Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, thank you for joining the Hepsiburada Conference Call and live webcast to present and discuss the Q3 2022 financial results. All participants will be in listen only mode, the conference is being recorded. The presentation will be followed by a Q&A session. Should anyone need assistance during the Conference Call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Ms. Helin Celikbilek, Investor Relations Director. Ms. Celikbilek, you may now proceed.
Thanks, Geli. Thank you for joining us today for Hepsiburada Q3 2022 earnings call. I'm pleased to be joined on the call today by our CEO, Murat Emirdag, and our CFO, Korhan Oz. The following discussion, including responses to your questions, reflects management's views as of today's date only. We do not undertake any obligation to update or revise this information except as required by law. Certain statements made on today's call are forward-looking statements. Actual results may differ materially from these forward-looking statements. Please refer to today's earnings release, as well as the risk factors described in the safe harbor slide of today's supplemental slide deck, today's press release, the 6-K, our Form 20-F filed with the SEC on May 2nd, 2022, and other SEC filings for information about factors which would cause our actual results to differ materially from these forward-looking statements.
We will reference certain non-IFRS measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's press release for a presentation of the most directly comparable IFRS measure, the relevant IFRS to non-IFRS reconciliations. As a reminder, a replay of this call will be available on our investor relations website. With that, I will hand it over to our CEO, Murat.
Thank you, Helin. Welcome, everyone, and thank you for joining us today. I will begin with a summary of our quarterly highlights and continue with an update on our operations. I will then turn the call over to Korhan for an in-depth discussion on our financial figures. Let's have a brief look at our Q3 performance. Next slide. In the Q3, we showed consistent progress in our results despite continued challenges in the macro environment, where inflation in Turkey has continued to rise, reaching above 80%. On an unadjusted for inflation basis, our GMV growth was 66% in the Q3 and 68% in the first nine months of 2022 compared to the same periods of last year. Adjusted for inflation, our GMV declined by 9% in the Q3, bringing the first nine months GMV growth to -1%.
On an adjusted for inflation basis, revenue growth was 7%. We delivered 8.4% gross contribution margin in Q3, with a 4.5 percentage point year-on-year improvement compared to the same quarter of last year. Fueled by the continued momentum in active customers and order frequency, we achieved 26% order growth during the Q3, contributing to 29% growth in the first nine months of 2022. Before I touch upon our EBITDA performance, I would like to summarize our recent development and point out its effect on our financials. As disclosed, we have reached a settlement agreement related to the both putative class action lawsuits in the U.S. Hepsiburada agreed to pay $13.9 million to resolve these lawsuits in entirety. The settlement remains subject to approval and/or entry of judgment by the respective courts.
As part of prudent management, we have booked a provision expense for the total at approximately TRY 258 million, corresponding to $13.9 million. This expense had a one-off impact on our financials. TurkCommerce is expected to contribute $3.975 million towards the settlement amount. Once all the relevant processes are finalized, the relevant amount will be accrued accordingly. Despite this one-off, our EBITDA as a percentage of GMV improved by 4.6 percentage points year on year to negative 5.8%. Excluding the one-off, EBITDA as a percentage of GMV would have been negative 3.5% in Q3 2022 on an adjusted for inflation, and negative 1.8% on an unadjusted for inflation basis.
On the cash flow front, following the positive free cash flow in Q2, we are glad to have delivered another quarter with a positive free cash flow. Let's move on the next slide to look at our progress on our path to profitability. Next slide. As a continuation from the Q2, we continued our progress on our path to profitability this quarter as shown on the slide. I must emphasize that this performance was made possible through our commitment to continuous optimizing end-to-end customer experience, expanding our selection and merchant base, and improving the effectiveness of our marketing through smart use of data science capabilities. Let's move on the next slide to look into our operational metrics. Next slide. All four growth drivers continued their healthy rise, both on a year-on-year as well as quarter-on-quarter basis.
Active customer base grew by 11% on a yearly basis, reaching 11.8 million in the Q3. order frequency reached 5.4, up from 4.4 a year ago. Continued momentum in key growth drivers was attributable to a few factors, including our hybrid 1P 3P business model, attractive value propositions, and expansion in selection. Additionally, we have improved the effectiveness of our marketing through the use of data-driven marketing tools and a sharpened focus on retention and engagement with accuracy in acquisition. We have also developed our gamification capabilities, such as two-state offerings, which encourage interaction with our relevant customer segments. Our platform has become home to nearly 95,000 active merchants. After the Q3, we held Hepsiburada Merchant Summit in three large cities to showcase our valued services for them.
