Meesho’s Q2 loss narrows 68% as revenue grows 34%

BENGALURU: E-commerce company Meesho’s net loss narrowed 68% to Rs 132.4 crore in the September quarter from Rs 411.4 crore a year earlier, as revenue grew faster than expenses.Total income rose 31% to Rs 4,259 crore from Rs 3,254.9 crore. Revenue from operations increased 34% to Rs 4,131.6 crore.The loss was nearly unchanged from Rs 132.8 crore in the June quarter. Total expenses rose 24% year on year to Rs 4,382.3 crore. The year-earlier quarter included exceptional expenses of Rs 45 crore, while tax expenses fell to Rs 9.2 crore from Rs 80.9 crore.Orders increased 17% to 819 million. Net merchandise value (NMV), which measures the value of successfully delivered orders after returns and discounts, grew 23% to Rs 12,911 crore. Annual transacting users rose 21% to 284 million.Meesho said the timing of its flagship Mega Blockbuster Sale affected the quarterly comparison. The sale fell in the September quarter last year but moved to the December quarter this year. Comparing the 90 days before Dussehra in each year, NMV grew 33%, it said.Marketplace contribution margin, which measures revenue remaining after costs directly linked to orders, rose to 6% of NMV from 3.3% a year earlier and 4.6% in the preceding quarter. Meesho attributed the improvement to higher advertising revenue and logistics efficiencies that lowered shipment costs.The company said it would reinvest part of these gains in the user and seller experience, Meesho Mall and content commerce, and expected the margin to moderate in the near term.Advertising and sales promotion spending rose to 2.9% of NMV from 2.1% in the June quarter. Server costs increased to 2.3% from 1.9%, reflecting GPU capacity reserved ahead of the festive sale for AI workloads. Growth spending will remain elevated through the sale and the weeks around Diwali, while technology costs will stay higher until planned efficiencies take effect, it said.Quarterly free cash flow was positive at Rs 345 crore, helped by seasonal collections from customers ahead of payments to sellers. However, free cash flow over the preceding 12 months remained negative at Rs 565 crore. The company reported a cash balance of Rs 7,048 crore.Separately, Meesho appointed former Godrej Consumer Products managing director and CEO Sudhir Sitapati as an independent director for five years, subject to shareholder approval.You use AI every day. Now get your AI Quotient. Take the AIQ test.