Kaspi.kz - Q4 2025

Transcript

David Ferguson (Head of Investor Relations)

Good morning, good afternoon to everyone on the call. Welcome to Kaspi's fourth quarter and full year 2025 financial results. I'm David Ferguson from Kaspi. As usual, I'm joined by Mikhail Lomtadze, CEO and co-founder of Kaspi, Tengiz Mosidze, and Yuriy Didenko, the deputy CEOs of the company. We'll take you through the strategic highlights and financial results for the final quarter of last year and provide guidance for this year. We'll open up the call to Q&A as usual. On that note, first of all, I'll hand over to Mikhail. Mikhail, over to you.

Mikhail Lomtadze (Chairman and CEO)

Hello, everyone. Yes, thank you, David. Let's move straight to the presentation. Our results for the year have been quite strong. You know, we're obviously reviewing the underlying performance without the influence of external factors. At the same time, I do think that we are at the stage when we can continue investing into long-term growth and the value creation which we always prioritized, and also distribute and resume the dividends, considering the strong cash generation which our business model allows. We are proposing a dividend of KZT 850 per ADS, subject to shareholder approval. The performance itself of underlying performance has been quite strong.

Our net income has grown 18% without the impact of some of the external factors which we've discussed during the year. Those are, you know, the smartphones, sales reductions and shortage of supply, some tax changes, minimum reserve capitals, and the high interest rate environment during 2025. In spite of those, if we include those factors, would our net profit consolidated grew around 10%, and the underlying profit grew around 18% during the year. Next slide. In terms of the last quarter, you know, considering all the headwinds, still was, you know, quite solid. The underlying performance and the net income growth reached 13%. We have had good reasonable growth across all our businesses.

Some of the most important metric for us, which is, you know, consumer engagement, and one of those is monthly transactions per active consumer. It's 77 monthly transactions per consumer, which is, we believe is a world-class indicator, and very few businesses can have such consumer engagement. That's is an important metric which, you know, going forward, we can, and creates the more value for the company. David will cover some of the verticals further, but, you know, in general, we're pleased with performance in quite challenging environment in 2025. The biggest asset we have, or I would say the reflection of our, the quality of our products and services is our brand.

Our brand is number one consumer brand, pretty much in every category, and by wide margin. Here you can see just some of the selected metrics, which just tell you how strong our brand is. You know, for example, the mobile application installed on your phone. You know, almost half of the respondent surveys during the year, are having our mobile application on their smartphone considering, which is 6 times more than the nearest brand. The same sort of wide margin in payments were like 13 times the second brand, e-Commerce three times, you know, travel, you know, more than 4 times. We have a very strong position in the cars, for example, 9 times the nearest brand. That's, that's an important asset.

That's something which notwithstanding what's going on around in terms of the external factors which unfortunately are not entirely under our control. Things we control and things we execute on are reflected in the consumers using our products, merchants using our products, and the brand indicators. The trust that we have from the consumers and the merchants is extremely important for us, and that's the reason to create the value long term and just testament to the management really being extremely focused on the quality of our products. Another example of how this quality is actually reflected in some of the innovations is the pay by palm, which Kaspi Alaqan, which we just launched under 90 days. You know, clearly we have unprecedented adoption.

I think, very few markets in the world can, showcase such an adoption of the innovative service. So we have now, almost 500,000 customers in Almaty registered with Kaspi Alaqan. Almost 6,000 merchants are accepting our payments through the Alaqan, and that's almost 10% of the transactions in the stores where, we have been, merchants connected to Alaqan. It just tells you that pay by palm, it's truly changing the consumer behavior. We have changed consumer behavior from cash to cashless, to the mobile payments, then to the QR code and now to the pay by palm. We believe pay by palm has a bright future. Adoption has been remarkable.

Consumer feedback has been remarkable. Everybody's really super excited. Achieving 10% penetration at the merchants just in three months and having 500,000 customers. By the way, to put 500,000 customers into perspective. This is almost 1/3 of the population of the largest city of Kazakhstan where we started to launch. You know, we are only in one city at the moment, and we're scaling city by city and across the board during the year. We're replacing the old network, and we're installing the new devices which are equipped to accept all kinds of payments and are purposely built for Alakan. As being an innovative company, that's a testament of how consumers are using every year next product.

The penetrations we're again achieving are unprecedented, remarkable, and in just three months, having 1/3 of the population in the largest city registered in the service, that's really very encouraging. We're extremely happy, and we're just focused on really on execution and replacing the old network with the new devices. I also would like to walk you through some of the penetration numbers which we have across all our services now. This is our key services. You don't really have here all our products and services. Just to give you an overview, the, you know, the payments being the highest penetrated.

We still believe that B2B payments has a huge potential, and there is a range of innovations which we have been rolling out during the last year and some of the services we plan to do this year. e-Commerce in general, we believe, will be the driver for the growth. e-Commerce is something where we create the most value for both the merchant and the consumer. e-Commerce is when merchant is making the decision to sell something pretty much anywhere across the country and then hopefully in other countries, and then consumer is making decision to buy something. It's a front end of consumer and merchant relationship. All the services around e-Commerce like delivery, advertising, value-added services around, you know, financing, payments. When merchant sells, he needs to get the financing.

