Good afternoon and good morning, everyone. Welcome to our Warsaw Stock Exchange Q4 2025 and Full-Y ear Results Call. Thank you for joining us. Let me introduce today's speakers. We have with us CEO of Warsaw Stock Exchange, Mr. Tomasz Bardziłowski, the CFO, Marcin Rulnicki, and additionally with us, we have the CEO of our subsidiary, the Commodity Exchange, Mr. Piotr Listwoń. We have planned around 20-25 minute presentation, followed by a Q&A session for you. Now, without further ado, let me pass the floor to our CEO, Tomasz.
Hello, good afternoon and good morning. Welcome on our earnings call. 2025 was a record year for Polish capital market and for the Warsaw Stock Exchange. When you look at the cash equity turnover, it was up 42% year-on-year and also the record high performance of our indices. The main index WIG was up 47% and MSCI Poland up 68%. This helped our revenues for cash equity for Cash Equities business.
As a result of that, our consolidated top line went up by 90% year-on-year to a record high PLN 552 million, driven by Financial Market revenues up 23%, and also helped by quite solid and strong revenues from Commodity Markets, up 12.5% last year. In terms of operating costs, they grew by a single-digit number, which was an achievement, 9.9%. The cost/income ratio fell by 5 percentage points to 66%, and helped by a strong operating leverage. Our adjusted EBITDA went up by 38% and adjusted net profit by 30% to almost PLN 205 million. CapEx increased 35% year-on-year to PLN 75 million.
However, thanks to strong cash flow, the net cash at the end of the day went up by 4% to PLN 384 million. You can now see that this is our net cash level. Also, we are happy to say that the performance of our stock has been quite strong last year. It was up 61%, and including dividend, the total return was 68.5%. Our market cap increased by more than PLN 1 billion last year. You see here the turnover last year went up by 42%, and we are very happy to say that compared to our peer exchanges, the liquidity on the Warsaw Exchange remains relatively solid.
In terms of velocity ratio, i.e., turnover- to- market cap, we are the second most liquid exchange after Deutsche Börse in Europe. When you look at the beginning of this year, first months were also very strong in terms of turnover. The sum of turnover in January and February was up over 50% year-over-year. Obviously, this is also due to the higher volatility on global markets. We are very happy to see a very strong growth in the most important products for us in terms of our strategy, especially in attracting retail investors. These are ETFs.
The ETFs turnover doubled last year, and then we have very strong beginning of this year when the turnover went up by over 200%. We have added 13 new ETFs last year, and very happy to have one of the largest Polish financial institutions, the issuer PZU, launching their first ETF on Polish stocks on WIG20 and WIG40 Index. This was just a week ago, and we hope for PZU and for more Polish financial institutions to issue ETFs on our market this year. Also, very happy to see a strong ECM market.
While we have had only three IPOs, the ECM market has been very active last year with ABBs and SPOs, and the total number of transactions exceeded PLN 20 billion, so more than $5 billion. Also this year, we have a good start with some large ABBs and also quite active market in terms of SPOs, so capital raising by some mid-cap and small companies. A quite active corporate bond market last year in terms of it was total value of issuance of corporate bonds PLN 30 billion compared to PLN 31 billion in 2024. Very strong beginning of the year with PLN 5 billion issuance already.
We point out also to a strong mortgage-covered bond market, and here we are very happy to have a first benchmark retail issue of mortgage bonds done by PKO Bank Hipoteczny. Here we are comparing our results for 2025, the first year of our three-year strategy with our financial ambitions. In terms of revenues, we were able to exceed significantly our targets. This also led to slightly higher OpEx, as some of the costs are variable in nature. We had a 9.9% increase versus a target range of 4.6%. In terms of EBITDA, 38% growth compared to between 8%-12% target range.
Very happy to see cost-to-income ratio at 66%. This compares to our 2027 target of 65%, so quite close. We may say that we have already achieved the target in terms of ROE at 18%. Let me now pass to Marcin to guide you through our 4Q results and also more details about 2025 full year. Thank you.
Thank you. Good morning, good afternoon, everyone. In the next few slides, we'll share details of our financial performance, starting with the summary of P&L for Q4 and the whole year. As Tomek already mentioned, a very strong quarter in terms of revenues. You can see that in Q4 only they went up 23%, reaching more than PLN 140 million. The bigger component to this growth was the Financial Market, where we still had a very high turnover trading on equities. But still, a solid 19% growth on the Commodity Market, where investors were also very active trading natural gas mainly.
