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 third quarter and the nine months ended September 30, 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 and nine months ended September 30, 2024, including figures corresponding to the same periods 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 September 30, 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 September 30, 2024 are as follows:

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.

Third Quarter 2024 Financial and Operational Highlights

(All financial figures are restated pursuant to IAS 29 unless otherwise indicated)

• Gross merchandise value (GMV) increased by 10.3% to TRY 42.3 billion compared to TRY 38.4 billion in Q3 2023.
  • IAS 29-Unadjusted GMV increased by 69.9% to TRY 41.2 billion compared to Q3 2023.
• Revenue increased by 1.7% to TRY 12,241.6 million compared to TRY 12,036.6 million in Q3 2023.
• Number of orders increased by 18.9% to 32.0 million compared to 27.0 million orders in Q3 2023.
• Active Customers increased by 1.9% to 12.3 million compared to 12.0 million as of September 30, 2023.
• (Order) Frequency increased by 15.6% to 10.8 compared to 9.4¹ as of September 30, 2023.
• Active Merchant base decreased by 1.3% to 99.8 thousand compared to 101.1 thousand as of September 30, 2023.
• Number of SKUs increased by 33.1% to 280.4 million compared to 210.6 million as of September 30, 2023.
• Share of Marketplace GMV was 70.4% compared to 65.5% in Q3 2023.
• Operating income was TRY 32.4 million compared to an operating loss of TRY 245.1 million for Q3 2023. This quarter marks the first time we have achieved quarterly positive operating income since our IPO in July 2021.
• EBITDA increased by 286.5% to TRY 507.8 million compared to TRY 131.4 million in Q3 2023. Accordingly, EBITDA as a percentage of GMV was at 1.2%, a 0.9 percentage point improvement compared to 0.3% in Q3 2023.
  • IAS 29-Unadjusted EBITDA increased by 40.0% to TRY 901.3 million compared to TRY 643.9 million in Q3 2023. IAS 29-Unadjusted EBITDA as a percentage of GMV in Q3 2024 decreased by 0.5 percentage points to 2.2% compared to 2.7% in Q3 2023.
• Loss for the period was TRY 307.4 million compared to a loss of TRY 285.5 million for Q3 2023.
• Free cash flow was TRY 1,579.0 million compared to TRY 2,831.0 million in Q3 2023.

"Our third quarter performance once again confirms our commitment to sustainable growth and improved profitability. Working towards our strategic priorities, we have delivered another solid set of results, meeting our quarterly financial guidance. Adjusted for inflation, our GMV growth in Q3 2024 came in at 10.3%, with EBITDA as a percentage of GMV at 1.2%, up by 0.9 percentage points compared to the same period last year. Moreover, we marked a milestone in our Q3 2024 results by recording positive quarterly operating income for the first time since our IPO.

As Türkiye's most recommended e-commerce brand, we once again scored an NPS of 75. Customers identified our speed of delivery, range of affordability and lending solutions and their trust in the Hepsiburada brand as the key factors in their preference for the platform. Our appeal is also evidenced by 233 thousand net additions in our Active Customers, which reached 12.3 million by the end of the third quarter, and firm traction in Hepsiburada Premium program enrollment, which reached approximately 3.7 million members as of the end of November.

Meanwhile, HepsiJet's service excellence and its commitment to flexible and convenient delivery options led to increased penetration among our merchants and other retailers. In the third quarter of 2024, with a remarkable 6.8 percentage point yearly rise, HepsiJet delivered 74% of total parcels on our platform, confirming its integral role in our delivery ecosystem. HepsiJet also continues its off-platform penetration, nearly doubling its volume year-on-year, corresponding to nearly 35% of its total volume in the third quarter of 2024.

On the fintech front, Hepsipay's proposition has increased our relevance in the challenging economic climate with a comprehensive suite of affordability and lending solutions, unmatched in the Turkish e-commerce sector. Our affordability solutions penetration rose to 8.8% of GMV by the end of the third quarter of 2024 with a total lending volume of TRY 13.6 billion over the last twelve months. On the payments front, Hepsipay stands out in the market with its 17.6 million wallet customers and 21.1 million stored credit cards as of the end of November. As part of its off-platform efforts, Hepsipay is already integrated at the checkout of 127 leading retailers as of the end of November 2024.

Our expectations for Q4 reflect the ongoing challenging macroeconomic conditions. Despite continued pressure on consumer purchasing power, we anticipate sustained top-line growth and margin expansion through diligent execution of our strong fundamentals. Accordingly, in the fourth quarter of 2024, we forecast GMV growth within the range of 50% to 55% compared to the same quarter of 2023 and an EBITDA as a percentage of GMV within the range of 1.8% to 2.0%. These figures are unadjusted for inflation.

