The grim Zomato numbers we should talk about

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Editor's note: On Thursday, Zomato announced its results for the quarter ended 31 December 2021. The food-delivery company shows that revenue had grown 1.8x from the same period a year earlier, and that losses had substantially reduced. The markets saw through the fact that losses had actually more than tripled if one excludes a one-time gain from the sale of investments, and the stock was hammered, ending the day down almost 6%. What is more worrying is that Zomato’s letter—12 pages titled “Staying the course”, by chief executive Deepinder Goyal and chief financial officer Akshant Goyal—to the shareholders paints a totally different picture. Throughout the letter, the company tries very hard to pick metrics to show a healthy enough business that has come a long way and has its eye on big expansion plans. Riddled with ambiguous terms and sometimes convoluted reasoning, the letter raises more questions than it answers. We went through the company’s financial statements and found at least five reasons why investors need to ask more questions of Zomato. 1. Adjusted revenue  Zomato defines its “adjusted revenue” as a …