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QIWI Plc (NASDAQ:QIWI)
Q2 2019 Earnings Call
Aug 19, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the QIWI Second Quarter 2019 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mrs. Varvara Kiseleva, Deputy CFO of QIWI. Please go ahead.

Varvara Kiseleva -- Deputy Chief Financial Officer

Thank you, operator, and good morning, everyone. Welcome to the QIWI second quarter earnings call. I am, Varvara Kiseleva; Deputy CFO and with me today are Sergey Solonin, our Chief Executive Officer; Andrey Protopopov, Chief Executive Officer of the Payment Services segment, Vladislav Poshmorga, our Chief Financial Officer.

A replay of this call will be available until Monday, September 2, 2019. Access information for the replay is listed in today's earnings press release, which is available on our Investor Relations website at investor.qiwi.com. For those listening to the replay, this call was held and recorded on August 19, 2019.

Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. QIWI cautions that these statements are not guarantees of future performance. All forward-looking statements made today, reflects our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission for factors that could cause our actual results to differ materially from any forward-looking statements.

During today's call, management will provide certain information that will consist of non-IFRS financial measures such as adjusted net revenue, adjusted EBITDA, adjusted net profit and adjusted net profit per share. Reconciliations to IFRS measures and certain additional information is also included in today's earnings press release.

With that, we will begin by turning the call over to Sergey Solonin, our Chief Executive Officer.

Sergey Solonin -- Chief Executive Officer

Thank you, Varvara, and good morning, everyone. Thanks for joining us today. I'm very excited to share second quarter results with you today. This quarter, we have demonstrated exceptional performance. Our Payment Services business delivered 35% segment net revenue and 42% segment net profit growth, securing strong results for the first half of 2019. Our growth was driven by the robust performance in our key strategic stream. Payment Services for digital entertainment merchants, digital management agencies and projects we developed for self-employed and sharing economy partners as well as by the general expansion of our payment ecosystem.

I'm glad to acknowledge that the strong performance of our Payment Services business was largely driven by the expansion and scaling of our operations and enhancements of our product proposition we offer to our users, merchants and partners. This quarter will continue to invest in the development of our financial services project primary SOVEST and Rocketbank, while Tochka project has reached breakeven and booked some positive net profits this quarter.

I will walk you through some latest developments in this segment in just a moment. Overall, I believe that our performance clearly demonstrates the value of our ecosystem. It also serves as a solid foundation for the future growth and an important step forward the achievement of our mid-term goal that we have provided last year.

The significant cash flows that generated by a core payment business support our strategy and allow us to carry it on with investing in new products and project in financial and payment spaces, in order to secure the long term growth prospects of our company.

Now onto some operating highlights. But before we move on, I would like to introduce you to my colleague who are here with me today. First, I'm glad to announce that Andrey Protopopov formerly served as our Head of Product and IT has been appointed as our Chief Executive Officer of our Payment Services business. He will be running the day to day operations of the segment, developing and implementing the strategy. Andrey has been with the company for over six years and has taken leading roles with marketing products and IT.

Moreover, he was practically leading the payment services business, while I was on my trip earlier this year. I'm very glad that Andrey has taken this responsibility and will continue to lead our payment business in the CEO role. He will walk you through greatest development in the segment in just a moment.

I'm also glad to introduce you to Vladislav Poshmorga, our new CFO, who is also here with me today, Vlad will walk you through the second quarter numbers and more details shortly, while, I would like to share with you some recent developments. Second quarter 2019, total adjusted net revenue increased by 23% reach RUB5.6 billion, up from RUB4.5 billion in the second quarter of 2018.

The increase was mainly driven by Payment Services and Consumer Financial Services segment, net revenue growth. The growth was likely to set by the decreasing in each segment net revenue and negative net revenue contribution of Rocketbank segment. Our Consumer Financial Services segment payment volume reached to RUB5.8 billion for the second quarter 2019, increasing by 82% as compared to the same period of the prior year.

Consumer Financial Services segment net revenue was RUB283 million for the second quarter of 2019, as compared with RUB58 million in the second of the prior year, demonstrating the development of the service project. During the last several quarters, we have enhanced the product offering and improved the monetization of the project. At the same time, we continue to explore potential opportunities to support and reinforce the scaling up in project.

