Kaspi.kz Stock

[Audio Gap] in Tokyo, it's 28% growth on the constant currency basis. Our major business in the payment still continues to grow very nicely, around 13% growth quarter-quarter and average net log portfolio continues to grow strongly around 18% year-over-year.

So e-commerce is the area which we believe is extremely important 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 GMV 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 would continue scaling, and that's about delivered in advertising. What is important is how engaged the consumers remain and how frequently they transact with us.

So the number of purchases for consumer continued to grow in both Turkey and Kazakhstan and the e-comm 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 and that is 1P mainly the gross rate 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, both for us, the important priorities 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. So as you can see, the value-added services grew 49% on a constant currency growth and 27% wheel 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 is 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 the -- of our company's development.

As you know, the CASB has done sort of reinvention of itself or transformations multiple times during this history. We have 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 Casper, which is the the assistant for our consumers. We started with the one task now, which is actually enabling shopping. So Casper actually is built on our technology and is built on our data and build on our consumer experience, and it's in a single mobile application.

So it's actually integrated in our super -- so Casper, we coin, a Casper or the new personal assistant and he can actually understand your needs. He can recommend the best products, we can engage in a conversation with you and ask to clarify questions, compare different products, give you the reviews and so on and so forth.

So actually, it's enabled in voice and tax, so you can actually type your task or you can -- you can record it by voice and then customer helps you to find the right product for you among 20 million in products in our Kazakhstani commerce platform, he can follow up with the smaller questions, and then he can lead you to the right product for you, which you can after 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 it 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 1 out of 5 customers whom customer was available actually used it.

The response rate is around seconds. So this tells you that all the sort of investments we have done both in the compute, but also in optimizing the speed had played off really nicely.

So you as a consumer get response really quickly, which is extremely important for any AI model at assistant, the consumers are looking for the products across pretty much the entire catalog. So 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 wide range of the products that we have, 8 in 10 conversations, so 80% of conversations actually end up with a product recommendation and 60% of those take customer through the specific product.

So if you are looking for a vacuum kitclearer, 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 with the Casper is 50% faster than just a regular product discovery and 50% faster adding to fibroids and 30% faster to the basket.

So again, what we believe is that this sort of technology or this customer experience is lipfogging all the traditional way you to finding the products, you're scrolling, you are reading, you were analyzing the information on the screen, you are tapping buttons and so on and so forth. So you're spending much more time going through multiple stages of the product discovery and understanding the product that you need yourself.

So Casper is actually speeding up this process. So Casper is helping to find the products faster, and he's 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 a 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 Casper like your personal assistant and our priority now is to build the trust, which means it's 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 customers. So it's just month, but those are really very encouraging metrics that we observe with the customer interaction of consumers with customer.

This is just an example of the queries, which basically tell you how different it is, is in track term with the customer and actually the traditional search, more traditional way to find the products you usually type the product that you have in mind.

And then 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 females yourself with the ratings, but also a rate down through filters and other navigation tools, which have been developed over time.

So when customers are interacting with the customer now, they just give them a task. I want to give my a gift for her second birthday or I want to have like after shape for consistency in fact that has a strong smell or I want a sprayer that I can set up next to the house.

So it creates a cool miss. I mean, this type of interaction and the type of tasks which Casper is getting and able to solve is really remarkable. So we're truly be true sort of delivers 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 Casper really helps. And those examples, which you see here, they actually ended up in a real order but it's really important when you sort of think how customers do mission shopping, how they're focused on delivery, give me the items which can be delivered within 3 hours or solve this type of problem, which I have like after double-sided tape that has it was left on the plastic window, 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 tailings are extremely encouraging for us. We're scaling customer 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 1 task we're now focused on.

But in the future, we believe that Casper can help with all other tasks across all our services in our Super. I just would like to give you a bit of a demo. So the -- some of you that actually watch the screening, I think it would be pretty cool. So David, can we go to the demo -- so Gaspar actually has a dedicated space in our e-commerce.

So you can basically type the task which you want aspire to be. So for example, I need a vacuum cleaner? The users basic analysis, and he starts asking good clarifying questions. For example, what type of bacon cleaners use you best. -- but then he goes into the requirements.

So one of the things which is important for any vacuum cleaner is size of the apartment. So he will ask you to clarify size of your partner -- the bacon -- and then in basically a couple of seconds, he pulled together for you different vacuum cleaners, which are available in.

They are described in a simple language. I can get you a list of the bacon cleaners, which are acceptable for you and then you can ask him to compare specific models. And then give us comparison.

So on one screen, you can see the main characteristics and you can compare the products.

You can actually use your voice. So if can ask with your voice at this task can be actually something which is in the core, for example, in terms of added value, like which of these vacuum cleaners is best suited for a person with.

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 HEPA filter is important, and you can ask him what is water. And he can tell you in a simple language what is hyperfiltrand then you select the vaccine, you want, you push the button, and that's it.

You can continue through the checkout and actually buy the product, all the charts, obviously, the store, personalized and things like that, you could go back and forth.

So it's really it's a important development for us. As I have said, we are starting from the shopping experience because that's where we can add most of the value.

But over time, we plan customer 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 obviously, the customer is highly scalable to all our other markets and the businesses. So we'll be thinking about scaling him to Turkey as well.

Another just a quick update. So we have secured the banking license. So we've basically completed the acquisition of Rubber bank. And now we're building up our fintech capabilities, so we will be investing around $300 million as we initially said in order to just for the capital of the bank. We're scaling fintech products now, and we're building up the capabilities to roll them out next year and we expect no material impact this year.

But obviously, the sort of the combination of -- I mean this is feedback and financial services 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 the e-commerce together.

So that's something which is important strategically for us. This is something which we're extremely experienced is successful and we will be rolling them out sort of next year, the fintech products, both for consumers and merchants.

We are not sitting idle, obviously. So we have been working on launching the new shopping loan based on the consumer finance license, which we already have in Turkey.

And we have launched the new shopping loan on sort basically flow is extremely similar to what you actually have in Cascade itself. So you can actually silent the product based on the product, you can select the monthly payment, which feeds best of your needs and then you can proceed seamlessly through the checkout.

So this product is -- we are piloting the new shopping loan is already 0.54% of the GMV in June.

Again, we have been preparing ourselves for quite some time in any financial services, originated loan or financing customer is step #1.

So actually, get being paid back, it's more important than originating the loan. So for all these months, we have been building up our risk management capabilities. You're rolling out risk management, which consists of the approval, managing the consumer and also the collection process, like the entire sort of loan journey.

We have been implementing and rolling out now. So now we're with all the metrics, and we're piloting the new cash loan basically on the Hepsiburata platform.

And again, we're strong believers that combining this around the consumers and merchants, shopping experience and the fintech experience and the financial products will give us a more -- at a lot of value for consumers and merchants and therefore, a lot of that for the company.

The products which we'll be focused on to roll out as we build the foundation for them will be products around shopping, around merchants and you know all the products that Gaspihas, right? So we have shopping loan, BNP, Merchant Finance and the consumer finance product. So and obviously, savings accounts and so on and so forth.

So we 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, encourage risk management, basically, all those things coming together very nicely. So we're very optimistic about launching financial services and fintech products in Tokyo.

All right. So thank you, Michael. So just to run through the financials. Starting, firstly, with marketplace, so marketplace constant current GMV growth up 15% year-on-year. So as you saw, that's driven by less GMV growth, up 28% with commerce and travel broadly flat, consistent with trends in the first quarter.

Take rates increased 120 -- sorry, 110 bps to 12.1%, again, driven by e-commerce and specifically advertising and delivery.

The revenue and EBITDA growth of 11% and 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 lease per announced we've seen actually for the last couple of years and despite the investments that we're making into hep C Parada.

Moving on to payments. TPV growth was 13%. That's a slight moderation, reflecting a slight moderation in inflation and as inflation continues to come down. TPV 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 favor of CASB Pay.

The result is reported revenue growth of up 5% and EBITDA down 1%, the pressure on EBITDA is 2 things. Number one, it's the investment in CAS Alicon.

So that's pay by Par. It's tech and product development spend. And number two, you should keep in mind that adjusted EBITDA exclude the interest revenue, the payments generate.

So that interest revenue was up 15% year-on-year. That's not reflected in EBITDA, but is reflected in net income is net income accretive.

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, short duration, low revenue-generating loan is getting smaller in the mix or the loans, general purpose match and financing of growing in share. [Audio Gap] 18%, the mix changing in favor of higher revenue generating loans.

Pricing is stable and so the result is faster revenue growth -- revenue growth of both 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 that cost of funding remains an issue, up 150 bps year-on-year in the second quarter. However, as some of you will have seen, Kazakhstan lowered its national Bankrate at the end of June and we lowered on 1 of our products, our deposit rate last week, effective last Wednesday, I believe.

So that was our fast rate cut for over 2 years. It applies to our 3-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 3-month duration product.

So it will be reflected to a much greater extent in the fourth quarter and then fully as we go into next year. But the bigger point to keep in mind is this isn't just about 1 rate cut for the last several years on this call, we'd be 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'll be able to push those rate cuts through. And that will be very beneficial at the bottom line for us over actually not just 1 quarter, but potentially over the next couple of years.

In the second quarter, EBITDA up 6% versus the revenue growth of 23%. On the risk side of things, cost of risk, 0.7% and 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 NPL ratio, NPL 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 carload, these are products with a higher level of -- a higher probability of collection.

Therefore, we can keep those NPLs on the balance sheet for longer, a higher probability of collection means they require less coverage.

So this remains just a function of changing mix. If you look at the sort of the real-time credit metrics, you see whether it be first, second payment default on the left, or delinquency rates on the right, they remain low and stable.

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 higher rates and investments into Turkey and net income flat, again, reflecting those same pressures on EBITDA.

And you should also keep in mind that the regulatory changes that were announced last year, particularly higher national bank reserve requirements have been introduced in 2 phases.

The first phase was last year. The second kickup 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 the -- 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 Heps and these things, tech and product spend, sales and marketing, the not just Tarkett Kazakhstan as well.

But actually, you can see that in the context of CASB that earnings generation, they're relatively small. That's whether you cut it from an earnings perspective or if you look at 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%, the 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.

As we talked about, we've moved from TF guidance to average net loan portfolio guidance 20% in the first half of the year guiding for 15%. But the full year.

EBITDA is trending up 7% at this stage in the year versus the guidance of around 5%. So overall, we're comfortably on track for where we expected to be at this point in the year.

So on that note, so let's open the call up, please to Q&A.

[Operator Instructions] Our first question comes from Gabe.

Can I first ask about the fintech business, please? Indeed, a decline in your deposit pricing for the first time.

I think you can't how deposit rates around 2 months after the Central Bank policy rate cut. Is this dynamics -- is this reflective of how you expect your pricing to evolve in light of the Central Bank policy rates?

And can you share your thoughts on how deposit your deposit pricing may evolve in the next few quarters? And my other question would be -- just on a combination of this very quick deposit growth in the quarter, coupled with a drop in your deposit pricing.

If you can elaborate a bit further on these trends, please, which clearly left you in a better funding position than you have been for some time.

And my final question would be on the marketplace dynamics. It looks like Kazakhstan was growing more quickly this time than Turkey.

Can you shed some light on how these respective markets are evolving?

Mike, do you want to take actually all of those questions?

Yes, sure. So thank you for your questions. In terms of the deposit rates, I mean, in general, we're really focused on always on acquiring the sort of the customers and delivering them the best product experience.

So the previous actions, which we really had resulted in a very strong customer and deposit inflow. In terms of our strategy for the pricing in the future. I mean, our general strategy really will remain the same.

So we just look at the dynamics. And if we believe that we will get -- if there is a relationship really strong, considering the market dynamics and the rates on the market, relationship between the way that we price our products and how we acquire customers.

And if we believe that there is a room to reduce the interest rate because this dynamics on the changing the rates on the market allow us to do, then we will do it.

So there is no magical formula basically behind it. And our decision to reduce the rate was driven by basically these dynamics.

So what you could expect is this product specific product, which is the 3-month saving account, around 30% of our deposit base, so you expect the impact -- positive impact financially in the -- by the end of the year as deposits churn, the duration is, again, of the positive.

So all the deposits will be repriced when the duration is basically in 3 months.

In terms of the marketplace dynamics, I mean, again, we have a bit different strategies on the market. So our e-commerce is a priority. But in Kazakhstan, what we're doing is we're just developing consumer experience based on the specific verticals.

And that's what gives us the sort of the successful growth on the e-commerce side. We are also growing extremely fast on the eco-service side, so which is also helping both with the consumer engagement but also profitability on the marketplace, but most importantly, the growth. So in Kazakhstan, our strategy is just we're working vertical by vertical.

Again, the electronics has not really recovered just because of all the price changes and the conflict of the Middle East and things like that.

Supply chain is still challenging GPU prices, chip prices going up. So you still see the growth because all other verticals are growing very nicely, everything around closing or car spare parts or home items and things like that.

So we're really happy with the way we're proceeding in Kazakhstan, and the strategy there is cortical vertical -- and in Turkey, our strategy, considering that we're just starting to actually launch the product for the consumers, especially on the fintech side.

For us, it's extremely important to work on foundational things, even though growth has been there, our focus has not been on the growth, right? Our focus really has been on the on the consumers, so consumer experience, Net Promoter Score, merchant experience, delivery speed, which we have improved dramatically during the last 12 months year-over-year like consumer frequency of transactions increased 15% in Turkey.

As those things basically the strategy there to put it in simple words, it's much better to have nearly customers which do love you rather than 3 million or 5 million customers, which have just occasional shopping with you.

And the reason why we want this 1 mile customer should love with us is because next products, which we will launch that will use those products if they are in love with our existing consumer experience.

So in Turkey, the growth has not been the goal. We have grown nicely. Our goal is to make customers even happier, and the merchants even happier, and we're building the foundation for the phase of the growth coming next year, and we just want to drive the adoption of the new products, which we'll launch next year, especially on the fintech side.

And maybe just I'll just add on Gabor on Tek. When you're looking at its performance in the second quarter, I think you should look actually at order growth over the first half because you probably remember, there was a lot of retail disruption in Turkey in the first half March, April of last year.