With our founder's vision, our employees, business partners, and entire ecosystem, Hepsiburada has pioneered the digitalization of commerce in Türkiye for nearly a quarter of a century, having introduced numerous industry firsts and innovative solutions. We are now entering a new period in Hepsiburada's history as Kaspi.kz ("Kaspi”) has entered into an agreement to acquire a controlling 65.4% stake in Hepsiburada, subject to the satisfaction of customary closing conditions. As Kaspi is the preeminent payments, marketplace and fintech ecosystem in Kazakhstan, the synergies to arise from this deal are expected to propel Hepsiburada further on its ambitious journey. Our shared customer centricity and service quality orientation confirm the strong cultural fit necessary for success. Kaspi's expertise in fintech, technological capabilities and experience will therefore underpin our commitment to remain a preferred companion in people's daily lives. We aim to leverage the combined expertise of Kaspi.kz and Hepsiburada to advance e-commerce and digital services, fostering new opportunities for SMEs and entrepreneurs in Türkiye and Kazakhstan.

We thank our shareholders for their belief in our vision, our loyal customers and partners for their trust, and our dedicated team for their continued support.”

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 September 30, 2024 and September 2023, and the nine months ended September 30, 2024 and September 30, 2023 prepared in accordance with IFRS. Unless indicated otherwise, all financial figures in the tables provided are inflation-adjusted (in accordance with IAS 29).

Note: All financial figures in the tables provided are expressed in terms of the purchasing power of the Turkish Lira on September 30, 2024 (in accordance with IAS 29) unless otherwise indicated.

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.

Q4 2024 and Full Year 2024 Outlook

The below forward-looking statements reflect Hepsiburada's expectations as of December 10, 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 fourth quarter of 2024, we expect to deliver IAS 29-Unadjusted GMV growth within the range of 50% to 55% compared to the fourth quarter of 2023 and IAS 29-Unadjusted EBITDA as a percentage of GMV within the range of 1.8% to 2.0%. Consequently, for the full year 2024, we expect to deliver IAS 29-Unadjusted GMV growth of approximately 75% compared to the full year 2023 and to record IAS 29-Unadjusted EBITDA as a percentage of GMV within the range of 2.1% to 2.2%.

Business and Strategy Highlights

As of September 30, 2024, the annual inflation rate published by TurkStat was 49.4%, declining from 61.5% as of September 30, 2023, and 71.6% as of June 30, 2024. The monthly inflation rates during the third quarter of 2024 were 3.2%, 2.5% and 3.0% in July, August and September, respectively. The Consumer Confidence Index increased by nearly 6.7 points on a yearly basis to 78.2 as of September 30, 2024.

In Q3 2024, IAS 29-Unadjusted GMV increased by 69.9% to TRY 41.2 billion compared to TRY 24.3 billion in Q3 2023, in line with our guidance. Adjusted for inflation, GMV increased by 10.3% to TRY 42.3 billion in Q3 2024 compared to TRY 38.4 billion in Q3 2023. GMV growth was attributable mainly to the 5.2% order growth and 4.7% average order value growth, both excluding that of digital products (which mainly include sweepstakes and gamified lotteries as well as the first monthly payment of Hepsiburada Premium membership subscription).

We experienced order growth of 18.9% compared to Q3 2023, resulting from the continued rise in order frequency during the third quarter of 2024. Our order frequency (LTM) grew by 15.6% to 10.8, up from 9.4² as of September 30, 2023. Strong customer demand for our digital products contributed to the rise in order frequency. Excluding the orders of digital products, order frequency would have been 6.7 as of September 30, 2024 compared to 6.1 as of September 30, 2023, corresponding to 9.4% growth. Accordingly, order growth excluding that of digital products was 5.2% in Q3 2024 compared to Q3 2023. While these digital products only generated around 0.4% of our GMV in Q3 2024, we value the repeat interaction they enable with the participating customer segments.

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 75 in Q3 2024, in line with the score obtained in Q2 2024 (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.

