Joint Stock Company Kaspi.kz (KSPI) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
E-commerce GMV Grew 41% year-over-year on a constant currency and pro forma basis. This growth was driven by higher purchasing frequency and faster monetization of value-added services compared to GMV growth.
E-commerce Transactions Grew 43% year-over-year. The frequency of quarterly purchases increased by 44% year-over-year, reaching 15 purchases per quarter, indicating higher consumer engagement.
Advertising and Delivery Value-Added Services Revenue grew 73% year-over-year. This growth was attributed to a more engaged user base and increased opportunities for monetization.
Consolidated Revenue Increased by 31% year-over-year. This reflects overall business growth.
Adjusted EBITDA Increased by 9% year-over-year. The slower growth compared to revenue was influenced by factors such as higher funding costs and the inclusion of Hepsiburada's EBITDA breakeven performance.
Marketplace GMV Grew 19% year-over-year on a constant currency pro forma basis. This growth reflects the transition from offline to online retail and the inclusion of Hepsiburada.
Marketplace Revenue Increased by 49% year-over-year. This was driven by e-commerce growth and value-added services.
Marketplace EBITDA Increased by 12% year-over-year. The slower growth compared to revenue was due to the inclusion of Hepsiburada's EBITDA breakeven performance.
TPV (Total Payment Volume) Grew 14% year-over-year. Revenue from payments grew at a slower rate of 7% year-over-year due to take rate compression driven by a change in product mix.
Interest Revenue from Payments Grew 26% year-over-year. This revenue accounts for around 1/4 of payments revenue and is excluded from EBITDA metrics.
Average Loan Portfolio Grew 23% year-over-year. This growth was driven by a shift towards longer-duration loans, which generate more revenue.
TFV (Total Financing Volume) Declined by 2% year-over-year. This decline reflects a deliberate shift towards longer-duration loans, which generate more revenue despite lower origination volumes.
Fintech Revenue Increased by 25% year-over-year. This growth was driven by a 23% increase in the average loan portfolio and stable pricing.
Fintech Adjusted EBITDA Increased by 12% year-over-year. Growth was impacted by higher funding costs, which increased by 220 basis points year-over-year.
Cost of Risk Increased slightly by 10 basis points year-over-year to 0.7%. This reflects stable risk metrics and portfolio quality.
Consolidated Net Income Decreased by 1% year-over-year. This decline was driven by higher interest expenses and increased cost of goods sold (COGS) due to the inclusion of Hepsiburada's 1P business.
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Operating Highlights
E-commerce GMV growth: E-commerce GMV grew 41% year-over-year on a constant currency and pro forma basis, with transactions growing 43% year-over-year. Frequency of quarterly purchases increased by 44% year-over-year, reaching 15 purchases per consumer.
Value-added services: Advertising and delivery value-added services grew by 73% year-over-year, contributing to increased monetization.
Market expansion in Turkiye: Kaspi.kz is creating additional growth in Turkiye, with e-commerce operations in Kazakhstan and Turkiye now contributing equally to GMV.
Hepsiburada acquisition: Kaspi.kz acquired Hepsiburada, contributing to marketplace GMV growth of 19% year-over-year on a constant currency pro forma basis.
Revenue and EBITDA growth: Consolidated revenue increased by 31% year-over-year, while adjusted EBITDA grew by 9% year-over-year.
Payments TPV growth: Payments TPV grew by 14% year-over-year, with interest revenue contributing 26% growth year-over-year.
Fintech loan portfolio: Average net loan portfolio grew by 23% year-over-year, with a shift towards longer-duration loans and stable pricing, resulting in 25% revenue growth and 12% adjusted EBITDA growth.
Focus on e-commerce: E-commerce is a key area of focus, driving growth through increased consumer engagement and monetization opportunities.
Shift in loan portfolio: Strategic shift towards lower-risk, longer-duration loans, including merchant financing and car loans, to improve revenue and portfolio quality.
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Risk or Challenges
E-commerce growth dependency: The company's growth in e-commerce is heavily reliant on increasing purchasing frequency and monetization through value-added services. Any slowdown in consumer engagement or inability to scale these services could impact financial performance.
Hepsiburada acquisition: The inclusion of Hepsiburada in the financials has led to slower EBITDA growth due to its near breakeven status. This could pose a challenge to profitability if the business does not achieve significant growth or cost efficiencies.
Funding costs: Higher funding costs, particularly in Kazakhstan and Turkiye, have increased by 220 basis points year-on-year, pressuring profitability and net income.
Loan portfolio risk: The shift towards longer-duration loans and lower-risk products like merchant finance and car loans has led to changes in NPL ratios and coverage. While this reduces risk, it could impact revenue growth if not managed effectively.
Take rate compression in Payments: Revenue growth in the Payments segment is slower due to take rate compression, driven by a shift in product mix towards Kaspi QR and B2B payments. This could limit profitability in the segment.
Economic conditions in Kazakhstan and Turkiye: Economic uncertainties and high interest rates in these key markets could impact consumer spending, loan performance, and overall business growth.
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Guidance & Outlook
Dividend Guidance: The Board recommended a dividend of KZT 850 per ADS, representing a 64% payout ratio. This amount is consistent with the previous quarter and can be extrapolated for forecasting purposes throughout the year.
E-commerce Growth: E-commerce GMV is expected to be a key driver of growth over the next couple of years, with a focus on increasing purchases and consumer engagement in Kazakhstan and Turkiye. The company anticipates continued growth in value-added services such as advertising and delivery, which grew 73% year-on-year.
