Staying the course
Tracy Kivunyu
#themes: customer growth, adjusted EBITDA breakeven
1Q26 results analysis and final valuation update: After Jumia downgraded FY26e profitability guidance in February 2026 to adjusted EBITDA breakeven rather than PBT breakeven, the company has released a strong set of 1Q26 results with GMV growth of 32% y/y coming in at the top end of guidance and a 32% y/y reduction in adjusted EBITDA losses. The downward review of our profitability forecasts to reflect updated guidance has been offset by lower risk free rates in Jumia countries of operation, resulting in our future value valuation range slightly moderating from USD 4.5-USD 8.7, compared to USD 5.4-USD9.1 previously. This marks our final valuation update on Jumia Group.
Customer growth drives order and GMV performance: 1Q26 customer growth was 25% y/y excluding the impact of the Algeria exit. We have upgraded our FY26e average quarterly subscription growth to 22% y/y up from 18% y/y previously. Physical orders also grew strongly by 31% adjusted for the Algeria exit, with GMV growth of 32% y/y adjusting for the Algeria exit in line with Jumia guidance of 27-32% y/y growth. We forecast 31% y/y physical order growth in FY26e. We forecast GMV growth of 28% y/y for FY26e in line with the full year guidance range of 27-32% y/y growth, and a five year CAGR of 19% y/y to FY30 in our base case scenario. Jumia has guided for 27-32% y/y GMV growth in 2Q26 despite Ivory Coast facing pressure from lower customer purchasing power and supply disruptions in appliances as well as smartphones.
Revenue boost from take rate expansion: 1Q26 revenue growth of 39% was driven by a 30% y/y growth in first party revenue and a 50% y/y growth in marketplace revenue. Marketplace revenue growth was driven by a 1.8ppt y/y increase in calculated marketplace take rate to 14.4% in 1Q26. We expect benefits of the take rate increase to sustain into subsequent quarters, supporting our 34% y/y revenue growth forecast for FY26e.
Good momentum in reducing adjusted EBITDA losses, forecasts align with 4Q26e adjusted breakeven target: Adjusted EBITDA losses declined by 32% y/y to USD 10.7m in 1Q26. This was driven by gross profit as % of GMV expanding by 1.6ppts y/y, general and administrative expenses excluding share based compensation as a % of GMV and technology and content expenses both declining by 1.8ppts y/y. We anticipate further reduction in adjusted EBITDA in FY26 with further reduction in headcount driven by automation benefits offsetting potential fuel price pressures. We forecast a USD 26m adjusted EBITDA loss in FY26e in line with company guidance of USD 25-30m, and factor in an adjusted EBITDA breakeven in 4Q26. Loss before tax however grew by 8% y/y to USD 17.8m impacted by non-cash FX losses of USD 3.7m. We have pushed out our PBT breakeven to FY28e, compared to 4Q26e previously due to changes in breakeven guidance. Cash burn of USD 15m in 1Q26 (-33% y/y) and a neutral working capital position shows Jumia's improving cashflow management. Our forecasts align with Jumia's guidance to not seek any further capital raises.
Valuation: We value Jumia through EV/Sales, Price/Sales and EV/EBITDA 5-year exit multiples to which we apply a cost of equity of 17.5% to arrive at our valuation range. Iran conflict resolution leading to lower fuel prices and inflation risk in FY26 and boosting fulfilment expense efficiency, achieving long run FY30 guidance thus boosting Jumia's profitability are key upside risks. Key downside risks include extended Iran conflict impacting customer purchasing power, and Ivory Coast supply chain and purchasing power pressures going beyond 2Q26 and impacting GMV performance.
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