ISTANBUL, Türkiye, June 13, 2024 (GLOBE NEWSWIRE) -- D-MARKET Electronic Services & Trading (d/b/a "Hepsiburada") (NASDAQ:HEPS), a leading Turkish e-commerce platform (referred to herein as "Hepsiburada" or the "Company"), today announces its unaudited financial results for the first quarter ended March 31, 2024. Restatement of financial information: Pursuant to the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies ("IAS 29"), the financial statements of entities whose functional currency is that of a hyperinflationary economy must be adjusted for the effects of changes in a general price index. Turkish companies reporting under International Financial Reporting Standards ("IFRS"), including the Company, have been required to apply IAS 29 to their financial statements for periods ended on and after June 30, 2022. The Company's consolidated financial statements as of and for the three months ended March 31, 2024, including figures corresponding to the same period of the prior year, reflect a restatement pursuant to IAS 29. Under IAS 29, the Company's financial statements are presented in terms of the measuring unit current as of March 31, 2024. All the amounts included in the financial statements which are not stated in terms of the measuring unit current as of the date of the reporting period, are restated applying the general price index. Adjustment for inflation has been calculated considering the price indices published by the Turkish Statistical Institute (TurkStat). Such indices used to restate the financial statements as at March 31, 2024 are as follows: Date Index Conversion Factor 31 March 2024 2,139.5 1.00 31 December 2023 1,859.4 1.15 31 March 2023 1,269.8 1.68 Figures unadjusted for inflation in accordance with IAS 29, denoted as "IAS 29-unadjusted", "unadjusted for IAS 29", "unadjusted", "unadjusted for inflation", or "without adjusting for inflation", are also included in the summary tables of the consolidated financial statements and under the "Highlights" section and explanatory notes as relevant. The press release also includes tables that show the IAS 29 adjustment impact on the consolidated financial statements for the periods under discussion. Figures unadjusted for IAS 29 constitute non-IFRS financial measures. We believe that their inclusion facilitates the understanding of the restated financial statements in accordance with IAS 29 and our year-on-year growth and profitability guidance. Please see the "Presentation of Financial and Other Information" section of this press release for a definition of such non-IFRS measures, a discussion of the limitations on their use, and reconciliations of the non-IFRS measures to the most directly comparable IFRS measures. First Quarter 2024 Financial and Operational Highlights (All financial figures are restated pursuant to IAS 29 unless otherwise indicated) Gross merchandise value (GMV) increased by 42.5% to TRY 36.3 billion compared to TRY 25.5 billion in Q1 2023. IAS 29-Unadjusted GMV increased by 137.8% to TRY 35.2 billion compared to Q1 2023. Revenue increased by 45.0% to TRY 11,309.6 million compared to TRY 7,800.5 million in Q1 2023. Number of orders increased by 21.7% to 29.3 million compared to 24.1 million orders in Q1 2023. Active Customers increased by 1.4% to 12.1 million compared to 11.9 million as of March 31, 2023. (Order) Frequency increased by 30.3% to 9.8 compared to 7.5 as of March 31, 2023. Active Merchant base increased by 1.2% to 101.9 thousand compared to 100.7 thousand as of March 31, 2023. Number of SKUs increased by 37.9% to 248.2 million compared to 180.0 million as of March 31, 2023. Share of Marketplace GMV was 68.4% compared to 68.2% in Q1 2023. EBITDA improved to TRY 289.4 million compared to TRY 12.2 million in Q1 2023. Accordingly, EBITDA as a percentage of GMV was at 0.8%, a 0.7 percentage point improvement compared to 0.05% in Q1 2023. IAS 29-Unadjusted EBITDA improved to TRY 835.3 million compared to TRY 175.9 million in Q1 2023. IAS 29-Unadjusted EBITDA as a percentage of GMV in Q1 2024 improved by 1.2 percentage points to 2.4% compared to 1.2% in Q1 2023. Net loss for the period was TRY 130.7 million compared to a net loss of TRY 324.9 million for Q1 2023. Free cash flow was positive TRY 1,029.6 million compared to negative TRY 259.3 million in Q1 2023. Commenting on the results, Nilhan Onal