Negative Points

• Adjusted EBITDA growth of 5% lagged revenue growth due to investments in Turkey and higher interest costs, with net income flat.

• Turkish lira depreciation of 21% versus the Kazakh tenge negatively impacted reported revenue and EBITDA growth.

• Cost of funding remains elevated, up 150 basis points year-over-year, though recent rate cuts are expected to provide relief.

• Payments take rate declined by 7 basis points due to product mix shifts toward Kaspi Pay, and TPV growth is moderating as inflation falls.

• Regulatory changes, including higher national bank reserve requirements, pressured net income in Q2, with the full impact expected to persist into next year.

• Casper AI assistant is still in early stages with no detailed performance metrics yet, and its long-term cost and scalability remain uncertain.

• E-commerce growth in Kazakhstan is partly offset by weak electronics sales due to supply chain issues and price volatility.

• Turkey's e-commerce growth was slower in Q2, with management prioritizing foundational improvements over growth, which may delay near-term returns.

Q & A Highlights

Q: Can you elaborate on the early performance metrics of Casper, the AI assistant, and what level of investment is required for this project? A: Mikhail Lomtadze (CEO): One in five customers who had access to Casper used it, with a response rate of around three seconds. 80% of conversations end with a product recommendation, and 60% of those lead to a specific product. Casper is 50% faster than regular product discovery, 50% faster at adding to favorites, and 30% faster to the basket. We have invested in a modern data center to enable this compute. Our competitive advantage is operating in a 20 million person market, allowing us to scale cost-efficiently. We measure success by the cost to complete a task (enable a purchase), not price per token, as we are a transactional business.

Q: Why was the EBITDA guidance unchanged despite first-half growth trending above it, and how should we think about second-half profitability given the deposit rate cut? A: Tengiz Mosidze (CFO): The deposit rate cut on the three-month product (30% of deposits) was only implemented last week. It takes three months to fully reprice, so the benefit will only start to come through from the second part of November, meaning just one full month of benefit this year. The full benefit of this and potential future rate cuts will be felt from the beginning of next year.

Q: How will deposit pricing evolve in light of the central bank policy rate cut, and can you elaborate on the strong deposit growth and marketplace dynamics between Kazakhstan and Turkey? A: Mikhail Lomtadze (CEO): Our strategy is to look at market dynamics and reduce rates when there is room to do so. The recent cut was driven by these dynamics. In Kazakhstan, we are growing vertical by vertical, with strong e-grocery growth. In Turkey, our focus is on foundational things like consumer experience and delivery speed, not just growth. We aim to have a million customers who love us rather than 5 million who shop occasionally, as this builds the foundation for launching fintech products next year.

Q: What are the growth plans for Turkey in 2027, particularly regarding fintech products? A: Mikhail Lomtadze (CEO): Growth will be driven by improved delivery speed and consumer engagement. The long-term growth will be fueled by fintech products. We are piloting a new shopping loan (0.54% of GMV in June) and will launch merchant finance, consumer finance, and savings products. The $300 million investment in the bank's capital gives us a strong start for scaling these products next year.

Q: How should investors think about the long-term impact of the national QR system on the payments business and take rates? A: Mikhail Lomtadze (CEO): Our take rate is trending towards the majority of payment transactions, which are priced around 0.95%. We introduced Apple Pay and Google Pay to facilitate transactions when consumers travel abroad, which brought additional volumes. We have worked closely with the National Bank to build a secure and scalable payment system. Our consumers continue to transact with our merchants, and we also get additional volumes from other consumers using our vast payment network.

Q: How durable is the current rate-cutting cycle, and how long does it take for rate changes to reprice in the market? A: Tengiz Mosidze (CFO): If inflation continues to fall, national bank rates will continue to come down, and our deposit rates will follow. We weren't the first to raise rates, and we won't be the first to lower them, but the long-term dynamic will flow through. Any rate cuts this year should give increased confidence about earnings growth next year. It's not about one cut, but a sustained period of falling inflation and rates.

Q: Can you provide more detail on the financial performance drivers, particularly the difference between revenue and EBITDA growth? A: Tengiz Mosidze (CFO): Reported revenue grew 15%, driven by e-commerce (GMV +28% constant currency) and fintech revenue (+23%). Adjusted EBITDA grew 5%, impacted by the 21% depreciation of the Turkish lira and investments in Turkey (Hepsiburada). The EBITDA pressure is from investments in pay by palm (Alakan) and tech/product development spend. It's important to note that adjusted EBITDA excludes interest revenue from payments, which is up 15% and accretive to net income.

Q: What is driving the change in the loan portfolio mix and the cost of risk? A: Tengiz Mosidze (CFO): We are strategically focusing on longer-duration loans that generate more revenue. The mix is shifting away from BNPL (short duration, low revenue) towards general purpose and merchant financing loans. This is why loan portfolio growth is 18% but revenue growth is 23%. Cost of risk was 0.7%, up slightly year-on-year but flat quarter-on-quarter, and we expect it to moderate in the second half. The MPL ratio changes are a function of the mix shift towards products with higher probability of collection, which require less coverage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .