Kaspi.kz AO (KSPI) 2023 Q1 法說會逐字稿

(technical difficulty) (Operator Instructions) I would now like to hand over to David Ferguson from Kaspi.kz to begin. Please go ahead.

Okay. So thanks, Terry. Good morning, good afternoon, everyone. Welcome to Kaspi's First Quarter 2023 Financial Results Call. As usual, on the call, we have our CEO and Co-Founder; Mikheil Lomtadze, our Deputy CEO, Yuri Didenko; and Tengiz Mosidze. Mikheil will take you through the strategic update in the presentation. I'll run you through the financial section, and then we'll open up the call to Q&A. The whole team is available to take your questions.

So on that note, I'll pass the call over to Mikheil. Mikheil over to you.

Hello, everyone. So we're pleased to present our first Q numbers and the performance. The team has done a great job on delivering a strong performance in the first Q. So our Payments business revenue-generating TPV grew 62% year-over-year, revenue 59% and net income 67% due to significant operating leverage we have in this business.

Marketplace continued very strong performance. So we have GMV up 77%, 97% revenue and 104% net income. And the Fintech business, first quarter was strong in terms of the origination. So we have grown our finance value by 76%, revenue 35% and the net income 24%. So consolidated very strong performance. The revenue grew 53%, net income grew 52%. So we're happy also to recommend to our Board and shareholder -- sorry, for shareholder approval dividend of KZT 750 per GDR and we also, as announced previously, have started GDR program back in March of a buyback program up $100 million value.

Also, the Payments and the Marketplace businesses have started -- not started, they're growing faster as usual. So we have now 60% of our business actually coming from the Payments and the Marketplace. So the majority of our business comes from the fast-growing and the profitable, the Payments and Marketplace platforms, which creates the value for all the shareholders. And the Fintech now is 40% of our business.

As we continue growing business across all our platforms, we pay a specific sort of attention in the priority transactions. Again, just to take a step back, we are the business, which helps consumers and the merchants to transact with each other, connect to each other, but actually, ultimately, the transaction is what is the final result for anything we do. So a number of average transactions per consumer now 64 per month. So it's a 20% up to the year-over-year, it's incredible result and another justification testament of our super app business model. So basically, consumers transacting almost like 2x a day through our app, which is amazing. Total GMV purchases continue to grow very strongly, so 71% growth year-over-year and revenue-generating TPV transactions also growing very nicely, 56% year-over-year. And again, the transaction is the final goal or aim of anything we do across our platforms. Transaction is how we monetize it. Transaction is how we connect merchants and sellers and therefore, this is really an important sort of number and trend to pay attention to.

So we have talked during the last call about the grocery. So we are now continue developing that exciting business line jointly with Magnum, who is the largest food retailer in the country. So we have had a very good results. First Q, we have grown the GMV almost 6x. The grocery purchases, quite a nice remarkable number. So we basically crossed almost 1 million purchases in the first Q. And the consumer is growing also very rapidly 5.5x year-over-year. And again, the grocery is a new business line for us, a huge market potential at least KZT 12 billion for the food retail. So we're really excited about it, and we're showing a very nice performance.

Just to take also the step back and talk a little bit about the business model so that we make sure we're on the same page with you guys, so we are focused really on the weekly purchase. So basically, the platform at the moment, we are having around 12,000 SKUs. Those 12,000 SKUs are spread around 25 categories, including fresh and we enable our consumers to acquire those items at very good prices. We are designing the consumer experience also in a way that, that's a large ticket sort of weekly purchase, which is not only very predictable, but also helps us to build the relationship with the consumer, with the families, with the household, and we are achieving a very good size of the basket, which is about $25 order value. And we are not in a quick commerce.

So again, we are in the business of weekly purchase orders of average would have about 10 items for the consumer to buy and that makes a huge difference on the delivery. So if you look at the slide -- not the slide, but the screen, same-day delivery, for example, we have developed the functionality where on the one hand, because it's a $25 economics makes sense and really work. And on the other hand, we are delivering for free orders, which are above $11. But also, we've developed the functionality when you can actually choose the time which is convenient for you, but for us, it also means that it's very sort of predictable, we can plan and we can fulfill our promise on delivery to our users. And the result has been incredibly exciting.

