Jumia Technologies AG JMIA shares are trading higher after the company reported fourth-quarter FY23 financial results.

Volatile Revenue and Marketplace Metrics

The company’s revenue declined 2% year-over-year (Y/Y) but rose 28% in constant currencies to $59 million in the fourth quarter. However, marketplace revenue saw a 10% Y/Y decrease to $32.9 million, with orders dropping by 3.7% Y/Y to 6.6 million, and quarterly active consumers falling 16.3% Y/Y to 2.3 million.

Total payment value (TPV) decreased by 9.9% Y/Y to $59.3 million, while the gross merchandise value (GMV) plunged 7.6% Y/Y to $233.3 million.

Encouraging Cost Management and Performance Indicators

Gross profit witnessed a 0.6% Y/Y decline to $37.1 million. However, profit as a percentage of GMV improved to 16% from 15% a year ago, bolstered by better margins and reduced spending on customer incentives and promotions.

The operating loss narrowed to $(4.5) million from $(44.7) million the prior year, largely due to significant cost reductions. Additionally, adjusted EBITDA loss trimmed 98.5% Y/Y to $(0.6) million.

Positive Future Expectations

Looking forward, Jumia anticipates an upturn in orders and GMV for 2024, excluding the potential impact of foreign exchange.

Market Response

Investors responded favorably, with JMIA shares surging by 34.4% to $4.34 at the last check on Thursday.