Our SME segment, which was developed through Tochka multi-bank platform together with Otkritie Bank, continued to demonstrate robust, operating financial performance in the second quarter 2019 that I have just mentioned. At the same time, it's net revenue decreased by 69% to RUB185 million for the second quarter of 2019. Mostly it's the result of the transfer of Tochka operation to JSC Tochka that happened on February 1, 2019.

This month, we have also finalized and present to the Board of Directors of QIWI, the new Rocketbank strategic plan. We envision Rocket as a fintech company with a mission to simplify everyday relations with money for generations Y and Z. Rocket aims to transform how people spend, save, earn, receives salary, invest, get best deals, keep track on expenses and used credit funds. It will enable customers to do all of this together with friends and their communities in a convenient mobile application without having to go to the bank branch.

Rocket team will continue doing what it does the best, using an latest interfaces and mechanics that combine the convenient services and essential banking products. Today Rocket team is developing three main product streams, the new financial tool for self-employed as freelancers and innovative application for getting the most benefit, bonuses, privileges and using installments when making purchases. It's simple application to saving and investing. By the end of 2019, Rocket aims to reach over 400,000 of active clients and begin a new chapter with QIWI of victory as a stand-alone fintech company.

Following the detailed discussion, our Board of Directors concluded that the strategic plan of Rocketbank suggested by the management has limited synergy potential with the core business of QIWI and did not use QIWI risk appetite. In the next couple of months, we will explore different opportunity of partial or complete sale of the project, focusing on raising investment to funds -- to fund the development and growth of this project. We will provide an update on this process as soon as practical. At the same time, we will continue investing in the development of new product and acquisition of customer security that we are able to choose the best possible deal.

Further, I'm glad to announce that following the determination of the second quarter 2019 financial results, our Board of Directors has approved the dividend of $0.28 per share keeping nominal per share payout constant as compared to the previous quarter. In accordance with the decision of the Board announced earlier this year, we aim to distribute between 65% to 85% of our adjusted net profit for 2019 starting from the first quarter of 2019.

We believe that distributing excess cash to the shareholders is a good practice and aim to provide maximum transparency and consistent in this respect going forward.

With this, I will turn the call over to Andrey for an update on the payment services segment. Andrey?

Andrey Protopopov -- Chief Executive Officer, Payment Services

Thank you, Sergey, and good morning, everyone. It's my pleasure to be here with you today. Now on the results of our Payment Services segment. For the second quarter 2019, our Payment Services segment volume increased by 41% to reach RUB371 billion, driven by significant growth in the quarter, financial services and money remittance vertical which grew 74%, 52% and 43%, respectively.

The growth in e-commerce and money remittance verticals was largely driven by the development of our three streams, mainly digital entertainment, self-employed and sharing economy partners, where they are -- were able to expand our partner and merchant network, build up our relations with our existing partner, expand our product offering.

This growth was reinforced by secular market brand. While the growth in financial service category was driven primarily by the new additional contract. Payment Service segment net revenue increased 35% to reach EUB5.2 million compared to RUB3.8 billion the prior year. Payment Service adjustment net revenue increased 31% to RUB4.4 billion, up from RUB3.4 billion in the prior year as a result of the net revenue growth in our money remittance and e-commerce verticals, which grew 73% and 25%, respectively. Partially offset by a slight decline in net revenue in other verticals.

Our financial results in this segment were predominantly driven by increasing volume. Our payment average adjusted net revenue yield was down by 9 basis points year-over-year to 1.19%, driven by the yield decline across all key category. Such decline was driven by our focus on increasing the scale of our business that we started offering our merchants and partners new services such as online acquiring, which makes a lower commissions that our Qiwi Wallet product proposition. The growth of this three business stream diluted payment average adjusted net revenue yield primarily in the economy category, while the commissions in charge in our core solutions remained unchanged.

Payment Service other adjusted net revenue increased 59% to RUB746 million as compared to RUB470 million in the prior year. As a result of growth of revenue from fees from inactive account, unclaimed payment and interest revenue, this is inline with our overall growth and scaling of our strategy. As Sergey mentioned earlier, our growth was driven by the robust performance we had achieved in our key strategic streams and through the expansion and enhancement of the project proposition we offer to our users, merchants and partners. We believe that we are well positioned to continue growing our business by reaching our fleet of services in this area, while we aim to show the improve our installations and use cases and develop new strategic solutions to support our longer term growth.

