Q3 2025 Kaspi.kz Earnings Call
Uh, also without, uh, excluding effect of some, uh, external factors. Uh,
So, the payments, uh, grew tpv, 18% Revenue. 10%, nice growth on the net, income of 12%, the marketplace.
Impacted by the shortage of supply of the smartphones and iphones more specifically so our growth has been 12% year over year, but 20% G&A growth in case, if we exclude the effect of the smartphones and you can also see that our revenue would be 32% up excluding the effects of the smartphones and <unk>.
16% net income.
Growth, excluding the effect of the of the logic of the smartphones a 7% growth. If we considered that factor in the Fintech also has some nice growth 16% on cfe.
24% of revenue and it would be 28% growth excluding some of the effects are like a text on the government securities revenue.
And other external factors that will go through them on the following slide.
About 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 a 21% if we exclude the external factors as well.
And also considering where we are in terms of our performance in the in the next year. We're also.
Starting.
India's buyback in in November for 400 million, we'd like to bring forward.
Considering our cash generation performance 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 are you know.
It had the impact on our on our performance from the financial point of view again, the core business has performed very nicely some of the things which have happened.
From external factors as a smartphone registration requirement then shortage of supply of iphones that had about 8% the impact on the JV of 3% on the consolidated income. However, we still believe that the demand is there so next year.
Please go there to to recover.
10% Texan revenue from government Securities I mean in most of the markets actually the revenues text. So Kazakhstan are introduced to the.
Texas on the on the revenues from the government Securities <unk> D C or.
And it's minus 1% of net income increase in minimum reserve requirements, but also.
We cannot you know those reserves are kept with a national bank and there is no interest accrued so.
That had the impact of minus 1% in the base rate decrease from 15 to 25% to 65% again impact on consolidated net income minus 4% that we are in the environment of high interest.
Interest rates are is.
As the interest rates inflation normalizes.
There is an additional.
Performance are positives for the for the next year.
Yeah.
This is just to tell you and explain that actually the core business performing really nicely in the growth rates are quite high. So if you exclude the smartphones.
Our GMB growth has been 25%.
And you know how does the growth of the top five categories are you know like a beauty and personal care of our 69% growth closing, 51% growth in home and garden 35, So we're really growing across the board on many of the categories.
And the smartphones.
Cause of the.
Supply disruption really had a had an impact this year, but again, we believe that demand is there. So we should you know we we.
Spec to recover next year and based also would be would be supportive.
One of the growth next year.
Grocery we continue building up the the leading grocery business.
So as you can see we continue growing very nicely, we have about 1.3 million customers now.
We grew on the G N V, 53% and we're growing on the transactions, 55%, we're scaling it across the board you know we have a.
As we speak we had.
Dark stores in the third Q were just sneak another one in.
And we plan to enter another at least two cities next year. So we have ambitious plans as you remember the business is growing fast, but it's also profitable so for us it's very exciting vertical which both said you know drives the engagement.
But also brings a lot of value to consumers just because of the speed of the over delivery and the quality of services we provide.
Another update is also on the on the connecting to other banks and the payment systems store payment. The the QR code ability to pay with the QR code. So now we have even more bags connecting.
So our platform for growth has been.
Very high you know, 176% in terms of the.
TPB and 5.4 million transactions in the third user transactions I'm going to give them even faster we have now.
Kevin Beggs connecting to it and we have early pay which enables our consumers to transact with a QR code in the countries, where private pay is present and we have also introduced the functionality to win.
Users of holiday coming together can also transact with the cost of the QR, So where we're building up this flexibility for our consumers, which is also useful for the merchants and <unk>.
We'll 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 I'm excited about it it's it's a major major vertical in the in the spending in our lives.
So we have been growing very nicely. This is the functionality to remind everyone. When the consumer can actually paid with the QR code straight in the in the restaurants. The instantly, but also can leave the T. But all of this happens in a mobile application. So TPB has grown 259 times and the transactions.
In excess of a million transactions in the third Q. So growth is there. The vertical is is also very.
A valuable service for the restaurants and consumers love it.
And then we continue rolling this out as we are going for the restaurants vertical but we also have integrated.
The third party of our restaurant delivery platform, it's global it's a subsidiary of delivery hero in Kazakhstan is a it's.
It's a top three player in the country. So now we have a we have integrated them in our Super App basically consumer skin.
You can access the global service through a single registration, which is a car T I D and from the legislation that they can have access to before.
Service of the of the global App and they can they are also integrated with our payments so that consumers can seamlessly pay with a with a cost we pay so it's a it's it's it's a major.
Step for us So we're working with a third party mobile application and yeah. It's exciting that the teams are now working together to to develop the service further but this is again around the restaurants, where to go and we're.
We're excited to continue building up services into specific verticals in the future.
We have also done a you know coffee has been doing a regularly the events called Casspi keynote event, when we presented the major innovations and and demonstrate them and.
