Welcome everyone to the Kaspi 4Q and Full Year '24 Financial Results Webinar. My name is Brieka and I will be your coordinator today. I would now like to hand the call over to David Ferguson from Kaspi to begin today's presentation. Please go ahead, David.

Okay, thanks, Brieka. Good morning. Good afternoon, everyone. Thank you for joining us today. It's our fourth quarter and full year 2024 financial results. I'm David Ferguson from Kaspi. Joining me on the call are CEO and Co-Founder, Mikheil Lomtadze; our Deputy CEOs, Tengiz Mosidze and Yuri Didenko. Standard format for the call, Mikheil will run you through strategic update of 2024. I'll run you through the financials. We'll open the call up to Q&A. The whole team is available to participate. So, on that note, over to you, Mikheil.

Thank you, David. Good to have you all on this call. Just to give you another reminder of the Kaspi Super App business model and this incredible range of diverse services for consumers and merchants. To remind everyone, we run two Super Apps: one for consumers and another one for merchants. We connect the experiences of both through the payment network, marketplace, fintech, and financial services. On the consumer side, there is a huge range of services which we continuously innovate. Some of the things I will cover later in the presentation include gift certificates, which we launched last year. Consumers can shop, pay, manage their finance, and delivery through our consumer Super App. On the merchant side, we have mentioned that there will be a strong pipeline for innovations just to help them grow their businesses become more efficient and to onboard to the marketplace, gaining access to financing. As merchants grow, we are successful, and the products being either paid for or purchased through the consumer Kaspi.kz Super App are quite exciting. We have launched and scaled products like deposits for business, buy inventory now, pay later products, and innovations in advertising. Just to remind everyone, we run two Super Apps with a wide range of services around the daily needs of consumers and merchants. On the fourth-quarter numbers, we had a very strong quarter. All our platforms show strong growth. The payments TPV grew 30%, and the net income on payments grew 22% with revenue increasing by 19%. Marketplace has been our fastest-growing business, with GMV growing 39%, revenue increasing by 43%, and net income by 32%. The fintech business had strong growth with financing volumes growing 21% and net income growing 28%. We are a business that drives transactions, which is the foundation of our business. Our monthly transactions per active consumer stand at 73, which is incredible. This is not just opening the mobile application; this is real engagement where consumers pay, shop, and merchants transact. Again, 73 transactions per month per active consumer is world-class. Revenue grew 28%, and net income also grew 28% in Q4. For our annual performance, our net income grew 25% year-over-year, with revenue increasing by 32%. Although fintech grew 12% throughout the year, the last quarter saw a growth of 28% in net income for fintech, showing significant catch-up. Marketplace was the fastest-growing segment for net income with 41% growth throughout the year. As we continue developing our platform, we are becoming increasingly diversified. We now have a balanced output from three platforms, with non-fintech now at 69%. Another year of growth is ahead of us, and our profits have been driven by faster-growing marketplace and payments. This is reflected in the distribution of our net income, well diversified across three platforms, which is a good sign. Our consumer services penetration shows strong growth in services like payments, where TPV grew 31%, with 94% of our consumers using QR and card transactions. E-commerce and marketplace will continue to drive growth with services like e-grocery, where only 6% of our consumers currently participate, hinting at significant growth potential. On the merchant side, 95% of our merchants are now using our payments platform, but e-commerce penetration is only 11% among our merchant base, indicating room for growth. This year, we launched new products on both the payments and financial services side. Our cohorts are showing strong growth, with 65% of our consumers from the last five years engaging with our payments platform. Our marketplace continues to grow, now serving more consumers and merchants with each cohort showing increasing numbers. E-grocery grew 97% in GMV and 84% in transactions last year, showing robust growth. We're expanding our operations to new cities and enhancing our efficiency in existing dark stores. Our delivery service is world-class, with 128% growth in delivered orders last year, covering almost 100 million orders at an incredibly low cost. We launched the advanced version of our Kaspi POS Register, serving 35% of merchants and processing 1.2 trillion in payments, showcasing our commitment to enhancing merchant operations. We've further developed our advertising offering with our Kaspi ad service being utilized by 51,000 merchants. The business deposit product we launched last year has seen extraordinary adoption, growing by 443%. Additionally, we've launched a Buy-Inventory-Now-Pay-Later product that streamlines B2B operations for convenience stores. Our innovations continue to be met with strong consumer demand. In summary, the Kaspi Super App model is effective for consumers and merchants, showcasing our ability to innovate and grow our market share, and we look forward to continuing this trend in 2025.

