Executive Summary / Key Takeaways

• Kaspi.kz maintains a formidable market position in Kazakhstan through its integrated Super App model, driving high consumer engagement and diversified revenue streams across Payments, Marketplace, and Fintech segments.
• The company's strategic international expansion into Turkey, highlighted by the Hepsiburada (HEPS) acquisition and planned Rabobank integration, aims to leverage its technological expertise to tap into a larger, underpenetrated e-commerce and fintech market.
• Despite near-term headwinds from high interest rates impacting Fintech profitability and temporary disruptions in e-commerce due to new smartphone regulations, Kaspi.kz's core business demonstrates robust growth and operational efficiency.
• Kaspi.kz's commitment to continuous product innovation, such as e-Grocery expansion, new deposit offerings, and merchant-focused tools, reinforces its competitive moat and drives future growth.
• The company anticipates a consolidated bottom-line growth of approximately 20% for 2025 (excluding Turkey), with a return to capital distributions to shareholders expected in 2026, balancing investment in growth with shareholder returns.

Kaspi.kz: Forging a Digital Ecosystem Across Eurasia

Joint Stock Company Kaspi.kz (NASDAQ:KSPI) has established itself as a leading digital powerhouse in Kazakhstan, pioneering a unique Super App model that seamlessly integrates payments, marketplace, and fintech solutions for both consumers and merchants. Incorporated in 2008, Kaspi.kz's journey has been defined by a relentless focus on innovation and customer-centricity, building a comprehensive ecosystem that addresses the daily needs of its users. This foundational strategy has enabled the company to achieve remarkable engagement metrics, boasting approximately 75 transactions per month per active consumer, a testament to the platform's indispensable role in daily life.

The company's overarching strategy centers on expanding its reach and deepening its product offerings. Historically, Kaspi.kz has demonstrated a clear progression: consumers and merchants initially engage with its payments business, then migrate to m-Commerce, with e-Commerce serving as the ultimate destination for a fully digital experience. This journey is supported by continuous vertical expansion and the introduction of value-added services. Kaspi.kz's ambition extends beyond Kazakhstan, with a stated goal of serving a market of over 100 million people, driving its recent strategic international expansion.

Technological Edge and Innovation Driving Growth

Kaspi.kz's competitive advantage is deeply rooted in its differentiated technology and rapid innovation cycle. The company operates two distinct Super Apps—one for consumers and another for merchants—interconnected by a robust payment network, a dynamic marketplace, and sophisticated fintech services. This integrated approach allows for a holistic user experience, where shopping, payments, and financial management are all accessible within a single, intuitive interface.

The tangible benefits of this technological integration are evident across its operations. For instance, the Kaspi Postomats network, a "world class" delivery infrastructure, has been instrumental in fulfilling almost 100 million orders in 2024, with 84% delivered almost for free and nearly half within two days. This extensive network, comprising over 8,000 Postomats, significantly enhances delivery efficiency and cost control, a critical advantage in e-commerce. Furthermore, the Kaspi POS Register, provided free to merchants, streamlines operations by enabling product catalog management, payment acceptance, and digital tax receipt generation. This tool, used by 35% of merchants and processing KZT 1.2 trillion in payments, exemplifies how Kaspi.kz leverages technology to create value-added services, fostering merchant loyalty and driving platform adoption.

Kaspi.kz's R&D initiatives are focused on enhancing existing services and launching new, high-impact products. The "Buy-Inventory-Now-Pay-Later" (BINPL) product, launched in late 2024, is a prime example. It streamlines B2B transactions by allowing convenience stores to purchase inventory from distributors and pay Kaspi.kz 30 days later, while Kaspi.kz pays the distributor immediately. This innovation improves merchant working capital and reduces distributor receivables, showcasing the company's ability to leverage its fintech and payments infrastructure to solve real-world business challenges. The company's continuous development of advertising tools, which saw ad revenue increase by 67% in Q2 2025, further illustrates its commitment to technological differentiation that directly translates into merchant value and revenue growth.

For investors, Kaspi.kz's technological leadership translates into a strong competitive moat. The integrated Super App fosters powerful network effects, leading to high customer retention and recurring revenue. Its proprietary data analytics capabilities enable informed decision-making, allowing for personalized services and targeted product development. This technological prowess underpins Kaspi.kz's ability to maintain market leadership, drive operational efficiencies, and expand into new verticals and geographies, positioning it for sustained growth and profitability.

