Q2 2026 Talabat Holding PLC Earnings Call

August 12, 2026

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Speaker #2: Okay. I think we have quorum. Hello, everyone, and welcome to Talabat Analyst Call for the second quarter of 2026. My name is Shadi Salman, and I head investor relations at Talabat.

Shadi Salman: Okay, I think we have quorum. Hello, everyone, and welcome to Talabat's analyst call for Q2 2026. My name is Shadi Salman, and I head investor relations at Talabat. I will also be hosting today's call. All participants are currently in listen-only mode, and we will have a question and answer session at the end of the presentation. In the meantime, please feel free to use the Q&A feature in Zoom or the raise your hand feature. As in the past, we will prioritize sell-side analyst questions and those questions that are being asked live. Please be aware that we are recording this webcast to offer a replay through our website afterwards at ir.talabat.com, where a copy of this presentation can also be found. Today, I am pleased to be joined by Toon Gyssels, our CEO, and by Khaled Al Fakesh, our CFO.

Speaker #2: I will also be hosting today's call. All participants are currently in listen-only mode, and we'll have a question-and-answer session at the end of the presentation.

Speaker #2: In the meantime, please feel free to use the Q&A feature in Zoom, or the raise-your-hand feature. As in the past, we will prioritize sell-side analyst questions, and those questions that are being asked live.

Speaker #2: Please be aware that we are recording this webcast to offer a replay through our website afterward, at ir dot talabat dot com, where a copy of this presentation can also be found.

Speaker #2: Today, I'm pleased to be joined by Thun Geisels, our CEO, and by Khalid Alfakhsh, our CFO. But before I hand over, the usual housekeeping points: I'd like to draw your attention to our disclaimer, which is at the end of this slide deck.

Shadi Salman: Before I hand over, the usual housekeeping points, I would like to draw your attention to our disclaimer, which is at the end of this slide deck. In particular, I would like to highlight the section on forward-looking statements, which cover such items as our financial guidance, future investments, dividend policy, and share buybacks. For today's agenda, Toon will kick off by presenting key highlights for the quarter, along with a business and investment update. He will then hand over to Khaled to run us through the period's financial highlights and outlook for the rest of the year. With that, let me hand it over to Toon.

Speaker #2: In particular, I would like to highlight the section on forward-looking statements which cover such items as our financial guidance, future investments, dividend policy, and share buybacks.

Speaker #2: For today's agenda, Thun will kick off by presenting key highlights for the quarter, along with a business and investment update. He will then hand over to Khalid to run us through the period's financial highlights and outlook for the rest of the year.

Speaker #2: So, with that, let me hand it over to Thun.

Speaker #3: Thank you, Shadi. Welcome, everybody. Thanks for joining us. I'll quickly go through the highlights. We had a strong Q2, continuing the momentum from the start of the year. Although the growth looks modest, with a 12% increase.

Toon Gyssels: Thank you, Shadi. Welcome, everybody. Thanks for joining us. Quickly go through the highlights. We had a strong Q2, continuing the momentum of the start of the year. Although the growth looks modest with the 12%, this is due to the Eid seasonality, which last year fell in Q2. Now in Q1, we talked about that with the previous earnings as well. Our top line is strong. We actually strengthened our leadership position in food in all the competitive markets since Q1, while the intensity remained the same. Profitability is also strong. EBITDA now at 5% versus 4.8% last quarter, and this is partly because we did not have to spend as much on tactical measures to defend the food position. In Q2, we also started the buyback, and Khaled will share more on that later. Looking at the business pillars, strong performance across the line.

Speaker #3: This is due to the ET seasonality, which last year fell in Q2, now in Q1. We talked about that with the previous earnings as well.

Speaker #3: But our top line is strong. We actually strengthened our leadership position in food in all the competitive markets since Q1, while the intensity remained the same.

Speaker #3: Profitability is also strong. EBITDA now at 5% versus 4.8% last quarter. And this is partly because we didn't have to spend as much on tactical measures to defend the food position.

Speaker #3: In Q2, we also started the buyback, and Khalid will share more on that later. Looking at the business pillars, strong performance across the line.

Speaker #3: Maybe a few things worth calling out. We're now serving almost 100,000 vendors, and we're working with 189,000 riders. NCR was very strong. We jumped 0.3 percentage points versus last year.

Toon Gyssels: Maybe a few things worth calling out. We are now serving almost 100,000 vendors, and we are working with 189,000 riders. NCR was very strong. We jumped 0.3 percentage points versus last year, and of course, on a bigger base as well. The vendor-funded deals are now at 7.2% for H1, a total of more than $400 million. We also crossed 50% GMV from our subscription customers. Important to note that for Talabat, this number, more than 90% of that, is from customers paying the full price on subscription. That is very strong. If there are more questions on these pillars later, happy to answer them. I want to spend a bit of time talking about the investment program. Beginning of the year, we announced $120 million across OpEx and CapEx to be invested in the Everyday App value proposition.

Speaker #3: And of course, on a bigger base as well. The vendor-funded deals are now at 7.2% for H1, a total of more than $400 million.

Speaker #3: And we also crossed 50% GMV from our subscription customers. It's important to note that for Talabat, more than 90% of that is from customers paying the full price on subscription.

Speaker #3: So that's very strong. If there are more questions on these pillars later, happy to answer them. But I want to spend a bit of time talking about the investment program.

Speaker #3: At the beginning of the year, we announced $120 million across OPEX and CAPEX to be invested in the everyday value proposition. A good chunk of that was going to the grocery infrastructure, and I want to show some initial results and talk about the dynamics.

Toon Gyssels: Good chunk of that was going to the grocery infrastructure, and I want to show some initial results and talk about the dynamics, because as you remember, these investments, they were not just for capacity, rather, they were for experience and quality, in particular, focus on speed. It is early, right? We are six months in. These investments, they take time to execute, and the behavior change on customers takes even longer. Nevertheless, we have some exciting insights, some exciting learnings I already want to share with you. Let us have a look. First, speed. Building out more stores, right? Obviously, you get more density, and the objective of that, shorter delivery, faster delivery. What we see is that in the markets where we did these investments, we have reduced delivery time already 18%. In others, we reduced 5% because always we do further improvements, of course.

Speaker #3: Because as you remember, these investments, they were not just for capacity; rather, they were for experience and quality. In particular, focus on speed. And it's early, right?

Speaker #3: We're 6 months in. And these investments, they take time to execute. And the behavior changed on customers takes even longer. But nevertheless, we have some exciting insights, some exciting learnings I already want to share with you.

Speaker #3: Let's have a look. First, speed. Building out more stores, right? Obviously, you get more density, and the objective of that is shorter delivery, faster delivery.

Speaker #3: And what we see is that in the markets where we did these investments, we've reduced delivery time already by 18%. In all this, we reduced 5% because we always do further improvements, of course.

Speaker #3: Now, why is speed so important? We see that for every minute we get to deliver faster, we see an uplift of growth of up to 2 percentage points.

Toon Gyssels: Now, why is speed so important? We see that for every minute we get to deliver faster, we see an uplift of growth of up to 2 percentage points, right? So we see growth acceleration from that better experience. Even more, what we see in groceries now that we are hitting below 15 or even below 10 minutes, we see a change in the perception of the customers. They do not look at Talabat anymore as a way to replenish their cupboard. They look at Talabat as the cupboard. This is great. This is fantastic, really. It shows the big potential we have in groceries. The question is, of course, yeah, but at what cost? Now, of course, when we build out more stores, we increase the fixed cost, right? Because initially, we have more stores to deliver the same volume of orders.

Speaker #3: Right? So we see a growth acceleration from that better experience. But even more, what we see in groceries, now that we're hitting below 15 or even below 10 minutes, we see a change in the perception of the customers.

Speaker #3: They don't look at Talabat anymore as a way to replenish their cupboard, they look at Talabat as the cupboard. And this is great. This is fantastic, really.

Speaker #3: It shows the big potential we have in groceries. And then the question is, of course, yeah, but at what cost? Now, of course, when we build out more stores, we increase the fixed costs, right?

Speaker #3: Because initially, we have more stores to deliver the same volume of orders. But our plan was not just that it gives an acceleration of growth, it's also to offset that increased fixed cost with a reduction of the delivery cost.

Toon Gyssels: Our plan was not just that it gives an acceleration of growth, it is also to offset that increased fixed cost with the reduction of the delivery cost because you get shorter distances. If we look at the fixed cost, the dark store model operates with a relatively low fixed cost. It is about 5%, and this includes rent, because it is actually below the line, but in the fixed cost it is included. What we see in the markets where we did these investments, we have indeed increased the fixed cost. It is up 0.8 percentage points due to that higher density. On the other hand, if we look at the delivery cost, and you have to know that for Talabat, the delivery cost is about 15% of the GMV.

Speaker #3: Because you get shorter distances. If we look at the fixed cost, the dark store model operates with a relatively low fixed cost. It's about 5%.

Speaker #3: And this includes rent, because it's actually below the line, but in the fixed cost, it's included. And what we see in the markets where we did these investments, we have indeed increased the fixed cost.

Speaker #3: It's up 0.8 percentage point due to that higher density. But on the other hand, if we look at the delivery cost, and you have to know that for Talabat, the delivery cost is about 15% of the GMV.

Speaker #3: We see that on the delivery cost for Talabat Mart, where we've done these investments, versus where we didn't do these investments, we've been able to reduce the delivery cost 10% more.

