Kaspi.kz JSC Q3 FY2024 earnings call

Management Statement and Operational Highlights

• 3Q and 9M Performance: The company performed strongly in 3Q with payments, marketplace, and fintech all showing growth. E-grocery continued to grow with 88% YOY GMV growth, vacation packages had over 300% YOY growth, a gift card service was launched, and a business deposit product for merchants saw strong adoption.
• Hepsiburada Acquisition: Excited about acquiring a controlling stake in Hepsiburada, seeing Turkey as an attractive market with similarities to Kazakhstan. Valued the shared vision with Hepsiburada's founder and the company's strong cultural fit and profitability.

Segment Performance

• Payments Platform: In 3Q, TPV was up 28% year-over-year, revenue up 25%, and net income up 25% year-over-year. For the nine months, TPV growth was 42% year-over-year, revenue growth was 24%, and net income growth was 24%. Take rate was broadly stable.
• Marketplace Platform: The fastest growing part of the business. In 3Q, purchase trends were up 45% year-over-year, and GMV was up 24%. For the nine months, purchase trends were up 39% year-over-year, and GMV was up 46%. E-commerce became the fastest growing component of the marketplace.
• Fintech: In 3Q, CSP grew to 18%, revenue was up 24%, and net income was up 15% year-over-year. For the nine months, net income growth was 7%. The loan portfolio was up 39% year-over-year, and deposits were up 25% year-over-year.

Guidance

• Payments: Robust consumer and merchant trends were expected to continue, with payments on track for 25% bottom line growth.
• Marketplace: Expected 65% revenue growth for the full year, down from the originally guided 70%, but profitability guidance remained +40%.
• Fintech: Expected revenue growth around 20% for the full year, with profitability up 15% in 3Q vs 7% in the nine months. Guidance for 2025 would be discussed at full year results in Feb 2025.

Risks

• No specific detailed risks discussed, but general business and regulatory risks associated with acquisitions and market conditions.

Question and Answer

Q: Can you give us some flavor on what you think you can add to the Hepsiburada franchise?

A: Mikheil Lomtadze talked about shared values, innovation, and joint work to excite merchants and consumers.

Q: Could you share your thoughts in terms of the structure of the Hepsiburada transaction?

A: David Ferguson mentioned the transaction is all cash and would be funded from cash on hand and generated cash between now and closing, with focus on closing the transaction smoothly.

Q: What implications could the Hepsiburada acquisition have on the payout ratio in the medium term?

A: David Ferguson stated it wasn't appropriate to discuss medium-term payout ratio, but referred to the company's track record of returning cash and potential for flexibility with investment-grade rating.