Talabat Holding

1. Company Overview & Earnings Context

Talabat Holding plc is a Dubai Financial Market (DFM)-listed everyday app operating across the Middle East and North Africa, connecting customers with restaurants and retailers across food, groceries and other everyday essentials. The company operates across the UAE, Kuwait, Oman, Qatar, Bahrain, Jordan, Iraq and Egypt.

Talabat delivered strong top-line growth in H1 2026, with GMV growing 15% at constant currency and revenue increasing 19% YoY. However, profitability and free cash flow declined as the company continued its planned USD 120 million strategic investment programme to expand its everyday app ecosystem. Despite these investments, H1 performance came in ahead of full-year expectations, prompting Talabat to raise its 2026 guidance across all five key metrics.

2. Financial Performance Snapshot

• GMV: USD 5.60 Billion (+15% YoY at constant currency)

• Revenue: USD 2.19 Billion (+19% YoY)

• Gross Profit: USD 554 Million (-1% YoY)

• Adjusted EBITDA: USD 277 Million (-11% YoY)

• Net Income: USD 186 Million (-18% YoY)

• Free Cash Flow: USD 266 Million (-29% YoY)

• Cash Conversion Ratio: 96%, down from 120%

Compared with H1 2025 on a pro-forma basis:

• GMV increased from USD 4.87 billion to USD 5.60 billion.

• Revenue increased from USD 1.83 billion to USD 2.19 billion.

• Gross profit decreased from USD 561 million to USD 554 million.

• Adjusted EBITDA decreased from USD 311 million to USD 277 million.

• Net income decreased from USD 227 million to USD 186 million.

• Free cash flow decreased from USD 373 million to USD 266 million.

The H1 2025 figures in the press release are presented on a pro-forma basis, treating the Instashop acquisition as though it had been completed on 1 January 2025 to provide like-for-like comparability.

3. Operational Highlights & Key Metrics

• GCC GMV: USD 4.40 Billion (+9% YoY)

• Non-GCC GMV: USD 1.21 Billion (+46% YoY)

• Active Partners: ~97,000 (+14% YoY)

• Active Riders: ~189,000 (+25% YoY)

• Multi-Vertical GMV Share: 75%, up 4 percentage points YoY

• Talabat Pro GMV Share: 51% of the Talabat platform

• Partner-Funded Customer Savings: USD 404 Million (+30% YoY)

• Advertising Revenue Margin: 3.4% of GMV, up 0.2 percentage points YoY

Non-GCC markets were a particularly strong growth driver, with H1 GMV increasing 46% YoY to USD 1.21 billion, significantly outpacing the 9% growth recorded across GCC markets.

4. Key Performance Drivers

Talabat's revenue growth continued to outpace GMV growth, supported primarily by a higher contribution from its own-grocery business, Talabat Mart, and expansion in adtech margins. This was partially offset by lower commission rates and higher incentives aimed at customer acquisition and retention.

The company also continued expanding its ecosystem beyond food delivery. Active partners increased 14% to approximately 97,000, while active riders grew 25% to around 189,000. Multi-vertical engagement strengthened, with 75% of GMV generated by customers ordering across more than one category.

However, H1 profitability was affected by planned investments to strengthen food-delivery leadership and expand the everyday app ecosystem. Talabat deployed approximately USD 58 million during H1 across operating, capital and lease expenditure under its strategic investment programme.

5. Outlook & Forward Guidance

Following its stronger-than-expected H1 performance, Talabat raised its full-year 2026 guidance across all five key performance metrics:

• GMV Growth at Constant Currency: 13%–15%, previously 11%–14%

• Revenue Growth at Constant Currency: 16%–18%, previously 14%–17%

• Adjusted EBITDA: USD 535–565 Million, previously USD 510–540 million

• Net Income: USD 325–355 Million, previously USD 300–330 million

• Free Cash Flow: USD 400–430 Million, previously USD 370–400 million

• Dividend Policy: 90% of Net Income, unchanged

Talabat's USD 120 million everyday app investment programme remains on track, with approximately USD 75 million earmarked for operating expenditure and USD 45 million for capital expenditure. Investments are focused on increasing Talabat Mart dark-store density, strengthening supply-chain infrastructure, expanding Talabat Pro and developing new retail and adjacent services.

The company also expects to declare its H1 2026 interim dividend in September 2026, with payment expected in October, while maintaining its 90% payout policy.

6. Investor Takeaway

Talabat's H1 2026 results show strong underlying business growth but near-term pressure on profitability. GMV grew 15% at constant currency and revenue increased 19%, supported by customer growth, rapid expansion in non-GCC markets and increasing adoption across groceries, subscriptions and advertising.

At the same time, Adjusted EBITDA declined 11%, net income fell 18%, and free cash flow decreased 29%, reflecting the company's planned investment phase. Adjusted EBITDA margin fell from 6.4% to 4.9% of GMV, while net income margin declined from 4.7% to 3.3%.

Importantly, management's decision to raise all five key 2026 guidance metrics suggests that the investment programme is progressing better than originally anticipated. Talabat also maintains a strong liquidity position, with USD 807.8 million in cash and cash equivalents at the end of June 2026.

For investors, the key factors to watch are whether Talabat can sustain its double-digit GMV and revenue growth while rebuilding margins, and whether its investments in Talabat Mart, Talabat Pro and the broader everyday app ecosystem translate into stronger long-term earnings growth.