So that just sort of distort the comp quarter-on-quarter, both in Q1 and Q2. And probably if you look over a longer period of time, H1, where orders increased just under 18%, you get a bit of a better indication of the performance of the business this year.

Our next question comes from Maxim Nekrasov.

I have a couple of questions. The first 1 is very simple. So basically, your first half EBITDA growth was around 7% and it was already trending above the full year guidance, while you mentioned the reduction in the deposit rates that should benefit you in the second half of the year. So simply, why EBITDA guidance was unchanged? And how should we think about the second half growth and profitability?

And the second topic I wanted to ask about maybe not surprisingly about AI and the Casper. So I know it's quite early, but maybe if you can tell us about the early benefits you've been seeing so far or any measurable impact.

And also in terms of the costs and what level of investment? And should we expect any significant costs related to that project.

Thanks, Max. Maybe I'll take the first question on the guidance and then Michael can take the AI-related question. So you are right, we lowered the rate on the 3-month deposit. That's around 30% of the deposit base last week, last Webs Day. It will take 3 months to fully reprice that.

So you're looking at the benefit really big starting to come through. from the second part of November. So really only one full month this year. So you're right, there is some benefit of it this year, but it's for a relatively short period time, the full benefit of that and actually potentially other rate cuts that we might see will be felt from the beginning of next year.

On the customer, do you want to -- David, to pull out the slide?

With the metrics. Yes, great. So I mean, in terms of -- so the cost per Per, we're just 1 month into it. Obviously, we have been working with Casper ourselves for much longer.

But our consumers across Kazakhstan we have been rolled out now across the whole country on our e-commerce platform. So again, as I mentioned, the initial results are quite encouraging, one out of 5 customers using and most importantly, Castercompletes tasks much faster.

So 2x faster for consumer to add product to favorites, 30% faster to the basket.

And those are very important metrics. The metrics that we're focused on now, they are all about trust.

So Casper needs to perform the tasks which he is given because the trust is the most important first phase for this type of service because this service is -- it needs to be giving you the recommendations and helping you and guiding you through the process in a highly reliable and highly relevant manner.

So we're quite encouraged with the Caspers performance. In terms of the investments, we have done actually quite a lot of not only investments in terms of building the data center, which we did last year, the modem data center, which enables us enough compute and that actually is a result in a number which you see like 3 seconds for the response, which I think is remarkable.

So he can give you highly relevant recommendation when analyzing and going across such a wide range of the products that we sell in just 3 seconds, and then he can also give you some added value answers based on some of the tax you actually give them.

So it's not just the product listing but things around the product like reviews, delivery types, ratings and so on and so forth. In terms of the -- going forward, we are not thinking about -- I mean, if you -- first of all, if you think about our competitive advantage compared to many other companies, is that we are operating in 20 million people market.

So when you think about scaling this type of service in an environment when you operate on a 100 million people market you have exponential costs associated with rolling outside service, but we can enable in a very cost-efficient manner to actually launch the service in Kazakhstan at reasonable costs, and that allows us to develop the product to trade the models and ensure that consumer experience is highly relevant and high quality at a very reasonable cost. We're not really talking at the moment in terms of price per tokens or anything like that because we are a transactional business.

And for us, what we will measure sort of this functionality in the future is is based on how much it actually costs Casper to complete the task and cost to complete the task.

The task is enable the purchase with transactional business, the reason why I have been successful historically is because we're always focused enable the transaction.

We are not just a chatbot. We're not a fancy lifestyle business. We are transactional business. We enable consumers to buy, pay and show.

And everything that we do eventually results in a transaction. So that's an extremely powerful business model. It actually gives us a competitive advantage because transacting means highly relevant information around the transaction. So the reason why the Casper has all the ingredients to be highly accurate is because the layer of the data he operates on is extreme accuracy.

So that basically is the foundation both of our competitive advantage and also our ability to get this up and running at a very reasonable cost and the cost will be measured against the transaction, which means completely the purchase and highly scalable, which means we can deploy this technology in the future in other markets.

Got it. If I may add another question on the payments. And there have been some news about the National QR system. I wonder if you can comment if you saw any changes or any impact? And how should the investors think about long-term impact on the payments business and possibly take rates in the future?

Well, our take rate, as we have said before, is trending towards what is the majority of the payment transactions and that is actually the transactions, which are through our payment system and the QR, which is priced around 0.95.

So that's the trend you actually observed. What we have done during the last -- in the second Q, we have introduced 2 things.

We have introduced Apple Pay which we didn't have before because we thought that Apple Pay was not really necessary for the consumers. If we can build much better experience ourselves locally.

So we introduced Apple Pay and Google Pay. And that introduction was driven by the fact that the ability to transact with Apple Pay or Google Pay when you travel it was something which consumers really asked us quite a lot.

So we have decided to launch that service and it brought us additional payment volumes when our consumers travel growth. So that had a positive impact. In Kazakhstan, it has -- it doesn't have such an impact mostly for the international because, again, our consumers, the pain with CASB mobile application and this range, so we have what about -- I don't remember the exact number, but whatever, $800,000 cost minus points where you can pay with the customer well application.

So consumer in Kazakhstan is extremely happy and merchants are seamlessly both transacting with each other through our technical capabilities, which we have built.

Aragon also the same, so it performs really nicely, especially in an environment where the payable pump is high frequency, sort of environments really, so has been performing really nicely.

And we actually scaled our can across the country now during the last, what is it, 30-plus days. And then we connect it to the -- we worked really closely with the National Bank.

The priority of National Bank and us and all other players in the market would really to make sure that the payment system is highly scalable because of the volumes now on the market, but also highly sticky work.

So we have really successfully worked with them during the last, I would say, 6 months maybe plus/minus. So we really help to build the secure payment functionality. So that functionality is there.

And our consumers continue transacting with our merchants and where they used to and also we're getting additional volumes when everybody else is transacting with their mobile applications through our vast majority of our network payments network.

So now we see both our consumers and other consumers transacting to the payment network, which is accessible for everyone.

So we're extremely happy that there is a wide variety of the payment methods as well from everyone and the consumers can choose. And they choose, as I have described before, they can choose the most convenient option when you're traveling, you pay with Apple Pay.

When you're in Kazakhstan, you pay with the Caser you the custom mobile application.

Our next question comes from James Friedman.

Hi. Good morning, good evening. Mike, in your prepared remarks, you alluded to some of the growth initiatives you're anticipating for Turkey next year.

Could you -- I realize now that's not the time, but next year maybe. So -- could you just remind us what some of those growth plans are for 2027?

James, yes, thank you. So I mean, our growth is sort of our -- the way we operate again, is we're focused on things which are foundational for the merchant experience and the consumer experience.

So the things which will drive growth next year and are coming through this year are really around like increase the speed of delivery. So we have increased the speed of delivery roughly about yet quite substantial.

So that actually means higher speed of delivery, I mean better conversion rates and the return of customers because they are happy with the -- with the consumer experience.

So the growth on the e-commerce side will just continue growing sort of consumer engagement mobile app usage and all the ingredients of this, which is really about delivery and the user experience and so on and so forth.

In terms of the something which we believe will be feeling sort of long-term growth is the fintech products.

And the fintech products we are really excited about just because that's where our experience is on the one hand. But on the other hand, consumers really don't need to buy a TV -- sorry, they don't need the loan, they need to buy a TV set.

So once you are in e-commerce and the marketplace platform where you actually see the consumer making the actual purchases for the items, this is the best place where the buying decision is happening.

So this is the best place to introduce the fintech product. So shopping loan, for example, which we have introduced the new shopping loan which is 6.4% of GMV.

Now that's a new flow which enables customers to finance their products seamlessly. And then there is a whole grade of the merchant products like merchant finance and things like that, which we have done in our home market.

So those would be the primary products, which we will launch on the consumer and the merchant side. But also we will be launching the savings products because in order to fund your growth, you really need the savings.

And we do have incredible, simple, transparent products, which are highly popular in our home market, and those are some of the ideas which will bring and technology behind it. because that's something which enables us to scale will bring into 2027.

So to put it simply, there will be fintech products around consumer, helping them to fund the purchases, feedback products for the merchants so that they can actually acquire some of the inventory and then the savings product, which will enable fintech to continue to scale long term.

The fact that we have about $300 million investing into the capital actually gives us a very short start because that's the funding which we can also use in order to start scaling the fintech products next year.

And this year, we're just building up regular stuff. We just acquired the bet. So we take -- taken over operational control. So back systems and things like that for local reporting purposes is something which we're building up.

Everything else, we're very comfortable. Risk management, we already rolled out and did and the mobile application experience we're already building up in the shopping level.

Great. And then this is the first time that I've analyzed the company that we've seen rates go in your favor.

And I'm just wondering how long does it take to get repriced to the market. What I mean is in terms of consumer behaving, what have you noticed historically in terms of rate changes going the other way, how durable do you think that this cycle will be?

James, I just look at inflation continues, Inflation has been falling now of for most of this year, if inflation continues to come down, national bank rates, which are very high in Kazakhstan by historical standards will continue to come down.

If national bank rates continue to come down, our deposit rate will come down. You should remember that when rates went up, we weren't the first player in the market to raise rates.

And when rates go down, it doesn't mean we'll be the -- I wouldn't expect us to be the first player in the market to lower rates. But the long-term dynamic will flow through. I've sent to investors before that any rate cuts this year just to give you increased confidence of our earnings growth next year. That's the sort of time frame to think about things.

But again, it's not about 1 cut -- what you're looking to see is rate cuts inflation falling and for that to be sustained great custer for and for that to be sustained over multiple over a decent period of time and exactly the same whether this has been a headwind.

I mean you mentioned you've been covering us since beginning of 2024, and it's been a headwind for pretty much all of that time, 2.5 years.

We currently have no further questions. So I'd like to hand back to David for some closing remarks.

All right. So Sami, thanks very much. Thank you, everyone, for your time today. Happy to follow up Offline, we are in London and New York in early September post holiday period, so happy to follow up in person. So thanks again for your time today, keep in touch, and have a good summer. Thanks, everyone. Bye-bye. Thank you. Bye-bye.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines. RECONNECT

Hello, everybody, and welcome to the Kaspi First Quarter 2026 Financial Results. My name is Elliot, and I'll be your coordinator today. [Operator Instructions] I would now like to hand over to David Ferguson, Head of Investor Relations at Kaspi. Please go ahead.

Thank you, Elliot. Good morning, good afternoon, everyone. Welcome to Kaspi kz's First Quarter 2026 Financial Results Call. I'm David Ferguson from Kaspi. As usual, with me on the call, I've got our Co-Founder and CEO, Mikheil Lomtadze. The rest of the management team, team members of the management team, Tengiz Mosidze and [indiscernible], our Deputy CEO of the company.

We're going to do things a little bit differently to how we've done them in the past. So for today, going forward, we're going to make the first quarter and the third quarter cause financial updates and where relevant updates to the guidance. There's no change today. And then we'll keep the full year results and the interim results for more detailed calls where Mikheil will talk about the strategy products, other initiatives going on in the company.

So I think this should be a more efficient way of doing things, particularly, I know a lot of you have multiple companies reporting at the same time, and it should make for more interesting full year and interim results calls. So on that note, I will hand over to Mikheil. He will make a couple of introductory comments, and then I'll take you through the rest of the presentation. Mikheil, over to you.

Thank you, David. Hello, everyone. So our -- we have started the year in the first quarter with the good growth and strong growth in e-commerce, which was driven by the also higher purchasing frequency and some of the services, value-added services showing additional monetization faster than the GMV growth itself. So our e-Commerce still grew 41% year-over-year on a constant currency and pro forma basis. And importantly, the transactions grew 43% year-over-year. And then frequency of the quarterly purchases now reached 15%, which is also quite a substantial growth of 44% year-over-year. We are remaining a very profitable company, and we're happy that the Board recommended a dividend of [indiscernible] or EDS, which represents about 64% payout ratio. I mean the general sort of message for everyone is pretty simple that we are creating a much larger bigger, more diversified more diversified business. And now we're happy with both building on our strength of the Super App leading positions in our home work in Kazakhstan, but also creating additional growth in Turkey.

The one thing which I wanted to mention briefly that e-Commerce for us is important. As I mentioned before, we are the company which is focused on the front end of the consumer and merchant relationship. And when I say front end of consumer and merchant relationship, I mean to the point where the purchase and sale decision is happening and the purchase and sale decision is happening on e-commerce where consumers are searching, reviewing and buying goods on the one hand, in the future with the help of the AI agents. And on the other hand, you have merchants that are also creating those listings. And and getting additional sales. And when you combine this together on top of it, you do have additional value-added services.

The simplest today would be advertising and delivery delivery value-added services, which have grown actually quite substantially about 73% year-over-year. So we remain very optimistic, we believe in the future of our company. As you've probably been already learned that I have made investment myself alongside with Tencent and other long-term shareholders. and I remain fully aligned and true believer in the company, and we are really excited about some of the services we're working on. So hopefully, during the year, as David mentioned, we'll be providing more detail overview of some of the products we have been already launching, and we'll be sharing with you how excited we are about the range of innovations which companies is launching and working on.

So that's pretty much everything from me at this stage. Back to you, David.

Sure. So thanks a lot, Mikheil. I'll run through the financials, both at the platform at the group level and then guide on the guidance. So just quickly to sort of summarize consolidated revenue up 31% year-on-year and adjusted EBITDA up 9% year-on-year. I think the simple message, the first quarter, on track with where we expected to be. On the dividend, as Mikheil, [indiscernible] 850 per share. This is the same amount as when we brought back the dividend for the fourth quarter, and we said at the time, extrapolate the amount throughout the 4 quarters of this year. So it's consistent with what we've said and what you can assume for forecasting purposes. And then at a divisional level, marketplace GMV growth of 19%.