Gökçetekin, CEO of Hepsiburada said: "We are glad to have had a robust start to the year across the business, following a year of turnaround in profitability in 2023. In the first quarter, we continued to execute on our strategic priorities with a focus on strengthening our core operations, leveraging our key strengths for on-platform and off-platform operations and prudent cost management. Our efforts, accelerated by the base effect of last year due to the tragic earthquake, drove a 137.8% year-on-year GMV growth on an unadjusted basis. Meanwhile, we recorded 2.4% EBITDA as a percentage of GMV representing a 1.2 percentage point yearly rise on an unadjusted basis, a clear sign that our strategy is working. During the quarter, we continued our initiatives to improve user experience by leveraging advancing technology and strengthening our appealing value proposition through diverse affordability and lending solutions. These have resulted in competitive NPS metrics, marking Hepsiburada as the most recommended e-commerce brand in Türkiye once again. Our appeal is also evidenced by a 30% year-on-year rise in order frequency and firm traction with Hepsiburada Premium program enrollment, exceeding 2.6 million members by the end of May 2024. Merchants' preference for our last-mile delivery services has sustained its uptrend, whereby HepsiJet delivered 68% of total parcels on our platform, up by 5.1 percentage points year-on-year. With its fast and reliable service quality, HepsiJet also more than doubled its external delivery volume year-on-year, corresponding to a third of its total volume. On the fintech front, we cemented our pioneering credentials in the market by expanding the suite of affordability and lending solutions that our customers have come to rely on in today's economic landscape. January marked a milestone for our Company as we launched our in-house consumer finance loan facility. Including financing from partner banks, the total financed transaction volume through our platform reached TRY 8.1 billion by the end of the first quarter. On the payments front, with Hepsipay, online shopping becomes a seamless one-click process. We believe Hepsipay is on the right path to becoming Türkiye's leading digital wallet with its 15.7 million Hepsipay wallet customers and 18.3 million stored cards, already integrated into the check-out of 28 retailers. It is important to note that we are in a challenging macroeconomic conjuncture with certain repercussions for consumers. And yet, our platform preserves our relevance for consumers' purchases as their trusted household brand. Our well-defined strategic priorities built on solid fundamentals allow us to pursue sustainable and profitable growth. As we continue to execute along these lines, we anticipate delivering GMV growth of around 75% in Q2 2024 compared to the same quarter of last year, on an unadjusted basis. With continued strict cost management in place, we expect an EBITDA within the range of 1.8% to 2.0% of GMV on an unadjusted basis in Q2 2024. I thank our formidable team for their dedication, our loyal customers for their trust in our brand, our partners for their collaboration and support, and our shareholders for their belief in our vision." Summary: Key Operational and Financial Metrics The following table sets forth a summary of the key unaudited operating and unaudited financial data as of and for the three months ended March 31, 2024 and March 31, 2023 prepared in accordance with IFRS. Unless indicated otherwise, all financial figures in the tables provided are inflation-adjusted (in accordance with IAS 29). (in TRY million unless otherwise indicated) Three months ended March 31, unaudited 2024 2023 y/y % GMV (TRY in billion) 36.3 25.5 42.5% Marketplace GMV (TRY in billion) 24.8 17.4 42.8% Share of Marketplace GMV (%) 68.4% 68.2% 0.2pp Number of orders (million) 29.3 24.1 21.7% Active Customers (million) 12.1 11.9 1.4% Revenue 11,309.6 7,800.5 45.0% Gross Contribution 3,804.0 2,374.3 60.2% Gross Contribution margin (%) 10.5% 9.3% 1.2pp Net loss for the period (130.7) (324.9) (59.8%) EBITDA 289.4 12.2 2,272.1% EBITDA as a percentage of GMV (%) 0.8% 0.0% 0.7pp Net cash provided by operating activities 1,455.7 101.5 1,334.2% Free Cash Flow 1,029.6 (259.3) n.m. Note: The abbreviation "n.m." stands for not meaningful throughout the press