Zomato's Q3 results: Net profit plunges 57%, revenue up 64%
What's the story
Zomato has reported a massive 57% decline in its consolidated net profit for the third quarter of the fiscal year 2025. The company's net profit now stands at ₹59 crore, down from ₹138 crore in the same period last year. However, revenue from operations witnessed a significant growth of 64%. The company's revenue jumped to ₹5,405 crore from ₹3,288 crore in Q3 FY24. Sequentially, this marks a 13% growth over the ₹4,799 crore reported in Q2 FY25.
GOV increase
Gross order value sees significant growth
Zomato's gross order value (GOV) for its B2C businesses grew a whopping 57% year-on-year. On a quarter-on-quarter basis, the GOV increased 14% to ₹20,206 crore in Q3 FY25. However, without the impact of the acquisition of Paytm's entertainment ticketing business, the GOV growth was slightly lower at 52% YoY and 12% QoQ.
Demand slump
Zomato acknowledges slowdown in demand
In a letter to its shareholders, Zomato admitted to a slowdown in demand since late November. The company said, "Our 20%+ YoY GOV growth guidance for the food delivery business is more longer-term. There will be periods of higher and lower growth along the way." Despite the slowdown, Zomato is optimistic about an imminent recovery and confident of its long-term 20%+ yearly GOV growth outlook due to strong business fundamentals.
EBITDA performance
Adjusted EBITDA grows despite profit drop
On the profitability front, Zomato's consolidated adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) grew by 128% YoY to ₹1.4 crore in Q3 FY25. This was mainly driven by an improvement in food delivery adjusted EBITDA margin to 4.3% from 3% a year ago. However, on a QoQ basis, the EBITDA declined by 14% or ₹45 crore due to higher investments in expanding Zomato's quick commerce store network.
Business losses
Quick commerce business incurs losses
Zomato's quick commerce business Blinkit also posted losses this quarter, mainly due to growth investments that were supposed to be made over the next few quarters. "The losses in our quick commerce business this quarter are largely on account of pulling forward the growth investments in the business that we would have otherwise made in a staggered manner over the next few quarters," said CEO Deepinder Goyal. He is confident Blinkit will hit its target of 2,000 stores by December.