Toon Gyssels: We see that on the delivery cost for Talabat Mart, where we have done these investments versus where we did not do these investments, we have been able to reduce the delivery cost 10% more. 10% on 15% is about 1.5% benefit. So it is largely offsetting already the extra fixed cost. Just to clarify, we are looking at the year-on-year impact on delivery cost for focus areas for investment versus not, because the delivery cost is driven by a lot of elements, and we had quite some things going on in Q2 and in H1 in general. To recap, these investments in groceries from our program, they have already significantly improved the customer experience, which has started to change the behavior and driving accelerated growth without hurting the economics. That is what we already see only six months into the program. So that is very exciting.

Speaker #3: Now, 10% on 15% is about a 1.5% benefit, so it's largely offsetting already the extra fixed cost. Just to clarify, we're looking at the year-on-year impact on delivery cost for focus areas of investment versus not.

Speaker #3: Because the delivery cost is driven by a lot of elements, and we had quite some things going on in Q2 and in H1 in general.

Speaker #3: But to recap, these investments in groceries from our program, they have already significantly improved the customer experience. Which has started to change the behavior and driving accelerated growth without hurting the economics.

Speaker #3: And that's what we already see only 6 months into the program. So that's very exciting. Now, over to Khalid to talk about financials.

Toon Gyssels: Now over to Khaled to talk about financials.

Speaker #2: Thank you, Thawn. Hello, everyone. Let's look at the financial performance. So, when it comes to performance, or when it comes to GMV, it's better to look at the first half of the year.

Khaled Al Fakesh: Thank you, Toon. Hello, everyone. Let us look at the financial performance. When it comes to performance or when it comes to GMV, it is better to look at the first half of the year. GMV growth in H1 is at 15% on constant currency basis, reaching to $5.6 billion. Revenue grew 19%, both of them ahead of the full year guidance we have set in February. Of course, as Toon highlighted, Q2 GMV looks lower at 12%, but this is entirely related to the Eid calendar. Eid fell 10 days earlier this year, pulling demand into Q1. If we normalize this impact in Q2 growth actually at 15% on year-over-year basis. When it comes to profitability, EBITDA at five percentage points margin, $147 million, and net income at 3.4% margin at $100 million.

Speaker #2: GMV growth in H1 is at 15% on constant currency basis, reaching to 5.6 billion dollars. And revenue grew 19%, both of them ahead of the full-year guidance we have set in February.

Speaker #2: Of course, as Thawn highlighted, Q2 GMV looks lower at 12%, but this is entirely related to the Eid calendar. Eid fell 10 days earlier this year, pulling demand into Q1.

Speaker #2: And if we normalize that, this impact in Q2, Q2 growth actually at 15% on year-over-year basis. When it comes to profitability, EBITDA at 5 percentage points, margin 147 million, and net income at 3.4% margin at 100 million.

Speaker #2: Both are also ahead of where we would expected them. And the margin impact that you've seen is entirely related to the planned investments. What we've seen slightly better than planned is that we've managed to think our food leadership position while needing to spend less than budgeted.

Khaled Al Fakesh: Both are also ahead of where we would expected them, and the margin impact that we have seen is entirely related to the planned investments. What we have seen slightly better than planned is that we have managed to think our food leadership position while needing to spend less than budgeted. Free cash flow also $162 million with high conversion above 100%. It is very important to highlight that the year-over-year decline is a prior year base effect with no bearing on the underlying business fundamentals. On the Everyday App investments program, we are broadly on track during Q2. Specifically on the OpEx side, we have invested 0.7% of GMV in Q2, and that is in line with the program that we have communicated back in February. Now moving on to the outlook and the guidance.

Speaker #2: Free cash flow also 162 million with high conversion above 100%. And it's very important to highlight that the year-over-year decline is a prior year base effect with no bearing on the underlying business fundamentals.

Speaker #2: On the Everyday app investments program, we are broadly on track during Q2, specifically on the OPEX side. We have invested 0.7% of GMV in Q2, and that's in line with the program that we've communicated back in February.

Speaker #2: Now, moving on to the outlook and the guidance. So based on this strong H1 performance and the continued positive structural trends we see in the business, we are revising the full-year guidance across all the 5 key metrics.

Khaled Al Fakesh: Based on this strong H1 performance and the continued positive structural trends we see in the business, we are revising the full year guidance across all the five key metrics. We now expect GMV to grow to a range between 13% to 15% at constant currency, implying a full year GMV of approximately $11.4 to $11.6 billion. Revenue is growing faster and now guided to 16% to 18% growth at constant currency as well. When it comes to profitability, adjusted EBITDA is raised up to a range of $535 to $565 million, net income to a range of $325 to $355 million. Lastly, free cash flow guidance also moves up to a range between $400 to $430 million. The upgrade reflects many dynamics moving at the same time. On the first hand is on the demand.

Speaker #2: We now expect GMV to grow to a range between 13% to 15% at constant currency, implying a full-year GMV of approximately $11.4 to $11.6 billion.

Speaker #2: Revenue is growing faster and now guided to 16% to 18% growth at constant currency as well. When it comes to profitability, adjusted EBITDA is raised up to a range of 535 to 565 million, net income to a range of 325 to 355 million, and lastly, free cash flow guidance also moves up to a range between 400 to 430 million dollars.

Speaker #2: The upgrade reflects many dynamics moving at the same time. On the first hand is on the demand. We see customer acquisition and order volume have both come up ahead of the plans.

Khaled Al Fakesh: We see customer acquisition and order volume have both come up ahead of the plans. Our multi-vertical model continues to prove resilient, as we have seen during Ramadan and the regional conflict in March, where customers continue shifting to use our grocery vertical. This is a structural behavior, and this is what gave us confidence to raise the top line. We have also seen a good start during the month of July, with the World Cup being an additional tailwind, specifically for the food vertical. On the margin side, we managed to achieve plans across the board, including our main competitive markets. We have further strengthened our food leadership position while needing to spend less on marketing and pricing than budgeted.

Speaker #2: Our multi-vertical model continues to prove resilient, as we have seen during Ramadan and the regional conflict in March, where customers continue shifting to use our grocery vertical.

Speaker #2: This is a structural behavior. And this is what gave us confidence to raise the top line. We've also seen a good start during the month of July, with the World Cup being an additional tailwind, specifically for the food vertical.

Speaker #2: On the margin side, we managed to achieve plans across the board, including our main competitive markets, we have further strengthened our food leadership position while needing to spend less on marketing and pricing.

Speaker #2: Than budgeted. On the everyday investments, we have spent 0.6% of GMV during the first half of the year, and we are now on track to fully deploy the full 0.7% of the upgraded GMV guidance, which gives us also more firepower till the end of the year.

Khaled Al Fakesh: On the Everyday investments, we have spent 0.6% of GMV during the first half of the year, and we are now on track to fully deploy the full 0.7% of the upgraded GMV guidance, which give us also more firepower till end of the year. Lastly, on the regulatory environment, we have seen some developments that have emerged across our key markets, and our guidance reflect each of them. Specifically in Kuwait, there is a new ministerial regulation that takes effect 1 September. We have reflected the anticipated negative financial impact in our upgraded guidance, and we are operationally ready to implement these new regulations on the effective date. At the same time, we continue engaging constructively with the regulator throughout this process. I want to close also with capital returns.

Speaker #2: Lastly, on the regulatory environment, we have seen some developments that have emerged across our key markets. And our guidance reflects each of them. Specifically in Kuwait, there is a new ministerial regulation that takes effect 1 September.

Speaker #2: We have reflected the anticipated negative financial impact in our upgraded guidance, and we are operationally ready to implement these new regulations on the effective date.

Speaker #2: At the same time, we continue engaging constructively with the regulator throughout this process. I also want to close with capital returns. Our dividend policy remains unchanged.

Khaled Al Fakesh: Our dividend policy remain unchanged, 90% dividend payout ratio, and our H1 interim dividends are due to be declared in September and paid in October. At the same time, we have also purchased 108 million shares of Talabat, approximately $35 million deployed as part of our approved buyback program that took place in May, and we are planning to continue starting next year. With that, moving to Shadi.

Speaker #2: We have a 90% dividend payout ratio, and our H1 interim dividends are due to be declared in September and paid in October. At the same time, we have also purchased 108 million shares of Talabat, approximately $35 million deployed, as part of our approved buyback program that took place in May, and we are planning to continue starting next year.

Speaker #2: So with that, moving to Shadi.

Speaker #1: Great. Thank you, Thawn and Khalid. If you wish to ask a question, please use the Q&A feature in Zoom to submit it in writing, and mention your name and firm, please.

Shadi Salman: Great. Thank you, Toon and Khalid. If you wish to ask a question, please use the Q&A feature in Zoom to submit it in writing and mention your name and firm, please. If you prefer to ask your question orally, then please use the raise your hand feature and we will give you the floor to speak. We do have some raised hands. Let's start with Andrew Ross at Barclays. Over to you.

Speaker #1: If you prefer to ask your question orally, please use the 'raise your hand' feature, and we will give you the floor to speak.

Speaker #1: We do have some raised hands. Let's start with Andrew Ross at Barclays. Over to you.

Speaker #3: Great, good afternoon, guys. Thanks for taking my question. I've got two, if that's okay. The first one is just to come back on your earlier remarks around gaining category share.