In terms of operating expenses, they reached PLN 96 million in Q4, up by 14.2%. We have dedicated slides where we present details. We had also a number of non-recurring one-off events, transactions. We will explain them later as well in the following slide. Excluding those non-recurring transactions, the adjusted EBIT was PLN 45.5 million in Q4, 37% up, and EBITDA was PLN 54.5 million, 31% up. Very, very strong, very good operating results. What happened below the operating profit line, share in our associated companies, PLN 10 million. This is coming mainly from the depository, and net financial income of PLN 4 million. Pretty good level, and it looks normal.
Net financial income looks low compared to previous year, but we had one-offs in the comparable data, hence this level is more, let's say, for us. At the end, the adjusted net profit went up 9% in Q4 and reached PLN 47.3 million. Again, very strong results. We are very, very happy about this quarter. I mentioned non-recurring transactions one-offs, and here is a short summary of what we did at the end of 2025. We had still two projects which were not related with our core business.
At the end of last year, when we did this review of assets, including non-core assets, these projects were pretty advanced in terms of developing software platforms, which were the core of them. We decided to write them off only partially and give ourselves a chance to commercialize them during 2025. Unfortunately, these efforts to commercialize these two were not successful. They were not able to bring the expected results. Eventually, we decided to write them off entirely at the end of 2025. Together with this write-off, we recognized revenue from grants, which would normally be recognized over time corresponding with amortization. Since we write them off entirely, we recognize the full revenue as well.
Therefore, the net impact of these non-recurring transactions was around -PLN 9 million on operating level and almost PLN 10 million on net profit. Looking at the structure of our revenues, no surprises here. Q4 was basically the continuation of what we saw in previous quarters. Very strong Financial Market, mainly due to trading related revenue, trading on equities, first of all, and also very strong Commodity Market where trading on gas was the main driver of growth. Maybe one thing to mention here is that our structure of revenues in terms of trading and non-trading related improved towards non-trading, even though the trading related revenues were growing very fast.
This was due to very high revenue from depository activities in Armenia. We will also show it on a separate slide. Anyway, it was 34.3%. This is the revenue that is not related to trading in the overall revenue sales of Warsaw Stock Exchange, consolidated. Looking at the trading revenue, so the biggest part of our Financial Market income, as I mentioned before, a very high turnover on equities. As you can see on the right-hand side of the slide, in Q4, it was PLN 140 billion, 41% up year-over-year. In the whole year, we had over PLN 470 billion, 42% higher than the year before, the record high revenues on Warsaw Stock Exchange.
The higher turnover was not only due to higher market cap, but also growing number of transactions. This is also, I think, which we can consider a very positive one. In other classes of assets, we see the same trends as in previous quarters. Considering other components of our revenue in the Financial Market segment, we have solid growth in Information Services. It's been similar to what we saw in previous quarters, 7.5% up compared to Q4 2024. In the whole year, we have 9% solid growth rate in the Information Services.
Listing-related revenue is stable and the Armenia Stock Exchange, so this is the right-hand side of the slide, it shows a very high growth both in Q4 and also annually. The reason for this is new rates for services related to deposit activities in Armenia that have been implemented since July 2025. In the whole second half of the year, we already benefited from higher rates and extended scope of services that our company in Armenia can provide. Let's move on. Now I'll pass to Piotr to comment on revenue on Commodity Market.
Sure. Thank you very much. The Commodity Market, both in Q4 and throughout whole 2025, with the small exception to electricity market, experienced a volume, I would call renaissance. During these periods, we recorded both year-on-year and quarter-on-quarter volume increase in every segment of our business lines, achieving a quarter-on-quarter revenue increase over 18% and slightly lower year-on-year increase over 15%. The total revenues from Commodity Market trading amounted to PLN 24.7 million in Q4 and nearly PLN 98 million in the entire year. The big star of this period was the gas market, of course, whose trading volume in Q4 reached almost 60 TWh, increasing by 33% year-on-year and over 14% quarter-on-quarter.
The entire year 2025 gas trading volumes amounted to almost 209 TWh and accounted for PLN 24.5 million in the revenues. We also recorded good results in the trading of renewable energy property rights in Q4, recording nearly 3% year-on-year increase in the volumes and 1.6% increase in 2024, totally, achieving total revenues of PLN 17.7 million. The Electricity Trading segments disappointed a bit us and our market participants through 2025, when we achieved a total trading volume of less than 120 TWh. Unfortunately, that was the lowest level since 2017 and over 9% lower than the already weak forward market in 2024.
