Shares of Jumia Technologies (JMIA 12.41%) were sliding today after the African e-commerce company missed the mark in its third-quarter earnings report. The stock closed down 12.3%.
Today's report was Jumia's third as a publicly traded company, but the third time was definitely not the charm as the stock continued its downward spiral.
Jumia said marketplace revenue on the platform rose 52.1%, to 18.9 million euros, but overall revenue ticked up just 19.1%, to 40.1 million euros, or $44.1 million, as it saw nearly flat growth from its first-party e-commerce business. That was below analyst estimates of $51.9 million.
Jumia saw record volume with its payment platform JumiaPay, which reached 2.1 million transactions and 32 million euros in total payment volume, nearly double the year before. Gross profit in the quarter rose 45%, to 18.1 million euros, but its operating loss continued to expand, widening 34.6%, to 54.6 million euros.
Co-CEOs Sacha Poignonnec and Jeremy Hodara said:
We are making significant progress in the usage and relevance of our platform for consumers and sellers and are firmly positioning Jumia as the digital destination of choice for everyday needs in Africa. In parallel, we continue to make great strides in our payment and fintech business with JumiaPay showing very strong growth momentum on both volume and transaction metrics.
Jumia has been hammered by a range of concerns since its IPO, including the growth potential of the core business itself, a short-seller report from Citron Research, a legal investigation, and the company's own revelations of wrongdoing by some members of its JForce sales team. Today's report showed steady growth for the company, especially in its marketplace and payment platform, its two most promising businesses, but it did little to change the market's view that it isn't a safe place to put your money, as its ability to turn a profit is still dubious and investors are skeptical about the governance issues.
Considering the stock's headwinds coming into the report, its modest top-line growth and widening losses weren't enough to change investors' minds.