Andrew Ross: Great. Good afternoon, guys. Thanks for taking my question. I have two, if that is okay. First one is just to come back on your opening remarks around gaining category share

Andrew Ross: Great. Good afternoon, guys. Thanks for taking my question. I have two, if that is okay. First one is just to come back on your opening remarks around gaining category share in Q2. I hope you can give us a bit more color in terms of what is happening with category share in your largest markets, so I guess UAE, Kuwait, Qatar, and a bit more color around competition would be great. Would also be helpful if you could help us with the year-on-year growth in those three markets, given that the GCC division slowed in Q2, obviously understanding that some of that is the phasing of Eid.

Speaker #3: In Q2, and hoping you can give us a bit more color in terms of what's happening with category share in your largest market. So I guess UAE, Kuwait, Qatar, and a bit more color around competition would be great.

Andrew Ross: in Q2. I hope you can give us a bit more color in terms of what is happening with category share in your largest markets, so I guess UAE, Kuwait, Qatar, and a bit more color around competition would be great. Would also be helpful if you could help us with the year-on-year growth in those three markets, given that the GCC division slowed in Q2, obviously understanding that some of that is the phasing of Eid. Second question then is your view on the regulatory environment for consolidation in the UAE in the context both of the new antitrust guidelines that have come in eventually, and the potential change in control of Delivery Hero from Uber, and Uber's position in Careem Technologies, and your thought process around that. Thank you.

Speaker #3: It would also be helpful if you could assist us with the year-on-year growth in those three markets, given that the GCC division slowed in Q2—obviously, understanding that some of that is due to the phasing of EVs.

Speaker #3: Second question then is your view on the regulatory environment for consolidation in the UAE. In the context both of the new antitrust guidelines that have come in, and then clearly in the potential change in control of delivery hero from Uber and Uber's position in Careem Technologies, and your kind of thought process around that.

Andrew Ross: Second question then is your view on the regulatory environment for consolidation in the UAE in the context both of the new antitrust guidelines that have come in eventually, and the potential change in control of Delivery Hero from Uber, and Uber's position in Careem Technologies, and your thought process around that. Thank you.

Speaker #3: Thank you.

Speaker #2: Yeah, I'll take the first one. So, our competitive positioning in food in Kuwait, UAE, and Qatar has all increased versus Q1—and by even more than 3 percentage points.

Toon Gyssels: I will take the first one. Our competitive positioning in food in Kuwait, UAE, Qatar, has all increased versus Q1 and up to even more than 3 percentage points, where we increased the most. So it is strong. When you look at the GCC growth, it is fully that Eid effect, which is pulled forward and why that growth might look a little bit less. But performance is very strong, and it is on the back of that, because these are our core markets, that we are able to revise that guidance upwards.

Speaker #2: Where we increased the most, so it is strong. And when you look at the GCC growth, it is fully that EAT effect, which is pulled forward, and that’s why that growth might look a little bit less.

Speaker #2: But performance is very strong, and it's on the back of that, because these are our core markets. That we're able to revise that guidance upwards.

Speaker #1: Okay. Maybe I'll take the second one. Hi, Andrew. So basically, Andrew, as you know, that the transaction or the Uber anticipated acquisition should potentially take place if all the regulatory approval actually managed to be obtained by H2 next year.

Khaled Al Fakesh: Okay, maybe I will take the second one. Hi, Andrew. Basically, Andrew, as you know, the transaction or the Uber anticipated acquisition should potentially take place if all the regulatory approval actually managed to be obtained by H2 next year. During this period, we remain in full competitive mode across the board, including UAE, including all the platform, even the one that is owned by Uber. I think also as part of the public disclosure Uber came up with and delivered you, there is potentially a merger control filing in UAE, but that is a matter subject to regulator to decide on.

Speaker #1: During this period, we remain in full competitive mode across the board, including the UAE, including all the platforms—even the one that is owned by Uber.

Speaker #1: And I think also as part of the public disclosure, Uber came up with and delivered Europe. There's potentially a merger control filing in UAE, but that's a matter subject to regulator to decide on.

Speaker #1: Okay. Thank you, Andrew. Next, question from Caesar at Bank of America. Go ahead.

Shadi Salman: Okay. Thank you, Andrew. Next question from Cesar at Bank of America. Go ahead.

Speaker #3: Yes, hi. Good afternoon. Thanks for the opportunity to ask questions, and congrats on the numbers. I just had a question. I wanted to go back—I have three, actually.

[Analyst] (Bank of America): Yes, hi. Good afternoon. Thanks for the opportunity to ask questions and congrats on the numbers. I just had a question. I wanted to go back, I have three actually, but wanted to start with the GCC GMV growth in Q2. I know you said it is all Eid related, but is it 100% all Eid related? There is almost 700 basis points of sequential slowdown. What would be the impact of competition on that number? Second question relates to your investments. I just wanted to check if there were. Obviously, they seem to be very successful, and thanks for all the detailed slides highlighting the use cases and the positive impact on unit economics, et cetera. I just wanted to check if they are so successful, is there a chance that in the future, they could be repeated or even upsized? That would be the second question.

Speaker #3: But I wanted to start with the GCC GMV growth in Q2. I know you said it's all EAT related, but is it 100% all EAT related?

Speaker #3: I mean, there's almost 700 basis points of sequential slowdown. What would be the impact of competition on that number? Second question relates to your investments.

Speaker #3: Just wanted to check if there were obviously there seemed to be very successful, and thanks for all the detailed slides. Highlighting the use cases and the positive impact on unit economics, etc.

Speaker #3: Just wanted to check if they're so successful, is there a chance that in the future, they could be repeated or even upsized? That would be a second question.

Speaker #3: And I think the third question, I just wanted to circle back on the regulation. Any update from any of the local regulators on enforcing some of these anti— I would say, call them abusive competition behaviors?

[Analyst] (Bank of America): I think the third question, I just wanted to circle back on the regulation. Any update from any of the local regulators on enforcing some of these anti, I would say, call them abusive competition behavior? Thank you.

Speaker #3: Thank you.

Speaker #2: So I'll tackle the first two. Looking at the growth in Q1 versus Q2, there is a 7-percentage-point slowdown. And the impact of EAT, as we’ve discussed, is around 3% of that.

Toon Gyssels: I will tackle the first two. Looking at the growth Q1 versus Q2, there is a 7 percentage point slowdown, and the impact of Eid is, we have discussed, around 3% of that. So the food growth, if you compare it, H1 is 9%, and it is actually the same as you were to correct Q2 for Eid. We really see strong momentum continued in food. Look, I just disclosed how much we are gaining category position. I think that is quite clear that we have got good performance and the drop is really seasonality. On the investment program, the results look very promising. We are 6 months in, so today we are still focused on executing all the rest of it, which is quite a number of stores.

Speaker #2: So really, the food growth, if you compare it H1 is 9%, and that's actually the same as you would to correct Q2 for EAT.

Speaker #2: So we're really see strong momentum continued in food. And look, I just disclosed how much we're gaining category position. I think that's quite clear.

Speaker #2: That we got good performance in the drop is really seasonality. On the investment program, so the results look very promising. We're six months in.

Speaker #2: So today, we're still focused on executing all the rest of it, which is quite a number of stores. And if these results get confirmed, and if we really start to see we can offset the fixed cost rather quickly with the logistics reduction, then continuation will be kind of a no-brainer.

Toon Gyssels: If these results get confirmed, and if we really start to see we can offset the fixed cost rather quickly with the logistics reduction, then continuation will be a no-brainer, and it will also not be a significant investment required. Now we have to build on that initial traction to see if we can scale it up and deliver the same results everywhere.

Speaker #2: And it will also not require a significant investment. But now we have to build on that initial traction to see if we can scale it up and deliver the same results everywhere.

Speaker #1: Hi, Caesar. Maybe just to add on the investment part, because I think also it's worth mentioning that we remain disciplined on the investment program that we've announced.

Khaled Al Fakesh: Hi, Cesar. Maybe just to add on the investment part, because I think also it is worth mentioning that we remain disciplined on the investments program that we have announced. As I mentioned earlier, we are fully on plan to deploy the 0.7% on the newly upgraded GMV. That implies also some more investments in that in terms of dollars value. I think for the regulatory environment, what matters the most for us is the guidance. I think on the guidance, we have taken these regulatory environments on the conservative side, so we do not assume any upside on the guidance due to the regulatory enforcement, specifically when it comes to predatory pricing. Of course, in Qatar, there is already a code of conduct out there. In UAE, we expect the regulation and hopefully enforcement as well. But we do not bake this in our guidance.

Speaker #1: And as I mentioned earlier, we are fully on plan to deploy the 0.7% on the newly upgraded GMV. And that's implies also some more investments in that in terms of dollars value.

Speaker #1: I think when for the regulatory environment, what matters the most for us is the guidance. I think on the guidance, we have taken these regulatory environments on the conservative side.

Speaker #1: So, we don't assume any upside on the guidance due to the regulatory enforcement, specifically when it comes to predatory pricing. Of course, in Qatar, there's already a code of conduct out there.

Speaker #1: In the UAE, we expect bidder regulation, and hopefully enforcement as well. But we don't bake this into our guidance. We also have, I think, in the Q&A section, more detailed information around the regulatory environments in general.

Khaled Al Fakesh: We have, I think, in the Q&A section also more detailed information around the regulatory environments in general.

Speaker #3: Thank you so much. But just to check, is there any is there any update on positive regulatory development that could happen in the next couple of quarters?

