Joint Stock Company Kaspi.kz

Hello and welcome to the CASB.KZ 4Q and FY2025 financial results. My name is Harry and I'll be your operator. We will be taking questions from the audience after management's prepared remarks and presentation. To enter the queue for questions, please use the raise hand button on your Zoom toolbar or dial star 1 if you are joining us over the phone. I would now like to turn the call over to David Ferguson with CASB to begin the presentation. Please go ahead.

All right. Thank you, Harry. Good morning. Good afternoon to everyone on the call. Welcome to Caspi's fourth quarter and full year 2025 financial results. I'm David Ferguson from Caspi. As usual, I'm joined by Mikhail Lomtadze, CEO and co-founder of Caspi, Tengiz Mesidis and Yuri Yudenko, 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 and then we'll open up the call to Q&A as usual. So, on that note, first of all, I'll hand over to Mikhail. Mikhail, over to you.

Hello, everyone. Yes, thank you, David. So, let's move straight to the presentation. So, our results for the year have been quite strong, you know, we're obviously reviewing the underlying performance without influence of external factors. But at the same time, I do think that we are at the stage when we can continue investing into long-term growth and value creation, which we always prioritized. and also distribute and resume the dividends considering the strong cash generation which our business model allows. So we are proposing a dividend of 850 TGAP or ADA subject to shareholder approval. The underlying performance is 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 interest rate, high interest rate environment during 2025. And in spite of those, if we include those factors, our net profit consolidated grew around 10% and underlying profit grew around 18% during the year. Next slide. In terms of the last quarter, last quarter, you know, considering all the headwinds, still was, you know, quite solid underlying performance, and the net income growth reached 13%. We have had good, reasonable growth across all our businesses, and 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. And that is an important metric which, you know, going forward, we can create more value for the company. David will cover some of the verticals further, but 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 the quality of our products and services is our brand. And our brand is number one consumer brand pretty much in every category. and by wide margin. So here you can see just some of the selected metrics which 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 respondents surveyed during the year are having our mobile application on their smartphone considering which is six times more than the nearest brand and 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 four times. And we have a very strong position in the cars, for example, nine times the nearest brand. And 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 are reflected in the consumers using our products, merchants using our products, and the brand indicators. So 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 we just launched under 90 days. And, 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 half a million customers in Almaty registered with Caspi Alakan. almost 6,000 merchants are accepting payments through the Alakan and that's almost 10% of the transactions in the stores where we have been merchants connected to Alakan. So it just tells you that pay by palm is it's it's truly changing the consumer behavior so we have changed consumer behavior from cash to to cashless to the mobile payments then to the qr code and and and and now to the to the pay-by-pub so we believe pay-by-pub has a has a bright future adoption has been remarkable consumer feedback has been remarkable everybody is really super excited and achieving 10% penetration at the merchants just in three months and having half a million customers. By the way, to put the half a million customers into perspective, this is almost third. of the population of the largest city of kazakhstan where we started to launch and you know we 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 those all kinds of payments and and are purposely built for for alakan as being an innovative company that's a testament of how consumers are using every your next product And the penetrations we're, again, achieving are unprecedented, remarkable. And in just three months, having a third 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 an 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, but just to give you an overview, 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 working uh rolling out during the last year and and some of the services we plan to do this year e-commerce 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. So it's a front end of consumer and merchant relationship. All the services around e-commerce like delivery, advertising, value-added services around financing, payments. So when a merchant sells, he needs to get the financing. When a consumer buys, he needs to pay for it, and the merchant accepts the payment. So all the universe of our services is highly applicable to e-commerce. So e-commerce is our important focus, and it's focused in Kazakhstan, and it will be focused in Turkey as well. And then, of course, merchant finance, which has been the fastest growing product. And 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. So the results have to be highly relevant, high accuracy. But we have a very strong result, and, you know, David will show you the take rate is increased due to the value added services of delivery and advertising, which we have launched. And on the consumer side, only half of our consumers use e-commerce. And as we get more merchants migrating to e-commerce, especially from e-commerce, when we have, you know, more consumers and more selection and more price competitiveness, which – which we have been driving. You know, we are regarded as one of the lowest and the best price e-coms in the country. So that really drives the liquidity and the transactions. And, of course, e-grocery, which we are scaling across the country. E-grocery is the fastest growing e-commerce business for us. So those are the things which will be focused during the year, and they will be driving our growth. And, you know, Caspi Delivery and Caspi Advertising being highly scalable, high margin businesses will contribute to our profitability. Next slide is about Turkey. So I just want to spend really more time about our – progress in Turkey. So as you can see from this slide, our focus has been the growth of number of orders. And we have been focused on growing number of orders through growing consumer engagement. And consumer engagement, in our case, is a very simple sort of metric, which talks about the health of our services. And we would rather have 1 million basically of the engaged consumers which frequently transact with us and are coming back and love our service, then have 10 million consumers which are one-offs because of whatever the promotion, one-time promotion or some other temporary benefit which after that they leave. So 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 Turkey. We have tested different parts of our models, and I'm really happy that all those, you know, our expertise in technology, in the personalization, in search, in the marketing, and improvements in delivery, they are giving and yielding very similar results. And this is an example. We have been growing our orders quarter on quarter. And 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, yeah, improvements which we have received during the year is all our efforts around, again, which I mentioned, the consumer engagement. So engaged number of purchases I've mentioned increased 19%. We are not focused on growing demand. 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 year. But what is more important for us is that the growth of engaged consumers have been 29%. And those are the consumers which repeatedly buy with you and those are the ones which generate the value. And then, of course, we understand the relationship between the quality and speed of delivery with the customer happiness and the growth of the business. So, next day shipping, we have improved also coverage from 47% to 63%. So, 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. And 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 within the right product in the right time through the right channel, then we have a marketing and we have focus on delivery and the quality and speed and the broadening the payment options. And the broadening payment options means actually that the customers can buy more items more affordably. So 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 Turkey and Hapsiburata metrics to custody. So if you look at and compare the Caspi and Hapsiburata metrics, those are the ones which just give you a view of this, what we call sort of engagement opportunity, right? So if you think about, compare this Caspi and Hapsiburata across those metrics, you can see that active consumers in Caspi is 7.4 million, which is... And Hepsiburata 11.8 million, so Hepsiburata has 1.6 times more consumers. However, GED per consumer is 1.6 times less in Hepsiburata than in Caspi. And then if you think, okay, what is actually driving such a difference? You know, one simple metric that the frequency of purchases in Caspi is almost... four times more than in Hapsiburada. So in Caspi, 24.8 purchases per consumer per year and 6.7 in Hapsiburada. And then when you think, okay, what drives that in purchases which are translated into profits is actually the English 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. So 66% growth of engaged consumers in Caspi, despite of its, you know, scale, continues to grow and Hepsiburata with opportunity in front of it, 29%. So 2.3 times less. so 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 in the economics and profitability uh going forward and that's our strategy in 2026 we'll manage for segurata around uh and Turkey business around EBITDA breakeven and will continue targeted investments. But we also believe, you know, if there is a question always from investors, can you continue developing Hapsi Gurada and the Turkey and at the same time, you know, resuming dividends and returning capital to shareholders? So the answer is yes. We are, you know, we're 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.

