Q4 2024 Earnings Summary
- The company continues to innovate and expand its product offerings, such as the "Buy Inventory Now Pay Later" product, which is both a fintech and payments product, indicating growth potential.
- Despite macroeconomic challenges like currency volatility and rising interest rates, the company expects strong volume growth in its payments and marketplace segments, demonstrating resilience and robust demand for its services.
- Management is committed to returning excess cash to shareholders through dividends or buybacks and is well-positioned to navigate regulatory changes without significant impact on its business model or investment case.
- Potential regulatory changes in Kazakhstan, such as discussions on VAT tax, the national payment network, and requirements for merchants to advertise both cash and financed prices, could introduce regulatory risks that may impact Kaspi's commerce and payments businesses.
- Kaspi's profit growth guidance has been reduced to around 20% for 2025 compared to 25% in 2024, possibly indicating a slowdown in growth due to scale effects or other challenges, which may raise concerns about the company's ability to sustain previous growth levels. ,
- Rising interest rates due to currency weakness and inflation could negatively impact the FinTech business, as higher funding costs may slow down bottom line growth compared to top line growth in 2025, with the possibility that rates may stay higher for longer, affecting FinTech earnings growth. , ,
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Marketplace Revenue Growth | FY 2024 | 65% | no current guidance | no current guidance |
Fintech Revenue Growth | FY 2024 | 20% | no current guidance | no current guidance |
Consolidated Net Income Growth | FY 2024 | 25% | no current guidance | no current guidance |
Payments Platform Bottom Line Growth | FY 2024 | 25% | no current guidance | no current guidance |
Bottom Line Growth | FY 2025 | no prior guidance | Around 20% profit growth | no prior guidance |
Marketplace GMV Growth | FY 2025 | no prior guidance | 25% to 30% year-on-year | no prior guidance |
Payments Growth | FY 2025 | no prior guidance | 15% to 20% year-on-year | no prior guidance |
FinTech Bottom Line Growth | FY 2025 | no prior guidance | Expected to grow slower than top‑line growth | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Product Innovation and Diversification | Q1–Q3 earnings calls consistently discussed launching new products and services – from BNPL, gift cards, and dedicated services (e.g., car finance, e-grocery, travel) – as key drivers of growth. | Q4 underscored a continuous commitment to innovation with detailed emphasis on fully online offerings like BINPL, new service launches (e‑grocery, travel, car finance) and deeper diversification across platforms. | Consistent focus with expanded emphasis in Q4 on online integration and diversification, reinforcing optimism about future growth. |
Regulatory Changes and Compliance Risks | Q1 focused on the National Payment System and fee regulation, while Q2 discussed interest rate caps and tax changes, and Q3 underlined adherence to KYC and compliance standards. | Q4 shifted attention to discussions on VAT changes and the national payment network—with no mention of KYC—suggesting an evolving regulatory focus. | Consistent regulatory concerns but with a changing spotlight—from domestic fee and system issues in Q1 to VAT and network matters in Q4—indicating a shift in external regulatory challenges. |
Macroeconomic Challenges and Interest Rate Impacts | Q1 mentioned expectations of declining rates and stable consumer trends. Q2 focused on deposit repricing benefits and stable consumer behavior. Q3 highlighted lower funding costs aiding fintech growth. | Q4 highlighted currency volatility and an unexpected rise in interest rates in December that negatively impacted fintech net income growth. | A shift from early optimism about rate normalization to increased caution in Q4 due to rising rates and currency volatility, suggesting growing macroeconomic headwinds. |
Fintech Business Performance and Profitability | Q1 noted healthy loan growth despite higher funding costs. Q2 and Q3 discussed improving loan-to-deposit ratios and lower funding costs driving better profitability. | Q4 demonstrated that, while revenue growth remained strong due to an improved loan-to-deposit ratio, higher funding costs and yield dilution led to net income growth falling short of guidance. | Bullish early performance turned more measured in Q4, as improved liquidity metrics are partially offset by unanticipated funding cost pressures, tempering overall profitability. |
Marketplace Dynamics: Take Rates and Promotional Event Dependency | Q1 and Q2 emphasized rising take rates driven by new value‐added services and the impact of promotional events (e.g. Kaspi Juma). Q3 re-affirmed these trends with detailed attribution to advertising and delivery. | Q4 reported record take rates in e‑commerce and strong GMV growth driven by promotional events, though noted mild dilution in the payments segment from increased QR transactions. | Steady positive trajectory with consistent expansion of value-added services; however, while dependency on promotions remains, diversification is gradually reducing overreliance on any single event. |
Acquisition Integration and Expansion Opportunities | Q1 had little to no discussion; Q2 mentioned international expansion in broad terms; Q3 introduced strategic integration of Hepsiburada and initial Turkish market prospects. | Q4 provided in-depth details on the Hepsiburada integration, emphasizing operational independence, strategic partnering, and clear expansion opportunities in Turkey with robust management confidence. | A new and increasingly prominent theme: starting as a peripheral discussion in Q1–Q2, it emerged in Q3 and was elaborated significantly in Q4 as a key strategic growth initiative. |
