Zomato Q1 net loss widens to Rs 356 crore; revenue rises to Rs 844 crore

In its first quarterly results after its listing last month, food delivery platform Zomato said its net loss widened in the first quarter (Q1) ended June 30 due to increased expenses and a hit on dining out as the second wave of the Covid-19 pandemic upended lives and livelihoods. 

Zomato also crossed one billion overall orders on the platform last week.

The total loss attributable to equity shareholders rose to Rs 356 crore, from Rs 99.8 crore a year ago. Adjusted earnings before interest, tax, depreciation, and amortisation (Ebitda) loss widened nearly 42 per cent to Rs 170 crore on a quarterly basis. 

Revenue from operations in Q1 rose to Rs 844.40 crore, from Rs 266 crore a year ago. 

Chief Executive Officer and Co-Founder Deepinder Goyal and Chief Financial Officer Akshant Goyal in a blogpost filed to the BSE and on the company's website said the reported loss in Q1 was "largely on account of non-cash employee stock option plan (ESOP) expenses, which have increased meaningfully in Q1 of 2021-22 (FY22) due to significant ESOP grants made in the quarter pursuant to creation of a new ESOP 2021 scheme. This divergence in reported profit/loss and adjusted Ebitda will continue, going forward".

They said Zomato will do earnings/analyst calls once a year, at the end of each financial year, where the firm will share a more detailed commentary on the year gone by, along with key metrics. 

They added that revenue growth was largely on the back of growth in Zomato's core food delivery business, which continued to grow despite the severe Covid wave that started in April. "On the other hand, Covid significantly impacted the dining-out business in Q1FY22, reversing most of the gains the industry made in the fourth quarter (Q4) of 2020-21 (FY21)," they said.  

Further, Zomato crossed the milestone of delivering one billion orders on Zomato. 

“It took us six years to get to this milestone and we hope it takes us much less time to deliver the next billion. The fact that over 10 per cent of these billion orders were delivered only in the last three months makes us confident about getting to the next billion much sooner,” the senior executives said.

The gross order value (GOV), which the company defines as the total monetary value of all food delivery orders placed online on its platform in India, including taxes, customer delivery charges, gross of all discounts, excluding tips, also rose.

The India food delivery business of Zomato reported the highest-ever GOV, number of orders, transacting users, active restaurant partners, and active delivery partners, said Goyal.

India food delivery GOV in Q1FY22 grew 37 per cent quarter-on-quarter to Rs 4,540 crore ($605 million), from Rs 3,310 crore ($442 million) in Q4FY21. It was Rs 1,090 crore ($145 million) in the year-ago quarter. The company considered an exchange rate of $1 equalling Rs 75.

In the blogpost, the two executives further said the firm has taken steps to improve the working conditions of its delivery partner network after an independent survey last year ranked Zomato at the bottom of a gig worker survey. 

This has resulted in a nearly 15 per cent increase in the delivery executives' earnings per order from a year ago.

Key numbers of Q1FY22 (Rs crore)

• Rs 4,540 Gross order value
• Rs 844.4 Revenue
• Rs 356 Loss

Improved payout structure for delivery partners

Increased existing cash limit for delivery partners by 1.5x-2x 

Covid-19 second wave impacted results as dining out reduced

Firm will hold analyst/investor calls once a year