So we have -- on the most important sort of for us, the KPI is really the feedback from the consumers, so here, you see that 92% of our users read the shopping experience with our grocery business is excellent. So that's our priority. We'll continue to develop -- delivering excellent quality of service, predictable delivery around the weekly purchase, and that's the business model, which we'll be pushing forward.

We are also rolling out the delivery network. So now we have almost 4,000 Postomats across the country. So that's sort of the last mile. We plan to have around 6,000 by the year-end. And notwithstanding such incredible growth of, whatever, 328% year-over-year in terms of the Postomats and 30x in terms of deliveries, we still are achieving, on top of that growth, we're still achieving a very good penetration, right? So 37% of our deliveries are not done through the Postomat. The Postomat is enabling us to deliver cheaper than to door because, again, you deliver like 1 parcel per door and here, you can deliver 70 parcels into 1 device. But also customers or end users are extremely happy because it's convenient for them, and they don't have to talk to the couriers and they have flexibility to pick up on the way home from work, for example. And also this is environment-friendly, right? Because couriers are driving significantly less because they are delivering the packages to the one device instead of going from around the houses and apartments with a single to door delivery. So very excited about it. We're pushing forward 6,000 Postomats as by the year-end.

We continue also driving the B2B. So B2B for us would be sort of the kind of initial stage of really building the transactional business with -- for the businesses to help settle invoices. So our growth has been extremely impressive. So we grew over 3x in the money terms, and we have grown 2.5x in the number of transactions. And just to remind everyone again, that's a business which was built on the back of our Payments Platform, the P2P and other transactions, which have been taking place between the businesses. This service take rate is 0.7%.

So we deliver the value to the suppliers, to the distributors, wholesalers by seamlessly and instantly settling invoices between the convenience store, for example, where sort of Coca-Cola delivers its items and the distributor or the manufacturer or the suppliers. So we're shortening the days of receivables. We are getting rid of cash in the value chain of the retail trade and also the settlements are done according to the invoices, which provides a greater transparency, everyone participating in that. So great value for the players, great business, which we've started from 0, basically didn't exist a couple of years ago, and now it's really fast-growing business in our Payments Platform. So David back to you.

Great. So thank you, Mikheil. I'll run you now through the 3 respective platforms and the guidance for the remainder of the year, starting with the Payments Platform. So we've built a large and engaged consumer and merchant base. Merchants were up 75% year-on-year in the first quarter, but as Mikheil talked about, priority #1 now is increasing transaction intensity. And you see that this is playing out RTPV transactions up 56% year-on-year. That's an acceleration in run rate versus the fourth quarter of last year.

And more broadly, it's just indicative of a healthy consumer. The caveat on this slide and for that matter on subsequent slides is that the year-on-year comp is favorable in the first quarter. It will become less favorable, particularly in the second half of the year. Therefore, when looking at growth and extrapolating it relative to the guidance that we've provided, you should bear in mind that growth this year is first half weighted. That's true in all platforms and actually more so in Marketplace and with regard to Fintech, TFV origination.

Strong growth in the number of merchants and opportunities to transact and drive strong growth in consumers, up 16% year-on-year to KZT 11.7 million. The objective of all our Payment Platform products, Kaspi Pay, Bill Payments, B2B is to monetize transaction volumes and here too, you see that playing out RTPV, monetized transactions growing at a faster rate than TPV. This is a 2-year -- close to 2-year trend now of RTPV outperforming TPV.

And in terms of take rate, what you see here is take rate has proven stable but consistent with the full year guidance of around 1.1% as lower take rate businesses, Kaspi Pay and B2B, moving the mix, time that -- take rate will gradually move down effectively as a function of timing.

Within our Payments Platform and actually within all platforms, although we talk about 3 main platforms, within each platform, now you have a range of products, diverse revenue streams. In Payments, that is QR, we talk about that a lot, but it's also B2B payments that Mikheil mentioned. And even actually our sort of legacy product, Bill Payments is still growing very, very fast. So you have a large and divest revenue base, all delivering good growth rates currently.