And until you know the you know what the service is about so we've launched a.
Three services on the Gatsby keynote event.
It's a pay by Paul it's advertising service and the gas P. I.
So pay by Palm is probably one of the of our major innovations in the payments.
After we have introduced the QR code and and before that with introduced are the payments into wire transfer by the mobile number whereas the first one to do that so it's very cool feature you know when you basically just connect through our mobile application.
And the device to the.
Oh gosh, they pay by by Palm Gosh, the Olive garden, Olive Garden, and Kozlov means Palm and then you can you can simply put your your palm on the top of our device and that the payment goes.
Through so it's very exciting innovation, we are where we're planning to roll out at the end of this year.
It will be free of charge for the merchants for the first three months.
And were you know in general our view in the payments business is that we would like to give as much.
Flexibility in the choice to consumers.
So our consumers are able to pay with the with the cargo Disney can pay with a QR code the can pay with the palm.
And in the future will be we're also expecting to introduce some additional source. So we would like to give them as much flexibility to the consumers as possible and we're also working with the National Bank. So that our consumers can also pay a sort of any QR code at any merchant.
So our consumers will have as much choices.
As possible in this innovation will just bring conditional very exciting way to transact in the stores, especially in the in the high intensity.
Transactions. There is a video we have a published both of cost me a long time and also the event so you're welcome to.
Check them out, it's 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 our revenue drivers for us in the marketplace, specifically and we have grown AD revenue, 56% year over year and as we think.
The advertising you know, we constantly rolling to the services, which enable merchants to increase their sales, but also for consumers to make a very informed informed decisions. So we have launched are 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 it within the one minute you can you.
You can set up a campaign you can you can you can manage the campaign from the screen of your smartphone you can review it analytics and their third party platforms. So you can preview your ads and and platforms, which are merchants will be able to advertise our.
Facebook Instagram a tick tock.
M P. A Google and we're very excited this is just the one more tool for our merchants to have a very efficient.
Advertising campaigns, but also they can track them they can manage them in analytics, a really in depth around those.
This new service and advertising we have just launched.
We also have been working a lot of behind the scenes on the on the AI gusty I assistant our.
Our view of the AI assistant is actually quite simple we call him assistant because we believe that.
You know technology that we're developing get custody.
Will help to to make a daily tasks.
In a faster simpler and more convenient better quality. So we are looking for very specific use cases, which technology that we're developing and Caspian can enable again technology has very wide as you guys know very wide applications.
The applications are.
However, we believe that to deliver the most value.
We want the technology to be assistance 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 a cafe AI assistant for the for the merchants are so the way the service works is.
Quite straight forward, David can you switch the slide so basically you can create the.
The goal and the application of this service is to enrich.
The product content and create the rich content, which which helps you too.
The increase the.
The interest from the consumers and therefore.
Since we yourselves so.
Basically you upload photos and see some function of August screens here I'll clothing. The photo then coffee right.
Creates.
<unk> creates the photos for your product in this case for example, Casspi I will select the model which will be.
You know where in your Oh they are.
Uh huh.
Then you have to be I also creates the discretion description is based on many different.
And parameters, which also includes the customer reviews and what is important for the customers in order to make an informed decision about this product and afterwards, you can preview of the product and you can published so it's really before that it would take whatever for either maybe depending how complicated the item is.
Maybe 10 15 minutes to upload the item and create the disruption and that was the main.
One of the main pain points for the merchants now just takes the minutes and everything gets filled up automatically you can even make a photo of the label and then Paul characteristics of the product you know will be filled up also.
<unk> automatically and then we still call. This an assistant which means the control is when the merchant or with the user. So user can edit user can confirm those description 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 a extraordinary results as most of the technologies.
And the sources, we're developing we run those services on ourselves first and then we are we get convinced that technology is really working on the services the value and after that we offer it to customers and the and the merchants in that specific case. So we have enriched about over half a million products.
And I just you know can show just some of the examples.
So for example, this one is the is the capital and you know how much else you can say about the cattle in order to.
Have more interest from buyers and drive yourself, but actually what cafe I will suggest you to do and again. This is all generated by cafe coffee I those are actual screens and actual texts. It you know interaction works like a similar like to so the AI assistant so.
It will create the photo in the interior it all suggests to create the photo in the hand with the hand holding the smartphone for example, because this is actually a smart capital. So it's not the only boiling water, but it's doing a bit more of the functions and also it will it will suggest to create and will create the size of the cattle because then.
You can understand from those photos that actually this is the way it looks at an interior. It's more just the catalyst smartcard Oh and also it has a sizes. So we can understand how it stands and in theory 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, carve the product has been enriched and the results were quite meaningful. So we have this this product after enrichment increased 35% in clicks interest from consumers and gave 83% increases in the sales and again this is the product which.
Was just the.
Photo or limited for the you know.
