Prosus Reports Strong Financial Growth Amid Transformative Changes in E-commerce

Table of Contents

1. Key Highlights
2. Introduction
3. Financial Performance Overview
4. Sector-Specific Performance
5. Strategic Acquisitions and Investments
6. Market Implications and Future Outlook
7. FAQ

Key Highlights

• Prosus achieved a 21% increase in e-commerce revenue, amounting to $6.2 billion in the last fiscal year.
• Adjusted EBIT surged twelvefold to $443 million, surpassing forecasts.
• The company is now free cash flow positive for the first time (excluding Tencent dividends) and has doubled its dividend to €0.20.
• Significant investments totaling $7.8 billion were made to bolster regional ecosystems and AI-native startups.
• Notable acquisitions include Despegar and ongoing negotiations for Just Eat Takeaway.com, aimed at enhancing its European presence.

Introduction

Prosus, the global consumer internet group and one of the largest technology investors, has recently reported a remarkable financial performance that signals its major transformation into a leading lifestyle e-commerce company. With a staggering 21% growth in e-commerce revenue to $6.2 billion, the company is not just riding the global e-commerce wave but is also strategically positioning itself as a powerhouse in Latin America, Europe, and India. CEO Fabricio Bloisi emphasized the company's commitment to innovation and collaboration, creating a culture that embraces an AI-first mindset, essential in today's rapidly evolving technological landscape. This article delves into Prosus's impressive financial results, strategic acquisitions, and future outlook while exploring the implications for the global e-commerce market.

Financial Performance Overview

In the fiscal year ending in 2025, Prosus reported significant milestones that reflect its robust growth trajectory and operational efficiency. The company's adjusted EBIT increased dramatically, illustrating its capacity to enhance profitability even amidst competitive pressures. Below are some key performance metrics:

• E-commerce Revenue Growth: $6.2 billion, a 21% increase year-over-year.
• Adjusted EBIT: Rose to $443 million, significantly above guidance, highlighting operational improvements and revenue efficiency.
• Acquisition Costs: $7.8 billion invested in strengthening regional ecosystems and expanding its portfolio of AI-native startups.
• Dividend Increase: A 100% increase in dividends to €0.20, demonstrating confidence in long-term profitability.

Insights from Leadership

Prosus's leadership has expressed optimism regarding the company's future direction. CEO Fabricio Bloisi attributed the company's success to its evolving culture, which emphasizes innovation and a strong customer-centric approach. He stated, “I believe that truly great companies are shaped by their culture. Through ‘The Prosus Way’, we’ve implemented a cultural model that empowers our teams to deliver exceptional customer experiences through discipline, innovation, and an AI-first mindset.”

CFO Nico Marais echoed these sentiments, highlighting the significant improvement in free cash flow and the company's commitment to disciplined capital allocation. “Prosus has delivered a strong financial performance over the past year, with topline growth in our operating businesses at double the rate of our peers,” he noted, underlining the strategic focus on enhancing shareholder value.

Sector-Specific Performance

The impressive overall performance of Prosus can be attributed to the success of its various segments, particularly in food delivery, classifieds, and fintech.

Food Delivery: iFood's Exceptional Growth

iFood, a leading food delivery platform under the Prosus umbrella, exhibited remarkable growth:

• Gross Merchandise Value (GMV): Increased by 32%.
• Revenue Growth: Grew by 30%, driven by enhanced customer loyalty programs and increased ad revenues.
• Profitability: iFood achieved a record aEBIT of $306 million, up 178%, with an improved margin of 27%.

iFood's success can be attributed to its innovative Clube loyalty program, which has fostered customer retention and frequency of orders. The company’s strategic initiatives, including expanding into groceries and credit offerings, have also bolstered its revenue streams.

Classifieds: OLX Group's Performance

OLX, another key player in Prosus’s portfolio, has shown substantial growth in its classified segment:

• Revenue Growth: 18% overall, with motors and real estate verticals witnessing 24% and 23% growth, respectively.
• Profitability: aEBIT accelerated by 61% to $270 million, highlighting improved monetization strategies and product development initiatives.

The positive trajectory of OLX signifies its ability to adapt to market demands while enhancing user trust and experience through innovative product offerings.

Fintech: PayU's Resilience

Despite facing challenging market conditions, PayU, Prosus’s fintech arm, has made notable strides:

• TPV Growth: Increased by 17% in India, with revenues up by 14%.
• Improved Losses: aEBIT losses improved by over 100%, reflecting strategic adjustments in its operations.

The fintech landscape poses unique challenges, but PayU’s focus on expanding its credit offerings and adapting to competitive pressures has positioned it for recovery and growth.

Strategic Acquisitions and Investments

Prosus's growth strategy is heavily influenced by strategic acquisitions aimed at reinforcing its market position. The recent acquisition of Despegar, a major travel platform, marks a significant move towards creating a comprehensive lifestyle ecosystem. This acquisition will allow for the integration of Despegar’s services into iFood’s Clube membership, enhancing customer value.

Additionally, the ongoing negotiations for Just Eat Takeaway.com represent a pivotal step in establishing a formidable presence in the European market. This acquisition is anticipated to yield synergies in technology and customer engagement, further solidifying Prosus's competitive advantage.

The Role of AI in Prosus's Strategy

As Prosus forges ahead, the integration of artificial intelligence into its operations remains a cornerstone of its strategy. The company has emphasized an “AI-first mindset,” which entails leveraging data analytics and machine learning to enhance customer experiences and operational efficiency. By investing in AI-native startups, Prosus is positioning itself at the forefront of technological innovation, ensuring sustainable growth in an increasingly digital economy.

Market Implications and Future Outlook

Prosus's transformative journey reflects broader trends within the global e-commerce landscape, where companies are increasingly relying on technology and innovation to drive growth. The success of e-commerce giants has prompted competitors to adapt quickly, leading to a more dynamic market environment.

Potential Developments

• Continued E-commerce Growth: With the ongoing digital transformation, Prosus is well-positioned to capture market share as consumer preferences shift towards online shopping.
• Expansion of Services: The integration of various services—ranging from food delivery to fintech—will likely enhance customer retention and cross-selling opportunities.
• Focus on Sustainability: As consumers become more conscious of sustainability, Prosus’s commitment to ethical practices and eco-friendly initiatives may resonate well with its target audience.

FAQ

What is Prosus?

Prosus is a global consumer internet group and one of the largest technology investors, primarily focusing on e-commerce, online classifieds, and fintech.

How did Prosus perform financially in the last fiscal year?

Prosus reported a 21% increase in e-commerce revenue, reaching $6.2 billion, with adjusted EBIT rising to $443 million.

What strategic acquisitions has Prosus made recently?

Prosus recently acquired Despegar and is in negotiations to acquire Just Eat Takeaway.com, aiming to strengthen its position in the lifestyle e-commerce market.

What are the main segments of Prosus's business?

Prosus operates in several segments, including food delivery (iFood), classifieds (OLX), and fintech (PayU), each showing significant growth.

How is Prosus integrating AI into its business?

Prosus is adopting an AI-first mindset to enhance customer experiences and operational efficiency, investing in AI-native startups to foster innovation.

What does the future look like for Prosus?

With strong financial performance, strategic acquisitions, and a focus on innovation, Prosus is well-positioned for continued growth in the evolving e-commerce landscape.