To wrap up the Payment financials. The combination of strong volumes or transactions, stable take rate translates into fast revenue growth, up 59% year-on-year. On the profitability side, the ongoing elimination of third-party costs, just the natural operational gearing inherent within the payment business, a more broadly tight cost controller theme throughout the company translated into material margin improvement, up 310 basis points year-on-year to 65.1%, bottom line, growing faster than top line. Again, I'll caveat that. Don't expect to see a 310 basis points improvement in profitability in every quarter. The full year guidance that we've given is the guidance that stands.

So moving on to the Marketplace Platform. here too, we have focused on growing the number of purchases. That is the priority now going forward across all 3 of the Marketplace platforms, e-Commerce, M-Commerce and Travel. You see that, that is playing out.

e-Grocery is not included in Marketplace. We now present that as a stand-alone segment. If you were, however, to look at combined Marketplace and e-Grocery transactions, the number would be up 71% year-on-year, no surprise that e-Grocery will be an additive to growth. A combination of strong merchant base, attractive range of SKUs, free delivery to the consumer, amongst other factors, continues to translate into ongoing strong consumer growth up 27% year-on-year to KZT 6.4 million, but still some way short of the just short of KZT 12 million Payment Platform consumers.

GMV momentum in the first quarter, very, very strong, 77% year-on-year. Remember, Q1 last year, a favorable base. On take rate, take rate will always vary from quarter to quarter. I remember, particularly last year in Q1 and Q2, questions around take rate being down, here you see it up. Again, it's primarily a function of base and promo activity last year, in the first part of the year, we scaled back promo activity; over here, promo is running at a normalized level and merchants pay a higher take rate to participate in promo; hence, the reason for the higher year-on-year take rate of 8.4%, but that is consistent with the full year guidance of around 8.5% and going forward, take rate will vary from quarter to quarter depending on the level of promotional activity.

As I talked about with Payments, a diverse platform of multiple revenue streams. You see that, that's also the case now with Marketplace, M-Commerce, e-Commerce and Travel. Travel having reached 9% of GMV in just over 2 years.

By respective platform, starting with M-Commerce, M-Commerce just keeps on delivering the numbers every quarter and Q1 was no exception, another strong quarter. Purchases up 46% year-on-year, GMV at faster rate, up 75% year-on-year. So that is a functional, the higher -- the faster GMV growth is, the function of normalized promo activity year-on-year combined with just growth in retail track trade, it translates into a higher ticket size. Similar comments on take rate up to 8% from 7.4% year-on-year and again, a function of normalized promo activity.

Moving to e-Commerce. e-Commerce is seeing incredibly strong growth in purchases of 216% year-on-year. This is, again, a function of more merchants, more SKUs, free delivery and everything else we're doing to increase the attractiveness of the platform. GMV is growing at a slower rate. So we talked about this theme over the last 12 months. A lot of the new purchases, a lot of the new SKUs that we're adding are at lower price points, that's take rate, that is GMV dilutive. But once the sort of SKU base normalizes, then you will see the 2 growing at a more comparable rate.

That said, actually, this is the fourth consecutive quarter of accelerating growth in the e-Commerce platform. e-Commerce take rate up to 10.2% from 8.7% in the first quarter last year, reflects, as previously mentioned, higher promo but specific to e-Commerce, it also -- is in part due to initiatives to monetize logistics, monetize advertising and changes in product mix. And certainly, monetization of advertising and the logistics will be themes that will become more important in subsequent years.

Here just to reiterate the point that you've seen a dramatic increase in SKUs over the last -- well, over the last 18 months, up 2x year-on-year to 3.1 million SKUs, and as I just mentioned previously, that will start to -- that growth rate will start to normalize and here too the focus will be on value-added services that drive transactions; advertising, logistics being 2 good examples.

On delivery, for the last 2 years now, we have made delivery free to the consumer for the vast majority of orders, 92% of orders. We've subsidized the cost of delivery for merchants to incentivize merchants to advance the platform and sell, deliver nationwide. You can see that, that investment is bearing fruit with orders delivered up 232% year-on-year. That's a massive increase. And what that does as well as just improve the consumer proposition, more volume means better unit economics, more profitable for both merchants and ultimately over the long run for ourselves to provide delivery services.