[Analyst] (Bank of America): Thank you so much. Just to check, is there any update on positive regulatory development that could happen in the next couple of quarters? I think you seem to indicate in prior calls that you were expecting something to potentially happen and there has not been any updates. Just wanted to check if you do still expect something to come up, especially in the UAE.

Speaker #3: I think you seem to indicate in prior calls that you were expecting something to potentially happen. And there's not been any update. So just wanted to check if you do still expect something to come up, especially in the UAE.

Speaker #1: Yeah. We continue to be hopeful on the Uber that this enforcement takes place as well.

Khaled Al Fakesh: Yeah, we continue to be hopeful on the UAE that this enforcement takes place as well, yes.

Speaker #3: Thank you so much.

[Analyst] (Bank of America): Thank you so much.

Speaker #1: And I think maybe, yeah, thanks, Caesar. I'll just maybe add: I think we still expect some kind of federal sector-specific guidelines in the UAE to be issued, although the timing is not very clear yet.

Shadi Salman: I think maybe, yeah, thanks, Cesar. I will just maybe add, I think we still expect a kind of a federal sector specific guidelines in the UAE to be issued, although the timing is not very clear yet for us. But I think clearly the Dubai sector guidelines would be a template of sorts for the federal guidelines, but we will keep you updated as soon as those come out.

Speaker #1: For us. But I think clearly the Dubai sector guidelines would be a template of sorts for the federal guidelines. But we'll keep you updated as soon as those come out.

Speaker #3: Thank you.

[Analyst] (Bank of America): Thank you.

Speaker #1: Thank you, Caesar. Next question from Joseph Barnett Lam at UBS. Go ahead.

Shadi Salman: Thank you, Cesar. Next question from Joseph Barnett-Lam at UBS. Go ahead.

Speaker #4: Excellent. Thank you very much for taking my questions. A couple from me. So firstly, I just wanted to ask on the building blocks of your GMV guidance specifically.

Joseph Barnett-Lam: Excellent. Thank you very much for taking my questions. A couple from me. Firstly, I just wanted to ask on the building blocks of your GMV guidance specifically. We have GMV comps that get about 8 percentage points easier in H2, unchanged reinvestment guidance for the full year, which implies around about a 50% uplift in food reinvestment H2 versus H1. Yet you are forecasting GMV guidance, which at the midpoint is slowing by about 1 percentage point. Can you give a little bit more color on why? I guess one of the explanations is probably the regulation as you refer to in the helpful Q&A in the back of your deck and the impact of Kuwait. Can you quantify in your guidance what impact you think the evolution of Kuwaiti regulation will have on an H2 GMV growth?

Joseph Barnett-Lamb: Excellent. Thank you very much for taking my questions. A couple from me. Firstly, I just wanted to ask on the building blocks of your GMV guidance specifically. We have GMV comps that get about 8 percentage points easier in H2, unchanged reinvestment guidance for the full year, which implies around about a 50% uplift in food reinvestment H2 versus H1. Yet you are forecasting GMV guidance, which at the midpoint is slowing by about 1 percentage point. Can you give a little bit more color on why? I guess one of the explanations is probably the regulation as you refer to in the helpful Q&A in the back of your deck and the impact of Kuwait. Can you quantify in your guidance what impact you think the evolution of Kuwaiti regulation will have on an H2 GMV growth?

Speaker #4: We have GMV comps to get about 8 percentage points easier in H2. Unchanged reinvestment guidance for the full year, which implies around about a 50% uplift in food reinvestment H2 versus H1.

Speaker #4: Yet your forecasting GMV guidance, which at the midpoint is slowing by about 1 percentage point. Can you give a little bit more color on why?

Speaker #4: And I guess one of the explanations is probably the regulation, as you referred to in the sort of helpful Q&A in the back of your deck, and the impact of Q4.

Speaker #4: Can you quantify in your guidance what impact you think the evolution of Q8E regulation will have on H2 GMV growth? Second slash third question, depending on if that was one or two.

Joseph Barnett-Lam: Then my second/third question, depending on if that was one or two, you say you have had a good start to July. Can you quantify GMV growth in July? That would be very helpful just to give us a steer on how Q3 has started. Thank you.

Joseph Barnett-Lamb: Then my second/third question, depending on if that was one or two, you say you have had a good start to July. Can you quantify GMV growth in July? That would be very helpful just to give us a steer on how Q3 has started. Thank you.

Speaker #4: You say you've had a good start to July. Can you quantify GMV growth in July? That'd be very helpful just to give us a steer on how Q3 has started.

Speaker #4: Thank you.

Speaker #1: Yeah, maybe let me take the first one. On the GMV, yes, you are absolutely right. We are baking in, of course, the potential implication of Kuwait into the guidance when it comes to both growth and profitability.

Khaled Al Fakesh: Yeah, maybe let me take the first one. On the GMV, yes, you are absolutely right. We are baking in, of course, the potential implication of Kuwait into the guidance when it comes to both growth and profitability. I think it is soon to quantify. We have multiple scenarios. The regulations have been out maybe three weeks now, but we are confident with the revised guidance that we just upgraded today. At the same time, also we want to see what would be hopefully the implication or the positive momentum with back to school in September in specific when people come. This is also a factor that we keep watching, and we hopefully have a positive results on that.

Speaker #1: But I think it's soon to quantify. We have multiple scenarios. The regulations have been out maybe three weeks now. But we are confident with the revised guidance that we just upgraded today.

Speaker #1: At the same time, we also want to see what would be, hopefully, the implication or the positive momentum with back-to-school in September, specifically when people come.

Speaker #1: So this is also a factor that we keep watching. And we hopefully have a positive results on that. On July, I can tell you maybe it's I don't want to share the exact number, but I can tell you it's, of course, it's better than H1, what we've seen in July.

Khaled Al Fakesh: On July, I can tell you maybe it is. I do not want to share the exact number, but I can tell you, of course, it is better than H1, what we have seen in July. What we believe is mainly driven by the strong momentum as well as the World Cup implication. I am not sure, Toon, if you want to add.

Speaker #1: What we believe is mainly driven by the strong momentum, as well as the World Cup implication. I'm not sure if you want to add.

Toon Gyssels: Yeah, and what we have seen in July is that people seem to have traveled later this year, so we had very strong momentum beginning of the month. That is why what Khaled mentioned, September, we want to see how back to school happens, because now it is summertime. But if in September we see the same momentum as July, that would also be very positive.

Speaker #2: Yeah. And what we've seen in July, is that people seem to have traveled later this year. So we had very strong momentum beginning of the month.

Speaker #2: And that's why, as Khaled mentioned, in September we want to see how back-to-school happens, because now it's summertime. But if in September we see the same momentum as in July, that would also be very positive.

Speaker #4: Thank you for the color. Maybe just as a follow-up—I mean, is it fair to assume, though, that you're being pretty conservative on that back-to-school season?

Joseph Barnett-Lam: Thanks for the color. Maybe just as a follow-up, is it fair to assume, though, that there is quite, you are being pretty conservative on that back to school season. You are being pretty conservative on the impact of Kuwait. Just because, as I say, from an underlying perspective, 8 percentage point easier comp, 50% more reinvestment, but slower growth. If it is not those two factors, then the underlying market must be slowing a lot, or you are expecting competition to pick up a lot. Are your underlying assumptions quite conservative in there?

Joseph Barnett-Lamb: Thanks for the color. Maybe just as a follow-up, is it fair to assume, though, that there is quite, you are being pretty conservative on that back to school season. You are being pretty conservative on the impact of Kuwait. Just because, as I say, from an underlying perspective, 8 percentage point easier comp, 50% more reinvestment, but slower growth. If it is not those two factors, then the underlying market must be slowing a lot, or you are expecting competition to pick up a lot. Are your underlying assumptions quite conservative in there?

Speaker #4: You're being pretty conservative on the impact of Q8. Just because, as I say, from an underlying perspective, 8 percentage point easier comp, 50% more reinvestment, but slower growth.

Speaker #4: If it's not those two factors, then the underlying market must be slowing a lot, or you're expecting competition to pick up a lot. Are your underlying assumptions quite conservative in there?

Speaker #2: Look, with the revised guidance, we want to be very confident we can hit that. And that's why we've revised it up relatively little versus a very optimistic scenario.

Toon Gyssels: Look, with the revised guidance, we want to be very confident we can hit that, and that's how we've revised it up, relatively little versus a very optimistic scenario.

Speaker #1: Yeah, I always like to use the word 'responsible.' I think it's very important for us to come up with guidance that we feel very comfortable achieving.

Khaled Al Fakesh: Yeah, I always like to use the word responsible. I think it's very important for us to come up with a guidance that we feel very comfortable in achieving it. That's why we are responsible with the revision, I would say.

Speaker #1: And that's why we are responsible with the revision, I would say.

Speaker #4: Perfect. Thank you. Very helpful, gentlemen.

Joseph Barnett-Lam: Perfect. Thank you. Very helpful, gentlemen.

Joseph Barnett-Lamb: Perfect. Thank you. Very helpful, gentlemen.

Speaker #1: Great. Thanks, Joe. Next question from Anchor Agrawal at HSVC. Over to you, Anchor.

Shadi Salman: Great. Thanks, Joseph. Next question from Ankur Agarwal at HSBC. Over to you, Ankur.

Speaker #5: Yeah. Thank you for taking my question and thank you for the presentation. So two questions from my end. My first question is, would you be able to quantify the impact of the World Cup promotion in terms of the uptake of the sort of Talabat Pro and the benefits that accrued in the second quarter?