Hopefully, Q4 we notice a quarter-on-quarter increase over 18% compared to Q3 last year, which was the result of the situation of the forward market, which saw the standard seasonal increase in trading and particularly liquidity of the quarterly products. When we move to the two other segments, revenues from the Commodity Markets, as you may see, they are strongly correlated with the turnovers. So we may simplify that increased volumes, especially in gas markets, had significant input on the clearing revenues, which increased year-on-year in Q4 over 20% and almost 60% year-on-year in the whole 2025, reaching almost PLN 2 million.
Revenues from operations of registers in Q4 were pretty nice, increasing year-on-year almost 80% in total. It's due to the better performance of operations in certificates of regional registry, reaching almost 30% increase of revenues. Comparing 2025 to 2024, we know that slightly 7% drop in the revenues due to lower volumes of certificates issued by the Energy Regulatory Office and lower volumes reported for cancellation by registered participants.
Now back to consolidated numbers. Let's have a look at the operating expenses. In Q4, they were PLN 96 million, 14% up. In the whole year, we had almost 10% growth of operating expenses, and it is mainly driven by personal costs. Within personal costs, the main reason for higher costs is increase in average employment. We hired a number of new FTEs, mainly in teams responsible for the IT area. We had to strengthen this area in the Warsaw Stock Exchange. Also, a certain part of this number comes from variable salaries. I will show details in a second.
In Q4, we also observed growth in external services, again, mainly in the IT area. This is related to seasonal settlement of projects. The year-end is usually, let's say, a time when we summarize several projects in IT. We also have slightly higher advisory services. This is also related to implementation of the new accounting system that went live in the financial market companies January 1st, 2026. Therefore, Q4 was a very intensive time. We worked on it.
Anyway, despite this slightly higher growth in operating expenses, we keep our trend of the growth rate of expenses below the growth rate of our revenues, and this is the seventh quarter in a row that we managed to keep it this way. Similarly to Q3, we presented a bridge in which we are trying to explain what part of our operating expenses growth comes from, let's say, underlying organic growth and how much comes from, let's say, unexpected events or those that exceeded our expectations. The first main component of those unusual is the variable compensation part.
Accrual for the variable compensation in 2025 is almost PLN 9 million higher than the year before. This is straight, let's say, consequence of very good results in Warsaw Stock Exchange and also subsidiaries because variable compensation of our team is very much related to financial performance. The second component is our operating costs in Armenia. They increased because of this extension of services provided by the depository. It is a part of the deal with the Central Bank of Armenia that they allowed the revaluation of rates and extension of services, but also the condition that our company will invest in the team and infrastructure used to provide these services.
Working the other way is our savings on operating expenses in non-core companies. We managed to save PLN 3.8 million in 2025. So when we netted and deducted from overall cost growth, the remaining part is PLN 25.2 million, so 7.6% up. This is what we consider the organic underlying operating expenses increase in 2025. CapEx. In Q4, it was comparable to Q4 2024. However, the structure was slightly different. We invested more in our trading platform development, as you can see in the dark blue part of the bar and slightly less in other elements, other components. When you look at the whole year, the investments were almost PLN 75 million, 35% up.
It's not surprising because we communicated during the year that we have certain investments we should catch up with. As you can see, especially the technical equipment went up very much in 2025, but also intangible assets and especially the trading platform development costs, which we capitalize on our balance sheet. In terms of cash flow and liquidity, again, no surprises here. We had very strong cash flow from operating activities, more than PLN 200 million. Even though our capital expenditures were higher than the year before, our free cash flow is still growing. It reached PLN 127 million compared to PLN 93 million the year before. Our conversion of results into cash is still very high.
Cash flow- to- EBITDA is almost 90%, and it's comparable to last year. We end the year with over PLN 380 million net cash on our balance sheet. Very safe liquidity position. Now I will ask Tomek to take over and discuss the outlook.
Thank you, Marcin. Let me now give you some guidance about the trends that shape our revenues and OpEx in terms of cash equity tradings. As we said, we had very strong January and February. In March until the end of last week, we saw trading which is up around 20% on year-on-year basis. However, we point out that we should expect, all other things being equal, lower year-on-year growth due to a high base effect starting from the second quarter next year. In the first quarter of this year, the average daily turnover so far is PLN 2.6 billion versus PLN 1.88 billion a year ago, and PLN 2.2 billion in the second quarter.