Kaspi Travel continues to deliver good growth. That's been a consistent theme over the last 2 years, purchases up 54%; GMV up 84% year-on-year, take rates moving up to 4.1%, and that just reflects higher -- relatively higher ticket, rail versus flight growing at a faster rate.

In the first quarter, we started to roll out international package tour holidays. This is a billion dollar addressable market, that's similar in size to the flight market. There's no impact on -- in the Q1 numbers. This will become more important as we go into 2024, but for the remainder of this year, although rural travel should be additive -- Travel GMV should be additive to Marketplace GMV, and over the medium term, package holidays should be additive to Travel GMV and Travel take rate for that matter.

So to wrap all this up on the Marketplace side of things, strong GMV growth, up 77% combined with take rate expansion translated into revenue growth of 97%. On the profitability side, again, just as with Payments, profitability growing at a faster rate than revenue. And that is despite the investment that we've made in free delivery and a substantial increase plus 200% in delivery volumes. It also, again, just reflects ongoing tight cost control across the rest of the company.

So finally, moving on to the Fintech Platform. Here, the focus is different. We raised interest rates last year to attract new customers and to attract new deposits. You can see that, that is working well with the deposit base up 35% year-on-year to 4 million. Growth in loan customers also continues at a robust rate, up 15% year-on-year.

In terms of origination or TFV, so here, a very vivid example of where the comp is boosting growth in the first quarter, up 76% year-on-year. Last year, we dramatically scaled back origination at the beginning of the year. Originations has been running at a normalized level since last summer. On conversion, how quickly customers repay their loans, 2.1 consistent with the trend over the last 2 years that effectively needs to put people to pay on average just after 6 months.

So the combination of strong payment trends, the combination of growth in deposit base and the combination of people repaying loans normally, all of these 3 things, are sort of lead indicators for consumer health, which is never sort of often a question that people ask. It's true now we have a diverse product mix. Buy Now Pay Later is our most important Fintech product with Kaspi Juma scheduled to take place in the third and fourth quarter of the year. Buy Now Pay Later will later naturally step up again. And merchant financing now is our fastest-growing Fintech product at 14% of origination is now at a point where it continues to grow faster, it starts to really matter.

Average net loan portfolio up 32% and consistent with previous comments. Savings deposits growing at a faster rate of 45%. The result of that is the loan-to-deposit ratio falls to 79% year-on-year from 88%, although broadly consistent with where we finished 2022. Over the medium term, more deposit customers, more funding will allow us to do more origination. That's over the next couple of years, and you'll gradually see the loan-to-deposit ratio move up again.

The yield declining to 25.3% from 27.1% reflects ongoing changes in product mix, namely the growing importance of BNPL and merchant financing and is consistent with the guidance that we provided for the year.

In terms of credit quality. The credit quality remains good. That's in terms of both origination and collection. I mentioned earlier, the sort of the indicators are that -- for that are payment transactions, deposit growth, loan repayments, loan conversion. And what you see here is ongoing strong trends. There is always in the first quarter some seasonal deterioration recognized in first and second payment default. Q2, high number of public holidays, payment discipline slips. It's normal, and you see that, that improved subsequently later on in the year.

When looking at these charts as well, you need to be careful if you magnify any change in direction, whether that be up or down because you're looking, ultimately, what is a very, very low base. Cost of risk is probably the best measure to look at to understand every -- how much we lend. We ultimately collect and cost of risk of 1.7% in the first quarter of 2023 is stable year-on-year and is consistent with our full year guidance of around 2%.

NPL, a small step-up at 6.5% versus 6.3% at the end of last year. Again, that is consistent with the comments I made around normal first quarter seasonality and our coverage stays at levels consistent with historic trends.

To wrap up the Fintech numbers. So the combination of faster origination in the second half of last year, partially offset by yield compression is translating into decent revenue growth up 35% year-on-year. On the net income side of things, funding costs are up substantially, up 103% year-on-year. That's partially offset by lower provisioning and lower sales and marketing costs year-on-year, but you can't offset that completely. So here, you do see a margin erosion down to just short of 31% from just short of 34% last year.

The comment we made on the last call still stands true that this is cyclical, not structural, as rates are very, very high currently. Rates will normalize over time. And when that happens, we'd expect newly attractive deposit customers and their funds to stay with us and margins to recover quickly.