Ankur Agarwal: Yeah. Thank you for taking my question, and thank you for the presentation. Two questions from my end. My first question is, would you be able to quantify the impact of the World Cup promotion in terms of the uptake of Talabat Pro and the benefits that accrued in Q2? I think the impact on margins as well. That is my first question. My second question is, if you can talk a bit about the strength in the adtech revenue, and how should we think about the evolution of that given your investments and the plans ahead? Those two.

Speaker #5: And I think the impact on margins as well. So that's my first question. My second question is, if you can talk a bit about the strength in the edtech revenue.

Speaker #5: And how should we think about the evolution of that, given your investments and the plans ahead? Those two.

Speaker #2: Okay. So, talking about the World Cup, I think the impact that we have seen in Q2, especially the T-Pro impact, will have been limited there.

Toon Gyssels: Okay. Talking about World Cup, I think the impact, what we have seen in Q2, especially the Talabat Pro impact, will have been limited there because there was upside, but there were also investments to that campaign, of course. I think this is something rather we expect to see some benefits from later in the year when these customers remain Talabat Pro customers.

Speaker #2: Because there was upside, but there were also investments to that campaign, of course. I think this is something rather we expect to see some benefits from later in the year, when these customers remain T-Pro customers.

Speaker #2: Yeah. I don't know if you want to add something to that, Khaled.

Toon Gyssels: Yeah, I do not know if you want to add something to that, Violet. Sounds good. Okay. Can you remind us of the second question, Ankur? Sorry.

Speaker #1: Sounds good.

Speaker #2: Okay.

Speaker #1: Can you remind us of the second question, Anchor? Sorry.

Speaker #5: So that is on the contribution of edtech revenue. Yeah.

Ankur Agarwal: That is on the contribution of ad tech revenue.

Khaled Al Fakesh: Ad tech. Sorry.

Toon Gyssels: Ad tech. Sorry.

Ankur Agarwal: Yeah.

Speaker #1: So on edtech, we're doing a lot of things. I think, first of all, what's important to understand is that food business and the grocery business is quite different in terms of the type of edtech we do.

Toon Gyssels: On ad tech, we are doing a lot of things. I think first of all, what is important to understand is that food business and the grocery business is quite different in terms of the type of ad tech we do, because on groceries, we can also sell not just to the vendors that are listing, but to the CPGs. The bulk of the business is still food today, and so when we increase year on year, it is driven by better performance in food. We have a couple of new products that we had introduced, and these are products that allow vendors to target their promotions or to target their ads, which is very interesting for them because then they can focus on lapsed customers, on people that are not customers yet, so it can be focused.

Speaker #1: Because on groceries, we can also sell not just to the vendors that are listing, but to the CPGs. But the bulk of the business is still food today.

Speaker #1: And so, when we increase year on year, it is driven by better performance in food. We have a couple of new products that we had introduced.

Speaker #1: And these are products that allow vendors to target their promotions. Or to target their ads. Right? Which is very interesting for them. Because then they can focus on lapsed customers, on people that are no customers yet.

Speaker #1: So, to be focused, these are new products that we've introduced in Q2 that have given some uplift on food. But for the long run, the big upside in edtech exists more on the grocery side, where we're building the right products for CPGs.

Toon Gyssels: These are new products that we have introduced in Q2 that has given some uplift on food. But for the long run, the big upside in ad tech exists more on the grocery side, where we are building the right products for CPGs. But this requires a lot of tech investment and data investment because they also want to do full loop measurement to see the impact on their campaigns. This is explaining a little bit the performance of Q2 and giving a perspective on where do we see the further growth potential in the ad tech.

Speaker #1: But this requires a lot of tech investment and data investment, because they also want to do full-loop measurement to see the impact on their campaigns.

Speaker #1: This is explaining a little bit about the performance of Q2 and giving a perspective on where we see further growth potential in edtech.

Speaker #5: All right. Thanks a lot. Thank you.

Ankur Agarwal: All right. Thanks a lot. Thank you.

Speaker #1: Great. Thanks, Anchor. Next question from Sharuk Nawaz at First Abu Dhabi Bank. Over to you, Sharuk.

Shadi Salman: Great. Thanks, Ankur. Next question from Shahrukh Nawaz at First Abu Dhabi Bank. Over to you, Sharukh.

Speaker #6: Hi. Am I audible?

Shahrukh Nawaz: Hi, am I audible?

Speaker #1: Yes, yes, we can hear you.

Khaled Al Fakesh: Yes. Yes, we can hear you. Not anymore, Sharukh. Well, yeah.

Shadi Salman: Yes. Yes, we can hear you.

Speaker #2: Yeah. Not anymore.

Toon Gyssels: Not anymore, Sharukh.

Speaker #1: Well, yeah.

Shadi Salman: Well, yeah.

Speaker #6: Am I audible?

Shahrukh Nawaz: Am I audible?

Speaker #1: Yeah. You are now, yes.

Khaled Al Fakesh: Yeah, you are now. Yes.

Shadi Salman: Yeah, you are now. Yes.

Speaker #6: Okay, thank you. Thank you for the presentation. I have a couple of questions. First, we can see that there is a rise in the G&A expenses in this quarter.

Shahrukh Nawaz: Okay. Thank you. Thank you for the presentation. I have a couple of questions. First is, we can see that there is a rise in the G&A expenses in this quarter. Can you highlight the reasons for it, and can you just add the color, like how can we look at this in Q3 and Q4? Also, we can see that, for the foreign exchange gain, how should we look at this element for the remainder of 2026? The second question is, you revised your guidance in terms of revenue growth and net income. I believe it is with the existing market or you are planning to enter some new market, and are there any planned acquisitions in pipeline? The third question is about you mentioned in the GMV growth, there was increased incentives to support customer acquisition and retention.

Speaker #6: So can you highlight the reasons for it? And can you just add the color? Like, how can we look at this in the third quarter and the fourth quarter?

Speaker #6: And also, we can see that for the foreign exchange gain, how should we look at this element for the remainder of 2026? The second question is, you revised your guidance in terms of revenue growth and net income.

Speaker #6: I believe it's with the existing market or you're planning to enter some new market? And are there any planned acquisitions in pipeline? And the third question is about, you mentioned in the GMV growth, like there was increase incentives to support customer acquisition and retention.

Speaker #6: Can you just highlight more? Can you just add more color to it?

Shahrukh Nawaz: Can you just add more color to it?

Speaker #1: Yeah. Maybe let me try to address your three questions. I think on the number one, in fact, if you see, this is just a regular trend quarter over quarter and month over month on the SG&A and we continue enjoying operating leverage.

Khaled Al Fakesh: Yeah. Let me try to address your three questions. I think on the number one, in fact, if you see, this is just a regular trend quarter-over-quarter and month-over-month on the G&A, and we continue enjoying operating leverage. In fact, if you look at Q2, the EBITDA margins came up even higher than the full year guidance. We are at 5% EBITDA margin to GMV, while the top end of the previous guidance was at 4.8%. The second one is the guidance is fully organic. We are not baking in the guidance or the upgrade on both on the revenue and GMV side or on the profitability, anything related to geographical expansion outside of the eight markets we are operating in or any M&A. This is just purely organic growth due to the stronger demand that we have seen.

Speaker #1: In fact, if you look at Q2, EBITDA margins came up even higher than the full-year guidance, at a 5% EBITDA margin to GMV, while the top end of the previous guidance was at 4.8%.

Speaker #1: The second one is the guidance is fully organic. We are not baking in the guidance or the upgrade on both on the revenue and GMV side or on the profitability.

Speaker #1: Anything related to geographical expansion outside of the ed markets we are operating in or any M&A, this is just purely organic growth due to the stronger demand that we've seen.

Speaker #1: And I think lastly, on FX, our exposure to FX is quite limited because it's primarily from the Egyptian market and it's already baked in in our guidance.

Khaled Al Fakesh: Our exposure to FX is quite limited because it is primarily from the Egyptian market, and it is already baked in in our guidance.

Speaker #6: And what about the increased incentives which you have done to support the customer acquisition and retention?

Shahrukh Nawaz: What about the increased incentives which you have done to support the customer acquisition and retention?

Khaled Al Fakesh: Yeah. So originally, we had planned the beginning of the year to have 0.5% extra incentives, extra marketing efforts to retain our leadership position. What we see now is we do not need to spend all of that. So we are actually spending less than what we had planned in the beginning of the year.

Speaker #1: So originally, we had planned beginning of the year to have 0.5% extra incentives extra marketing efforts to retain our leadership position. But what we've seen now is we don't need to spend all of that.

Speaker #1: So we're actually spending less than what we had planned in the beginning of the year.

Speaker #6: Okay. But don't you think going ahead, it will just add an pressure on the margins? Or it's fine?

Shahrukh Nawaz: Okay. Do not you think going ahead, it will just add in pressure on the margins, or it is fine?

Speaker #1: So the way we spend—it's smart, right? It's not blanket discounts; we cannot do that. So where are we spending? We're spending on customers that we see are at risk of reducing frequency or have reduced frequency.

Khaled Al Fakesh: The way we spend, it is smart. It is not blanket discounts. We cannot do that. Where are we spending? We are spending on customers that we see are at risk of reducing frequency or have reduced frequency, and we are reactivating them. These are targeted incentives that have a life cycle effect on these customers so that they come back and keep their frequency high. It is more of a one-off shot to make sure they remain loyal, high-frequency customers. No, we do not expect there to be long-term margin erosion from that. Also to highlight, this is also embedded already in our upgraded guidance with the revision on EBITDA and profitability margins as well. It already has been taken into consideration, the guidance.