Limited description and done and this is the rich content, which sells which boso gifts consumer more tools to make the right decision.
Another example is is tires you know how much you can tell about tile tires. Obviously, you know tire is a tired everybody knows what tire looks like however, Crosby I actually identified that you know if you can create the info graphic which has on the first page, which usually consumer sees you.
I need to say actually what is the seasonality of this tire and also lists some main most important.
Characteristics in info graphics, so that consumers can make a decision while looking at the photo. So this is how cafe I created the whole thing and then on top of it it actually inserted the description and created the description which.
Says a little bit more on every individual most important parameter of the tire so that consumers can make the right decision again all of those have created a bicuspid bicuspid.
Including these photos and info graphics and description so quick sexual increased 4%. So they are they drive more interest from the consumers and the 53% of the sales increase just because of this change on that at.
At that time.
Really exciting technology, we have been working.
Behind the scenes for 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 will basically identified 30 30 days before let's assume there are two similar control groups right. So red is the product, which we improve the enriched content and then the gray color is the control group so.
Those are the similar products or assume similar capital sort of similar.
The tires and we observed them for 30 days and as you can see behavior is very similar because those groups at extremely compatible products. After that you know we have had our gaspe eye to enrich the content. So again can you again to create the products to create a description and characteristics.
So on and so forth and as you can see 30 days after the enrichment the control will continue performing.
This simply by me still giving some increase however, enriched our content has is has more than two times our interest in fixed from the consumers than the control group. So this is a very exciting technology. It's the first application out of many which are there.
You can be applied then you know we're rolling.
The south it will be available for the merchants and in January of 2026, but again as I mentioned, we are ourselves. We're using this technology and ourselves are enriching already the content and we have been reached about of over 500000 in the products on our marketplace ecommerce type.
I would like also to mention just studied briefly some of the important.
Priorities CLO Pepsi Borgata is working on and you know all of our main goal is really to.
To ensure that we have a very sort of strong.
Performance.
And then continuing exciting the consumers and merchants and there are four priorities number one is the delivery and they are not a priority right. So we're focused we're working on on full affordable so.
The the main areas of investment as delivery, a b M. P. L. A and the payment options from the banks marketing and user experience on delivery side.
You know we are.
Making the low ticket items more beneficial for the merchants to to ship before that the delivery cost was more than the value of the item which was salt.
So we have actually worked on making sure that delivery is economically viable for the merchants and especially in the low ticket items a bit.
Those items are the ones, which also driving engagement and also we have launched a weekly delivery, which was not yeah. We could deliver it basically was not the market practice.
And we believe that if your e-commerce business, you should be delivering going to 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 in the low ticket items, which again you know you are driving that engagement.
Marketing that's another area of investments and improvements as you know teams are working mostly to optimize the performance to make sure that you.
You know if we are marketing the products those products are of high quality at the.
Go under good terms and and therefore, they generate more interest more traffic and more views and.
As soon as this traffic lengths on your mobile application of course user experience improvements are targeted to to redesigning of the consumer shopping journey in order to have the higher conversion rates. So those are the number of other things we're working on of course, but this is.
Something which gives us both results, but also there are important both for merchants and for the consumers.
So as a result of those for repairs and improvements and changes in some of the areas. We have shown a very nice growth.
A number of purchases, which is the main metric.
<unk> 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 really exciting trends.
Obviously, we will continue.
Making further improvements in 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 were sort of working go on just to visualize those are really you know.
You don't have to be the rocket scientists there are some really simple stuff that he can do so in case of the payment options. For example, we have a you know we have shown a to the consumers number of payments, you're making but also the monthly payment that you you might have with the B M. P. L payment option in and those results.
You know before and after gave us may be a test for 5% growth in the G. M. D. 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 as for example, the redesigning some of the homepage items. So we have we have basically brought in more personalization in order for consumers to easier to understand some of the products that are there or is there a fit for their more interesting for them. So recently viewed protein.
And especially for youth sections on the homepage.
And also in principle, just to see more more more products on the homepage. So ctr.
Previous to almost two times from 15% to 31% in the a b test for recently viewed section.
And especially for use section increased from 18% to 23%.
Click through rate. So it just tells you how much of the simple improvements on the user experience skimmed can bring the value.
We're also working on the third party platforms in this case as Influencers, which are you know hep.
Zebra has a there's a significant influencer.
Channel, which drives the sales and here we are basically also.
That made the various sort of important changes basically helping the influencers.
And the merchants in this case to.
To launch their campaigns when when you reduce the price.
And you also have the reduction from the from the Mercury from the from the Pepsico, rather how much of the benefit you will get how much of the uplift you will have and you can also see the products, which you can launch. So this AB tests gave us more than 9% of the <unk> uplift and again this is the service when merchant.
Can can launched are the prices and the price reduction has also mentioned with the with the reps who brought the commission a commission reduction.
