Kaspi.kz JSC Sponsored ADR RegS ((KSPI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Kaspi.kz’s recent earnings call painted a picture of robust performance across its core segments, including payments, marketplace, and fintech. The company showcased notable growth in its e-Grocery and advertising revenue, although it faced challenges such as a decline in smartphone sales and high interest rates affecting fintech margins. Despite these hurdles, Kaspi.kz’s strategic initiatives and expansions suggest a positive outlook, with temporary setbacks not overshadowing the overall progress.
Strong Performance in Core Segments
Kaspi.kz reported impressive results in its core segments, with the payments sector seeing a 21% increase in Total Payment Volume (TPV), a 16% rise in revenue, and a 19% boost in net income. The marketplace segment also performed well, with Gross Merchandise Volume (GMV) up by 15%, revenue increasing by 25%, and net income growing by 13%. Fintech operations showed strong volumes, with origination up 17%, revenue up 21%, and net income up 8%.
Rapid Growth in e-Grocery
The e-Grocery business demonstrated remarkable growth, with GMV increasing by 57% year-over-year and transactions up by 63%. This segment now operates in the five largest cities in Kazakhstan, highlighting its rapid expansion and increasing consumer adoption.
Successful New Deposit Product
Kaspi.kz introduced a new deposit product that has seen extraordinary growth, with amounts up by 207% and the number of customers increasing by 263%. This success underscores the company’s ability to innovate and attract new customers.
Kaspi QR Volume Growth
The company’s QR payment solutions have gained significant traction, with volumes up 128% and 3.4 million transactions processed in the second quarter. This growth reflects the increasing popularity and convenience of QR payments among consumers.
Advertising Revenue Surge
Kaspi.kz’s advertising revenue surged by 67% in the second quarter, driven by the introduction of new services for merchants. This growth highlights the company’s ability to diversify its revenue streams and capitalize on emerging opportunities.
Hepsiburada Recovery
Hepsiburada, a part of Kaspi.kz’s portfolio, showed signs of recovery with volumes up 7% year-on-year in the second quarter and EBITDA growth up 42%. This improvement indicates a positive turnaround for the segment.
Smartphone Sales Decline
Despite overall positive performance, Kaspi.kz faced challenges with declining smartphone sales, which were down 17% year-on-year in the second quarter, affecting GMV. This decline is attributed to new legislation requiring smartphone registration, impacting consumer demand.
High Interest Rate Environment
The high interest rate environment posed challenges for Kaspi.kz, impacting the fintech segment’s bottom line growth, which was up only 8% despite higher revenue growth. This situation underscores the broader economic challenges faced by the company.
Challenges with Smartphone Registration
The introduction of new legislation requiring smartphone registration has temporarily disrupted smartphone growth, affecting consumer demand. This challenge highlights the regulatory hurdles that can impact business operations.
Forward-Looking Guidance
Kaspi.kz remains optimistic about its future, reiterating its full-year guidance and expressing confidence in resuming capital returns to shareholders in 2026. The company highlighted its strong cash-generative capabilities and continued expansion into new cities and services, such as domestic tours and QR payment solutions, which saw transaction volumes increase by 128%.
In conclusion, Kaspi.kz’s earnings call reflected a strong performance across its core segments, with significant growth in e-Grocery and advertising revenue. Despite challenges like declining smartphone sales and high interest rates, the company’s strategic initiatives and expansions indicate a positive outlook. Kaspi.kz’s ability to innovate and adapt to changing market conditions positions it well for future growth.