release. Note that Gross Contribution, EBITDA and Free Cash Flow are non-IFRS financial measures. See the "Presentation of Financial and Other Information" section of this press release for a definition of such non-IFRS measures, a discussion of the limitations on their use, and reconciliations of non-IFRS measures to the most directly comparable IFRS measures. See the definitions of metrics such as GMV, Marketplace GMV, share of Marketplace GMV, Gross Contribution margin, EBITDA as a percentage of GMV, number of orders and Active Customer in the "Certain Definitions" section of this press release. Q2 2024 Outlook The below forward-looking statements reflect Hepsiburada's expectations as of June 13, 2024, considering year-to-date trends that could be subject to change, and involve inherent risks which we are unable to control or foresee. The financial outlook is based on management's current views and estimates with respect to existing market conditions. However, there are several factors which may impact the current outlook, including the inflationary environment both in Türkiye and globally, local currency volatility, further tightening in monetary policy, low consumer confidence, pressure on purchasing power, regional geopolitical headwinds, the regulatory environment for our activities in Türkiye and the evolving competitive landscape. Management's views and estimates are subject to change without notice. See also the "Forward Looking Statements" section at the end of this press release. For the second quarter of 2024, we expect to deliver IAS 29-Unadjusted GMV growth of around 75% compared to the second quarter of 2023 and IAS 29-Unadjusted EBITDA as a percentage of GMV within the range of 1.8% to 2.0%. In 2024, we intend to remain focused on sustainable and profitable growth with a prudent approach to capital allocation. Business and Strategy Highlights As of March 31, 2024, the annual inflation rate published by TurkStat was 68.5%, up from 50.5% as of March 31, 2023, and 64.8% as of the end of 2023. The monthly inflation rates during the first quarter of 2024 were 6.7%, 4.5% and 3.2% in January, February and March, respectively. The Consumer Confidence Index fell by nearly 0.7 points on a yearly basis to 79.4 as of March 31, 2024. In Q1 2024, IAS 29-Unadjusted GMV increased by 137.8% to TRY 35.2 billion compared to TRY 14.8 billion in Q1 2023, exceeding our guidance of approximately 120% by nearly 18 percentage points. Adjusted for inflation, GMV increased by 42.5% to TRY 36.3 billion in Q1 2024 compared to TRY 25.5 billion in Q1 2023. The earthquake in Q1 2023 acted as a favorable comparable base for Q1 2024. For Hepsiburada, GMV growth is a function of the growth in the number of orders and average order value. In Q1 2024, we experienced order growth of 21.7% compared to Q1 2023, resulting from the continued rise in order frequency and number of Active Customers. Meanwhile, average order value grew by 95.4% in Q1 2024 compared to Q1 2023, outpacing average inflation of 68.5% as of March 31, 2024. The faster average order value growth is attributable mainly to the faster-than-inflation rise in average selling prices in Q1 2024, partially boosted by the VAT increase in 2023. Overall, our performance was also supported by the appeal of our Hepsiburada Premium loyalty program, attractive affordability solutions and data-driven marketing campaigns. Our Net Promoter Score ("NPS") of 73 in Q1 2024 compared to 70 in Q4 2023 (according to the results of market research conducted by FutureBright on behalf of Hepsiburada) positioned us, once again, as the number one most recommended e-commerce platform in Türkiye. In 2024, we remain committed to executing our strategic priorities set in 2023 with minor adjustments to enhance our approach. Currently, our strategic priorities include: a) nurturing loyalty, b) capitalizing on our clear differentiation of superior delivery services, c) capitalizing on our clear differentiation with affordability and lending solutions and d) offering our payment, lending and last-mile services to third parties. The discussion below elaborates on our progress in Q1 2024 within each of our strategic priorities: a) Nurturing loyalty Central to our strategy is prioritizing customer loyalty and retention. Our loyalty program, Hepsiburada Premium, has played a key role in achieving