Brad Erickson

Brad Erickson asked for clarification on Jumia's October order and GMV growth relative to full-year guidance, inquiring if it implies a significant acceleration later in Q4. He also questioned the reasons behind the slight adjustment to the full-year guidance, the impact of supply access from China, the competitive environment with international players retreating, the future mix of 1P vs. 3P sales excluding Egypt's corporate sales, the importance and profitability of the Jumia Instant pilot, drivers of the fulfillment cost per order reduction, and the top-line algorithm for achieving 2026/2027 profitability targets.

Answer

Francis Dufay, CEO of Jumia, clarified that October's 'above 30%' growth is an indication of momentum, and the company adheres to its refined 15-17% GMV guidance for the full year. He stated the slight guidance adjustment was a conservative refinement based on mid-quarter trends, not a massive shift in market dynamics. Mr. Dufay highlighted positive supply trends from currency stability and Chinese manufacturers shifting to Africa, with Q3 being early to see the full impact. He explained that international non-resident platforms like Shein and Temu face challenges in Africa due to unreliable customs and lack of logistics infrastructure, allowing Jumia to consolidate its leadership. He confirmed no major shift in 1P vs. 3P mix is expected, and Jumia Instant is a margin-neutral pilot for convenience-driven customers. The fulfillment cost reduction was attributed to fulfillment center consolidation, productivity programs, automation, and scale effects. Antoine Maillet-Mezeray, Executive VP of Finance and Operations, added that the pre-tax loss refinement was due to cost phasing, not top-line guidance. Mr. Dufay concluded that while no specific top-line guidance for 2026/2027 is provided, Q3's healthy B2C growth driven by strong fundamentals is a long-term trend.

Brad Erickson asked for clarification on Jumia's October order and GMV growth, questioning if an implied acceleration in late Q4 was necessary to meet full-year guidance. He also inquired about the reasons for the slight adjustment to the year-end guidance, potential transitory issues affecting supply access from China in Q4, and the competitive environment given reported retreats by international players. Further questions covered the impact of removing Egypt's corporate sales on the 1P vs. 3P mix, the importance and profit impact of the Jumia Instant product, drivers behind the fulfillment cost per order reduction, and the top-line algorithm for achieving 2026 breakeven and 2027 profitability targets.

Answer

Francis Dufay, CEO, clarified that October's 'above 30%' growth was a range, and Jumia was sticking to its refined full-year GMV guidance of 15-17%. He explained the slight guidance adjustment as a conservative refinement based on mid-quarter trends, with no massive shifts in market dynamics. On supply, Mr. Dufay highlighted positive medium-to-long-term trends driven by currency stability and Chinese manufacturers shifting to Africa, with Q3 being early to see the full impact. He attributed competitor retreats (Shein, Temu) to the difficulty of operating at scale in Africa due to unreliable customs and lack of logistics infrastructure, asserting Jumia's consolidating leadership. He stated no major shift in 1P vs. 3P mix was expected, excluding Egypt's corporate sales. Jumia Instant, a Nairobi pilot for 4-hour delivery, was described as margin-neutral, with additional costs passed to customers. Fulfillment cost reduction was driven by consolidating fulfillment centers, productivity programs, and scale effects. Antoine Maillet-Mezeray, Executive VP of Finance and Operations, noted the pre-tax loss adjustment was a refinement due to cost phasing, not linked to top-line guidance. Mr. Dufay concluded that while no specific top-line guidance for 2026/2027 was provided, Q3's strong performance suggested a healthy B2C growth trend likely to continue.

Brad Erickson of RBC Capital Markets inquired about the drivers for the accelerated growth seen in July, plans for inventory and cash use in Q4, capacity utilization in underserved upcountry regions, and the strategy for international suppliers, particularly in light of US tariff changes on Chinese goods. He also asked for details on the Jumia Delivery service's total addressable market (TAM) and margin profile, and sought clarification on the updated GMV guidance and the role of marketing in the path to breakeven.

