Allegro.EU SA (FRA:AL0) Q2 2025 Earnings Call Highlights: Robust Growth Amidst Competitive Pressures

This article first appeared on GuruFocus.

GMV Growth in Poland: Close to 10% growth, with GMV per active buyer exceeding PLN4,000. Revenue Growth: Over 18% year-on-year increase in Poland; over 10% growth at the group level. Advertising Revenue Growth: Over 30% year-over-year increase. Take Rate in Poland: Exceeded 13%, improving by nearly 5 percentage points. Adjusted EBITDA Growth: Increased by 14% in Poland and over 20% at the group level. CapEx Expenses: Increased by 67% to over PLN200 million. Active Buyers: Exceeded 15 million in Poland and 21 million at the group level. Allegro Pay GMV Funding: 15.3% of GMV funded by Allegro Pay, with loan origination at PLN3.3 billion. International GMV Growth: 61% increase in Allegro International segment. Leverage: Reduced to 0.72x adjusted EBITDA, with a pro forma increase to 1.16x after share buyback. Smart! Program Subscribers: Over 6 million in Poland, with over 1 million internationally. Logistics Expansion: Managed volume increased to 34%, with plans for over 8,000 parcel lockers by year-end.

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Release Date: September 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Allegro.EU SA (FRA:AL0) reported a strong GMV growth of close to 10% in Poland, outperforming nominal retail sales growth. The company achieved a significant increase in active buyers, surpassing 15 million in Poland and 21 million at the group level. Revenue growth was robust, with an 18% year-on-year increase, driven by strong GMV and an improved take rate exceeding 13% in Poland. The advertising business line showed impressive growth, with over 30% increase year-over-year. Adjusted EBITDA increased by 14% in Poland and over 20% at the group level, leading to an upgraded revenue and EBITDA outlook for the full year 2025.

Negative Points

CapEx expenses increased significantly by 67% to over PLN200 million, reflecting ongoing investments in marketplace functionality and logistics infrastructure. The cost of delivery rose by 23.1% year-on-year, impacting overall expenses despite efforts to manage costs through Allegro managed volumes. The international operations, particularly the Mall segment, continued to incur losses, although efforts are underway to reduce these. The company faces competitive pressure from Chinese marketplaces, impacting marketing spend and customer acquisition costs. There is ongoing arbitration with InPost regarding delivery network usage, which could impact future logistics strategies.

Story Continues

Q & A Highlights

Q: With DPD coming online, how can we expect the Allegro managed volume to trend over the next 2 or 3 quarters? A: Jonathan Eastick, CFO: The impact from DPD will be more significant in the fourth quarter as deliveries will start in the next few weeks. The additional APMs will drive an increase in Allegro managed volume, especially in Q4.

Q: Can you provide a framework for the investments discussed with the Board to accelerate growth? A: Marcin Kusmierz, CEO: We are exploring new product categories, services, and strategic partnerships to accelerate growth. These discussions are in early stages, and we aim to make tangible moves in the coming months.

Q: How do you view the impact of Chinese marketplaces on customer acquisition costs and competition? A: Jonathan Eastick, CFO: There is increased activity from Chinese players, but it hasn't significantly impacted our surveys. We are maintaining our marketing spend to ensure we remain the market leader.

Q: What is Allegro's long-term vision for logistics in Poland, and are there any M&A opportunities? A: Jonathan Eastick, CFO: We are focused on expanding Allegro Delivery through partnerships. There are no immediate M&A plans, but we remain open to opportunities that align with our strategy.

Q: Can you comment on the potential regulatory changes in Europe that could affect competition with international marketplaces? A: Marcin Kusmierz, CEO: We expect fair competition with the same rules for all players. We are working with European authorities to address unfair advantages held by some international players.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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