And then Influencers are again influencers skier can actually easier to see the the offers.
We've taken a market to the subscribers them. So we have done.
Are you can you can you can use you'll see the the brand. So you can see the products and those are also very.
Very much a we're trying to match those selected this selection with a specific influencing.
So of course, our channel is quite substantial and they'd be test gave US also the same excess in excess of 9% G&A growth.
So all in all I mean, we have introduced some of the major innovations on the coffee side and we're also achieving the growth in orders, which is very healthy because were in investing our efforts.
In deed.
Two delivery marketing payment.
<unk> B M P L and user experience improvements.
Back to you David.
Alright. Thank you Macau, let's go on you talk about that performance.
Core business, starting with the payment platform.
So I think that's the key message here on the slide eight.
Payments Crouch remain.
Our robust but also.
Throughout the year.
Our Belgian himself 14 ascent in the third quarter.
15% year on year for the nine month period.
And as we've talked about previously just reflects the ongoing popularity of SP.
Bill payments and the fast adoption.
<unk> eight.
Strong.
Volume growth translates plus a growth in ticket size.
Flight Centre pass that broke and Keybanc.
18% MBE at bought up by 14% Belgian Bronx, Op 20 cents, a benign area batches.
Sure.
Strong.
Trends.
Hum.
Within that 69%.
I come from.
While our oncology.
Yes.
I'll try to take write down.
Thanks, Ed.
And sorry, eight basis points at the nine month, Eric again.
And you've seen that actually playing out.
The last couple of years.
The combination of.
Strong top line growth strong boggy both shrunk.
Oh great.
Results in lower revenue growth was 10% up 14% quarter and nine months area.
<unk> consistently seen topline dropping straight to the bottom line operational gearing and cost control.
You're buying broking payments of 12% and 17% respectively.
Moving on.
Marketplace.
Oh yeah.
Again actually that you stay attached.
The purchase volumes.
Very strong again.
Throughout the year.
36%.
Yeah.
At quarter.
That is 6% yesterday.
Heritage transaction broke the marketplace remains robust.
In terms of GMB growth.
<unk> growth of 12% and 15% year on year.
Illustrates the impact.
The supply issues and then small outage.
Excluding smart balance JMP is up 20% at quarter end up 21% year on year and you should keep in mind that the smartphone supply disruption is relevant not just about e-commerce and commerce.
As well.
Marketplaces take rate continues to move buckets, you could get once again, all time high levels, 10% attach water and for the nine month period.
By value added sabotage, namely Casspi, appetizing and deliberate as Macau Shaoqi appetizing wrapping you up 86% in the back or 76% at the nine month period.
If we look more specifically at e-commerce.
Oh <unk> driving in a bad quarter, if we adjust our smartphone.
Can't be growth of 25%.
For the nine month period.
It can be up 19% and again, if we had just a small upfront.
29% year on year.
The apartment.
X Smart Bunge remains very very strong.
Oh supply disruption in a country wide issue.
Okay.
In March we have a very favorable I'll.
We'd also expect out of the car.
Next year.
<unk> issues to naturally.
Hum them themselves, the companionship, especially to be compromised remains completely unchanged and actually on the patch side of the equation see Aragon growth very strong 86% year on year and up 19% year on year that ultra and nine month periods respectively.
Contributing to that basket.
And as always the slower growing marketplace platforms, but nonetheless, it's still an important platform, particularly.
Onboarding merchants GMB growth of 12% in both areas to wait just to smartphones G. M B broke up 17%.
Basketball.
In nine months and 10.
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.
GMB up 13% in the third quarter up 17%.
But the nine month area.
Take rates.
Nicely 50 basis points and bad bots at 60 basis points for the nine months areas.
That is primarily due to the growth in <unk>.
Now account for around 10% of GMB travels GMB launched around two years ago.
One nicely from from from Zero, and we will continue as we move into next year too broad of a bulk travels overall G. M E racing bind fab that take rate expansion.
Yeah.
So that combination.
Hmm.
Yeah.
Thank.
Take rate expansion of both GMB growth.
Yes.
In grocery revenue translates into revenue growth and market place well above our GNP growth up 24% and 27% year on year areas.
If we make the smartphone.
Adjustments.
C rapid new York's attitude, Samsung and basketball sense, So Randy just again reiterating the point that.
The supply disruption in smartphones, which we expect to be temporary and tourists solve itself over the course of next year is the primary and actually owner you only raised them.
A lot of growth that you are seeing in marketplace same comments on the net income side of things up 7% and 13% adjusted just not bonds up 16% and 20% net income will grow below revenue growth and that is just the mix effect of one eight.
Strike growing faster.
Within that mix.
Finally in Kazakhstan, moving onto the <unk> platform.
Yeah, the growth remains very robust.
Up 16%.
17%.
Nine month period.
So it is not just robust but again consistent.
So yeah.
