Company Continues Top Line Growth Trend with $655 Million in Reported Revenue
NEW YORK, February 07, 2025--(BUSINESS WIRE)--Freedom Holding Corp. (the "Company") (NASDAQ: FRHC), a multinational diversified financial services holding company with a presence through its subsidiaries in 22 countries, today announced the financial results for their third quarter and first nine months of fiscal 2025. Highlights include the following:
$655 million in revenuefor the quarter
Net income of $1.29 earnings per share, diluted, and $1.32 earnings per share, basic
Total expenses of $557 million
$9.1 billion in total assets
55% increase in overall customer base to 3.2 million
$225 million in interest income, $178 million in insurance underwriting income, $143 million in fee and commission income, $90 million in net gain on trading securities.
Third Quarter Financial Highlights:
The Company recognized revenue of approximately $655 million for the third quarter of fiscal 2025, compared to $419 million in the third quarter of fiscal 2024, a 56.5% increase. The Company's total expense was approximately $557 million in the third quarter of fiscal 2025 as compared to $307 million for the same period last year, an increase of approximately 81%.
Net income was approximately $78 million for the third quarter of fiscal 2025 compared to $96 million for the similar period in the previous fiscal year, providing for basic and diluted earnings per share of $1.32 and $1.29, respectively. This compares to $1.65 and $1.63 per share, respectively, for the same period last year. Weighted average common shares outstanding used to compute diluted earnings per share for the three-month periods ended December 31, 2024, and 2023 were 60.5 million and 59.3 million, respectively.
9 Months Year to Date Financial Highlights:
For the nine months ending December 31, 2024, the Company's revenue totaled approximately $1.7 billion compared to approximately $1.2 billion for the prior year period, an increase of 44%. The Company's operating expense was $1.4 billion for the period as compared to $840 million in the prior year period, an increase of 69%.
Net income was approximately $227 million for the first nine months of fiscal 2025, compared to $280 million for the same period in fiscal 2024, providing for basic and diluted earnings per share of $3.83 and $3.76, respectively. This compares to $4.79 and $4.73 per share, respectively, for the same period of the last fiscal year. Weighted average common shares outstanding used to compute diluted earnings per share for the nine-month periods ended December 31, 2024, and 2023 were 60.4 million and 59.3 million, respectively.
Balance Sheet Highlights:
Total assets were $9.1 billion on December 31, 2024, as compared to $8.3 billion on March 31, 2024, fiscal year-end. Net working capital at the end of the third fiscal quarter was $890 million, up from $675 million on March 31, 2024.
"Our ongoing investments in digital infrastructure, AI, and an offering of increasingly diversified fintech based services continues to bear fruit… "
"I am pleased to report that Freedom Holding Corp. delivered another record quarter on several fronts," stated Timur Turlov, the Company's founder and chief executive officer. "Our ongoing investments in digital infrastructure, AI, and an offering of increasingly diversified fintech based services continues to bear fruit as evidenced by the extensive growth of our customer base, particularly in our banking and insurance segments which grew by 56% and 82% respectively, as compared to our 2024 fiscal year end." Turlov continued, "From a consumer banking perspective, one of the most innovative products we've developed is our loyalty cashback program, which, among other things, offers clients the opportunity for cash back in the form of a unique currency linked to the value of Freedom Holding Corp. shares. Our cash back program is one of the most lucrative on the market and it allows our customers to be part of our great company. This approach is unique in our region’s financial market and has resonated well with our growing customer base."
Turlov commented further, "We’ve been actively developing our Freedom digital ecosystem with Freedom Bank at its core, disrupting the regional banking and online retail services sectors with the delivery of innovative financial services and lifestyle products for our clients. The Bank now serves over 1.4 million customers who form part of the 522,486 individuals who use the Freedom SuperApp, where many of our breakthrough products are available. The SuperApp not only provides access to the best products and services available in the Freedom ecosystem, but also allows them to shop, compare, save money, and earn cash back."
"We expect that our continued development and deployment of new AI based analytics will have a positive impact on insurance risk assessments…"
"Commensurate with our record revenues, we experienced a significant increase in our operating expenses during the quarter, which included a near doubling of our advertising expenses and a similar increase in our Fee and commission expenses, which were in line with our expectations. We also saw a substantial increase in our Insurance claims incurred, net of reinsurance, which came in at $105 million. This was in line with our 125% increase in underwriting income and the growth of our customer base in this segment to nearly 1 million customers. We expect that our continued development and deployment of new AI based analytics will have a positive impact on insurance risk assessments and related expenses going forward," the CEO added. "During the quarter Freedom Insurance set a record of 1,399 online policies sold in a single day with more and more customers choosing our insurance products over our competitors'. We believe that this results from our products being 100% digital, diverse, and extremely convenient in terms of the payout of benefits. This was further evidenced by Freedom Insurance ranking in the top 5 for general insurance, and our Life division is in the top 3 for life insurance," noted the CEO.
