Online food delivery firm Zomato Ltd on Thursday said its revenue from operations for the December quarter rose from both a year earlier and sequentially, even as its loss shrank.
Revenue from operations for the fiscal third quarter rose to Rs 1,112 crore from Rs 1,024.2 crore in the July-September period and Rs 609.4 crore a year earlier. Loss narrowed dramatically to Rs 67.2 crore, compared with Rs 434.9 crore a quarter earlier and Rs 351.3 crore in the previous-year period.
Online food delivery firm Zomato Ltd on Thursday said its revenue from operations for the December quarter rose from both a year earlier and sequentially, even as its loss shrank.
Revenue from operations for the fiscal third quarter rose to Rs 1,112 crore from Rs 1,024.2 crore in the July-September period and Rs 609.4 crore a year earlier. Loss narrowed dramatically to Rs 67.2 crore, compared with Rs 434.9 crore a quarter earlier and Rs 351.3 crore in the previous-year period.
Zomato said it saw 9% growth in revenue from operations on a quarterly basis, while its customer delivery charges shrank 22%.
“This was driven by a Rs 7.50 per order reduction in customer delivery charges in Q3 FY22 as compared to Q2 FY22,” Zomato said, explaining that it re-distributed its growth investments more in favour of discounts on customer delivery charges compared with food coupons.
“We are seeing higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order reduced by Rs 5 per order in the last quarter as compared to Q2 FY22,” it said.
Zomato reiterated its focus on the quick-commerce segment and added that it will invest an additional $400 million in the space in the next two years.
The Gurgaon-based company also expanded to 180 new cities, taking its presence in India to more than 700 cities.
Zomato’s adjusted revenue — a combination of revenue from operations and customer delivery charges — increased 78% on year to Rs 1,420 crore. As reported by ET earlier, the company saw a massive increase in food order volumes on New Year’s Eve, resulting in gross order value (GOV) of $18 million, 78% higher than the same day last year.
Zomato’s GOV grew by 84.5% Y-o-Y and 1.7% Q-o-Q to Rs 5,500 crore in the December quarter.
Zomato said over the years, unit economics in its food delivery business has improved with scale. Contribution margin (as a percentage of GOV) has improved steadily from a negative 15% in 2019 to 1% today, it said. “A 5% contribution margin in our food delivery business (at the current scale) should get us to Ebitda break-even as a company (covering all common corporate costs as well).”
