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01/11 03:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: strong GMV and EBITDA growth guidance, but weak Q3 financials and macroeconomic pressures. The ownership transition poses regulatory risks, and there's no announced shareholder return plan. The Q&A highlights concerns about demand and unclear responses on fintech plans. While the company shows resilience with loyalty programs and fintech growth, the lack of clear positive catalysts and ongoing economic challenges suggest a neutral stock price movement over the next two weeks.
GMV Growth (Q3 2024) 10.3% growth in Q3 2024; 17.4% growth in the first nine months compared to the same period last year, adjusted for inflation.
Gross Contribution Margin (Q3 2024) 11.5% in Q3 2024, a 2.1 percentage point improvement compared to Q3 2023.
EBITDA as a Percentage of GMV (Q3 2024) 1.2% in Q3 2024, a 1.3 percentage point rise year-on-year, excluding one-off contributions from Q3 2023.
Operating Income (Q3 2024) Positive operating income (EBIT) of TRY 32 million, the first since the IPO.
Revenue Growth (Q3 2024) 1.7% growth in Q3 2024; 13.5% growth in the first nine months compared to the same periods last year.
3P Revenue Growth (Q3 2024) 6% rise in 3P revenue in Q3 2024.
Delivery Service Revenue Growth (Q3 2024) 47% increase in delivery service revenue in Q3 2024.
Other Revenue Growth (Q3 2024) 82% increase in other revenue in Q3 2024.
1P Revenue Decline (Q3 2024) 9% decrease in 1P revenue compared to Q3 2023, attributed to a shift in GMV mix towards 3P.
Cash Provided by Operations (Q3 2024) Decreased by TRY 1.2 billion compared to a year ago.
Free Cash Flow (Q3 2024) Around TRY 1.6 billion in Q3 2024.
CapEx (Q3 2024) TRY 359 million in CapEx.
BNPL Volume Growth (Q3 2024) More than tripled year-on-year during Q3 2024.
Active Customers (Q3 2024) Grew by 233,000 customers to 12.3 million.
Order Frequency (Q3 2024) Reached 10.8, up by 16%.
Orders (Q3 2024) Recorded 32 million orders, a 19% year-on-year growth.
Active Merchant Base (Q3 2024) Almost 100,000 active merchants.
Hepsipay Wallet Customers (Q3 2024) 17.6 million wallet customers by the end of November.
New Product Launch: In July ‘24, Hepsiburada launched its 'renew your mobile at your doorstep' product in 81 cities across Turkey, marking the first nationwide device renewal program at home.
Loyalty Program Growth: The Hepsiburada Premium program reached nearly 3.7 million members by November, with premium members showing a 31% increase in monthly order frequency.
Payment Solutions Expansion: Hepsipay has grown to 17.6 million wallet customers, with a significant increase in transaction volume.
Market Positioning: Hepsiburada is positioned as Turkey's most recommended e-commerce brand, achieving an NPS of 75.
Market Expansion: The company is expanding its logistics capabilities through HepsiJet, which delivered 74% of total parcels in Q3.
Operational Efficiency: Hepsiburada recorded 32 million orders in Q3, a 19% year-on-year growth, with an active merchant base of almost 100,000.
Profitability Improvement: The company achieved positive operating income for the first time since its IPO, with EBITDA as a percentage of GMV reaching 1.2% in Q3.
Strategic Shift: Hepsiburada is undergoing an ownership transition to Kaspi, which is expected to enhance its fintech and marketplace capabilities.
Macroeconomic Pressures: The company is facing ongoing macroeconomic challenges, including reduced purchasing power and a potential shrinking demand for discretionary products in Turkey over the next six to nine months.
Regulatory Approvals: The ownership transition to Kaspi is pending certain regulatory approvals, which could pose a risk to the timeline and execution of the acquisition.
Supply Chain and Logistics Costs: Increased shipping and packaging expenses due to higher parcel volumes and rising delivery fees, driven by fuel price increases and minimum wage rises, are impacting profitability.
Active Merchant Base: The active merchant base has not increased for eight consecutive quarters, attributed to a focus on quality over quantity and new regulatory requirements for merchant verification.
Credit Card Costs: The cash outflow from early collection of credit card receivables is currently higher than EBITDA, with expectations for improvement as interest rates decrease.
Competitive Pressures: The company must navigate competitive pressures in the e-commerce sector, particularly as it seeks to expand its loyalty program and fintech solutions.
Quarterly Positive Operating Income: Achieved quarterly positive operating income for the first time since IPO, reflecting strong strategy and execution.
Hepsiburada Premium Program: Grew to nearly 3.7 million members, with premium members showing a 31% increase in monthly order frequency.
HepsiJet Logistics: Delivered 74% of total parcels, with significant growth in off-platform services, confirming its role in the delivery ecosystem.
Buy Now Pay Later Solutions: BNPL volume tripled year-on-year, with a 2.6% cost of risk, aiming to capture a share of Turkey's $40 billion consumer loan market.
Hepsipay Growth: Increased wallet customers to 17.6 million, with a focus on scaling one-click checkout solutions.
Q4 GMV Growth Guidance: Expecting 50% to 55% GMV growth for Q4, leading to approximately 75% growth for the full year.
EBITDA Margin Guidance: Q4 EBITDA as a percentage of GMV expected to be between 1.8% to 2%, with full year guidance around 2.1% to 2.2%.
Ownership Transition: Kaspi to acquire a controlling 65.4% stake, expected to close in early 2025, anticipated to create synergies.
Shareholder Return Plan: Hepsiburada has not explicitly mentioned a share buyback program or dividend program in the call. However, they discussed their strategic priorities and growth plans, indicating a focus on sustainable growth and profitability.
The earnings call reveals mixed signals: strong GMV and EBITDA growth guidance, but weak Q3 financials and macroeconomic pressures. The ownership transition poses regulatory risks, and there's no announced shareholder return plan. The Q&A highlights concerns about demand and unclear responses on fintech plans. While the company shows resilience with loyalty programs and fintech growth, the lack of clear positive catalysts and ongoing economic challenges suggest a neutral stock price movement over the next two weeks.
The earnings call summary presents a mixed picture. Basic Financial Performance shows modest GMV growth, yet strong margins. Product Development and Business Update are positive due to strategic initiatives and loyalty programs. Market Strategy faces challenges from competitive pressures and economic factors. Expenses and Financial Health are concerning due to high costs and negative cash flow. Shareholder Return Plan is neutral with no buyback program. The Q&A reveals cautious optimism but highlights economic and competitive pressures. Overall, the sentiment is neutral, with no major catalysts for strong price movement.
The earnings call highlights strong financial performance with GMV and revenue growth, improved margins, and increased order frequency. Despite economic uncertainties and competitive pressures, Hepsiburada shows resilience with strategic partnerships and regulatory advantages. Positive sentiment is reinforced by optimistic guidance and future profitability trajectory. However, lack of specific market share data and unclear responses on US GAAP reporting are minor concerns. Overall, the positive aspects outweigh the negatives, suggesting a likely positive stock price reaction.
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