Warsaw Stock Exchange Concedes OpEx Will Run Well Above Strategy Targets as WATS Launch Nears, While Retail Tax Account and S&P Upgrade Add Long-Term Optionality
Q2 2026 earnings call, September 4, 2026
Gielda Papierów Wartosciowych w Warszawie (GPW) reported a quarter in which the cost discipline that has underpinned its re-rating showed its first crack. Management guided to third-quarter operating expense growth "not lower than in overall first half," with further acceleration in the fourth quarter once its new proprietary trading system, WATS, begins to depreciate. The CFO acknowledged that the 10.2% OpEx growth in the second quarter was the first time in roughly nine quarters that costs outgrew revenue. Wood & Co. analyst Miguel Dias estimated full-year OpEx growth of 11% to 12%, about double the upper end of the 4% to 6% range in the 2025-2027 strategy. Management did not dispute that arithmetic and chose not to revise the target.
Costs Break Above Strategy as WATS Depreciation Looms
Second-quarter revenue rose 8% to PLN 155.4 million, but OpEx rose 10.2% to PLN 99.8 million. The cost/income ratio climbed 130 basis points to 64.2%, still inside the 65% strategic ceiling but with little room left. Adjusted operating profit rose 3.8% to almost PLN 55 million, adjusted EBITDA rose just 0.6% to almost PLN 63 million, and adjusted net profit rose 1% to PLN 58 million. First-half net profit grew 18% to PLN 128 million.
CFO Marcin Rulnicki argued the 4% to 6% OpEx target should be read alongside the revenue goal of 6% to 8% growth and the EBITDA goal of 8% to 12%, "so actually, we are beating all these measures." Management stripped out PLN 3.4 million of Armenia-related costs and growth in the low-margin logistics subsidiary, which brought underlying OpEx growth to PLN 5.1 million, or 5.6%. This framing is reasonable for the second quarter. It is less convincing for the second half, when depreciation, the end of the capitalization benefit and recurring SaaS and security spending all add to the cost base. Rulnicki said new KPIs would come with a fresh strategy in 2027.
WATS is the central driver. The go-live date has slipped to October 5, and the project budget has been revised to PLN 173 million, of which PLN 152 million is capitalized and will begin amortizing after launch. Second-quarter capex was PLN 17.3 million, up 7.1%, including PLN 10.5 million for WATS. Capex is expected to be higher in the second half than in the first. Part of the personnel costs capitalized until now will move into the P&L. CEO Tomasz Bardzilowski said dress rehearsals begin the day after the call, and that the final go-live decision will be made only after confirming that "the market is ready and on our side that everything works well." A further delay would be a clear negative for both costs and credibility.
Offsets Are Real but Modest
Management outlined three offsets. The first is the logistics subsidiary. After failing to find a strategic investor, GPW will shrink it and cut revenue with a gross margin of around 5%, along with the related costs. Bardzilowski said this would help "at least optically" to offset WATS costs. The second is the retirement of the legacy UTP infrastructure, with lower maintenance and data-transfer costs expected from 2027. The third is lower capex after launch, which should leave free cash flow flat or higher.
The commercial case for WATS is capacity. Bardzilowski recalled that trading was halted for several hours in April 2025 when the old system neared its limits. The new platform offers at least 5 times the capacity and significantly lower latency, which management hopes will attract additional brokers and liquidity providers.
Equity Trading Strong, but Fee Dilution Is Structural
Cash equity turnover reached PLN 151 billion in the second quarter, up 15%, and was up 27% in the first half. July and August turnover grew about 44% year-on-year, which supports a stronger third quarter. Cash equity revenue rose 11.2% to PLN 58.4 million. Main indices are up about 30% year-to-date, and the WIG20 has surpassed its prior record high for the first time in nearly 20 years.