With this, I will pass over to Vladislav for more details on the financial performance of the group. Vladislav?

Vladislav Poshmorga -- Chief Financial Officer

Thank you, Andrey, and good morning, everyone. Moving on to expenses. Profit operating performance of our Payment Services business has continued to generate substantial cash flows, supported our investments in the development of our new projects. Our net revenue growth outpaces the growth of expenses supported by the improving operating leverage. This being said, adjusted EBITDA increased 90% to RUB2.6 billion from RUB1.4 billion in the prior year.

Adjusted EBITDA margin was 47% compared with 31% in the prior year. Adjusted EBITDA margin expansion primarily resulted from adjusted net revenue growth, as well as the decline in payroll and related taxes, related to the cost of revenue and advertising. Client acquisition and related expenses partially offset by the increase in compensation to employees and related taxes, related to SG&A expenses. As well as an increase in credits lost expenses incurred due to scaling up of the service project and increase in other expenses related mostly to the transfer and operations of Tochka multi-bank project.

Group adjusted net profit increased 125% to RUB2 billion from RUB0.9 billion in the second quarter of the prior year. Adjusted net profit was largely affected by the same factors as adjusted EBITDA, as well as smaller net foreign exchange loss as compared to the same period in the prior year. Payment Services segment net profit increased 42% to RUB3.2 billion compared to RUB2.3 billion in the prior year, driven primarily by Payment Services segment net revenue growth and circumstances that were performed and will be caught up during the year.

Consumer Financial Services segment net loss was RUB435 million in the second quarter of 2019, as compared to our net loss of RUB702 million in the same period of the prior year, resulting from the expansion of the operation of the service project, improvement of user economics, as Sergey previously mentioned, as well as optimization of certain expenses. SME segment net profit was RUB60 million as compared to RUB263 million net loss in the second quarter of 2018. Substantial reduction of SME segments net loss resulted primarily from growth and development of the Tochka business.

Rocketbank segment net loss was RUB511 million for the second quarter of 2019, as compared to the net loss of RUB97 million for the same period in 2018. The substantial increase in net loss was primarily driven by expenses incurred in connection with transfer and commencement of Rocketbank operations and QIWI, including primarily personnel expenses as well as client acquisition and marketing cost.

Now onto our guidance. Firstly, I would like to remind you of certain accounting changes that are embedded in our 2019 guidance. We have ceased starting from February 1, 2019, to recognize part of Tochka revenues associated with information and technology severance agreement with Otkritie Bank for providing services to Tochka clients that have their accounts with Otkritie Bank. As Tochka business was transferred to a separate legal entity JSC Tochka.

Such revenues recognize for the full year 2018. However, they are only being recognized one-month in 2019. What I like them about all these revenues related to Tochka clients that have their accounts with Otkritie Bank are recognized as QIWI group revenues starting from February 1, 2019. We correspondingly accommodate this year Tochka as an equity associate. It is being said, we upgrade our 2019 guidance to reflect strong performance of our Payment Services business and underlying trends, which we currently observed. We expect group adjusted net revenue to increase by 11% to 16% over 2018.

Payment Services segment net revenue to increase by 23% to 27% over 2018, While Payment Services segment net profit is expected to increase by 25% to 29% over 2018, to reflect the operating leverage in the business. We reiterate group adjustment net profit guidance reflects our current expectation in regards of the investments we are likely to endure this year in connection with the implementation of certain strategic initiatives in Rocketbank that are aimed at securing the best potential deal for this project. Group's growth adjusted net is to increase by 40% to 50% over 2018. Also this year second quarter results, that's a solid foundation for the future growth, certain other factors, remain beyond our control, and hence we reserve the right to revise guidance in the course of the year.

With that, operator, please open up the call for the questions.

Questions and Answers:

Operator

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.

Cristopher Kennedy -- William Blair & Company LLC -- Analyst

Hey, guys, thanks for taking the question. Sergey, can you provide an update on your latest thinking on the multi-bank model and your ability to scale SOVEST?

Sergey Solonin -- Chief Executive Officer

Hi, Chris. Thank you for your question. Yes. We are currently under the testing period with one of the banks with the Bars Bank. And I think we issued around 30,000 clients together with this bank and we have few more banks in line. So I would say that I'm very positive on the ability to work with banks in a multi-bank model. So I think that we will discuss it on the next Board Meeting about the next phase of the project on a multi-bank. So in the mid-term, we definitely will not have account balances on QIWI balance. So it will be some more multi-bank.

