Joint Stock Company Kaspi.kz (KSPI) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture: strong deposit growth and positive GMV and EBITDA growth, but challenges from high interest rates and a reduced GMV growth outlook. The Q&A reveals underpenetrated opportunities in Kazakhstan, but concerns about funding costs and unclear guidance on smartphone market recovery and capital deployment. These factors balance out to a neutral sentiment.
Key Financial Performance
TPV +21% year-over-year. Growth attributed to strong performance in payments despite high interest rates.
Payments Revenue +16% year-over-year. Growth driven by robust demand volumes and higher ticket sizes.
Payments Net Income +19% year-over-year. Reflects strong top-line growth and high profitability.
Marketplace GMV +15% year-over-year. Growth impacted by declining smartphone sales (-17%) but offset by strong growth in other verticals.
Marketplace Revenue +25% year-over-year. Driven by advertising revenue, delivery revenue, and revenue from classifieds.
Marketplace Net Income +13% year-over-year. Growth impacted by lower-margin e-Grocery business.
e-Grocery GMV +57% year-over-year. Fastest-growing e-commerce business with 1.1 million consumers and 3.4 million transactions.
Advertising Revenue +67% year-over-year. Growth fueled by new merchant tools and cashback services.
Fintech Origination +17% year-over-year. Growth driven by merchant and micro business finance products.
Fintech Revenue +21% year-over-year. Growth supported by stable pricing trends and healthy deposit growth.
Fintech Net Income +8% year-over-year. Impacted by high interest rates but supported by deposit growth.
Deposit Growth +18% year-over-year. Growth driven by new deposit products and higher interest rates.
Travel GMV +16% year-over-year. Growth supported by international tours and new domestic tour services.
Hepsiburada GMV +16% year-over-year. Recovery in retail environment and company-specific initiatives contributed to growth.
Hepsiburada Revenue +23% year-over-year. Growth driven by 1P business and delivery platform initiatives.
Hepsiburada EBITDA +42% year-over-year. Reflects strong operational gearing and revenue growth.
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Operating Highlights
e-Grocery: Fastest-growing e-commerce business with 57% year-over-year GMV growth, over 1.1 million consumers, and 3.4 million transactions. Expanded to five largest cities in Kazakhstan and planning further expansion.
Fixed-term deposit product: Extraordinary growth of 207% in amounts and 263% in customers. Targeting savers and contributing to transactional business growth.
Kaspi QR payment network: Volumes up 128%, processed 3.4 million transactions in Q2. Partnered with five banks and integrated with Alipay for cross-border transactions.
Restaurant payment service: New service allowing seamless payments via QR codes in restaurants, improving efficiency and customer satisfaction.
Advertising tools for merchants: Introduced cashback bonuses for consumers, driving 67% ad revenue growth in Q2.
Domestic tours service: Promotes tourism in Kazakhstan with 10x growth in June, offering seamless booking and payment options.
e-Grocery expansion: Expanded to five major cities in Kazakhstan, including Almaty, Astana, Aktobe, Shymkent, and Karaganda.
Hepsiburada in Turkey: Improved performance with 16% GMV growth in Q2, driven by recovery in retail and company-specific initiatives.
Payments business: TPV up 21%, revenue up 16%, and net income up 19% in Q2. Strong volume growth and profitability.
Marketplace: GMV up 15%, revenue up 25%, and net income up 13% in Q2. Excluding smartphones, e-commerce growth was 31%.
Fintech: Origination up 17%, revenue up 21%, and net income up 8% in Q2. Deposit growth of 18% year-over-year.
Smartphone registration service: Introduced tools for merchants and consumers to ensure compliance with new smartphone registration regulations.
Banking license acquisition in Turkey: On track to complete in the second half of 2025, enabling new product launches.
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Risk or Challenges
High Interest Rates: The company continues to operate in an environment of high interest rates, which impacts the profitability of its Fintech segment and overall financial performance.
Smartphone Registration Regulation: New legislation requiring smartphone registration has temporarily disrupted supply and consumer demand, negatively affecting e-commerce growth in the smartphone category.
E-Grocery Expansion Costs: The rapid expansion of the e-Grocery business into new cities and the establishment of additional logistics centers may increase operational costs and strain resources.
