Deliveroo (ROO) H1 2024 earnings summary

Executive summary

• Achieved positive statutory net profit and free cash flow in H1 2024, with profit for the period of £1.3m and adjusted EBITDA of £62m, marking significant year-over-year profitability progress after exceptionals and share-based payment charges.

• Orders returned to year-on-year growth, with GTV up 6% in constant currency, driven by improvements in the UKI and most international markets, especially France, Italy, and UAE.

• Enhanced customer value proposition through innovations in the Plus loyalty programme, focus on price integrity, and strong growth in grocery and retail segments.

• Announced a further £150 million return of surplus capital via an on-market share buyback, reflecting confidence in financial progress and outlook.

• Grocery vertical delivered strong double-digit growth, now 14% of Group GTV, with improved consumer experience and expanded merchant selection.

Financial highlights

• GTV reached £3,690m, up 6% in constant currency; revenue was £1,028m, up 2% in constant currency.

• Gross profit increased 5% year-over-year to £383m, with gross margin stable at 10.4% of GTV.

• Adjusted EBITDA reached £62m, up 57% year-over-year, with margin expanding 60bps to 1.7% of GTV.

• Positive free cash flow of £3.2m (including £42.9m outflow for exceptionals), and net cash position of £662m at period end.

• Advertising revenue scaled to 1.2% of GTV in Q2, up from 1% in Q4 last year.

Outlook and guidance

• Reiterated GTV growth guidance of 5%-9% in constant currency for the full year 2024.

• Adjusted EBITDA expected in the upper half of £110m-£130m range, consistent with consensus.

• Expectation to maintain positive free cash flow momentum in H2 and beyond.

• Medium-term targets include mid-teens GTV growth and 4%+ adjusted EBITDA margin by 2026.