The mix is working against yield. High-volume providers and market makers accounted for almost 36% of turnover, up 310 basis points, and the average fee fell 3.7% to 1.89 bps. Rulnicki said there has been no price list change and that dilution is purely a mix effect. In response to Dias, Bardzilowski said a medium-term liquidity-provider share of around 40% was "a good guess" and that the major players are already active in Warsaw, so he does not expect a significant increase. GPW added one major player in the first half. Revenue should still rise provided turnover grows faster than the fee falls.
ETF turnover was up almost 90% in the second quarter and nearly 140% in the first half, though it contributes little revenue so far. The number of listed ETFs has grown from 17 in January to 45, with more than 50 targeted. Polish retail investors put about PLN 5 billion into equities year-to-date, but only around 70% of that went into ETFs listed in Warsaw, which leaves room for share gains.
Capital Markets Revival and the OKI Account
There have been 10 main-market debuts year-to-date against 3 in all of 2025, and ECM volume is almost PLN 20 billion, up almost 80%. The number of listed companies has risen to 403, reversing a long decline, and free float is around 54% versus under 50% a few years ago. The IPO pipeline for the rest of 2026 looks thin, however. Bardzilowski said brokers expect only "small, not major" transactions by year-end, though the third IPO Academy cohort is full.
The bigger structural catalyst is the Personal Investment Account (OKI), modeled on Sweden's ISK, which takes effect January 1. Holdings up to PLN 100,000 (roughly $25,000) are tax-free. Above that threshold, the account is taxed on assets rather than gains, at about 0.85% in year one and then 19% of the central bank reference rate, currently equivalent to about 0.7%. The Ministry of Finance estimates PLN 70 billion or more of inflows over 15 years, or around PLN 5 billion annually, which management considers achievable. GPW wants to lift market cap from 27% of GDP, against an EU average of about 70%, to 50% within five years. That would take around PLN 50 billion of new domestic capital a year.
Derivatives will not benefit directly, since OKI excludes derivatives and CFDs. Bardzilowski pointed instead to mutual fund allocation, with funds holding only about 10% of Polish equities, and to mini futures with lower margin requirements that GPW is preparing.
S&P Upgrade Is a Reputational Event, Not a Flow Event
S&P Dow Jones has upgraded Poland to developed market status, effective September 2026 according to the company, though an analyst on the call referred to 2027. Management was candid that the impact will be limited. Poland's weight falls from 1.27% in the S&P emerging markets index to 0.15% in the developed index. Bardzilowski estimated assets tracking the S&P benchmarks at "a couple of hundred millions in active money," and expects net passive inflows and net active outflows. MSCI is "by far" the more important index provider, and management does not expect to be placed on its watchlist for an upgrade for several years. The 2018 FTSE Russell upgrade had no major immediate flow impact. An MSCI upgrade would be "massive," but is not a near-term scenario.
Commodities: Gas Remains the Drag
Commodity revenue fell 7% in the second quarter, though it rose almost 5% in the first half. Electricity volumes fell 4% to 29 TWh as forward volumes dropped to 15 TWh, although spot rose 15% and a recovery in forwards has begun in the third quarter. Gas volumes fell 28% to 44 TWh, with forwards down 34%, while spot gas rose 18% to 8.4 TWh. TGE's Mariusz Buraczynski cited a clear negative correlation between gas prices and turnover, and said it would be "very difficult" for 2026 gas volumes to beat the high 2025 base. Trading services revenue fell 18% and clearing revenue fell 12%. Other participant fees rose 23%.
Armenia Tailwind Fades; Balance Sheet Remains Solid
Armenian depository revenue rose 130% year-on-year because of the July 2025 fee increase. That effect ends with the second quarter, so growth will slow materially from the third quarter. Other revenue was boosted by one-off items and is not expected to repeat. Return on equity reached 20.1%, the first time above 20% in seven years, and non-trading revenue reached 35.6% of the total versus 31.3% a year earlier.
First-half operating cash flow declined despite higher profit, because of larger receivables and payments of 2025 bonuses and corporate income tax. Net cash was PLN 470 million at the end of June, before the PLN 143 million dividend (PLN 3.40 per share, up 8%) paid on August 6.