We remain committed to executing our strategic priorities that include: a) nurturing loyalty, b) capitalizing on our clear differentiation of superior delivery services, c) capitalizing on our clear differentiation through 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 Q3 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, continues to play 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 more than doubled, reaching 3.3 million by the end of Q3 2024 compared to 1.5 million by the end of Q3 2023. The number of Hepsiburada Premium members reached nearly 3.7 million by November 30, 2024.
• Hepsiburada Premium members continue to generate higher order frequency than non-members. In Q3 2024, the monthly order frequency for members was 31% higher than before joining the program.
• To mark the second anniversary of the Hepsiburada Premium program, we held Hepsiburada Premium Days from July 16 to July 25, 2024, offering exclusive campaigns to our Premium members. The ten-day event prompted 130 million visits to the platform and 4 million products were ordered through the platform. Premium members received 587 thousand orders with free shipment and earned TRY 22 million cash back. During Premium Days, HepsiAd services were used by 20 thousand merchants.
• The NPS for Hepsiburada Premium members was 84 in Q3 2024, according to the results of market research conducted by the research company FutureBright on behalf of Hepsiburada. This score, which is in line with the one obtained in Q2 2024, remains higher than the Company's overall NPS, which we believe signifies a strong satisfaction level among members.

• In Q3 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 Q3 2024, HepsiJet delivered 80% of the orders placed through our retail arm (1P) within the next day (compared to 82% in Q3 2023).
• HepsiJet is also a key component of our value proposition for our merchants. In Q3 2024, HepsiJet delivered approximately 74% of our total parcels (compared to 67% in Q3 2023).
• The NPS for HepsiJet was 88 in Q3 2024, 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 69% of oversized parcels ordered through our platform in Q3 2024, up from 57% in Q3 2023.

• 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.
• Our total financed transaction volume (including BNPL, shopping loans, general purpose loans and consumer finance loans) had reached TRY 13.6 billion over the last twelve months by the end of Q3 2024. 47% of this amount was issued through partner banks in the form of shopping loans and general purpose loans, while 53% was issued by Hepsiburada group companies (up from 47% in Q3 2023) in the form of our BNPL solution and consumer finance loans.
  • As of September 30, 2024, our BNPL solution had been used by over 465 thousand customers.
  • Approximately 1.4 million orders were processed through our non-card affordability solutions (including BNPL, shopping loans and consumer finance loans) over the past 12 months.
  • In Q3 2024, orders made through our BNPL solution, shopping loans and consumer finance loans accounted for 6.5% of total GMV for the period, up from 6.1% in Q2 2024.
  • The consumer tendency to use general purpose loans for shopping on our platform has also increased. As such, including the impact of general purpose loans spent on the platform, GMV penetration of all affordability solutions rose to 8.8% in Q3 2024 from 8.1% in Q2 2024.
  • By September 30, 2024, our wholly-owned subsidiary, Hepsifinans, had provided over TRY 1,047 million in consumer finance loans since its launch in January 2024.
  • We diligently manage credit risk in our BNPL, with a CoR³ of around 2.65% as of October 31, 2024, while remaining focused on growth optimization.
  • Shopping related credit receivables create limited balance sheet load with average durations of around 2.9 and 4.0 months for BNPL and consumer finance loans solutions, respectively, as of October 31, 2024.
  • Hepsipay targets the consumer loan market which is estimated to have a total size of $40 billion in Türkiye in 2024. (according to our estimate based on data published by the Banking Regulation and Supervision Agency).
• As of September 30, 2024, Hepsipay registered approximately 17.0 million Hepsipay wallet customers (representing users who have opened their wallet account by giving the required consent to Hepsipay), up from 13.2 million as of September 30, 2023. As of November 30, 2024, the number of Hepsipay wallet customers had reached 17.6 million. Additionally, 21.1 million cards are stored in the wallets of Hepsipay customers.
• As of September 30, 2024, 1.7 million Hepsipay prepaid cards had been issued through the Hepsiburada mobile app. The Hepsipay prepaid card can be used online at any e-commerce site and is linked to the QR payment feature which allows customers to use it at any off-line retailer that accepts QR payments. As of the end of November, the number of Hepsipay cards issued reached 2.1 million. The option for Hepsipay prepaid card holders to top up their e-wallets by way of general purpose loans is now available at ten leading banks in Türkiye.
• Hepsipay targets the off-line card payments market for domestic cards with a size of $263 billion and online payments with a size of $102 billion in 2024, each in Türkiye. (according to our estimate based on data published by The Interbank Card Center and The Ministry of Trade).

• 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 approximately 2,750 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 35.1% in Q3 2024, up from 24.8% in Q3 2023. The total parcel volume of third parties delivered in Q3 2024 almost doubled compared to Q3 2023.
• As of September 30, 2024, Hepsipay's one-click check-out ("Pay with Hepsipay”) offering was successfully integrated into the online checkout of 82 retailers, reaching 127 retailers by November 30, 2024. Total payment volume through "Pay with Hepsipay” almost doubled compared to Q2 2024. By enabling payment with cards stored on the Hepsipay wallet, Hepsipay has gained a share of these retailers' online sales.