Speaker #1: And we're reactivating them. So these are targeted incentives that have a life cycle effect on these customers so that they come back and keep their frequency high.

Speaker #1: So, it's more of a one-off shot to make sure they remain loyal, high-frequency customers. So, no, we don't expect there to be long-term margin erosion from that.

Speaker #2: Just also to highlight, this is also embedded already in our upgraded guidance with the revision on EBITDA and profitability margins as well. So it's already have been taken into consideration, the guidance.

Speaker #6: Okay. Thank you.

Shahrukh Nawaz: Okay. Thank you.

Speaker #1: Great, thanks, Sharuk. Next question from Maxim Nicholas at Citi. Go ahead, Maxim.

Shadi Salman: Great. Thanks, Sharukh. Next question from Maxim Nikishev at Citi. Go ahead, Maxim.

Speaker #7: Yes. Good afternoon. Thank you for the presentation. Just wanted to ask about the margin expectations, maybe a slightly on the longer-term horizon. Assuming things go as they do now, would you think that this year would be the year of kind of peak investments and the peak pressure on your EBITDA margin?

Maxim Nikishev: Yes. Good afternoon. Thank you for the presentation. Just wanted to ask about the margin expectations, maybe slightly on the longer-term horizon. Assuming things go as they do now, would you think that this year would be the year of peak investments and the peak pressure on your EBITDA margin? Maybe based on the experience in other markets, like we have seen in Saudi Arabia, would you expect your profitability to improve basically next year or over the medium term as the competition potentially eases? Yes, just wanted to get your thoughts on whether this year is going to see the peak margin pressure.

Maxim Nekrasov: Yes. Good afternoon. Thank you for the presentation. Just wanted to ask about the margin expectations, maybe slightly on the longer-term horizon. Assuming things go as they do now, would you think that this year would be the year of peak investments and the peak pressure on your EBITDA margin? Maybe based on the experience in other markets, like we have seen in Saudi Arabia, would you expect your profitability to improve basically next year or over the medium term as the competition potentially eases? Yes, just wanted to get your thoughts on whether this year is going to see the peak margin pressure.

Speaker #7: And maybe, based on the experience in other markets—I have seen in Saudi Arabia—would you expect your profitability to improve basically next year, right?

Speaker #7: Or over the medium term as the competition potential is? So yeah, just wanted to get your thoughts on whether this year is going to see the peak margin pressure.

Speaker #1: So maybe I can just quickly tackle this and don't feel free to chip in. If you look at the revised guidance, we are revising EBITDA at a margin of 5%, 5 percentage points of GMV.

Khaled Al Fakesh: So maybe I can just quickly tackle this, and Toon, feel free to chip in. If you look at the revised guidance, we are revising EBITDA at a margin of 5 percentage points of GMV. If you look at the investments program, it is basically 0.7% of GMV is related to this investments program. This, theoretically speaking, no need to continue unless we have strong results, as just mentioned by Toon on the returns. We have seen actually these returns not only accelerated growth but also potentially offset the margin pressure that is related to increased fixed costs. I think it is early to give probably an outlook for next year, but I think what I can summarize is that what we see is potential expansion on the margins from this moment onward rather than further contraction. Toon, anything you want to

Speaker #1: And if you look at the investments program, it's basically 0.7% of GMV is related to this investments program. So this theoretically speaking, no need to continue unless we have strong result as just mentioned by Tone on the returns.

Speaker #1: And we've seen actually these returns not only accelerate growth but also potentially offset the margin pressure that is related to increased fixed cost. I think it's early to give probably an outlook for next year, but I think what I can summarize is that what we see is potential expansion on the margins from this moment onward rather than further contraction.

Speaker #1: Tone, is there anything you would like to add?

Toon Gyssels: Yes, and the timing, I think as you point out, Khaled, too soon to comment on next year. There are also things that are not fully in our control, so we will await how the rest of the year unfolds before we guide for 2027. Medium term, these investments, they are not recurring, so there should be margin expansion there.

Speaker #3: Yes. And the timing, I think as you point out, Khaled, too soon to comment on next year. There are also things that are not fully in our control.

Speaker #3: And so we'll await how the rest of the year unfolds before we guide for 2027. But medium term, these investments— they aren't recurring.

Speaker #3: So there should be margin expansion there.

Speaker #7: Yeah, understood. Thank you so much. And maybe just a follow-up on the competitive dynamic. Maybe just briefly, if you can talk us through like in what markets you see relatively higher competition and what is the situation in the UAE, for example, and would you expect the competition to increase in that market?

Maxim Nikishev: Yeah. Understood. Thank you so much. Maybe just to follow up on the competitive dynamic, maybe just briefly, if you can talk us through, in what markets you see relatively higher competition, and what is the situation in the UAE, for example, and would you expect the competition to increase in that market?

Maxim Nekrasov: Yeah. Understood. Thank you so much. Maybe just to follow up on the competitive dynamic, maybe just briefly, if you can talk us through, in what markets you see relatively higher competition, and what is the situation in the UAE, for example, and would you expect the competition to increase in that market?

Speaker #1: So what we've seen in Q2 is pretty much a continuation of Q1, which is quite intense competition. If it will increase or not, look at that.

Toon Gyssels: What we have seen in Q2 is pretty much a continuation of Q1, which is quite intense competition. If it will increase or not, look, that will not be under my control. What I can say is that our formula, focusing on multi-verticality, focusing on subscription, and giving an amazing experience, works. In Q2 it is clear we had to spend less while we actually strengthened our leadership position. Then we are talking really all the key markets, UAE, Kuwait, Qatar. I hope that answers your question.

Speaker #1: That will not be under my control. But what I can say is that our formula focusing on multi-verticality focusing on subscription and giving an amazing experience works, right, in Q2.

Speaker #1: It's clear we had to spend less while we actually strengthened our leadership position. And we're talking really all the key markets, right? UAE, Kuwait, Qatar, so I hope that answers your question.

Speaker #7: Yes. Thank you.

Maxim Nikishev: Yes. Thank you.

Maxim Nekrasov: Yes. Thank you.

Speaker #1: Great. Thanks, Maxim. We'll move on to some of the written questions now. So, one from Ayoub Ansari at Wisaya—I'll just read it out.

Shadi Salman: Thanks, Maxim. We will move on to some of the written questions. One from Ayub Ansari at Lisaaya. I will just read it out. Can you discuss the grocery margin trajectory in Q2, both year-on-year and quarter-on-quarter? Given the supply chain disruption and margin pressure we are seeing across regional modern retail, what has Talabat experienced, and how are you adapting sourcing, pricing, and inventory strategy post-conflict?

Speaker #1: Can you discuss the grocery margin trajectory in Q2, both year-on-year and quarter-on-quarter? Given the supply chain disruption and margin pressure we're seeing across regional modern retail, what has Talabat experienced, and how are you adapting sourcing, pricing, and inventory strategy post-conflict?

Speaker #3: Look, I'll take the operational part. So challenging. But nevertheless, we increased availability. We actually increased the absolute number of items in-store since the beginning of the year.

Toon Gyssels: Well, I will take the operational part. Q2 continued to be challenging. Nevertheless, we increased availability. We actually increased the absolute number of items in store since the beginning of the year. We managed to find ways to work around. Government has supported also a lot with keeping a lot of the prices stable. On some items, prices have increased. The hit we took is not so much on the direct margin, a little bit on logistics costs that have increased. For us, this was not a very significant impact on the margins. We also did not have to increase a lot of prices to absorb that delivery cost. From our business perspective, I think the best way to say is that the outcome is consistent. I would not say the same, but similar, but the effort we had to do to get there was significantly more.

Speaker #3: So we managed to find ways to work around. Government has supported also a lot with keeping a lot of the prices stable on some items prices have increased.

Speaker #3: The hit we took is not so much on the direct margin—a little bit on logistics costs, which have increased—but for us, this was not a very significant impact on the margins.

Speaker #3: We also did not have to increase a lot of prices to absorb that delivery cost. So, from our business perspective, I think the best way to say it is that the outcome is consistent.

Speaker #3: I wouldn't say the same but similar, but the effort we had to do to get there was significantly more.

Speaker #1: Any comment, Khaled, on margins?

Shadi Salman: Any comment, Khaled, on margins?

Speaker #2: I think on margins, if you're referring to an impact on margins, when it comes to the increase in pricing, I think there's many dynamics, right?

Khaled Al Fakesh: I think on margins, if you are referring to an impact on margins when it comes to the increase in pricing, I think there are many dynamics. The price increase, and Toon I think covered that. There is also the level of the promotions and intensity of promotions. But what matters the most for us is the more we grow the grocery business, the better potentially the margins we get because we enjoy operating leverage. We just shared that the fixed cost of the business is relatively small compared to, for example, the variable cost, which is delivery costs, and we have seen some improvement on them. Secondly, ad tech margins keeps improving, so we are not concerned. In fact, we are very optimistic on the margins on the grocery business as well.

Speaker #2: The price increase and tone, I think, covered that. There's also the delivery of the promotions and the intensity of promotions. But what matters the most for us is, the more we grow the grocery business, the better potentially the margins we get because we enjoy operating leverage.

Speaker #2: We just shared that the fixed cost of the business is relatively small compared which is delivery cost. And we've seen some improvement on that.