This is constant currency pro forma. So just to remind people, we acquired Hepsiburada at the end of January. So on a reported basis, it's in the numbers for 3 months this quarter versus 2 months approximately 2 months in the first quarter of last year. Pro forma constant currency gives you the true indication the real growth in the business. So Marketplace GMV up 19% on the same basis, e-Commerce GMV, up 41% year-on-year. So that's sort of the true rate of growth in e-commerce. TPV, up 14%, not affected to any material extent by Hepsiburada TFE, down 2% with average loan portfolio up 23% and I'll talk a little bit more about that later on.

So moving on to the segments. As we talked about, both at the full year results and for that matter over the last 12 months, e-Commerce is one of our most important areas of focus and will be one of the main drivers of growth over the next couple of years. e-Commerce GMV up 41% and year-on-year. So again, constant currency pro forma like-for-like, driven by purchases up 43% year-on-year. And here, again, we've spoken about the importance of driving order growth both in Kazakhstan and in [ Turkey ]. You see the result of this or another way of looking at this purchases for consumer on commerce up from 10.4 last year to 15 this year. That's really an indication that the existing consumer base is becoming more engaged as we sale an engaged consumer base, it drives more opportunities for monetization around advertising, delivery fintech and so on. And it's the foundation of sustainable, healthy, long-term profitability in e-Commerce.

So that metric moving very much in the right direction and contributing to the take rate increasing, up 90 basis points year-on-year to 15.8%. And Today, around half of the GMV is coming from Kazakhstan and Turkey. So the businesses are broadly equal in size and importance with the bulk of the Marketplace business being 3P component is coming primarily from Hepsi, around 1/3 of their GMV is one with e-Grocery in Kazakhstan also contributing.

Again, to reinforce that point, you now see e-commerce revenue growing faster than GMV because of take rate expansion or because of growth in value-added services. In this case, this is advertising and delivery. Revenue up 73% year-on-year versus e-commerce revenue growth, up 58% year-on-year. So again, with a more engaged user base, more opportunities to drive monetization and you see this coming through here. The revenue growth is, just to be clear on the reported basis. And then if we look at marketplace growth, so organic just to keep in mind, e-commerce is around 60% of market GMV marketplace GMV.

The other 40% comes primarily from m-Commerce to a lesser extent, travel being Kazakhstan, GMV growing at a slower rate, up 19% year-on-year. but with revenue growth up 49% and EBITDA up 12%. What we are seeing really is that, that transition from offline to online retail or that transition from commerce to e-commerce is gathering momentum. Hence, the stronger growth from e-commerce versus overall marketplace GMV growth. Revenue up 49% from marketplace and EBITDA up 12%. On the EBITDA, that primarily reflects the inclusion of Hepsiburada, for the 3-month period versus 2 months in 2025. As you know -- as we've said previously, the aim we have [indiscernible] keep it around EBITDA breakeven this year. So you've got a full 3-month consolidation of a business that's around EBITDA breakeven, slightly positive, hence, the slower EBITDA growth versus the revenue growth.

Moving on to payments. Our payments, 15% TPV growth versus -- sorry, 14% TPV growth versus the guidance of around 15%, revenue growing at a slower rate, up year-on-year as a result of take rate compression. That is consistent with long-run trends, driven by a change in product mix in favor of Kaspi QR and particularly Kaspi B2B payments and overall flat EBITDA growth. Keep in mind that EBITDA excludes interest revenue. Interest revenue is around 1/4 of payments revenue.

And the EBITDA metric doesn't capture that. So it's around 1/4 of revenue, and it grew about 26% year-on-year. So overall, payments is large, more pure business but still highly profitable and highly cash generative as well as strategically being the driver of engagement across our other businesses in Kazakhstan. And then moving on to fintech, and I'll spend a bit more time on this slide. So first of all, average net loan portfolio growth of 23% and versus TFE decline of 2% versus the guidance for the year of 5% TFE growth. We're deliberately choosing to prioritize longer duration loans that generate revenue that generate more revenue.

So TFE is an indication of origination, but TFE in itself doesn't drive revenue for financials its average loan portfolio that drives revenue that drives bottom line of the business. So we're favoring longer-duration loans, which generate more revenue. You can see the duration of the portfolio has increased from 7 months to 9.3 months. Effectively, what's happening is BNPL, small-ticket short duration is becoming smaller in the portfolio mix. and merchant financing and the general purpose loan, which has a longer duration loans to becoming larger in the mix. And while this change is going on, you have this sort of divergence between loan portfolio growth or widening between loan portfolio growth and [indiscernible] growth.

So the combination of 23% loan portfolio growth with stable pricing, fintech yield of 6% year-on-year translates into 25% revenue growth and 12% adjusted EBITDA growth year-on-year. And as we've talked about for now several years, the EBITDA growth is being impacted by higher fund of increased around 220 bps year-on-year on the back of the interest rate increases in Kazakhstan last year, and continues to pressure growth rates start to move down. And hopefully, now we are at the point where rates have peaked. That will be very helpful to growth next year, profitability growth next year. I'll also just talk a little bit on the risk metrics because I've had a lot of questions on this over the last couple of months.

If we look at sort of understand our risk in the portfolio and the dynamic, how it's changing first and set payment default, number one, and delinquency rates are some of the best sort of real-time metrics that we can look at. So first and second payment default, people who have taken a loan and immediately missed a payment. You can see that, number one, the levels of default are low. 0.9% and 0.4%, it's extremely low. And number two, if you look at the trend going back to the beginning of 2023, it's broadly stable. There can be some variation at different periods, particularly due to seasonality. But overall, it's a pretty flat chart, pretty flat line. And similarly, on delinquency rates, so looking across the portfolio, people who've just missed a payment, a good indication, a good lead indicator for credit quality, again, exactly the same sort of conclusion, 2.2%, a very low delinquency rate.

And again, the trend broadly stable over the last couple of years. So whilst a lot of people are focused on peers and then NPL metrics, it's also important when you look at peers to actually look at the sort of real-time risk metrics to get a true understanding of the health of the portfolio. On the back of those comments, cost of risk and broadly flat year-on-year or 10 bps to 0.7% versus 0.6%. But on the NPL ratio, NPL ratio moving up, again, the same comments that I've made previously is the portfolio is shifting towards lower-risk merchant finance and [indiscernible] being secured that means is that the probability of collection on NPLs is improving. So we keep more NPLs on the balance sheet. This ratio is effectively just the time -- driven by the timing of write-off rather than the quality of the portfolio. As we keep more loans on the balance sheet because the probability of collection is improving with higher probability, lower NPL coverage, particularly for the car loan which is a secured product. So effectively, this coverage ratio is just a function, the change in the coverage ratio. It's just a function of the change in mix of the lower portfolio in favor of lower risk products that require lower levels of coverage. And as mix changes, that will determine how the NPL ratio -- coverage ratio changes over time.

It's not a change in the underlying coverage of a specific product necessarily. So here are the reported consolidated numbers. Revenue up 31% year-on-year up 9% year-on-year and net income flat, down 1% year-on-year. So just to put a bit more color around the net income trend. There's 2 things that are really driving it. One, higher interest expense. So I mentioned funding costs in Kazakhstan have gone up 20 bps year-on-year. So as funding costs actually in both Kazakhstan and Turkey, number one; and number two, COGS, what does that mean? That is just driven by the inclusion of Hepsiburada, which has this one key business that comes with COGS for 3 months versus 2 months previously. Thereafter, if you look at the other cost lines, yes, we're making investments into Hepsiburada [indiscernible] if you look at the weight of the extent to which [indiscernible] product spend or sales and marketing spend is weighing on profitability is actually relatively minor under control where we'd expect it to be.

On the guidance, GMV, around 20% for the full year on track, unchanged, same comment [ TPV ] 15% on track, unchanged. And on the TFV, the around 5% whilst trending below that currently. To some extent, it's a mute point. The key is to drive faster revenue growth rather than necessarily to drive 5% TV growth Overall, that's trending to around 5%. We're on track for around 5% EBITDA growth for the year. Clearly above that in the first quarter, therefore, implying slower growth in subsequent quarters, but pretty much exactly where we want to be at this point in time. So on that note, let's open the call up to Q&A. Please, Elliot.

[Operator Instructions] First question comes from [ Gabor Kemeny ].

This is Gabor Kemeny from Autonomous Research. I have a few questions. First one will be on Turkey, where your loss is narrowed. -- significantly in Q1. You are guiding us towards breakeven EBITDA going forward. Can you give us a sense of what sort of losses shall we assume over 2026 in Turkey. Second 1 will be on the marketplace stay great, which showed a very decent increase in the first quarter. Can you give us a flavor how much seasonality did you notice there in the first quarter? And what shall we model here going forward? Some guidance would be helpful. And then finally, you made a point that Kaspi interest rates falling might impact your NII next year. Can you give us some sensitivities to your funding costs and your NIM to fall in Kaspi [indiscernible] and can you comment on what you actually expect? How you actually expect CASA rates to develop from here?

Thanks for the question. Maybe I'll start and then Mike may add some additional comments. So I'll do it in reverse order. On the last one on intrastate cuts, we don't assume any interest rate cuts in the guidance. this year. I think all you can do -- or we can do and all you can do is just look at trends in inflation data, and you can see that inflation has peaked in Kazakhstan. In September and has started to fall at quite a decent rate over the last couple of months. So that's an encouraging lead indicator. In terms of sensitivity, I would just advise just to look at the full year results presentation from last year because there you see the impact -- we called out the impact of last year's interest rate increases on the net income in Kazakhstan. So I think broadly, if I remember correctly, if you look in 2025 in Kazakhstan, interest rates moving or our cost of funding moving up by somewhere between 100 to 150 bps knocked around sort of 4% of the net income growth in Kazakhstan, but that was also the set out last year. So that would be some proxy for you to take. On the marketplace take rate, I wouldn't say it's sort of anything to do with [ seasonality ]. It's a function of advertising in the brand there's been a trend over many years of growing value-added services. which has been additive to take rate. And I would just look at again the sort of the increase that you've seen last year, year-on-year and use that as a proxy for what you might expect to see this year. On Turkey, we guide EBITDA breakeven. We've also talked about free cash flow positive as the guardrails, we're putting around this business. I wouldn't specifically comment on net income. And I would also just comment that the main focus is really driving engagement, making the investments to drive engagement on the platform which will -- you'll see, first of all, through the orders, and that's the best sort of lead indicator for the progress that we're making in [indiscernible].

We now turn to [indiscernible]

I appreciate your comments regarding the first call being more focused on financials. But I have to ask about the Tencent recently acquired a minority stake. So how should we think about any potential strategic synergies going forward from that? And whether it changes in any way you're positioning the super app in Kazakhstan and Turkey? That's the first question. The second one is about the marketplace growth in Kazakhstan specifically and the updates on smartphone situation? Has it normalized? And whether you see any impact from the from the currency ratio in the Middle East on the electronic supply. And the third one -- final one is on the guidance, and we saw EBITDA growth trending above the full year guidance, it's 9%, but your guidance hasn't changed. So what kind of factors do you take into account on kind of maintaining the guidance? Should we expect some heavier investments in Turkey or any other reasons?

All right. Thanks for your questions, Max. I'll take the questions on sort of marketplace growth and guidance and then maybe Mike will make a comment on both the Tencent and in investment. So just keep in mind, it's the first quarter. The first quarter is exactly where it's the smallest quarter of the year. Q4 is the most important quarter of the year is pretty much where we would expect it to be. And you will see in subsequent quarters, the timing of investment, having more of an impact on EBITDA and the bottom line. So I wouldn't get carry away. That's the first thing. On the marketplace growth, I'd say no material. There may be some -- there have been some disruption, but I'd say no material disruption as a result of what's going on in the Middle East and supply chain disruption and broadly speaking, and he's a very general comment, the current macro situation is probably or the current geopolitical situation is probably more positive than negative for Kazakhstan macro, but a lot depends on how things evolve. Over time. So that's on your second and third question on Tencent. Mikheil, is there anything you'd like to add?

I mean it's exciting to have such a shareholder and the team that was working on the transaction in general, we have been quite admirers of Tencent believing that Tencent is the pioneer of the super app business model. So -- but I don't really have anything specific to comment. But in general, when you look at Kaspi -- Kaspi is the type of company, which is in the team, which is really hungry for for knowledge and constant development and improving and developing some of the really incredible innovative services, which -- yes, which we always have a very strong pipeline of. So I guess having this relationship with the Tencent and some other companies actually benefiting really us, but also we have a lot to share. There is nothing really specific at the moment, which I would like to discuss on this call. But again, you should always keep in mind that you are working with the company and with the management team, which is as hungry as ever is constantly learning and constantly thinking what is the next breakthrough product, which is going to change consumer realize actually the consumer experience and the merchant experience. So having such a shareholder is a good thing for us.

We now turn to James Friedman.

It's Jamie at Susquehanna. So when you originally bought as [indiscernible], your observations were that the service quality was below what you are accustomed to delivering and that you needed to invest in Hepsi, especially in terms of delivery. I was wondering where you think you are in that journey now is -- and the metrics that you use, what are you focused on? How have you improved the service? And what are your future objectives with it?

So I guess I will take this [indiscernible] Yes. So in terms of the strategy, the strategy in our understanding of the world strategy is this is not the thing which you sort of turn off from one call to another. So we did have a substantial discussion about some of the metrics, which we would like to bring our Turkey business towards and those metrics are really the Kaspi metrics and they are related to the frequency of the consumer purchases, speed of delivery, and accessibility of the financial options on the marketplace, which again drive the GMV per consumer. So those metrics have been improving quite nicely during last year, and we see pretty much the same trend. Again, we retain the game exactly the same focus. So everything we do I need to make one sort of comment that it's -- where we would like that we deliver the same quality of the experience in Turkey like we do in our home market. So that's our goal. It does mean that the experience currently is -- I mean is as good as as other players in the market. And again, all the investments we're doing, they are around technology that are around organizing the data so that it's readily available in the structure for real-time decision-making and some of the models, which we're currently building to enhance consumer and merchant experience and then to deliver as quickly as possible and deliver on weekends or deliver on holidays, but actually deliver the items when consumers want them. So if you think from the number perspective, this is where all the investments are going and the increase that you saw in the investments were actually around those priorities. So we're quite pleased, and that's what is reflected in the growth as well. And the reason why we're pleased is that these decisions which we are making and the new initiatives, which were sort of rolling out and completing on the, again, delivery payment options the advertising products, personalization, risk management, marketing, all those are giving the results which you see in the growth. And that's what keeps us really excited for such a large market. And just to go back again to our strategic strategy is that the e-Commerce. In Kazakhstan when we started our business, we started from sort of financial fintech payments and then e-commerce. And in Turkey, we're working backwards because we actually do have very strong consumer base. We do have the strong base of the merchants. And we do have a the online interaction and traffic and the engagement from both. So now what we need to do is we really need to roll out some of the services and technology, which we have in-house and and that's what you actually see in some of the numbers for the first Q.