Additional third quarter fiscal 2025 highlights:
Insurance underwriting income for the quarter was $177.5 million, an increase of $98.5 million or 125%, compared to the three months ended December 31, 2023 and there was a net gain on trading securities of $89.6 million during the quarter as compared to a net loss on trading securities of $5.1 million for the three months ended December 31, 2023.
Fee and commission income for the three months ended December 31, 2024 was $143.4 million, an increase of $23.3 million, or 19%, compared to the three months ended December 31, 2023, and there was a net gain on derivatives for the three months ended December 31, 2024 in the amount of $11.9 million, an increase of $54.5 million, or 128%, compared to the three months ended December 31, 2023.
The Company reported approximately 618,000 total retail brokerage customers as of December 31, 2024 as compared to approximately 530,000 as of March 31, 2024. Banking customer count totaled approximately 1,407,000 at the Company’s subsidiary, Freedom Bank KZ, as of December 31, 2024, as compared to approximately 904,000 as of March 31, 2024.
About Freedom Holding Corp.
Freedom Holding Corp., a Nevada corporation, is a diversified financial services holding company conducting retail securities brokerage, investment research, investment counseling, securities trading, investment banking and underwriting services, mortgages, insurance, and consumer banking through its subsidiaries, operating under the name Freedom Finance in Europe and Central Asia, and Freedom Capital Markets in the United States. Through its subsidiaries, Freedom Holding Corp. employs more than 8,200 people and is a professional participant in the Kazakhstan Stock Exchange, the Astana International Exchange, the Republican Stock Exchange of Tashkent, and the Uzbek Republican Currency Exchange and is a member of the New York Stock Exchange and the Nasdaq Stock Exchange.
Freedom Holding Corp.'s common shares are registered with the United States Securities and Exchange Commission and are traded under the symbol FRHC on the Nasdaq Capital Market, operated by Nasdaq, Inc. The Company has its main market of operations in Kazakhstan and has operations through its subsidiaries in 22 countries.
This release contains "forward-looking" statements, including with respect to Freedom Holding Corp.'s (the "Company") potential for future growth and success, and the ongoing development and deployment of technology, services, and products that would continue to sustain future growth or improve related expenses. All forward-looking statements are subject to uncertainty and changes in circumstances. In some cases, forward-looking statements can be identified by terminology such as "expect," "new," "plan," "seek," and "will," or the negative of such terms or other comparable terminology used in connection with any discussion of future plans, actions, and events. Forward-looking statements are not guarantees of future results or performance and involve risks, assumptions, and uncertainties that could cause actual events or results to differ materially from the events or results described in, or anticipated by, the forward-looking statements. Factors that could materially affect such forward-looking statements include certain economic, business, and regulatory risks and factors identified in the Company's periodic and current reports filed with the U.S. Securities and Exchange Commission. All forward-looking statements are made only as of the date of this release and the Company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances. Readers should not place undue reliance on these forward-looking statements.
Website Disclosure
Freedom Holding Corp. intends to use its website, https://ir.freedomholdingcorp.com, as a means for disclosing material non-public information and for complying with U.S. Securities and Exchange Commission Regulation FD and other disclosure obligations.