Answer

CEO Francis Dufay attributed the July acceleration to fundamental improvements in Jumia's value proposition and a renewed, disciplined focus on online marketing, rather than macro factors. He noted that while Q4 inventory will build for the holiday season, the working capital impact is not expected to be as significant as last year. Dufay emphasized there is still massive growth potential in underserved cities and that US tariffs are a medium-term tailwind for securing more supply from China. He described Jumia Delivery as a profitable service from the outset, targeting a broad, unstructured parcel market. EVP Antoine Maillet-Mezeray clarified that the raised guidance is based on business trends, not FX, and that profitability will be achieved through growth combined with cost controls and operating leverage, not significant new marketing spend.

Bradley Erickson of RBC Capital Markets inquired about the disconnect between order growth and GMV due to corporate sales weakness, the future volatility of corporate sales, and the use of cash for inventory to support raised order guidance. He also asked about potential supply chain tailwinds from Asia, the strategy for marketing spend, the rationale and financial impact of the new logistics service rollout, the bridge between cash burn and loss guidance, and the visibility into the 2026 profitability targets.

Answer

CEO Francis Dufay explained that high-value, low-volume corporate sales disproportionately affect GMV, and their decline explains the GMV/order growth gap. He stated that inventory levels are now sufficient, and working capital's impact on cash burn should decrease. Dufay sees the shifting global trade landscape as a medium-term tailwind for sourcing from Asia. He noted that with strong fundamentals in key markets, Jumia is now tactically increasing marketing, citing a recent campaign in Nigeria. The logistics service is being rolled out now due to network stability and new IT tools, and it is designed to be profitable from day one with minimal CapEx. Dufay and EVP, Finance & Operations Antoine Maillet-Mezeray clarified that reduced cash burn will come from stabilized working capital, the full-year impact of cost-saving initiatives, and Q4 seasonality. Dufay affirmed the 2026 profitability goal will be met through a combination of continued growth and cost discipline.

Bradley Erickson inquired about several key operational and financial topics, including current Q1 2025 business trends, constraints on expanding product selection, the dynamics of the first-party versus third-party sales mix, and the drivers behind physical order growth and its impact on average order value (AOV). He also sought details on the efficiency gains from warehouse consolidation, the current fixed cost base, the scale required to reach profitability, and the adequacy of the balance sheet to support the company's inventory and growth strategy for the year.

Answer

CEO Francis Dufay and EVP, Finance & Operations Antoine Maillet-Mezeray addressed the questions. Dufay confirmed positive Q1 trends in order growth and cost discipline, underpinning the 2025 guidance. He described expanding product selection as a long-term operational focus and explained that the 1P/3P mix shift was due to cyclical corporate sales in Egypt. He noted that AOV is a consequence of product mix, with the company focused on unit economics per order. Dufay also detailed the consolidation of warehouses in H2 2024, which is expected to yield significant fulfillment efficiencies in 2025. Maillet-Mezeray added that the company targets another 20% in fixed cost efficiencies and that the current structure can handle 2-3x the volume. He estimated that a doubling or tripling of volume is needed to reach profitability. Both executives confirmed the Q4 working capital increase was a strategic investment in supply and that similar increases are not expected going forward.

Brad Erickson of RBC Capital Markets inquired about the significant gap between GMV and order growth, the requirements to accelerate order growth, the rationale for exiting South Africa and Tunisia, and the company's path to improving EBITDA and free cash flow.

Answer

Executive Antoine Maillet-Mezeray attributed the GMV and order growth gap to a mix shift toward higher-value categories and inflation. CEO Francis Dufay explained that accelerating order growth depends on improving the core value proposition—supply, price, and service—rather than increasing marketing spend, highlighting a 22% order growth in Nigeria outside major cities as a proof point. Dufay also clarified that the exit from South Africa and Tunisia was a strategic resource allocation decision, as South Africa was a mature, non-core market and Tunisia had lower potential. Regarding profitability, Antoine Maillet-Mezeray stated that future improvements will be driven by top-line growth combined with continued operational efficiencies, such as the recent warehouse consolidations.