New Revenue Streams from Brand Advertising and e‑Grocery Growth | Q1 introduced the scaling of ad services and initial e‑grocery growth; Q2 offered detailed performance metrics and market penetration figures; Q3 further reinforced the impact on take rates and purchase growth. | Q4 highlighted record growth in e‑grocery (97% GMV growth) and strong merchant adoption of brand advertising (51,000 merchants), underlining these streams as major revenue drivers. | Positive and consistent momentum across all periods with Q4 setting new highs, reinforcing the strategic importance of diversifying revenue through digital advertising and expanding e‑grocery capabilities. |
Auto Market Expansion and Integrated Car Ownership Services | Q1 and Q2 elaborated on integrated car services and auto market leadership (including acquisitions like Kolesa), driving early profitability and improved customer experience. | Q4 returned to the auto segment with robust GMV growth (62%) and an expanded suite of services (from financing to spare parts), despite its absence in Q3. | After a brief absence in Q3, the topic re-emerged in Q4 with enhanced detail and a bullish outlook on market opportunity and service integration, signifying its potential as a future growth driver. |
Shareholder Returns Strategy and Dividend Guidance | Q1 briefly mentioned dividend declarations; Q2 confirmed dividends (e.g. KZT 850) and aligned capital allocation with growth initiatives. | Q3 and Q4 increasingly prioritized funding acquisitions (e.g. Hepsiburada) over immediate payouts, with plans to re-assess shareholder returns (dividends or buybacks) later in 2025. | A gradual shift from regular dividend payouts towards prioritizing reinvestment and strategic funding, suggesting a more cautious approach to cash returns in the near term while maintaining a history of shareholder returns. |
National Payment System Competition | Q1 discussed the National Payment System, emphasizing free-market principles and minimal fee regulation interference; Kaspi’s low fee structure (0.95%) was highlighted. | Q2, Q3, and Q4 contain no further discussion on the National Payment System competition or potential fee regulation challenges. | Topic no longer mentioned beyond Q1, which may indicate that the competitive pressures or regulatory debates have either been resolved or deprioritized in Kaspi’s current strategic narrative. |
-
Guidance and Growth Outlook
Q: Why does your guidance show slower growth despite strong exit rates?
A: Management explained that the 20% guidance for 2025, compared to 25% last year, reflects the scale of the business and current market conditions. They advised taking the guidance at face value and noted that trends from 2024 are expected to carry forward into 2025. Factors such as interest rates moving up, affecting the FinTech bottom line, contribute to the difference between top-line and bottom-line growth. -
[Hepsiburada] Integration and Strategy
Q: What are your plans for [Hepsiburada] and international expansion?
A: Kaspi is excited about opportunities in Turkey through [Hepsiburada], a platform serving 12 million consumers and 100,000 merchants. They see potential in launching mobile services and products for both merchants and consumers. While [Hepsiburada] will focus on its own results, Kaspi is considering launching services as Kaspi itself in Turkey. -
Kazakhstan Macro Environment
Q: How is the macro environment in Kazakhstan impacting your business?
A: Management observes a stable and predictable environment with consumer and merchant trends consistent over the last 18 months. While currency weakness has led to higher inflation and interest rates moving up, they expect rates to eventually come down over the next few years, potentially providing a tailwind for the business. -
Impact of Regional Conflict
Q: How would an end to regional conflict affect Kazakhstan and your business?
A: Management believes that peace would have a positive impact on various fronts, including economic benefits for Kazakhstan and its consumers. Geopolitical stability would lead to broader de-risking across the region, which would be helpful from a risk perspective. -
Marketplace Growth Initiatives
Q: What are your key initiatives for marketplace growth, and will you introduce successful products from Kazakhstan in Turkey?
A: The marketplace remains the most important growth engine, focusing on underpenetrated services like e-grocery, which has the biggest potential. Demand is strong, and growth is driven by expanding into new cities and building infrastructure. Kaspi is considering launching services in Turkey, potentially introducing successful products from Kazakhstan. -
[Hepsiburada] Margin Expansion
Q: Is there a plan to drive margin expansion in [Hepsiburada]?
A: Management stated that [Hepsiburada] reports quarterly and provides detailed updates on its strategy, which may evolve over time. They emphasized that any strategic changes will be communicated by [Hepsiburada] itself, respecting its own shareholder communications. -
[Hepsiburada] Management and Strategy
Q: Will Kaspi make changes to [Hepsiburada]'s management or approach to credit products?
A: Kaspi respects [Hepsiburada]'s strong management team and has no intention of replacing executives or imposing changes. They focus on creating innovative products that improve lives and may share knowledge and technology between teams. If innovation is needed on the credit side, they will consider it, following consumer and merchant needs. -
Regulatory Environment
Q: Are there any regulatory changes that could affect your business?
A: While discussions are ongoing regarding VAT taxes and payment networks, there is nothing material to report at this time. Kaspi is involved in these discussions and has historically navigated regulatory changes without significant impact on its business model.
Research analysts covering Joint Stock Co Kaspi.kz.