History

The Story

The Kaspi.kz that arrived on NASDAQ in January 2024 had a simple story: a dominant Kazakhstan super-app compounding at 25-30% with predictable economics and a sleepy local market for protection. Eighteen months later that story was unrecognisable — a $1.1 billion Türkiye acquisition, a Culper Research short report alleging Russia ties, two guidance cuts in the same fiscal year, a paused dividend, a switch from net income to Adjusted EBITDA guidance, and a Tencent equity stake. Management's operational execution remained largely intact; the story they sold investors did not. Credibility on near-term numbers slipped; conviction in the long-term ambition (a "100 million user company") expanded to absorb the slippage.

1. The Narrative Arc

The arc breaks into three chapters that matter to a present-day buyer:

2018 → 2023 — The compounder chapter. A single-country super-app with an enviable network effect: by FY 2023 Kaspi was processing 71 monthly transactions per active consumer (one of the highest in the world for any mobile app), with 65% daily app engagement. Revenue grew 51% and net income 44% YoY in FY 2023. The story was simple, the numbers were predictable, and the multiples expanded.

Jan 2024 → Oct 2024 — The NASDAQ honeymoon, broken. The US listing valued Kaspi at roughly $17.5B and brought the company to US institutional investors for the first time. Within nine months, two events broke the honeymoon: the April 2024 Kazakhstan floods (a 7% sell-off treated as overdone) and — far more consequentially — Culper Research's September 19, 2024 short report titled "The NASDAQ-Listed Fintech Moving Money for Criminals and Kleptocrats." The ADS fell 16.1% in a single session, securities class actions followed in January 2025 (Levi & Korsinsky, Gross Law, Robbins LLP), and the disclosure premium investors had granted Kaspi was withdrawn.

Oct 2024 → present — The multi-country pivot. On October 17, 2024 Kaspi signed to acquire 65.4% of Hepsiburada in Türkiye for approximately $1.13B. Within fifteen months Kaspi had: closed Hepsiburada, raised a $650M Eurobond, paused its dividend, agreed to acquire Rabobank A.Ş. (a clean Türkiye banking licence), invited Tencent in as a minority shareholder, issued $600M of senior notes, started a $100M ADS buyback, and switched its 2026 guidance metric from net income to Adjusted EBITDA. The story stopped being about Kazakhstan.

2. What Management Emphasized — and Then Stopped Emphasizing

Five patterns matter:

• Türkiye/Hepsiburada went from absent to dominant in five quarters. Zero mentions before Q3 2024, then 24–48 mentions per quarter thereafter. The Q4 2025 letter opened with: "Two topics have dominated my conversations with investors over the last year: our progress in Türkiye and our approach to dividends." This is no longer a Kazakhstan story.
• e-Cars / Kolesa was promoted heavily in Q1 2024 (25 mentions), then quietly de-emphasised — by Q4 2025 it had vanished from the prepared remarks. In Q1 2024, Lomtadze wrote: "When we acquired Kolesa.kz, I promised you that it wouldn't take long for us to start transforming the car market." In FY 2025 results, m-Commerce GMV (which includes cars) declined 1% YoY. The promise has not been rescinded; it has been quietly dropped from the headline.
• B2B Payments was the standout payments narrative in Q4 2023 (20 mentions, "fastest-growing component of TPV"). By Q4 2025 it merits 2 mentions; Kaspi Alaqan (pay-by-palm) has replaced it as the payments-innovation talking point.
• e-Grocery's frequency has roughly halved as growth has decelerated from +125% YoY in Q1 2024 to +43% in Q4 2025 — still fast, but no longer the standout.
• Adjusted EBITDA appeared from nowhere in Q4 2025 (15 mentions). It is now the official guidance metric for 2026. Net income guidance — which was the talked-about KPI from FY 2024 through Q3 2025 — has been retired. The 2026 Adj EBITDA guide is +5% YoY including Türkiye. (Historical IFRS comparison: FY 2025 net income +10% YoY.)

3. Risk Evolution

The risk section in the 20-F has expanded faster than the business, in two specific places:

• Türkiye is now a top-five disclosed risk area (0 → 27 → 72 mentions). This is the largest single-year increase in any risk category since the company became a public filer.
• Tax and reserve requirements jumped from 2 → 10 mentions as Kazakhstan introduced a new 10% tax on revenue from government securities investments and raised minimum reserve requirements. Both were called out in Q1 2025 as drivers of the guidance cut.
• Material-weakness-in-ICFR mentions have halved (44 → 21 → 20) — consistent with management's repeated statements that remediation is in progress. This is the only risk category that is meaningfully shrinking.
• Russia/sanctions language remained essentially flat (21 → 21 → 24 mentions) — despite the Culper short report alleging undisclosed Russian-related exposures and securities-fraud class actions filed in January 2025. The Filed complaints allege Kaspi "continued doing business with Russian entities, and also providing services to Russian citizens, after Russia's 2022 invasion of Ukraine." The 20-F has not added a dedicated risk factor naming Culper or the litigation in language commensurate with the market reaction.
• Kazakhtelecom dependency is the largest single-issuer concentration in the risk section (35–39 mentions across years) — a quietly persistent dependency that has not gone away despite Kaspi's growth.