Cristopher Kennedy -- William Blair & Company LLC -- Analyst

Okay. Great. Thank you. And then just one more on -- you mentioned, you've alluded to your mid-term guidance that was provided at your Investor Day. Can you just give us your latest thinking on that and your ability to achieve those targets?

Varvara Kiseleva -- Deputy Chief Financial Officer

Chris, hello. This is Varvara. So as we said on the call, we are on a new track to achieve the guidance that we have provided during our Investor Day. We're well on with the Payment Services business over performing our current expectations, we reiterate the mid-term guidance, no change to that yet. But we believe that we're on the good track with our three main stream. For the -- and definitely, as we've already said, the core of the results and the core of the increase in the scale of business and net profits and net profit -- net revenue net profit guidance lies within the growth of the Payment Services business. Most other businesses are including Tochka, SOVEST, are now as well in the budget, and well in the midterm plans that was underlying the guidance that we have provided during the Investor Day.

Cristopher Kennedy -- William Blair & Company LLC -- Analyst

Fantastic. Thanks for taking the questions.

Operator

Our next question comes from the line of Svetlana Sukhanova with Sberbank. Please proceed with your question.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Good afternoon. First of all, congratulations to a strong beat on the second quarter results. My first question would be on your guidance. And traditionally, you do expect a significant slowdown in the second half of the year, especially on the net profit, especially on the net profit or front, I mean, including Payment Services and overall objective. So is it kind of slowdown a real or you're traditionally conservative? And if it is real, what should be the underlying reasons for the such slowdown? I will ask the second question after you answer the first one. Thank you.

Varvara Kiseleva -- Deputy Chief Financial Officer

Svetlana, that's Varvara again. So as far as Payment Services guidance, would you expect certain slowdown in the growth rates in the second half of the year, mostly because of the high rates effects that kicks in from the third quarter. That's for the next revenue growth. For the net profit growth, as was mentioned in our press release, we do expect that there will be certain additional expenses are mostly connected to the shift of the certain compensation programs from our share base nature to the cash base nature that will add some course to the Payment Services net profits. Though we believe that there will be operating leverage in the Payment Services segment will be maintained.

As for the overall group guidance, we expect that the course for the development of Rocketbank would be slightly above those related now and previous guidance, so that even given the increase of the Payment Services net profit guidance, we reiterate the net profit guidance for the group. Otherwise, of course, as usual, we're trying to be conservative.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Very clear. Thank you very much. My second question would be about the e-commerce and money remittance. So I got from Andrey speech, why your yields turns e-commerce segment are under pressure because of this online acquiring. But can you please kindly elaborate on them Payment Services revenues. Why do they slow down and why do money rem net revenues so much accelerated in the second quarter? Thank you very much.

Andrey Protopopov -- Chief Executive Officer, Payment Services

Thank you for the question. For the money rem in the second quarter, we were successful in our key streams, including the self-employed, working businesses and the payout program. And those volumes are going to the money rem as well as self-employed entrepreneurs, which use our Qiwi Wallet to run their businesses growing as well where eternal peer-to-peer between wallets and sending money from the wallet to their bank cards were growing as well and as a result are going to the money rem category. And they also -- it's here that those type of payments within the money rem categories are more marginal. That's why you cannot grow the yields when the money rem is higher versus prior periods.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Apologies, but may I ask a follow-up question on money rem. Do you payout just win rate, I mean, what I'm trying to ask is how money rem are affected by the betting revenues and that kind of acceleration of money rem, I got everything about payout, about self-employed, et cetera. But is that kind of money rem acceleration somehow connected with the the betting business and with the payout to them from the betting business to the wallet that people for work to using the same money transfer et cetera, et cetera. So the question, is it somehow connected with the betting businesses as well?

Andrey Protopopov -- Chief Executive Officer, Payment Services

It is partially connected with the betting business as well, because part of the payout it goes directly to the bank app, it's going to the money rem. While the volumes that they go into the payout [Indecipherable] is not reflected in our volume of the categories, it's a top up part of top up. So it's partially connected. But the main growth of this category is driven by how the factors that I already mentioned and for betting it's not big.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Very clear. Thank you so much. And what about e-commerce revenue slowdown?