In terms of Commodity Market, we saw a strong volume growth in Gas segment January and February. However, there's some deceleration in terms of growth in March as a result of the situation in the Middle East. Electricity, a flat January and then somewhat better volumes, strong volumes in February and March. In terms of OpEx, this year will be another year with elevated level of OpEx, especially related to the WATS system. First we run two parallel infrastructures for two systems at the same time.
Following the planned launch of WATS, which is planned for the mid of this year, we'll have a sharp increase in depreciation expense. We will recognize in our P&L a portion of costs previously capitalized. This will increase our cost base. On the other hand, after the launch of WATS, our free cash flow generation should improve because there'll be less CapEx. On the other hand, we expect that some of this increase in costs will be offset by a reduction in the costs of non-core subsidiaries as we are finishing the review of strategic options for non-core companies.
We would expect that, especially in the second half of this year, those costs will be significantly lower, while last year it was roughly around PLN 10 million negative impact on our bottom line. In terms of CapEx, will still be quite high. i.e., at the level compared to revenues similar to what you've seen last year. Of course, works on the WATS trading platform and further investments in cybersecurity and development on digital tools, some small investments in related to AI and to our Data segments.
However, starting 2027 especially, and after the launch of WATS, you should expect CapEx to normalize at levels related to revenues seen in the previous years. We are and will be a company with attractive dividend policy. Our policy assumes a payment of between 60%-80% of constant net profit in dividends, with an ambition to increase dividend per share. We will publish our recommendation in terms of a dividend over next few weeks. Let me perhaps also make a comment here that, as you know, in our strategy, we focus on two pillars in terms of market development and creating value for our shareholders.
I think that still in terms of market development, there's lots to do, and we are here quite optimistic that there's a huge potential ahead of the Polish market. I'm sure that it and with many of you, I've discussed it already, and we'll be happy to discuss it in our one-on-one meetings.
Thank you very much, guys, for the presentation. Let's move on to the Q&A session. If you would like to ask a question, please raise your hand, and also it would be very helpful for us if you could introduce yourself. I see we have a raised hand from Miguel Dias, the analyst from WOOD. Miguel, the floor is yours.
Hi, everyone. Can you hear me?
Yeah. Yes.
Thanks for taking the time to present the results and take my questions. I would like to ask you first on the OKI accounts. I understand this has been pushed to start 2027. Do you have an estimate that you can share with us regarding the inflows that you expect in domestic-listed products in 2027 to 2028 from these accounts? The second question would be regarding Armenia Stock Exchange, if we should consider delivery in the fourth quarter as the run rate for 2026. Also on TGE, how should we think about the recent developments on the energy markets? Are these a net positive or negative for the Commodity Exchange?
Finally on costs, 2025 came in materially ahead of the guidance that you've provided, 10% year-on-year. Guidance is at 46%, if I'm not mistaken. Do you still maintain that there has been no frontloading in 2025 vis-à-vis the strategy? Also, how much can AI help you contain or reduce these costs? If I understand correctly that by the second half of 2026, the non-core subsidiary questions will be given a definite answer. Thank you.
I can take the first question about the OKI accounts. For those who don't know what OKI account will be, it's an account for retail investors with a free tax allowance of around 100,000 PLN, so around EUR 25,000 . This is modeled after the very successful ISK account in Sweden. Yes, the launch of this account is original plan for mid this year has been postponed, but I can share with you that this was rather a request of the market participants for them to be ready with the IT segments, and that's why there was a postponement till January of next year. We are very excited about OKI accounts. We believe it will be a breakthrough also for the Warsaw Stock Exchange.
Although you could invest in OKI accounts in securities, International securities and shares and bonds with preferential very small tax on the assets base, this non-tax allowance is only for domestic investor investments and, i.e., investments on the Warsaw Stock Exchange. We feel that this could be a strong driver for our business as well. We haven't really shared and published our own forecast, but we can share the forecast from the Ministry of Finance. The Ministry of Finance will assume that, on annual basis, the inflow to equities on the Warsaw Stock Exchange should be around PLN 5 billion. These are the estimates from the Ministry of Finance. We believe they are. We don't have a reason not to argue with those forecasts.
Maybe I can-
Konstantin?
Okay, go ahead.
Miguel?