The growth is being driven by batch lending, which we expect to keep growing at a faster rate than the consumer lending.
Lending products.
Really nothing new that's been the case over the last couple of years and should remain that that that's the case going going forward.
The growth in origination is happening it's stable pricing in.
Fintech yield flat year on year at around 16% in that quarter.
In a sense that the nine month area and you get to your seat.
Strong growth.
In the loan portfolio of 30% and 32% year on year growing at a faster rate than the deposit base bucket to the deposit base and you used to see.
Trends and new products.
We talked about previously.
Seem solid.
A month growth in deposits essentially.
Intra introduction.
Cost of risk no 0.6% basket.
And in the same period last year overall.
Trends remain strong.
Consistent.
Albeit that as we mentioned at the H one numbers currency depreciation in the first part of the year and necessitate I am macro provisioning in the fast pot.
Yeah.
Mpls.
Moved up slightly.
But again this is a trend that's been consistent that slightly passed at the end of last year. This has been the trend true.
Off the course.
And overall credit trends remained strong and consistent.
Our coverage reflects the growing share at all.
And the growing share of the matching financings to call out is secured the match financing is sort of by nature, a lower risk products and therefore.
Requires.
Less less provisioning provisioning unchanged on the consumer side.
So what you have is just the mix effect.
Okay.
Strong origination and bring you to experience stable pricing.
Decent and accelerating fintech revenue growth of 24% in a bad quarter and up 21% the nine months areas.
Faster rapid you broke this also translated into accelerating net income growth accelerating.
Accelerating net income growth of up to 15% from 10% in the nine month period, that's despite the growth in interest expenses in the basketball Apache defense year on year.
Adjusted net income growth reflects the effects of the bank rate base rate increase so you can see that if rates havent moved up in the SaaS part of the year actually.
Fintech platform would be on track, but what it delivered 28% bottom line growth in the third quarter.
18% for the nine months area and so yeah, I think the point to illustrate it just.
How material the rising prices have been on the bottom line, but interest rates in Kazakhstan are at high levels and it can move the other way when rates trend trend trend downwards.
So moving on to <unk>.
<unk> talked about what the multiple product initiatives, taking place around payments options market and deliberate user experience and so on a one way you can sort of track. The progress ultimately is in terms of patchy says driving patches is frequency of transactions.
On that that the marketplace and you can see here.
The initiatives that we have.
Launched a gathering increasing momentum with purchase volumes up 16% for the third quarter basket plus 4% at the nine month period.
Gary that's a really encouraging.
Embraced in an unbroken momentum as we look into next year.
The Baroness and the G M B side.
By Asian.
Financials are inflation adjusted we're talking about real growth here. So I know, there's been some sort of confusion.
Around that and some of the commentary that I have seen but here you see GMB growth moving go 15% that's a.
At quarter Vas is 5%, but nine months area itself the investments.
Once that we're making are starting to drive an improvement in the top line performance.
And that's reflected in both <unk> eight and the bumpy side.
That business.
Okay, 8%, 5% GMB growth translate to Danny Astra rail revenue growth of 22% and 11% basket batches.
11% for the nine months period, you see that the investments that we're making a start to translate into a faster growing.
Business is the aim to invest and drive the top line performance.
So to a faster rate from sustained area.
At a time and that is also being helped at the rapid lateral by broken appetizing and grossing standup deliberate SaaS is the faster you browse passage GMB growth you can see the impact of the investments are there.
We're making the investments are targeted primarily into those.
Areas that we've talked about deliberate payment options.
Marketing.
And at user experience and you see that impact on the EBITDA level, but you can see that these investments are.
Translating into faster rapid you'd probably somebody asked about faster ramp and you probably should be sustainable I think I wouldn't say a few years.
<unk> impact the bottom line, but what you can see if you look at the 2025 is.
The main area of that investment is is is on the payment options.
That's fine.
I'll pay later options that are integrating with that Aki backstops that that may increase the former.
Advertising and deliberate to a lesser extent.
<unk> also announced a $100 million share capital increase and again it is raising funds whether it be U K.
Ensuring that that business is well capitalized she much different objectives over the course.
Next year.
So what does all of.
This mean.
Cassie and Kazakhstan, you see decent and consistent revenue growth of 20% in both areas.
Yeah, you see again, the revenue level at a group level the impact of smartphones AGM at rapid you would be up 23% and 22% respectively at the third quarter and the nine months.
Area and then at the net income level.
The impact of 21% net income growth in the past quarter in the 24% net income growth reflects the impact of smartphones the high base right.
Oh, there external factors regulatory and tax changes that have been introduced over the course of.
Sure. It helps you to understand the underlying operating performance of that business.
But some perspective on this is it.
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 that have occurred subsequent like we're actually trending very close exactly.
Exactly on track.
Paul or without the underlying core business growth drivers remain unchanged.