Competitive Dynamics and Strategic Positioning

Kaspi.kz operates in a dynamic competitive landscape, primarily in Kazakhstan, where it holds a dominant position across its core segments. The company's strategy emphasizes product quality and customer satisfaction over direct competition, aiming to be the leader in consumer and merchant experience. This approach has resulted in significantly higher brand recognition compared to its nearest rivals in Kazakhstan, being mentioned 5.5 times more for mobile applications and almost 20 times more for payment apps.

In the payments sector, Kaspi.kz's integrated QR and B2B payment solutions offer a more streamlined and convenient experience compared to traditional banking interfaces offered by competitors like Halyk Bank (HSBK). While Halyk Bank benefits from an extensive branch network and deep regulatory expertise, Kaspi.kz's digital-first approach and faster innovation cycles provide a distinct advantage in digital adoption and user engagement. Kaspi.kz's focus on network effects and proprietary data analytics allows for superior personalization and cross-selling opportunities, potentially leading to stronger customer loyalty and market penetration in shared segments.

Against financial services firms like Freedom Holding Corp. (FRHC), which specializes in brokerage and investment platforms, Kaspi.kz differentiates itself with a comprehensive marketplace and fintech ecosystem for everyday transactions. While Freedom Holding excels in niche financial products and investment-related cash flows, Kaspi.kz's Super App offers greater versatility through features like BNPL and travel services, fostering higher recurring revenue from its diversified offerings.

Compared to digital payments providers like QIWI PLC (QIWI), Kaspi.kz offers a more integrated marketplace and fintech suite. QIWI's wallet-centric approach is less versatile than Kaspi.kz's omni-channel strategy, which includes e-commerce, m-commerce, and various fintech products. This broader ecosystem building by Kaspi.kz enhances customer loyalty in e-commerce and payments, giving it a competitive edge in consumer-focused innovations.

Kaspi.kz's competitive advantages are further solidified by high barriers to entry in its markets, including the need for regulatory licenses and the challenge of replicating its established network effects. The company's strategy of not "over-monetizing merchants" through excessive take rates, but rather by delivering value-added services like advertising and delivery, ensures merchant growth and long-term partnership, reinforcing its ecosystem.

Robust Performance Amidst Evolving Dynamics

Kaspi.kz's financial performance in 2024 and the first half of 2025 reflects its strong strategic execution, even as it navigates a complex macroeconomic environment. For the full year 2024, the company reported a robust 32% increase in total revenue to KZT 2.52 trillion and a 25% rise in net income to KZT 1.04 trillion. This growth was well-diversified, with non-fintech businesses (Payments and Marketplace) contributing 69% of the consolidated net income, showcasing the strength of its integrated model.

The Payments Platform demonstrated consistent strength. In Q2 2025, TPV grew 21% year-on-year, with revenue up 16% and net income rising 19%. This performance was driven by robust transaction volumes (up 14%) and higher ticket sizes, despite a slight take-rate dilution from the increasing share of lower take-rate products like Kaspi QR and B2B payments. The platform's inherent operational gearing ensures that strong top-line growth translates efficiently to the bottom line.

The Marketplace Platform continues to be a significant growth engine. In Q2 2025, GMV increased 15% year-on-year, with revenue surging 25% and net income growing 13%. Overall demand was up 35%. This growth was propelled by strong take-rate improvement (up 70 basis points year-on-year), primarily from advertising and delivery revenues. E-commerce GMV, excluding the temporary impact of smartphone registration rules, would have grown 31% year-on-year in Q2 2025. The e-Grocery business, a key vertical, saw its GMV jump 57% year-on-year, reaching 1.1 million consumers and 3.4 million transactions. This segment's rapid expansion across Kazakhstan's largest cities, with plans for two more dark stores in 2025, underscores its significant growth potential.

The Fintech Platform generated strong volumes, with origination up 17% year-on-year in Q2 2025, leading to a 21% revenue increase. Net income, however, grew a more modest 8% due to the "continuous high interest rate environment." The average loan portfolio expanded 33% year-on-year, indicating future revenue potential. A strategic response to the high-interest environment was the launch of new fixed-term deposit products, which saw "extraordinary growth of 207% in terms of the amounts and 263% in terms of the number of customers" in Q2 2025. This initiative aims to acquire valuable customers and secure funding for future transactions, with the expectation that Fintech profitability will be a "dramatic beneficiary" when interest rates eventually decline.