• In Q3 2024, Hepsiburada continued its support in social, commercial and economic areas.
• Our "Trade and Technology Empowerment for the Earthquake Region” program, launched in March 2023 a month after the earthquake, reached approximately 19,000 merchants. This includes the 4,900 new businesses in the region that we recruited and trained to sell their products online through Hepsiburada. Active sellers have generated a trade volume exceeding TRY 7.2 billion since the program's launch. Our E-Commerce Specialization Centers in Adana, Hatay and Kahramanmaraş 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.
• The "Technology Empowerment for Women Entrepreneurs” ("TEWE”) program reached an additional 2,537 women. To date, the TEWE program has supported approximately 57.5 thousand women entrepreneurs. Furthermore, as of September 30, 2024, the number of women's cooperatives on our platform had reached 276.
• As part of the TEWE program, various NGO collaborations have been established to provide sustainable support to the earthquake zone. As of September 30, 2024, the number of women entrepreneurs and women's cooperatives in the impacted region had reached 3,804 and 43, respectively.
• As part of our ongoing social responsibility projects for animals, Hepsiburada has become the microchip and ID card sponsor of The Rescue House Charity Association. Additionally, Hepsiburada has created a "Support for Pawed Friends” page on its website. On this page, our customers can donate products to the animal shelters of The Rescue House Charity Association. Purchased products are sent directly to the shelters without the application of any delivery costs.
• Following its initial launch in 2023, Hepsiburada relaunched its "Promise for Tomorrow" education and internship program on August 12, recognized as International Youth Day by the United Nations. The program, which began this year with 170 students, aims to reduce inequalities and remove barriers to education and employment for university students, supporting their integration into the digitalized world of commerce. At the end of the program, the top 10 performers in the program will have the opportunity to do an internship at Hepsiburada.
• In September 2024, Hepsiburada published its 2023 Sustainability Report, disclosing its environmental, social, and governance (ESG) initiatives.

• On November 15, 2024, Hepsiburada and the Ministry of Family and Social Services signed a cooperation agreement supporting Türkiye's entrepreneurial women. This partnership aims to reinforce Hepsiburada's support for these entrepreneurs and reach a wider audience.

Change of Control Transaction

On October 17, 2024, Kaspi.kz signed a Stock Purchase Agreement with members of the Doğan Family to purchase Class A and Class B shares representing 65.41% of the total outstanding share capital of Hepsiburada. The aggregate consideration for the transaction is approximately $1,127 million.

The transaction remains subject to customary closing conditions and receipt of regulatory approvals by the Central Bank of the Republic of Türkiye, the Banking Regulation and the Supervision Agency and the Information Technologies and Communication Authority in Türkiye. Approval from the Turkish Competition Authority was granted on November 19, 2024. The transaction is expected to close in the first quarter of 2025.

Hepsiburada Announces the Third Issuance of Asset-backed Securities

The third issuance of asset-backed securities amounting to TRY 450 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 December 4, 2024. In this structure, Hepsiburada participated as the originating entity with respect to its BNPL receivables. The issue consists of six tranches with an average maturity of 73 days and at an annual average interest rate of 51.00%. Hepsiburada intends to use the funds raised through this issue to sustainably grow its BNPL business and reduce its impact on working capital.

This third issuance follows a first issuance of asset-backed securities amounting to TRY 150 million, which settled on June 5, 2024, and a second issuance of asset-backed securities amounting to TRY 350 million, which settled on September 27, 2024.

Key Highlights of Our Performance During Legendary November

Our business is characterized by seasonality, with higher sales typically generated during the fourth quarter of the year. One key driver is the month of November during which we traditionally hold numerous campaigns with participating merchants. Our preliminary "Legendary November” results indicate that we delivered yet another strong performance in November this year. Below are key highlights:

• Our platform received 500 million visits in November.
• On Single's Day, November 11, 2024, we recorded the highest daily traffic in Hepsiburada's history.
• HepsiJet achieved an average of approximately 606 deliveries per minute throughout the month.
• The average order value for customers using our affordability solutions (BNPL, consumer loans and shopping loans) was 72% higher than that of customers using credit cards for payment.
• The best-selling categories for the month included FMCG products, cosmetics, home textile & kitchenware and apparel.

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 September 30, 2024 (in accordance with IAS 29) unless otherwise indicated.

Note: Unless otherwise indicated, all discussions and analysis provided in this section are based on inflation-adjusted IFRS figures and non-IFRS measures.

Revenue