Kaspi.kz (KSPI) Q2 2025: Guidance Cut as Smartphone Rules Shave 7pts Off E-Commerce Growth
KSPI’s Q2 revealed a guidance reset driven by regulatory shocks in Kazakhstan’s smartphone market and persistent high interest rates, compressing e-commerce momentum and pressuring fintech margins. The company’s core payments and marketplace engines remain resilient, but new tax headwinds and deposit repricing signal a more cautious earnings trajectory. Investors should track the normalization of smartphone demand and evolving deposit costs as key levers for the back half of the year.
Summary
- Smartphone Registration Disruption: Temporary regulatory change sharply reduced e-commerce growth, prompting a guidance cut.
- Deposit Cost Escalation: Higher rates and repricing across the deposit base are weighing on fintech profitability.
- Turkey Expansion Bets: Strategic capital deployment in Turkey positions KSPI for long-term growth, despite near-term losses.
Performance Analysis
KSPI delivered revenue and net income broadly in line with internal expectations, but the quarter was marked by significant external shocks. The most material was the Kazakh government’s new smartphone registration requirement, which led to a sharp price hike and a sudden drop in demand for smartphones—a category representing about 18% of e-commerce gross merchandise value (GMV). Management attributed a seven percentage point drag on e-commerce GMV growth to this single regulatory move, reducing normalized growth from 30% to 23% for the period. The company expects this to persist into Q2, with a potential catch-up effect in the second half.
Fintech results reflected the impact of sustained high interest rates, as KSPI aggressively repriced deposits (up to 18%) and shifted focus to deposit-gathering, which management views as a strategic long-term investment. While origination volumes and revenue posted double-digit growth, net income growth was muted by a rising cost of risk and increased funding costs, which are expected to add 100 to 150 basis points this year. The launch of new term deposit products succeeded in rapidly growing the deposit base, but at a higher cost of funds.
- Marketplace Margin Dynamics: Take rate accretion continued, especially in e-commerce and travel, but profit growth lagged revenue due to lower-margin e-grocery expansion and smartphone headwinds.
- Payments Platform Resilience: Transaction volume and revenue grew solidly, with B2B payments outpacing the segment, though take rate dilution from mix shift remains a structural trend.
- Fintech Margin Compression: Deposit repricing and higher macro provisioning drove cost of risk higher, muting bottom line expansion despite robust top-line growth.
Overall, KSPI’s core platforms demonstrated operational resilience, but the aggregate effect of regulatory, macro, and tax changes forced a reset in full-year growth expectations and a more defensive posture in guidance.
Executive Commentary
"The overall, the company's underlying performance is probably within our expectations. It could have been better on the GNV side. There was requirements to register smartphones, which was introduced in Kazakhstan, and that had a quite significant, you know, temporary impact on the demand for smartphones."
Michal Luntata, CEO & Co-Founder
"GMV growth moves to 15 to 20% from 25 to 30% previously. So number one, that is a function of the new rules for imported smartphones, higher prices in the short term and temporarily lower demand. But again, this should be a short-term effect that should work itself out in the second half of the year and into the following year."
David Ferguson, Head of Investor Relations
Strategic Positioning
1. Smartphone Regulation and E-Commerce Volatility
The abrupt smartphone registration mandate in Kazakhstan has exposed KSPI’s sensitivity to regulatory shocks in key GMV categories. Smartphones, accounting for nearly a fifth of e-commerce GMV, saw demand collapse as prices jumped, forcing the company to cut its GMV growth outlook. Management expects normalization and possible pent-up demand recovery in H2, but this episode highlights the inherent risk in category concentration and regulatory unpredictability.
2. Deposit-Led Funding Model Under Strain
KSPI’s fintech arm is leaning into deposit growth as a strategic funding base, rapidly scaling new term products with attractive rates. However, the speed and magnitude of rate hikes (from 14% to 18%) have driven up funding costs, compressing fintech margins and muting net income growth. The company’s approach—repricing the entire deposit portfolio when rates move—amplifies both the competitive advantage and the earnings drag in a high-rate environment.
3. Payments and Marketplace Structural Shifts
The payments platform continues to benefit from operational leverage and tight cost control, but the ongoing mix shift toward lower-margin B2B and QR payments is gradually diluting take rates. In marketplace, take rate accretion from value-added services (like advertising and delivery) is a bright spot, but profit growth is increasingly dictated by the mix of high-volume, low-margin categories like e-grocery and volatile big-ticket items like smartphones and cars.