When consumer buys, he needs to pay for it and the merchant accept the payment. All the universe of our services is highly applicable to e-Commerce. e-Commerce is our important focus, and it's focused in Kazakhstan, and it will be focused in Türkiye as well. Of course, merchant finance, which has been the fastest-growing product, and the delivered and advertising, which we're scaling very responsibly. Again, we want to make sure that delivery is not going against consumer in terms of the organic search, for example. The results have to be highly relevant, high accuracy. We have a very strong results, and, you know, David will show you the take rate is increased due to the value-added services of delivered and advertising which we have launched.

On the consumer side, only half of our consumers use e-Commerce. As we get more merchants migrating to e-Commerce, especially from m-Commerce, when we have, you know, more consumers and the more selection and more price competitiveness which we have been driving, you know, we are regarded as one of the lowest and the best price e-coms in the country. That really drives the liquidity and the transactions. Of course, e-Grocery, which we are scaling across the country. e-Grocery is the fastest-growing e-Commerce business for us.

Those are the things which we'll be focused during the year, and they will be driving our growth and, you know, Kaspi Delivery and Kaspi Advertising being highly scalable, high-margin businesses will contribute to our profitability. Next slide is about Türkiye. I just want to spend really more time about our progress in Türkiye. As you can see from this slide, our focus has been the growth of number of orders. We have been focused on growing number of orders through growing consumer engagement. Consumer engagement, in our case, is a very simple sort of metric which talks about the health of our services.

We would rather have 1 million, basically, you know, of the engaged consumers which frequently transact with us and are coming back and like and love our service than have, you know, 10 million consumers which are one-offs, you know. Because of, you know, whatever the promotion, one-time promotion or some other temporary benefit which after that they leave. We are focused on engaged consumers. Engaged consumers will drive future of the business. That has been the playbook in Kazakhstan. It will be the same in Türkiye. We have tested different parts of our models and are really happy that all those, you know, our expertise and technology in the personalization, in search, in the marketing, and improvements in delivery, they are giving and yielding very similar results.

This is an example. We have been growing our orders quarter-on-quarter. In the fourth quarter, we had the 19% growth, which is a very high growth for some time already for the company. In terms of some other improvements or improvements which we have received during the year is all our efforts around, again, which I mentioned, the consumer engagement. Engaged number of purchases I've mentioned increased 19%. We are not focused on growing Monthly active consumers, right? But we're really happy that the Monthly active consumers grow 15%, which is a very good number in the fourth quarter.

What is more important for us that the growth of engaged consumers have been 29%, and those are the consumers which repeatedly buying with you, and those are the ones which generate the value. Then, of course, we understand the relationship between the quality and speed of delivery with the customer happiness and the growth of the business. Next-day shipping, we have improved also coverage from 47%-63%. You know, those are not all metrics we're working around, but those are the ones which just give you a bit of a flavor what really we're focused on. Again, growing engaged consumers, growing number of purchases is for us the very important focus which results in all the investments and the time we're spending on key components of that, right?

Again, that is about personalization, meeting customer demands with the right product in the right time, through the right channel. We have marketing, and we have focus on delivery and the quality and speed and the broadening the payment options. The broadening payment options means actually that the customers can buy more items more affordably. All those things, you know, working together give us these results. We're very encouraged and are really focused on, yeah, we're just focused on continuously bringing the, you know, the Türkiye and Hepsiburada metrics to Kaspi. If you look at and compare the Kaspi, and Hepsiburada metrics, those are the ones which just give you a view of this, what, you know, what we call sort of engagement opportunity, right?

If you think about compare just Kaspi and Hepsiburada across those metrics, you can see that the active consumers in Kaspi is 7.4 million, and Hepsiburada 11.8 million. Hepsiburada has 1.6 times more consumers. However, GMV per consumer is 1.6 times less in Hepsiburada than in Kaspi. If you think, okay, what is actually driving such a difference, you know, one simple metric that the frequency of purchases in Kaspi is almost 4 times more than in Hepsiburada. In Kaspi, 24.8 purchases per consumer per year, and 6.7 in Hepsiburada.

When you, when you think, okay, what drives that in purchases which are translated into profits, is actually the engaged consumers that are coming repeatedly and the costs related to those consumers are more and more sort of efficient, right? You know, the consumers are coming back. There is limited marketing costs and so on and so forth. 66% growth of engaged consumers in Kaspi.kz, despite of its, you know, scale, continues to grow. Hepsiburada with the opportunity in front of it, 29%, so 2.3 times less. Again, everything we do is we're focused on growing number of engaged consumers, growing number of frequency of purchases and interactions, and those will result in the economics and profitability going forward. That's our strategy.

In 2026, we'll manage Hepsiburada around, and Türkiye business around EBITDA breakeven, and we'll continue targeted investments. We also believe, you know, if there is a question always from investors, can you continue developing Hepsiburada, and the Türkiye and at the same time, you know, resuming dividends and returning capital to shareholders? The answer is yes, and we are resuming that, and now we're comfortable with all the things we have actually tested that we're on the right path, and we'll just continue executing to deliver the world-class services to consumers and merchants. David, back to you.

David Ferguson (Head of Investor Relations)

Great. All right, thanks a lot, Mikhail. Let's run through the respective platforms. First of all, payments in Kazakhstan, a TPV growth of 14% year-over-year in the fourth quarter, 19% for full year 2025. That is pretty much bang in line with the guidance of around 20% TPV growth for the year, driven by solid and consistent trends in transaction volumes up 12% for the fourth quarter and 14% for the full year. As we've talked about many times before, slight take rate attrition, and that's just the result of Kaspi Pay and Kaspi B2B lower take rate products growing in share.