Brad Erickson followed up on pricing and bundling, asking if the magnitude of impact from new bundles launching in Q4 could be sized, similar to the way security products were a driver in the prior year.

Answer

CEO Aman Bhutani stated it was too early to discuss the specifics of 2026 bundles. CFO Mark McCaffrey emphasized that the key takeaway is the balanced contribution from both volume-based initiatives (attach, conversion) and value-based initiatives (pricing), which creates a sustainable growth model.

Bradley Erickson asked for clarification on whether pricing or bundling was the larger driver of performance in 2024 and requested recent anecdotes on how customers are using Airo, particularly in ways that could be monetized.

Answer

CEO Aman Bhutani explained that pricing and bundling are deeply intertwined, as the strategy is to bundle products to create value and then price that bundle through testing. He noted that the greatest long-term value is created when bundling is a core part of the offer. For Airo, he highlighted high engagement with the 'Conversations' product, which uses AI to help small businesses respond to customers. CFO Mark McCaffrey added an anecdote of a pizza maker using it to book events, underscoring its real-world value.

Brad Erickson asked for GoDaddy's latest thinking on its marketing tools versus 'walled gardens' and inquired about management's view on potential infrastructure efficiencies from cheaper AI models.

Answer

CEO Aman Bhutani positioned their marketing tools as custom-built for their micro-business customers and noted they are just starting out. On AI costs, he emphasized that the primary focus is on leveraging AI to create customer and shareholder value, not just on infrastructure savings, given the rapid evolution of the technology.

Brad Erickson asked about the potential business impact of two AI-related trends: declining organic search traffic and AI-driven layoffs. He also inquired about the timing for monetizing the value added by recent enhancements to Wix Studio.

Answer

Co-Founder & CEO Avishai Abrahami acknowledged a minor decline in organic search but argued that AI creates a new, more complex need for visibility on LLMs, which requires a powerful platform like Wix. He noted that complex backend business logic will remain on websites. Regarding Studio, he highlighted an exciting roadmap that will enhance capabilities and provide partners with tools for the future internet, creating a competitive edge.

Bradley Erickson of RBC Capital Markets asked about product development considerations for AI agents and whether websites will need to be structurally different for discoverability in an AI-first internet. He also questioned if AI advancements would alter the mix between the Partners and self-creator businesses.

Answer

CEO Avishai Abrahami stated that AI will increase website complexity, particularly with new protocols like MCP, which will reinforce the value of platforms like Wix over independent development. Regarding the business mix, Abrahami believes that while agencies adopt technology faster, the fundamental human choice to build a site oneself or hire a professional is stable. Therefore, he expects the split between self-creators and partners to remain relatively constant.

Brad Erickson asked if research suggests the next generation of users, Gen Alpha, might exhibit more favorable behavior towards online dating, moving past a potential post-COVID 'air pocket'.

Answer

CEO Spencer Rascoff stated that while he is optimistic about future generations, the immediate focus is on improving product-market fit with Gen Z. He strongly refuted the narrative that the online dating category is in decline, citing Hinge's robust audience growth of nearly 20% YoY as definitive proof of the category's health and vibrancy, further supported by 100 million messages sent daily across Match Group's apps.

Brad Erickson from RBC Capital Markets requested a more detailed breakdown of the competitive intensity, asking why it remains so persistent. He also inquired about the company's assumptions for the supply environment in the second half of the year.

Answer

CFO Lawrence Fey described the competitive landscape as an auction for top search placement where a competitor is bidding at uneconomic levels, seemingly to demonstrate top-line growth despite industry profitability. For H2 supply, he reiterated a view of a 'flattish' industry calendar. CEO Stan Chia added that the company's structural cost changes are designed to allow it to compete more nimbly against both marketing and take rate pressures.

