Good morning, everyone. During today's call, we will discuss our first half and second quarter 2022 results and operating performance, followed by a question and answer period. If you wish to ask a question via the webcast, please use the Ask and Question tab available on the webcast link at any time during the webcast. With me today are Mostafa Kandil, CEO, and Youssef Salem, CFO. During this call, we'll be making certain forward-looking statements, including projections or estimates about the future performance of the company. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed on today's call and detailed in the company's most recent Form 20-F, interim results on Form 6-K, and other disclosures filed with the U.S. Securities and Exchange Commission from time to time.
During this call, we will also refer to certain non-IFRS financial measures, which include adjusted EBITDA and contribution margin. The reconciliation between our IFRS and non-IFRS financial measures can be found in the investor relations section of our website, including in the company's first half trading update. As a reminder, this conference call is being recorded. A replay of the call will be available on the Swvl investor relations website. The replay will be available approximately two hours after the end of the call and will continue through Friday, September 1st, 2023. Now I will turn the call over to Mostafa.
Thank you everyone for tuning in. After our Q1 earnings where we grew our total ticket fares and total bookings 4x year-over-year and beat estimates, our focus became on how to maintain this rapid growth while achieving positive cash flow generation even faster than we planned. We made significant progress towards that in Q2. Our transformative mobility operating system now powers mass transit systems for mega cities across 20 countries in Europe, Latin America, Asia, Africa, and Middle East. Our differentiated mobility stack delivers massively on accessibility, efficiency, and convenience through various mobility routing solutions and technologies, utilizing cutting-edge AI and machine learning for a better rider operator and driver experience.
Currently, Swvl caters to a spectrum of use cases across business to business and business to government, where we help more than 370 live accounts in simplifying a complex mass transit ecosystem while optimizing cost structures. Our strategy is predicated on three key pillars. Sustainable growth powered by technology innovation, leading to accelerated profitability. We continue to invest in the company's unique technology stack and build on Swvl's product suite and routing capabilities to serve more user personas and expand the addressable market with higher margins. This differentiated portfolio of in-house built capabilities includes fixed, dynamic, and on-demand routing. Fixed routing is the ability to create an optimized network of fixed routes and timings based on fixed demand data inputs. Dynamic routing is where we create reservations-based model to adapt with dynamic time and location demand patterns.
On-demand routing allows for demand responsive routing model where vehicles move within a defined zone based on the real-time demand pooling. These capabilities are all brought together as an integrated suite of products for our customers via the Swvl operating system. This technology-centric model allows for easy, rapid, and parallel expansion across multiple markets due to its resource-light requirements. This allows us to deepen our penetration in existing markets while we continue to launch new markets and expand our global footprint. After establishing our position as the leading mass transit technology platform across Asia and Africa over the past few years, we've expanded in the last 12 months our geographic presence to become also the leading mass transit operating system that has integrated marketplace and software service offerings across Latin America and Europe.
With a footprint spanning Brazil, Mexico, and Argentina, and Chile in Latin America, Germany, France, U.K., Spain, Italy, Turkey, Portugal, and Switzerland in Europe, we have substantial presence across both continents, creating significant synergies in multiple growth levers. This continued growth, coupled with strong unit economics, drives increasing cash flow generation for markets which over time we expect will continue to grow and continue to absorb our R&D investments. Q2 in July. In Q2, total ticket sales hit another all-time high, $29 million, up 3x year-over-year, driven by bookings growth of 3.5x year-over-year, now at $22.6 million in Q2, another all-time high. With that, I'm very proud to say that we crossed 100 million bookings.
When we started Swvl five years ago, we wanted to create opportunities for everyone by building a platform that enabled cities to move in a more efficient, safe, and reliable commute. I'm extraordinarily proud that we have now done this more than 100 million times. Our business is backed by strong fundamentals. Net revenue retention in Q2 in our B2B and B2G segments was 125%. Annualized ticket sales reached $126 million in June. 450% CAGR since 2017. We continue to win large clients around the world. In Germany, Swvl partnered with the German government at the G7 summit to power fully electric on-demand shuttles for 2,500 media representatives.
