Istanbul, Turkey – D-Market Electronic Services & Trading, trading as HEPS on the NASDAQ, has released its first-quarter financial results, showcasing robust growth and improved profit margins. The Turkish e-commerce giant, operating as “Hepsiburada,” has successfully navigated challenging economic conditions by offering a wide range of services, including fintech, which has attracted a loyal customer base.

Analysts had previously issued a rare “strong buy” rating for HEPS stock, recognizing the company’s potential for sustainable profitability. The latest results exceeded expectations, reaffirming a positive outlook for HEPS supported by strong fundamentals.

In the first quarter, HEPS reported revenue of TRY 11.3 billion, equivalent to approximately $344 million, marking a 45% increase year-over-year. Notably, the company adjusted the figures for inflation, highlighting the real growth achieved despite Turkey’s high inflation rate.

The company’s gross contribution margin increased by 9.3% from the previous year to 10.5%, driven by cost control measures and improved financial efficiencies. As a result, EBITDA surged to TRY 289.4 million, compared to TRY 12.2 million in the first quarter of the previous year, while free cash flow turned positive.

Operationally, HEPS experienced a 42.5% growth in gross merchandise value (GMV), with a notable increase in total orders. The company’s active customer base expanded to 12.1 million, indicating higher customer engagement and brand loyalty.

The shift towards non-electronic product categories within GMV suggests a strategic move by customers towards staples and household items. HEPS’s “Hepsipay” offering, with 15.7 million installed users, is on track to become Turkey’s leading digital wallet, already integrated with 28 local retailers.

Looking ahead, analysts expect HEPS to continue its impressive growth trajectory, with revenue projected to increase by 50% this year, reaching $1.4 billion. Earnings per share (EPS) are also forecasted to more than double by 2024, reflecting the company’s strong performance and growth potential in the emerging market.

The company’s current valuation compared to its peers and the risks associated with the Turkish market are factors to consider for investors. However, HEPS’s strategic focus on profitability and market potential position it favorably for future growth and success in the e-commerce industry.