Shares of Jumia Technologies AG experienced a notable decline in premarket trading on Tuesday, falling approximately 3.75% to $11.81. The sell-off followed the release of the company's fourth-quarter financial results, which presented a mixed picture for the Africa-focused e-commerce platform.
The company reported a significant year-over-year revenue increase of 34%, reaching $61.4 million for the quarter. However, this figure fell short of analyst expectations, which had been set at $63.8 million according to consensus data. Gross Merchandise Value (GMV), a key metric representing the total value of goods sold on the platform, showed robust growth of 36% to $279.5 million. Despite the top-line expansion, investors appeared focused on the revenue miss and broader strategic shifts.
Jumia's financial health showed some improvement in profitability metrics. The operating loss narrowed considerably to $10.6 million, while the adjusted EBITDA loss improved to $7.3 million. Management highlighted a meaningful reduction in cash burn, with net cash used in operating activities totaling just $1.7 million for the quarter. Chief Executive Francis Dufay stated the company closed 2025 with clear operational momentum, emphasizing the progress on cost management.
In a significant strategic update, Jumia announced its intention to exit the Algerian market during the first quarter. This move continues the company's pattern of streamlining its geographic footprint, following its withdrawal from South Africa and Tunisia in late 2024. The company indicated that its core operating numbers for physical goods now exclude those markets. Executives noted that the Algeria exit would involve some one-off charges, which could pressure near-term results.
Looking ahead, Jumia provided its inaugural financial outlook for 2026. The company forecasts GMV growth in a range of 27% to 32%. However, it also guided to an adjusted EBITDA loss between $25 million and $30 million, indicating that profitability remains a future target rather than an immediate achievement. This outlook is adjusted for perimeter effects related to the ongoing market exits. Management also cautioned that cash outflows are typically heavier in the first quarter due to seasonality and contract renewal cycles.
The company's liquidity position stood at $77.8 million at the end of the year, providing a financial cushion as it executes its strategic plan. The market's reaction suggests investors are weighing the strong GMV growth and reduced losses against the revenue miss, ongoing losses projected into 2026, and the costs associated with the Algeria exit. The path to sustainable profitability remains a central concern.
Jumia's performance arrives at a critical juncture for the company, as it seeks to demonstrate that rising sales can consistently drive down losses and reduce cash consumption. The balance between growth investment and financial discipline is under intense scrutiny. The company's ability to navigate its market exits efficiently while maintaining growth momentum in its core operations will be key to rebuilding investor confidence.
Attention now turns to the company's scheduled conference call for further details. Analysts and investors will be keen to understand the projected timeline for further reductions in cash burn, the financial impact of the Algeria withdrawal, and whether the company's long-term target of reaching breakeven remains feasible. The broader market context for emerging market e-commerce and consumer spending trends will also influence Jumia's trajectory as regular trading commences.