Q3 2024 Earnings Summary
- The acquisition of Hepsiburada provides Kaspi.kz access to Turkey's large market of over 85 million people with low e-commerce penetration of 16.3%, offering significant growth opportunities ( , , ).
- Kaspi.kz's strategy of enhancing take rates through value-added services like advertising and delivery drives sustainable revenue growth without over-monetizing merchants, fostering strong merchant relationships and long-term success ( ).
- By spreading promotional campaigns throughout the year, Kaspi.kz is reducing dependency on single events, leading to more predictable and consistent growth and improving quarterly growth planning ( , ).
- The acquisition of Hepsiburada may pose integration challenges due to its large size and lower profitability compared to Kaspi.kz, potentially impacting KSPI's financial performance. , ,
- The acquisition may affect KSPI's dividend payout in the medium term, as the transaction requires significant cash funding, possibly leading to lower dividends for shareholders. ,
- Regulatory compliance concerns related to allegations about former shareholders and KYC processes may pose reputational and operational risks for KSPI.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Net income growth | FY 2024 | 25% | 25% | no change |
Marketplace revenue growth | FY 2024 | no prior guidance | 65% | no prior guidance |
Marketplace profitability | FY 2024 | no prior guidance | +40% | no prior guidance |
Fintech revenue growth | FY 2024 | no prior guidance | 20% | no prior guidance |
Fintech profitability | FY 2024 | no prior guidance | 15% | no prior guidance |
Payments platform bottom line | FY 2024 | no prior guidance | 25% | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Fintech Performance and Regulatory Impact | In Q1 earnings, discussions focused on increasing loan-to-deposit ratios and anticipated profitability improvements with a moderate regulatory tone. In Q2, the call highlighted a rebound in profitability driven by lower funding costs, higher loan-to-deposit ratios, and mentioned regulatory proposals (interest rate caps, tax discussions) that were seen as non-disruptive. | In Q3, the fintech segment was noted for robust profitability growth with accelerated bottom line performance, reinforced by strong regulatory compliance and transparent operations. | Consistently positive performance with an upward trajectory in profitability and regulatory confidence, building from early ratio improvements to robust Q3 performance. |
Marketplace Take Rate and Promotional Strategies | Q1 focused on rising marketplace take rates driven by early-stage value-added services and a shift from two large promotional events to more seasonal campaigns. In Q2, the narrative expanded with further take rate increases, new initiatives such as brand advertising, and modifications in promotional frequency (increased Juma events) that boosted GMV. | Q3 emphasized continued value-added service contributions (advertising, delivery) to marketplace take rate, though with noted absence of a major promotional event (Juma) impacting quarterly GMV, alongside subtle pressures on the payments platform take rate. | Evolving promotional strategy toward consistent, year-round campaigns aimed at sustainable revenue growth while balancing merchant satisfaction. |
Acquisition of Hepsiburada and Integration Challenges | Not mentioned in Q1 or Q2. | In Q3, this topic emerged as a high‐impact discussion highlighting Turkey’s market potential, emphasizing integration challenges, profitability differences, and short-term dividend implications due to the all-cash funding approach. | New and emerging topic with significant future implications, bringing both high opportunity and integration risks. |
Service Diversification and Revenue Expansion | Q1 commentary detailed diversification through brand advertising, e-Grocery initiatives, and integrated digital solutions such as car market services (e.g., via the Kolesa acquisition). In Q2, the diversification expanded further with the introduction of vacation packages, enhanced e-Grocery performance, and continued growth in advertising and automotive-related services. | Q3 discussions continued to emphasize diversification via robust growth in e-Grocery and brand advertising, while noting a diminished focus on the automotive segment as the company refines its portfolio. | Sustained emphasis on revenue diversification with a strategic shift away from lower-margin automotive services toward higher-growth, innovative revenue streams. |
Evolving Sentiment on Innovation and Growth | In Q1, sentiment conveyed both optimism for new revenue channels (e.g., e-Grocery, e-Cars) and caution over funding and competitive risks, reflecting a dynamic innovation-driven approach. Q2 maintained this dynamism with selective international expansion and strong growth outlooks tempered by promotional timing and funding vigilance. | In Q3, the sentiment remains dynamic—marked by optimism driven by the acquisition opportunity and innovative growth prospects, yet coupled with caution regarding funding implications and competitive/regulatory risks. | Consistently dynamic sentiment that blends robust optimism for innovative growth with a cautious stance on fiscal and competitive challenges, increasingly highlighted by strategic acquisitions. |
-
Hepsiburada Acquisition Strategy
Q: What will Kaspi add to Hepsiburada?
A: Kaspi plans to share its technology and experience with Hepsiburada to enhance services around merchants and consumers. Both companies share similar DNA, values, and a focus on high-quality services. Kaspi is excited to collaborate with Hepsiburada's visionary founder to jointly innovate and excite merchants and consumers. -
Impact on Dividend Policy
Q: Will the acquisition affect dividend payments?
A: Kaspi intends to fund the acquisition with cash from earnings and cash on hand. While it paid a dividend for Q3, future dividends may be used to fund the transaction. Kaspi has an investment-grade rating, providing financial flexibility, but the near-term priority is closing the transaction. -
Hepsiburada Integration and Synergies
Q: How will Kaspi integrate Hepsiburada?
A: Kaspi will maintain Hepsiburada as a standalone brand and company. They plan to share knowledge and technology, leveraging Kaspi's wider range of services and Hepsiburada's e-commerce expertise. Management teams will collaborate to innovate and learn from each other, aiming for synergy. -
Future M&A Plans
Q: Any future M&A beyond Hepsiburada and Uzbekistan?
A: Kaspi is focused on closing the Hepsiburada transaction and is awaiting requirements for the Uzbekistan acquisition. Currently, there are no specific plans for additional M&A. The company is excited about opportunities in these large markets. -
Take Rate Outlook
Q: How is the take rate expected to change?
A: Kaspi's take rate is driven by value-added services like advertising, about 1.8% of GMV. Expansion is due to added services, not higher seller fees. Kaspi doesn't aim to over-monetize merchants; instead, it focuses on supporting merchant growth through additional services. -
Seasonality and Marketing Campaigns
Q: What's the plan for promotional events in 2025?
A: Kaspi plans to have similar seasonality in 2025, with quarterly marketing campaigns like Juma events, back-to-school, and New Year promotions. This approach follows consumer and merchant demand, making growth more predictable and less dependent on a single campaign. -
Gift Card Initiative
Q: What's the strategic relevance of gift cards?
A: Kaspi has launched gift cards on its e-commerce platform to drive GMV growth and consumer engagement. Unlike others, Kaspi's gift cards have no expiration date, encouraging ongoing customer involvement. It sees this as a medium-term goal to enhance services. -
Management Time Allocation
Q: How will management allocate time to new assets?
A: Kaspi doesn't have a metric for time allocation but plans to share technology and experience with Hepsiburada while learning from them. Management teams will collaborate to excite merchants and consumers. Kaspi's CEO will spend time in Turkey to support this collaboration. -
KYC Processes and Compliance
Q: What reassurance on KYC processes after allegations?
A: Kaspi is in full compliance with all local and international sanctions, rules, and regulations. The Kazakhstan regulator has commented on Kaspi's transparency and compliance efforts. Most transactions are between fully identified Kaspi consumers and merchants, offering high visibility.