These summits also serve to bolster our merchant relationships prior to peak shopping season. The rising number of merchants, as well as our efforts to ease the product listing procedure, have contributed to the 89% rise in SKUs to 145 million in the Q3. Meanwhile, we continued our leadership in NPS in the e-commerce sector in Turkey, thanks to our excellent customer experience on the back of our technology, robust logistics capabilities, and our broad affordability solutions. Worth mentioning is our performance in gaining members to Hepsiburada Premium program. In only five months, Hepsiburada Premium members exceeded 500,000. Hepsiburada Premium members have access to a range of benefits that include free delivery and cashback, subject to certain conditions, and free access to an on-demand streaming service, among others, in exchange for a monthly subscription fee.
This program has been instrumental in driving higher engagement and order frequency. Now, I would like to switch gears and give an update on our robust logistics capabilities, which are essential enabler for our customer and merchant value propositions. Next slide. Our last mile delivery service, HepsiJet, serves through a nationwide network across Turkey with nearly 2,000 carriers. As of the Q3, HepsiJet offers its customers the ability to live track their parcels prior to delivery. In the Q3, HepsiJet delivered 62% of orders from the marketplace operations, compared to 57% a quarter ago and 53% a year ago. Regarding the next day delivery performance, HepsiJet delivered 84% of the orders from 1P operations on the next day. HepsiJet's oversized cargo delivery arm, HepsiJet XL, delivered nearly 73% of such oversized parcels in our 1P operations during this period.
HepsiJet XL offers delivery by appointment for customer convenience. HepsiLojistik added another 138 clients to its portfolio during the quarter, providing the fulfillment services to 651 clients in total. On the next slide, I would like to give an update on our financial services. During the quarter, with over 9 million users, around 44% of GMV passed through our Hepsipay wallet. Hepsipay has continued its rapid penetration within the Hepsiburada platform and marked a milestone by reaching 10 million users in November. Our buy now, pay later solution had been used by over 115,000 customers as of the end of the Q3 since its launch in January 2022. We continue to diligently manage credit risk while maintaining our focus on growth optimization.
Post Q3, HepsiPay announced new added features, enriching the shopping experience with improved customer verification and e-wallet capabilities. In addition to the existing ability to transfer money from credit or debit cards, HepsiPay users may now also top up their e-wallets by transfers from their bank accounts without needing to use a card. On the next slide, let's take a look at our progress with respect to other strategic assets, integral parts of our ecosystem. Next slide. Our strategic assets are cornerstones of our diverse ecosystem and suggest solid support to our growth potential. One of those is our ad tech solutions. Our HepsiAd portfolio includes search ads, display ads, and sponsored ads, which were used by more than 10,000 merchants in Q3 2022, in line with the previous quarter. HepsiAd continues its focus on enriching product capabilities.
In our international operations, we have been serving the Azerbaijan market since early this year, having chosen it as a proof of concept market. Through these efforts, we focus on testing and optimizing our playbook for cross-border execution. We will continue to evaluate our other international opportunities ahead. Our online grocery business, Hepsiburada Market, continues its focus on enhancing unit economics and customer experience with its new operating model. Under this model, Hepsiburada Market serves as a location-aware marketplace platform with minimal operational involvement. Its perfect order ratio in grocery was 82% in the Q3, up by 3 percentage points compared to the Q2. our flight ticket service, Hepsiburada Seyahat, continued its focus on unlocking synergies in traffic and customer engagement for Hepsiburada's wider scale of operations over time.
With its asset light business model to expand product portfolio, it enabled sales of nearly 29,000 tickets in the Q3, up from 9,000 during the same period last year. Overall, we remain committed to diligently operating our strategic assets to help fuel further monetization and growth for the overall ecosystem, and yet again, with the focus on disciplined cost and cash management. Now, let me say a few words on our guidance for the full year. Next slide. Having recorded 66% GMV growth in the first nine months compared to the same period of last year, considering the performance in our growth drivers, we are raising our GMV growth guidance once again from around 60% to 70% for the full year.
In line with our focus on the path to profitability, we expect to deliver this GMV growth while keeping our EBITDA as a percentage of GMV guidance within a range of -2.5% to -3% for the full year. A kind reminder that our guidance for GMV growth and EBITDA as a percentage of GMV remain on an unadjusted for inflation basis. As a final note for today, as I announced in June, I will be transitioning to a new role, and Nilhan Onal will be coming on board as CEO as of January 1st, 2023. I would like to say that I am grateful to have had the opportunity to lead Hepsiburada for nearly four years, and I am extremely proud of what we have accomplished as a team.
Together, we have developed an integrated technology ecosystem with strong capabilities, not just in e-commerce, but also in fintech, logistics, advertising, cross-border operations, and more. During my time at Hepsiburada, we have played a pivotal role in the digitization of commerce in Türkiye and fortified our strong position as the household brand of Türkiye. Looking ahead, I remain excited about Hepsiburada's journey in the future. I will now leave the floor to Korhan. Thank you for listening.
Thank you, Murat, and welcome everyone. In the Q3, on an unadjusted for inflation basis, we generated TRY 10.7 billion GMV, corresponding to 66% year-on-year growth. Adjusted for inflation, the GMV became TRY 11 billion , indicating a 9% decline compared to Q3 of last year. This decline was mainly due to the below inflation rise in our average order value, similar to the Q2 performance, while we recorded continued order growth. The full impact of inflation does not necessarily get reflected on our GMV growth due to several reasons, including customers' tendency to substitute for budget-friendly choices and partial holdback in purchase decisions in certain categories. We also believe that other factors, such as inventory carryover and competitive market dynamics, might affect selling prices in certain categories.
Meanwhile, the share of marketplace GMV was around 68%, which was 70% a year ago, and 64% in the Q2 of this year. This GMV mix may fluctuate from one quarter to another since it's impacted from several factors, including, but not limited to, macro-economic environment, customer behavior, campaign calendar, and inventory dynamics during the quarter. On the next slide, I would like to discuss our revenue performance. On an unadjusted for inflation basis, our revenue grew by 93% in Q3 compared to the Q3 of last year. When adjusted for inflation, our revenue increased by 7%. The reason behind 7% revenue growth, despite the 9% GMV decline, is mainly due to our strategic decision to focus on improving the profitability and therefore cutting back on campaigns and discounts compared to the same period of last year.
The 2 percentage point shift in GMV mix in favor of 1P also had an impact on this result. 7% revenue growth was mainly achieved by nearly six-fold growth in our marketplace revenue, 10% increase in our delivery service revenue, and 85% increase in our other revenue against 7% decline in 1P revenue. The decline in our 1P revenue reflected the trend in GMV from 1P operations. This was mainly due to the customer tendency for substitution with affordable alternatives and the increase in share of non-electronic categories contribution compared to the same period of last year. As to the marketplace revenue, significant growth reflects our focus on path to profitability and cutbacks on campaign and discounts which are deducted from revenue.
The 10% increase in delivery service revenue was mainly attributable to the rise in unit delivery service charges in January and also in July 2022. I would like to discuss our gross contribution performance in the next slide, please. Our inflation-adjusted gross contribution margin was 8.4% in the Q3, with an improvement of 4.5 percentage points compared to the same quarter last year. This was mainly attributable to the lower customer discounts in retail and marketplace operations, and higher revenue from delivery service and other revenue streams. Compared to the Q2 of 2022, our gross contribution margin improved by 3.4 percentage points in the Q3, given our focus on inventory management and the slowdown in the monthly inflation rates. Next slide, please.
Net total OPEX as a percentage of GMV was 14.2% in this quarter, slightly less compared to the 13.3% in the Q3 of last year. This was mainly due to 3.8 percentage point decline in advertising expenses and 0.7 percentage point decrease in shipping and packaging expenses against 4.3 percentage points rise in our G&A and other expenses. The decline in advertising expenses was a result of enhanced marketing efficiency, including sharpened focus on retention and engagement across customer life cycle, as well as enhanced return on marketing investments in relevant channels. The decrease in shipping and packing expenses was on the back of decline in shipping expenses of Hepsiburada Market. As discussed, its business model has been pivoted to reduce dependency on own delivery resources and keeping the operational involvement at minimum.
The rise in our G&A expenses, which includes the other OPEX as you see on the chart, it's result of several factors including salary increases, talent onboarding, and the litigation settlement provision expense of TRY 257.9 million. Murat has already explained the details of this settlement, I will not take more of your time. Excluding the one-off impact of this provision, G&A expenses as a percentage of GMV would have been 5.4% in the Q3. Accordingly, the total net OPEX as a percentage of GMV would have been 11.8% on a 2.5 percentage point decline year-over-year. Let's have a look at our EBITDA margin bridge in depth on the next slide.
As a function of aforementioned drivers, our adjusted for inflation EBITDA in the Q3 of 2022 was negative TRY 0.6 billion compared to negative TRY 1.2 billion a year ago. This corresponds to a negative 5.8% EBITDA as a percentage of GMV in Q3 2022, indicating a solid 4.6 percentage point year-over-year improvement. EBITDA as a percentage of GMV continued its improvement also sequentially by 0.4 percentage point from the previous quarter. This performance was mainly attributable to improvements in our gross contribution margin and lower advertising spending. Excluding the one-off impact of provision, EBITDA as a percentage of GMV would have been higher by 2.4 percentage point in the Q3. I would like to say a few words on our cash flow dynamics.
We generated a positive free cash flow of TRY 331 million in the Q3, compared to negative TRY 1.3 billion a year ago, thanks to the positive cash generation from our operating activities. Net cash provided by operating activities was TRY 542 million in the Q3, which is mainly due to lower net loss and the decrease in the change in net working capital. CapEx was around TRY 211 million, around 60% of which consisted of the cost of tech-related employees who are mainly employed for the development of web and mobile platforms. Remaining CapEx mainly consisted of purchase of property and equipment and software and rights. We continued to operate with negative net working capital at the, and the change in net working capital in Q3 was TRY 629 million.