Great. All right. So thanks a lot, Mikhail. So let's run through the respective platforms. So first of all, payments in Kazakhstan, a TPV growth of 14% year on year in the fourth quarter, 19% for full year 25. So 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 of 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 CaspiPay and CaspiB2B, lower take rate products growing in share. So 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. And 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 Alakan. So that will sort of normalize as we go into this year. Moving on to marketplace in Kazakhstan. So Underlying growth, strong, 12% in GMB 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% to 14% GMB growth. On that, I would say, and I guess this would be a question, there was no improvement at all in smartphone dynamics in the fourth quarter. GMB from smartphones was down around 24%, which is pretty consistent with the year trend. So that's the explanation for Q4, although what I would say more encouragingly, having been down materially throughout or since March of 2025, smartphone category did return to growth in January of this year. And from March, we just have a favorable year-over-year comp. So 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. So that's on GMB growth. If you look at purchases, purchases very strong and consistent, 34% in the fourth quarter, 35% for the full year. So not really impacted to a material extent by the smartphone issue. And you see that demand is strong. As Mikhail talked about, you also see the 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 delivering 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 the full year, 25%. 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. And 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 position. anomaly take rate hitting 13.1% for the fourth quarter and 12.7% for the full year so again that point all-time high take rate driven by advertising driven by delivery and 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 Mikel said, is sort of the fastest growing major product line that we have. Growth really not slowing down at all, up 53% for the GMB growth, up 53% for the year. And number of consumers now well north of 1 million approach, 1.4 million. So continuing to scale very, very nicely. And, again, would expect grocery to keep posting very, very decent growth into the medium at this time. Part of the reason for our success in e-commerce is actually a result of the mCommerce business. So 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 mCommerce 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%. Or for the health and beauty category, M-Commerce growth of 1%. This is for full year 25 versus for e-commerce growth of 62%. So, of course, this means lower growth in M-Commerce, but the value... even when mCommerce isn't growing, is that you've got those relationships with offline merchants through mCommerce, through the other products and services that we offer, and you're their first point of call as they migrate their businesses online. And that's something pure online-only e-commerce players do not have. So this is a material sort of competitive advantage. Having said that, I mean, you shouldn't assume that e-commerce is completely sort of X growth. We X'd out the smartphone issue for last year. It still delivered 11% GMV growth, 7%, including smartphones, and minus 4% growth in the fourth quarter, including smartphones, plus three, excluding. But the M-commerce will be one of the things that drives the growth in e-commerce. And 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. That's pretty clear. And then on Caspi Travel, this is also now a more relatively, at least more mature business within Marketplace, 6% GMV growth in the fourth quarter, 14% GMV growth for the full year, with some take rate expansion. But again, I mean, I think the point is pretty clear. The main driver now of the Marketplace business is the core e-commerce franchise and the value-added services sector. around that advertising delivery and financing for both the merchant and the consumer. So the combination of decent GMB growth but strong take rate improvement results in materially faster revenue growth, 13% and 23% X smartphones, up 21% for the fourth quarter and up 30%. 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 marketplace, that growth in purchases is being driven by by lower ticket size, frequently purchased, but lower ticket size items where the cost of delivery is a higher part of the GMV. And from the 1st of January or from the beginning of this year, we've raised the price of delivery to protect against that. So, again, that will sort of be an issue that is less obvious as we move into 2026, increasing the price of delivery offsets the sort of the dilution from growth in small ticket items. So then finally moving on to FinTech in Kazakhstan, 4% growth, TFE growth in the fourth quarter. Again, lower growth in the marketplace means lower growth in FinTech. 