Okay. Great. And when you think about -- so the engagement is increasing significantly. When you think about where that could potentially go? How do you see that traveling? I think the statistics are that the average U.S. consumer transacts e-commerce 4 a year. I think the average Brazilian is about 10x a year. So what do you think that, that will travel to over long term in Turkey, Mikheil?

Yes. Well, I mean, James, in our case, our sort of benchmark is really what we have already achieved in our home market. And if you think in terms of our home market, if I'm not mistaken, the numbers which we have discussed in the year-end, was it about 27 purchases for consumer and I think in our [indiscernible] in Kazakhstan, and there are about 7 purchases per consumer in Turkey. So that just gives you an understanding what we're really focused on. And again, we're not inventing anything. We're basically taking our playbook, and we're focused on execution and making sure that technology and data supports it. So that's where our primarily focus on -- and of course, this sort of engagement, you are required to make some investments in order to explain your user experience in order to market it. And that's why this year is more of the, I would call it, an investment year. We do have a rules, which we would like to still remain a very profitable dividend-paying company. We do have a [indiscernible] for the decisions we make, but that's our focus. So we want to increase the consumer engagement. We want to have the right assortment for that engagement. We want to have the right merchant base. and delivery and the payment methods, which support that. But the difference, again, as I mentioned, around 7 in Turkey and around in Kazakhstan. And Kazakhstan growing really, really fast. So it will be even bigger this year. So basically, that would be our sort of goal for [ Turkey ]

We now hand over to [indiscernible]. Please state your company name and proceed to your question.

I'm [indiscernible] JPMorgan. And if I may, I would like to ask you questions on your strategy for Hepsi. Actually, this question has been partially answered like you have been consuming some cash in Turkey after stepping up in marketing campaigns in the past 5 quarters. And this also seemed to put some pressure on the working capital outflows. I mean, particularly in this quarter, which may be -- so a seasonal shift. I wonder how long will you continue on this strategy? And is there a specific KPI target that you would like to reach before normalizing the marketing activities? That's my first question. The second one is we have also observed some decline in consumer financing activities in the first quarter in Turkey. Is this a deliberate decision like pausing on Hepsi products before you finalize your license approval in Turkey. And the third one is that after the initiatives that you have taken into care like listing of the small ticket items which you have been quite successful, actually. Have you achieved a more diversified category.

Yes. Thank you for the questions. So in terms of -- if I got them right, but please tell me if I miss anything. So in terms of the consumer finance and the consumer finance side, we have our sort of way of really working both on the product side, but most importantly, risk management. It's not only about originating consumer finance, but actually, it's about originating that to the right person at the right time with the right amount, but also in a way that the people are sort of repaying you basically. So originating is when you originate the wrong consumer finance, it's not an asset, it's a liability for the company in terms of the risk. So we have been really happy with the way we have rolled out the new risk management system. And as we were rolling out the risk management system, we basically slow down the origination for everybody's benefit on the call, the Hepsiburada has fully owned consumer finance subsidiary. So actually, we, in Turkey, can originate consumer loans. But we wanted to get first the whole system, which Kaspi has to bring it to the to our business in Turkey. And then we feel now increasingly comfortable with opportunities to do more in the consumer finance. So that's on the consumer finance side. Again, we were not in a hurry. We didn't want to originate anything above the normal course of business, and we're putting together the risk systems and data management in order to do it at the extraordinary quality, which is acceptable at our level, like we have cost of risk a bit over [indiscernible], which is the world class. So that's on the consumer finance side. In terms of the diversification, what we have done really last year which gave us, as you said, the very strong results is we are focused on the merchants and we have realized that if we want to promote the merchants and give them ability to sell the low-ticket items we actually had to improve our delivery experience but also provide the reasonable delivery fees. So that's what we have done last year. We continue doing it this year. We also rolled out our data-driven logistics platform, we're actually completing this in the first Q, and that's something which with the help of our LLM and forecasting models that will give us a substantial improvement in the speed of delivery and the quality. And we're quite happy with the performance, and we see the low ticket items growing really fast, but also 3P growing faster than 1P. So that's on the merchant side and low tickets. In terms of the marketing, again, we're a data-driven company. So we're not really focused on just making sort of driving the traffic in the short term. So we're not driven by the weekly targets or whatever we're really driven by putting the system in place, which enables us to be -- to have a profitable growth in the future. So from that perspective, we -- when we do marketing we're not solving the short-term targets. We are actually building the engine to generate very sustainable curing and repetitive target traffic from our consumers. And yes, that's what we have done last year, and that's what we will continue doing this year. And our goal is simple that the consumers that we acquire, they continue to be engaged with us and deliver value and the profits in the future. But initially, you really do need to invest in orders for consumers to experience your products and services.

So is it reasonable to say that your initial target is more like frequent to focus, I mean, to take up to Turkey's frequency numbers close to Kaspi.

Well, our focus is engaged consumer base. An engaged consumer base comes with the frequency. So frequency is just one indicator that consumers love your products, and they come back come back to you and with you frequently. So yes, you're correct.

We now turn to [indiscernible]

This is Sergey calling from Greyhound Capital. Good to see a result improvement in Turkey. I have 2, 3 questions. One is on Rabobank. Has there been any update? Or is there any reason for the delay? And then on -- in Kazakhstan on the payment take rate, you mentioned already, it has come down quite a bit. Is that the reason -- what are the reasons behind that? Is that the shared QR code and have we seen the worst in terms of the drop? Or -- and what can we expect going forward? And lastly, on net you already briefly touched on on it. I would like to understand, is it purely passive investments from Tencent or more deeper operation? And is there a potential that the acquire a bigger stake in your company from maybe other larger shareholders who want to [indiscernible]

All right. Thank you for your questions. I'll say start. Payments take rate is nothing to -- I know we've spoken before about National Payment System. It's nothing to do with that. Either you look at the sort of take rate decline and you look at it over the last 3 years -- 3 to 5 years for that matter, I think you'd see that it's broadly consistent each year. And it's largely being driven by Kaspi at 95 bps and Kaspi B2B payments, which is a lower take rate product, growing gain share. So it's purely mix mechanical and it will continue -- to the extent that Kaspi QR continues to outperform other payment products. But I guess, can't broadly go below 95 bps. It's kind of the floor. So that's on that. On Rabobank, no update, nothing to report. Base case remains that we have to close the transaction over by the summer. It's kind of out of our hands. The wheels turn slowly, but we continue to work and aim for closing at that point. On Tencent, I'm not sure if there's much we can add and I wouldn't want to sort of speculate on their behalf about what they might do or might not do in the future. Maybe that -- I think your question is a question for Tencent, not a question for Kaspi.

Well, perhaps just if it's pure passive investment or maybe if you could answer that, that would be great

Yes. All right. Sorry, yes, fair question. It's primarily a financial investment.

[indiscernible]

This is [indiscernible]. Maybe I looked about 3 questions. one, I guess, is just a follow-up from the previous call. So on the payment side, obviously, the decline in take rate is understood, and you can see that in the revenue reduction. But I was just trying to understand what other factors are driving the drop in EBITDA because you could see the EBITDA was flat on a year-on-year basis. So if you comment on what the drivers there were. Then going to the fintech space, like you mentioned, the focus is to grow the car finance and merchant loads. Could you maybe give some guidance on what the implications of that would be in terms on the NIMs. What are the respective lending rates for those segments vis-a-vis unsecured loans and NPL. And then last one just on the recent capital that you raised, the $600 million. If you could just give some insights into how that will be deployed will all of that be injected into Turkey. Or will there be some sort of split between Turkey and Kazakhstan.

Yes. Thanks, Ronak. On the last question, the official line is general corporate purposes. What does that mean? There's no one specific big bang project, but across both Kazakhstan and Tech, there's multiple initiatives, growth initiatives. And this just gives us more flexibility in how we fund those initiatives. And we're pretty pleased that we were able to raise the $600 million at the 5.9% rate that we were able to do that at. So more flexibility at a cost that makes a lot of sense for us. So that's on that side of things. on fintech take rate, I think you should look at the trend over the last 12 of fintech pricing. You should look at the trend over the last 12 months at the gross level, it's been broadly stable. I wouldn't want to provide guidance going forward, but I wouldn't expect it to be dramatically different to that going forward. And I think it was another question that I forgot.

Take rate on payments. I think the take rate on more payments answer is exactly the same and quite simple and that was something which we have said on every quarter of our our results. It's basically that 0.95% is the acquiring fee on the [indiscernible] codes and the share of [ QR codes ] is increasing. And there is about point file roughly on the B2B payments, which is increasing even faster. So it's a function of the faster growing bigger numbers on the payment side. And in terms of the EBITDA margin or -- I mean, this is like, what, 50-plus percent EBITDA margin business. So I mean from that perspective, I mean, it's really a very profitable business. It's just such a huge scale that there is no really economies of scale at this stage. I mean it's a big business. It's mature. We do are making some innovations in this field, like pay by [indiscernible], for example, which has closed to the 1 million registered users already and growing quite nicely. But again, this is really a business which delivers profitability. On the one hand, but also most importantly, it actually delivers the engagement from the consumers and merchants, which is the backbone for anything we do now, whether you think in terms of the e-commerce or if you think in terms of AI technology and things like that, that's the big bone for future innovation. So the direct monetization is nice, very important. But actually, as far as I'm concerned from 5, 10 years' perspective, it's secondary. What it really gives us is gives us this huge advantage of having incredibly high-quality data, which enables us to train our models to be very precise in their decision-making.

We have no further questions. I hand back to you, David, for any final remarks.

All right. So thanks, Elliott. Thanks, everyone, for your time today. Please feel free to reach us if you'd like to follow up on anything. We've got a few you guys in Kazakhstan this week. So looking forward to seeing you. So thanks a lot, and speak soon. Take thank you. Bye-bye.

Thank you. Bye-bye.

Thank you, everyone. This concludes today's webinar. You may now disconnect from the call.

Hello, and welcome to the Kaspi.kz and FY 2025 Financial Results. My name is Harry, and I will be your operator. [Operator Instructions]

I would now like to turn the call over to David Ferguson with Kaspi to begin the presentation. Please go ahead.

All right. Thank you, Harry. Good morning, good afternoon to everyone on the call. Welcome to Kaspi's Fourth Quarter and Full Year 2025 financial results. I'm David Ferguson from Kaspi.

As usual, I'm joined by Mikheil Lomtadze, CEO and Co-Founder of Kaspi; Tengiz Mosidze; and Yuri Didenko, the Deputy CEO of the company. We'll take you through the strategic highlights 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 Mikheil. Mikheil, 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. We're obviously reviewing the underlying performance without the 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 prioritize and also distribute the -- and resume the dividends, considering the strong cash generation, which our business model allows.

So we are proposing a dividend of KZT 850 per ADS, subject to shareholder approval. The performance itself of underlying performance has been quite strong. Our net income has grown 18% percent without the impact of some of the external factors which we've discussed during the year. Those are 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 would -- 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, considering all the headwinds still was 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 consumer engagement. And one of those is monthly transactions proactive consumer. It's 7 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 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 a 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 #1 consumer brand pretty much in every category and by wide margin. So here, you can see just some of the selected metrics, which just tell you how strong our brand is.

For example, the mobile application installed on your phone, almost half of the respondent service during the year. are having our mobile application on their smartphone considering, which is 6x more than the nearest brand. And the same sort of wide margin in payments were like 13x the second brand, e-Commerce, 3x, travel, more than 4x. And we have a very strong position in the cars, for example, 9x the nearest brand. And that's an important asset. That's something which notwithstanding what's going on around the terms of the external factors, which unfortunately are not entirely under our control, things we can control and things we execute on our 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 [ later ] 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 Kaspi Alaqan, which we just launched under 90 days. And 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 0.5 million customers in Almaty registered for with Kaspi Alaqan almost 6,000 merchants are accepting our payments through the Alaqan and that's almost 10% of the of the transactions in the stores where we have been merchants connected to Alaqan. So it just tells you that Pay-by-palm, it's truly changing the consumer behavior. So we have changed consumer behavior from cash to cashless to the mobile payments then to the QR code and now to the Pay-by-palm.

So we believe Pay-by-palm 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 0.5 million customers, by the way, to put the 0.5 million customers into perspective. This is almost third of the population of the largest city of Kazakhstan where we started to launch. We are only in one city at the moment, and we're scaling city by city across the board during the year.

We're replacing the old network, and we're installing the new devices, which are equipped to accept all kinds of payments and are purposely built for Alaqan. As being an innovative company, that's a testament of how consumers are using every your next product, and the penetrations were again achieving are unprecedented, remarkable. And in just three months having 1/3 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 -- 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 rolling out during the last year and some of the services we plan to do this year.

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 a 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 merchant sells, it needs to get the financing. When consumer buys, it needs to pay for it and the merchant accept the payments. 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 Turkiye as well. And then, of course, merchant finance, which has been the fastest-growing product had delivered an 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 high and relevant, high accuracy, but we have a very strong results, and 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 for our m-Commerce using e-Commerce and as we get more merchants migrating to e-Commerce, especially from m-Commerce, when we have more consumers and the more selection and more price competitiveness, which we have been driving.

We are regarded as one of the lowest and the best price e-Comms in the country. So that really drives the liquidity of the transactions. And of course, e-Grocery, which we are scaling across the country that it grows to is the fastest-growing e-Commerce business for us. So those are the things which we'll be focused during the year, and they will be driving our growth and the Kaspi Delivery and Kaspi Advertising being highly scalable, high-margin businesses will contribute to the to our profitability.