this. Meanwhile, focusing on retention has helped us to reduce and optimize our marketing and advertising spend. Hepsiburada Premium members almost tripled, reaching 2.5 million by the end of Q1 2024 compared to 915 thousand by the end of Q1 2023. By the end of May 2024, the total number of members had reached 2.6 million. Hepsiburada Premium members continue to generate higher order frequency than non-members. In Q1 2024, the monthly order frequency for members was 36% higher than the order frequency generated before joining the program. Hepsiburada Premium members' NPS was 81 in Q1 2024, according to the results of market research conducted by the research company FutureBright on behalf of Hepsiburada. This score remains higher than the Company's overall NPS, which we believe signifies a strong satisfaction level among members. b) Capitalizing on our clear differentiation with superior delivery services In Q1 2024, HepsiJet continued offering competitive services, including our oversized delivery services that differentiate us in the market. We believe that swift delivery is a core customer expectation and, in Q1 2024, HepsiJet delivered 82% of the orders placed through our retail arm (1P) within the next day (compared to 84% in Q1 2023). HepsiJet is also a key component of our value proposition for our merchants. In Q1 2024, HepsiJet delivered approximately 68% of our total parcels (compared to 63% in Q1 2023). In Q1 2024, HepsiJet had a customer satisfaction score of 87 according to our internal survey results, underscoring its service excellence. Through HepsiJet, our customers enjoy flexible delivery options and value added services including return from doorstep for all purchases on our platform. Our oversized package delivery service (HepsiJet XL) delivered 63% of oversized parcels ordered through our platform in Q1 2024, up from 60% in Q1 2023. c) Capitalizing on our clear differentiation with affordability and lending solutions Leveraging our e-money and payment services licenses, we offer a comprehensive suite of payment and affordability solutions on the Hepsiburada platform as well as externally to other partner retailers. In January 2024, we took a further step to include our in-house consumer finance loans in our affordability solutions offering. By May 31, 2024, our wholly-owned subsidiary, Hepsifinans, had provided over TRY 280 million in loans since its launch. As of March 31, 2024, our BNPL solution had been used by over 365 thousand customers. Approximately 1.1 million orders have been processed through our non-card affordability solutions (including BNPL and shopping loans) over the past 12 months. Meanwhile, our total financed transaction volume (including general purpose loans and consumer finance loans) reached TRY 8.1 billion, with 55% of this volume generated through our BNPL solution in Q1 2024 compared to 30% in Q1 2023. In Q1 2024, orders made through our BNPL solution and shopping loans accounted for 4.9% of total GMV in the period, down from 5.6% in Q4 2023. This was mainly due to lower lending willingness among banks combined with higher card-based campaigns in number throughout February and March with the expectation of a potential tightening of credit card solutions following the Turkish elections in March 2024. We diligently manage credit risk in our BNPL solution, while maintaining our focus on growth optimization. As of March 31, 2024, our wallet and payment gateway solution, Hepsipay, registered approximately 15.3 million Hepsipay wallet customers (representing users who have opened their wallet account by giving the required consent to Hepsipay), up from 14.3 million as of March 31, 2023. As of May 31, 2024, the number of Hepsipay wallet customers had reached 15.7 million. Additionally, 18.3 million cards are stored in the wallets of Hepsipay customers. As of March 31, 2024, 1.3 million Hepsipay prepaid cards had been issued through the Hepsiburada mobile app. The Hepsipay prepaid card is linked to the QR payment feature which allows customers to use it at any off-line retailer that accepts QR payments. As of May 31, 2024, the number of Hepsipay cards issued exceeded 1.4 million. The option for Hepsipay prepaid card holders to top up their e-wallets by way of general purpose loans is available from six leading banks in Türkiye. In April 2024, the automatic