Strategic Expansion into Turkey

A cornerstone of Kaspi.kz's international growth strategy is its expansion into Turkey. In January 2025, the company completed the acquisition of a controlling stake (66.35%) in Hepsiburada, a prominent e-commerce platform. Turkey, with its population of over 85 million and 16.3% e-commerce penetration, presents a substantial market opportunity. Hepsiburada itself boasts 12 million active consumers and 100,000 active merchants, with a GMV of approximately $3.5 billion (based on 9M 2024 figures).

The initial performance of Hepsiburada in Q2 2025 showed a notable recovery, with volumes up 7% year-on-year and GMV growing 16% year-on-year (inflation-adjusted), following a challenging Q1 impacted by politically driven consumer boycotts. Revenue increased 23%, and EBITDA grew 42%, demonstrating the operational gearing of the business. Kaspi.kz's immediate focus in Turkey is to ensure existing services meet its high standards of quality and customer satisfaction. Major fintech innovations are planned to follow the acquisition of a banking license.

To further its fintech ambitions in Turkey, Kaspi.kz signed an agreement in February 2025 to acquire Rabobank, a fully licensed bank without customers or a branch network. An initial investment of approximately $300 million is earmarked to fund this fintech strategy, enabling Kaspi.kz to introduce its world-class financial products to the Turkish market. This strategic move is expected to unlock significant opportunities for innovation in digital financial services for both consumers and merchants.

Outlook, Guidance, and Capital Allocation

For the full year 2025, Kaspi.kz anticipates a consolidated bottom-line growth of approximately 20% for its Kazakhstan operations. This guidance reflects a disciplined approach to growth, acknowledging the business's increasing scale. Key performance indicators are projected as follows: GMV growth between 15% and 20%, TPV growth between 15% and 20%, and TFV growth around 15%.

The outlook incorporates several factors. The "higher for longer" interest rate environment is expected to temper Fintech's bottom-line growth relative to its top-line, with an anticipated annualized increase in funding costs of 100 to 250 basis points. Regulatory changes in Kazakhstan, including a potential 10% tax on investment revenue and increased National Bank reserve requirements, could collectively impact net income by approximately 200 basis points. Furthermore, new smartphone registration rules are expected to temporarily depress e-commerce GMV, though management anticipates a normalization and potential "catch-up effect" in the second half of 2025.

Regarding capital allocation, Kaspi.kz has a strong track record of returning excess cash to shareholders. However, the $1.1 billion Hepsiburada investment is being funded from operating cash flow generated between Q4 2024 and H1 2025. Consequently, the company will not be paying dividends for Q4 2024 and H1 2025. Looking ahead to 2026, management expects to resume capital returns, which could include both dividends and buybacks, balancing ongoing investments in future growth (such as e-Grocery expansion and the Turkish fintech strategy) with shareholder distributions. The company's recent successful issuance of a $650 million euro bond at 6.250% due in 2030 also provides financial flexibility for its international ambitions.

Risks and Challenges

While Kaspi.kz's growth trajectory is compelling, investors should consider several pertinent risks. The temporary disruption in e-commerce GMV due to new smartphone registration rules in Kazakhstan highlights regulatory sensitivity. Although Kaspi.kz is actively addressing this with merchant and consumer tools, prolonged impact could affect marketplace performance. The "continuous high interest rate environment" poses a near-term challenge to Fintech profitability, even as the company strategically attracts deposits. Macroeconomic uncertainty in Kazakhstan, driven by factors like commodity price volatility and currency fluctuations, could impact high-ticket discretionary spending on the marketplace. Furthermore, potential regulatory changes, such as new taxes on investment revenue and increased bank income tax, could compress margins. Geopolitical risks in the region also remain a factor influencing investor perception.

Conclusion

Kaspi.kz stands as a compelling investment proposition, leveraging its dominant Super App ecosystem and relentless innovation to drive robust growth across its Payments, Marketplace, and Fintech segments. The company's strategic expansion into Turkey, through the Hepsiburada acquisition and planned Rabobank integration, marks a pivotal step towards its ambition of serving a market of over 100 million people, promising significant long-term growth opportunities. While near-term challenges from high interest rates and regulatory adjustments in Kazakhstan may temper profitability in certain segments, Kaspi.kz's core operational strength, technological leadership, and disciplined capital allocation strategy position it for sustained success. The company's ability to consistently deliver high-quality, integrated services and adapt to evolving market dynamics, while maintaining a strong competitive moat, underpins its potential for continued value creation for shareholders.