Zomato reported its Q1’24 earnings today, with the headline being the company finally turning a profit for the first time ever. With a 54% uptick year-on-year, revenue reached ₹2786 crore (~$337Mn), returning a narrow but re-assuring profit of ₹2 crore. This is Profit After Tax (PAT), meaning the company was finally actually able to make money in its over decade-long operational history.
In terms of some other key financials reported by the company, adjusted EBITDA went from a negative ₹150 crore in Q1’23 to a positive ₹145 crore in the recently reported quarter. The adjusted EBITDA margins improved significantly too, with the company now in the green on that front, seeing a 14% increase YoY to 6% (it was -8% in Q’23). Here’s a snapshot from Zomato on the most important numbers:
The company continues to bleed money on its quick commerce segment for the preceding quarter. However, the segment did turn profitable for the first time in June 2023, with Zomato issuing guidance that it can deliver an EBITDA adjusted breakeven in the segment, in the coming four quarters. The quick commerce segment is through its much-talked about acquisition of Blinkit.
Talking about guidance for upcoming quarter, Zomato CFO Akshant Goyal said, “we expect our business to remain profitable going forward and knowing what we know today, we believe we will continue to deliver 40%+ YoY topline (Adjusted Revenue) growth for at least the next couple of years.” Detailed metrics can be checked out here.
Zomato’s modest but encouraging profit numbers are a signal, that some of India’s first generation startups are finally turning in profits for their investors. More recently, Flipkart too returned sizeable returns to Tiger Global, when the legendary VC firm sold its entire stake to Walmart for a staggering $1.4Bn. Zomato and Paytm are expected to be next in line, both having being listed on the Indian stock markets. Both though, are trading well below their private valuations, but Zomato’s numbers signal positivity in a year, that has been otherwise a black-cloud affair for India’s fabled unicorns.