In Kuwait, Swvl entered into a strategic partnership with City Group, the leading transport operator in the country, who will utilize Swvl's software as a service to power their offering. The goal across these projects is to ensure the high standard of sustainability while maintaining maximum safety, reliability, and convenience. Activity levels exceeded pre-pandemic levels with a number of clients in our B2B and B2C reaching 6x at pre-pandemic count. With that, I will now turn the call over to my colleague, Youssef.
Thank you, Mostafa. Starting with the financial recap. Top line strength coupled with rigorous cost discipline translated into turning contribution margin breakeven in July for the first time across the full cycle, significantly earlier than planned. We have also significantly improved our adjusted EBITDA with the latest monthly adjusted EBITDA as of July of -$3.9 million as we reduce central costs and increase efficiency. Reconciliation between our IFRS and non-IFRS financial measures can be found in the investor relations section of our website, including in the company's first half trading update. The majority of this adjusted EBITDA spend is on R&D, where we have a 300-person-strong engineering, product, data science, and operational research team building our entire technology stack in-house.
We expect this adjusted EBITDA to turn positive next year as more cities continue to scale, and hence the cash flow generated by the market becomes sufficient to self-fund the R&D spend. We ended H1 with $19 million cash on balance sheet, with $29 million subsequently raised in early Q3 from a private placement and equity facility, with access to further funds as needed from the equity facility. Our Q2 performance is also in line with our expectation to turn cash flow positive in 2022, putting us at an inflection point in our journey where we are well-capitalized and have a clear roadmap to cash flow generation. Turning to M&A.
Our organic business continues to grow significantly month-on-month, both in existing markets as well as new organic launches, including four new countries since the beginning of the pandemic, Brazil, Kuwait, Saudi Arabia, and Jordan. We expect to continue to scale existing markets and launch new ones organically as we capitalize on the strength of our technology, market launch, and marketing experience. In each market, we look for the most capital efficient and highest return on investment avenue to deploy our technology and operating system. We see competitive advantage and barrier to entry. Therefore, we complement and further accelerate this organic growth with inorganic market entries where we conclude that it is more capital efficient to back the leading local regional champions.
In this case, we roll up this asset into Swvl in an own share or primarily via a strategic link where we utilize the existing team, supply and user base, on-the-ground presence and local integration, and combine that with the strength of our technology to deliver more accelerated and synergistic growth. We have now completed five acquisitions, door2door in Germany, Shotl in Spain, Urbvan in Mexico, Viapool in Argentina, and Volt Lines in Turkey, as we continue to expand in countries with higher purchasing power in alignment with Swvl's portfolio optimization program to turn cash flow positive in 2022. We are realizing significant revenue and cost synergies from these transactions by integrating them into Swvl's operating system.
For example, revenues in Turkey and Argentina are now at 2.0x and 2.1x respectively than pre-integration revenues in February 2022, and grew month-on-month 36% and 16% respectively in June. While at the same time improving contribution margin by 9% and 32% respectively in the same month, with both becoming contribution margin positive for the first time. Finally, on our outlook. We expect to end 2022 within 90%-100% of our initial top-line guidance of $141 million. The main headwind is the continued strength of the U.S. dollar. The currencies in Swvl's countries of operation have depreciated by a weighted average of 19% over the course of the year-to-date.
We also expect to beat our adjusted EBITDA target for this year of -$87 million by 5%-10%. Our roadmap to beat it again substantially next year, where we expect to become cash flow positive in 2023 compared to our initial adjusted EBITDA guidance of -$92 million. Our year-to-date results are a strong endorsement of our ability to maintain growth while improving profitability, and we are confident in our ability to continue to deliver on those goals. This confidence is shared by our shareholders, directors, and officers of the company, including 31 pre-business combination shareholders, key executives, and Queen's Gambit Holding who entered into voluntary six-month extensions to their respective lock-up agreements, with these extensions applying to approximately 84% of the total number of outstanding Swvl shares as of 30 June , reinforcing their long-term commitment.