Hepsiburada Losses: The company's investment in Hepsiburada in Turkey has resulted in ongoing losses, which could impact overall profitability.
Take Rate Dilution in Payments: The growth of QR payments, which have a lower take rate, is diluting overall take rates in the payments segment, potentially impacting revenue growth.
Economic and Regulatory Risks in Turkey: The acquisition of a banking license in Turkey and the expansion of operations there expose the company to economic and regulatory risks in a volatile market.
NPL Trends and Cost of Risk: Non-performing loan (NPL) trends have slightly increased, and the cost of risk remains a concern, particularly in the Fintech segment.
Advertising Revenue Dependency: The company's marketplace revenue growth is heavily reliant on advertising revenue, which may not be sustainable in the long term.
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Guidance & Outlook
e-Grocery Expansion: The company plans to expand its e-Grocery business further in Kazakhstan, adding new dark stores/logistic centers in Astana and Almaty, with two additional centers planned for 2025.
Deposit Growth and Interest Rate Outlook: The company expects continued growth in its fixed-term deposit product, which has already shown significant growth. Management anticipates that high interest rates will eventually decline, benefiting the company’s financial performance.
Kaspi QR Payment Network: The company plans to continue partnering with other financial institutions to expand its Kaspi QR payment network, which has already shown strong growth in transaction volumes.
Domestic Tours Service: The company has launched a new domestic tours service in Kazakhstan and plans to promote and build this business further over the next 12 months.
Marketplace Growth: Despite temporary setbacks in smartphone sales, the company expects strong growth in other e-commerce verticals, such as Beauty and Personal Care and clothing, which are growing at 63% and 54%, respectively.
Advertising Services: The company plans to scale its new advertising tools for merchants, which have already shown strong engagement and revenue growth of 67% in Q2 2025.
Travel Segment Outlook: The company expects continued growth in its travel segment, driven by international tours and the newly launched domestic tours service.
Hepsiburada Acquisition and Banking License in Turkey: The company is on track to complete the acquisition of a banking license in Turkey in the second half of 2025, which will support future growth in the Turkish market.
Capital Returns to Shareholders: The company expects to resume capital returns to shareholders, including dividends and buybacks, starting in 2026, following the completion of its investments in Turkey.
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Shareholder Return Plan
Capital Returns: The company expects to resume capital returns to shareholders in 2026, following investments in international markets, including Turkey. Capital returns may include both dividends and share buybacks, with decisions to be made at the appropriate time.
Capital Returns: The company expects to resume capital returns to shareholders in 2026, following investments in international markets, including Turkey. Capital returns may include both dividends and share buybacks, with decisions to be made at the appropriate time.
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Key Q&A
Q:What product improvements are being worked on with Hepsi, and what should be expected through 2025 and 2026?
A:The focus is on ensuring existing customers and merchants are extremely happy with current services, particularly in e-commerce, payments, and Fintech. The strategy involves bringing services to the level of Kaspi KZ's standards, with multiple projects underway to improve delivery, user experience, and Fintech products. Major innovations in Fintech will follow the acquisition of a banking license.
Q:What are the growth initiatives in Kazakhstan, and what opportunities remain there?
A:The market in Kazakhstan is still underpenetrated, with specific verticals like clothing and fashion growing at high rates (around 60%). The strategy involves targeting major verticals such as e-grocery, travel, and restaurants, each with a market potential of around $1 billion. The focus is on connecting merchants and buyers, scaling infrastructure like Scan & Pay, and introducing value-added services such as advertising, marketing campaigns, and loyalty programs.
Q:How do you expect funding costs to develop if rates stay where they are?
A:Funding costs increased by 70 bps year-on-year in Q2, and an additional 100 bps increase is expected over the course of the year. This is consistent with previous guidance.
Q:What is the outlook for asset quality and provisioning rates?
A:There was an uptick in the NPL ratio, and quarterly provisions imply a 2.5% provisioning rate, higher than the previously guided 2%. However, underlying risk trends are stable year-on-year, and macro provisioning related to higher interest rates was added in Q1.
Q:What are the plans for capital deployment between cash distribution and investments?
A:The bank acquisition is a priority, and investments in Turkey beyond the banking business are planned. Decisions on the mix between dividends and buybacks will be made at the end of this year or early next year. There is a strong case for share buybacks given the stock's valuation.