Here is the consolidated numbers and just it's just a culmination of Kazakhstan and Turkey.
Together.
In bad times.
That's the guidance.
On the Middle column, you see the need.
The guidance, so lower GMB growth.
This reflects the absence of recovering and smile.
In the fourth quarter.
Again, just to reiterate from March 2026, if nothing else, we have a very very favorable base effect going forward.
No reason to think that the supply disruption was resolved itself of course.
Next year, we're just the smart box you can see that marketplace is on track from 19% to 21% GNP growth.
<unk> payment growth around 20% that's at the top end of the range, we provided at the beginning in some areas.
In line with the guidance that we provided at the.
PRA 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 that is lower than the around 15% and that reflects smartphones. It reflects that.
The tax and regulatory changes and again the impact is there.
Yes.
If you ex out those factors the business will be on track for around 18% to 20%.
Next year and this gives you some indication of what broke smart machines herself themselves.
Interest rates at some point, maybe moved out the tax and regulatory factors at least move into the base.
We've also launched the 100 million or we will launch them. Obviously is the first call the $100 million Aes a buyback program.
I think what we 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 by both buybacks and 100 million buyback program doesn't have to be the end it can be.
The staff.
And their assumption.
Dividend payments, it's too early to go into the detail just to preempt that question or at exactly the dividends paid.
But I think being pretty consistent this year was an investment year.
Those investments to put the foundations in place for future growth that was what we saw 12 months ago, our message of being consistent.
And our message now is we can achieve a balance between investing in our growth.
Cash next year.
Pretty clear.
Yeah.
So on that note.
Let's open the call up to.
Go ahead please.
Thank you as a reminder, if you'd like to Richard a question. Please use the right hand button on your zoom to Bob If you have dialed into the call. Today, you may rich a question by pressing star one on your telephone keypad.
Please hold while we allow questions to queue.
Okay.
Our first question comes from the line of Aegon Iranian from Citigroup.
Please proceed with your question.
Hey, good morning, good afternoon guys.
I'll start with Hep C in Turkey.
The updates there on.
The investment is really helpful.
Can you just help sort of paint a picture on kind of where we're going from here, particularly around the investment level needed when you can get.
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 <unk> in Kazakhstan.
Advertising.
Product numbers.
Really strong growth there and it looks like it's still very early in terms of penetration you've got a lot of different products. So just help us think about how to think about advertising.
Advertising kind of if you benchmark against peers, how big it can be.
Is that you can drive more advertising or less just kind of help them think through that as well. Thanks.
Alright, thanks for the questions, Mike Alex you want to take both of those questions.
Yes sure.
So on the on the.
The Pepsico ratified.
We are again as a as a part of our priorities in the.
The strategy is always.
To make sure that the debt.
The products of the services and the both for consumers and merchants is the.
Is the one which.
Briggs the value. So that's that is our priority which means.
When you when you think in terms of the growth or in terms of consumer engagement.
And the merchant side that's.
Thats.
Our most important priority. So the growth is a result of those of those of those changes and we believe that.
But building up to the highest quality products and the user experience.
Those are the yeah those are the.
The priorities will we generate the value for us.
What I was going forward. So that's so that has that is our priority has been our priority for this year and the teams are working.
They basically on bringing the quality of the products to the to the to the to the next the next level. So the investments that you really see those are the investments which are again you know on the delivery side, we want to deliver both faster, but also have more engagement for merchants.
And on the consumer side.
And the marketing side, those are the investments, which bring traffic, which converts at the increase in grade.
It into the into the sales and in most of our initiation initiated strategic priorities are.
Around the mobile application, which we're all busy prioritizing so.
That's the that's where we are with we don't really we don't really see the.
The huge huge need for for capital investments going forward, but again those are the justified by.
Improving the quality of the services and the speed of delivery and in infrastructure for the delivery then we'll bring those investments.
Investments into the company. So that's basically all of a sudden our priority is really growth. So that's the broad growth.
High quality growth, which means to the growth of our hip engaged customers and have been engaged merchants.
So that's on the.
On the Hep C. What are the other side.
Yes, and in terms of the overall competitive dynamics on the market.
You know again I think we have been.
Saying this many.
Many times that we.
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.
We don't think about competition in a traditional way.
Okay.
These are companies would think.
So that's that's on the Hep C side in terms of the in terms of Kazakhstan. I think we are developing the full range of the advertising services, which are indifferent.
And different stages of the development. So we have you can you can advertise products now through the product listings, we have advertising service for the brands. We have advertising service when you can actually introduced.
Points or rewards.
As a merchant.
We also are thinking how we can enhance the merchant's experience in.
In the App itself in order for the merchants to.
A brief look a very highly targeted engaged consumer base to the products and to their shop in caustic is it itself.
Yeah. So it's growing very nicely to the merchant is giving us a very good books.
Good feedback and we believe that we can.
