Joint Stock Company Kaspi.kz

Thanks, Saby. Good morning. Good afternoon, everyone. I'm David Ferguson from Kaspi. Welcome to our second quarter and first half of 2026 financial results call. With me is Kaspi's CEO and co-founder, Mikheil Lomtadze, and our deputy CEOs, Tengiz Mosidze and Yuri Didenko. As usual, Mikheil will take you through the financial and strategic highlights from the second quarter. I'll talk through the broader financials, and then we'll open the call up to Q&A. So on that note, over to you, Mikheil.

Yeah, thank you, David. Thank you for everyone joining this call. So our financial performance for the second quarter is strong. The revenue went up 15%, adjusted it up 5%. Considering the performance and the strong financial position of the company with the We're the board is recommending to increase the dividends by 18% compared to the first Q dividend. Our core businesses continue to perform the marketplace GNV plus 15% driven by the e-commerce, which is our strategic, most important focus, both in Kazakhstan and Turkey. It's 28% growth on the constant currency basis. TPV, our major business in the payments, still continues to grow very nicely, around 13% growth quarter-on-quarter, and average net low portfolio continues to grow strongly around 18% year-over-year. So e-commerce is the area which we believe and for us that's the final destination for our consumers and merchants is where we can add the most of the value in terms of enabling the purchases and connecting merchants and sellers. So e-commerce GFV has grown nicely around 28% on the constant currency basis year over year and the take rate continues to expand. The main driver of the take rate is the value-added services which we continue scaling and that's about delivery and advertising. What is important is how engaged the consumers remain and how frequently they transact with us so the number of purchases per consumer continue to grow. In both Turkey and Kazakhstan and the e-com purchases grew 33% which is a very nice growth and we delivered in excess of 76 million purchases in the second quarter. About 20% of our GMV is a 1P and that is 1P, mainly the e-grocery in Kazakhstan, which is the fastest growing e-commerce vertical for us and the 1P in Turkey, which is electronics and historically has been a category for 1P in Turkey. and we are about 53% of our GMV in Kazakhstan and 47% in Turkey and again the both for us the important priority is just continue building up our e-commerce capabilities and Making sure that the delivery quality and the speed is improving, the value added services are monetized and we just continue working on converting the traffic and the properties that we have into the purchases from our consumers, so connecting merchants and consumers to each other successfully. E-commerce has been growing the take rate with the value-added services. As you can see, the value-added services grew 49% on a constant currency growth and 27% real growth, growing faster on the constant currency basis than e-commerce revenue. Again, just to reinforce the fact that we are extremely responsible in terms of growing those additional sort of services and making sure that we deliver the value for the merchants and also we make sure that our services are highly reliable on the delivery side and highly relevant on the advertising side if we sort of promote something to our consumers that actually something they really need and we deliver value to both merchants and the consumers through this experience. We're also approaching this new stage of our company's development. As you know, the Kaspi has done sort of reinventions of itself or transformations multiple times during this history. We've started from financial services, then we expanded into the ecosystem of everyday services, and then we united all these everyday services in a single super app. And now we are approaching the stage when we want to develop the personal AI assistant which will help with everyday tasks to our consumers and to our merchants. And in the first of July we launched Kasper, which is the assistant for our consumers. We started with the one task now, which is actually enabling shopping. So Kaspi, Kasper, you know, actually is built on our, you know, technology and is built on our data and built on our consumer experience and it's in a single mobile application. So it's actually integrated in our super app. So Kasper, we call him Kasper, our new personal assistant, and he can actually understand your needs. he can recommend the best products he can engage in a conversation with you and ask the clarifying questions compare different products give you the reviews and so on and so forth so actually and it's enabled in a voice and text so you can actually either type your task or you can you can record it by voice and then Kasper helps you to find the right product for you you know among 20 million products in in our Kazakhstan