The combination of decent TPV growth with some take rate dilution is slightly lower revenue growth at 7% in the fourth quarter and 12% for the full year. It's just the natural flow through there. Overall, the more moderate rate of growth just reflects the scale now of this business. At the bottom line, a 4% growth in the fourth quarter and 13% for the full year. I'd just say to keep in mind on the fourth quarter, it was at least in part impacted by some of the costs related to the launch and scaling of Alaqan. That will sort of normalize as we go into this year. Moving on to Marketplace in Kazakhstan. Underlying growth strong, 12% in GMV growth in the fourth quarter, 19% for the full year.

That's after the effect of smartphones, sort of, pre-smartphones 11%, and that's just slightly lower than the full year guidance of 12%-14% GMV growth. On that, I would say, I guess this would be a question, there was no improvement at all in smartphone dynamics in the fourth quarter. GMV from smartphones was down around 24%, which is pretty consistent with the year trend. That's the explanation for Q4, although what I would say more encouragingly, having been down materially throughout or since March of 2025, smartphones category did return to growth in January of this year. From March, we just have a favorable, year-over-year comp.

We do expect that sort of growth in Marketplace to normalize over the first half of this year and that smartphone issue to be a 2025 issue rather than a 2026 issue. That's on GMV growth. If you look at purchases very strong and consistent at 34% in the fourth quarter, 35% for the full year. Not really impacted to a material extent by the smartphone issue. You see that demand is strong. As Mikhail talked about, you also see that ongoing trend of take rate expansion. Take rates across Marketplace and specifically e-Commerce hitting all-time highs, driven on the back, particularly of advertising and delivery, those value-added services.

If we look specifically at e-Commerce, the fastest-growing part of Marketplace, 9% GMV growth in the fourth quarter, 16% for the full year. It's e-Commerce that's really impacted by smartphones, and that's sort of pretty obvious when you look at ex-smartphones, 27% GMV growth for full year, 2025. Again, same point on purchases. If we want to look at sort of real demand on the e-Commerce platform, growth in purchases up 70% and 83% for the fourth quarter and full year. It illustrates that demand is strong. As we've said in sort of pre-prepared remarks, the competitive position of the e-Commerce platform is unchanged. The smartphones was a very sort of specific anomaly. Take rate hitting 13.1% for the fourth quarter and 12.7% for the full year.

Again, that point, all-time high take rate driven by advertising, driven by delivery. Here you see that advertising growing quickly, up 45% year-on-year in the fourth quarter and up 64% for the full year. We talked on our last call about some of the new advertising products that we launched at the end of last year, and they'll be very helpful for sustaining decent advertising growth both this year and into the medium term. The other driver of e-Commerce is also grocery, which, as Mikhail said, is the sort of the fastest-growing major product line that we have. Growth really not slowing down at all, up 53% for the GMV growth, up 53% for the year.

Number of consumers now well north of 1 million, approach 1.4 million. Continuing to scale very, very nicely. Again, would expect grocery to keep posting very, very decent growth into the medium term. Part of our reason for our success in e-Commerce is actually a result of the m-Commerce business. This is a sort of a bit more color on the dynamics within Marketplace. What you can see here is that migration of both merchants and consumers from m-Commerce to e-Commerce is taking place now at a very rapid rate. Here's just two sort of vertical examples. m-Commerce GMV down 5% for shoes and clothing category, but e-Commerce GMV up 103%.

For the health and beauty category, m-Commerce growth of 1%, this is for full year 2025, versus for e-Commerce growth of 62%. Of course, this means lower growth in m-Commerce, but the value, even when m-Commerce isn't growing, is that you've got those relationships with offline merchants through m-Commerce, through the other products and services that we offer, and you're their first point of call as they migrate their businesses online. That's something pure online only e-Commerce players do not have. This is a material sort of competitive advantage. Having said that, I mean, you shouldn't assume that m-Commerce is completely sort of ex-growth.

If we ex out the smartphone issue for last year, it still delivered 11% GMV growth, 7% including smartphones, and -4% growth in the fourth quarter, including smartphones, +3% excluding. The m-Commerce will be one of the things that drives the growth in e-Commerce. Longer term, e-Commerce will just naturally evolve around the more services part of the economy, which doesn't migrate to e-Commerce, restaurants, beauty salons, gyms, those kind of areas, but that's over the sort of the medium term. m-Commerce take rate strong and consistent, 9.4% in the fourth quarter, 9.2% up slightly for the full year. Clearly, the growth driver of Marketplace is e-Commerce, though.

I think that's pretty clear. Then on Kaspi Travel, this is also now a more, a relatively, at least more mature business within marketplace, 6% GMV growth in the fourth quarter, 14% GMV growth for the full year with some, a take rate e-expansion. Again, I mean, I think the point's pretty clear. The main driver now of the marketplace business is the core e-Commerce franchise and the value-added services around that advertising delivery and financing for both the merchant and the consumer. The combination of decent GMV growth, but strong take rate improvement results in materially faster revenue growth, 13% and 23% ex smartphones, up 21% for the fourth quarter and up 30% revenue growth for marketplace for full year 2025.

