Swiggy's financial loss expands to an estimated 1,197 crore Indian rupees in Q1 of the fiscal year 26; nearly a 54% increase in revenue reported.
Swiggy Reports Significant Growth and Improved Profitability in Q1 FY2025-26
In a recent financial report, Swiggy, the leading food delivery platform based in Bengaluru, has revealed considerable growth and improvements in profitability for the first quarter of the fiscal year 2025-26.
The company has expanded its quick commerce business segment by opening 41 new dark stores, bringing its total to 1,062 across 127 cities. This move follows Amazon's strategy of opening several new dark warehouses for the same purpose.
Swiggy's quick commerce arm, Instamart, has shown significant growth, with a year-on-year increase in Gross Order Value (GOV) to Rs 5,655 crore. The average order value (AOV) for Instamart rose by 25.6% year-on-year to Rs 612.
The company's revenue from operations rose 54% to Rs 4,961 crore, driven by strong performance across food delivery and Instamart verticals. The revenue from the food delivery segment increased nearly 20% to Rs 1,800 crore.
However, Swiggy's net loss expanded sequentially, reaching Rs 1,197 crore, marking a 96% year-on-year increase. The adjusted EBITDA margin for the company widened to Rs 813 crore, more than doubling from Rs 348 crore a year earlier.
Despite the widened loss, Swiggy's CEO, Majety, remains optimistic. He stated that they have surpassed the peak of losses in quick commerce and will adjust investments to drive the business towards scale-led profitability.
Swiggy's Out-of-Home vertical maintained its profitability, posting an adjusted EBITDA margin of 0.5% for a second consecutive quarter. The platform's average monthly transacting users (MTUs) in food delivery rose to 16.3 million, the highest addition in two years, reflecting a net gain of 1.2 million users sequentially.
In comparison, rival Zomato added 243 dark stores in the same period. Instamart's contribution margin improved to -4.6%, a sequential increase of 97 bps. The GOV for Instamart increased by 21.1% over the previous quarter.
The company attributes the decline in food delivery adjusted EBITDA margin to seasonal expenses associated with delivery partner availability during monsoon-related migration and its annual employee appraisal cycle. The total expenses for the quarter increased nearly 60% to Rs 6,244 crore.
Despite the challenges, Instamart's adjusted EBITDA margin improved to -15.8%, up from -18.0%. This improvement, along with the significant growth in Instamart, suggests a promising future for Swiggy's quick commerce segment.
In conclusion, while Swiggy faced a sequential increase in net loss, the company's growth in revenue, user base, and Instamart's performance indicate a positive outlook for the future. The focus on improving profitability and the continued expansion of the quick commerce segment could position Swiggy for long-term success.
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