The company debuted on the stock exchanges on December 10 and these are its first earnings after the listing.
Highlights of the third quarter
Meesho’s annual transaction user base rose 34% YoY to Rs 251 million, with its net merchandise value (NMV) standing at Rs 10,995 crore, up 26% YoY. Over 9MFY26, it rose 37% YoY to Rs 30,189 crore.
The company saw 690 million orders on its platform in the quarter under review, up 36% year-over-year. Contribution margin as a percentage of NMV was 2.3%, down 104 basis points quarter-over-quarter and 198 basis points year-over-year due to Valmo’s accelerated scale following the consolidation of the 3PL industry. “This is expected to normalize in the coming quarters,” the company filing said.
Trailing twelve months free cash flow (LTM) was Rs 56 crore and LTM free cash flow to equity was Rs 437 crores with a cash balance of Rs 7,277 crores.
Adjusted EBITDA market margin for Q3FY26 was -4.2% (Rs -460 crores) due to lower contribution margin and accelerated user growth and technical investments.Adjusted EBITDA for new initiatives stood at Rs 19 crores, up 44% quarter-on-quarter and 30% year-on-year, with continued improvement in user adoption for the financial services platform.
In a letter to shareholders, founder and CEO Vidit Aatrey said the company has increased its investments in Advertising & Sales Promotion from 1.3% in Q3 FY25 to 2.4% of NMV in Q3 FY26.
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“Our extensive investments are being deployed in increasing awareness, acquiring traffic and driving initial customers, where this justifies our long-term FCF return thresholds. We are consistently witnessing improved year 1 and subsequent rates of acquisition of our new cohorts of customers, leading to accelerated investments and therefore NMV growth,” the letter said.
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Business speaking
“This marks our first quarter reporting as a publicly traded company and demonstrates our operating philosophy in action: continued ATU growth toward our mission to democratize Internet commerce, and when forced to choose between short-term financial optimization and long-term flywheel health, we chose the latter. We kept order fulfillment costs stable and increased user acquisition. Each decision positions us for stronger platform profitability on the long-term. These investments met our return thresholds as measured by payback periods, expected IRR versus hurdles and long-term impact. Cash flow of 251 million ATUs, a purchase frequency of 9.78 and NMV growth of 37% over the first nine months of FY26 confirm such decisions made twelve to eighteen months ago.
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