e-commerce platform he can follow up with the smart questions and then he can lead you to the right product for you which you can after you know complete in our e-commerce So we have launched it in the first of July. We have been scaling during the month. So now it's available to everyone, to all our consumers in Kazakhstan. So has been very rapid sort of scaling. It's still early to give you any sort of detailed performance metrics, but I think the metrics we already have are quite encouraging. So one out of five, customers whom Kasper was available actually used it response rate is around three seconds so this just tells you that all the sort of investments we have done both in the in the compute but also in optimizing the speed you know have played off really nicely so you as a consumer get response really quickly which is extremely important for any AI model and assistant The consumers are looking for the products across pretty much the entire catalog. So 22 product categories have been covered so far, which is pretty much our entire catalog, which just tells you that the customer is performing the tasks across a wide range of the products that we have. In 10 conversations, so 80% of conversations actually end up with a product recommendation. and 60% of those take customers through the specific product. So if you are looking for a vacuum cleaner, he will just guide you through the process, understand your needs, but then you basically have your product in the shopping cart. And what is important is obviously the speed. So the customer is 50% faster than just a regular product discovery and 50% faster adding to favorites and 30% faster to the basket. So again, what we believe is that this sort of technology or this customer experience is leapfrogging all the traditional way of you to finding You are analyzing the information on the screen, you are tapping buttons and so on and so forth. So you are spending much more time going through multiple stages of the product discovery and understanding the product that you need yourself. So Kasper is actually speeding up this process. So Kasper is helping to find the products faster and he really is working on the task with you. rather than you sort of typing in the search box name of the product. So highly relevant, highly reliable, faster. And those are the most important metrics for us at the moment. We're not looking for... I mean, our goal is to build the trusted assistant. So assistant is equal trust, which means that if you don't trust your assistant, you can easily fire him. So we treat Kasper like your personal assistant and our... Our priority now is to build the trust, which means highly reliable, highly relevant service that actually helps you to buy a product which is exactly the product that you need. So this is our priority as we're scaling Kaspi.kz, so it's just a one month, but those are really very encouraging metrics that we observe with the Kaspi.kz interaction of consumers with Kaspi.kz. This is just an example of the queries which basically tell you how different it is to interact with a customer and actually the traditional search or traditional way to find the products. You usually type the product that you have in mind. and then you know traditional e-commerce or marketplace way to offer your product is you are trying to give you a selection of the products which you then are reading through familiarizing yourself with the ratings but also narrowing down through filters and and other navigation tools which have been developed you know over time so when customers are interacting with the customer now they just give him a task you know i want to give my Thank you for watching! and the type of tasks which Kaspi is getting and able to solve is really remarkable. So that we're true sort of believers in this technology which we have been developing already for quite some time behind the scenes and getting ready to scale it. So it's really remarkable how consumers interact, how Kaspi really helps and those examples which you see here, they actually ended up in a real order. but it's it's really important when you when when you sort of think how customers do mission shopping you know how they're focused on delivery when give me the give me the items which can be delivered within three hours uh or or or or saw me solve this type of problem which i have like after double-sided tape uh adhesive was left on the plastic window you know what product will help to remove it I mean, this is not the regular search. This is you asking someone to help with an advice. So all those things are extremely encouraging for us. We're scaling Kasper as we speak in our e-commerce platform. And again, our mission is to develop a personal assistant for everyday tasks. And e-commerce and shopping is just the one task we're now focused on. but in the future we believe that Kasper can help with all other tasks across all our services