Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Freedom Holding Corp. Reports Third Quarter Fiscal Year 2024 Financial Results By: Freedom Holding Corp. via Business Wire February 12, 2024 at 09:35 AM EST With $419 Million in Reported Revenue, Company Remains on Pace for a Record Year Freedom Holding Corp. (NASDAQ: FRHC) (the "Company"), a diversified financial services holding company with operations in the Central Asia and Eastern Europe, Europe Excluding Eastern Europe, the United States, and the Middle East/Causaus, today announced the financial results for their third quarter and nine months ended December 31, 2023, of fiscal 2024. Highlights include the following: $419 million in revenue Net income of $96 million, or $1.63 earnings per share, diluted Operating expenses of $307 million 177% increase in insurance underwriting premiums to approximately $79 million New branch offices now include Italy, The Netherlands, Austria, and Bulgaria Third Quarter Financial Highlights: The Company recognized revenue of approximately $419 million for the third quarter of fiscal 2024, compared to $214 million in the third quarter of fiscal 2023, a 96% increase. The Company's operating expense was approximately $307 million in the third quarter of fiscal 2024 compared to $163 million for the same period last year, an increase of approximately 89%. Net income was approximately $96 million for the third quarter of fiscal 2024 compared to $62.4 million for the same period in fiscal 2023, a 54% increase, providing for basic and diluted earnings per share of $1.65 and $1.63, respectively. This compares to $1.06 and $1.05 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, 2023, and 2022 were 59.3 million basic and 59.5 million, respectively. Nine Months Year to Date Financial Highlights: For the nine months ending December 31, 2023, the Company's revenue totaled approximately $1.2 billion compared to $567 million for the prior year period, an increase of 107%. The Company's operating expense was $840 million for the period as compared to $401 million in the prior year period. Net income was approximately $279 million for the first nine months of fiscal 2024, compared to $149 million for the same period in 2023, providing for basic and diluted earnings per share of $4.79 and $4.73, respectively. This compares to $2.54 and $2.50 for the same period last fiscal year. Weighted average common shares outstanding used to compute diluted earnings per share for the nine-month periods ended December 31, 2023, and 2022 were 59.3 million and 59.5 million, respectively. Balance Sheet Highlights: Total assets were $7.5 billion on December 31, 2023, as compared to $5.1 billion on the March 31, 2023, fiscal year-end. Net working capital increased to $1.0 billion for the period ended December 31, 2023, up from $771 million on March 31, 2023. Brokerage Customer Information: Total brokerage customer count for the Company increased to approximately 458,000 at December 31, 2023, as compared to approximately 370,000 customers at the fiscal year ended March 31, 2023. Approximately 56% of these customers carried positive cash or asset account balances. "Our Central Asia and Eastern European business lead the way for growth…" Commenting on the quarterly results, Timur Turlov, the Company's founder and chief executive officer, stated, "Our fiscal year 2024 has been excellent thus far, highlighted by the planned diversification of our revenue streams and the healthy expansion of almost all business lines in each of our regions. Central Asian operations (Kazakhstan, Uzbekistan, and Kyrgyzstan) accounted for approximately 86% of our revenue for the quarter, totaling $361 million, a 137% increase over the same period last year." "Our Central Asia and Eastern European business lead the way for growth for our enterprise, which includes our Freedom Finance Bank, Freedom Finance Global, Freedom Finance JSC, and our insurance divisions: Freedom Life and Freedom Insurance," Turlov remarked, "contributing approximately $361 million in total revenue from these divisions." He further highlighted that, "Our Europe, Excluding Eastern Europe business line reported $39.5 million in revenue during the reporting period, and we are pleased to have announced the opening of a number of branch offices including Italy, Netherlands, Austria and Bulgaria." "Our operating expenses grew in line with our strategic expansion…" In the third quarter of fiscal 2024, Freedom Holding Corp. reported $307 million in expenditures, an 88% increase over the same period last year. "Our operating expenses grew in line with our strategic expansion plans for this year, which we fully expected," stated Turlov. "This also coincided with increased interest expenses of approximately $131 million as the amount of short-term financing through repurchase agreements and percentage costs on clients' deposits have grown as well." "Highlighted by $96 million in net income, this was another great quarter for Freedom overall and despite market challenges, our growth story continues, driven by our strategy to diversify our revenue streams. Our aim of building out a digital fintech ecosystem where our customers can access a broad array of financial and ancillary services in a one-stop-shopping fashion continues to bear fruit, particularly in our Central Asian markets, where our cross-selling capabilities continue to expand," stated Turlov. "Of course, none of this could have happened without the support of our group of highly trained professionals and service partners who work to meet the diversified financial needs of our customer base every day. In doing so together, we continue to build credibility and earn the trust of all stakeholders in the Freedom universe, and we look forward to what the future will bring for our organization," Turlov concluded. Additional select third quarter fiscal 2024 highlights: Similar to the