Shares of African e-commerce and digital-payments company Jumia Technologies (JMIA 5.17%) jumped on Tuesday after the company reported financial results for the first quarter of 2022, showing strong growth across its business. As of noon ET, Jumia stock was up 24%.
Keep in mind that a business like Jumia has some seasonality to it -- you'd expect fourth-quarter results to be stronger than first-quarter results, so it's better to look at year-over-year numbers. With that context, Jumia's gross merchandise value (the total value of products purchased on its platform) rose 27% from last year to $253 million. And total payment value with Jumia Pay increased 36.7% to $71 million.
These increases in merchandise value and payment volume resulted in a 44% year-over-year increase in Jumia's revenue, which came in at $47.6 million.
Importantly, Jumia's base of active customers also rose. The company ended Q1 with 3.1 active customers compared to just 2.4 million last year. That said, there were 3.8 million active customers at the end of 2021. However, there were 2.98 orders per active customer in Q1, which is a continued improvement from last quarter.
It appears Jumia's users are adopting its services for smaller purchases more frequently. And that's actually the company's goal; it doesn't want to be an infrequent option for large purchases. Rather, it wants to be a top-of-mind market for everyday items. For this reason, I'd say it was particularly good to see the increase in orders per active customer.
However, don't think that Jumia has finally arrived. To the contrary, it still has a long way to go. The company had a $66 million operating loss in Q1 as its gross profit margin fell from 75% last year to just 58% this year. And fulfillment expenses increased a dramatic 42% year over year. Therefore, while it is gaining needed adoption, it's safe to say this company still needs much more time before it can reward its shareholders with profits.