Andrey Protopopov -- Chief Executive Officer, Payment Services

Actually, the main reason is that high base in the last year, because of the World Cup and the high betting volumes on this period last year.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Thank you very much.

Operator

Thank you. Our next question will be coming from the line Anna Kazaryan with VTB Capital. Please proceed with your questions.

Anna Kazaryan -- VTB Capital plc -- Analyst

Hello. Thank you for taking my questions. My first question is about your adjusted EBITDA. So do I understand correctly that adjusted EBITDA growth in the second quarter included some impact of one-off -- some one-offs from incentive program or from IFRS 16 may be. If I understand it correctly, what was an organic EBITDA growth results least one-off and what might be future impact of such one-offs? It's my first question. My second question. Could you please clarify -- sorry, if I missed it. Do I understand correctly that your full year guidance include expenses for Rocketbank? And so do you -- can you explain how much do you planned to invest into Rocketbank by year end? Thank you.

Varvara Kiseleva -- Deputy Chief Financial Officer

Anna, hi. So for your first question, there was an attempt to IRFS 16 in the EBITDA numbers. Roughly 2%, so the EBITDA would be slightly or EBITDA margin would be slightly less without these IFRS 16. As for the one-offs, I would like to clarify that this would affect the numbers going further. So we would have some additional expenses in the Payment Services business that would slightly affect EBITDA margin going forward in the second half of the year. But the business affect the EBITDA margin in the first half of the year. So in this respect, we believe that the EBITDA margin will be more or less stable throughout the year, probably slightly decreasing for the group because of the Rocketsbank. All one-off are more or less material marking 2% of adjusted EBITDA margin except overall. And for your second question for Rocketbank, you're absolutely right. All expenses are currently anticipate for Rocketbank are included in the current guidance and the course that we expect for the second half of the year, overall, it can be up to RUB2 billion that's what I have been discussing.

Anna Kazaryan -- VTB Capital plc -- Analyst

Thank you.

Operator

[Operator Instructions] Thank you. Next question is from the line of Maria Sukhanova with BCS Global. Please proceed with your question.

Maria Sukhanova -- BCS Global Markets -- Analyst

Yes, hello. Congrats from my side too. Great results. I have a question about SOVEST. You mentioned that economics are improving. I wonder if you could share with us, like, any data points. So like, for instance, half a month -- half a year ago, you said that it's becoming breakeven, like the cohort attractive is becoming breakeven at 27 months. I wonder if how it's changed so far and maybe if you could share with us how many cards you have issued in total or like loans issued or something like that? Thank you.

Varvara Kiseleva -- Deputy Chief Financial Officer

Maria, hi. So as per the unit economics and for the monetization of the projects, we indeed have improved the unit economic and monetization as compared to the previous year mostly through the consumer value-add options that we have introduced last June. That was really a good driver for the increase in net revenues. As for the cohorts, the behavior is more or less the same. So the behavior and the results of the newly acquired cohort is more or less the same as we've discussed with you earlier. We don't see any significant changes neither of in cost of consumer acquisition or in cost of risk. So it's more or less in line with what we have historically seen. And regarding the number of cards, this summer, we have surpassed 1 million of cards distributed to SOVEST customers.

Maria Sukhanova -- BCS Global Markets -- Analyst

Okay. Thank you.

Operator

The next question comes from the line of Anna Kurbatova with Alfa Bank. Please proceed with your question.

Anna Kurbatova -- Alfa Bank -- Analyst

Good afternoon. Thank you for that opportunity. I wonder about your progress with the new strategy development that you announced several months ago that -- it was announced that in August, you were to submit of a new strategy to the Board of Directors. So could you give us some update in this regard? And my second question is about potential and future sale of Rocketbank. I wonder what -- would you give a partial sale of the asset because as far as I understand, the full sale would enable you to deconsolidate the assets and losses and to attract or to -- like no need -- you will have no need for investments, but what you seek with the partial sale? Thank you.

Sergey Solonin -- Chief Executive Officer

Thank you, Anna, for your question. First of all, about the strategy, we presented our product strategy on the Board of Directors, which was generally accepted. And we also presented our ideas about the partial sale of the project because of the reasons we mentioned in our speech today. So we are -- we will be working in line with the strategy. And we understand that during -- up to the end of the year, we will be clear with the investors how it will be done. We definitely aim to deconsolidate Rocketbank from QIWI. So we aim to sell -- make a partial sale of the majority stake in this project and develop it with investors money.