top-up feature went live in the digital wallet. d) Offering payment, lending and last-mile delivery services to third parties We believe that our strategy to extend our services and solutions beyond our platform by offering them to other retailers benefits both retail partners and customers. We see great potential for both Hepsipay and HepsiJet to leverage their own assets and increase their revenue contribution to our company. HepsiJet today serves over two thousand external customers, including household-name retailers. We believe HepsiJet is best positioned to build on this momentum and grow its share in the logistics market. The share of external customer volume in HepsiJet's operations increased to 32.6% in Q1 2024, up from 22.1% in Q1 2023. The total parcel volume of third parties delivered in Q1 2024 is 2.3 times the volume in Q1 2023. As of March 31, 2024, following the product launch in July 2023, Hepsipay's one-click check-out ("Pay with Hepsipay") offering was successfully integrated into the online checkout of 28 retailers. By enabling payment with cards stored on the Hepsipay wallet, Hepsipay has gained a share of these retailers' online sales. We believe that the envisaged growth in one-click checkout integrations will become instrumental in Hepsipay's off-platform expansion. ESG Actions In Q1 2024, Hepsiburada continued to provide support in social, commercial and economic areas. Our "Trade and Technology Empowerment for the Earthquake Region" program, launched in March 2023 following the earthquake, reached approximately 17,340 merchants, with over 3,775 new businesses now selling their products online through Hepsiburada. Active sellers generated a trade volume exceeding TRY 5.2 billion. Our E-Commerce Specialization Centers in Adana and Hatay support existing merchants and organize training courses and programs for those new to the e-commerce market, benefiting over a thousand merchants from the region. In February 2024, to commemorate the first anniversary of the earthquake, Hepsiburada launched a campaign as part of our "A Smile is Enough" project pledging to donate toys and books to children for every order placed by customers on its platform regardless of the order value. Through our "A Smile is Enough" project, Hepsiburada has reached 235,500 children living in the affected region. Further, Hepsiburada celebrated February 11, the International Day of Women and Girls in Science, with high school students at Ahbap Association's science trucks in the earthquake region, organizing various trainings. The "Technology Empowerment for Women Entrepreneurs" ("TEWE") program reached an additional 2,506 women. To date, the TEWE program has supported approximately 53 thousand women entrepreneurs. Furthermore, as of March 31, 2024, the number of women's cooperatives on our platform has reached 267. As part of the TEWE program, various NGO collaborations have been established to provide sustainable support to the earthquake zone. As of March 31, 2024, the number of women entrepreneurs and women's cooperatives in the impacted region had reached 3,419 and 40, respectively. As part of our ongoing social responsibility projects, Hepsiburada has continued to provide food, medical supplies, and logistics support to animal welfare associations. Subsequent Events Hepsiburada issued asset-backed securities amounting to TRY 150 million The first issuance of asset-backed securities amounting to TRY 150 million, within the scope of the TRY 2 billion limit given by the Capital Markets Board to Pasha Yatırım Bank Hepsiburada Varlık Finansmanı Fonu, settled on June 5, 2024. In this structure, Hepsiburada participated as the originating entity with respect to its BNPL receivables. The issue consists of four tranches with a maximum maturity of 147 days and at an annual interest rate varying between 54% to 57% depending on the maturity. Hepsiburada intends to use the funds raised through this issue to sustainably grow its BNPL business and reduce its impact on working capital. Hepsiburada and Jumia join forces to unlock broader product selection for African and Turkish consumers In June 2024, Hepsiburada entered into a commercial partnership with Jumia Technologies AG (NYSE: JMIA) ("Jumia") pursuant to which Hepsiburada will facilitate access to the Turkish market for merchants based in Africa by giving