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Investing.com -- Delivery Hero SE (ETR:DHER) reported first-quarter revenue ahead of expectations, but shares fell more than 8% on Thursday driven by continued weakness in Asia and growing scrutiny over its strategic exits from key markets.
The German food ordering and delivery company reported a 22% year-over-year increase in revenue on a constant-currency basis in the first quarter, ahead of consensus expectations of 17% and surpassing the upper end of its full-year guidance range of 17% to 19%.
Reported revenue growth came in at 19%, while GMV grew 9% like-for-like and 5% reported, in line with consensus and 2% ahead of Morgan Stanley’s forecast.
However, regional performance was sharply mixed. GMV in the MENA region increased by 30% year-over-year, bolstered by what analysts described as “impressive growth” at Talabat.
The Americas delivered 45% GMV growth, and Europe posted a 12% increase. In contrast, GMV in Asia fell 8% in constant currency, weighed down by ongoing competitive pressure in South Korea, where Coupang continues to gain market share.
Revenue figures followed a similar pattern. Asia reported 9% revenue growth year-over-year, despite the GMV contraction.
Europe grew revenues by 25%, MENA by 28%, the Americas by 45%, and Integrated Verticals by 26%, all in constant currency terms.
Segment revenue growth for the group reached 21.9% in the quarter, outpacing GMV expansion and reflecting continued monetization progress across the business, according to Jefferies.
Morgan Stanley (NYSE:MS) also flagged a growing contribution from AdTech, with Europe’s top-performing country seeing AdTech account for more than 4% of GMV.
Additionally, dark store operations (Dmarts) and other monetization efforts contributed to the revenue outperformance.
Gross margins were largely flat, increasing by 20 basis points year-over-year. In Asia, margins declined due to the rollout of a tiered commission model, which is expected to normalize over time.
Despite the overall topline momentum, there were concerns over the company’s recent decisions to exit certain geographies.
After pulling out of multiple European markets in 2024, Delivery Hero announced it will exit Thailand by May 2025.
Jefferies analysts noted that these changes complicate GMV growth comparability and shift the composition of reported metrics. The company has now defined its full-year 2025 guidance on a like-for-like basis to reflect these changes.
For full-year 2025, Delivery Hero maintained guidance for 8% to 10% GMV growth and 17% to 19% revenue growth on a constant-currency like-for-like basis.
Adjusted EBITDA is forecast at €975 million to €1.03 billion, aligned with both Morgan Stanley and consensus estimates, and unlevered free cash flow is expected to exceed €200 million, slightly below the consensus of €232 million.
The company ended the quarter with €2.9 billion in cash, supported by a €900 million convertible bond buyback.
Free cash flow for full-year 2024 was reported at €99 million under the company’s definition, exceeding Morgan Stanley’s estimate of €42 million.