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Deliveroo upgrades earnings guidance amid muted revenue growth

Deliveroo revenue
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Deliveroo has upgraded its adjusted full-year earnings guidance amid flat revenue growth for the previous quarter.

The food delivery platform reported revenues across all markets of £523m for the fourth quarter of 2023, an increase of 1% from £521m in the year-ago period.

Revenues increased by 4% in the UK and Ireland but fell by 2% internationally.

In a 2023 fourth-quarter trading update, Deliveroo said that gross transaction value grew by 3%.

However, the average number of active consumers on its platform fell by 2% between the third and fourth quarters. Gross transaction value grew by 7% year on year.

Deliveroo cited a “mix shift in marketing spend” and “targeted investment in consumer fees” as reasons for the low revenue growth.

Equity research firm Jefferies described the update as “solid enough” in a research note, citing a return to group order growth and international gross transaction value growth as “the bright spots”.

Adjusted EBITDA guidance is expected to be “slightly above” the £60m-£80m guidance range.

“I’m really proud of the team’s execution in Q4, including launching our retail offering,” said Will Shu, founder and CEO of Deliveroo.

“We delivered a good performance in UKI and saw International return to GTV growth, with encouraging trends in several markets. As we saw ongoing signs of stabilisation in consumer behaviour in the quarter, we continued to invest in the consumer value proposition to lay the foundations for future growth.”

Deliveroo was founded in 2013 by Shu and Greg Orlowski. It completed a public listing in 2021 in what was at the time branded the “worst IPO in London’s history”. Shares were down by 3% on Friday morning.

Deliveroo broke even for the first time in 2022 following cost-cutting measures, albeit using an adjusted EBITDA metric. It was one of many tech firms to make layoffs amid a challenging macroeconomic landscape.

Deliveroo will publish full-year results on 14 March.