Brad Erickson from RBC Capital Markets asked how Reddit's ad performance (ROAS) compares to other platforms and whether it's winning new or shifted budgets. He also inquired about converting Reddit Pro business profiles into advertisers.

Answer

COO Jen Wong stated that ROAS is becoming increasingly competitive, which is driving growth from both budget consolidation and overall market growth. On Reddit Pro, she noted it's still early but they are actively building the pipeline to convert organic business engagement into paid advertising, for instance, by enabling users to boost successful organic posts directly from the platform.

Brad Erickson from RBC Capital Markets questioned how Reddit's ROAS compares to other platforms and whether it's winning new ad budgets. He also asked if Reddit Pro sign-ups are converting into paying ad customers.

Answer

COO Jen Wong stated that Reddit's ROAS is increasingly competitive, leading to budget wins from both market consolidation and overall growth. Regarding Reddit Pro, she noted it's still early but they are actively building the pipeline to connect organic business profiles with the ads manager, seeing it as a clear opportunity for future conversion.

Brad Erickson of RBC Capital Markets asked for details on future capacity expansion plans, including the necessary investment, and how the ability to source vehicles from consumers is affected as more inspection centers become operational.

Answer

CFO Mark Jenkins outlined a two-phase strategy: first, CapEx-light ADESA integrations, followed by more extensive build-outs estimated to cost around $1 billion over several years. CEO Ernie Garcia added that more facilities improve sourcing efficiency, noting the wholesale-to-retail ratio has remained stable despite significant sales growth.

Brad Erickson of RBC Capital Markets asked for details on future capacity expansion plans and the required investment, and also inquired about the company's ability to source vehicles from consumers as its physical footprint grows.

Answer

CFO Mark Jenkins outlined that the current strategy focuses on CapEx-light ADESA integrations, with a future phase involving more significant build-outs. CEO Ernie Garcia added that expanding the physical network improves efficiency, such as reducing inbound transport miles, and noted that vehicle sourcing from consumers has scaled effectively alongside retail growth.

Brad Erickson asked for a breakdown of recurring versus transactional revenue within the Services segment and inquired about when the mix shift towards complex services might become a tailwind for Marketplace growth.

Answer

Ofer Katz, President & CFO, detailed that the Services segment primarily consists of Promoted Gigs, Seller Plus, and AutoDS. He noted that Seller Plus and AutoDS are subscription-based, while Promoted Gigs, though transactional, show high seller retention. Micha Kaufman, Founder & CEO, added that while the timing is uncertain due to macro volatility, the upmarket and AI-driven mix shift is expected to eventually return the Marketplace to growth on its own.

Bradley Erickson of RBC Capital Markets questioned what specific signals or improvements Fiverr needs to see before increasing marketing spend, particularly given the challenging macro environment for SMBs. He also asked for quantification of the acquisition price for AutoDS.

Answer

CEO Micha Kaufman explained that marketing spend is a function of macro conditions. With SMB sentiment low, increasing spend to acquire these customers is not efficient. However, Fiverr is investing more in acquiring higher-value mid-sized and enterprise customers where the return is favorable. He stated that the company's sophisticated marketing automation can respond extremely fast once macro indicators improve. Regarding AutoDS, he declined to disclose the specific price but indicated the cost was in the "few dozens of millions of dollars" and was combined with an acqui-hire from earlier in the year.

Bradley Erickson inquired about the current pricing environment, including factors within and outside of Lyft's control, and asked for an update on how insurance costs are being factored into pricing formulas for the year.

Answer

CFO Erin Brewer acknowledged that Q1 prices were lower than Q4 but up modestly year-over-year. CEO David Risher reiterated Lyft's strategy to remain competitive and reliable, highlighting features like Price Lock. Regarding insurance, Brewer confirmed the program is progressing as planned and its impact is reflected in the Q2 guidance, without offering new specific details.

