20-F: Kaspi.kz Reports Strong 2025 Revenue Growth, Hepsiburada Integration

Kaspi.kz announced a 60% increase in total revenue for 2025, driven by growth across all platforms and the acquisition of Hepsiburada, despite a modest 1% rise in net income.

Summary

• Total revenue for the year ended December 31, 2025, increased by 60% to 4,046,074 million KZT ($8,004 million USD) from 2,532,156 million KZT in 2024.
• Net income increased by 1% to 1,067,707 million KZT ($2,112 million USD) in 2025 from 1,056,834 million KZT in 2024.
• The Hepsiburada acquisition contributed 1,018,830 million KZT to total revenue and resulted in a net loss of 89,564 million KZT for 2025.
• Payments segment net income grew by 13% to 433,001 million KZT, with TPV increasing by 19% to 44,219 billion KZT.
• Marketplace segment net income decreased by 20% to 279,773 million KZT, while GMV increased by 11% to 6,657 billion KZT (excluding Turkey).
• Fintech segment net income increased by 9% to 354,933 million KZT, with Total Finance Value (TFV) growing by 13% to 11,652 billion KZT.
• Average Monthly Active Users (MAU) for the Kaspi.kz Super App in Kazakhstan reached 15.7 million, with an Average Daily Active User (DAU) to MAU ratio of 68%.
• Active Merchants grew to approximately 764,000 as of December 31, 2025.
• The Cost of Risk remained low and stable at 2.2% for 2025, reflecting efficient risk management.
• A share repurchase program was completed on February 27, 2026, repurchasing 1,297,131 ADSs for 50,274 million KZT ($100 million USD).
• The company launched Kaspi Alaqan, a pay-by-palm service, in Q4 2025, with over 500,000 registered customers and 5,000 merchants accepting payments by February 2026.
• The NBK increased minimum reserve requirements for banks in 2025, impacting effective yield on assets.
• A new 10% tax on revenue from government securities was imposed in Kazakhstan in 2025, increasing tax expenses.
• The 1P part of the e-Cars business was discontinued in Q4 2025 due to its capital-intensive nature and limited replication possibility.
• The average interest rate paid on customer accounts increased to 13.0% in 2025 from 12.5% in 2024, due to prevailing interest rates.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report. While revenue growth is strong and strategic acquisitions are expanding market reach, the minimal net income growth and segment-specific declines, particularly from the Hepsiburada acquisition, temper the overall positive outlook. The company's strong operational metrics and innovation are positives, but macroeconomic and regulatory headwinds present challenges.

Positives

• Total revenue increased significantly by 60% in 2025, demonstrating strong top-line growth.
• Payments segment net income grew by 13%, indicating continued strength in core payment services.
• Total Payment Value (TPV) increased by 19%, driven by higher transaction volumes and active consumers.
• Fintech segment net income increased by 9%, and Total Finance Value (TFV) grew by 13%, showing robust lending activity.
• The Kaspi.kz Super App maintains high user engagement with 15.7 million Average MAU and a 68% Average DAU to MAU ratio.
• The number of Active Merchants reached approximately 764,000, expanding the ecosystem.
• Cost of Risk remained low and stable at 2.2%, reflecting effective data-driven credit underwriting and collection capabilities.
• Successful launch and early adoption of Kaspi Alaqan (pay-by-palm) demonstrates continued innovation and user acceptance.
• The acquisition of Hepsiburada significantly expanded the company's addressable market into Turkey, contributing substantially to revenue.
• The company's proprietary technology and data capabilities are highlighted as key competitive advantages, enabling automation and personalized user experiences.
• High customer retention rates reduce the need for significant marketing expenses.

Negatives

• Net income growth was modest at 1% despite substantial revenue growth, primarily due to increased operating expenses and the Hepsiburada acquisition's net loss.
• Marketplace segment net income decreased by 20%, largely due to net losses from Hepsiburada and delivery expenses outpacing revenue growth.
• Fintech fee revenue decreased by 44% as banking service fees were removed from most new customer contracts.
• Higher than normal interest rates negatively impacted Fintech segment profitability by increasing funding costs.
• Regulatory requirements for smartphone registration in Kazakhstan and a shortage of new iPhones adversely affected Marketplace GMV and revenue in 2025.
• The discontinuation of the 1P part of the e-Cars business resulted in a 14,817 million KZT decrease in retail revenue.
• Increased mandatory cash balances with the National Bank of Kazakhstan (NBK) reduced the effective yield on a portion of the asset base.
• A new 10% tax on revenue from government securities increased tax expenses.
• Hepsiburada experienced a cybersecurity incident in February 2024, breaching several hundred merchant accounts, and was fined TRY 1,060,128 for IT system non-compliance in April 2024.
• The Turkish economy faces significant inflationary pressures, impacting Hepsiburada's financial performance.