Now I would like to share some highlights on our cash position and bank borrowings. As of September 30th, we have TRY 4.3 billion cash, which is mainly in time deposits and in financial investments. This total is $234 million U.S. dollar equivalent, and as September 30th, around 73% of this total was in U.S. dollars. Our strong cash position, combined with our cash generating capability, enables us to continue to have the liquidity to fund our operations. Furthermore, our USD position keeps the company resilient against potential currency fluctuations. Compared to the year-end, the decline in total cash was mainly due to the decline in negative net working capital and US dollar Turkish Lira appreciation at a rate lower than inflation.
On the liability side, we have TRY 332 million bank borrowings and lease liabilities, which declined from TRY 616 million at the end of 2021. Please note that all of our borrowings are in Turkish lira. Next slide. As I end my presentation, I would like to leave you with a few highlights on our quarter-on-quarter momentum. Overall, our Q3 results showed improvement on several lines, including gross contribution margin, advertising expenses, and hence EBITDA and net loss compared to the Q2 of this year.
The litigation settlement provision expense had one of impact on our financials at mainly EBITDA and net loss balances. This process was achieved in a macroeconomic environment with continued challenges. Looking at acknowledging the challenges and uncertainties, we are confident to increase our GMV growth guidance from 60% to around 70% on an unadjusted for inflation basis while keeping our EBITDA as a percentage of GMV guidance within a range of -2.5% to -3% for the full year 2022. We believe we are on track with our plans on our path to profitability, and we will continue to execute with disciplined cash and cost management. This concludes our presentation. Thank you for listening. We can now open the line for questions.
Ladies and gentlemen, at this time, we will begin the Q&A session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Please use your headset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. Once again, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no questions at this time. I will now turn the Conference over to management for any closing comments. Thank you. I'm sorry. I apologize. We do have a question. Mr. Unal with Goldman Sachs, please go ahead.
Hi. Thank you, Murat and Korhan , for the presentation. Also, congrats on your new role, Murat . My question will be related to the new e-commerce law, and I'd like to understand how do you expect to see the impact on profitability post significant reduction in advertisement and the promotion budgets as indicated by the new e-commerce law in 2023, and how do you see this to impact competition, your and your market share, as well as the GMV growth going forward? Also, did you already start to see some kind of easing in aggressive discounts and advertising spends from the competitors within this forth quarter?
Also going forward, if there will be any kind of improvement in the cash on lower spending, how do you plan to spend this excess cash? Thank you very much.
Thank you, Cem. I guess I will leave the floor to Korhan for cash. I will answer the other questions first. With respect to, like, to your comment with respect to competitive landscape, I guess we believe it's fair to say that the market continues to be competitive, where the cost of marketing and cost of growth remains still high. I guess this is still valid based on our observations. With respect to regulatory changes, like you mentioned, we expect the law to be in effect by January 1st, 2023. It is yet to be observed with the new year. We believe the new regulatory framework will bring a more open, transparent and fair operating environment for all players.
With that said, as we discussed, we are already getting ready and prepared for the publicly shared timeline as of January 1st, 2023. As you also mentioned, the first impact of the regulatory framework is seem to be the restrictions on marketing spending and promotions and discounts. As a team, we are already actively working towards that timeline, which is January 1st, 2023. With that said, maybe just as a side note, as you can see from our numbers, we and also from our announcements, we've been actively working on increased marketing efficiency, and we are already actually implementing those efficiency points into our execution as we speak, regardless of regulatory framework. Let me stop here and hand over to Korhan for the cash question.
Thank you, Cem, for the question. On the cash side, there will be a reduction in the payment terms for the merchants, and we are in a position to calculate the impact because the newcomers and the existing merchants will differentiate for the first six months and going forward. To create excess cash, it depends on the GMV and how we distribute our promotions among the months and so on. This is under progress, and in the coming calls we will be talking more about our cash flow projections. Thank you.
Thank you very much.
As a final reminder, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the Conference over to management for any closing comments. Thank you.
Thank you. Before we close our call, thank you all once again for participating in our results announcement call and for your kind support over the years. Much appreciated. I would like to take one more minute to thank our Founder, Board of Directors, the executive and the wider team for their trust and relentless support to me and Hepsiburada's mission over the years. I also would like to express my gratitude to our customers and business partners, the investor community, and to the rest of Hepsiburada community who have been part of this amazing journey. Thank you again, and goodbye.
Ladies and gentlemen, the Conference is now concluded, you may disconnect your telephone. Thank you for calling, have a good afternoon.