Continue growing this business and it will grow faster than the rest of the and we believe it will grow faster than the rest of the revenue and advertising. We just launched our I think what we've talked during the last presentation, if I'm not mistaken that launched gift certificates even for offline retailers. So all of those things.
At some point that will start contributing meaningfully to the growth. So advertising is really exciting and that's our core competency. It's all about data is all about user experience.
And it's all about the merchant experience.
In the mobile application. So yeah, we're very excited about the about the advertising services and they they will they will continue.
<unk> growing much faster than the rest of our revenue.
Okay. Thank you so much.
Thanks.
Our next question comes from the line of James Friedman from S. Archie James Your line is now open. Please go ahead.
Hey, good morning, guys good evening.
Wanted to ask about.
The.
So.
On the marketplace side did 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.
The advertising side can.
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.
Try to understand.
What it means to run it for them. So one on marketplace wanted advertising. Thank you.
Yeah.
Sure. So on the on the take rate the main drivers of the take rate.
A really additional services and advertising more specifically and also the delivery.
Delivery revenue. So that's the main the main driver of the of the take rate.
We're 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 there driven by additional added 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 items they want to promote.
And then and advertise and then they are just tell us a bit to 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 know you can launch an advertising campaign on class B with the one hand by driving a car.
Sure.
If you're on a small merchant and and this is how we are a we're looking into this so this is not the.
Something which complicates the merchant's life. They just to quickly launch at the very simple very simple.
Settings, they just need to tell us the type of merchants.
The type of consumer they want to reach and then we will do the rest of the job for them.
And behind this of course is is.
There are a number of technologies, which we are developing.
And and the data, which enables us to have this very high prediction high accuracy.
Advertising.
Our services are advertising campaigns for merchants, which deliver them.
The value at an affordable cost. So that's basically the way we look at the at the Advertiser gets its it's simpler than many other big advertising.
That forms just because you know you don't really we don't really we do a lot of work for the merchants on them rather than merchants going through the complicated quest of setting up the advertising campaign. So this is why the services are.
You know I'm showing high engagement in the growth rates.
Great.
Thank you so much.
Thank you.
Yeah.
Thank you. Our next question comes from Griffin dragging from Wolfe research piece of meat Lucky and proceed.
Hey, guys Griffin dripping on for Darren just wanted to touch on the smartphone impact again I know last quarter. You mentioned there were not seeing improvements from the eight points.
Impact of G. M P largely as expected, but just any color on current trends through October 1st 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.
Alright, great and thanks for your question. So maybe I'll just start on that one but just for the benefit of everyone. I think there's sort of two issues to be aware of bass was number one.
Registration requirements.
Those were introduced in the spring and that was the sort of the initial cost.
The supply disruption what subsequently.
The bolt into than just a shortage at the latest models.
Type 17 models across the entire country and you have a situation, where now people say well longer of Virgin.
Our new smart power.
Don't want to go out and purchase the old model when they know that the.
New bottle will be available shortly.
But that's what's going on.
And that the market.
Theres nothing to show any improvement.
Currently.
Our supplier base, particularly off new models and an incredibly.
Really constrained.
But apple will get you into the country over the next couple of months. So number one as I mentioned earlier, you've got very favorable comp.
It kicks in in March.
As of next year. So that's your basis, if nothing else favorable cum.
You too.
There's no reason to believe that loss, it's taking a little bit longer than we would have hoped that the supply disruption wont.
Normalize over the next.
Couple of months since that lead into it.
That's part a.
Next year.
So that song.
Smartphones and we'll show you just how material a lot is.
And how meaningful that can be run at dose a tab on it will turn.
That's the first thing, but in the second thing. We showed you there is that ex smartphones.
Place in particularly e-commerce growth.
Okay.
Israeli really shrunk.
As you look into next year when smartphones come back.
Or the basketball should also remain pretty decent.
Marketplace, and he called us, adding to its more normalized growth trajectory.
There's no change in market places competitive position.
The supply disruption is not unique to attach a cafe XR.
It's a country wide issue.
One basketball everything else is pretty much performing as we'd expect it to where the marketplace. So that would be my main comments.
Thank you.
Thank you as a reminder, if you'd like to ask a question today peaches or 800 feet challenging well, if you've dialed into the call. Please press star one on your telephone keypad.
Our next question comes from Reggie Smith of J P. Morgan Ricky Your line is now if you. Please go ahead.
Perfect. Thank you I.
I guess, one quick follow up on the marketplace question, a second ago I guess it wasn't quick math I think year to date you guys are at 16% growth in markets like AMD. Thank you guide also like 12 to 14 for the entire year, just wondering if I'm thinking about that right is that a storm like a low single digit GNP growth.
<unk> fourth quarter and is that primarily like seasonality around the <unk>.
Mr Alba.
Home purchases and then one other piece with that.
