Prosus's Pivot: Can Strategic Shifts Sustain Growth and Reward Investors?

The 2025 earnings call for Prosus, the investment arm of Naspers, marked a turning point. Under CEO Fabricio Bloisi, the company has shifted from a passive investor in tech giants to an active operator of high-growth e-commerce platforms. This pivot has delivered a $7.4 billion core earnings surge, its first profitable e-commerce division, and a renewed focus on operational excellence. But can this transformation endure, and what does it mean for investors?

The Financial Breakthrough: A New Era for Prosus

Prosus's fiscal 2025 results are a stark departure from its recent history. Core headline earnings rose 47% to $7.4 billion, driven by a dramatic turnaround in its e-commerce division. After years of losses, the division reported a $38 million net profit in 2025, while revenue jumped 21% to $6.2 billion. The adjusted EBIT of $179 million, compared to a $118 million loss in 2024, underscores operational improvements. Key subsidiaries like iFood (food delivery) and OLX (classifieds) delivered standout performance, with aEBIT surging 178% and 61%, respectively.

This profitability milestone is not incidental. Bloisi's strategy—focusing on cost discipline, AI-driven logistics, and market consolidation—has begun to pay off. The company's decision to pause PayU's IPO and prioritize organic growth reflects a shift toward long-term value creation over short-term listings.

Strategic Shifts: From Passive to Active

The most critical move under Bloisi is the $4.7 billion acquisition of Just Eat Takeaway, aimed at creating a European food-delivery “tech champion.” This deal, pending EU approval, would combine Just Eat's scale with iFood's AI logistics expertise, potentially reducing delivery costs by 20%. Prosus has also expanded in high-growth regions like India (via stakes in Swiggy and Meesho) and Latin America (via Despegar's travel dominance).

These moves align with Prosus's stated goal of becoming a “Lifestyle E-commerce Company.” By consolidating leadership in underpenetrated markets—where e-commerce adoption lags global averages—Prosus aims to replicate iFood's success across regions. CFO Nico Marais emphasized that operational excellence, not listings, will drive returns.

Risks and Challenges

Despite the progress, risks loom large. First, regulatory hurdles: the EU's antitrust review of the Just Eat deal could delay synergies or force asset sales. Second, geopolitical risks: the U.S. designation of Tencent (Prosus's 24%-owned stake, contributing 80% of its $177 billion NAV) as a “military-linked” entity threatens its valuation. Third, execution: integrating acquired firms like Just Eat and scaling AI logistics across diverse markets will test management's capacity.

Macroeconomic factors also pose threats. Inflation and currency volatility in emerging markets could dampen consumer spending, while competition from giants like Amazon and MercadoLibre looms. Prosus's 20% NAV discount—a valuation gap persisting despite buybacks—suggests investors remain skeptical.

Investment Thesis: A Structural Turnaround?

The key question is whether Prosus's shift is structural or a fleeting improvement. The data leans toward the former. The e-commerce division's first-ever profit and positive free cash flow ($36 million vs. -$235 million in 2024) signal lasting operational changes. The $35 billion buyback program since 2021 has already reduced its free float by 25%, narrowing the NAV discount and aligning shareholder interests.

Moreover, Prosus holds $18 billion in cash, enabling further acquisitions or buybacks. If the EU approves the Just Eat deal by mid-2026, as expected, synergies could boost EBIT margins by 10%+. Meanwhile, its stake in Tencent, while volatile, remains a cash-rich asset.

Investor Playbook: Entry Points and Catalysts

For investors, the entry point hinges on risk tolerance and time horizon. Short-term traders might wait for regulatory clarity and NAV discount narrowing. Long-term investors could view the current 20% discount as a compelling margin of safety.

Catalysts to watch include:
1. Just Eat Approval (H2 2026): A green light would unlock European market dominance.
2. PayU Profitability: If the payments business turns profitable, its IPO could unlock $2–3 billion in value.
3. Tencent's Stability: A resolution to U.S.-China tech tensions could revalue Prosus's core asset.

Conclusion: A Leverage Play on Emerging Markets

Prosus's 2025 results confirm that Bloisi's pivot is working. The shift to operational control, coupled with disciplined capital allocation, has transformed a struggling holding company into a growth engine. While risks remain, the structural improvements in e-commerce profitability and the strategic clarity under new leadership suggest Prosus is well-positioned for long-term investors.

For those willing to bet on emerging markets' digital revolution and management's execution, Prosus offers a compelling opportunity—if patience is paired with a focus on the long game.

Investment advice: Consider a staged entry at current levels, with positions scaled up if the Just Eat deal clears regulatory hurdles. Monitor the NAV discount closely; narrowing to 15%+ could signal a buy-and-hold opportunity.