Overall, just to wrap that all platforms, particularly Payments and Marketplace contributing to strong top line growth that is translating into comparable bottom line growth even with substantial increase in funding costs, even with investments in delivery. And all this is against what is still a backdrop of a limited visibility and volatile external environment, a global theme.

So moving on to guidance. The simple point here is guidance is unchanged versus the numbers we presented to you, well, just over 6 weeks ago. Growth, as we said previously, will be 1H weighted. That's particularly true for Marketplace GMV and the TFV origination. But overall, we're on track for a very, very good year. And again, that's even taking into account the volatile macro environment, limited visibility and higher funding costs.

We continue to expect bottom line net income growth of around 25% year-on-year. So on that note, let's open the call up to questions. Terry, would you like to ask.

(Operator Instructions) Our first question comes from Gabor Kemeny from Autonomous.

I have a few questions. First one is on the Marketplace take rate. When in Q1, you were trending around the level you are guiding for the full year, around 8.5%. And I believe that you are planning some promotional events for later this year, like consumer type events, which I suppose may imply some further upside for the rest of the year. So could you please elaborate a bit on this seemingly on the level of conservatism built into this 8.5% full year guidance in light of Q1?

The other question I had was on the merchant network, which is still expanding consistently, but I believe in the last quarter or two, the growth in the merchant network slowed down a little bit. How do you see your addressable market here, like in terms of the number of merchants you might able to acquire? And if you can provide any pointers on what this means for your adjustable market in Marketplace and Payments, please?

And my last question is on the preparations for the U.S. IPO, which you mentioned in the release. What have you actually done and what is your current thinking on the timing?

So thanks a lot for your questions, Gabor. I'll pass your question on sort of addressable market, how we think about it over the medium term to Mikheil. But on the Marketplace take rate guidance, a couple of things to think about. One, you just bear in mind that the first quarter is usually the smallest quarter in the context of the year. So whether you have outperformance or underperformance, it's impact on the full year outcome is less pronounced. It's a small quarter, basically. So that's the first thing. And the second thing, you're right, we do have events like Juma in the second half of the year, but we had them last year. And so they were in the base last year. They're in the base -- they're in the comp going into this year. But you certainly -- so the guidance that we're giving is the right guidance, and you're not going to see that kind of substantial year-on-year increase in take rate that you've seen in the first quarter. That reflects ultimately a very unusual quarter where there was almost no promo activity last year back to normal last year -- this year, sorry.

And then on the U.S. listing, look, so we don't want to sort of get boxed into any particular time frame simply because actually it's contingent on market to a large extent rather than ourselves. But all of the sort of work streams that are necessary to make that happen. So they are around things like legal and accounting are all now actively taking place. And we would hope that it would be possible that market conditions would allow us to complete this transaction before the end of this year. That's not going to be the first half. It's likely to be the second half. But again, it is ultimately contingent on the market.

So on that, I'll pass over to Mikheil to talk about addressable market for the business.

Sure. Well, I mean, first of all, in terms of the take rate, I think I just would like to make 1 point about the way we look at our business, right? So we're not driven by the take rate in a sense that the take rate expansion that you would see in the future, it will be driven by the type of services we launched, so that merchants basically get the value for those services. So we don't want -- we want to be in a situation when merchants connecting to our platforms actually get the value, and we don't want to be in a situation when the merchants are unfairly sort of paying us. They have to use advertising services, for example, if you want to sell anything on our platform. So we don't want to do that. So we want actually the merchants to value each individual service. And that's why we have been carefully rolling out some of the services, which is marketing, advertising and also the delivery, for example. And slight increase in the take rate of Q1 is actually a result of these initial results of this monetization as well.

In terms of the merchant growth, well, yes, we have reached 0.5 million merchants and it's 75% growth year-over-year. So I mean, it's incredible growth, but also you should sort of take a step back in a sense that it's always been our strategy, right? So we acquired consumers as fast as we can with the high-quality services and engagement with -- we acquire merchants as well with the services which they love. And then we connect them to each other, and we start driving the transaction. So as a result, we basically, we are at the stage of both merchant and consumer side of things that now we are focused even more on delivering the value through the transaction to each of the buyers and sellers.