Thanks, Mikael. I will now run you through the financial results for 2024 and guidance outlook for 2025. Starting on the payments platform, the overall message is that payments growth remains strong and consistently predictable throughout the year. This includes volumes up 33% year-on-year in the fourth quarter and up 40% for the full year. Ongoing strong volume growth reflects the strength of our products and continued growth in our merchant base, which was up 27% year-on-year. Consumer balances in wallets were up 22% year-on-year. Volumes translate directly into TPV growth, with predictable factors such as QR and B2B products powering that growth. Looking forward to 2025, B2B will continue to outperform. Mild take rate dilution reflects changes in mix, with QR and B2B becoming more important. Overall payments revenue growth was up 23% for the year, and bottom-line growth was 22% in the fourth quarter, with 24% for the full year. These metrics highlight that we remain on track with the guidance provided 12 months ago, achieving our bottom-line growth target. Now moving to the marketplace platform, it continues to be the fastest-growing segment. We noted that purchases in the fourth quarter saw an acceleration up to 48% year-on-year, driven by promotional events and grocery initiatives. GMV growth in Q4 was 39%, with full-year growth at 44%. E-Commerce has now reached equal size to m-Commerce, a critical inflection point for our business. Current strong trends highlight the significant growth potential in value-added services, where we are seeing take rate expansion. For 2025, you should expect a consistent timing of promotional events. E-Grocery, in particular, will be a major growth driver. Overall, strong GMV growth and take-rate expansion will continue to contribute positively to revenue growth. The financial performance of the marketplace remains robust and indicates sustainable growth. Lastly, on the fintech platform, healthy trends in loan origination remain consistent. For 2024, origination was up 21% in the fourth quarter, driven by integrated products within the marketplace. The loan portfolio grew 37% versus deposits up 23%. Looking at revenue, we experienced solid growth at 26% in Q4, projecting an annual increase of 25%. We will continue to monitor interest rate trends but remain confident in our growth outlook. Overall, our operational results for both Q4 and 2025 align well with our historical performance.

Thanks, guys. Nice job exiting the year in this growth format. Can I just ask about guidance for a moment? You mentioned the 20% figure, but there seem to be more underlying growth assumptions that imply something different for KPIs. Can you share if you see conservatism built in and what factors might drive any deceleration on those KPIs?

Thanks for your question, Darrin. I'll make two points first. Our guidance should be taken at face value; it's a natural scale effect within the business. Second, the trends we've shared for 2024 should carry into 2025. For example, payments show dilution, and fintech yields may fluctuate based on product mix. The macroeconomic situation is also different from three months ago, impacting predictions especially for fintech. So the 20% guidance reflects the reality of operating at the current scale.

Well, I mean, just to clarify, Turkey presents an exciting market for us. The economic policies there are encouraging, but consumer sentiment might still be challenging. Hepsiburada serves a strong consumer base and we've identified future opportunities in mobile services. We're keen on potentially launching independent services in Turkey through Kaspi.

Hi, good afternoon. Could you reiterate your observations about the macro environment in Kazakhstan? With interest rates and inflation, what's your perspective?

The macro environment remains stable overall, with consumer trends consistent over the last 18 months. Payments growth continues, signaling a stable consumer landscape. Interest rates are fluctuating, particularly impacting our fintech division, but long term we anticipate a positive trend. Overall, the consumer environment is stable, and we expect to maintain growth levels.

Additionally, the region's geopolitical stability is crucial. Improved market flexibility by the national government has positively affected consumer sentiment. It's essential to monitor broader impacts on the economy.

During the Q&A, I want to provide clarity on our interests in Turkey and the structure of our influence over Hepsiburada. Our relationship allows us to provide strategic guidance without direct interference in daily operations. The guiding principles of the new board will ensure governance aligns with our strategic vision.

We are not planning to impose changes but rather leverage existing strengths of Hepsiburada. Fostering innovation and inviting collaboration are essential as we work alongside their experienced management team to enhance service offerings for consumers and merchants alike.

I have higher-level questions about guidance. Your profit growth guidance reflects slight slowdown compared to last year. Can you shed light on where you anticipate margin improvements?

Market growth will be solid across all divisions, with our scaling business showing continued growth as we move to maximize efficiencies. I expect a combination of factors influencing margins, but our outlook remains positive. Volatility in currency markets also may influence our P&L, but our revenue systems are designed to manage local market conditions.

Congrats on the quarter. I wanted to clarify your approach; has the new board conducted meetings yet?

Yes, we have yet to have formal board meetings as per regulations, but the dynamics are in place for proper governance.

I have questions regarding the BNPL offering and its classification. Additionally, what's your outlook on regulatory discussions?

Buy-Inventory-Now-Pay-Later is effectively both a fintech and payments product. We're excited about its integration into our systems and the opportunities it provides. We remain attentive to regulatory discussions on VAT and broader implications.

In conclusion, our findings during this earnings call illustrate consistent momentum across all platforms. We will continue to closely monitor both external and internal factors that influence our guidance and performance. We look forward to aligning our strategies going forward.

Thank you all for the insightful questions and discussion today. We appreciate your continued support and are optimistic about achieving our targets.

Thank you all for joining today's call with Kaspi. You may now disconnect from the webinar and please enjoy the rest of your day.