Q:What is the impact of the smartphone market on growth, and what are the plans to address it?
A:Growth in e-commerce excluding smartphones is 31%, with other verticals like clothing and beauty growing around 60%. The smartphone market faces challenges due to registration requirements, but demand is expected to recover. Services are being developed to address consumer and merchant hesitations.
Q:What is the sustainable growth outlook for the marketplace segment?
A:The marketplace segment shows healthy growth in various verticals, with electronics (excluding smartphones) growing 26%, home and garden 35%, and clothing 54%. The focus is on enabling transactions through technology and data, with a long-term view on sustainable growth.
Q:What is the profitability outlook for the Fintech platform given current interest rates?
A:The focus is on acquiring more customers with savings and maintaining healthy risk metrics. High interest rates are seen as a temporary cushion, and profitability is expected to improve as rates eventually decrease.
Q:What are the plans for dividends and share repurchases in 2026?
A:Capital distribution will resume in 2026, with a balance between investments and returning capital to shareholders. Specific payout ratios or schedules have not been decided yet.
Q:What is the significance of obtaining a banking license in Turkey?
A:The banking license allows the company to offer savings and lending products to consumers and merchants, providing a competitive advantage. The focus will be on launching innovative financial services and building a strong framework for compliance and risk management.
Q:What mitigated the increase in funding costs for the Fintech business?
A:Volume growth led to increased revenue, which offset the rise in funding costs. The focus remains on top-line growth, with profitability expected to follow as interest rates decrease.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the expected recovery timeline for the smartphone market and the exact payout ratios or schedules for dividends and share repurchases in 2026. Additionally, there was no clear guidance on the scale of investments in Turkey beyond the banking business.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aktobe Shymkent
Almaty store
Astana Aktobe
Astana Almaty
Beauty
China
Ferguson
Kaspi
Kaspikz
QR
advertising service
application
beauty country
consumer deposit
consumer service
demand
deposit saving
deposit term
engagement
functionality
hand
innovation
location
merchant consumer
merchant service
merchant smartphone
partner
presentation
restaurant consumer
service merchant
service trend
setback
smartphones smartphone
spite
tool merchant
tour
travel
vacation
vertical
KSPI Transcript
Joint Stock Company Kaspi.kz (KSPI) Q1 2026 Earnings Call Transcript
Positive5-11
The earnings call indicates a positive outlook with strategic initiatives like Pay-by-Palm expansion and e-commerce growth. The dividend proposal and optimism about Kazakhstan's macro environment add to this sentiment. Despite some uncertainties, such as unclear synergies with Tencent and a decline in payment take rates, the focus on long-term engagement and strategic investments in Turkiye suggest a positive trajectory. The guidance stability, despite Q1 results, reflects confidence in future performance. Therefore, the stock is likely to see a positive movement over the next two weeks.
Joint Stock Company Kaspi.kz (KSPI) Q4 2025 Earnings Call Transcript
Unknown3-2
The earnings call shows mixed signals. While there are positive aspects like revenue growth and plans for expansion, concerns remain about high interest rates, taxes, and a lack of specific guidance on investments and new product launches. The Q&A reveals uncertainties, particularly around Hepsiburada's investments and the $300 million Rabobank initiative. The neutral sentiment reflects balanced positive long-term strategies and immediate concerns, with no strong catalyst for a significant stock price movement in the short term.
Joint Stock Company Kaspi.kz (KSPI) Q3 2025 Earnings Call Transcript
Positive11-10
The company shows strong growth in key areas like e-Grocery, advertising, and fintech, despite smartphone supply issues. The strategic expansion in Kazakhstan and Turkey, along with plans to resume shareholder returns, are positive indicators. While management avoided specifics on dividends and smartphone supply normalization, the overall sentiment is optimistic, especially with strong performance in non-smartphone segments and advertising growth.
Joint Stock Company Kaspi.kz (KSPI) Q2 2025 Earnings Call Transcript
Unknown8-4
The earnings call presents a mixed picture: strong deposit growth and positive GMV and EBITDA growth, but challenges from high interest rates and a reduced GMV growth outlook. The Q&A reveals underpenetrated opportunities in Kazakhstan, but concerns about funding costs and unclear guidance on smartphone market recovery and capital deployment. These factors balance out to a neutral sentiment.
KSPI Report
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