4. How They Handled Bad News

The two biggest bad-news events of the post-IPO era were the September 2024 Culper short report and the 2025 guidance cuts. Management's handling differed sharply.

5. Guidance Track Record

Credibility score: 6 / 10

The case for 6 (not lower): operational execution has been mostly solid — Kazakhstan KPIs (engagement, payments, dividends, debt issuance, M&A closings) have largely delivered on what was promised, and the underlying ex-headwind FY 2025 number landed within the revised normalised range. Capital-markets execution has been clean (IPO, Eurobonds, ADS notes, dividend mechanics).

The case for 6 (not higher): the FY 2025 headline guidance — the one the IPO investors wrote down — was cut twice in seven months and ultimately delivered at the bottom of the second revised range. Management's preferred response was to switch the headline metric (to Adjusted EBITDA) and the geographic scope (to include Türkiye) for FY 2026, breaking comparability with the metric they had been guiding for two years. The Culper allegations have not been addressed on calls. e-Cars/Kolesa was promised as transformational in Q1 2024 and is now barely mentioned. The "20% net income growth" message from the IPO roadshow no longer applies.

A 6 is "broadly trustworthy on operations, suspect on what they choose to talk about and when." That seems right here.

6. What the Story Is Now

The current story is: a multi-country digital ecosystem with a proven Kazakhstan compounder funding a Türkiye expansion that is showing early operational re-acceleration, governed by a founder-CEO with 19 years in the seat who has just brought Tencent in as a strategic minority. Guidance is now in Adjusted EBITDA terms (+5% in 2026, including Türkiye), with the implicit message that the Kazakhstan business is in a cyclical air pocket (smartphones, rates, tax) while Türkiye is in a J-curve.

What has been de-risked:

• Hepsiburada order growth went from −11% YoY in Q1 2025 to +19% in Q4 2025 — the operational thesis on the Türkiye acquisition is showing evidence in management's preferred metric.
• Material-weakness language in the 20-F has fallen by half from FY 2023; ICFR remediation is visibly progressing.
• The dividend was paused and resumed within four quarters — Lomtadze's commitment that Türkiye-plus-dividends-can-coexist held.
• The Tencent investment (announced April 2026) provides external validation of strategy from one of the most respected platform investors in EM tech.

What still looks stretched:

• 2026 Adjusted EBITDA growth of ~5% is a meaningful deceleration from the 25%+ net income growth on which the NASDAQ IPO was sold. The "100 million user" ambition has expanded just as the near-term numbers have compressed.
• The Culper Russia/sanctions allegations have not been resolved or rebutted in detail on earnings calls; class actions remain pending. This is the single largest unmitigated tail risk in the story.
• Türkiye losses persist at the net-income line even as EBITDA approaches breakeven; the playbook depends on consumer purchase frequency reaching Kazakhstan-like levels (6–7x current), which takes years.
• Kazakhstan's tax, reserve-requirement, and base-rate headwinds are described as cyclical but have been ratcheting in one direction for two years.
• Rabobank A.Ş. acquisition has slipped past its 2H 2025 close target — regulatory approval is now an unknown.

What the reader should believe versus discount:

Believe	Discount
Operational execution in Kazakhstan (TPV, GMV, engagement)	Anything labelled "underlying" — it's the metric of last resort
Hepsiburada integration is real and re-accelerating	2026 guidance comparability with 2024-vintage commitments
Capital-markets execution (debt, equity, M&A closing)	Guidance switches as innocent metric improvements
Lomtadze's long tenure and inherited high-quality Kazakhstan franchise	The "no sanctions exposure" position until the class actions resolve

The 2026 story is genuinely bigger than the 2024 story — multi-country, 100-million-user ambition, Tencent-blessed. It is also genuinely less predictable than the 2024 story, and management has done the natural thing a good executive team does in that situation: changed the metric, lengthened the time horizon, and led with capital returns. A patient long-term holder will read this as the right pivot at the right time. A two-year-window investor reading the 2024 prospectus has every right to feel that the company they bought is not the company they own.