13% growth for the full year. Growth-driven across all products, but again, it's been the case now for several years. The merchants and micro-business financing has really been the growth driver of the lending part of the business. Although FinTech trends broadly stable over the year, so those trends being both sort of pricing yield flat at 24% over the year and cost of risk broadly unchanged at 2.2%. We talked about it on previous calls, the increase in the MPL 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. So 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. And 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 their coverage to stay around that level, although it just varies. It will depend again on 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%, and growth in savings, growth in deposits, up 16% and 18%, so actually pretty consistent throughout the year. So 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%. So again, FinTech is the 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 the position we were in 12 months ago when we started, the year of fintech growth was around 18% for the fourth quarter and also 18% for the full year 2025. So 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. Bonn, Hepsi, Barada, well Michal'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 businesses 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 so 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. And 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. So 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. And, of course, we're still in the early days of the plan for Hepziburada and for Atechia. 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. So, again, you see that the revenue momentum is starting to get up in real terms to much better levels at Hep C Barada. Of course, the improvements that we're making, there's an investment behind that. And the aim here now is to sort of to keep the business at around EBITDA breaking even, reinvest into improving the products and services, driving the engagement and driving the growth to create a much bigger business and with scale, with a highly engaged user base. It's what will drive the profitability of the business. So we'll keep that strategy of investing to build. a much bigger, much more valuable asset in the medium term. But you can see that the results are starting to come through. I've got a lot to continue working on. That wraps up the review. of the respective segments. So, I mean, here is just the summary for Kazakhstan, 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. So, again, just a really clear indication of the impact that higher rates how taxes and regulatory requirements and smartphones have had on the business in 2025. Including Turkey, you see that revenue increased to just over 4 trillion tenge, which is just over 8 billion US dollars of revenue for the full year. And 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, 1.1 trillion tenge, just around $2.1 billion. And we're reinvesting, we've reinvested the profit growth into Hep C varietal. just that um sorry i should have said just on this slide that net income growth there of 10 for full year 25 that compares with the revised guidance for last year of 10 to 12 percent at the lower end reflecting again the absence of recovering smartphones in the fourth quarter so looking forward to 2026 a couple of points to to make here so firstly Guidance, as usual, for GMV, TPV and TFE. However, guidance now includes Hep C, Burada and Turkia. So previously, last year's guidance was Kazakhstan only. This year's guidance is Caspi KZ. It includes Kazakhstan and Turkey. To give you the base to work off, these are the GMV, TPV, and the TFV numbers, including Hep C Barada in 2025. Clearly, the bulk of Hep C businesses is a marketplace that goes into GMV. Although there are components of payments and fintech as well. And if you want to work out those components, you can just compare these numbers with the respective segments for Kazakhstan that have just run through. You can split out what's from Kazakhstan and what's from Turkey. the growth again we've been pretty clear the growth now going forward for 26 and medium term will be driven by marketplace tmv so this around 20 is both kazakhstan marketplace and turkey a marketplace uh tpv and tfv the the the same and then at the bottom line we're at the profitability level we'll guide on adjusted ebitda here is the base to work off 1.6 trillion ten gay for 2025 And this just reflects now with Kazakhstan and Turkey as a multi-country business, different interest rate environments and cycles, different tax levels, different regulatory changes. This sort of Xs out those things is a better reflection of the sort of underlying business and just aids comparability between the different countries. So we're looking for around 5% EBITDA guidance. I mean, here just one point beyond the point about sort of reinvestment in HEPC. From talking with investors, a lot of investors talk to me about the benefit from interest rates potentially moving down this year. And 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. And I think that may be some of the sort of differences between where some sort of buy side expectations are and versus our own. So 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 material benefit for us, but we're not there today. Just on the marketplace guidance, so what we will now do, again, combining Kazakhstan and Turkey, so we'll go 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 Turkey. 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. And then e-commerce, travel, and e-commerce, the Kazakh-specific parts of marketplace will have them sort of separately. So this gives you a sense of how we'll report from Q1 and going forward. or P126. 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. So that's on that side of things. But I think that generally wraps up our comments. So, Harry, let's open the call up to Q&A, please.

certainly thank you david if you would like to ask a question please use the raise hand button on your zoom toolbar and 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 yeah good afternoon and thank you for taking my questions um i'm just going to send to mine on on hep c and turkey

The first is that you're obviously seeing more positive changes regarding the order trajectory, more same and next day delivery. But in that context, with two-thirds of orders now same or next day, is this a year where we could potentially see peak losses? Or 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? And then the final question, again, just centering more on Turkey and the broadening of potentially e-grocery offerings. I'm just wondering where you stand, particularly in light of Ubers, more activity with Gatir and Trendy or Go in the sector, and whether you see it as a necessity at some stage for Hep C's proposition. Thank you.

All right, Luke. Thanks a lot for your questions. So they're all on Turkey. Maybe I'll just pass them all on to Mikael. Peak losses, Rabobank and eGrocery in Turkey.

Yes, sure. Thank you for your questions. In terms of our strategy and investments, again, our... We will manage in Turkey a business around EBITDA breakeven which basically means that we will be investing into the consumer engagement and the consumer engagement increase comes from faster delivery, again all around the data and personalization so that consumers can find their products. You know, we're investing into technology and we're scaling technology out of 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. So all those are the investment areas. So 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. So that would be our strategy for for this year, and then we'll 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. And in terms of the investments into things like delivery and marketing, those investments are again targeting at 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 FC Burata and some of the products we plan to launch notwithstanding the full banking license and when we talk about the banking license that just gives us an opportunity to launch the wide range of the of the financial products, especially around the consumers and the merchants, both on the saving side and the lending side. 300 million, it's an investment which comes together with the capital, and we're just going through the regulatory approval, but as soon as you know, those will be taking specific steps on the products, you know, we'll be updating you in the due course. We don't really like to speak about the future products which will launch, but the one thing which we can clearly say the investment of 300 million, which we are forecasting and also actually did say about it last year that is already taken into account when we're thinking about resuming the dividends. And then the third question was

e-grocery, you know, what?

Yeah, well, this is actually pretty exciting. I think the fact that Uber is doubling down on the investment just tells you that Turkey 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. So that's on the move. We're not in a quick commerce business so we're not that's not the business which we have in in Kazakhstan either at least at this stage we're focused on 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. And even though we deliver very fast in Kazakhstan, we're not in the quick commerce business yet. But for the Turkey itself, you know, we will see 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. And 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. And at that stage, there is no – at this stage, we don't have intention to move into quick commerce.