If you say in terms of the size of the market, I mean I think there are about 1 million businesses registered in Kazakhstan roughly, but that is kind of also a moving number because we have launched service with the government services, which enables businesses, small and micro businesses, more specifically to register. And we are registering over, what is it, 20,000 merchants every month. So it's also kind of we are the company which is not just creating services, we're the company which actually creates the markets also for itself. And even though we are a company that is sort of very competitive. We also are not thinking about the competition because the way that we create the markets is actually provides significant growth for us, but also provides a huge value for the country itself in digitalization and the cashless transactions across the board.

The next question on the line comes from Catherine O'Neill from Citi.

Great. I firstly had a question actually about some of the sort of earlier stage initiatives you talked about Kaspi marketing on the advertising revenue side. I just wondered how meaningful you think that could be and what the sort of revenue model is that you have in place currently? And then also on delivery, how that sort of increasingly becomes monetized? That's my first question.

And the second is, I get quite a lot of questions as to David earlier about regulation. So just an update on your thoughts on the regulatory outlook for your business across the different areas and whether there's anything we should have in mind that's on the radar at all?

Great. Thanks for your questions, Catherine. So I'll pass both of those advertising and delivery, addressable market and regulation over to Mikheil.

So on the -- again, on the advertising and the delivery, we have just started, right, that we're extremely careful. And again, we're extremely careful because we want -- when we -- when the consumers or merchants are paying us something, we want to make sure -- this is our majority of our revenue, right? So they are paying actually, selling to us, if you put that into simple terms. And as a result, we want to have an extraordinary quality of services, we want to deliver the value to both.

The first few numbers that you see are just a very initial stage of the monetization. We don't expect those numbers to be sort of huge, some of other marketplaces that charging 5%, 10% for the type of additional services and squeezing the merchants on their margins are becoming very expensive places to sell. That's not our strategy. But the initial monetization has been sort of very encouraging. And we see that both merchants and consumers receiving the value and engaging in advertising and paid -- sort of paid delivery. This is just the first Q. So give us a bit of a time and we'll be able to discuss those initiatives in more details with you guys.

In terms of the regulation, I mean, nothing really that stands out. So yes, I mean for us, it's really business as usual. So we are an important company in the country. We're one of the largest taxpayers in the country. And yes, we contribute a lot to digital economy. So we're working with the government entities across the board. So nothing really specific to report.

The 1 thing I would make a comment on this is a question which we're asked quite regularly. And sometimes, there are a lot of speculations regarding these issues, right? So my advice would be that don't make a judgment based on the speculations about regulation.

Okay. Great. I actually just wanted to quickly ask you on the Marketplace, e-Commerce side, whether you're seeing any change in the competitive landscape at all or whether -- because you got a pretty high market share or whether it's still pretty benign?

Well, I mean, there is competition and there has been a competition. So we have different players in the market. Again the same guys. We have Chinese, AliExpress, which is a subsidiary of Alibaba. We have Russian Ozon, we have Russian Wildberries. We have some smaller local players. So they have been on the market. They have been announcing -- and also the local players try to repeat our success. And every time sort of this question rises, our response is really that we just have this incredible business, which consumers and the merchants love. And as a result, we have extraordinary performance just because they are using our services because they are highest quality services on the market. But we do create competitive advantages as well as we continue developing, right? So for example, Postomats will be the significant competitive advantage. This will be the largest last mile proprietary network in the country. So when we're growing that network really fast. Grocery actually, will become not only profitable business for us over a large size, but also grocery provides a significant engagement, right? I mean, when we're talking about going for weekly purchase, that actually means that we are going for weekly purchase and we want households to buy weekly from us the products at a very good prices with free delivery.

So all of that fuels our growth. It has this incredible network effect and yes, and this is the reason why we're actually profitable, being a technology company and being profitable and fast-growing, very few examples in the world companies like that and we continue delivering exceeding actually from quarter-to-quarter.

The next question comes from Sam (inaudible) of Virgin Asset Management.

Congratulations on the numbers. I've 3 quick questions. The first, how are you seeing cost of funds trending most recently, should we still expect to see some upward pressure in the near term. I'm not sure if you're seeing any significant changes in consumer behavior, people locking in higher rate term deposits or anything? That's the first one.