With that, we will move to questions from the audience. We'll start with questions from Poe Fratt. We'll reiterate the questions and then we will move to answering them. The first question is: Please discuss the impact of the portfolio optimization program. The objectives of the programs were twofold. One, continuing to focus, invest, and scale our highest profitability cities, networks, and routes globally in order to continue to increase the free cash flow generation coming from the respective markets. Second is increasing efficiencies and reducing central costs in order to be able to self-fund these costs from these cash flows from the markets. What impact did it have on the cash burn rates? We have reduced our cash burn to -$3.9 million in July on an adjusted EBITDA basis.
We expect this to continue to reduce going forward as more and more of these cash flows from the markets contribute towards this R&D spend which constitutes the majority of the $3.9 million. Until next year, we achieve the scale at which the cash flows coming from the market will be enough to fully fund the R&D budget and the group will turn cash flow positive on a consolidated level. Please discuss the acquisition of Urbvan. When do you expect the acquisition to close? The acquisition has legally completed in July, so now all our five acquisitions in Mexico, Argentina, Germany, Spain and Turkey have all legally been concluded. What are the terms of the Urbvan transaction?
It's an all-share deal where we will be issuing over the course of two years, up to 12 million shares in Swvl to the pre-combination Urbvan shareholders, subject to achieving milestones that are pre-agreed. This represents the standard transaction structure we use for our M&A, where they are all share or primarily share deals priced in an accretive way, where the number of shares being issued to the target as a percentage of the overall share count is significantly lower than the contribution they bring to the group to make these transactions highly accretive, with the shares being issued over a long period of time to, one, manage dilution, two, ensure full alignment of interests, and three, linked to underlying milestones of the business. Do you have a current run rate for Urbvan? Urbvan currently constitutes just over 10% of the full top line of the group.
What we have seen with M&A transactions is with the integration, these numbers increase significantly. For example, our acquisitions in Turkey and Argentina have combined been at less than 10% of the top line of the group pre-integration. Once the integration has now taken place, collectively, they're almost at 20% of the entire group. That demonstrates our ability to power these targets with our technology, significantly increasing both their scale and profitability. Do you expect Mexico to move into the top five countries by revenue in 2023? Yes, Mexico is one of our top five countries alongside Turkey, Argentina, Egypt and Pakistan. Should we expect additional hyperinflation adjustments in the third quarter of 2022?
Our expectation to remain within 10% of our top line guidance and deliver between 90% and 100% is already baking in the significant headwind of the currency devaluations, which amounts to around 19% during the course of it. On a constant currency basis, we would actually be significantly outperforming our initial guidance. How did the utilization change in the first half of 2022? Our utilization has increased both on the half as a whole as well as in the second quarter of 2022 compared to the first quarter.
This is one of the outcomes of our portfolio optimization program, where we are continuing to focus and scale the more mature parts of our network and platform globally, and hence being able to constantly pool more people on the same routes and hence being able to cross 90% utilization levels on our routes consistently. Moving to questions from Erkan Erbil. Can you please comment on fundraising and liquidity? On fundraising, we continue to strike a balance between making sure that we are well capitalized and capable on further investing into the business and scaling to the level that allows us to be cash flow profitable next year. We are able to effectively do that as demonstrated by our recent private placement equity line, while at the same time being cognizant of the overall dilution and maximizing overall shareholder value.
We will continue to focus on striking the balance between these two. With the $90 million we have on the balance sheet as of the end of June and the subsequent $29 million raise as a combination of the private placement and the equity facility, we have sufficient liquidity and are on track for the free cash flow generation starting next year. Moving to questions from Steven Fox. Can you discuss expectations for quarterly organic growth bookings for the rest of the year and for 2023? What is the company's appetite for future acquisitions over the next 12-18 months? The core part of the growth would continue to come from the organic side of the business as a combination of both deepening penetration in existing markets, as well as being able to continue to launch new markets.