Bradley Erickson of RBC Capital Markets asked about the net effect of AI on top-of-funnel hiring trends amid macro pressures and inquired about client conversations regarding economic uncertainty and potential tariff impacts.

Answer

CEO Hayden Brown stated that while macro pressure affects the top of the funnel, AI is viewed as a net tailwind, with no evidence of it negatively impacting hiring. She added that despite general uncertainty, clients are proceeding with critical work on the platform. CFO Erica Gessert reinforced this by noting the 25% YoY growth in AI-related GSV and no degradation in creative work categories.

Bradley Erickson of RBC Capital Markets asked about the levers within Upwork's control to drive GSV back to growth versus external factors. He also sought more detail on potential new products and services that could expand the take rate over time.

Answer

CFO Erica Gessert acknowledged ongoing top-of-funnel weakness but highlighted positive signals within their control, such as increased engagement from retained clients and a 9% YoY growth in the overall retained client base in Q4. She mentioned GSV-beneficial take rate strategies like Business Plus as a key lever. CEO Hayden Brown added that take rate expansion opportunities include new subscription tiers, expanding client-side advertising products, and monetizing ad hoc paid services.

Bradley Erickson asked about the impact of new buyer agreement requirements on conversion rates and market share, and also requested details on Zillow Showcase's market share in its most mature individual markets.

Answer

CEO Jeremy Wacksman explained that Zillow's automated Touring Agreement is available for over 90% of tour connections and is viewed as 'helpful friction' that educates buyers, though he did not provide concrete data on conversion impact. Regarding Zillow Showcase, Wacksman noted it's at nearly 1.5% of new listings nationwide but it's too early to provide mature market mix details, reiterating the product's strong engagement metrics and its intermediate-term goal of 5-10% listing coverage.

Bradley Erickson asked about the impact of recent regulatory changes, specifically if the new buyer agreements are affecting conversion rates, and requested data on Zillow Showcase's market share of new listings in its most mature markets.

Answer

CEO Jeremy Wacksman addressed both points. Regarding buyer agreements, he described them as 'helpful friction' for educating consumers and noted they are available for over 90% of tour connections, but did not provide specific conversion data. For Zillow Showcase, he reiterated its nationwide share is nearly 1.5% of new listings but stated it's too early to provide mature-market-specific data, emphasizing strong product-market fit and positive results for agents.

Bradley Erickson of RBC Capital Markets asked for Zillow's latest perspective on upcoming real estate commission changes and the company's exposure to potential impacts.

Answer

CFO Jeremy Hofmann stated that while they don't see broad trends, commission rates in their business have remained in a tight band. He reiterated Zillow's belief that the company and its high-performing Premier Agent partners, who represent the top 20% of producers, are positioned to be 'outsized beneficiaries' and gain market share through any industry evolution.

Bradley Erickson of RBC Capital Markets questioned the confidence in the second-half revenue ramp given the Q2 slowdown in residential, and asked how Zillow would manage potential friction from new buyer agreements.

Answer

CFO Jeremy Hofmann expressed confidence in a second-half acceleration, citing contributions from enhanced markets, mortgages, and Showcase, noting they are ahead of their internal plan. COO Jeremy Wacksman explained that the buyer agreement is an optional, post-connection educational tool, not a point of friction, and pointed to higher conversion rates in states like Connecticut where similar agreements are already in use.

Inquired about the primary friction points and timelines for agents to increase their spend after receiving higher quality leads from real-time touring, and also asked for details on the synergies and integration costs associated with the Follow Up Boss acquisition.

Answer

Executives explained that real-time touring friction involves eligibility across the consumer, agent, and listing, and that it's a new workflow for agents requiring training. The Follow Up Boss strategy is to improve the CRM and expand its user base, which will increase conversion for Zillow's agent partners. The acquisition just closed, so while Q1 costs are included, there is no 'outsized' investment planned at this time.