You mentioned I phone it doesn't issue for like all phones like Samsung follow the Android phones as well can you talk a little bit about the mix of I guess, the iPhone sales versus Android and the country just to give us some background I have one follow up after that thank you.
Well I'll I'll start, yes, I mean, you will see marketplace growth, but right in that Oh, sorry, I meant the market places not just.
E Commerce E Commerce and commerce.
And travel.
But yes.
You will see that that number number one.
And number two I would say.
On the smartphone issue, particularly this time of year.
It's high end smartphones.
The likes of 17.
17, so it's not just.
But.
So that is why in the latest models are.
And if you think about it.
It's $500.
Hum.
A lot of missed GMB.
The gain can be when it comes back and a lot of missed wrapping buses and average ticket size.
Marketplaces on the E Commerce that's materially.
A little below that.
In my comments that I've made Michelle wants to add anything about the market as a whole.
Yes, well I think that the.
Well the <unk> growth is a combination of.
Also the value of items, which are a soap and as David said, you know the highest value item.
And the smartphone specifically the iphones and since the new model has not reached in the requested volumes the country, it's not only Kazakhstan specific.
And then basically.
The people don't have a don't have a trigger to to change their phone, but we just believe this thing will will change.
In the in the in the future because demand is there but in terms of looking at the.
The trends and the engagement I think that the number of transactions as well number of purchases is actually extremely sort of valuable valuable number just because that actually tells you how many purchases consumers make how many times they interact with your market.
Place and not just the value of items they buy it and you can see that actually the value of the marketplace purchases.
Went up 36%.
They're not the value story, 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 the game transactions in the marketplace, 36% up transactions on e-commerce, 86% up quarter over quarter. So this is tells you that you know there is a very healthy engagement than in our core business continues performing well and those external factors eventually will have to.
You know we will.
We believe will disappear because demand is there and the supply will be reinstituted, just unfortunate that it's not happening as quickly as.
All of Us wanted.
Yeah, no that makes sense, if I hear you talk about the appetite and I've talked about here in the states.
You have two bucks for phone.
A lot a lot a lot of Americans are pulling back on those types of approaches that I'm surprised that.
It's still a I guess, a hungry for new I found that in Capex as well.
One last one for me thinking about grocery and deliberate no honestly those businesses are scaling now, but remind me your thinking about those businesses like self sustaining a profitable on their own them. All the time are you still thinking about.
It's kind of engagement tools to keep people on our platform. So you can monetize them through other ways.
It for me thank you.
Oh, yes, well the grocery business is a very much self sustainable we are on.
On the call.
On the profitability side I think.
Some time ago with did show the profitability of a grocery store you could go back to those numbers and those those numbers are.
The same pretty much so yes. It is a it is sustainable as profitable.
But as we are also having more demand for our products are then.
The capacity to fulfill you know we are building up.
Dark stores, which is not like a which is not just.
In investment, which which is huge but still you know to.
To build the once this state of art, the dark stores, which we're opening depending on the size, but it can be an investment from.
What is it 10 to 15 million or something like this.
Which can hold inventory for at least 15 20 days 10000, plus Cisco used so those what do we say.
The new city, we are building, the dark store sort of first or or or.
Renting it if it werent as good an 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 the demand is there and it's almost like always demand is more than we can we can we can source. So we are following the demand at the moment as well.
Speak we have about.
10, dark stores and we will enter.
A couple of new cities next year and.
So we will continue to sort of a building that infrastructure.
Got it got to sneak one more and.
I know this is important to investors the dividend. So 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, it's higher today than it was.
Before you a pause there.
While Iraqi I just stay on.
You should keep in mind.
International will require.
Expansion so.
That's something to keep in your base case and will remain an important priority international was Napa that spring 2000.
25, so that's number one.
Number two.
Again, having said that.
Kind of a balance.
<unk> debt to our track record of returning cash primarily by dividends, but also by buybacks speaks.
Alright itself.
Gas.
Something that is important to our investors.
Precisely why we've actually started the buyback or it's one of the reasons why we started with the buyback.
Leah than we'd initially indicated each one numbers, we indicated cash retention start from the beginning of the year. So we'll do our best to get the balance right between investing in future growth.
Returning cash to buy different message about buyback.
And dividends when we can decide what is appropriate as we move into next year at the right point in time, but it's it wouldn't be right at this stage to go into specifics around what payout ratios.
Yeah.
Alright Thats helpful. Thank you so much.
Thank you I. Unfortunately, we have run out of time for any further questions. At this time I'd like to hand back to David for any closing remarks.
Alright, Thanks, Tom Thanks, everybody for your time I've been at hour 20 minutes, but we have another.
Another meeting starting shortly so we'll wrap things up now happy to follow up one on one of the calls or get in touch if you have follow up.
<unk>. Thanks, a lot for your time.
Thanks, everyone Bye.
Thank you everyone.
And this concludes today's webinar. Thank you all for joining Youll now be disconnected.