Net income growth was down 7% in the fourth quarter, but up 6% for the full year. Now, part of the reason here for the decline in the fourth quarter is again, the smartphone issue growth. Net income growth would have been positive otherwise, but also a lot of the growth in a marketplace, that growth in purchases is being driven by lower ticket size, frequently purchased but lower ticket size items where the cost of delivery is a higher part of the GMV. Now, from the first of January or from the beginning of this year, we've raised the price of delivery to protect against that. Again, that will sort of be an issue that is less obvious as we move into 2026.

Increase in the price of delivery offsets, the sort of the dilution from growth in small ticket items. Finally moving on to Fintech in Kazakhstan, 4% growth, TFV growth in the fourth quarter. Again, lower growth in the marketplace means lower growth in Fintech. 13% growth for the full year. Growth driven by across all products, again, it's been the case now for several years. The merchant and micro business financing has really been the growth driver of the lending part of the business. Other Fintech trends broadly stable over the years. Those trends being both sort of pricing, yield flat at 24% over the year, and cost of risk broadly unchanged at 2.2%. We've talked about it on previous calls, the increase in the NPL ratio.

That's just a function of as collections become more efficient, as we get better collecting, the probability of collection improves, those non-performing loans stay on the balance sheet. That's the reason for the increase, number one. Number two, we'd expect it to stay broadly around that sort of 6% level for the remainder of this year. The lower coverage, that just reflects, again, I've said this before, the growing share of car loans, that's a collateralized product, requires less coverage, and the growing share of the merchant financing, the fastest growing lending product, which is a lower risk product. Again, we'd expect the coverage to stay around that level, although it just varies. It will depend again on you know, the exact pace of growth between those, the mix of different products.

Loan portfolio growth was good, both in the fourth quarter and for the year, up 27% and 31%. Growth in savings, growth in deposits up 16% and 18%. Actually pretty consistent throughout the year. Decent TFV growth with stable pricing translates into decent revenue growth, up 19% in the fourth quarter, up 20% for the full year. The net income growth was 4% and 9%. Again, you know, Fintech is the along with marketplace was affected by the smartphone issue, Fintech has been impacted by material increase in interest rates over the course of the year, higher taxes and higher National Bank reserve requirements.

If you X out those factors, which is, you know, the position we were in 12 months ago when we started the year, our Fintech growth was around 18% for the Q4 and also 18% for the full year 2025. That just gives you a sense of the impact these external factors have had on the performance of the business, and particularly Fintech over the course of the year. On Hepsiburada, well, Mikhail's already talked about it.

You know, I think we said on the last call, a simple metric for investors to track the improvement in the performance of the business is just look at purchases, and you can see that purchase momentum at the end of the year, up 19%, was dramatically better than at any other point during the year, and actually for some time. Here too, similar strategy to the marketplace in Kazakhstan, driving a number of orders, which is frequency of purchase, the things that we all buy on a day-to-day basis to increase the relevancy and engagement on the platform. That is clearly coming through and can improve further. That is partly at the expense of ticket size. Frequently purchased items cost less, so you have slightly lower GMV growth.

Just to be clear, the 13% and the 7% growth in the fourth quarter and the full year respectively, that's the real growth. The 49% and the 45% is the nominal growth in the business. From our perspective, what's important, again, is that the momentum where this business finished the year from a top line perspective is in a dramatically better position from where it started the year. Of course, we're still in the early days of the plan for Hepsiburada and for Türkiye. With take rate improvement and with also fast growth in delivery revenue that led to faster growth in revenue, 18% in the fourth quarter, 13% for the full year.

Again, you see that the revenue momentum is starting to get up in real terms to much better levels at Hepsiburada. Of course, the improvements that we're making, there is an investment behind that. The aim here now is to sort of to keep the business at around EBITDA break, even reinvest into improving the products and services, driving the engagement and driving the growth to create a much more bigger business and with scale, with a highly engaged user base is what will drive the profitability of the business. We'll keep that strategy of investing to build a much bigger, much more valuable asset in the medium term. You can see that the results are starting to come through, and we've got a lot to continue working on.

That wraps up the review of the respective segments. I mean, here is just a summary for Kazakhstan, a 15% revenue growth in the fourth quarter, 19% for the full year, 18% and 21% underlying. Net income growth 1% and 10% in the fourth quarter and full year underlying 13% and actually 18% for the full year. Again, just a really clear indication of the impact that higher rates, higher taxes and regulatory requirements and smartphones have had on the business in 2025. Including Türkiye, you see that revenue increased to just over KZT 4 trillion, which is just over $8 billion revenue for the full year. Again, sort of similar, you see on the top line.

Sorry, on the bottom line, the net income growth for the full year was flat year-on-year, KZT 1.1 trillion, just around $2.1 billion. We've reinvested the profit growth into Hepsiburada. Sorry, I should have said just on this slide, that net income growth there of 10% for full year 2025, that compares with the revised guidance for last year of 10%-12% at the lower end, reflecting again the absence of recovery in smartphones in the fourth quarter. Looking forward to 2026, a couple of points to make here. Firstly, guidance as usual for GMV, TPV and TFV. However, guidance now includes Hepsiburada and Türkiye. Previously, last year's guidance was Kazakhstan only.