As we grew in the last quarter, 3-4x year-over-year across the various metrics in terms of ticket fare, bookings, et cetera, the majority of that growth has come from the organic business, and we expect that to continue to be consistent over the course of the coming quarters and 2023. The acquisitions will continue to be bounded by the guard rails that we have in terms of being all share or predominantly share, being with local original top player in the country, being linked to milestones and being accretive on a share exchange perspective. To the extent we continue to find players that meet these targets, we will be continuing to pursue these transactions only as a complement and addition to the core organic growth of the business. Moving to questions from Chip Moore.
Can you expand on the trajectory towards becoming adjusted EBITDA positive next year? Given now that we are contribution margin breakeven across the platform as a whole, and in the majority of the key countries in which we operate, becoming adjusted EBITDA positive is now purely a function of getting, one, these positive countries to incremental scale, and two, younger countries to the same maturity level of the more mature countries for that amount of cash flow coming back from these countries to be able to fully fund our adjusted EBITDA spend today of $3.9 million. At this point, us being adjusted EBITDA positive is not predicated on any underlying or fundamental changes or improvements in the business or in unit economics.
It is purely, at this point, a function of continued scale and continued evolution of the underlying cities based on the same trajectory and the same milestones without any further step changes. Also, the spend itself, which is being recouped from the cash flows coming from the market, is largely fixed, as the majority of it is the people cost, which in turn the majority of it is our 300-person strong engineering, product, data science, and operational research teams, which are building our entire proprietary technology in-house end to end. Are there any timing considerations to consider as you balance significant growth opportunity versus optimization of current markets? Or should we look for relatively steady improvement? It will be steady improvement, as what we do now is we focus on bringing the two together.
Because these markets are unit economic positives, and hence as they continue to grow, they continue to grow within this disciplined and attractive unit economic framework and bring these cash flows back. At this point, we're not looking at a trade-off or a friction between the markets and growth and the free cash flow profitability. We're looking at them moving in tandem with these countries scaling under the existing strong economics, bringing this cash flow back to fund the central fixed R&D budget, and hence the overall platform turning cash flow positive. Another question from Steven Fox. Can you discuss quickly how you are scaling enterprise customer revenue? Today, our enterprise segment, which covers our B2B and B2G clients, constitute around 70% of our total revenue in contract-based business with a 1.5% net revenue retention.
Hence, our business continues to deploy more and more SaaS-like characteristics, whether in the form of pure technology licensing as a classic SaaS or in the form of technology licensing coupled with fulfillment of the mobility solution from our marketplace as a SaaS plus offering. These two offerings, the SaaS and the SaaS Plus, which combined comprise our B2B and B2C business, are now 70% of our total business, giving us very high visibility over the recurring nature of our top line and cash flows, as well as very high visibility over our pipeline and growth. Moving to questions from Michael Melani. Please discuss the recent transaction in which you entered into a sale of $20 million worth of warrants.
The concern is that this transaction creates supply at the $1.65 level for the foreseeable future and validates management's view that this is the current level of the stock. The warrants that we have entered into were entered into only in conjunction with the equity private placement, with the view here being that ensuring that the business is well capitalized all the way into its future positive free cash flow during the course of next year, and being able to set this firmly. Which the recent transaction, in conjunction with the equity line that we have and our disclosure around the drawdown on that, would allow us to get there.
With a well-capitalized balance sheet and a clear roadmap to free cash flow generation, we're now able to focus on deploying this capital to get us to free cash flow profitability and hence being able to remove any risk to that trajectory. We see the advantage of being able to do that as the driver of the transaction, rather than a view on what is the level of stock. We continue to deliver and over-deliver on the business plan. As we mentioned in the guidance, we are ending this year within 10% of our top-line guidance. We are overachieving on our profitability for this year, and then we are bringing our cash flow positive forward by entire year.