Risks

• Inability to attract sufficient new customers, engage and retain existing customers, or sell additional functionality, products, and services on platforms.
• Failure to maintain and improve the network effects of the Super App business model.
• Failure to improve or maintain technology infrastructure, leading to system disruptions, slower response times, or impaired user experience.
• Cybersecurity incidents and attacks, including phishing, DDoS, ransomware, and breaches, which could lead to operational interruptions, data disclosure, reputational damage, and regulatory fines.
• Reliance on merchants selling products on platforms; inability to partner with sufficient new merchants or maintain existing relationships.
• Dependence on consumers' consumption and income levels, making the business vulnerable to economic downturns, inflation, and high interest rates in Kazakhstan and other operating countries.
• Failure to effectively manage the rapid growth of business and operations, especially with international expansion.
• Credit, liquidity, and market risks, including the risk of customer defaults, unexpected deposit withdrawals, and interest rate/currency fluctuations.
• Adverse developments affecting the financial services industry, such as liquidity problems or defaults by other financial institutions.
• Harm to brand or failure to maintain the trusted status of platforms and Super Apps due to customer complaints, negative publicity, or misconduct.
• Inability to retain and motivate talented employees, including senior management, or attract new talent.
• Slow adoption of online or mobile payment methods and consumption patterns.
• Failure to keep pace with rapid technological developments, including AI and machine learning, to provide innovative services.
• Inability to implement necessary changes to systems and operations to capitalize on future growth opportunities.
• Reliance on third-party providers (software, hardware, delivery, credit bureaus, debt collection agencies); adverse changes in these relationships could disrupt operations.
• Competition from existing or new competitors, potentially leading to reduced demand, lower operating margins, and loss of market share.
• Use of platforms for fraudulent, illegal, or improper purposes, including counterfeited sales or bank fraud.
• Difficulties in integrating acquisitions, strategic alliances, and investments, particularly in new international markets like Turkey.
• Exposure to local political, economic, and other risks in countries of operation (e.g., Azerbaijan, Turkey).
• Inability to adequately obtain, maintain, enforce, and protect intellectual property rights.
• Risks from using open-source code, potentially leading to intellectual property claims or security vulnerabilities.
• Lack of customary insurance coverage for business interruption, property, or product liability claims.
• Real or perceived inaccuracies of internally calculated operating metrics or third-party industry data harming reputation.
• Adverse judgments or settlements in legal disputes or government investigations.
• Need to raise additional funds for future capital needs, with no assurance of obtaining funds on acceptable terms.
• Kazakhstan law prohibiting or restricting certain entities from owning common shares or exercising voting rights.
• Disclosure requirements and voting procedures under Kazakhstan law restricting voting rights.
• Evolving legislative and regulatory framework in Kazakhstan and other operating countries, creating uncertainty and potential adverse impacts.
• Exposure to inadvertently violating anti-corruption, anti-bribery, anti-money laundering, and sanctions laws.
• Changes in the regulation of the Internet, mobile carriers, and their partners.
• Failure to obtain or retain required licenses, permits, and approvals in a timely manner.
• Kaspi Bank's capital position requiring capital support, impacting profitability or dividend distribution.
• Instability of the Kazakhstan banking sector affecting business.
• Inflationary pressures increasing costs and reducing consumer buying power.
• Exchange rate fluctuations adversely impacting business, especially with international operations.
• Currency control laws affecting foreign currency dealings.
• Risks of corruption and other business-environment weaknesses in Kazakhstan and Turkey.
• Difficulties in obtaining effective redress in court proceedings in Kazakhstan.
• Inaccuracy of official statistics and other data published by government authorities.
• Treatment as a passive foreign investment company (PFIC) for U.S. federal income tax purposes.
• Frequent changes in Kazakhstan's taxation system and other operating countries, leading to unexpected tax assessments.
• References to IFRS Accounting Standards in the Tax Code resulting in adverse tax assessments.
• Requirement for ADSs to be listed on AIX or KASE and meet Active Trading Criteria for tax exemptions.
• Control by current principal shareholders limiting influence over corporate matters.
• Dependence on subsidiaries for cash to fund operations and expenses.
• Limitations on transfer of ADSs and withdrawal of common shares.
• Difficulty enforcing U.S. judgments outside the United States.
• Waiver of jury trial rights for claims under the deposit agreement.
• Potential inability to receive distributions on common shares if illegal or impractical.

