HelloFresh (HFG) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered robust revenue growth of €1,828.4m, up 2% year-over-year in constant currency, with AEBITDA of €72.1m (3.9% margin), driven by a strategic marketing shift to high-value customers and improved operational efficiency.

• The company prioritized customer retention and order rates, with subdued new customer acquisition and a focus on long-term profitability and cash flow.

• Product innovation and the HelloFresh+ loyalty program were accelerated to enhance customer satisfaction and retention, with a global rollout planned for 2025.

• Net loss for Q3 was €33.6m, with diluted EPS at (€0.20), compared to a loss of €11.1m in Q3 2023.

• Free cash flow for 9M 2024 was €29.9m, with cash and equivalents at €355.6m.

Financial highlights

• Q3 2024 revenue reached €1,828.4m, up 1.9% year-over-year in constant currency; AEBITDA was €72.1m (3.9% margin), and free cash flow for 9M 2024 was €29.9m.

• Contribution margin for Q3 was 24.1%, down 1.3pp year-over-year, but sequentially improving.

• Marketing expenses decreased to 18.9% of revenue, reflecting improved efficiency.

• Average order value rose to €66.2, up 3.8% year-over-year in constant currency.

• Number of orders declined 1.9% year-over-year to 27.5m.

Outlook and guidance

• FY 2024 revenue growth outlook lowered to 1%-1.7% (constant currency), from previous 2%-8%.

• FY 2024 AEBITDA guidance raised to €360m-€400m, with Q4 implied AEBITDA of €125m-€160m.

• CapEx for 2024 targeted in the low €200m, with further reductions planned for 2025.

• Expectation of negative growth in meal kits for 2025, with stabilization and potential moderate growth thereafter.

• Q4 marketing spend to be reduced year-over-year, focusing on acquiring fewer but more profitable customers.