Deliveroo is out of the red… sort of

After 12 years and countless takeaways, Deliveroo has finally delivered what its investors have been waiting on: a profit.

The London-based delivery giant just posted its first-ever net profit of £2.9 million for 2024, a sharp turnaround from a £32 million loss the previous year. Revenue edged up 2% to £2.07 billion, and, perhaps more importantly, it generated positive free cash flow for the first time after years of burning cash while scaling up from a small tech startup to one of the few tech firms to join the London Stock Exchange.

But, despite all the growth that Deliveroo has shown, the company only made a net profit because it booked £28.5 million of “finance income” (predominantly interest income). On its core operations, the company still notched an operating loss of £12 million for last year.

For years the company has struggled to turn a profit, as it kept delivery fees low and funded promotions to fend off competition, prioritizing growth over margins — only to retreat from unprofitable markets later, including Germany (2019), Spain (2021), Australia (2022), and just this week, Hong Kong, where it lagged behind local rivals. The company is shifting focus to its core UK and Ireland markets, where it generates 61% of its revenue.

But Deliveroo isn’t dominating the UK market just yet. While it surpassed Just Eat in revenue in 2022, the Netherlands-based food delivery giant still remains a strong competitor and is now newly backed by a deep-pocketed, ambitious parent company. And Uber Eats is keenly competing for the crown, too, reporting an impressive 55% jump in UK revenue in 2023, compared to Deliveroo’s modest 8% growth in the region.

Founded in 2013 in London, Deliveroo was once hailed as Britain’s unicorn tech startup, with Amazon among its biggest backers. But its £7.6 billion IPO in 2021 was something of a disaster: shares crashed 26% on day 1, being labeled “the worst IPO in London’s history” (and earning the nickname Flopperoo) as investors balked at its gig-economy model and lack of profitability.

Shares have risen 7% over the past year as Deliveroo neared breakeven, but they are tumbling once again in trading on Thursday.