Meesho Q4 revenue jumps 47%; operating losses widen on aggressive growth push

요약

CEO Vidit Aatrey said that over 70% of the company’s code now is being written using artificial intelligence. More than three fourths of Meesho's orders come through its AI recommendation engine, underscoring the ecommerce marketplace's efforts on driving gro…

본문

Synopsis

Ecommerce marketplace Meesho reported a 47% year-on-year rise in operating revenue to Rs 3,531 crore in the March quarter. The Bengaluru-based company's net loss narrowed sharply to Rs 166 crore from Rs 1,391 crore a year earlier, largely because the year-ago quarter included a significant one-time expense that created a high base effect.

Meesho's cofounder and CEO Vidit Aatrey, in a letter to shareholders, detailed the company's expanding use of artificial intelligence across product building and customer facing services.

"Today, over 70% of our code is now AI-generated. Platform experiments up 2x YoY. But the number I keep coming back to: 75%+ of orders on Meesho come not from users searching, but from personalised feeds powered by PRISM (Personalised Ranking and Intent Signal Module) - our AI recommendation engine that infers what a consumer is looking for before they've articulated it themselves. That is a fundamentally different way to think about ecommerce," Aatrey wrote.

However, the company said that despite more than two-thirds of the code being written using AI, it hadn't seen meaningful savings in people costs. Instead, Meesho is deploying AI tools to grow productivity with the same amount of resources.

"FY2026 has strengthened our long-term belief that the Indian ecommerce market has far more depth than most people assume. About 264 million Indians transacted on Meesho in the last twelve months, up 33% year-on-year. Around 961,000 sellers sold a product on our platform, up 87% year-on-year," he added.

However, excluding exceptional items, Meesho's losses widened 45% year-on-year as operating margins came under pressure amid aggressive spending to acquire new customers and drive growth.

In its shareholder letter, the company said: "Every rupee of growth investment we make, whether in acquiring new users to the platform or building technology infrastructure, shows up in the P&L in the quarter it is spent even though the economic returns accrue over many years."

Breaking down the rise in operating losses during the quarter, Meesho's contribution margin declined to 4% from 4.3% a year earlier. Contribution margin refers to segment revenue minus direct costs. At the same time, the company continued to invest heavily in customer acquisition, with advertising and marketing spends as a percentage of net merchandise value (NMV) increasing to 2.1% from 1.5% a year ago. As a result, adjusted EBITDA margin widened to -1.7% from -1.3% in the fourth quarter of FY25.

"During Q2 and Q3 last year, consolidation in the 3PL (third-party logistics) industry led to disruptions in logistics capacity availability, which had a temporary impact on our operations. Most of those challenges are now behind us, and contribution margins have broadly recovered to around 4%," a company spokesperson told ET when asked about the change in contribution margin.

As logistics capacity returned to third-party logistics providers, the share of Meesho's in-house logistics platform Valmo in total marketplace shipments fell to around 50% during the January-March quarter, compared with nearly 60% in the previous quarters, the spokesperson added.

Meesho's last-twelve-month free cash flow – a metric that reflects cash generated after operating expenses and reinvestments – stood at a negative Rs 633 crore at the end of the fourth quarter, compared with a positive Rs 591 crore a year earlier. The decline in this metric – that refers to how much actual cash the company generated over the past year after paying for its daily operations and investments – was primarily due to elevated spending on customer acquisition.

Backed by investors including SoftBank Group and Elevation Capital, Meesho went public in December last year through a Rs 5,421 crore IPO.

The company's shares ended Wednesday 3.8% lower at Rs 196.50 on the BSE. The results were announced after market hours. Add ET Logo

as a Reliable and Trusted News Source Google Preference in ET

Add Now!

Meesho Q4 revenue jumps 47%; operating losses widen on aggressive growth push

요약

본문

Synopsis

Read more news on