Joint Stock Company Kaspi.kz (KSPI) Earnings

Management highlights

- **Call Format Change**: First and third quarter calls will be streamlined financial/guidance updates, while full-year and interim results calls will include detailed strategy and product updates to improve efficiency for investors. - **Overall Business Performance**: The company started 2026 with strong growth, particularly in e-commerce, and remains highly profitable. The board recommended a dividend of 850 Tenge per share, a 64% payout ratio consistent with prior guidance, matching the Q4 2025 dividend level. - **Strategic Focus**: The company is building a larger, diversified business, leveraging its leading super app position in Kazakhstan while scaling growth in Turkey. E-commerce is a core strategic priority, focused on owning the front-end consumer/merchant purchase decision process, supported by AI tools and value-added services (advertising, delivery). - **Alignment with Shareholders**: CEO Mikhail Lomtadze made a personal investment alongside Tencent and other long-term shareholders, demonstrating alignment with investor interests. - **Credit Risk Profile**: First and second payment default rates are extremely low (0.9% and 0.4% respectively) and broadly stable. Portfolio delinquency rate is 2.2% also stable, and cost of risk is broadly flat, up 10 bps YoY to 0.7%. Changes in NPL and coverage ratios are driven by a shift toward lower-risk secured products (not underlying credit quality deterioration). - **Hepsi Barada (Turkey) Integration**: Investments in service quality (delivery speed, availability, technology, data infrastructure, risk management) are delivering results, with growing consumer engagement. The business targets at least EBITDA break-even for 2026, with investments focused on closing the engagement gap with Kazakhstan (7 purchases per consumer annually in Turkey vs. 27 in Kazakhstan).

Guidance

- Full-year total marketplace GMV growth guidance of ~20% is unchanged, and the company remains on track to meet this target. - Full-year TPV growth guidance of ~15% is unchanged, and the company remains on track to meet this target. - Full-year TFV growth guidance of ~5% is maintained; current TFV is trending below target, but the company prioritizes faster revenue growth (driven by loan portfolio expansion) over hitting origination volume targets, and remains on track for the full-year ~5% figure. - Full-year adjusted EBITDA growth guidance is unchanged. Q1 2026 EBITDA growth came in above the full-year implied trend, but slower growth is expected in subsequent quarters due to the timing of planned investments, bringing full-year results in line with existing guidance. - Hepsi Barada (Turkey) guidance of at least full-year 2026 EBITDA break-even and free cash flow positivity is maintained.

Segment performance

1. **Marketplace (including e-commerce)**: Total marketplace GMV grew 19% YoY (constant currency pro forma). E-commerce GMV, which accounts for 60% of total marketplace GMV, grew 41% YoY, with total marketplace revenue up 49% YoY and adjusted EBITDA up 12% YoY. Within e-commerce: 43% YoY transaction growth, quarterly purchases per consumer increased from 10.4 to 15 (44% YoY growth), take rate expanded 90 bps YoY to 15.8%, and value-added services (advertising/delivery) revenue grew 73% YoY outpacing total e-commerce revenue growth of 58% YoY. Half of e-commerce GMV comes from Kazakhstan and half from Turkey, with 3P sales making up the majority of marketplace GMV. 2. **Payments**: Total payment volume (TPV) grew 14% YoY, in line with full-year guidance of ~15%. Revenue grew 7% YoY, with adjusted EBITDA flat YoY. Interest revenue, which makes up ~25% of total payments revenue and is excluded from EBITDA, grew 26% YoY. Take rate compression due to faster growth of lower-take-rate products (Caspi QR and Caspi B2B payments) drove slower revenue growth. 3. **FinTech**: Total financing volume (TFV) declined 2% YoY, while average net loan portfolio grew 23% YoY as the company prioritizes longer-duration loans. Portfolio duration increased from 7.9 months to 9.3 months, with BNPL (short-duration small-ticket) shrinking as a share of the portfolio, and merchant financing and general purpose loans (longer-duration) growing. Revenue grew 25% YoY and adjusted EBITDA grew 12% YoY, with growth pressured by 220 bps higher funding costs driven by 2025 Kazakh interest rate increases. 4. **Consolidated**: Total consolidated revenue grew 31% YoY, adjusted EBITDA grew 9% YoY, and net income was flat (-1% YoY).

Risks & headwinds

- Higher funding costs from 2025 interest rate increases in Kazakhstan continue to pressure FinTech EBITDA growth, though rates are believed to have peaked. - The Rabobank acquisition is delayed pending regulatory approval, with closing expected by summer 2026, and is largely out of the company's control. - Geopolitical instability in the Middle East creates potential for minor supply chain disruption, though management notes no material disruption to date and suggests the broader macro impact for Kazakhstan is currently more positive than negative. - Aggressive growth of consumer lending in Turkey without robust risk management could create credit losses, so the company is deliberately slowing origination while integrating its proprietary risk management systems.

Analyst Q&A

• Q: What 2026 loss levels should be assumed for Turkey, what drove the Q1 marketplace take rate increase, and what is the sensitivity of net income to falling Kazakh interest rates? /

  A: Management reaffirms the existing guidance of at least full-year EBITDA break-even for Turkey, and declines to give specific net income forecasts, noting the primary near-term focus is growing consumer engagement. The Q1 take rate increase is not driven by seasonality, but by the multi-year trend of fast growth in higher-margin value-added services, and investors should extrapolate this trend for forward modeling. No interest rate cuts are priced into 2026 guidance; the existing sensitivity analysis from the 2025 full-year results (a 100-150 bps change in funding costs impacts Kazakh net income growth by ~4%) remains a good proxy.

• Q: What strategic synergies are expected from Tencent's minority stake investment, why is EBITDA guidance unchanged despite Q1 coming in above target, and has smartphone supply chain disruption from the Middle East conflict normalized? /

  A: Management notes Tencent is a pioneer of the super app model, and the relationship benefits Caspi via knowledge sharing to support ongoing product innovation, with no specific strategic initiatives to announce currently. Q1 is the smallest quarter of the year, and the timing of planned investments (especially in Turkey) will impact EBITDA in later quarters, so full-year guidance remains appropriate. There is no material supply chain disruption from the Middle East conflict to date.

• Q: What progress has been made improving Hepsi Barada service quality, and what is the long-term engagement target for Turkey? /

  A: Management has been focused on closing the service quality gap with Caspi's Kazakh operations, specifically improving delivery speed/availability, consumer credit access, and technology/data infrastructure to support better personalization and decision-making. These investments have driven strong results, with current annual purchase frequency at ~7 per consumer in Turkey vs. ~27 in Kazakhstan, which is the long-term benchmark for Turkey. 2026 is an investment year focused on growing engagement, while the company maintains overall profitability and dividend payments.

• Q: Why has payments take rate declined, is there a floor to the decline, and is Tencent's stake purely passive? /

  A: The consistent multi-year take rate decline is purely a mechanical mix shift, driven by faster growth of lower-take-rate products (Caspi QR at 0.95% and Caspi B2B at ~0.5%), with no impact from regulation or the national payment system. Take rate cannot fall below 0.95%, so the decline is near a floor. Management states Tencent's stake is primarily a passive financial investment, and declines to speculate on future increases to Tencent's stake.