Next slide is about Turkiye. So I just want to spend really more time about our progress in Turkiye. 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 the 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 onetime 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 and in Kazakhstan. It will be the same in Turkiye. We have tested different parts of our models, then I'm really happy that all those -- our expertise and 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 the -- some other improvements or 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 monthly active consumers, right? So -- but we're really happy that once the active consumer will grow 15%, which is a very good number in the fourth Q. But what is more important for us is that the growth of engaged consumers have been 29%. And those are the consumers which repeatedly buying 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 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 marketing and we have focused on delivery and the quality and speed and broadening the payment options. And the broadening payment options means actually that the customers can buy more items more affordably. So all those things working together, give us these results. We're very encouraged and are really focused on -- we just focused on continuously bringing the Turkiye and Hepsiburada metrics to Kaspi.

So if you look at the -- and compare the Kaspi and Hepsiburada 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 compared Kaspi and Hepsiburada those metrics, you can see that active consumers in Kaspi is 7.4 million, which is -- and Hepsiburada, 11.8 million, which -- so Hepsiburada, has 1.6x more consumers. However, GMV per consumer is 1.6x less in Hepsiburada than in Kaspi. And then if you think, okay, what is actually driving such a difference, one simple metric that the frequency of purchases in Kaspi is almost 4x more than in Hepsiburada.

So in Kaspi, 24 purchases per consumer per year and 6.7% in Hepsiburada, And then when you think, okay, what drives that purchases which are translated into profits, is actually the engaged consumers that are coming repeatedly and the costs related to those consumers are more and more sort of efficient, right? The consumers are coming back. There is limited marketing costs and so on and so forth. So 66% growth of engaged consumers in Kaspi despite of its scale continues to grow and Hepsiburada with opportunity in front of it, 29%, so 2.3x less.

So again, everything we do is we are focused on growing the number of engaged consumers, growing right number of frequency of purchases and introductions, and those will result in the economics and profitability going forward. And that's our strategy. In 2026, we'll manage Hepsiburada around Turkiye business around EBITDA breakeven, and we'll continue targeted investments. But we also believe there is a question always from investors, can you continue developing Hepsiburada and the Turkiye and at the same time, resuming dividends and returning capital to shareholders?

So the answer is yes. And we're resuming that. And now we're comfortable with all the things we have actually tested that we're in the right path, and we'll just continue executing to deliver the world-class services to consumers and merchants. I'll get back to you.

Great. All right. So thanks a lot, Mikheil. 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 trends and 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, a slight take rate attrition, and that's just the result of Kaspi Pay and Kaspi B2B 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 Alaqan. So that will sort of normalize as we go into this year.

Moving on to marketplace in Kazakhstan. So Underlying growth, strong, 12% in GMV growth in the fourth quarter, 19% for the full year. If you -- 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% the GMV growth. On that, I would say, and I guess this would be a question. There was no improvement at all in smartphone dynamics in fourth quarter. GMV 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 GMV growth. If you look at purchases, purchase is very strong and consistent at 34% in the fourth quarter, 35% for the full year. So not really impacted to a material extent by issue and you see that demand is strong. And as Mikheil talked about, you also see the ongoing trend of take rate expansion. Take rates across the marketplace and specifically e-Commerce hitting gold 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 sort of pretty obvious when you look at x smartphones 27% GMV growth for 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% the fourth quarter and full year, it illustrates that demand is strong. And as we've said in sort of prepared remarks, the competitive position of the e-Commerce platform is unchanged. The smartphones was a very sort of specific anomaly, take rate hitting 13.1% for the fourth quarter and 12.7% for the full year.

So again, that point an 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 Mikheil said, is the sort of the fastest-growing major product line that we have. Growth really not slowing down at all, up 53% for the GMV growth of 53% for the year and number of consumers now well north of [ 1 ] million approach B14 million. So continuing to scale very, very nicely. And again, would expect grocery to keep posting very, very decent growth into the medium term.

Part of the reason for our success in e-Commerce is actually a result of the m-Commerce business. So this is sort of a bit more color on the dynamics within marketplace. What you can see here is that migration of both merchants and from merchants and consumers from commerce to e-Commerce is taking place now at a very rapid rate here. It's just two sort of vertical examples. M-Commerce, GMV down 5% and 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 m-Commerce isn't growing is that you've got those relationships with off-line merchants through m-Commerce, 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 commerce is completely sort of tax growth if we ex out the smartphone issue for last year, it still delivered 11% GMV growth of 7% including smartphones and minus 4% growth in the fourth quarter, including smartphones plus 3%, 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, I think that's pretty clear. And then on Kaspi 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 of the marketplace business is the core e-Commerce franchise and the value-added services around advertising delivery and financing for both the merchant and the consumer. So the combination of decent GMV growth, but strong take rate improvement results in materially faster revenue growth. 13% and 23% ex smartphones, up 21% for the fourth quarter and 30% revenue growth in the 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 lower ticket size, frequently purchased, but lower ticket size items where the cost of delivery is a higher part of the GMV from the first of January 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 increase in 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 TPV growth in the fourth quarter. Again, lower growth in the marketplace means a lot of growth in fintech, 13% growth for the full year. Growth driven by -- across all products, but again, been the case now for several years, the merchant and micro business financing has really been the growth driver of the lending part of the business.

[ Order ] 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 probably unchanged at 2.2%. We've talked about it on previous calls, the increase in the NPL ratio. That's just a function of as collections become more efficient as we get better collecting, the probability of collection improves. Those nonperforming 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, 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 the coverage to stay around that level. Although it just varies, it [ all ] depending 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 TF fee growth with stable pricing translates into a 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 ex all those factors, which is -- with the position we were in 12 months ago, when we started the year, our 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.

On Hepsiburada, when Mikheil already talked about it, I think we said on the last call, a simple metric for investors to track the improvement in the performance of the business is 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 will 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 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 for the year. And of course, we're still in the early days of the plan for Hepsiburada for [indiscernible]

With take rate improvement and with also grass 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 Hepsiburada, of course, the improvements that we're making, there is an investment behind that. The aim here now is to sort of to keep the business at around EBITDA breakeven, reinvest into improving the products and services, driving engagement and driving the growth to create a much more 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, and we've got a lot to continue working on. That wraps up the review of the respective segments.

So, I mean, here is just a summary for Kazakhstan, 15% revenue growth in the fourth quarter and 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 higher taxes and regulatory requirements and smartphones have had on the business in 2025 including Turkiye, you see that revenue increase to just a $4 trillion, which is just over $8 billion of revenue for the full year.

And again, sort of similar, you see on the top line to -- 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 Hepsiburada. And just that -- sorry, I should say 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% at the lower end, reflecting, again, the absence of recovery in smartphones in the fourth quarter.

So looking forward to 2026, a couple of points to make here. So firstly, guidance as usual for GMV, TPV and TFV. However, guidance now includes Hepsiburada and Turkiye. So previously, last year's guidance was Kazakhstan only. This year's guidance is Kaspi.kz. It includes Kazakhstan and Turkiye. To give you the base to work off, these are the GMV TPV and the TFV numbers. including Hepsiburada in 2025.

Clearly, the bulk of heps businesses is a marketplace that goes into 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 and you can split out what's from Kazakhstan and what's from Turkiye.

The growth, again, we've been pretty clear the growth now going forward for '26 and medium term will be driven by marketplace GMV. So this around 20% is both Kazakhstan Marketplace and Turkiye, our marketplace, TPV and TFV the same. And then the bottom line or the profitability level will guide on adjusted EBITDA. Here is the base to work off $1.6 trillion tenge for 2025. And this just reflects now with Kazakhstan and Turkiye as a multi-country business, different interest rate environments and cycles, different tax levels, different regulatory changes this sort of axes 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 Hepsi. From talking with investors, a lot of investors talk to me about the benefit from interest rates go it 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 our expectations 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 we'd be -- that would be a material benefit for us, but we're not there today. Just on the marketplace guidance. So also what we will now do again, combining Kazakhstan and Turkiye. So we guide from marketplace as a whole. This gives you the 2025 reconciliation. We'll split it is e-Commerce. These are the two comparable businesses between Kazakhstan and Turkiye. I mean, these relate to the metrics that Mikheil 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 m-Commerce, travel and e-Commerce with the Kazakh specific parts of marketplace, we'll have them sort of separately. So this will just give you a sense of how we'll report from Q1 and going forward of Q1 '26.

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.

[Operator Instructions] Our first question today will be from the line of Luke Holbrook with Morgan Stanley.

I'm just going to send to mine on Hepsi and Turkiye. 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 2/3 of orders now say more next phase? 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 entering more on Turkiye and the broadening of potentially e-Grocery offerings. I'm just wondering where you stand, particularly in light of Uber's more activity with [ Gati ] and trend go in the sector and whether you see it as a necessity at some stage for Hepsi's proposition.

All right, Luke. Thanks a lot for your question. So the role in Turkiye, maybe I'll just pass them all on Mikheil, [ Peak ] losses, [ Rabobank ] and e-Commerce in Turkiye.

Yes. Sure. Thank you for your questions. In terms of our strategy and investments, again, our -- we'll manage the Turkiye business around EBITDA breakeven, which basically means that we'll 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.

We're investing into technology and we're scaling technology out of Kazakhstan as we speak. We're making -- we're making investments in organizing data in a way that it's 360 degrees around consumers around the merchants, which enables us to delivered 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 are 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 this year, and then we will see how it goes in the future.

In terms of the -- what we will 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 consumers growing the share of engaged consumers who 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 a fully owned subsidiary of Hepsiburada, 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 financial products, especially around the consumers and the merchants both on the savings side and the lending side.

$300 million, it's an investment, which comes together with the capital and you have work just going through the regulatory approval. But as soon as those will be taking specific steps on the products, we'll be updating you in due course. We don't really like to speak about the future products, which we 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, what's...

Yes. Well, this is actually pretty exciting. I think the fact that Uber is doubling down on the investment just tells you that Turkiye is an attractive destination and there are several companies like that entering the market is just a 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 Kazakhstan, either, at least at this stage.

We are focused on the e-Grocery business, which is not about small ticket fast commerce items, but it's about staffing your fridge with your household. And even though we deliver very fast in Kazakhstan, we're not in the quick commerce business yet. And -- but for the Turkiye itself, 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 -- we don't -- at this stage, we don't have intention to move into quick commerce.

Understood. And just to clarify, there's no specific ring fencing that this year will be peak investment in Turkiye 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, we will be -- will our profitability in 2027 will be higher compared to 2026, 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. we will continue investing into those consumers. If we believe that 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 Turkiye, 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've launched the weekend deliveries, which didn't exist before, and that's speeding up delivery again. And of course, temporarily, you're running operation, which can potentially process more orders. But you're starting for the specific segments of the consumers on the lower volumes, and that means that your running network, not at full utilization.

When you look at Kaspi, Kaspi has -- what is it like almost 7x, 6, 7x 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 Turkiye, we are building up that capability. So utilization rates won't be as high as Kaspi 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. I'm not going to give you such a forecast or guidance. But the one thing I can tell you that what we're investing into, we believe, will bring the growth and the engagement of the consumers in the future. Kaspi was -- when we started Kaspi now is a $2 billion net income business. And at some point, it was minus $60 million. So there are no vehicles, but we know the playbook is there and we know how our 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.

The next question today will be from the line of Gabor Kemeny with Bernstein Society General Group.

This is Gabor here from Autonomous. To continue on Turkiye, can you comment a bit further on the competitive environment? I mean, you obviously have one large competitor, there are a number of smaller ones. I wondered how you perceive their behavior as you have been accelerating your volumes at Hepsi. So that's the first one.

Second one is we have an EBITDA 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, et cetera, that will 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 payout going forward?

Yes. Well, maybe I'll take the second and then pass it to Mikheil to talk on Turkiye. 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 I'd say.

The -- you asked about payout ratio as well that 850 tenge per share is 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 probably -- you look at 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 that -- should give people a decent level of predictability.

On the other, we're not going to give you guidance -- we're giving 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 off from the first 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 -- of 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 fully as much as I can say.

And as a question about the question about the competitive dynamics. I mean, we are very respectfully observing the competitive dynamics, of course, and that's not different from Kazakhstan or Turkiye. But at the same time, again, our priority is really just to focus on the very high quality of the products and services, 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 slip in the evening to thinking about competition. we're thinking about consumers and we're thinking about merchants, and that's our priority. This is the way we went on business in Kazakhstan, and this is the way we do business in Turkiye.

[Operator Instructions] The next question will be from the line of James Friedman with SIG.

I wanted to ask first, David, a modeling-related question. In terms of Slide 19, is this fully pro forma -- 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 Turkiye. I'm just trying to understand, is this fully -- is the '25 number fully pro forma so we get the -- yes, that one. So we get the underlying period of comparison.

Yes. The -- so that -- so 2025 numbers, they include Hepsiburada, the only thing -- so that number one, they include Hepsiburada, 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 Hepsiburada, at the end, we closed the deal at the end of January of last year. So it's approximately 12 months of Kaspi and 11 months of Hepsiburada, They are 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, Mikheil, in your prepared remarks, you were -- you were mentioning that you some of the effect if 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 up file. Can you elaborate on that as you migrate to Turkiye with Hepsiburada?

Well, I mean, basically our First of all, just also to make it will be -- 2026 will be also 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 pretty much compare consolidated business 2026 to 2025. So that's -- that would be a good news for everyone.

Number two is, because we acquired Hepsiburada in January of last year. Number two, in terms of the way we sort of manage again, what we're saying is that the new -- the customer's growth was 15% in the last quarter, which is a great headline. However, again, what is our focus. Our focus is engaged consumers because those are the ones which make business work, and those are the ones which repeatedly come back and interact with you and buy from you. So the things which you are right in the sense that those are the consumers which are keep basically buying with you.

Therefore, you have less marketing costs, you have less operating cost to serve them, and that's what is giving you the very favorable economics on the consumer level going forward. And we know that worked in Kazakhstan, and it will work exactly the same way in Turkiye. 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, let's say, e-Commerce, for example.

