Zalando (ZAL) Q4 2025 (Q&A) earnings summary

Executive summary

• Delivered strong 2025 results with double-digit growth in GMV, revenue, and profit, reaching the high end of guidance, driven by ABOUT YOU integration, AI innovation, and accelerated strategy execution.

• Active customers surpassed 62 million (+19.7% YoY), with significant engagement gains and multi-app strategy impact.

• Announced a capital allocation framework and a share buy-back program of up to €300 million, reflecting confidence in future earnings.

• Continued focus on leveraging AI and proprietary data to enhance customer engagement and operational efficiency.

• Expansion of B2B and retail media as key growth engines, with About You integration accelerating synergies.

Financial highlights

• Group revenue reached €12.3 billion (+16.8% YoY), GMV at €17.6 billion (+14.7% YoY), and adjusted EBIT at €591 million (+15.6% YoY).

• B2C revenue grew 16.8% YoY to €11.3 billion, with adjusted EBIT of €536 million; B2B revenue increased 14.6% YoY to €1.1 billion, with adjusted EBIT up 136.5% to €54 million.

• Free cash flow before M&A reached approximately EUR 700 million in 2025; cash and equivalents at year-end were €1.88 billion after the ABOUT YOU acquisition and bond repayment.

• Group gross margin declined by 170 basis points in Q4, mainly due to promotional activity and business mix; full-year gross margin at 39.9% (down 0.8pp YoY), offset by OPEX efficiencies.

• Net income for 2025 was €212.7 million, down from €251.1 million in 2024.

Outlook and guidance

• 2026 guidance: GMV €19.7–20.6 billion (+12–17% YoY), revenue €13.8–14.4 billion (+12–17% YoY), adjusted EBIT €660–740 million.

• Midterm (2028) targets: 6–8% adjusted EBIT margin, GMV and revenue CAGR of 8–13%, strong free cash flow.

• Capex expected at €240–300 million, with net working capital remaining negative.

• B2C gross margin expected to benefit from high-margin partner and retail media businesses, offset by About You dilution.

• No material impact from Middle East conflict observed in current trading; outlook excludes potential impact from a prolonged conflict.