This year's guidance is Kaspi.kz. It includes Kazakhstan and Türkiye. To give you the base to work off, these are the GMV, TPV and the TFV numbers, including Hepsiburada in 2025. Clearly, the bulk of Hepsiburada businesses is marketplace. It goes into GMV, although there are components of payments and Fintech as well. If you want to work out those components, you can just compare these numbers with the respective segments for Kazakhstan that I've just ran through, and you can split out what's from Kazakhstan and what's from Türkiye. The growth, again, we've been pretty clear the growth now going forward for 2026 and medium term will be driven by marketplace GMV. This around 20% is both Kazakhstan marketplace and Türkiye marketplace, TPV and TFV the same.

Then at the bottom line or at the profitability level, we'll guide on adjusted EBITDA. Here is the base to work off KZT 1.6 trillion for 2025. This just reflects, you know, it now with Kazakhstan and Türkiye as a multi-country business, different interest rate environments and cycles, different tax levels, different regulatory changes. This sort of X's out those things, is a better reflection of the sort of underlying business and just aids comparability between the different countries. We're looking for around 5% EBITDA guidance. I mean, here just one point beyond the point about sort of reinvestment in Hepsi. From talking with investors, a lot of investors talk to me about the benefit from interest rates, go at potentially moving down this year.

It's logical, but you just need to keep in mind it hasn't happened yet, and we don't assume in this guidance any sort of reduction in rates. I think that may be some of the sort of differences between where some sort of buy-side expectations are and versus our own. Just let's keep that in mind. It is reasonable to assume that rates can come down over the medium term and that would be a that would be a material benefit for us. We're not there today. Just on the marketplace guidance, Also what we will now do, again, combining Kazakhstan and Türkiye, we'll guide for marketplace as a whole. This gives you the 2025 reconciliation. We'll split it as e-Commerce.

These are the two comparable businesses between Kazakhstan and Türkiye. I mean, these relate to the metrics that Mikhail showed you. This is what we're focused on trying to drive. These two components in 2025 were 54% of marketplace GMV. We expect them to be around 60% of marketplace GMV this year. Then m-Commerce, travel and e-Commerce, with the Kazakh specific parts of marketplace, we'll have them sort of separately.

This gives you a sense of how we'll report from Q1 and going forward of Q1 2026. Here is the reconciliation from net income to adjusted EBITDA. I won't go through it line by line. If people have questions, we can just take this offline. That's on that side of things. I think that generally wraps up our comments. Harry, let's open the call up to Q&A, please.

Operator (participant)

Certainly. Thank you, David. If you would like to ask a question, please use the Raise Hand button on your Zoom toolbar. If you are dialed in over the phone, please press star followed by one on your telephone keypad. Our first question today will be from the line of Luke Holbrook with Morgan Stanley. Please go ahead. Your line is now open.

Luke Holbrook (VP of Internet Equity Research)

Yeah, good afternoon, and thank you for taking my questions. I'm just gonna center mine on Hepsiburada in Türkiye. The first is that you're obviously seeing more positive changes regarding the order trajectory, more same and next-day delivery. In that context, with two-thirds of orders now same or next-day, is this a year where we could potentially see peak losses? Do you see more investment required here to improve the selection and the delivery offering? By extension on that, my second question is just more on Rabobank and the $300 million of investment. I'm just trying to work out, can you be clearer on what that investment looks like, and the type of products that we could expect to see in timing, should the acquisition complete?

The final question, again, just centering more on Türkiye and the broadening of potentially e-Grocery offerings. I'm just wondering where you stand, particularly in light of Uber's more activity with Getir and Trendyol Go in the sector, and whether you see it as a necessity at some stage for Hepsi's proposition. Thank you.

David Ferguson (Head of Investor Relations)

All right, Luke. Thanks a lot for your questions. They're all on Türkiye. Maybe I'll just pass them all on to Mikhail. Peak losses, Rabobank, and e-Grocery in Türkiye.

Mikhail Lomtadze (Chairman and CEO)

Yes, sure. Thank you for your questions. In terms of our, you know, strategy and investments, again, you know, we'll manage the Türkiye business around EBITDA breakeven, which basically means that we'll be investing into the consumer engagement, and the consumer engagement increase comes from, you know, faster delivery, again, all around the data and personalization so the consumers can find their products. You know, we're investing into technology, and we're scaling technology out of Kazakhstan as we speak.

We're making investments in organizing data in a way that it's 360 degrees around consumers, around the merchants, which enables us to deliver better quality services. All those are the investment areas. When you think about what you call or think about the losses, we really think about that we're just investing into creating. It's not necessarily we're not focused on the size, not bigger business, but definitely a more valuable business which excites merchants and the customers. That would be our, you know, strategy for this year. We will see how it goes in the future. In terms of the. Well, we'll be basically showing you the progress through the year, of course.

In terms of the investments into things like delivery and marketing, those investments are again targeting at the consumers, growing the share of engaged consumers which shop with us frequently. In terms of the financial services or Fintech, first of all, we already have the capability to provide Fintech products through the microfinance company subsidiary, which is owned in fully owned subsidiary of Hepsiburada, and some of the products we plan to launch, notwithstanding the full banking license. When we talk about the banking license, that just gives us an opportunity to launch the wider range of the financial products, especially around the consumers and the merchants, both on the savings side and the lending side.

$300 million, it's an investment, which comes together with the capital and yeah, we're just going through the regulatory approval. As soon as, you know, those, we'll be taking specific steps on the products, you know, we'll be updating you in a due course. We don't, we don't really like to speak about the future products which we'll launch, the one thing which we can clearly say, the investment of $300 million, which we are forecasting and also you know, actually did say about it last year, that is already taken into account when we're thinking about resuming the dividends. Then the third question was?

