Kaspi.kz Earnings Call: Strong Growth Amid Challenges

Kaspi.kz JSC Sponsored ADR RegS ((KSPI)) has held its Q3 earnings call. Read on for the main highlights of the call.Meet Your ETF AI Analyst Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow. Kaspi.kz’s recent earnings call painted a picture of robust growth and innovation, despite facing some external challenges. The company demonstrated strong performance in its payments and marketplace segments, while also introducing new services that promise to enhance its market position. However, disruptions in smartphone supply and external financial factors posed notable challenges during the period. Strong Growth in Payments and Marketplace Segments Kaspi.kz reported impressive growth in its payments and marketplace segments. The total payment volume (TPV) increased by 18%, and revenue grew by 10%, leading to a net income growth of 12%. The marketplace segment also showed resilience, with a 12% year-over-year growth in gross merchandise value (GMV), which reached 20% growth when excluding the impact of smartphone supply disruptions. E-Grocery Expansion and Growth The e-Grocery segment was a standout performer, with GMV growing by 53% and transactions increasing by 55%. This segment now serves 1.3 million customers, and Kaspi.kz plans to expand its reach by entering at least two more cities, further solidifying its position in the market. Introduction of Innovative Payment and Advertising Services Kaspi.kz introduced several innovative services, including pay by palm, new advertising services, and the Kaspi AI Assistant. These initiatives have already started to pay off, with advertising revenue rising by 56% year-over-year, showcasing the company’s commitment to innovation and customer engagement. Hepsiburada’s Improvement in Purchase Volumes Hepsiburada, a key component of Kaspi.kz’s portfolio, saw a 16% increase in purchase volumes in the third quarter. This growth was driven by strategic investments in delivery, payment options, and enhancing the overall user experience, reflecting the company’s focus on improving customer satisfaction. Smartphone Supply Disruption The shortage of smartphone supplies, particularly iPhones, had a negative impact on Kaspi.kz’s GMV, reducing it by 8% and affecting consolidated income by 3%. This disruption was a significant challenge, but the company remains optimistic about overcoming these issues in the near future. External Factors Affecting Financial Performance Kaspi.kz faced several external financial challenges, including a new 10% tax on revenue from government securities and increased reserve requirements, each impacting net income by 1%. Additionally, a base rate increase affected net income by 4%, highlighting the external pressures on the company’s financial performance. Impact of Smartphone Disruption on Marketplace Growth The smartphone supply issues moderated marketplace GMV growth, but Kaspi.kz expects a recovery next year. The company is optimistic about resolving these supply challenges and anticipates a strong rebound in its marketplace segment. Forward-Looking Guidance Looking ahead, Kaspi.kz provided an optimistic outlook, forecasting a 20% year-over-year top-line growth, with revenue and net income both expected to grow by 21%. The company is also initiating a $100 million ADS buyback in November, reflecting confidence in its financial health and stock performance. With expectations of resolving smartphone supply issues and benefiting from favorable base effects, Kaspi.kz is well-positioned for a robust recovery in 2026. In conclusion, Kaspi.kz’s earnings call highlighted a period of strong growth and strategic innovation, despite facing some external challenges. The company’s commitment to expanding its services and improving customer experience, coupled with its optimistic forward-looking guidance, positions it well for continued success in the coming years.