Marketplace GMV Growth: Marketplace GMV is projected to grow around 20% for the full year, with e-commerce contributing approximately 60% of the total GMV. The transition from offline to online retail is expected to gather momentum.
Payments Segment: Payments TPV is expected to grow around 15% for the full year, with revenue growth slightly slower due to take rate compression. The segment remains highly profitable and strategically important for driving engagement across other businesses.
Fintech Segment: The company is prioritizing longer-duration loans, which are expected to drive revenue growth. Average loan portfolio growth is projected at 23%, with a focus on merchant financing and general-purpose loans. TFV growth is guided at around 5% for the year, though the company emphasizes revenue growth over TFV growth.
Profitability and Funding Costs: EBITDA growth is guided at around 5% for the full year, with higher funding costs in Kazakhstan and Turkiye impacting profitability. The company expects interest rates to have peaked, which could support profitability growth next year.
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Shareholder Return Plan
Dividend per ADS: KZT 850
Payout Ratio: 64%
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Key Q&A
Q:What are the expected losses in Turkiye over 2026, and what guidance is provided for breakeven EBITDA?
A:Management guided towards at least EBITDA breakeven and free cash flow positive for Turkiye. They did not specifically comment on net income but emphasized driving engagement and investments to achieve this.
Q:What is the seasonality impact on the marketplace take rate, and what guidance is provided for modeling it?
A:Management stated that the marketplace take rate increase is not due to seasonality but rather a function of advertising and delivery trends. They suggested using last year's year-on-year increase as a proxy for expectations.
Q:What are the sensitivities to funding costs and NIM due to falling Kazakh interest rates, and what is the expectation for rate development?
A:Management does not assume any interest rate cuts in their guidance for this year. They referred to last year's results presentation for sensitivity analysis, where a 100-150 bps increase in funding costs reduced net income growth by about 4%. They noted that inflation in Kazakhstan has peaked and is falling, which is an encouraging indicator.
Q:What are the potential strategic synergies from Tencent's minority stake acquisition, and does it change the positioning of the Super App in Kazakhstan and Turkiye?
A:Management expressed excitement about Tencent's investment, highlighting Tencent's expertise in the Super App business model. However, they did not provide specific details on strategic synergies or changes in positioning, emphasizing their focus on continuous innovation and development.
Q:What is the status of marketplace growth in Kazakhstan and the impact of the Middle East situation on electronics supply?
A:Management reported no material disruption in marketplace growth due to the Middle East situation. They noted that the current geopolitical situation might be more positive than negative for Kazakhstan's macro environment.
Q:Why has EBITDA growth not led to a change in full-year guidance?
A:Management explained that Q1 is the smallest quarter of the year, and investments in subsequent quarters will have a more significant impact on EBITDA and the bottom line. They advised against overinterpreting Q1 results.
Q:What progress has been made in improving Hepsiburada's service quality and delivery metrics?
A:Management stated that they are focused on improving consumer purchase frequency, delivery speed, and financial accessibility. They aim to match the service quality in Turkiye to their home market in Kazakhstan. Investments are being made in technology, data organization, and real-time decision-making to enhance consumer and merchant experiences.
Q:What is the long-term engagement target for Turkiye compared to Kazakhstan?
A:Management aims to increase consumer engagement in Turkiye to levels similar to Kazakhstan, where the average consumer makes 27 purchases per year compared to 7 in Turkiye. They are focused on executing their playbook and making necessary investments to achieve this.
Q:How long will marketing campaigns in Turkiye continue, and is there a specific KPI target?
A:Management emphasized a focus on building a sustainable, engaged consumer base rather than short-term traffic. They aim to increase consumer frequency and engagement, with investments continuing to support this goal.
Q:Why has there been a decline in consumer financing activities in Turkiye?
A:Management slowed down consumer finance origination to implement a new risk management system. They are now more comfortable with the system and see opportunities for growth in consumer finance.
Q:Has the GMV in Turkiye become more diversified by category after recent initiatives?
A:Yes, management reported strong growth in low-ticket items and faster growth in 3P compared to 1P. They have improved delivery experience and fees to support this diversification.
Q:What is the status of the Rabobank transaction, and why has there been a delay?
A:Management reported no updates on the Rabobank transaction, stating that the process is ongoing and expected to close by summer.
Q:What are the reasons behind the decline in payment take rate in Kazakhstan, and what is the outlook?
A:The decline in payment take rate is due to the growing share of Kaspi QR (95 bps) and B2B payments (lower take rate). Management expects this trend to continue but noted that 95 bps is the floor.
Q:What is the nature of Tencent's investment, and is there potential for a larger stake acquisition?
A:Management described Tencent's investment as primarily financial and did not speculate on the potential for a larger stake acquisition.
Q:What factors are driving the drop in EBITDA in the payments segment?
A:The drop in EBITDA is attributed to the mix shift towards lower take rate products like Kaspi QR and B2B payments. Despite this, the payments business remains highly profitable with over 50% EBITDA margin.
Q:What are the implications of focusing on car finance and merchant loans for NIMs?
A:Management did not provide specific guidance but indicated that Fintech pricing has been broadly stable over the last 12 months and is expected to remain so.
Q:How will the recently raised $600 million capital be deployed?
A:The capital will be used for general corporate purposes, providing flexibility for growth initiatives in both Kazakhstan and Turkiye.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on Tencent's strategic synergies, the exact timeline for achieving breakeven in Turkiye, and the potential for a larger stake acquisition by Tencent. They also did not provide precise guidance on NIM implications for car finance and merchant loans or the exact allocation of the $600 million capital.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
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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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