Luke Holbrook (VP of Internet Equity Research)

e-Grocery, you know, what's Trendyol?

Mikhail Lomtadze (Chairman and CEO)

Yeah, well, this is actually pretty exciting. I think the fact that Uber is doubling down on the investment just tells you that Türkiye is an attractive destination and there are, you know, several, you know, companies like that entering the market. It's just testament to its attractiveness. That's on the move. We're not in a quick commerce business. That's not the business which we have in Kazakhstan either, at least at this stage. We're focused on the e-Grocery business, which is not about small ticket fast commerce items, but it's about, you know, stuffing your fridge with your household.

Even though we deliver very fast in Kazakhstan, we're not in the quick commerce business yet. But for the Türkiye itself, you know, we will say at the moment we're really. The way we sort of operate, the data guides us what our consumers want, and based on what our consumers want, we develop those services. When we talk about this year, our focus will continue to be on the same things which we worked on last year, and those would be growing engaged consumers, understanding what type of items our consumers want, and then working with the merchants to enable this assortment. At that stage, we don't have intention to move into quick commerce.

Luke Holbrook (VP of Internet Equity Research)

Understood. Thank you. Just to clarify, there's no specific ring fencing that this year will be peak investment in Türkiye from what you've just said there. It just depends on ROI and trajectory through the course of this year.

Mikhail Lomtadze (Chairman and CEO)

Well, I mean, the investments which we're saying. If you're saying, you know, will our profitability in 2027 will be higher on compared to 2026, you know, the investments that we're making are. Again, if we see that investment gives us frequency, and we see investment gives us the consumers which are coming back, you know, we will continue investing into those consumers. If we believe that, you know, making improvements into delivery and increasing speed is something which retains those consumers and they come back to us, we will continue those investments. That's the way we have done in Kazakhstan, that's the way we plan to do in Türkiye.

We tested all those elements during 2025, and we do see how consumers are responding, merchants are responding, you know, very excited about it. We've launched the weekend deliveries, which didn't exist before, and that's speeding up delivery again. Of course, temporarily you're, you know, running operation which can potentially process more orders. You know, you're starting for the specific segments of the consumers on the lower volumes and that means that you're, you know, running network not at the full utilization. When you, when you look at Kaspi, you know, Kaspi has, what is it? Like, almost 7 times, 6-7 times more order frequency per consumer during the year.

That just gives you a huge scale on the network of the delivery and the logistics, which gives you a very strong return. At this stage, when we think about Türkiye, we are building up that capability. Utilization rates won't be as high as Kaspi during this year because we still have a long way to go to increasing frequency of the purchases. Whether investment will be in 2027 less than 2026, I'm not going to give you such a forecast or guidance, but the one thing I can tell you that what we're investing into will, we believe will bring the growth and the engagement of the consumers in the future.

When we started, you know, Kaspi now is a KZT 2 billion net income business, and at some point it was -KZT 60 million. There are no miracles, you know. We know the playbook is there, and we know how consumers and merchants react, and we're very excited about this opportunity to build up the very loyal, engaged consumer base which is happy with our services.

Luke Holbrook (VP of Internet Equity Research)

Understood. Thank you very much.

Mikhail Lomtadze (Chairman and CEO)

Thanks.

Operator (participant)

The next question today will be from the line of Gabor Kemeny with Bernstein Autonomous LLP. Please go ahead. Your line is open.

Gabor Kemeny (Senior Equity Research Analyst)

Hello, this is Gabor here from Autonomous. To continue on Türkiye, can you comment a bit further on the competitive environment? I mean, you obviously have one large competitor there, a number of smaller ones. I wondered how you perceive their behavior as you have been accelerating your volumes at Hepsi. That's the first one. Second one is, we have an EBITDA guide. Would you be able to give us a flavor of how you expect the bottom line to develop with all those moving parts, around regulatory changes, taxation reserves, et cetera, that would be helpful to understand the dividend capacity of the business. To follow up on that, can you give us a flavor of the sustainable dividend payout going forward? Thank you.

David Ferguson (Head of Investor Relations)

Yeah. Maybe I'll take the second, then pass it to Mikhail to talk on Türkiye. I think we've declared KZT 850 per share for Q4 of last year, and we've said that we believe that that is sustainable for the remainder of this year. You can extrapolate that to work out the total dividend for this year, the potential total dividend for this year. That's the first thing I'd say there. You asked about payout ratios. That KZT 850 per share was exactly the same as we paid in Q4 just prior to Hepsiburada acquisition.

I think you can think about, again, you can see what kind of payout ratio that was in 2024, and you probably, you know, you'll get a similar number. For 2026. Clearly, we've gone with an amount we believe will be sustainable going forward. We're not looking to cut the dividend the next quarter. That's the main point to make there. That should give people a decent level of predictability. We're giving guidance on EBITDA, we're not going to give guidance on net income. I think just the things though to keep in mind at the net income level are as of today, no reduction in interest rates, number one. Number two, higher taxes in Kazakhstan in 2026. This isn't just something that was a 2025 event.

The bank tax only went up from the first of January this year, this is something that people need to be aware of. That'll add around 200 basis points to the tax rate. That's something to build in. There's also the higher National Bank reserve requirements, which will have an impact on the bottom line as well. Clearly, there's a number of different factors that will weigh on the bottom line this year. Those factors should be in the base by the end of this year, you get the upside and return to growth next year.