Future Outlook

The company anticipates continued growth in transaction volumes, revenue, and net income by increasing user engagement and expanding services through its Super Apps. It expects to grow less mature services like e-Commerce, Kaspi Travel, e-Grocery, and Kaspi Classifieds. Profitability in the Fintech segment is expected to increase when interest rates normalize. The company plans to maintain Kaspi Bank's capital ratios above NBK requirements, using excess for dividends. International expansion, particularly in Turkey with Hepsiburada, is a key growth driver, with plans to launch deposit products and other financial services in Turkey. The new banking law in Kazakhstan, effective March 19, 2026, and a new Constitution, effective July 1, 2026, are expected to introduce regulatory changes, the full impact of which is yet to be determined.

Management Comments

• Our mission is to improve people's daily lives by developing innovative, highly relevant, world-class mobile services.
• Our ambition is to build business serving 100 million users.
• We believe our business model, reinforced by our highly recognizable brand and continuing product innovation, generates powerful network effects, which result in strong consumer and merchant engagement.
• We believe that the combination of integrated merchant and consumer Super Apps, with multiple services and highly relevant AI tools creates a more powerful business model than single-purpose payments or shopping apps.
• Users of our Super Apps value our existing products and, as a result, they can quickly adopt new products as they are introduced.
• We believe that our integrated merchant and consumer Super Apps enable faster user adoption of new features and products with lower marketing and operating costs than if the same service was provided through separate apps with different brands.
• We typically target large addressable markets, such as grocery, travel and digital advertising, where scale translates into meaningful net income and net income growth.
• We believe our Super App business model creates a structurally more profitable business than a stand-alone equivalent model, as evidenced by our robust net income growth of 10% year-over-year for the year ended December 31, 2025 (referring to Kazakhstan only).
• We believe that our proprietary technology and extensive data capabilities provide us with significant competitive advantages.
• We believe that our ability to maintain a broadly stable Cost of Risk, despite an increase in our consumer loan portfolio and a volatile macroeconomic backdrop in recent years, demonstrates the efficiency of our risk management system based on our big data and technology capabilities.
• We intend to pay dividends annually in the amount of at least 50% of net income, calculated under IFRS Accounting Standards as issued by the IASB (with the exception of 2025).
• We intend to pay a quarterly dividend of KZT 850 per ADS.

Industry Context

StockSavvy.ai notes that Kaspi.kz's continued expansion into Turkey with the Hepsiburada acquisition aligns with a broader trend of successful regional digital platforms seeking international growth, particularly within emerging markets. The company's Super App model, integrating payments, marketplace, and fintech, positions it uniquely against single-purpose competitors, leveraging network effects for user acquisition and retention. The focus on AI and machine learning for personalization and risk management is consistent with leading global tech companies. However, operating in emerging markets like Kazakhstan and Turkey exposes the company to higher macroeconomic volatility, regulatory changes, and inflationary pressures, which can impact profitability and consumer spending, as seen with the increased base rates and new taxes in Kazakhstan and inflation in Turkey.

Comparison to Industry Standards

• Kaspi.kz's Average DAU to Average MAU ratio of 68% is noted as one of the highest engagement metrics among mobile applications globally, suggesting superior user stickiness compared to many international peers.
• The company's proprietary loan approval process, enabling 99.9% of lending transactions in under six seconds while maintaining a low Cost of Risk (2.2%), compares favorably to traditional banking models which often have slower approval times and potentially higher NPLs in similar emerging markets.
• The expansion into e-Grocery and the trial of an offline convenience store format with a capital-light franchise model reflects a strategy similar to global omnichannel retailers, aiming to leverage existing infrastructure and data for new market penetration.
• The integration of third-party delivery partners via Kaspi Delivery Smart Logistics Platform and the extensive network of 10,441 Kaspi Postomats (APMs) demonstrate an advanced logistics infrastructure, comparable to leading e-commerce players in developed markets, contributing to faster delivery speeds and reduced last-mile costs.
• The use of AI-powered virtual assistants handling 64% of chat conversations and 38% of voice calls indicates a high level of automation in customer service, potentially surpassing the efficiency of many traditional financial institutions and e-commerce platforms.
• The company's brand awareness in Kazakhstan, ranking #1 across major product categories like mobile applications (47% vs 8% for #2), e-commerce (44% vs 14% for #2), and payments (79% vs 6% for #2), suggests a dominant market position that is difficult for competitors to replicate.

Corporate Governance

Legal Proceedings

• A putative class action lawsuit was filed on April 16, 2025, in the Supreme Court of New York, against the company and certain officers/directors, alleging false or misleading statements in IPO offering documents related to Russia exposure. The company moved to dismiss the case on August 4, 2025, and believes the likelihood of a material loss is remote.