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

Well, I mean, the investments which we're saying, if you're saying, you know, will our profitability in 2027 will be higher 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. So, That's the way we have done in Kazakhstan, and that's the way we plan to do in Turkey. And we tested all those elements during 2025, and we do see how consumers are responding, merchants are responding, and we're very excited about it. We launched weekend deliveries, which didn't exist before, and that's speeding up delivery again. And, of course, temporarily, you're running operations which can potentially process more orders. But, you know, you're starting for the specific segments of the consumers on the lower volumes and that means that you're running network not at full utilization. When you look at Caspi, you know, Caspi has what is it like almost seven times six seven times more order frequency per consumer during the year so that just gives you a huge scale on the network of the delivery and the logistics which gives you a very strong return and at this stage when we think about the turkey you know we are building up that capability so utilization rates won't be as high as 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, you know, I'm not going to give you such a forecast or guidance, but the one thing I can tell you that, you know, what we're investing into will, you know, we believe will bring the growth and engagement of consumers in the future. You know, Caspi was a When we started, you know, Caspi now is a $2 billion net income business, and at some point it was minus $60 million. So there are no miracles, you know, but 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.

Understood. Thank you very much.

Thanks. The next question today will be from the line of Gabor Kemeny with Bernstein Society General Group. Please go ahead, your line is open.

Hello, this is Gabor here from Autonomous. To continue on Turkey, 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 that hatching. So that's the first one. Second one is we have an EBIT 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, etc., that would be helpful to understand the dividend capacity of the business. And to follow up on that, can you give us a flavor of the sustainable dividend payouts going forward? Thank you.

Yeah, well, maybe I'll take the second and then pass it to Mikel to talk on Turkey. Well, I think, so we've declared 850 Kazakh tenge per share. for the final quarter of last year. And we've said that we believe that that is sustainable for the remainder of this year. So you can extrapolate that to work out the total dividend for this year, the potential total dividend for this year. So that's the first thing to say there. You asked about payout ratios. Well, that 850, 10 gave a share, was exactly the same as we paid in the final quarter just prior to HepsiBurada acquisition. So I think you can think about, again, you can see what kind of payout ratio that was in 2024, and you'll get a similar number for 2026. Clearly, We've gone within an amount we believe will be sustainable going forward. We're not looking to cut the dividend the next quarter. So that's the main point to make there. It should give people a decent level of predictability. On the other, we're not going to give you guidance on EBITDA, so 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, so as of today, No reduction in interest rates, number one. Number two, higher taxes in Kazakhstan in 2026. So this isn't just something that was a 2025 event. The bank tax only went up from the 1st of January this year. So this is something that people need to be aware of. So that will add around 200 bps to the tax rate. So that's something to build in. And then there's also the higher national bank reserve requirements, which will have an impact on the bottom line as well. So 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. And you get the upside and return to growth next year. But 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. But as I said, we're not there yet. That's probably as much as I can say.

And the question about the question about the competitive dynamics. I mean, we are, you know, we're obviously, you know, very respectfully observing the the the competitive dynamics uh of course and that's not different from uh from you know kazakhstan or or turkey you know but at the same time again our our priority is really just to focus on the very high quality of the products and services which uh which is the final product the company needs to produce for consumers to come back and for the merchants to do business with you. And that's basically where our focus is. So our focus is on the operations, on increasing the engaged customers, which eventually will increase the frequency of the orders. And 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 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 Turkey.

Fair enough. Thank you.

Thanks. As a reminder, if you would like to ask a question and you've joined the call via Zoom, please use the raised 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. 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, so it's the one where it says the guidance slide, the guidance now includes Turkey. I'm just trying to understand, is this fully, is the 25 number fully pro forma so we get the 20, yeah, yes, that one, thank you. So we get the underlying period of comparison.

Yes. So 2025 numbers, they include Hep C, Virada. The only thing – so number one, they include Hep C, Virada. Number 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, and this is more when you're just forecasting forward. Remember, we only acquired Hep C Varada at the end. We closed the deal at the end of January of last year. So it's approximately 12 months of Caspi. and 11 months of Hep C, Virada. They're the things to keep in mind there. But other than that, yes, I mean, this is the pro forma base to work from.

