Delivery Hero’s FY2024 Turnaround: A Culinary Delivery Comeback?

Delivery Hero’s full-year 2024 results marked a dramatic shift from its turbulent past. The German food delivery giant slashed its net loss to €882.4 million, a 61.6% improvement from the €2.3 billion loss posted in 2023, while its loss per share plummeted to €3.10—down from €8.57 the prior year. This turnaround, fueled by aggressive cost-cutting, regional growth, and operational discipline, positions Delivery Hero as a contender in an increasingly competitive food delivery landscape.

The Revenue Engine: Growth Across Key Markets

Delivery Hero’s top-line expansion was a critical driver of its improved financials. Total segment revenue surged 22% year-over-year to €12.8 billion, outpacing its own guidance. The company’s focus on high-growth regions paid dividends:

• MENA (Middle East & North Africa): GMV soared 30% in Q3 2024, with affordability initiatives boosting order volumes.
• Europe: GMV jumped 21%, and the region achieved break-even Adjusted EBITDA by Q3.
• Americas: GMV grew 21%, driven by quick-commerce (quick-commerce) and subscriptions.

Even its Integrated Verticals segment—home to ventures like Dmart—delivered a 32% GMV rise, with half the growth coming from higher order volumes and the rest from larger basket sizes. These metrics highlight Delivery Hero’s success in diversifying beyond its core food delivery business.

Profitability: From Bleeding Cash to Breakeven

The company’s most striking achievement was its first-ever positive free cash flow (FCF) of €99 million in 2024, reversing years of cash burn. This milestone was underpinned by:
- Adjusted EBITDA improvements: Rising to €693 million (up 173% from €254 million in 2023), though legal provisions related to Italian labor laws trimmed initial expectations.
- Cost discipline: Strategic exits from underperforming markets like Thailand (to be completed by May 2025) and reduced debt. Net debt dropped 55% to €1.9 billion.

Tech and Innovation: The Edge in Logistics

Delivery Hero’s investment in technology is paying off. The rollout of a unified global platform slashed logistics costs, while AI-driven tools enhanced ad revenue and customer targeting. Notably, robotic grocery deliveries in Sweden/South Korea and drone deliveries in Stockholm expanded coverage without adding significant labor costs—a critical advantage in markets facing regulatory scrutiny over gig workers.

The Risks Ahead

Despite its progress, Delivery Hero faces hurdles. The Italian labor classification dispute—a €57 million hit to 2024 EBITDA—underscores the regulatory risks in Europe. Additionally, Asia remains a challenge: GMV there fell 8% year-over-year as the company scaled back operations.

2025 Outlook: Can the Momentum Continue?

Management is bullish, guiding for 8–10% GMV growth in 2025, with Adjusted EBITDA of €975–1,025 million and FCF exceeding €200 million. The $1.8 billion windfall from Talabat’s Dubai IPO provides a war chest for debt repayment and tech investment.

Conclusion: A Culinary Comeback, But Risks Remain

Delivery Hero’s FY2024 results are a clear inflection point. With a 63% reduction in loss per share, positive FCF, and strategic exits to focus resources, the company has laid the groundwork for sustainable growth. Its tech investments and regional wins in MENA and Europe suggest it can compete effectively against rivals like Uber Eats and DoorDash.

Yet, the path ahead is fraught. Regulatory battles, particularly in Europe, and softening demand in Asia could test its margins. Investors should watch closely for execution against 2025 targets—especially in high-margin AdTech and Dmart—while remaining cautious about lingering legal risks.

For now, Delivery Hero’s stock—up 30% year-to-date—reflects optimism about its turnaround. But as the food delivery wars intensify, only time will tell if this comeback is more than a tasty appetizer.