So things which are related to the fintech and others will be something which we'll be also working on 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 can extrapolate the way that Kaspi has been really doing. The comparison we gave you, it was only on the 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, 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 comparable 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, though this is the combination from which you can build because that is the point when the merchant is making a decision to sell and the consumer is making 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.

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

Well, does have -- 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.

I apologize, we do have a follow-up question from the line of Gabor Kemeny.

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 yield 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, less 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 change in -- at least one key reason is it just reflects the changing shift in the marketplace business. Actually, that's a long run trend.

And we have a follow-up from the line of James Friedman also.

Yes. 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? Yes. I think it's the one or...

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 its higher take rate versus m-Commerce which is just around sort of under 10% 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 commerce 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. It's not to say you can't have value-added services for m-Commerce as well. And actually, m-Commerce take rate has consistently increased. But if you think about the two big ones that we've talked about, delivery earned advertising, they are really relevant to e-Commerce. So it's actually a positive dynamic from a take rate and revenue perspective.

I would like to make one quick comment on this. So even though it's a it's a positive dynamic from the take rate and revenue perspective, e-Commerce is more operations heavy than m-Comm, right? So let's say, delivery. And we are investing into delivering. We're monetizing the delivery of the merchant side, but the buildup of delivery, especially on the lower ticket item side, we're still investing.

So when you think about the take rate, take rate is [ tie ] potential is much higher the services we develop around consumer and the merchants have a huge potential and deliver a lot of value for both. But profitability of e-Commerce on is less than comes m-Commerce because of the operational side of working with -- on the delivery -- on the long term, of course, that will be something different, but immediate in fact, when you move m-Commerce, like if you move the merchants GMV from m-Commerce, which is in-store experience to e-Commerce, and you add on top of it, the operational costs related to the delivery investments, the take rate and the delivery take rate decrease 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.

And we have a follow-up from the line of Luke Holbrook with Morgan Stanley.

I just wondered if we could just touch on Agentic AI or Agentic Commerce here being the elephant in the room for e-Commerce companies as well around the world. Just your views on where we stand today regarding any partnerships you have. Large language models with ChatGPT and as considerations from your perspective, that would be interesting to hear.

Yes, thank you for the call. I mean, I think what we would like to -- yes, that's a separate subject, maybe even the different call, I would say. I mean, in general, we are working on the assistance to help our merchants to be -- to do business more efficiently and help our consumers to make purchases as well seamlessly navigating the help of the virtual assistance. So that's basically we're already applying a lot of it internally.

And yes, I think it deserves a separate call and a separate discussion maybe with you, too. But we're developing this in-house. And I think I've mentioned this to the discussion we had recently.

And that will conclude Q&A. I'd like to leave the floor to the Kaspi team for any closing remarks.

All right. So thanks, Harry, for the call. Thank you all for joining. Please get in touch with any questions. We are in the U.S. this week. Keep in touch. Happy to take questions off-line. 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.

Hello, everyone, and welcome to today's Kaspi.kz's Third Quarter and 9 Month 2025 Financial Results Call. My name is Sam, and I'll be the call moderator today. [Operator Instructions] I'd now like to hand you over to today's host, David Ferguson, Head of Investor Relations at Kaspi.kz to begin. So David, please go ahead.

Yes. Thank you. Good morning, good afternoon, everyone. Welcome to our Kaspi.kz's 3Q 2025 Results Call. Apologies for starting a little bit late. Well, let's crack on. So on the call, you've got myself, David Ferguson, Mikheil Lomtadze, CEO and Co-Founder of Kaspi.kz, Tengiz Mosidze, and [ Joriedenco ], the deputy CEOs of the company.

As usual, Mikheil and myself will take you through the presentation, and then we'll open up the call to Q&A where the whole team is available. So on that note, Mikheil, over to you. Thank you.

Yes. Thank you, David. So let's go straight to the presentation. So briefly, the results for the quarter across all our platforms. What we're showing here is the results also without excluding effect of some external factors. So the payments grew TPV 18% revenue, 10%, nice growth on the net income of 12%. The marketplace mainly impacted by the shortage of supply of the smartphones and iPhones more specifically. So our growth has been 12% year-over-year, but 20% GMV growth in case if we exclude the effect of the smartphones.

And you can also see that our revenue would be 32% up, excluding effect for the smartphones and 16% net income growth, excluding effect of the of largely of the smartphones, 7% growth if we consider that factor in. The fintech also has shown nice growth, 16% on TFE, 24% revenue, and it would be 28% growth, excluding some of the effects like tax on the government securities revenue and other external factors. I will go through them on the following slide, but 15% growth if we actually include them.

And our top line growth of 20% year-over-year and 23% if we exclude the external factors and 21% if we exclude the external factors as well. And also considering where we are in terms of our performance and the next year, we are also starting ADS buyback in November for 400 million would like to bring forward -- considering our cash generation and performance, we would like to bring forward the distribution of cash, but also it's a good investment considering where we are in the stock.

So this is just briefly some of the factors we have listed for the external ones, which had the impact on our performance from the financial point of view, again, the core business has performed really nicely. Some of the things which have happened from external factors is the smartphone registration requirement and shortage of supply of iPhones that had about 8% impact on the GMV and 3% on the consolidated income. However, we still believe that the demand is there.

So next year should be a good year to recover. 10% tax on revenue from government securities. I mean, in most of the markets, actually, the revenue is taxed. So Kazakhstan introduced the tax on the revenues from the government securities this year, and it's minus 1% on net income, increase in minimum reserve requirements, but also we cannot -- those reserves are kept with the National Bank and there is no interest accrued.

So that had an impact of minus 1%. And the base rate decreased from 15.5% to 16.5%, again, impact on consolidated net income, minus 4%. We are in the environment of high interest rates. As the interest rates inflation normalizes, there is an additional performance positives for the next year. This is just to tell you and explain that actually the core business performing really nicely and the growth rates are quite high. So if you exclude the smartphones, our GMV growth has been 25% and highest growth top 5 categories like Beauty and Personal Care, 69% growth. Clothing, 51% growth; and Home & Garden, 35%. So we're really growing across the board on many of the categories and the smartphones because of the supply disruption really had an impact this year.

But again, we believe that demand is there. So we should -- we expect to recover next year and base also will be supportive for the growth next year. E-grocery, we continue building up the leading e-grocery business. So as you can see, we continue growing very nicely. We have about 1.3 million customers now. We grew on the GMV 53%, and we are growing on the transactions 55%. We're scaling across the board.

We have -- as we speak, we had 9 dark stores in the third Q. We're just adding another one, and we plan to enter another at least 2 cities next year. So our -- we have ambitious plans. As you remember, the business is growing fast, but it's also profitable. So for us, it's a very exciting vertical, which both drives the engagement, but also brings a lot of value to consumers just because of the speed of the delivery and the quality of services we provide.

Another update is also on the on the connecting to other banks and payment systems to our payment and the QR code -- ability to pay with the QR code. So now we have even more banks connecting to our platform. The growth has been very high, 176% in terms of the TPV and 5.4 million transactions in the third Q. So transactions are going even faster. We have now 7 banks connecting to it, and we have Alipay, which enables our consumers to transact with the QR code in the countries where Alipay is present. And we have also introduced the functionality when users of Alipay coming to Kazakhstan can also transact with the Kaspi QR.

So we're building up this flexibility for our consumers, which is also useful for the merchants and will continue growing very nicely and fast. We also are going for the specific verticals we have mentioned briefly during our previous calls. So the restaurants is one of the verticals, which we are excited about. It's a major vertical and the spending in our lives. So we have been growing very nicely.

This is the functionality to remind everyone when the consumer can actually pay with the QR code straight in the restaurant instantly, but also can leave the T and all this happens in our mobile application. So TPV has grown 259x and the transactions in excess of 1 million transactions in the third Q. So growth is there. The vertical is also very valuable service for the restaurants and consumers love it, and we continue rolling this out.

As we are going for the restaurants vertical, we also have integrated the third-party restaurant delivery platform. It's Glovo. It's a subsidiary of Delivery Hero in Kazakhstan. It's a top 3 player in the country. So now we have integrated them in our super app. Basically, consumers can access the Glovo service through a single registration, which is Kaspi ID. And from the registration, they can have access to the full service of the Glovo app, and they can -- they are also integrated with our payments so the consumers can seamlessly pay with the Kaspi Pay. So it's a major step for us.

So we're working with a third-party mobile application. And yes, it's exciting that the teams are now working together to develop the service further. But this is again around the restaurant vertical, and we're excited to continue building up services in the specific verticals in the future. We have also done -- Kaspi has been doing regularly the events called Kaspi keynote event when we present the major innovations and demonstrate them and tell what the service is about.

So we have launched 3 services on the Kaspi keynote event. It's Pay by Palm, it's advertising service and the Kaspi AI. So Pay by Palm is probably one of the -- of our major innovations in the payments after we have introduced the QR code. And before that, we have introduced the payments and the wire transfer by the mobile number. We were the first one to do that. So it's very cool feature when you basically just connect through our mobile application and the device to the Kaspi Pay by Palm, Kaspi Aakan, Aakan in Kazakh means Palm. And then you can simply put your Palm on the top of our device and the payment goes through. So it's very exciting innovation. We are planning to roll out it end of this year. It will be free of charge for the merchants for the first 3 months.

And we're -- in general, our view in the payments business is that we would like to give as much flexibility and the choice to consumers as possible. So our consumers are able to pay with the card, obviously, can pay with the QR code, can pay with the palm. And in the future, we'll be -- we're also expecting to introduce some additional service.

So we would like to give as much flexibility to the consumers as possible. And we're also working with the National Bank so that our consumers can also pay through any QR code at any merchant. So our consumers will have as much choice as possible, and this innovation will just bring additional very exciting way to transact in the stores, especially in the high intensity transactions. There is a video we have published both of Kaspi Aakan and also the event.

So you are welcome to check them out. It's really cool, and the service is really exciting and initial feedback is really great. Advertising revenue has been one of the fastest-growing revenue drivers for us on the marketplace specifically, and we have grown ad revenue 56% year-over-year. And as we think about advertising, we constantly launch the services, which enable merchants to increase their sales, but also for consumers to make a very informed decisions. So we have launched, as we speak, the service when our merchants can advertise on the third-party platforms.

So it's a pretty exciting and really cool service when you can immediately almost like within the 1 minute, you can you can set up the campaign. You can manage the campaign from the screen of your smartphone. You can review the analytics and the third-party platforms, you can preview your ads and the platforms, which are merchants will be able to advertise are Facebook, Instagram, TikTok and Google, and we're very excited.

This is just one more tool for our merchants to have a very efficient advertising campaigns, but also they can track them, they can manage them and analytics are really in-depth around those marketing campaigns. So very excited about this new service in advertising we have just launched. We also have been working a lot behind the scenes on the on the AI, Kaspi AI Assistant.

Our view of Kaspi AI Assistant is actually quite simple. We call him Assistant because we believe that technology that we are developing at Kaspi will help to make daily tasks faster, simpler, more convenient, better quality. So we are looking for a very specific use cases, which technology we're developing in Kaspi can enable. Again, technology has very wide, as you guys know, very wide applications. However, we believe that to deliver the most value we want the technology to be assistant in a specific tasks for either merchants and in the future consumers. So this is the first application of that technology, which we're launching.

It's Kaspi AI assistant for the merchants. So the way the service works is quite straightforward. David, can you switch to this slide? So basically, you can create -- the goal and the application of this service is to enrich the product content and create the rich content, which helps you to increase the interest from the consumers, and therefore, that converts into your sales. So it's basically you are uploading the photos.

You can see some functionality screens here. You're uploading the photo, then Kaspi AI creates a photos for your product. In this case, for example, the Kaspi AI will select the model, which will be wearing your hoodie. Then Kaspi AI also creates the description. Description is based on many different insights and parameters, which also includes the customer reviews and what is important for the customers in order to make the informed decision about this product.

And afterwards, you can preview the product and you can publish it. So it's really -- before that, it would take whatever per item may be, depending how complicated the item is maybe 10, 15 minutes to upload the item and create the description, and that was the main -- one of the main pain points for the merchants. Now it just takes the minutes and everything is filled up automatically. You can even make a photo of the label and then whole characteristics of the product will be filled up also automatically.

And then we still call this an assistant, which means the control is with the merchant or with the user, so user can edit, user can confirm those descriptions, can select the photos, can ask AI to create more photos and so on and so forth. But that's really a very powerful tool, which has shown extraordinary results. As most of the technologies and the services we are developing, we run those services on ourselves first. And then we get convinced that technology is really working and the service has the value.

And after that, we offer it to customers and the merchants in that specific case. So we have enriched about over 0.5 million products. And I just can show just some of the examples. So for example, this one is the cattle and how much else you can say about the cattle in order to have more interest from buyers and to drive your sales. But actually, what Kaspi AI will suggest you to do -- and again, this is all generated by Kaspi AI. Those are actual screens and actual text, interaction works like similar like to the AI assistant. So it will create the photo in the interior.

It will suggest to create the photo in the hand with the hand holding the smartphone, for example, because this is actually smart cattle. So it's not only boiling water, but it's doing a bit more of the functions. And also, it will suggest to create and will create the size of the kettle because then you can understand from those photos that actually this is the way it looks in interior. It's more just a kettle. It's a smart kettle and also it has sizes so you can understand how it stands in interior in terms of the size. And then it will create also the description, which will give you more details around each of those points.

So this, for example, card product has been enriched and the results were quite meaningful. So we have this product after enrichment increased 35% in clicks, interest from consumers. and gave 83% increase in the sales. And again, this is the product which was just photo or limited photo, limited description and this is the rich content which sells, which also gives consumer more tools to make the right decision.

Another example is tires, how much you can tell about tires. Obviously, tire is a tire. Everybody knows what tire looks like. However, Kaspi AI actually identified that if you create the infographic, which has on the first page, which usually consumer sees, you need to say actually what is the seasonality of this tire and also list some main most important characteristics in infographics so that consumer can make a decision while looking at the photo. So this is how Kaspi AI created the whole thing.