We still need to work through them, and hopefully as we work through them, we start to move in the second half of the year into interest rates moving down, which again, would be a positive for next year. As I said, we're not there yet. That's probably as much as I can say.

Mikhail Lomtadze (Chairman and CEO)

The question about the competitive dynamics, I mean, we're very respectfully observing the competitive dynamics, of course, and that's not different from Kazakhstan or Türkiye. At the same time, again, our priority is really just to focus on the very high quality of the products and services which is the final product the company needs to produce for consumers to come back and for the merchants to do business with you. That's basically where our focus is. Our focus is on the operations, on, you know, increasing the engaged customers, which eventually will increase the frequency of the orders. That's basically what we're focused on.

I don't know if maybe if you have any specific questions other than that, we're not waking up in the morning, thinking about competition, and we're not going to sleep in the evening, to thinking about competition. We're thinking about consumers, and we're thinking about merchants, and that's our priority. This is the way we've done business in Kazakhstan, and this is the way we do business in Türkiye.

Gabor Kemeny (Senior Equity Research Analyst)

Fair enough. Thank you.

Mikhail Lomtadze (Chairman and CEO)

Thanks.

Operator (participant)

As a reminder, if you would like to ask a question and you've joined the call via Zoom, please use the raise hand button on your Zoom toolbar. If you are dialed in over the phone, please press star followed by one on your telephone keypad. The next question will be from the line of James Friedman with SIG. Please go ahead. Your line is open.

James Friedman (Senior Equity Research Analyst)

Hi. good evening, good morning. I wanted to ask first, David, a modeling related question. In terms of slide 19, is this fully pro forma? you know, I'm looking at slide 19 in the press release. It's the one where it says the guidance slide. The guidance now includes Türkiye. I'm just trying to understand, Is the 2025 number fully pro forma, so we get the yeah. Yes, that one. Thank you. we get the underlying period of comparison.

David Ferguson (Head of Investor Relations)

Yes. The 2025 numbers, they include Hepsiburada. The only thing, one, they include Hepsiburada. Two, it's relevant for all segments, but particularly GMV. Number three, the only thing you need to keep in mind, I would say, is that. This is more, when you're just forecasting forward, remember, we only acquired Hepsiburada at the end. We closed the deal at the end of January of last year. It's approximately, 12 months of Kaspi and 11 months of Hepsiburada. They're the things to keep in mind, there. Other than that, yes. I mean, this is the pro forma base to work from.

James Friedman (Senior Equity Research Analyst)

Got it. Mikhail, in your prepared remarks, you were mentioning that you're focused on the frequency of use as opposed to the total number of users, so like RPAC, as opposed to count subfile. Can you elaborate on that as you migrate to Türkiye with Hepsiburada?

Mikhail Lomtadze (Chairman and CEO)

Well, first of all, 2026, will be also almost a full year we can now make them comparable. That will make, I think, everybody's life easier, right? We can actually, you know, pretty much compare consolidated business, 2026 to 2025. That's, that would be a good news for everyone. Number two is, because we acquired Hepsiburada only in January of last year.

In terms of the way we sort of manage, again, what we're saying is that, you know, the new, you know, the customers' growth was 15% in the last quarter, which is a great headline. However, again, what is our focus? Our focus is engaged consumers because those are the ones which, you know, make business work, and those are the ones which, you know, repeatedly come back and interact with you and buy from you.

The things which, you are, you are right in a sense that, you know, those are the consumers which are, you know, keep basically buying with you, therefore, you know, you have less marketing costs, you have less operating costs to serve them, and that's what is giving you the very favorable economics on the, on the consumer level going forward. We know how that works in, how that worked in Kazakhstan and, it will work exactly the same way in the Türkiye. The one thing which we should also keep in mind that we are also true believer in building up different services around the consumer needs and not just, you know, let's say e-Commerce, for example.

You know, things which are related to the Fintech and others, you know, will be something which we'll be also working on, you know, during 2026 and onwards. When you think about the scale of the business and how much network effects and synergies that can have, you know, you can extrapolate the way that Kaspi has been really doing. The comparison we gave you, it was only on e-Commerce side. The comparison, if you think about the breadth of the services around the consumers and merchants, and if you go beyond e-Commerce, I mean, it's massive. I'm not saying that this will be automatically happening. Of course, you know, it will take a lot of work from us.

The opportunity on a total level around household needs of the consumer and the business needs of the merchants, it's just massive. We just gave you something to compare between e-Commerce, pure e-Commerce comparable piece, because that's where our focus is. 'Cause we believe that if consumers are buying with you frequently and the merchants are selling with you frequently, though this is the combination from which you can build because that's just the point when merchant making decision to sell and the consumer is making decision to buy. All the other services are built around that. It's much more difficult to make a Fintech financial services into marketplace, and it much easier to make marketplace into Fintech financial services.

James Friedman (Senior Equity Research Analyst)

Got it. Thank you. I'll drop back in the queue.

Mikhail Lomtadze (Chairman and CEO)

Thanks.

Operator (participant)

Thank you. This will conclude our Q&A today. I'd like to hand back to David and Mikhail for any closing remarks.