4. Turkey Expansion and Capital Allocation
KSPI’s acquisition of Rabobank in Turkey and its $300 million investment plan signal a bold long-term commitment to international fintech expansion. While the near-term impact is a modest drag (2% dilution), management views this as a foundational move to replicate its Kazakhstan model in a larger, underpenetrated market. Execution risk remains high, with regulatory approvals pending and product launches unlikely before late 2025.
5. Tax and Regulatory Headwinds
New taxes on investment income and higher reserve requirements are set to trim net income by roughly 2% in 2025, according to management. While the direct impact is manageable given KSPI’s transaction-driven model, these changes underscore the rising regulatory risk in the Kazakh banking sector and the need for ongoing agility in capital planning.
Key Considerations
This quarter’s results challenge KSPI’s reputation for uninterrupted growth, as external shocks forced a rare guidance cut and exposed sensitivities in the business model. Investors must now recalibrate expectations and monitor several evolving dynamics.
Key Considerations:
- E-Commerce Growth Rebound: Watch for normalization of smartphone demand and potential catch-up effects in H2 as regulatory headwinds abate.
- Deposit Cost Management: Track the pace and magnitude of further deposit repricing, as well as competitive positioning versus local banks.
- Marketplace Mix and Take Rate: Assess the sustainability of take rate gains in value-added services amid changing category mix and macro uncertainty.
- Turkey Execution Timeline: Monitor regulatory progress and early product launches as indicators of KSPI’s ability to export its fintech model.
- Tax and Reserve Impact: Quantify the net effect of new tax and reserve rules on 2025 earnings, with an eye on potential policy volatility.
Risks
Rising regulatory intervention, macro volatility in Kazakhstan (including currency and commodity swings), and persistent high interest rates present significant headwinds for KSPI’s earnings visibility. The company’s exposure to category-specific shocks (notably smartphones) and the unpredictable pace of deposit repricing further cloud the near-term outlook. Expansion into Turkey introduces execution and integration risk, with uncertain timelines and competitive dynamics.
Forward Outlook
For Q3 2025, KSPI guided to:
- GMV growth of 15 to 20%, revised down from 25 to 30%.
- Fintech origination growth at the lower end of the 15% to 20% range.
For full-year 2025, management cut GMV and origination guidance and flagged:
- Continued high interest rates as the largest near-term drag on earnings.
- New 10% tax on investment income and higher reserve requirements, expected to cut net income by approximately 2%.
Management expects the smartphone disruption to be temporary, with normalization and potential recovery in H2, and sees deposit growth as a strategic enabler for future transaction growth.
Takeaways
KSPI’s Q2 marks a strategic inflection, with regulatory shocks and deposit cost escalation forcing a more cautious stance and a rare guidance reset.
- Resilience in Core Engines: Payments and marketplace platforms continue to deliver, but are increasingly exposed to category and regulatory volatility.
- Margin Pressure Mounts: Fintech profitability is under strain from rapid deposit repricing and higher cost of risk, with only partial offset from volume growth.
- Turkey as a Long-Term Bet: Investors should view the Turkish expansion as a multi-year play, with near-term dilution and significant execution risk.
Conclusion
KSPI’s Q2 reset underscores the limits of its high-growth model in the face of regulatory and macro shocks. While core platforms remain robust, the company’s near-term trajectory is now more dependent than ever on external normalization and disciplined cost management. Strategic bets in Turkey and ongoing deposit innovation provide long-term optionality, but the path forward will require greater agility and risk calibration.
Industry Read-Through
The smartphone registration shock in Kazakhstan is a cautionary tale for all e-commerce platforms with heavy category concentration and regulatory exposure. The episode highlights the risk of sudden demand drops in high-ticket verticals and the need for diversified GMV streams. For regional fintechs, KSPI’s deposit repricing experience foreshadows broader margin compression as high rates persist, while new tax and reserve requirements in Kazakhstan may signal a tightening regulatory environment for digital-first financial institutions across emerging markets. Competitors and investors should monitor how quickly demand normalizes and whether fintechs can sustain growth without sacrificing profitability.