Speaker #2: Secondly, Adtech margins keep improving, so we are not concerned. In fact, we are very optimistic about the margins on the grocery business as well.

Speaker #1: Great. Thank you, Tone and Khaled. Another follow-on question from Ayoub, which is a bit more future-looking. How are you thinking or how are we thinking about agentic commerce and do we see AI agents becoming a meaningful new discovery and transaction channel for Talabat?

Shadi Salman: Great. Thank you, Toon and Khaled. Another follow-on question from Ayub, which is a bit more future-looking. How are you thinking or how are we thinking about agentic commerce, and do we see AI agents becoming a meaningful new discovery and transaction channel?

Khaled Al Fakesh: What Talabat?

Speaker #3: So on agentic or let's talk about AI. I think for us, it's very important, right? And it's not just on the discovery side. I think there are several other elements.

Toon Gyssels: On agentic or let us talk about AI, I think for us it is very important, right? And it is not just on the discovery side, I think there are several other elements. First of all, the AI in how we build, in how we operate is a significant unlock. Since the beginning of the year, our engineering productivity, let us say, has increased by 2 and a half times. So we ship 2 and a half times as much functionality as we did before. So that is a fantastic unlock to already build better experiences. Second is talking about the customers. As I mentioned, it is not just the agentic search, it is agentic or AI-powered personalization in general. But what we are building now is a customer model with over 1,000 variables, right?

Speaker #3: First of all, the AI in how we build, in how we operate is a significant unlock. Since the beginning of the year, our engineering productivity, let's say, is increased by two and a half times.

Speaker #3: So we shipped two and a half times as much functionality as we did before. So that's a fantastic unlock to already build better experiences.

Speaker #3: Second is talking about the customer. As I mentioned, it's not just the agentic search—it's agentic or AI-powered personalization in general. What we are building now is a customer model with over 1,000 variables.

Speaker #3: Right? So to truly understand not just the past history of that customer, but really understand what the who the customer is and what's the occasion that the customer has for placing that order.

Toon Gyssels: So to truly understand not just the past history of that customer, but really understand who the customer is and what the occasion that the customer has for placing that order. Based on so much more data that can be processed in a smart way, these recommendations and that curation is becoming so much smarter than before. I think the agentic search is also important. This is also an element where, especially for groceries, it can be very helpful in the basket-building experience. But as I mentioned, it is one of the multiple elements of AI, which is a big positive unlock for us as a company.

Speaker #3: So, based on so much more data that can be processed in a smart way, these recommendations and that curation are becoming so much smarter than before.

Speaker #3: I think the agentic search is also important. This is also an element where especially for groceries, it can be very helpful in the basket building experience but as I mentioned, it's one of the multiple elements of AI which is a big positive unlock for us as a company.

Speaker #1: Great. Thank you, Tune. A question orally from Evgeny at Jefferies. Over to you, Evgeny.

Shadi Salman: Great. Thank you, Tunc. A question orally from Evgenii at Jefferies. Over to you, Evgenii.

Speaker #4: Hi. Thank you for taking my questions. I have to. Please. First, can you please decompose your food category growth intervolume and average Czech growth?

[Analyst] (Jefferies): Hi. Thank you for taking my questions. I have two, please. First, can you please decompose your food category growth into volume and average check growth? It seems that some of QSR players, like Americana, managed to successfully pass on higher cost of inventories into their prices. Just trying to understand how your average check evolved and more on pricing in terms of what is directly controlled by you, do you see scope to raise cost of Talabat Mart as key use or Pro subscription anytime soon? My second question, quick one, can you please give an update on the shared group cost discussion? Has there been any slowdown related to the deal between Uber and Delivery Hero? Thank you.

Speaker #4: It seems that some QSR players, like Americana, managed to successfully pass on higher inventory costs into their prices. So, I'm just trying to understand how your average check evolved.

Speaker #4: And more on pricing, in terms of what is directly controlled by you, do you see scope to raise cost of T-marts, SKUs, or process subscription anytime soon?

Speaker #4: And my second question, quick one. Can you please give an update on the shared group cost discussion? Has there been any slowdown related to the deal between Uber and Delivery Hero?

Speaker #4: Thank you.

Speaker #3: So on the basket side, sorry. So when decomposing growth, we have a very significant order growth. And it is true that basket size has also increased year on year but it's not that there is a very significant increase in basket size that's kind of driving the growth.

Toon Gyssels: On the basket side, when decomposing growth, we have a very significant order growth, and it is true that basket size has also increased year on year, but it is not that there is a very significant increase in basket size that is driving the growth. We have very strong order growth, customer growth, MAU growth, and on top of that, additional basket size increase. When it comes to the pricing of Talabat Pro, there is a potential. Today, the pricing is very low, which is intentional. It is to make sure that we have great return for the customers, and our thinking is to further improve the value we can offer to the customers. I think today we have got free delivery. We have got a number of exclusive discounts. We also have these big partnerships like TOD with the World Cup.

Speaker #3: We have very strong order growth, customer growth, MAU growth, and on top of that, additional basket size increase. When it comes to the pricing of Talabat Pro, there is a potential, right?

Speaker #3: Today, the pricing is very low, which is intentional. It's to make sure that we have great return for the customers. And our thinking is to further improve the value we can offer to the customers.

Speaker #3: Right? I think today we've got free delivery. We've got a number of exclusive discounts. We also have these big partnerships like Todd with the World Cup.

Speaker #3: If we can further improve the total value that subscription customers get, then we may reach a point where we can increase the price. But for today, we want to keep it at a very low barrier to entry, where your ROI is achieved after just a few orders. It makes sense to stay with that.

Toon Gyssels: If we can further improve the total value that subscription customers get, this is maybe at a point where we can increase the price. But today, we want to have it as a very low barrier of entry where your ROI is after a few orders, it makes sense to stay with that.

Speaker #2: Yeah. And I think on the group cost, it's actually the process is really very technical and tech time. We are already seeing some good progress.

Khaled Al Fakesh: Yeah. I think on the group cost, it is actually the process is really very technical and takes time. We are already seeing some good progress. There is a little bit of slowdown during the summer, just due to the vacations of the team, to be honest, rather than anything else. So I do not see any slowdown in relation to the Uber Delivery Hero transaction. I think this is an independent process. We want to make sure that we tackle it very well from all angles, from technical and tax angle, because this is something we do not revise every year. So every couple of years, you do this revision. So it is just a process that takes its time. Great. Thank you, Evgenii.

Speaker #2: There's a little bit of slowdown during the summer just due to the vacations of the team, to be honest, rather than anything else. So I don't see any slowdown in relation to the Uber delivery hero transaction.

Speaker #2: I think this is an independent process. We want to make sure that we tackle it very well from all angles, from technical and tax angle, because this is something we don't revise every year.

Speaker #2: So, every couple of years, you do this revision. So, it's just a process that takes its time.

Speaker #1: Great. Thank you, Evgeny. Unless you have any further questions. Okay. Thank you. Another question in writing, which I'll read out. This is from Yasin Trad at Integra.

Shadi Salman: Great. Thank you, Evgenii.

[Analyst] (Jefferies): Thank you.

Khaled Al Fakesh: Unless you have any further questions. Okay. Thank you. Another question, in writing, which I will read out. This is from Yassine Touahri at Integra. He says there was a slide in the Uber presentation suggesting the merger of Careem with Talabat, where they talked about the benefits of mixing transportation with food delivery. Are you modifying your expansion strategy in any way to prepare for this scenario? Perhaps in dark store openings overlap.

Shadi Salman: Unless you have any further questions. Okay. Thank you. Another question, in writing, which I will read out. This is from Yassine Touahri at Integra. He says there was a slide in the Uber presentation suggesting the merger of Careem with Talabat, where they talked about the benefits of mixing transportation with food delivery. Are you modifying your expansion strategy in any way to prepare for this scenario? Perhaps in dark store openings overlap.

Speaker #1: He says, "There was a slide in the Uber presentation suggesting the merger of Careem with Talabat. Where they talked about the benefits of mixing transportation with food delivery.

Speaker #1: Are you modifying your expansion strategy in any way to prepare for this scenario? Perhaps in dark store openings overlap."

Speaker #3: So the answer there is no. We operate as we do today. We've been competing with Careem and many others for many years, and today we just continue as we are doing.

Toon Gyssels: The answer there is no. We operate as we do today. We have been competing with Careem and many others for many years, and today we just continue as we are doing. I think what Uber is highlighting there is also what we believe in, right? The multiverticality. We see people that order food, versus people that order food and groceries. The latter spend almost five times as much on our platform, right? And I think they have a similar observation on multiverticality on their platforms, between food and mobility.

Speaker #3: I think what Uber is highlighting there is also what we believe in, right? The multi-verticality. We see people that order food versus people that order food and groceries.

Speaker #3: The latter spend almost five times as much on our platform, right? And I think they have a similar observation on multi-verticality on their platforms.

Speaker #3: Between food and mobility.

Speaker #1: Great. Thank you, Tune. Question from Barat at Counter Fitzgerald. Over to you, Barat. Please ask your question.

Shadi Salman: Great. Thank you, Tunc. A question from Bharat at Cantor Fitzgerald. Over to you, Bharat, please ask your question.

Speaker #4: Hi. Thank you. Just a quick question for me. Probably you answered this in some form or shape earlier. But have you or the board of Talabat engaged with Uber on strategic on a strategic front with regards to the intent that Uber has post-close, like maybe on commercial integration, delisting optionality, or status quo in the future?