And then on top of it, it actually inserted the description and created a description, which says a little bit more on every individual most important parameter of the tire so that consumer can make the right decision. Again, all of those are created by Kaspi AI, including the photos and infographics and description. So clicks actually increased 4%. So they drive more interest from the consumers and 53% of the sales increased just because of this change on that tire. So it's really exciting technology. We have been working on this behind the scenes for quite some time.

We have been running different -- obviously running different experiments before we decided to launch on the merchants. Here, what you see on the screen is like we would normally do with any similar technology and innovation, we basically identified 30 days before. Let's assume there are 2 similar control groups, right? So red is the product which we improved -- enriched the content and then the gray color is the control group. So those are the similar products, let's assume similar cats or similar tires, and we observed them for 30 days.

And as you can see, behavior is very similar because those groups are extremely comparable products. After that, we have had our Kaspi AI to enrich the content. So again, to create the products, to create the description and characteristics and so on and so forth. And as you can see, 30 days after the enrichment, the control group continue performing decently, but we're still giving some increase.

However, enriched content has more than 2x interest and clicks from the consumers than the control group. So this is a very exciting technology. It's the first application out of many which technology can be applied, and we are rolling this out. It will be available for the merchants in January of 2026.

But again, as I mentioned, we are ourselves using this technology and ourselves are enriching already the content, and we have enriched about over 500,000 products on our marketplace e-commerce side. I would like also to mention just very briefly some of the important priorities Hepsiburada is working on. And our main goal is really to ensure that we have a very sort of strong performance and continue exciting the consumers and merchants, and there are 4 priorities.

Number one is the delivery, and they are not in priority, right? So we're focused -- we are working on 4 of them. So -- the main areas of investment is delivery, BNPL and the payment options from the banks, marketing and user experience. On delivery side, we are making the low-ticket items more beneficial for the merchants to ship. Before that, the delivery cost was more than the value of the item which was sold. So we have actually worked on making sure that delivery is economically viable for the merchants and especially in the low-ticket items because those items are the ones which also driving engagement.

And also, we have launched the weekly delivery, which was not -- yes, weekly delivery basically was not the market practice. And we believe that if you are e-commerce business, you should be delivering on the weekends, especially if the traditional retail works on the weekends. The NPL from banks and payment options, it's a wider selection of the banks and the wider selection of the payment terms and specifically also in the low-ticket items, which again are driving the engagement. Marketing, that's another area of investments and improvements.

Teams are working mostly to optimize performance to make sure that if we are marketing the products, those products are high quality on the good terms and therefore, they generate more interest, more traffic and more views. And as soon as this traffic lands in your mobile application, of course, user experience improvements are targeted to redesigning the consumer shopping journey in order to have the higher conversion rates.

So those are -- there are a number of other things we're working on, of course, but this is something which gives us both results, but also they are important both for merchants and for the consumers. So as a result of those, for improvements and changes in some of the areas, we have shown a very nice growth in number of purchases, which is the main metric for us, which shows the growing engagement from both consumers and merchants.

So the growth has been through the year and the third Q, plus 16% in order growth, which is a really exciting trend. Obviously, we will continue making further improvements and investments, but that's already a reasonable result to share with you. Some couple of things just to give you a bit heads up like some of the things which we're sort of working on, just to visualize those are really -- you don't have to be the rocket scientists.

There are some really simple stuff that you can do. So in case of the payment options, for example, we have shown to the consumers number of payments you are making, but also the monthly payment that you might have with the BNPL payment option and those results before and after gave us maybe a test 4.5% growth in the GMV. This is -- again, I'm just showing you some simple examples. Obviously, I'm not going to take your time to go through all the improvements we have done.

Another slide is, for example, the redesigning some of the homepage items. So we have we have basically brought in more sort of personalization in order for consumers to easier understand some of the products that they are fit for them or interesting for them. So recently viewed products and especially for you sections on the homepage and also in principle, just to see more products on the homepage.

So CTR increased almost 2x from 15% to 31% in A/B test for recently viewed section and especially for you section increased from 18% to 23% click-through rate. So it just tells you how much of the simple improvements on the user experience can bring the value. We're also working on the third-party platforms, in this case, is influencers, which Hepsiburada has a significant influencer channel, which drives the sales.

And here, we have basically also made a very sort of important changes, basically helping the influencers and the merchants in this case, to launch the campaigns when you reduce the price and you also have the reduction from the Hepsiburada, how much of the benefit you will get, how much of the sales uplift you will have, and you can also see the products which you can launch. So these A/B tests gave us more than 9% the GMV uplift.

And again, this is the service when merchant can launch the prices and the price reduction is also matched with Hepsiburada commission reduction. And then influencers, again, influencers here can actually easier see the offers which they can market to their subscribers. So we have done -- you can easier see the brands, you can see the products, and those are also very much -- we're trying to match those -- this selection with specific influencer.

So influencer channel is quite substantial and AB test gave us also the same excess -- in excess of 9% GMV growth. So all in all, I mean, we have introduced some of the major innovations on the Kaspi side, and we're also achieving the growth in orders, which is very healthy because we're investing our efforts into delivery, marketing, payment options, BNPL and user experience improvements. And back to you, David.

All right. So thank you, Mikheil. Let's go on and just talk about the performance of the core business, starting with the payment platform. So I think that's the key message here on this slide. Payments growth remains robust, but also consistent throughout the year. volumes up 14% in the third quarter, up 15% year-on-year for the 9-month period.

And as we've talked about previously, just this reflects the ongoing popularity of Kaspi Pay, bill payments and the fast adoption of B2B payments. Strong volume growth translates plus growth in ticket size translates into faster growth in TPV, up 18% in the third quarter versus 14% volume growth, up 21% for the 9-month period versus 15% volume growth.

So again, strong and consistent trends. What you have within the 69% of our volume that come from Kaspi QR and card is the shift continues to move in favor of and that drives the take rate down, down 9 basis points in Q3, 8 basis points for the 9-month period. And again, that trend is consistent. You've seen that actually playing out over the last couple of years.

The combination of strong top line growth, strong volume growth, strong TPV growth, but with take rate dilution results in lower revenue growth, plus 10% and plus 14% for the third quarter and 9-month period. Again, as you've consistently seen top line dropping through to the bottom line, operational gearing and cost control, faster bottom line growth in payments of 12% and 17%, respectively.

Moving on to Marketplace. So here, again, actually that you see the purchase volumes very strong and again, consistent throughout the year, up 36% year-on-year in the third quarter, up 36% year-on-year for the 9-month period. Transaction growth on marketplace remains fast. In terms of GMV growth, GMV growth up 12% and 15% year-on-year. This slide really illustrates the impact of the supply issues in smartphones, which as you see, excluding smartphones, GMV is up 20% for the third quarter and up 21% year-on-year.

And you should keep in mind that the smartphone supply disruption is relevant not just for e-commerce, but for m-Commerce as well. Marketplaces take rate continues to move up, hitting once again, all-time high levels, 10.3% for the third quarter and for the 9-month period, driven by value-added services, namely Kaspi advertising and Kaspi Delivery. As Mikheil showed you, advertising revenue up 56% in the third quarter, up 76% for the 9-month period.

If we look more specifically at e-commerce, 12% [indiscernible] GMV growth in the third quarter, if we adjust for smartphone GMV growth up 25%. And for the 9-month period, PMV up 19%. And again, if we adjust for smartphones, up 29% year-on-year. The performance of our e-commerce ex smartphones remains very, very strong. The smartphone supply disruption is a countrywide issue.

As we move into next year, from March, we have a very favorable comp and we'd also expect over the course of next year to supply issues to naturally resolve than themselves, the competitive position of e-commerce remains completely unchanged. And actually, on the purchase side of the equation, you see here again, growth, very strong of 86% year-on-year and up 9% year-on-year for the third quarter and 9-month period, respectively, with grocery contributing to that vast growth and commerce, always the slower growing of the marketplace platforms, but nonetheless, still an important platform, particularly for onboarding merchants. GMV growth, up 12% in both periods. Here too, if we adjust the smartphones, GMV growth up 17% and 15% in the third quarter, a 9-month period.

Take rate moved up slightly, again, as we continue to just add additional value-added services and marketing campaigns for our merchants. And on travel, travel continues to post decent growth, GMV up 13% in the third quarter, up 17% for the 9-month period, here too, take rate moving up nicely, 50 basis points in the third quarter, 60 basis points for the 9-month period. That is primarily due to the growth in Kaspi tours now account for around 10% of GMV, travels GMV launched around 2 years ago.

So it has grown nicely from 0 and will continue as we move into next year to grow a book travel's overall GMV rate implying further take rate expansion. So the combination of take rate expansion of both GMV growth, plus fast growth in grocery revenue translates into revenue growth in marketplace well above GMV growth, up 24% and 27% year-on-year for the period.

Here, too, and we make the smartphone adjustment you see revenue up 32% and 34%. So really just again, reiterating the point that the supply disruption in smartphones, which we expect to be temporary and to resolve itself over the course of next year is the primary and actually only reason for the sort of the slower growth that you are seeing in marketplace?

Same comments on the net income side of things, up 7% and 13% adjusted for smartphones, up 16% and 20%. Net income growth will grow below revenue growth, and that is just the mix effect of e-grocery growing, growing fast and taking share within the mix. Finally, in Kazakhstan, moving on to the fintech platform. Growth remains very robust, up 16%, 17% in the third quarter and 9-month period. So here too, not just robust but again, consistent over the course of the year. The TFB growth is being driven by merchant lending, which we expect to keep growing at a faster rate than the consumer lending products. That's actually nothing new.

That's been the case over the last couple of years and should remain the case going forward. The growth in origination is happening with stable pricing, the fintech yield flat year-on-year at around 16% in the third quarter 18% for the 9-month period. And you here too, you see strong growth in the loan portfolio of 30% and 32% year-on-year. Growing at a faster rate than the deposit base, but here to the deposit base continues to see very robust and predictable trends, the new products that we've introduced and that we talked about previously have seen solid month-on-month growth in deposits since their introduction. Cost of risk, 0.6% versus 0.5% in the same period last year.

Overall, credit trends remained strong and consistent albeit the -- as we mentioned at the H1 numbers, currency depreciation in the first part of the year did necessitate by a macro provisioning in the first part of the year. NPLs have moved up slightly. But again, this is the trend that's been consistent over that slightly versus the end of last year. This has been the trend through out the course of this year. And overall credit trends remain strong and consistent. Lower coverage reflects the growing share of the car loan and the growing share of the merchant financing for car loan you secure the matching financing is sort of by nature, a lower risk product and therefore requires less provisioning unchanged on the consumer side of the equation.

So what you have is just the mix effect. With strong origination in previous periods, stable pricing you have decent and accelerating fintech revenue growth, book 24% in the third quarter and up 21% for the 9-month period. Capacity revenue growth has also translated into accelerating net income growth, accelerating net income growth up to 15% from 10% in the 9-month period. That's despite the growth in interest expenses in the third quarter, up 30% year-on-year.

Adjusted net income growth reflects the effects of the base rate increase. So you can see the year base rates haven't moved up in the first part of the year. Actually, the fintech platform would be on track for it would have delivered 28% bottom line growth in the third quarter and 18% for the 9-month period. So here, I think the point to illustrate is just how material the rate increases have been on the bottom line, but interest rates in Kazakhstan are at high levels, and this can move the other way when rates trend downwards.

So moving on to Hepsiburada, as Mikheil talked about what -- there's multiple product initiatives taking place around payment options, marketing, delivering user experience and so on. And one way you can sort of track the progress ultimately is in terms of purchases, driving purchases, frequency of transactions on the marketplace. And you can see here that the initiatives that we have launched our gathering increasing momentum with purchase volumes up 16% for the third quarter versus plus 4% for the 9 months period, with us a really encouraging increase in growth momentum as we look into next year that mirrors in the GMV side of the equation.

Financials are inflation adjusted, we're talking about real growth here. So I know there's been some sort of confusion around that in some of the commentary that I have seen. But here too, you see GMV growth moving up 15% for the third quarter versus 5% for the 9-month period. So the investments, the product improvements that we're making are starting to drive an improvement in the top line performance of the business, and that's reflected in both repeat and the 1P side of the business.

The 15% and 5% GMV growth translates again into faster real revenue growth of 22% and 11% versus of 11% for the 9-month period so here too, you see that the investments that we're making start to translate into a faster-growing business. That is the aim to invest and drive the top line performance of this business up to a faster rate for a sustained period of time.

And that is also being helped at the revenue level by growth in advertising and growth in external delivery services, hence, the faster revenue growth versus GM growth. You can see the impact of the investments that we're making the investments are targeted primarily into those sort of 4 areas that we've talked about, delivery payment options, marketing and user experience, and you see that impact on the EBITDA level, but you can see that these investments are translating into faster revenue growth and for the aims for that faster revenue growth to be sustainable as we go into future years.

The investments impact the bottom line. But what you can see here, if we look at the third quarter of 2025 is that the main area of that investment is on the payment options, the buying up pay later options that we're integrating with their party banks. That's the main increase performance advertising and delivery to a lesser extent.

Kaspi Barata has also announced a $100 million share capital increase again, it is raising funds with a view to ensuring that, that business is well capitalized to pursue its different objectives over the course of next year. So what does all of this mean for Kaspi in Kazakhstan? You see decent and consistent revenue growth, up 20% in both periods.

Here, you see again the revenue level at a group level, the impact of smartphones, revenue would be up 23% and 22% respectively, over the third quarter and the 9-month period. And then at the net income level, here, you have the impact, the 21% net income growth in the third quarter and the 24% net income growth reflects the impact of smartphones, the higher base rate and the other external factors, regulatory and tax changes that have been introduced over the course of this year.

It could help you to understand the underlying operating performance of the business. As some perspective on this, if you think about at the beginning of the year, when we guided for net income growth of around 20%, you can see that without these external factors a bit of a subsequently, we're actually trending very close exactly on track for that. The underlying core business growth drivers remain unchanged.