David Ferguson (Head of Investor Relations)

Well, does Jamie have? Jamie said he was gonna drop back into the queue. If James has another question, we can take it. If you've got any follow up, James. If not, don't worry.

Operator (participant)

Oh, my apologies. We do have a follow-up question from the line of Gabor Kemeny also. Gabi, your line is open. Please unmute locally and proceed.

Gabor Kemeny (Senior Equity Research Analyst)

Yeah. Thank you for taking my follow-up. Just on the Fintech, the TFV growth, which you expect to slow down to 5%, can you give us some context there? I understand that you are not planning to change, I mean, the year, the growth year is expected to stay stable around 6%, presumably pricing stable. What is expected to drive the slowdown in lending?

David Ferguson (Head of Investor Relations)

I would just say, one thing to think about is TFV growth is linked to GMV growth in Kazakhstan. If you think about where the GMV growth is coming from, it's generally coming from lower ticket items. Less of the extreme example of that is grocery, which is just less credit sensitive. People are still using the same amount of credit to buy the consumer electronics items, but that now is a mature, slower growing category, within marketplace. It just reflects the changing. At least one key reason is it just reflects the changing shift in the marketplace business. Actually, that's a long run, trend.

Gabor Kemeny (Senior Equity Research Analyst)

Perfect. Thank you.

Operator (participant)

Thank you. We have a follow-up from the line of James Friedman also. James, your line is now open. Please unmute locally and proceed.

James Friedman (Senior Equity Research Analyst)

Yeah, thank you. In terms of what you were calling out earlier, David, about the e-Commerce versus m-Commerce relative growth rates, can you talk about how that impacts the consolidated take rate overall? Yeah, I think it's the one with.

David Ferguson (Head of Investor Relations)

Okay, it's take rate positive. Because if we look, sorry, I'm just flicking the slides. e-Commerce, let's do the end of the year. e-Commerce, take rate finished last year at 12.7%, just short of 13%. e-Commerce is faster growing, and it's higher take rate versus m-Commerce, which is just around under 10% take rate. That's one thing. Why? Because e-Commerce lends itself to delivery, so that's a clear value-added service that's not relevant for m-Commerce. m-Commerce, you're going to the physical location.

At least to date, the advertising products are all around e-Commerce. Again, the value-added services are all linked to e-Commerce. That's not to say you can't have value-added services for m-Commerce as well. actually, m-Commerce take rate has consistently increased. if you think about the two big ones that we've talked about, delivery and advertising, they are really relevant to e-Commerce. it's actually a positive dynamic from a take rate and revenue perspective. Got it. Thank you

Mikhail Lomtadze (Chairman and CEO)

I would like to make one quick comment on this. Even though it's a positive dynamic from the take rate and revenue perspective, e-Commerce is more operations heavy than m-Commerce, right? You know, let's say delivery. We are investing into delivery. We're monetizing the delivery on the merchant side, but in, you know, the buildup of delivery, especially on the lower ticket item side, you know, we're still investing. When you think about the take rate, take rate is higher, potential is much higher. The services we develop around consumer and the merchant have a huge potential and deliver a lot of value for both.

Profitability of e-Commerce is less than m-Commerce just because of the operational side of, you know, working with on the delivery. On the long term, of course, that will be something different, but immediate effect when you move m-Commerce, like if you move the merchants GMV from m-Commerce, which is in-store experience to e-Commerce, and you add on top of it, the operational costs related to the delivery investments, the take rate and the delivery take rate increases revenue, but the delivery is decreasing the profitability. The margin of the e-Commerce at that immediate migration will be less. The take rate and the future potential is much bigger.

James Friedman (Senior Equity Research Analyst)

Got it. Thank you.

Mikhail Lomtadze (Chairman and CEO)

Thanks.

Operator (participant)

Thank you. We have a follow-up from the line of Luke Holbrook with Morgan Stanley. Please go ahead, your line is open.

Luke Holbrook (VP of Internet Equity Research)

Yeah. Thank you. I just wondered if we could just touch on agentic AI or agentic commerce here, being the elephant in the room for e-Commerce companies as well around the world. Just your views on where we stand today regarding any partnerships you have with large language models with ChatGPT, just considerations from your perspective. That would be interesting to hear. Thank you.

Mikhail Lomtadze (Chairman and CEO)

Yes. Thank you for the call. Yeah, that's a separate subject, maybe even the different call, I would say. I mean, in general, we are working on the assistance to help our merchants to do business more efficiently and, you know, help our consumers to make purchases as well, seamlessly. We're, you know, navigating the help of the virtual assistant. That's basically, we're already applying a lot of it internally and, yeah, I think it deserves a separate call and separate discussion maybe with you too.

Luke Holbrook (VP of Internet Equity Research)

Thank you.

Mikhail Lomtadze (Chairman and CEO)

We're developing these things, and I think I mentioned this to you in the discussion we had recently.

Luke Holbrook (VP of Internet Equity Research)

Thank you.

Operator (participant)

Thank you. That will conclude Q&A. I'd like to leave the floor to the Kaspi team for any closing remarks.

David Ferguson (Head of Investor Relations)

Thanks, Harry, for the call. Thank you all for joining. Please get in touch with any questions. We are in the U.S. this week. Keep in touch. Happy to take questions offline. Thanks everyone for your time, speak to you soon. Thanks a lot. Bye-bye.

Operator (participant)

This concludes today's webinar. Thank you all for joining. You may now disconnect from the call.