such merchants the opportunity to sell their products via Hepsiburada's e-commerce platform to customers in Türkiye. Further, the partnership allows Hepsiburada to sell its private label products together with a selection of other Turkish brands on Jumia's platform in certain countries in the African region in which Jumia operates. Hepsiburada Financial Review Restatement of financial information: Pursuant to IAS 29, the financial statements of an entity whose functional currency is that of a hyperinflationary economy are reported in terms of the measuring unit current as of the reporting date of the financial statements. All amounts included in the financial statements which are not stated in terms of the measuring unit current as of the date of the reporting period are restated applying the general price index. In summary: (i) Non-monetary items are restated from the date of acquisition to the end of the reporting period. (ii) Monetary items that are already expressed in terms of the monetary unit current at the end of the reporting period are not restated. (iii) Comparative periods are stated in terms of measuring unit current at the end of the reporting period. (iv) All items in the statement of comprehensive income/(loss) are stated in terms of the measuring unit current as of the date of the financial statements, applying the relevant (monthly) conversion factors. (v) The gain or loss on the net monetary position is included in the statement of comprehensive loss and separately disclosed. Note: All financial figures in the tables provided are expressed in terms of the purchasing power of the Turkish Lira on March 31, 2024 (in accordance with IAS 29) unless otherwise indicated. (in TRY million unless otherwise indicated) Three months ended March 31, unaudited   2024 2023 y/y % GMV (TRY in billion) 36.3 25.5 42.5% Marketplace GMV (TRY in billion) 24.8 17.4 42.8% Share of Marketplace GMV (%) 68.4% 68.2% 0.2pp Revenue 11,309.6 7,800.5 45.0% Gross Contribution 3,804.0 2,374.3 60.2% Gross Contribution margin (%) 10.5% 9.3% 1.2pp Net loss for the period (130.7) (324.9) (59.8%) EBITDA 289.4 12.2 2,272.1% EBITDA as a percentage of GMV (%) 0.8% 0.0% 0.7pp Net cash provided by operating activities 1,455.7 101.5 1,334.2% Free Cash Flow 1,029.6 (259.3) n.m. Note: Unless otherwise indicated, all discussions and analysis provided in this section are based on inflation-adjusted IFRS figures and non-IFRS measures. Revenue (in TRY million, unaudited) Three months ended March 31, 2024 2023 y/y % Sale of goods1 (1P)       7,815.6      5,676.4 37.7% Marketplace revenue2 (3P)       1,470.5      1,117.2 31.6% Delivery service revenue       1,602.3         821.9 95.0% Other          421.3         185.0 127.7% Revenue 11,309.6 7,800.5 45.0% 1: In 1P direct sales model, we act as a principal and initially recognize revenue from the sales of goods on a gross basis at the time of delivery of the goods to our customers.2: In the 3P marketplace model, revenues are recorded on a net basis, mainly consisting of marketplace commission, transaction fees and other contractual charges to the merchants. Our revenue increased by 45.0% to TRY 11,309.6 million in Q1 2024 compared to TRY 7,800.5 million in Q1 2023. This was mainly due to a 37.7% increase in our (1P) revenue (comprising 69.1% of total revenue) and a 31.6% increase in Marketplace revenue (3P) (comprising 13.0% of total revenue), compared to Q1 2023. Our delivery service revenue, comprising 14.2% of total revenue, rose by 95.0% compared to Q1 2023. Meanwhile, other revenue increased by 127.7% compared to Q1 2023 primarily as a result of a 102.3% growth in our advertising services (HepsiAd) and a 4.1x growth in our Hepsiburada Premium subscription revenues in addition to the rise in our fulfillment service revenues. While GMV increased by 42.5% in Q1 2024 compared to Q1 2023, the 1P and 3P revenue growth during this period was 36.7%. Faster GMV growth compared to revenue growth was due mainly to the increase in VAT across all goods and services in early July 2023, resulting in an increase in average selling prices throughout the platform. The 95.0% increase in delivery service revenue compared to Q1 2023 was mainly due to i) a significant increase in delivery service revenue from the off-platform customers of Hepsijet, ii) annual rises in unit delivery service charges