Here is the consolidated numbers in it's just the culmination of Kazakhstan and Turkey together. And then in terms of the guidance, on the middle column here, you see the updated guidance, so lower GMV growth. This reflects the absence of the recovery in smartphones in the fourth quarter. Again, just to reiterate, from March 2026, if nothing else, we have a very, very favorable base effect going forward.

There's no reason to think that the supply disruption will resolve itself over the course of next year. We adjust for smartphones, you can see that marketplace is on track for a 19% to 21% GMV growth. TPV payment growth around 20%. That's at the top end of the range we provided at the beginning and summer periods and TFE growth in line with the guidance that we provided at the summer period around 15%.

So it's really only the smartphone issue that's affecting the top line trends. bottom line of around 10% growth in Kazakhstan at is lower than the around 15%, and that reflects smartphones, it reflects the tax and regulatory changes and again, the impact of the higher base.

If you x out those factors, the business will be on track for around 18% to 20% growth next year. And this gives you some indication of what grows the smartphone issues resolve and self interest rates at some point move down in the tax and regulatory factors at least move into the base.

We've also launched the GBP 100 million or we will launch post this call, the GBP 100 million ADS buyback program. And I think what we've said in the press release as we look into 2006, we expect to be able to achieve a balance between investing in the business returning cash to our shareholders via both buybacks.

This GBP 100 million ADS buyback program doesn't have to be the end. It can be the start. And the resumption of dividend payments. It's too early to go into the detail, just to preempt that question around exactly what dividends can be. But I think we've been pretty consistent. This year was an investment year.

We've made those investments to put the foundations in place for future growth. That's what we said 12 months ago, our message has been consistent, and we can achieve our message now as we can achieve a balance between investing in our growth and returning cash next year. So I hope that's sort of pretty clear to people. So on that note, let's open the call up to Q&A, please.

[Operator Instructions] Our first question comes from the line of Ygal Arounian from Citi Group.

6 Maybe I'll start with Hepsi in Turkey and the updates there on the investment is really helpful. Can you just help sort of paint the picture on kind of where we're going from here, particularly around like the investment level needed when we can get to reverse the trend in terms of the operating losses and how you found the competitive environment so far to be in Turkey, better than expected, worse than expected? Sort of any insights around that.

And then second question, back to Kaspi and Kazakhstan and the advertising product numbers, I mean, real strong growth there, and it looks like still very early in terms of penetration. And you've got a lot of different products. So just help us about how to think about advertising, kind of if you benchmark against global peers, how big it could be, which areas that you can drive more advertising or less? Just kind of help think through that product as well.

Ygal, thanks for the questions. Michael, do you want to take both of those questions?

Yes, sure. 8 So on the Hepsiburada side, we are, again, as a part of our priorities and the strategy is always to make sure that the products of the services and both for consumers and merchants is the one which brings the value. So that is our priority, which means when you think in terms of the growth or in terms of consumer engagement and the merchant side that our most important priority. So the growth is a result of those changes.

And we believe that by building up the highest quality products and the user experience, those are the -- yes, those are the priorities will generate the value for us going forward. So that has -- that is our priority, has been our priority for this year, and the teams are working on the -- yes, basically on bringing the quality of the products to the next level.

So the investments that you really see, those are the investments which, again, on the delivery side, we want to deliver both faster, but also have more engagement from merchants. And on the consumer side, and the marketing side, those are the investments, which bring traffic, which converts at the increasing rate into the sales and most of our initiated strategic priorities are around the mobile application, which we are obviously prioritizing.

So that's where we are. And we don't really see the huge need for capital investments going forward. But again, if those are justified by improving the quality of the services and the speed of delivery and the infrastructure for the delivery, then will bring those investments into the company.

So that's basically on -- and our priority is really growth. So that's -- that growth high-quality growth, which means growth of heavy engaged customers and happy engage merchants. So that's on the Hepsiburada, yes. And in terms of the overall competitive dynamics in the market, again, I think we have been saying this many times that we do pay attention to competition. But at the same time, we believe that our priority needs to be quality of the services and bringing excitement by the quality of the services to the merchants and consumers.

So we don't think about competition in a traditional way like maybe some other companies would think. So that's on the Hepsiburada side. In terms of Kazakhstan, I think we are developing the full range of the advertising services, which are in different stages of the development. So we have -- you can advertise products now through the product listings. We have advertising service for the brands. We have advertising service when you can actually introduce these points or rewards as a merchant.

We also are thinking how we can enhance the merchant experience in the app itself in order for the merchants to bring a very highly targeted engaged consumer base to their products and to their shop in Kaspi.kz itself. So yes, so it's growing very nicely. The merchant is giving us a very good feedback. And yes, we believe that we can continue growing this business, and it will grow faster than the rest of the we believe it will grow faster than the rest of the revenue on advertising.

We just launched, I think, what we've talked during the last presentation. If I'm not mistaken, that we launched Gift Certificates, even for offline retailers. So all of those things at some point will start contributing meaningfully to the growth. So advertising is really exciting. And that's our core competency. It's all about data. It's all about user experience and it's all about the merchant experience in the mobile application.

So yes, we're very excited about the advertising services, and they will continue growing much faster than the rest of our revenue.

Our next question comes from the line of James Friedman from SIG.

I wanted to ask about the -- so -- on the Marketplace side, the take rate was up again 80 basis points. I was hoping you could elaborate on some of the components that are driving that. And then on the advertising side, can you just explain kind of in simple terms when you say you'll run the advertising campaigns for the merchants on the Super app. Just I'm trying to understand what it means to run it for them. So one, on marketplace, one on advertising.

Sure. So on the take rate, the main drivers of the take rate are really additional services and advertising more specifically and also the delivery revenues. So that's the main driver of the take rate we are not -- as you remember, historically, we believe that we want to deliver the value to the merchants by additional services, not by constantly increasing the seller fees. So that's not our strategy.

So the increases that you actually see they are driven by additional edit value services, and those are at the moment, specifically advertising and delivery. So that's on the take rate. In terms of the advertising, I mean, it's quite straightforward, right? So the current technologies enable us to develop a very sort of simple user experience when the merchants from the screen of their smartphone, they can select the items they want to promote and then advertise and then they just tell us a bit the type of customers they want to reach.

So it's a very simple service, all the data driven. We truly believe that advertising needs to be developed in a way that you can launch an advertising campaign on Kaspi with the one hand by driving a car, if you are a small merchant. And this is how we are we're looking into this. So this is not something which complicates the merchant's life. They just quickly launch it. They're very simple, very simple settings they just need to tell us the type of merchants they -- sorry, the type of consumers they want to reach, and then we will do the rest of the job for them.

And behind this, of course, is there are a number of technologies which we're developing and the data, which enables us to have this very high prediction, high accuracy advertising services or advertising campaigns for merchants, which deliver the value at an affordable cost. So that's basically the way we look at the advertising.

It's simpler than many other big advertising platforms just because you don't really -- we don't really -- we do a lot of work for the merchants rather than merchants going through the complicated quest of setting up the advertising campaign. So this is why the services are showing in the growth rates.

Our next question comes from Griffin Devin from a Research proceed.

Griffin Devin on for Darren. Just wanted to touch on the smartphone impact again. I know last quarter you mentioned there would not be an improvement. So the 8 points impact to GMV largely as expected. But just any color on current trends through October, first week of November or updated thoughts on the potential duration and then how you're viewing the sustainability of non-smartphone marketplace growth given so much strength across the top verticals?

All right, Griffin. So maybe I'll just really start on that one. So just for the benefit of everyone, I think there's sort of 2 issues to be aware of. The best was number one, new registration requirements that those were introduced in the spring, and that was the sort of the initial cause of the supply disruption.

What subsequently how that's evolved into then just a shortage of the latest models, iPhone type 17 models across the entire country, and you have a situation where now people who are long overdue a new smartphone don't want to go out and purchase the old model when they know that the new model will be available shortly.

So the -- that's what's going on in the market. There's nothing to show any improvement currently supply remains, particularly of new models incredibly constrained. But Apple will get new phones into the country over the next couple of months. So number one, as I mentioned earlier, you've got a very favorable comp it kicks in, in March of next year. So that should face if nothing else favorable comp.

And number two, there's no reason to believe that whilst it's taking a little bit longer than we would have hoped, the supply disruption won't normalize over the next couple of months and certainly through the first part of next year. So that's on smartphones and we've shown you just how material that is and how meaningful that can be when it does and it will -- So that's the first thing.

But then the second thing we've showed you is the back smartphones, marketplace and particularly e-commerce growth in all of the verticals is really, really strong. So again, as you look into next year, when smartphones come back, all the verticals should also remain pretty decent and you have marketplace and e-commerce sort of returning to its more normalized growth trajectory.

There's no change in marketplaces competitive position. and the supply disruption is not unique to Kaspi. It's a country-wide issue, and it's in one vertical, everything else is pretty much performing as we'd expect it to within marketplace or that be my main comments.

[Operator Instructions] Our next question comes from Reggie Smith of JPMorgan.

Perfect. I guess one quick follow-up on the marketplace question a second ago. I guess give us some quick math. I think year-to-date, you guys are at 16% growth in Marketplace GMV. I think you guide also like 12% to 14% for the entire year. Just wondering, am I thinking about that right, does that assume like a low single-digit GMV growth in the fourth quarter?

And is that primarily like seasonality around the cell phone purchases? And then one other piece with that I know you mentioned iPhone. Is this an issue for like all phones like Samsung phones, the Android phones as well. Maybe just talk a little bit about the mix of, I guess, iPhone sales versus Android in the country. Just to give us some background. And I have one follow-up after that.

Well, I'll start. Yes. I mean you will see marketplace growth moderate in the fourth quarter. So remember, marketplace is not just e-commerce, it's e-commerce and commerce and travel. But that -- you will see that, that happens, number one. And number two, I would say on the smartphone issue, well, particularly at this time of year, its high-end smartphones, it's particularly the likes of an iPhone 17. So it's not just that.

But that sort of -- this is where the latest models are released. And if you think about it, if a smartphone is $1,500. That's a lot of missed GMV, but it's a lot of gain GMV when it comes back and a lot of missed revenue versus an average ticket size on marketplace and on e-commerce that's materially below that. So that would be my comments.

I don't know if Mikheil wants to add anything about the market as well.

Yes. Well, I think that -- well, the GMV growth is a combination of also the value of items, which are sold. And as David said, the highest value item in the smartphones is specifically at iPods. And since the new model has not reached in the requested volumes the country, it's not only because of not specific, then basically the people don't have a trigger to change their phone.

But we just believe this thing will change in the future because demand is there already in terms of looking at the trends and the engagement, I think that number of transactions is -- or number of purchases is actually extremely sort of valuable number just because that actually tells you how many purchases consumers make, how many times they interact with your marketplace and not just the value of items they buy.

And you can see that actually the value of the marketplace purchases went up 36% and not the value -- sorry, the number of the marketplace purchases went up 36%. And e-commerce, which is taking share from the m-commerce is actually plus 86%. So I think, again, transactions in the marketplace, 36% up transactions on e-commerce, 86% up quarter-on-quarter.

So this tells you that there is a very healthy engagement and our core business continues performing well, and those external factors eventually will have to -- we believe will disappear because demand is there, and supply will be reinstituted. It's just unfortunate that it's not happening as quickly as all of us wanted.

Yes. No, that makes sense. It's interesting. I hear you talk about the iPhone. And I think about here in the States, $1,500 for a phone, a lot of Americans are pulling back on those types of purchases. So I'm surprised that folks are still, I guess, hungry for new iPhones [indiscernible].

One last one for me. Thinking about grocery and delivery. I know obviously, those businesses are scaling now, but remind me, you're thinking about are those businesses like self sustainingly profitable on their own longer term? Or are you still thinking about them as kind of engagement tools to keep people on the platform so you can monetize them to other ways? That's it for me.

Yes. The grocery business is very much self-sustainable. We are on the profitability side. I think -- some time ago, we did show the profitability of the groceries. So you can go back to those numbers and those numbers are the same pretty much. So yes, it is sustainable, it's profitable. But as we are also having more demand for our products, then the capacity to fulfill, we are building up the dark stores, which is not just an investment which is huge.

But still, to build, once the state-of-art dark stores, which we are opening depending on the size, but it can be an investment from -- what is it $10 million, $15 million, something like this, which can hold the inventory for at least 15, 20 days on 10,000 plus SKUs. So those -- when we say we enter in the new city, we are building the dark store sort of first or renting it if it's -- rent is very affordable.

So those are the investments we're taking because we need to build the infrastructure to meet the demand. But the good news is that demand is there, and it's almost like always demand is more than we can serve. So we are following the demand. At the moment, as we speak, we have about 10 dark stores, and we will enter a couple of new cities next year. So we'll continue sort of building that infrastructure.

Got it. And I'll just sneak one more in. I know this is important to investors. The dividend, I saw you guys are going to reinstate that next year. Should we think about that being at a similar level to where it was or maybe even higher given that the income basis is higher today than it was before you positive.

Well, Reggie, I'd just say on that, you should keep in mind international will require further expansion. So that's something to keep in your base case and will remain an important priority. International was never there free 2025. So that's number one. Number two, having -- again, having said that, we can have a balance between the 2 our track record of returning cash, primarily by dividends, but also by buybacks, speaks for itself, and we get that this is something that is important to our investors.

It's precisely why we've actually started the buyback is one of the reasons why we started the buyback earlier than we'd initially indicated in our H1 numbers, we indicated cash returns would start from the beginning of the year. So we'll do our best to get the balance right between investing in future growth and returning cash by different methods, both buyback and dividends.

And we can decide what is appropriate as we move into next year at the right point in time, but it wouldn't be right at this stage to go into specifics around what payout ratios can be.

Thank you. Unfortunately, we have run out of time for any further questions. So at this time, I'd like to hand back to David for any closing remarks.

All right. Thanks. Thanks, everyone, for your time. We've done it now 20 minutes, but we have another meeting starting shortly. So we'll wrap things up now. happy to follow up one-on-one post the call. So get into if you have follow-up questions. Thanks a lot for your time, and speak to you soon. Thanks, everyone. Bye.

Thank you, everyone.

And this concludes today's webinar. Thank you all for joining. You will now be disconnected.