Related Party Transactions

• Agreements with Kolesa: The company holds approximately 51% of voting rights in Kolesa through a trust management agreement with Mr. Mikheil Lomtadze, allowing consolidation of Kolesa's results. Mr. Lomtadze is a significant shareholder of Kolesa, and Mr. Yuri Didenko is its board chairman.
• Agreements with Magnum: The company pays rent to Magnum for ATM and payment kiosk placements, while Magnum pays fees for QR and acquiring services and m-Commerce sales. Mr. Vyacheslav Kim, chairman of the board, is the beneficial owner of a controlling stake in Magnum.
• Finance Leases with Magnum: Two commercial properties owned by a Kaspi Bank subsidiary are leased to Magnum under finance leases maturing in 2027, with payments amounting to 146 million KZT in 2025.
• Magnum E-commerce Property Agreements: Magnum E-commerce Kazakhstan rents commercial properties from Magnum, with rent payments of 56 million KZT in 2025.
• Goods Purchases from Magnum: Magnum E-commerce Kazakhstan purchased 6,828 million KZT of goods from Magnum in 2025 on favorable terms.
• Property, Equipment, and Intangible Assets Purchases from Magnum: Total value of 2,967 million KZT in 2025.
• Ordinary Course Deposit Accounts: Executive officers and key management personnel maintain deposit accounts with Kaspi Bank on substantially the same terms as other customers. Interest expense on these deposits totaled 954 million KZT in 2025.

Stakeholder Impact

• Shareholders: Potential dilution from future capital raises, impact of dividend policy (no dividends in 2025, but KZT 850/ADS proposed for future), and fluctuations in ADS price due to various market and company-specific factors.
• Employees: Long Term Incentive Plan (LTIP) program incentivizes senior executives and key personnel with stock options, fostering retention and alignment with company goals. Growth in technology and product development personnel (4,455 in 2025) and overall workforce (14,008 in 2025) indicates job creation.
• Customers (Consumers & Merchants): Continued development of innovative digital services (e.g., Kaspi Alaqan, Kaspi AI for partners) aims to improve daily lives and business efficiency. Increased transaction volumes and active users suggest positive engagement. However, macroeconomic conditions and regulatory changes could impact affordability of loans or availability of services.
• Regulatory Authorities: The company's compliance with evolving regulations in Kazakhstan and Turkey, including capital adequacy requirements for Kaspi Bank and e-commerce regulations for Hepsiburada, is critical to maintaining licenses and avoiding penalties.
• Suppliers/Partners: Reliance on third-party providers for technology, logistics, and data means their performance and stability directly impact the company's operations and reputation.

Next Steps

• Nationwide rollout of Kaspi Alaqan (pay-by-palm) across Kazakhstan planned for 2026.
• Closing of Rabobank A.S. acquisition in Turkey targeted for mid-2026, pending regulatory approvals.
• NBK to introduce sectoral countercyclical buffer of 2% for risk-weighted assets of loans to individuals from April 1, 2026.
• Referendum on a new Constitution of Kazakhstan scheduled for March 15, 2026, with expected entry into force on July 1, 2026.
• New banking law in Kazakhstan scheduled to enter into force on March 19, 2026.
• Uniform reserve requirement of up to 15% expected to apply to certain categories of foreign currency liabilities from September 2026.
• Board of Directors proposed a dividend of KZT 850 per share, subject to shareholder approval.

Key Dates

Recommendation

Kaspi.kz demonstrates strong revenue growth and impressive operational metrics, particularly in user engagement and efficient risk management within its core Kazakhstan market. The strategic acquisition of Hepsiburada offers significant long-term international growth potential. However, the minimal net income growth in 2025, largely due to the Hepsiburada acquisition's initial losses and increased operating expenses, along with macroeconomic headwinds like high interest rates and new taxes in Kazakhstan, present near-term profitability challenges. The stock is likely to experience volatility as the market digests the integration of Hepsiburada and the impact of regulatory changes. A 'hold' recommendation is appropriate, acknowledging the company's strong underlying business model and growth strategy, while also recognizing the current pressures on profitability and the inherent risks of expansion into new, volatile markets.

Keywords

Fintech, Marketplace, Payments, Super App, Kazakhstan, Hepsiburada, Turkey, E-commerce, Digital Payments, Consumer Loans, BNPL, Mobile Banking, SEC Filing, 20-F, Financial Results, Risk Management, Capital Adequacy, Share Repurchase, Kaspi Alaqan, AI, Machine Learning, Corporate Governance