to our merchants (surpassing inflation), and iii) an increase in the number of parcels delivered. Gross Contribution (in TRY million unless indicated otherwise, unaudited) Three months ended March 31, 2024 2023 y/y % Revenue 11,309.6 7,800.5 45.0% Cost of inventory sold (7,505.6) (5,426.2) 38.3% Gross Contribution 3,804.0 2,374.3 60.2% Gross Contribution margin (% of GMV) 10.5% 9.3% 1.2pp   The Gross Contribution margin improved by 1.2pp to 10.5% in Q1 2024 compared to 9.3% in Q1 2023. This margin improvement was mainly attributable to a 1.2pp increase in delivery service revenue from off-platform customers and a 0.4pp improvement derived from higher other revenue, partially offset by a 0.3pp decline in the 3P margin (due to lower promotional activity in Q1 2023 after the earthquake in February) and a 0.1pp decline in the 1P margin mainly due to the impact of higher inflation on inventories. The table below shows the monthly inflation rates in 2024 and 2023. Consumer inflation Monthly (2003=100) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2024 7% 5% 3% - - - - - - - - - 2023 7% 3% 2% 2% 0% 4% 9% 9% 5% 3% 3% 3% Source: Data as announced by TurkStat Operating Expenses The table below shows our operating expenses for the three months ended March 31, 2024 and 2023 in absolute terms and as a percentage of GMV: (in TRY million unless indicated otherwise, unaudited) Three months ended March 31, 2024 2023 y/y% Cost of inventory sold (7,505.6) (5,426.2) 38.3% % of GMV (20.7%) (21.3%) 0.6pp Shipping and packaging expenses (1,227.0) (743.3) 65.1% % of GMV (3.4%) (2.9%) (0.5pp) Payroll and outsource staff expenses (1,197.2) (824.0) 45.3% % of GMV (3.3%) (3.2%) (0.1pp) Advertising expenses (714.8) (476.8) 49.9% % of GMV (2.0%) (1.9%) (0.1pp) Technology expenses (130.5) (101.0) 29.2% % of GMV (0.4%) (0.4%) 0.0pp Depreciation and amortization (387.2) (299.7) 29.2% % of GMV (1.1%) (1.2%) 0.1pp Other operating expenses, net (245.2) (216.9) 13.0% % of GMV (0.7%) (0.9%) 0.2pp Net operating expenses (11,407.5)  (8,087.9) 41.0% Net operating expenses as a % of GMV (31.4%) (31.8%) 0.3pp Net operating expenses increased by 41.0% to TRY 11,407.5 million in Q1 2024 compared to TRY 8,087.9 million in Q1 2023. As a percentage of GMV, our net operating expenses declined 0.3pp mainly due to a 0.6pp decrease in cost of inventory sold, a 0.2pp decrease in other operating expenses, net, and a 0.1pp decrease in depreciation and amortization, in each case as a percentage of GMV. This was partially offset by a 0.5pp rise in shipping and packaging expenses, a 0.1pp rise in advertising expenses and a 0.1pp rise in payroll and outsource staff expenses, in each case as a percentage of GMV. The 0.6pp decrease in cost of inventory sold as a percentage of GMV was mainly due to i) a 0.2pp shift in GMV mix towards Marketplace, and ii) the increase in VAT across all goods and services in early July 2023. The 0.5pp increase in shipping and packaging expenses as a percentage of GMV was mainly driven by the increase in the number of parcels delivered (including those of HepsiJet's off-platform customers) and a rise in delivery fees per unit, outpacing the average inflation in Q1 2024 compared to Q1 2023. Financial Income (in TRY million, unaudited) Three months ended March 31, 2024 2023 y/y % Foreign currency exchange gains 342.0 109.0 213.8% Interest income on credit sales 284.2 63.6 346.9% Interest income on time deposits 145.8 77.0 89.4% Fair value gains on financial assets measured at fair value 39.4 1.5 2,493.6% Interest income on financial investments 0.7 0.0 n.m. Other 7.0 21.3 (66.7%) Financial income 819.1 272.4 200.7% Our financial income increased by 200.7%, or TRY 546.7 million, to TRY 819.1 million in Q1 2024 compared to TRY 272.4 million in Q1 2023. The rise in financial income was mainly driven by the increase in interest income on credit sales and time deposits as a result of higher annual interest rates. The TRY 233.0 million increase in foreign currency exchange gains from our U.S. dollar denominated bank deposits and financial investments due to the higher U.S. dollar/TRY appreciation during Q1 2024 compared to Q1 2023 also contributed to the increase in interest income. Financial Expenses (in TRY million, unaudited) Three months ended March 31, 2024 2023 y/y % Commission expenses due to early collection of credit