Financial Tables to Follow
FREEDOM HOLDING CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated)
December 31, 2024
March 31, 2024
ASSETS
Cash and cash equivalents (including $50 and $203 from related parties)
$
577,940
$
545,084
Restricted cash (including $3,198 and $— with related parties)
742,153
462,637
Trading securities (including $1,128 and $1,326 with related parties)
3,415,517
3,688,620
Available-for-sale securities, at fair value
418,614
216,621
Margin lending, brokerage and other receivables, net (including $22,391 and $22,039 due from related parties)
2,037,673
1,660,275
Loans issued (including $139,514 and $147,440 to related parties)
1,454,259
1,381,715
Fixed assets, net
159,384
83,002
Intangible assets, net
44,488
47,668
Goodwill
48,217
52,648
Right-of-use asset
39,242
36,324
Insurance contract assets
26,518
24,922
Other assets, net (including $16,294 and $5,257 with related parties)
171,040
102,414
TOTAL ASSETS
$
9,135,045
$
8,301,930
LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations
$
2,199,703
$
2,756,596
Customer liabilities (including $51,017 and $44,127 to related parties)
3,783,291
2,273,830
Margin lending and trade payables
319,043
867,880
Liabilities from insurance activity
407,877
297,180
Current income tax liability
48,276
32,996
Debt securities issued
468,835
267,251
Lease liability
40,401
35,794
Liability arising from continuing involvement
472,867
521,885
Other liabilities (including $157 and $9,854 to related parties)
132,007
81,560
TOTAL LIABILITIES
$
7,872,300
$
7,134,972
Commitments and Contingent Liabilities (Note 23)
—
—
SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding
—
—
Common stock - $0.001 par value; 500,000,000 shares authorized; 60,619,217 shares issued and outstanding as of December 31, 2024, and 60,321,813 shares issued and outstanding as of March 31, 2024, respectively
61
60
Additional paid in capital
222,968
183,788
Retained earnings
1,226,079
998,740
Accumulated other comprehensive loss
(189,216
)
(18,938
)
TOTAL FRHC SHAREHOLDERS’ EQUITY
$
1,259,892
$
1,163,650
Non-controlling interest
2,853
3,308
TOTAL SHAREHOLDERS’ EQUITY
$
1,262,745
$
1,166,958
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
9,135,045
$
8,301,930
FREEDOM HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated)
Three Months Ended December 31,
Nine Months Ended December 31,
2024
2023
2024
2023
Revenue:
Fee and commission income (including for the three months ended $556 and $30,112, for the nine months ended $2,259 and $66,029 from related parties)
$
143,436
$
120,159
$
379,976
$
330,565
Net gain/(loss) on trading securities
89,564
(5,089
)
105,779
77,498
Interest income (including for the three months ended $380 and $7,566, for the nine months ended $1,023 and $22,650 from related parties)
224,688
226,445
661,016
588,857
Insurance underwriting income
177,472
79,017
467,224
181,882
Net gain on foreign exchange operations
3,945
38,825
18,513
54,430
Net gain/(loss) on derivatives
11,889
(42,568
)
30,691
(71,795
)
Other income
4,196
1,845
23,606
8,988
TOTAL REVENUE, NET
$
655,190
$
418,634
$
1,686,805
$
1,170,425
Expense:
Fee and commission expense
$
93,927
$
42,818
$
264,911
$
103,116
Interest expense
131,136
131,223
401,519
365,650
Insurance claims incurred, net of reinsurance
104,511
40,989
218,504
96,491
Payroll and bonuses
77,395
45,083
201,129
116,711
Professional services
10,955
6,217
26,468
24,793
Stock compensation expense
13,417
1,039
36,088
3,303
Advertising expense
21,472
11,066
58,722
27,805
General and administrative expense (including for the three months ended $7,892 and $1,502, for the nine months ended $16,864 and $9,063 from related parties)
73,437
32,106
171,782
86,211
Provision for/(recovery of) allowance for expected credit losses
30,612
(3,526
)
39,269
15,462
TOTAL EXPENSE
$
556,862
$
307,015
$
1,418,392
$
839,542
INCOME BEFORE INCOME TAX
98,328
111,619
268,413
330,883
Income tax expense
(20,191
)
(15,544
)
(41,529
)
(51,408
)
NET INCOME
$
78,137
$
96,075
$
226,884
$
279,475
Less: Net loss attributable to non-controlling interest in subsidiary
(144
)
(293
)
(455
)
(842
)
NET INCOME ATTRIBUTABLE TO COMMON
$
78,281
$
96,368
$
227,339
$
280,317
OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments available-for-sale, net of tax effect
7,993
1,486
15,673
5,893
Reclassification adjustment for net realized (gain)/loss on available-for-sale investments disposed of in the period, net of tax effect
872
(1,881
)
1,039
(3,145
)
Foreign currency translation adjustments
(101,212
)
28,100
(186,990
)
(3,593
)
OTHER COMPREHENSIVE (LOSS)/INCOME
(92,347
)
27,705
(170,278
)
(845
)
COMPREHENSIVE (LOSS)/INCOME BEFORE NON-CONTROLLING INTERESTS
$
(14,210
)
$
123,780
$
56,606
$
278,630
Less: Comprehensive loss attributable to non-controlling interest in subsidiary
(144
)
(293
)
(455
)
(842
)
COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