[Company Representative] (Cantor Fitzgerald): Hi, thank you. Just a quick question from me. Probably you answered this in some form or shape earlier, but have you or the board of Talabat engaged with Uber on a strategic front with regards to the intent that Uber has post-close? Like maybe on commercial integration, delisting optionality or status quo in the future. Thank you.

[Analyst] (Cantor Fitzgerald): Hi, thank you. Just a quick question from me. Probably you answered this in some form or shape earlier, but have you or the board of Talabat engaged with Uber on a strategic front with regards to the intent that Uber has post-close? Like maybe on commercial integration, delisting optionality or status quo in the future. Thank you.

Speaker #4: Thank you.

Speaker #2: Yeah. Maybe I can take this. I mean, if you look at Talabat, we are listed entity in the Dubai Financial Markets. And we have our own governance that is driven by that.

Khaled Al Fakesh: Maybe I can take this. If you look at Talabat, we are a listed entity in the Dubai Financial Market, and we have our own governance that is driven by that. All the conversation our board have is with the shareholders, and of course, with Delivery Hero being the major shareholder. We do not have any conversation directly with Uber.

Speaker #2: So all the conversation our board have is with the shareholders. And of course, with Delivery Hero, being the major shareholder. So we don't have any conversation directly with Uber.

Speaker #3: And what Uber has shared publicly is that closing expected H2 2027, they would use 2028 for planning and first migrations integrations would happen 2029 onwards.

Toon Gyssels: And what Uber has shared publicly is that the closing expected H2 2027, they would use 2028 for planning, and the first migrations integrations would happen 2029 onwards.

Speaker #4: Understood. Thank you. Very helpful.

[Company Representative] (Cantor Fitzgerald): Understood. Thank you. Very helpful.

[Analyst] (Cantor Fitzgerald): Understood. Thank you. Very helpful.

Speaker #1: Thank you, Barat. I just want to check, because I know Andrew, you still have your hand raised. Do you need to ask a question?

Shadi Salman: Thank you, Bharat. I just want to check, because I know, Andrew, you have still got your hand raised. Do you need to ask a question? Maybe not. Okay. Another question. Okay, another question in writing. Could you give us a sense on how the growth in food and the grocery and retail verticals progressed during the quarter separately?

Speaker #1: Maybe not. Okay. Another question okay. Another question in writing. Could you give us a sense on how the growth in food and the grocery and retail verticals progressed during the quarter separately?

Toon Gyssels: Yes. I think these numbers are shared.

Speaker #3: Yes, I think these numbers are shared.

Speaker #2: No. We don't disclose the growth by vertical on quarterly basis. But you can't expect similar growth previous to the trend. So we don't see any major deviation from previous growth trends that we have seen.

Khaled Al Fakesh: No, we don't disclose the growth by vertical on quarterly basis. You can expect similar growth previous to the trend. We don't see any major deviation from previous growth trends that we have seen.

Speaker #1: Okay. I think we have another question in writing from Honey Thunderwell at Habtur Group about the main levers behind the EBITDA margin and how sustainable they are.

Shadi Salman: Okay. I think we have another question in writing from Hani Khandelwal in the Hatsour Group about the main levers behind the EBITDA margin and how sustainable they are. How should we think about the cost of delivery per order as you scale both the fixed versus the variable dynamics? I think we've covered a bit the aspects. We can recap those, but-

Speaker #1: How should we think about the cost of delivery per order as you scale both the fixed versus the variable dynamics? I mean, I think we've covered the EBITDA aspects.

Speaker #1: We can recap those, but.

Speaker #3: Yeah. And maybe to talk about the cost of delivery. Today, we kind of have scale. We have quite significant scale. I think the further gains we have from just scale are limited.

Toon Gyssels: Yeah. I think I need to talk about the cost of delivery. Today, we have scale. We have quite significant scale. I think the further gains we have from just scale are limited. Gains will always be there from smarter operations and from increased density on the vendor side. Right? The vendor side on food is even more resonant. On the grocery side, it's, for example, this dark stores, because if you can further increase the density, you will always have shorter distances. It's with these shorter distances that we're able to further reduce the cost of the delivery.

Speaker #3: Gains will always be there from smarter operations. And from increased density on the vendor side. Right? And the vendor side on food is even more resonance.

Speaker #3: On the grocery side, it's, for example, these dark stores. Because if you can further increase the density, you will always have shorter distances. And it's with these shorter distances that you'll be able to further reduce the cost of a delivery.

Speaker #1: Great, thanks, Tune. Another question in writing, which I'll read from Gorav Scheller at ABI Analytics. It's in three parts. First part: Revenue conversion increased to 39% of GMV in the second quarter.

Shadi Salman: Great. Thanks, Teun. Another question in writing, which I'll read from Gaurav Schellan at ABI Analytics. It's in three parts. First part, revenue conversion increased to 39% of GMV in Q2. Should we expect further improvement in revenue conversion going forward? What is the company's target for 2026 and beyond? Maybe we'll go-

Speaker #1: Should we expect further improvement in revenue conversion going forward? And what is the company's target for 2026 and beyond? Maybe we'll go.

Speaker #3: Look, yeah. Maybe just to explain what's underneath that. It's the growth of Tmart. Right? The Tmart business, we recognize the full GMV as revenue.

Toon Gyssels: Look, yeah, maybe just to explain what is underneath that. It is the growth of Talabat Mart, right? The Talabat Mart business, we recognize the full GMV as revenue. The more that grows as a share of the total, the more our conversion will grow. We expect that to continue to do so, because the grocery business is growing significantly faster than the food business.

Speaker #3: So the more that grows as a share of the total, the more our conversion will grow. And so we expect that to continue to do so.

Speaker #3: Because the growth of the business is growing significantly faster than the food business.

Speaker #1: Perfect. The second part of their question is around the investment program. Around $58 million was deployed in the first half under the program.

Shadi Salman: Perfect. The second part of their question is around the investment program. Around $58 million was deployed in H1 under the program. How should we think about the timing of the remaining investment through Q3 and Q4, and its impact on 2026 margins?

Speaker #1: How should we think about the timing of the remaining investment through the third quarter and fourth quarter, and its impact on 2026 margins?

Speaker #2: I mean, it's we've announced an investment program of 120 million at the beginning of the year. So we are almost spent half of it between CapEx and OpEx in the first half of the half of the year.

Khaled Al Fakesh: We have announced an investments program of $120 million at the beginning of the year, so we almost spent half of it between CapEx and OpEx in H1. We would expect then as part of the guidance, we fully deploy the remaining in H2, probably at the same base.

Speaker #2: And we would expect as part of the guidance, we fully deploy the remaining in the second half of the year. Probably at the same pace.

Speaker #1: All right. Thank you, Khalid. The third part of that and third and final part of the question. The company did reclassify some expenses, certain expenses in marketing IT and GNA.

Shadi Salman: All right. Thank you, Khaled. The third and final part of the question. The company did reclassify certain expenses in marketing, IT and G&A to cost of sales in Q1 this year versus in the previous reporting. Could we provide maybe a short explanation on some of that?

Speaker #1: To cost of sales. In Q1 this year versus in the previous reporting. Could we provide maybe a short explanation on some of that?

Speaker #2: Yes, we shared the detailed explanation, I think, in the previous call around this. But this is simply to get the management report closer to IFRS.

Khaled Al Fakesh: Yeah. We shared a detailed explanation, I think, in the previous call around this, but this is just simply to get the management report closer to the IFRS, and all these reclassification has no impact on EBITDA. So EBITDA margins and EBITDA values on both the previous classification and the new one remains unchanged. It is basically all the lines between revenue and expenses just to get closer to IFRS.

Speaker #2: And all these reclassification has nothing to has no impact on EBITDA. So EBITDA margins and EBITDA values on both the previous classification and the new one remains unchanged.

Speaker #2: It's basically all the lines between revenue and expenses, just to get closer to IFRS.

Speaker #1: Perfect. Thank you, Khalid. And thank you, Tune. I think we don't have any further questions, so we can wrap up the call and hand it over to you for some final closing remarks.

Shadi Salman: Perfect. Thank you, Khaled. And thank you, Teun. I think we do not have any further questions, so we can wrap up the call, and hand it over to you just for some final closing remarks.

Speaker #3: Okay. All right. Thanks, Shari. So look, a quick wrap-up. Q2 was strong again. We will be continuing that momentum we started from the beginning of the year across all dimensions.

Toon Gyssels: Okay. Thanks, Shadi. So look, a quick wrap-up. Q2 was strong, again. We will be continuing that momentum we started from the beginning of the year across all dimensions, which is the reason why we are revising the guidance upwards. I think it is also very exciting that already today, we were able to share with you some of these positive results from our investment program, while it has only been six months. And none of that would have been possible without the hard work of our Talabatis, so I want to thank them all for this amazing quarter, and I want to thank you for attending our call. See you next time.

Speaker #3: Which is the reason why we're revising the guidance upwards. I think it's also very exciting that already today, we were able to share with you some of these positive results from our investment program while it's only been six months.

Speaker #3: And none of that would have been possible without the hard work of our Talabati. So I want to thank them all for this amazing quarter.

Speaker #3: And I want to thank you for attending our call. See you next time.

Speaker #1: Great. Thank you, everyone.

Shadi Salman: Great. Thank you, everyone.

Speaker #2: Thank you.

Khaled Al Fakesh: Thank you.

Operator: Goodbye

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Q2 2026 Talabat Holding PLC Earnings Call

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