Kaspi.kz 2Q and 1H 2024 Financial Results

Rhea-AI Summary

Kaspi.kz (Nasdaq: KSPI) reported strong financial results for Q2 2024, with revenue up 36% and net income up 25% year-over-year. The company's Payments and Marketplace Platforms accounted for 68% of consolidated net income. Key highlights include:

- Marketplace GMV and revenue grew 62% and 96% YoY respectively
- e-Commerce GMV increased 113% YoY
- Payments transactions up 46% YoY
- Fintech Platform TFV growth up 43% YoY

The company launched new services, including brand advertising and expanded e-Grocery operations. Kaspi.kz remains on track to deliver around 25% year-over-year full-year 2024 consolidated net income growth. The Board proposed a dividend of KZT850/ADS, subject to shareholder approval.

Positive

• Revenue increased by 36% year-over-year in Q2 2024
• Net income grew by 25% year-over-year in Q2 2024
• Marketplace GMV increased by 62% year-over-year
• e-Commerce GMV rose by 113% year-over-year
• Payments transactions grew by 46% year-over-year
• Fintech Platform TFV growth up 43% year-over-year
• Proposed dividend of KZT850/ADS for Q2 2024

Negative

• Year-on-year growth in Q3 2024 expected to be lower than during 1H 2024 due to timing of marketing campaigns

Insights

Financial Analyst

Kaspi.kz's 2Q 2024 financial results show robust growth, with revenue and net income rising by 36 and 25 YoY respectively. This is significant as it demonstrates the company’s ability to scale sustainably. Notably, their Payments and Marketplace Platforms, accounting for 68 of consolidated net income, indicate a strong revenue diversification strategy. Such growth in these segments often signals stability and resilience against market fluctuations, which are key for long-term investor confidence.

Kaspi.kz's proactive approach to expand its Marketplace offerings, particularly in **e-Commerce**, has yielded impressive results with GMV up 113 YoY. This aligns with global trends where online shopping is rapidly growing, suggesting Kaspi is tapping into a high-potential market. Additionally, the increased Take Rates in both Marketplace and e-commerce sectors could lead to higher profit margins.

From a valuation perspective, the introduction of new revenue streams such as **Kaspi Tours** and the expansion into brand advertising could contribute to higher multiples. However, the potential rising operational costs associated with international expansion should be closely monitored. Investors should also consider the proposed dividend of **KZT850/ADS** as a positive signal for shareholder returns.

Market Research Analyst

Kaspi.kz's expansion into various verticals such as e-Grocery and e-Cars shows a strategic move to diversify its revenue base and capture broader market segments. The e-Grocery segment, with a **GMV up 99% YoY**, suggests significant market penetration and an effective logistical operation in Kazakhstan's top cities. This expansion helps in reducing market risk as the company is not overly reliant on a single segment.

The strong performance of Kaspi Travel, with **Tours GMV up 644% YoY**, highlights an untapped potential in the travel market which the company is leveraging. The competitive Take Rates in these new services could potentially disrupt existing market players and capture a significant market share, positioning Kaspi.kz as a dominant player in multiple verticals.

Also noteworthy is the emphasis on **B2B Payments**, the fastest-growing component of Total Payment Volume (TPV). This aligns with trends where businesses are increasingly digitizing their payment processes, offering Kaspi a stable growth avenue. The company’s statement about moderating interest rates and loans outpacing deposits suggests a favorable macroeconomic environment, which could further support its growth trajectory.

Tech Expert

Kaspi.kz’s technological advancements and platform enhancements are pivotal in driving their impressive financial results. The integration of brand advertising within the Marketplace Platform is a strategic addition, likely to attract more merchants and enhance user engagement. Given the nascent stage of the digital advertising market in Kazakhstan, Kaspi's early entry could establish it as a key player, driving long-term revenue growth.

The expansion of e-Grocery and e-Cars verticals indicates a sophisticated technological infrastructure capable of supporting diverse product offerings. The planned opening of additional dark stores in Almaty shows a scalable logistics framework, essential for maintaining service quality and handling increased demand.

The continuous development of the Kaspi Super App, with increased user engagement (72 transactions per month per consumer), implies a robust and intuitive platform that resonates well with users. This could lead to higher customer retention and lifetime value, important metrics for sustained growth. Moreover, their focus on enhancing the consumer experience suggests ongoing investments in AI and machine learning, which can further optimize user interactions and operational efficiency.

ALMATY, Kazakhstan, July 22, 2024 (GLOBE NEWSWIRE) -- Joint Stock Company Kaspi.kz (“Kaspi.kz”, “we”) (Nasdaq: KSPI) which operates the Kaspi.kz Super App for consumers and Kaspi Pay Super App for merchants, today publishes its unaudited consolidated IFRS financial results for the quarter and first half ended 30 June 2024 (“2Q & 1H 2024”).

