Delivery Hero tops Q2 forecasts, trims profit outlook on FX headwinds

Delivery Hero reported stronger-than-expected Q2 revenue of €3.7 billion, up 27% year-on-year on a like-for-like basis, and H1 adjusted EBITDA of €411 million, a 71% increase, both exceeding analyst consensus and driven by positive momentum in Asia. Despite these strong operational results, the company recently lowered its full-year adjusted EBITDA guidance to €900-€940 million and cut free cash flow guidance by approximately 40%, attributing the revisions solely to currency headwinds from a stronger euro. Jefferies analysts view the operational performance as a clear positive and anticipate an overall positive equity response, noting the guidance cut was FX-driven and largely anticipated.

Analysis

Delivery Hero (ETR:DHER) demonstrated robust operational performance in its second-quarter and first-half results, significantly outperforming market expectations. The company reported a 27% year-on-year increase in Q2 like-for-like revenue to €3.7 billion, surpassing the consensus forecast of €3.5 billion. This strength was driven by an 11% rise in Gross Merchandise Value (GMV) to €12.2 billion, fueled by a notable recovery in the APAC region and improved growth in South Korea. For the first half, adjusted EBITDA surged 71% to €411 million, which was 7% ahead of consensus, with the corresponding margin improving by 70 basis points to 1.7% of GMV. This strong operational momentum, however, is contrasted by a recent downward revision of full-year guidance, announced a day prior. The company lowered its adjusted EBITDA forecast to €900-€940 million and slashed its free cash flow guidance by approximately 40%. Crucially, management attributes these cuts entirely to currency headwinds, specifically the strength of the euro against the Korean won and U.S. dollar-pegged currencies, while maintaining its GMV growth forecast at the upper end of the 8% to 10% range for 2025. Analyst commentary suggests the guidance cut was anticipated due to FX movements and that the underlying operational beat is the more significant takeaway, with the stock's future performance heavily dependent on developments in the South Korean market.

Key Decisions for Investors

• Investors should weigh the strong underlying operational results, including the significant revenue and EBITDA beats, against the headline guidance reduction which management has explicitly isolated to non-operational currency effects.
• Monitor developments in the South Korean market, particularly the commercial activity of the Baemin brand, as analysts highlight this as the most sensitive driver for the equity's performance.
• Consider that the negative impact of the guidance cut may be partially priced in, as Jefferies analysts noted that consensus estimates were already running below the new downgraded EBITDA forecast.
• The substantial 40% reduction in free cash flow guidance, even if attributed to FX, warrants careful scrutiny as it impacts the company's immediate cash generation profile and valuation.