Got it. And then, Mikael, in your prepared remarks, you were mentioning that some of the effective you would prefer, you're focused on the frequency of use as opposed to the total number of users, so like RPAC as opposed to accounts on file. Can you elaborate on that as you migrate to Turkey with Hep C Virada? Sure.

Well, I mean, it was basically our, you know, first of all, just, you know, also to make it will be, you know, 2026 will be also, you know, almost a full year where we can now make them comparable. So that will make, I think, everybody's life easier, right? So we can actually, you know, pretty much compare consolidated business 2026 to 2025. So that's... that that would be a good, good news for everyone. Number two is because we're quite close to growth only in January of last year. Number two, in terms of the way we sort of manage again, what we're saying is that, you know, the new the customers growth was 15% in the last quarter, which is which is 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. So the things which you are right in the sense that, you know, those are the consumers which are, you know, 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 approach. on the consumer level going forward. And we know how that works in Kazakhstan and it will work exactly the same way in Turkey. The one thing which we should also keep in mind that we are also a true believer in building up different services around the consumer needs and not just you know, let's say e-commerce, for example. So, 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. And 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 Caspi 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, but the opportunity on a total level around household needs of the consumer and the business needs of the merchants, it's just massive. And we just gave you something to compare between e-commerce, pure e-commerce compatible piece, because that's where our focus is. Because we believe that if consumers are buying with you frequently and the merchants are selling with you frequently, this is the combination from which you can build, because this is the point when the merchant is making a decision to sell and the consumer is making a decision to buy. And all the other services are built around that. It's much more difficult to make a fintech financial services into marketplace and it's much easier to make marketplace into fintech financial services.

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

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

Well, does Jamie have any... Jamie said he was going to drop back into the queue, but if James has another question, we can take it. If you've got any follow-up, James.

If not, don't worry. My apologies. We do have a follow-up question from the line of Gabor Kameni also. Gabor, sorry, your line is open. Please unmute locally and proceed.

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

I would just say one thing to think about is TFV growth is linked to GMV growth in Kazakhstan. And if you think about where the GMV growth is coming from, it's generally coming from lower ticket items. So the extreme example of that is grocery, which is just less credit sensitive. So 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. So 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.

Perfect. Thank you.

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

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 before.

Okay, so it's take rate positive. So because if we look, sorry, just flicking the slides, e-commerce, well, let's do the end of the year. E-commerce take rate finished last year at 12.7%, so just short of 13%. So e-commerce is faster growing, and it's higher take rate versus e-commerce, which... is um well just uh uh just around sort of um under 10 percent uh take rate so that's one thing and why because e-commerce well lends itself to delivery so that's a clear value-added service that's not relevant for m-commerce and because you're going to the physical location and at least to date the advertising products are all around e-commerce. So, again, the value-added services are all linked to e-commerce. That's not to say you can't have value-added services for e-commerce as well. And actually, e-commerce take rate has consistently increased. But if you think about the two big ones that we've talked about, delivery and advertising, they are really relevant to e-commerce. So... It's actually a positive dynamic from a take rate and revenue perspective.

Got it. I would like to make one quick comment on this. So even though it's a positive dynamic from the take rate and revenue perspective, e-commerce is... more operations heavy than MCOM, right? So, you know, let's say delivery. And we are investing into delivery. We're monetizing the delivery on the merchant side, but the buildup of delivery, especially on the lower ticket item side, you know, we're still investing. So 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. but profitability of e-commerce is less than e-commerce, just because of the operational side of working on the delivery. On the long term, of course, that will be something different, but immediate effect when you move e-commerce, like if you move the merchant's GMV, from e-commerce, which is in-store experience, to e-commerce, and you add on top of it the operational cost related to the delivery investments, the take rate and the delivery take rate increases revenue, but the delivery is decreasing the profitability. So the margin of the e-commerce at that immediate migration will be less. But the take rate and the future potential is much bigger.

Got it. Thank you.

Thanks. Thank you. And we have a follow-up from the line of Luke Holbrook with Morgan Stanley. Please go ahead. Your line is open.

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

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

Thank you. Thank you, and that will conclude Q&A. I'd like to leave the floor to the CASB team for any closing remarks.

all right so thanks harry for the call uh thank you all for joining please get in touch with any uh questions we are in the us um uh this this this week keep in touch having to take questions offline thanks everyone for your time and speak to you soon thanks a lot bye-bye this concludes today's webinar thank you all for joining you may now disconnect from the call