. So that's what is enabling us to maintain the guidance on the bottom line in spite of headwinds that do impact the GMV. And that's what's giving us this fairly high level of confidence. And then back to your second question on advertising. So main drivers of our progress this quarter are definitely better tools. We rolled out a new platform last year, and we keep on expanding the product range, if I may say, our core product is obviously sponsored products. In the second quarter, we started building revenues from what we call sponsored brands, which allows brands to get display advertising on category pages or search pages, and it's working pretty well. And the second driver is expanding usage across the vendor base. So you see this quarter, we have 26% of our vendors that are using the product versus 19% last year. It's significant progress, but it gives you an idea of how much headroom we still have to drive revenue in that segment. To make sure we keep growing, of course, we've allocated the teams and resources to educate our vendors, but we've also deliberately chosen to keep very high return on ad spend for our vendors. We don't want to monetize too hard right now. We want to prioritize vendor activation. And then greater revenue will come as marketplace density keeps on improving and usage keeps on increasing among our vendors. We're fairly confident about that revenue line for the coming quarters. Our target is to reach 2% of GMV equivalent in revenue from advertising. We're not there yet, but it's totally achievable in the medium term.

Your next question for today is from Ryan Sigdahl with Craig-Hallum Capital Group.

What was GMV in electronics and phones specifically on a year-over-year basis? And then secondly, if you could quantify kind of what overall GMV growth would have been excluding electronics and phones?

Yes. So we have not disclosed specifically the GMV of electronics and phones. However, on Page 11 of our slide deck, you can find it without the exact figures, but you get a good understanding of the share. So phones GMV is between 10% and 20%, basically. Other electronics would be slightly above 20%, including computing, TV and other products like styling terminals. You can see in that slide the year-over-year decrease in absolute GMV from phones. So it's actually decreasing in absolute terms. Interestingly, you'll also see in that slide that in items sold, the share of phones is holding better, which means that we have been more resilient in accessories, for example. We have a very strong supply of phones and electronics accessories largely from our international vendors from China, and that enables those categories to hold really well on items sold. But the GMV -- the impact on the share of GMV of the company, sorry, not absolute amount in share of GMV is clearly visible here.

Reasonable to assume the 5 points of GMV guidance reduction is entirely electronics and phones? Or is it.

No, that's a fair assumption, yes. That's broadly the idea, yes.

Moving on take rate, nice improvement relative to marketplace take rate relative to GMV. I get the mix shift probably had a pretty big impact on that just from electronics and phones. But curious how much of that is a structural change if you've changed your take rates, increased any of them on certain categories or regions?

So we did not change the take rate by category this quarter. All of our take rate increases happened in the first quarter. So we increased our commissions across the board and across countries mid-Jan 26. So of course, when you compare year-over-year, you still have this impact, but we did not do anything specific on take rate this quarter in particular. And so the improved ratio of gross profit now above 14% of GMV is a reflection of, well, that take rate increase earlier in the year. There's a slight impact -- there's an impact, obviously, of the mix shift, although it's not in dramatic proportions. And then there's the impact of better advertising and sales of logistics services.

Reasonable to assume improvement is mixed year-over-year is -- from the take rate in early in the year.

So do you mean versus last year?

Correct.

Or versus last quarter?

So quarter-over-quarter would be the mix shift change the year-over-year...

Yes. So quarter-over-quarter, you have mixed and you also have the fact that the new increased commissions were implemented only mid-Jan in Q1. And so it was on orders starting mid-Jan, which get delivered a bit later. So you can assume we lost about 20 to 30 days in the first quarter to get the full impact of the increased commissions. So there is that as well.

Competitive environment, anything changed meaningfully there? I know some of your competitors have moved towards more fast-moving consumer goods in some of your more developed markets and specifically on primary cities. I know that could potentially help you guys as you focus on secondary cities, value products, et cetera. But maybe that dynamic and then anything else to be aware from a competitive environment standpoint?

Yes. I think when we look at local platforms, I mean, platforms with operations on the ground, like specifically local African competitors, we see no change like Konga in Nigeria, Kilimall in Kenya, we don't see any specific change of trajectory. When we look at Egypt, which has always been and will remain a more competitive market, we see our core -- our biggest competitors investing fairly heavily on big cities and quick delivery, quick commerce, heavily focused on groceries, which is really not our segment. We are still -- consistent to our strategy of focusing on the lower middle class, going to smaller towns. For example, now in Egypt, we're opening new cities in the Upper Nile Valley. So we're targeting -- I mean, we're fighting different battles. We were not really targeting the same segments. I think it's better this way. And then when we look at nonresident platforms like Temu, we have seen -- so we see them -- I mean, they're still operating in Ghana, Nigeria, Morocco and a bit in Egypt, although customers are more difficult in Egypt for them. We've seen an increase in traffic in Nigeria, but due to very specific events. And we see it going down as we speak now. And we don't see any material change in the intensity of competition or the cost of online bidding under -- in Nigeria. So no meaningful change as we speak.

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