The second is on the Fintech business and particularly on the lower sales and marketing costs. Could you just give a bit more color on what it is you're cutting back on the and whether that's to defend margins? Or is it part of a broader strategy?

And then the third one on Kaspi Travel. Obviously, GMV growth has been very strong. Just curious if you can disclose how much of that GMV has been purchased using financing.

All right, Sam. So thanks for your question. So I'll ask Mikheil just to talk about sort of sales and marketing approach across the entire company, not just sort of to Fintech, and Travel also.

On the funding, I would just say in terms of the guidance, it assumes basically a sort of continuation of the status quo. And I think that is a reasonable assumption. We're pleased with the funds that we've attracted. We're pleased with more generally sort of trends in consumer behavior that we see. And I don't think there's any sort of reason to expect that to dramatically change over the next couple of months. So no sort of material change to flag to you, either seen or expected. Over to Mikheil.

Yes. Well, I mean, on the sales and marketing, you just need to keep in mind that we are sort of highly personalized experience company, which is driven by technology and data to deliver the right product to the right consumer through at the right time and I couldn't say at the right channel because we have -- our super app is that channel basically for our consumers. So as a result, you would actually see that our marketing -- we can see the marketing as an investment into a relationship, but also we're extremely smart about it, which means that we are providing the -- the majority of it is our points program and the points program is becoming very personalized. So sort of the new basically acquired consumers would get more incentives for us to engage, but once they get engaged, once they value our services, which are higher quality, and they love to use them, we sort of scale back on the investment. So that's basically the way we look at the marketing.

So the marketing reduction across the board is just a result of the fact that we're sort of providing or investing less into the marketing where the consumers are sort of fully engaged and that's just decided by sort of the data management or the personalized marketing strategy that we have in across all our platforms.

The question about GMV growth. Could you please remind me what was the question?

Yes, sure. On the Kaspi Travel business, how much of the GMV growth, if you could disclose it at all, is purchased using some kind of financing product by the consumer?

On the Travel side?

Yes.

It's about 20%. So it's not that high because the -- also the kind of type of the travelers and the type of purchases you are making, the ticket, for example, in the railway travels is, train tickets are very small. So you don't really need -- you don't need the financing to acquire this. So it's about 20%.

And also, just to step back, just to reinforce what David said about the interest expense. It's again, this is the way how we run the business. We look at the long-term relationship with the consumer. So we actually purposely decided to sort of continue attracting depositors, continue driving the sales and taking advantage of actually increasing the interest rates. So because the interest rates in Kazakhstan are regulated, so they're capped and they are moving only with the regulation and the base rate on the market, right? So as soon as the rates went up, consumers obviously prefer to have a high-quality product and services and everybody has plus/minus the same kind of interest rate of the market. So we are just beneficiaries because our product is -- and consumer experience is superior. And over time, as we acquire those consumers, that will continue using our services, the interest rates will go down, but those consumers will stay with us. So this is the way we look at the deposit franchise. And that's why it's also growing even faster than the financing business.

Okay. So you're not using -- you're not necessarily looking at kind of deposit market share. You're not using rates to try and drive market share. It's more of a case if you want to be in line with the market. And then you have confidence that your other services will retain those customers over time?

Yes. Our strategy is not to drive funds to fund our business in the Fintech side of things. And that's why you see funding actually growing faster, but if you take -- again, we're building the long-term business. So if you look at the -- several years down the road, definitely rates will normalize, but those consumers engaged with all our services, they will remain with us. And actually, those are some of the highest quality consumer, right? Those are consumers which also saving money, which are -- which have higher income. And those are the consumers, which will be -- therefore, over time, will be spending sort of -- and making purchases through our platform at a higher rate than other consumers. So yes, that's exactly right.

We currently have no further questions, so I'll hand back for any closing remarks.

Okay. So thank you, Terry. If there's no other questions, thanks, everyone, for dialing in today. We're happy to take your questions offline. So please get in touch if there's anything we can do to help. And if not, we'll update you again early summer. Thanks a lot, everyone.

Thank you. Take care, everyone.

This concludes today's webinar. Thank you all for joining. You may now disconnect from the call.