We believe that this significant outperformance represents in being able to match top line despite the currency headwind and overachieving on a constant currency basis on top line, while also substantially overachieving on bottom line. We believe that this overachievement on the plan is what will determine the correct level of the stock and the price of the stock over time, rather than the short-term transactions, which the objective of is to make sure that our balance sheet is well capitalized. Moving to questions from Ravanti Gaza. In terms of the December 31 ARR guidance, we currently stand at $126 million. We expect to end the year on a realized basis within 10% of our $141 million target, i.e., between $127 million and $141 million.
We expect our ARR by the end of the year to be well in excess of that $141 million level as the overall realized year comes towards that target. Moving to questions from Faizan Siddiqui. Can you quantify the synergies being recognized, expected to be recognized from all your transactions and so forth? When we signed the various transactions, the aggregate top line of all of these transactions, pre-integration, was less than 20% of Swvl's top line. Today, in just a few months after these transactions, with initial integrations being completed, today, these transactions contribute more than 30% of our top line as we stand today. Just the initial already realized synergies from transactions so far exceeds 10% of our top line.
On a bottom-line basis, as part of our last portfolio optimization program at the end of May, we were able to significantly introduce efficiencies and reduce costs. That included a headcount rationalization as well, which was enabled by the global breadth and depth of the teams globally, including in light of the recent acquisition. We're able to achieve an increment more of 10% initial revenue realization, a significant cost synergy realization with further significant synergies expected as we continue to further integrate these acquisitions. Moving to questions from Erkan Erbil.
Would you be able to repeat cash burn on a consolidated basis as well as liquidity analysis, cash and further funding? On a cash burn on a consolidated basis, it is currently standing on adjusted EBITDA basis at -$3.9 million, with the cash being just slightly above that from a working capital perspective. From a liquidity analysis perspective, we ended the first half with $19 million cash on balance sheet. We have subsequently raised $29 million as a combination of our equity facility and private placement. We continue to have further access to the equity line from to raise further funds as needed from it. As we have publicly disclosed, we expect around $20 million to be used from that line between Q4 and Q1 as we make our final stretch to becoming cash flow positive.
Going back to questions from Michael Melani, please discuss your access to capital for operations and inorganic growth. On the inorganic growth, in terms of the consideration, the secondary consideration from the deal, these are either all share deals or vast majority share with a small amount of cash to deal with any taxes or transaction fees and expenses. In terms of the capital for the operations itself of both the organic businesses as well as the integrated businesses, then the access to capital we have comes from our equity facility, where we are able to issue incremental shares at a 3% discount to the volume weighted average price or funds that we have raised both from the original PIPE as well as from the recent private placement. We are not raising further funds from Queen's Gambit.
The funds, the loan redemptions from Queen's Gambit from the SPAC came back in March earlier this year. Back to questions from Poe Fratt. You said cash flow positive is the goal in 2023. Do you have any idea of which quarter? We are targeting for this to take place around the middle of the year. This is driven by this becoming the point in time at which there is sufficient scale to be able to fully absorb the R&D spend. Will you be cash flow positive for the entire year? Yes. The objective is being able to generate sufficient cash in the second half of the year to recoup all or the majority of the cash burn in the first half of the year until we turn cash flow positive.
Would you be able to repeat the 2022 EBITDA guidance? Our original guidance was -$87 million. We expect to be able to beat that. Moving to questions from Erkan Erbil. Does the cash at hand the acquisitions? The acquisitions are all shares or primarily in shares, and hence we don't have material cash applications in that regard. Back to questions from Poe Fratt. Do you have a contribution margin regard? Back to questions from Poe Fratt. Do you have a contribution margin for Egypt in July? It improved from -42% in May to -13% in June. Did it continue to improve in July and August?
We have achieved an even bigger milestone with Egypt turning EBITDA positive in August, which we have just closed yesterday on a country basis on our B2C operations across both our intracity and intercity segments, and the entire country, including the B2B operations as well, and the entire country has reached contribution margin positivity. Yes, both the contribution margin on a country basis has continued to improve, reaching breakeven across the entire country, as well as segments of the country becoming EBITDA positive as well. We expect to continue to see significant progress on that in the rest of Q3.