in our super app. And I just here would like to give you a bit of a demo, so some of you that actually watch the screen, I think it would be pretty cool. So David, can we go to the demo? So Kasper actually has a dedicated space in our e-commerce. So you can basically type the task which you want Kasper to perform. So for example, I need the vacuum cleaner. Then Kasper does basic analysis and he starts asking you clarifying questions. For example, what type of vacuum cleaner suits you best? But then he goes into the requirements. So one of the things which is important for any vacuum cleaner is size of your apartment. So he will ask you to clarify size of your apartment. Then he will ask you the budget. What's your budget within which you want to buy the vacuum cleaner? And then in basically a couple of seconds, he pulls together for you different vacuum cleaners which are available in Kaspi Shop. They are described in a simple language. He gives you a list of the vacuum cleaners which are acceptable for you and then you can ask him to compare specific models. And then he runs comparison. So on one screen you can see the main characteristics and you can compare the products. You can actually use your voice, so you can give him tasks with your voice, and this task can be actually something which is really cool. For example, in terms of added value, like which of these vacuum cleaners is best suited for a person with allergies? And he gives you a selection of the products which fit this criteria and explains why. If you see some technical term, then you can ask him. For example, he's telling you that the HEPA filter is important, and you can ask him what is HEPA filter. and he can tell you in a simple language what is HEPA filter and then you you know select the vacuum cleaner you want you push the button and that's it you can continue through the checkout and actually buying the product all the charts obviously stored you know personalized and things like that you can go back and forth So it's really very interesting and it's important development for us. As I've said, we are starting from the shopping experience because that's where we can add most of the value. But over time we plan Kaspi.kz to expand in all our services in our super apps and also the service is highly scalable and when it's built on the high quality data can become highly relevant. and, you know, obviously the Kasper is highly scalable to all our other markets and the businesses. So, you know, we'll be thinking about scaling him to Turkey as well. Another, just a quick update, so we have, you know, secured the banking license, so we've basically completed the acquisition of Rabobank. and now we're building up our fintech capabilities so you know we will be investing around 300 million dollars as we initially said in order to just for the capital We're scaling fintech products now and we're building up the capabilities to roll them out next year. We expect no material impact this year, but obviously the combination of I mean, this is fintech and financial sources is where we started. So we're true believers that you can deliver the most value to your consumers and to your merchants when you actually combine capabilities of the fintech and e-commerce together. So that's something which is important strategically for us. This is something which we're extremely experienced and successful and we'll be rolling them out and the FinTech products, both for consumers and merchants. We're not sitting idle, obviously. We have been working on launching the new shopping loan based on the consumer finance license, which we already have in Turkey. We've launched the new shopping loan on Hepsi Burata. Basically, the flow is extremely similar to what you actually have in Kaspi itself. So you can actually select the products and based on the product you can select the monthly payment which fits best of your needs and then you can proceed seamlessly through the checkout. So this product we're piloting and the new shopping loan is already 0.54% of the GV in June. Again, we have been preparing ourselves for quite some time. In any financial services Thank you very much. and also the you know collection process like the entire sort of loan journey we have been implementing and rolling out now so now we're comfortable with all the metrics and we're piloting the new cash loan basically on the HEP Securata platform and again we're strong believers that The products which will be focused on and many more. and the consumer finance products and obviously savings accounts and so on and so forth. So you can expect us that next year we'll be launching those products in Turkey and banking license allows us to do that and technology we're rolling out in Turkey encourages and risk management basically all those things coming together very nicely. So we're very optimistic about launching financial services and fintech products in Turkey.

