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01/11 04:45
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Payments TPV 18% growth year-over-year. This growth reflects the ongoing popularity of Kaspi Pay, bill payments, and the fast adoption of B2B payments.
Payments Revenue 10% growth year-over-year. The growth is slower than TPV due to take rate dilution caused by a shift towards QR payments.
Payments Net Income 12% growth year-over-year. This is due to operational gearing and cost control.
Marketplace GMV 12% growth year-over-year. Excluding smartphones, GMV growth is 20%. The slower growth is due to smartphone supply disruptions.
Marketplace Revenue 24% growth year-over-year. Excluding smartphones, revenue growth is 32%. The growth is driven by value-added services like Kaspi advertising and delivery.
Marketplace Net Income 7% growth year-over-year. Excluding smartphones, net income growth is 16%. The slower growth is due to the mix effect of 1P e-Grocery growing fast and taking share within the mix.
Fintech TFV 16% growth year-over-year. This growth is driven by merchant lending, which is growing faster than consumer lending products.
Fintech Revenue 24% growth year-over-year. The growth is driven by strong origination in previous periods and stable pricing.
Fintech Net Income 15% growth year-over-year. Adjusted for external factors like base rate increases, net income growth would have been 28%.
e-Grocery GMV 53% growth year-over-year. This growth is driven by scaling operations, increasing customer base, and adding new dark stores.
Advertising Revenue 56% growth year-over-year. This growth is driven by the launch of new advertising services that enable merchants to increase sales and improve consumer decision-making.
Kaspi Pay-by-palm: A new payment innovation allowing users to pay by scanning their palm. It will be rolled out at the end of the year and will be free for merchants for the first 3 months.
Kaspi AI Assistant: An AI tool for merchants to enrich product content, create descriptions, and generate photos, leading to increased sales and consumer engagement. It will be available in January 2026.
Advertising Service: Merchants can now advertise on third-party platforms like Facebook, Instagram, TikTok, and Google directly through Kaspi's platform.
e-Grocery Expansion: Kaspi's e-Grocery business grew GMV by 53% and transactions by 55%. Plans to expand to at least 2 more cities next year.
Restaurant Vertical: Kaspi introduced QR code payments and tipping in restaurants, with TPV growing 259x and over 1 million transactions in Q3.
Glovo Integration: Kaspi integrated Glovo's services into its Super App, allowing seamless access and payments for restaurant deliveries.
Smartphone Supply Disruption: Shortage of smartphones, particularly iPhones, impacted GMV by 8% and consolidated income by 3%. Recovery expected next year.
High Interest Rates: Kazakhstan's base rate increased from 15.25% to 16.5%, impacting net income by 4%. Rates are expected to normalize next year.
Tax on Government Securities: A new 10% tax on revenue from government securities reduced net income by 1%.
ADS Buyback Program: Kaspi announced a $100 million ADS buyback program starting in November, reflecting strong cash generation and performance.
Hepsiburada Investments: Focused on delivery, BNPL options, marketing, and user experience to drive growth, with GMV up 15% in Q3.
Smartphone Supply Disruption: Shortage of supply of smartphones, particularly iPhones, impacted GMV growth by 8% and consolidated income by 3%. This disruption is a countrywide issue and affects both e-commerce and m-commerce.
Smartphone Registration Requirement: New registration requirements for smartphones contributed to the supply disruption, further impacting the company's performance.
Tax on Government Securities Revenue: Kazakhstan introduced a 10% tax on revenue from government securities, reducing net income by 1%.
Increased Minimum Reserve Requirements: Higher reserve requirements with the National Bank, which do not accrue interest, negatively impacted net income by 1%.
Base Rate Increase: The base rate in Kazakhstan increased from 15.25% to 16.5%, reducing consolidated net income by 4%. High interest rates continue to pose challenges.
High Interest Rate Environment: The high interest rate environment in Kazakhstan has a material impact on the company's financial performance, particularly on the fintech platform.
Economic and Regulatory Challenges in Turkey: Hepsiburada, the company's Turkish subsidiary, faces economic and regulatory challenges, necessitating a $100 million share capital increase to ensure adequate capitalization.
Smartphone Supply Recovery: The company expects the smartphone supply disruption to resolve itself over the course of next year, with a favorable base effect starting from March 2026.
e-Grocery Expansion: Plans to enter at least 2 new cities next year, with continued scaling of dark stores and a focus on profitability and engagement.
Kaspi Pay-by-Palm: The company plans to roll out the Pay-by-Palm payment innovation by the end of 2025, offering it free of charge to merchants for the first 3 months.
Kaspi AI Assistant for Merchants: The AI Assistant for merchants will be launched in January 2026, aimed at enriching product content to drive sales and consumer engagement.
Hepsiburada Investments: Investments in delivery, payment options, marketing, and user experience are expected to drive sustainable revenue growth in future years.
Interest Rate Environment: High interest rates in Kazakhstan are expected to normalize, providing additional performance positives for the next year.
Marketplace GMV Growth: Excluding smartphones, marketplace GMV growth is expected to be 19%-21% for 2025, with recovery anticipated in 2026.
ADS Buyback Program: A $100 million ADS buyback program will be launched, with potential for further buybacks and resumption of dividend payments in 2026.
Dividend Payments: The company has announced plans to resume dividend payments in 2026. However, specific details regarding the dividend amounts or schedule have not been disclosed yet.
Share Buyback Program: Kaspi.kz has announced a $100 million ADS buyback program starting in November 2025. This decision is based on the company's strong cash generation and performance, and management views it as a good investment given the current stock valuation.
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.
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.
The earnings call summary highlights several negative factors, including high interest rates, macroeconomic uncertainties, and a new government tax, all impacting profitability. Despite revenue growth, the lack of a share buyback program and increased risks, such as the higher cost of risk and loan-to-deposit ratio, add to the negative outlook. The Q&A further emphasizes macro uncertainties and unclear management responses. These factors, combined with no strategic plan update, suggest a likely negative stock price movement in the short term.
The earnings call presents a mixed picture: strong financial performance with revenue and net income growth, but challenges like regulatory risks, market competition, and operational challenges from the Hepsiburada acquisition. The Q&A reveals management's reluctance to provide concrete financial targets, adding uncertainty. Despite a positive dividend announcement, the lack of a share buyback program and potential integration issues balance out the positives. Overall, the sentiment is neutral due to the blend of strong financials and significant risks.
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