Anna Kurbatova -- Alfa Bank -- Analyst

Okay. Thank you.

Sergey Solonin -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from the line of Andrey Pavlov-Rusinov with Goldman Sachs. Please proceed with your question.

Andrey Pavlov-Rusinov -- Goldman Sachs -- Analyst

Hello. Thanks a lot for the opportunity to ask questions. I've got a couple of follow-up questions. First of all, on e-commerce dynamics, could you please give us a sense of out of this 25% year-on-year growth in net revenues there, what is growing faster, the betting revenues or the rest of the e-commerce? And also my second question is with regards to the SOVEST. Basically, could you please give us a sense of what kind of level of investments do you expect in this business in the second half of the year? And when should we actually approach the breakeven?

Vladislav Poshmorga -- Chief Financial Officer

Andrey, thank you for your question. I will take the first one. So regarding the e-commerce category, betting has more or less the same growth rate as other parts of this business.

Sergey Solonin -- Chief Executive Officer

Yeah. On the second question, we were planning to spend around RUB1 billion in total and our plan is to be breakeven in the mid-2020.

Andrey Pavlov-Rusinov -- Goldman Sachs -- Analyst

Thanks a lot. And just to -- basically to understand better. If I look -- if I see directly the Consumer Finance -- Financial Services had a loss of about RUB1 billion during the first half, so it's essentially -- this will be it in terms of the investments?

Varvara Kiseleva -- Deputy Chief Financial Officer

No, no, Andrey. The total investments for SOVEST for 2019 will be around RUB2 billion, RUB1 billion in the first half and RUB1 billion in the second half.

Andrey Pavlov-Rusinov -- Goldman Sachs -- Analyst

Okay. Yeah, thanks.

Operator

(Operator Instructions) The next question is from the line of Svetlana Sukhanova with Sberbank. Proceed with your questions.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Yeah. Hi, everyone. If I may, a follow-up question on betting again. So if we assume -- so my first question in betting could be if you can kindly disclose or give us some kind of hint what percent of betting revenues as of your total payment revenues. Is it more than 30%? How significant -- any hint would be much appreciated? And second question in betting would be if I look at 100% of your betting revenues, how would this be separated between e-commerce and money remittances segment because when asked about money remittances segment, the effect of betting, the answer was it's pretty insignificant for the acceleration. But how significant betting revenues for money remittances segment and the split between e-commerce and money remittance? Thank you.

Varvara Kiseleva -- Deputy Chief Financial Officer

Yes. Hi. So in terms of the split between categories, digital entertainment category, overall, the majority consist of the major part of the e-commerce category. We do not disclose separately the betting revenues. And if we're discussing the contribution of betting in e-commerce and money remittance, the major part by far would be booked into e-commerce category.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

That's very clear. Thank you very much. A quick question, a quick follow-up on digital entertainment. What else is included in digital entertainment? Is it games or it's pretty much all e-commerce? Or what is it, in fact?

Varvara Kiseleva -- Deputy Chief Financial Officer

That's online. That's online games, social network, some parts of the donations and e-sports, cyber sports, et cetera, everything which you can basically call digital entertainment.

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Okay. Clear. So it's pretty broad category. Thank you so much.

Operator

Thank you. At this time, we have reached the end of our question-and-answer session, that will also conclude our conference for today. [Operator Closing Remarks]

Andrey Protopopov -- Chief Executive Officer, Payment Services

Thank you.

Duration: 39 minutes

Call participants:

Varvara Kiseleva -- Deputy Chief Financial Officer

Sergey Solonin -- Chief Executive Officer

Andrey Protopopov -- Chief Executive Officer, Payment Services

Vladislav Poshmorga -- Chief Financial Officer

Cristopher Kennedy -- William Blair & Company LLC -- Analyst

Svetlana Sukhanova -- Sberbank CIB -- Analyst

Anna Kazaryan -- VTB Capital plc -- Analyst

Maria Sukhanova -- BCS Global Markets -- Analyst

Anna Kurbatova -- Alfa Bank -- Analyst

Andrey Pavlov-Rusinov -- Goldman Sachs -- Analyst

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