2Q 2024 Highlights

• Strong 2Q 2024 with revenue and net income up 36% and 25% year-over-year (“YoY”), respectively.
• Our faster growing and more profitable Payments and Marketplace Platforms together accounted for 68% of consolidated net income, up from 61% in 1H 2023.
• All Platforms continued to deliver strong top-line growth in the second quarter of 2024:
  • Marketplace remains our fastest growing platform with GMV and revenue up 62% and 96% YoY respectively.
  • Revenue from value-added services (“VAS”) increased 4.2x YoY and added 100 bps to Marketplace Take Rate, which reached 9.5%.
  • Range of ad products expanded with the launch of brand advertising.
  • Marketplace net income up 68% YoY.
• Within Marketplace, e-Commerce keeps delivering the stand-out performance:
  • e-Commerce GMV up 113% YoY.
  • e-Commerce Take Rate up 30 bps YoY to 11.3%.
• e-Grocery top-line keeps growing fast:
  • GMV up 99% YoY & active customers up to 639k.
  • Launched in Shymkent, Kazakhstan’s 3rd largest city. With a presence in Almaty, Astana and Shymkent, e-Grocery covers around half of Kazakhstan’s total retail trade.
  • We are expanding existing dark stores and are opening another large dark store in Almaty to meet growing consumer demand.
• Following the acquisition of Kolesa.kz, we are focussing on the autos’ vertical, which we believe is one of the largest areas of household spending:
  • e-Cars accounted for 28% of e-Commerce GMV during 1H 2024.
  • Further product launches planned later this year, as we build the leading digital experience around selling, buying & servicing a car.
• Kaspi Travel is still growing rapidly:
  • Travel GMV up 33% YoY.
  • Last year we launched Kaspi Tours, a vacation package marketplace and in 2Q 2024 tours GMV increased 644% YoY.
  • Tours are growth enhancing and had a 7.9% Take Rate.
• In Payments, strong top-line continues to drop-through to bottom-line:
  • Payment’s transactions up 46% YoY.
  • B2B Payments remains the fastest-growing component of TPV. We expect B2B to keep growing significantly faster than Payments TPV.
  • Payments revenue and net income up 23% and 22% respectively.
• Fintech Platform TFV growth up 43% YoY:
  • Merchant & Micro Finance is our fastest growing lending product and at 17% of TFV in 1H 2024 is increasingly meaningful in size.
  • Moderating interest rates and loans growing faster than deposits should see Fintech net income growth accelerate significantly from the third quarter of 2024.
• Investing in our growth including international expansion is our top priority. However, if we have excess capital, we will return it to our shareholders.
  • Based on strong 2Q 2024 Kaspi.kz consolidated financials our Board of Directors has proposed a dividend of KZT850/ADS, subject to shareholder approval.
• The third quarter of 2024 has gotten off to a strong start and we observe a healthy and predictable consumer and merchant environment. The timing of marketing campaigns often varies and year-on-year growth in 3Q 2024 will be lower than during 1H 2024 due to Kaspi Juma having already taken place. That said, we remain on track to deliver our existing platform guidance and expectation of around 25% year-over-year full-year 2024 Kaspi.kz consolidated net income growth.

To the shareholders of Kaspi.kz:

During the second quarter, we continued to execute in the fashion that you have become accustomed too.

User engagement continues to hit record levels, with our consumers transacting 72 times per month, payments transaction up 46% year-over-year and marketplace purchases up 38%. We always aim to do more for our customers and strong transaction activity in turn is resulting in rapid top-line momentum across our business.

Marketplace Platform continues to go from strength to strength, with GMV up 62% year-over-year. Within this, e-Grocery GMV increased 99%. In Kaspi Travel, GMV from Kaspi Tours increased 644%. Kaspi.kz is the market leader in e-Commerce and going forward we will focus on building a best-in-class consumer experience around more verticals. We started with Travel, then e-Grocery and now e-Cars. As we execute further on our vertical specific strategy, we expect this to unleash another wave of innovation and growth, creating value for both our customers and shareholders. More new game changing services to come from us later this year.

Another important area of focus for us, is merchant value-added services. This includes advertising, where we recently launched our brand advertising solution. Now brands can run campaigns and promote merchants that sell their products. The digital advertising market in Kazakhstan is still in its early days. With a world class advertising proposition for local and global brands, we expect to be a catalyst for the market’s growth.

Each of our new services are not only helping us to keep growing fast but will open new areas for product innovations in the future. Their success gives me confidence that Kaspi.kz can keep delivering healthy growth for many more years to come.

The third quarter of the year has gotten off to a strong start and the consumer and merchant environment remains healthy. Our Fintech Platform should now see its Net Income growth accelerate significantly, which is another encouraging driver for the future. With Kaspi Juma taking place in the first and second quarter this year, year-over-year GMV growth should be lower in the third quarter before accelerating again in the fourth quarter. Looking through the timing of marketing campaigns, we’re very much on track to deliver another year of strong top and bottom-line growth.

As usual, if we have excess capital, we return it to our shareholders. For the second quarter of 2024, our Board of Directors has recommended a dividend of KZT850/ADS, subject to shareholder approval.

Investors should keep in mind though, that we’re working on our plans to grow Kaspi.kz outside of Kazakhstan and when we think the time is right, we won’t hesitate to put our capital to work.

Mikheil Lomtadze
Kaspi.kz CEO and co-founder

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For further information
David Ferguson, david.ferguson@kaspi.kz +44 7427 751 275

FAQ

What was Kaspi.kz's (KSPI) revenue growth in Q2 2024?

Kaspi.kz (KSPI) reported a 36% year-over-year increase in revenue for Q2 2024.

How much did Kaspi.kz's (KSPI) net income grow in Q2 2024?

Kaspi.kz (KSPI) reported a 25% year-over-year increase in net income for Q2 2024.

What was the growth rate of Kaspi.kz's (KSPI) Marketplace GMV in Q2 2024?

Kaspi.kz's (KSPI) Marketplace GMV grew by 62% year-over-year in Q2 2024.

What is the proposed dividend for Kaspi.kz (KSPI) shareholders for Q2 2024?

The Board of Directors proposed a dividend of KZT850/ADS for Q2 2024, subject to shareholder approval.

What is Kaspi.kz's (KSPI) projected consolidated net income growth for full-year 2024?

Kaspi.kz (KSPI) expects to deliver around 25% year-over-year consolidated net income growth for full-year 2024.