card receivables (724.7) (321.2) 125.6% Interest expenses on purchases (364.8) (54.5) 569.4% Foreign currency exchange losses (150.7) (87.6) 72.0% Interest expenses on bank borrowings and lease liabilities (99.1) (61.7) 60.6% Other (4.2) (0.7) 500.0% Financial expenses (1,343.5) (525.7) 155.6% Our financial expenses increased by 155.6%, or TRY 817.8 million, to TRY 1,343.5 million in Q1 2024 compared to TRY 525.7 million in Q1 2023, primarily attributable to a TRY 403.5 million increase in commission expenses due to early collection of credit card receivables and a TRY 310.3 million increase in interest expenses on purchases as a result of a rise in annual effective interest rates and an increase in purchased goods during Q1 2024, each compared to Q1 2023. Net Loss for the Period Net loss for the period was TRY 130.7 million in Q1 2024, down from a net loss of TRY 324.9 million in Q1 2023. This was mainly attributable to TRY 277.1 million improvement in EBITDA and TRY 275.5 million in monetary gain against TRY 271.0 million increase in net financial expenses (net of financial income) and TRY 87.5 million increase in depreciation and amortization. EBITDA EBITDA was TRY 289.4 million in Q1 2024 compared to TRY 12.2 million in Q1 2023, corresponding to 0.8% EBITDA as a percentage of GMV in Q1 2024. This corresponded to a 0.7pp improvement in EBITDA as a percentage of GMV in Q1 2024 compared to Q1 2023. This improvement was driven by a 1.2pp rise in Gross Contribution margin and a 0.2pp decline in other operating expenses, net as a percentage of GMV, partially offset by a 0.5pp rise in shipping and packaging expenses and a 0.1pp rise in advertising expenses and a 0.1pp rise in payroll and outsource staff expenses, in each cases a percentage of GMV. Net Working Capital Net working capital was negative TRY 6,465.1 million as of March 31, 2024 compared to negative TRY 6,796.3 million as of December 31, 2023. The TRY 331.2 million change in negative net working capital was mainly driven by a TRY 231.3 million increase in trade receivables, a TRY 271.0 million increase in inventories and a TRY 189.5 million decrease in trade payables and payables to merchants; partially offset by a TRY 197.5 million increase in contract liabilities and merchant advances and TRY 128.0 million increase in wallet deposits. The increase in trade receivables was mainly due to a higher BNPL and credit card receivables balance. The increase in inventories was due to longer inventory turnover days as of March 31, 2024 compared to December 31, 2023. The increase in contract liabilities and merchant advances was mainly due to undelivered orders as of March 31, 2024 as a result of high number of orders in the last week of March, while the decrease in trade payables resulted primarily from a shift in the 1P GMV mix towards categories with shorter payment terms. Cash Flow from Operating Activities Our net cash provided by operating activities in Q1 2024 at TRY 1,455.7 million comprised a TRY 130.7 million net loss (Q1 2023: net loss of TRY 324.9 million), a negative TRY 443.0 million change in negative net working capital (Q1 2023: negative TRY 1,220.9 million) and a TRY 2,029.5 million change in other items (comprising non-cash items such as provisions and depreciation expenses as well as certain non-operating items such as financial income & expenses, non-operating monetary gains & losses and unrealized foreign exchange differences) (Q1 2023: TRY 1,647.2 million). The change in net working capital is further disclosed in the "Net Working Capital" section. Net cash provided by operating activities rose by TRY 1,354.3 million to TRY 1,455.7 million in Q1 2024 compared to net cash provided by operating activities in Q1 2023 of TRY 101.5 million. This was mainly due to a strong EBITDA performance of TRY 277.1 million and increase in change in net working capital of TRY 777.8 million. Free Cash Flow Our free cash flow increased to TRY 1,029.6 million in Q1 2024 from negative TRY 259.3 million in Q1 2023. The TRY 1,288.9 million improvement was mainly due to the increase in cash flows generated from operating activities offset by TRY 65.4 million increase in capex. Total Cash and Financial Investments Total cash and cash equivalents was at TRY 3,562.9 million as of March 31, 2024 compared to TRY 6,328.5 million as of December 31, 2023. ...