Oh, sorry. Yeah. I mean, if you want me to repeat the other questions, I'll be happy to.
No, no, it's okay. We got it.
Yeah, sure.
We got it. The next one was about the run rate of the AMX revenues, maybe. Well, let me perhaps ask Marcin to give you some insights.
Absolutely. What we have seen in Armenia in the second half of the year, I think it's run rate to stay in terms of revenues. I think this is something that is pretty, let's say, recurring. In terms of costs, I think they will be catching up a bit, okay? The commitment that Armenia Stock Exchange or the depository did towards the Central Bank was that they will be building up resources and infrastructure, and that's not happening overnight, so it takes a bit of time. I think they will be catching up with costs, but still these new activities, these new services will be provided with reasonable margin.
Sure. Marcin, as we have you already, okay, the other question from Miguel was about the OpEx line. It was ahead of the guidance. Was there any frontloading in 2025 vis-à-vis the strategy and how much AI-related savings or non-core companies related saving can help with that going forward?
Okay. I think in terms of costs, there are maybe two things that we should mention here. One thing is what we mentioned about variable salaries, okay? This is like a pure consequence of high results, and that's a part that is, let's say, kind of automatic. The better we perform, the higher this cost will be. Of course the performance was above expectations, therefore this part of cost was consequently above expectations as well. I think we can also say that towards the end of the year, especially in the second half of the year, we also expected that the results will be much better than we originally planned.
Therefore, we also, let's say, invested additionally in certain areas which were not planned originally. For example, we spent a bit more on promoting the capital market in Poland or different activities that are related to, you know, let's say, recognition of Warsaw Stock Exchange. We could do this because of good results, but we were not planning them when we were creating our strategy. Yes. They were not maybe the necessary expenses, but we used the opportunity to boost a little bit these areas because of the good performance of the company.
Just perhaps just to share with you in terms of variable compensation. It's not really this discretionary expense like majority of this or majority almost fully is basically a formula which links the payments to employees to financial results. We entered into the highest brackets in this formula and that's the way. This is a fully variable expense item. Also in terms of what Marcin just said, for example, we had a campaign in social media promoting ETFs, and we spent some considerable amounts on this campaign towards year-end. This is a traditional season when Poles invest in pension schemes to account for some tax reliefs. That's why this decision to spend a bit more for ETFs. As a result, we had this nice volume pick up in ETFs in the first months. We believe also this played a role here.
Yeah, sure. The last question from-
By the way, also, last year we had a promotion on ETFs, zero fee for brokers. This promotion has been ended with year-end.
Yeah. Small tailwind for the revenues. Sure. Piotr, maybe if you could tell us a little bit about the recent geopolitical events and the impact on the TGE business.
Sure. I understand that the question relates to the situation in the Middle East. So, of course, the situation in respect to LNG supply is, I believe, rather negative on the Polish gas market because of the higher price of the gas. Customers are rather waiting for the price drop, which caused the lower activity on the forward market. We need to have in mind that the product offered by TGE for Polish Commodity Markets is always connected with physical delivery, so fluctuation of the commodity price not always generate additional volumes, just in opposition to capital markets and especially financial futures for...
In this respect, on our market, such fluctuation of the price or prices and higher price of the gas, which is very important to produce energy in the Polish energy mix, is important. We see in March that our customers, our members just little bit withhold with the bigger volumes, and they are less active than they were in the f irst months and last year.
Just one point here. Sorry. In the English version of the presentation, we had a mistake that our IR team has just spotted and asked me to share with you. In terms of Gas, you see here, +23%, it should be -23%. Sincere apologies for that. In the Polish version, which we present in the morning, we had minus, somehow we had plus here. This is exactly what Piotr referred to. We had a decline, a double-digit decline in Gas trading in March, which
That's true.
May be offset with the pickup in Electricity trading.
Sorry again for the mistake. Let me just tell you once again that if you would like to ask a question, please raise your hand and introduce yourself. I don't see any new questions incoming, so maybe a last chance to ask anything to the Management Board. If there are no further questions, thank you guys for joining us and hope to see you all again in May when we will be presenting the Q1 2026 results. We are to publish it on the 27th of May. If you would like to meet with us earlier than that in either Warsaw or London, we'll be in New York also. Just let us know at ir@gpw.pl. Goodbye and I guess see you in May.
Thank you.
Thank you very much.
Thanks.
Thank you, everyone. Bye.
Thanks.