Zomato Q3 results: Net loss widens to ₹347 cr, revenue rises 75%

Revenue from operations rose 75% to ₹1,948 crore for the December quarter as compared to ₹1,112 crore in the corresponding period of last year. On a sequential basis, revenue improved by 17% as against ₹1,661 crore reported for Q2FY23.

Adjusted revenue – on a year-on-year basis – saw a 66% growth to ₹2,363 crore.

The online food delivery giant’s adjusted EBITDA loss increased to ₹265 crore in the December quarter as against ₹192 crore in the quarter ended in September last year. Excluding Blinkit, the operating loss was ₹38 crore compared with ₹272 crore a year ago.

Adjusted EBITDA loss was at ₹272 crore in the corresponding quarter of the previous fiscal.

Excluding Blinkit business, Zomato turned positive at the operating level in January even as the food delivery business witnessed a slowdown.

Reviving growth

On reviving growth, Deepinder Goyal, Founder & CEO at Zomato said, “We continue to stay focused on our long-term growth vectors without worrying too much about near-term growth pressures.”

Goyal also said the company has launched a brand-new membership program, Zomato Gold in late January. “We expect this program to drive loyalty and higher frequency of ordering going forward,” he said.

In less than a month, the Zomato Gold program has scaled to over 900k members, the Zomato boss said.

For the food delivery business, the company’s gross order value (GOV) grew by 22% year-on-year and 1% quarter-on-quarter, driven by growth in both order volumes and average order value.

GOV is defined as the total monetary value of all food delivery orders placed online on Zomato in India including taxes, customer delivery charges, gross of all discounts, excluding tips.

On profitability

Having a profitability mindset is the key, the Zomato CEO said. “As a company we have been constantly re-evaluating and optimizing investments across the board, including taking a hard look at resource allocation across functions, shutting down non-performing markets, reassessing our headcount, among others,” he noted. 

Goyal added, “Taking some of these actions early in 2022 has helped us deliver on our own expectations of profit growth. In the last year or so, investors have been far more focused on profitability and we are doing our best to deliver on those expectations.”

Hyperpure business

For Hyperpure business, the revenue grew 26% QoQ and 169% on-year to ₹421 crore in Q3FY23.

Adjusted EBITDA margin improved to -13% in Q3FY23 as compared to -16% in Q2FY23.

The company said that “Hyperpure” has also begun tapping into the quick commerce opportunity. Part of the revenue growth in Q3FY23 was on account of goods supplied to the sellers on Blinkit’s marketplace.

On new customer addition

Zomato said that the pace of new customer addition remained healthy. “We added 23.0 million new customers in CY22 as compared to 23.6 million in CY21. These are customers who placed at least 1 order on Zomato in the year. Even in the last quarter of CY22, while the overall demand was soft, the pace of new customer addition was strong,” the company said in a statement.

On plans to hire externally to fill CTO and head of food delivery roles, Goyal said, “We don’t have the need to fill these two spots; being in ‘continuous lookout for great talent’ is an attack tactic, not a defense tactic.”

On Thursday, Zomato shares closed 0.55% higher at ₹54.60 apiece on NSE.