All right, so thank you, Mikheil. So just to run through the financials, starting firstly with Marketplace. So Marketplace, constant currency GMV growth up 15% year on year. So as you saw, that's driven by e-commerce, GMV growth up 28%, with e-commerce and travel broadly flat, consistent with trends in the first quarter. Take rate increase 110 bps to 12.1%, again driven by e-commerce and specifically advertising and delivery. The revenue and EBITDA growth of 11.9% That is reported growth, not constant currency. So impacted by 21% depreciation of the Turkish Lira versus the Kazakh Tenge. That's the first thing to keep in mind. And the second thing to keep in mind, 9% EBITDA growth, that differential versus revenue growth of that margin pressure, that's sort of the least pronounced we've seen actually for the last couple of years and despite the investments that we're making into Hep C Barada. Moving on to payments, TPVD growth up 13%. That's a slight moderation reflecting a slight moderation in inflation. And as inflation continues to come down, TPVD growth will reduce accordingly. The take rate declines by 7 bps. So again, that is something similar to what we saw in the first quarter. Long run trend though, driven by changes in product mix in favour of Kaspi Pay. The result is reported revenue growth up 5% and EBITDA down 1%. The pressure on EBITDA is two things. Number one, it's the investment in Kaspi Alicant, so that's pay by palm. Thank you very much. and then on to FinTech. Firstly, we talked on our last call about strategically focusing on loans that generate more revenue. These are longer duration loans. So what that really means is within the loan portfolio, the mix is shifting. BNPL, short duration, low revenue generating loan is getting smaller in the mix. Other loans, general purpose, merchant financing are growing in share. with the mix. So you're seeing decent loan portfolio growth up 18%, the mix changing in favor of higher revenue generating loans. Pricing is stable, and so the result is faster revenue growth, revenue growth above net loan portfolio growth and revenue growth up 23% year on year. So that's the first point. The second point would be that you see the cost of funding remains an issue, up 150 bps, Thank you very much. It applies to our three-month duration product, which is around 30% of deposits. We lowered the rate from 20% to 19%. So clearly this isn't reflected in Q2 numbers. Some of it will be reflected in Q3. It's a three-month duration product, so it'll be reflected to a much greater extent in the fourth quarter and then fully as we go into next year. The bigger point to keep in mind is this isn't just about one rate cut. For the last several years on this call, we've been talking about how high rates have been a pressure on the bottom line. If inflation continues to fall in Kazakhstan, rates will continue to come down. You can see that growth in our deposits is strong, up 21%. So naturally, we will be able to push those rate cuts through, and that will be very beneficial at the bottom line for us over actually not just one quarter, but potentially over the next couple of years. In the second quarter EBITDA up 6% though versus the revenue growth of 23%. On the risk side of things, cost of risk 0.7%. That's up slightly versus 0.6% in the second quarter of last year, but flat quarter on quarter. We would expect cost of risk to moderate slightly in the second half of the year. The MPL ratio, MPL coverage trends consistent with what we've talked about previously as the portfolio mix shifts particularly towards merchant financing and to a lesser extent the car loan. These are products with a higher and many others. So to sort of wrap everything up for the second quarter, reported revenue up 15% driven by e-commerce and fintech revenue growth. Adjusted EBITDA up 5%, impacted by? Thank you very much. have been introduced in two phases. The first phase was last year. The second kick up was in the second quarter of this year. So you see that pressuring net income. And as we go into next year, that is in the base as well. On just another way of cutting things up, I think this just very clearly illustrates where the pressure on profitability is coming from. It's coming from interest rates. We've always said that that is cyclical. It now looks for the start of the cycle, that going from being a negative, from being a headwind to being a tailwind. If you think about the investments that we're making into Hep C and these things, tech and product spend, sales and marketing, they're not just Turkey and Kazakhstan as well. But actually, you can see that in the context of Kaspi.kz, its earnings generation, they're relatively small. That's whether you cut it from an earnings perspective, or if you look at it from a dividend perspective, the cash that we're able to return, despite these factors and despite these investments. On the guidance, guidance reiterated. GMV up 17% as of the first half of the year. Guidance for the full year remains around 20%. We would expect faster trends in the second half versus the second quarter, driven by the timing of promotional events and other product initiatives. TPV growth up 13% versus the guidance of around 15%. There will be, assuming inflation moderates, that will be a downward pressure, although Integration with Apple Pay should see us benefit from higher overseas volumes, particularly over the summer period. And as we talked about, we've moved from TFV guidance to average net loan portfolio guidance, 20% in the first half of the year, guiding for 15% for the full year. EBITDA is trending up 7% at this stage in the year versus the guidance of around 15%. So overall, we're comfortably on track for where we expected to be at this point in the year. So on that note, Sami, let's open the call up please to Q&A.