preceding quarter ended September 30, 2023, interest income was the key driver of Freedom Holding Corp.'s performance, reaching $226 million, an 182% year-over-year increase, largely due to the expansion of the Company's securities portfolio, an increase in the amount of bonds held as a percentage of total trading securities, an increase in margin loans and an increase in issued retail banking loans. The Company realized a net loss from securities trading of approximately $5.1 million for the third quarter of fiscal 2024, compared to a gain of $25.5 million in the third quarter of fiscal 2023 due primarily to the decline in the value of Kazakhstan Development Fund bonds. The Company also realized a 177% increase in insurance underwriting income to approximately $79 million during the quarter as compared to $28.6 million for the same period of the previous fiscal year. Fee and commission income rose by 49% to approximately $120 million as compared to the same quarter last year thanks to the overall general growth of the Company’s operations between the comparable quarters and the migration of clients from our Belize affiliate to brokerage accounts at companies within our group. This revenue line was positively impacted by an increase in fee and commission income from payment processing at Paybox and its subsidiaries, which were acquired in the fourth quarter of fiscal 2023. 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 5,000 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. is headquartered in Almaty, Kazakhstan, and has operations and subsidiaries in 19 countries, including Kazakhstan, the United States, Cyprus, Poland, Spain, Uzbekistan, and Azerbaijan, among others. 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. To learn more about Freedom Holding Corp., visit www.freedomholdingcorp.com. Cautionary Note Regarding Forward-Looking Statements This release contains "forward-looking" statements, including with respect to Freedom Holding Corp.'s (the "Company") potential for future growth and success. 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated) December 31, 2023 March 31, 2023 ASSETS Cash and cash equivalents 561,883 581,417 Restricted cash 384,553 445,528 Trading securities 3,680,453 2,412,556 Available-for-sale securities, at fair value 202,497 239,053 Margin lending, brokerage and other receivables, net 961,392 376,329 Loans issued 1,346,005 826,258 Fixed assets, net 78,099 54,017 Intangible assets, net 46,771 17,615 Goodwill 52,238 14,192 Right-of-use asset 34,180 30,345 Insurance contract assets 12,728 13,785 Other assets, net 88,244 73,463 TOTAL ASSETS 7,449,043 5,084,558 LIABILITIES AND SHAREHOLDERS’ EQUITY Securities repurchase agreement obligations 2,889,173 1,517,416 Customer liabilities 2,248,042 1,925,247 Margin lending and trade payables 145,804 122,900 Liabilities from insurance activity 242,179 182,502 Current income tax liability 27,711 4,547 Debt securities issued 266,310 60,025 Lease liability 34,614 30,320 Liability arising from continuing involvement 494,513 440,805 Other liabilities 61,447 30,060 TOTAL LIABILITIES 6,409,793 4,313,822 SHAREHOLDERS’ EQUITY Preferred stock - - Common stock 59 59 Additional paid in capital 167,465 164,162 Retained earnings 903,517 647,064 Accumulated other comprehensive loss (34,845 ) (34,000 ) TOTAL FRHC SHAREHOLDERS' EQUITY 1,036,196 777,285 Noncontrolling interest 3,054 (6,549 ) TOTAL SHAREHOLDERS’ EQUITY 1,039,250 770,736 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 7,449,043 5,084,558 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 2023 2022 2023 2022 Revenue: Fee and commission income 120,159 80,883 330,565 253,486 Net (loss)/gain on financial instruments through profit and loss (5,089 ) 25,456 77,498 38,894 Interest income 226,445 80,255 588,857 187,817 Insurance underwriting income 79,017 28,557 181,882 78,998 Net gain on foreign exchange operations 38,825 20,866 54,430 30,014 Net loss on derivative (42,568 ) (21,469 ) (71,795 ) (22,523 ) Other income/ (expense) 1,845 (570 ) 8,988 (79 ) TOTAL REVENUE, NET 418,634 213,978 1,170,425 566,607 Expense: Fee and commission expense 42,818 18,314 103,116 60,068 Interest expense 131,223 52,037 365,650 132,971 Insurance claims incurred, net of reinsurance 40,989 17,419 96,491 51,586 Payroll and bonuses 45,083 21,610 116,711 55,252 Professional services 6,217 5,901 24,793 14,174 Stock compensation expense 1,039 2,939 3,303 6,519 Advertising expense 11,066 3,730 27,805 9,479 General and administrative expense 32,106 16,428 86,211 40,943 (Recovery)/Allowance for expected credit losses (3,526 ) 24,140 15,462 30,294 TOTAL EXPENSE 307,015 162,518 839,542 401,286 INCOME BEFORE INCOME TAX 111,619 51,460 330,883 165,321 Income tax expense (15,544 ) (5,069 ) (51,408 ) (26,567 ) INCOME FROM CONTINUING OPERATIONS 96,075 46,391 279,475 138,754 INCOME BEFORE INCOME TAX EXPENSE OF DISCONTINUED OPERATION - 13,667 - 14,467 Income tax benefit/(expense) of discontinued operations - 2,342 - (4,538 ) INCOME FROM DISCONTINUED OPERATIONS - 16,009 - 9,929 NET INCOME 96,075 62,400 279,475 148,683 Less: Net loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 96,368 62,864 280,317 150,191 OTHER COMPREHENSIVE INCOME Change in unrealized gain/(loss) on investments available-for-sale, net of tax effect 1,486 (54 ) 5,893 2,309 Reclassification adjustment for net realized (loss)/gain on available-for-sale investments disposed of in the period, net of tax effect (1,881 ) 320 (3,145 ) 197 Foreign currency translation adjustments 28,100 (5,611 ) (3,593 ) (301 ) OTHER COMPREHENSIVE INCOME/(LOSS) 27,705 (5,345 ) (845 ) 2,205 COMPREHENSIVE INCOME BEFORE NONCONTROLLING INTERESTS 123,780 57,055 278,630 150,888 Less: Comprehensive loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 124,073 57,519 279,472 152,396 EARNINGS PER COMMON SHARE (In U.S. dollars): Earnings from continuing operations per common share - basic (Restated) 1.65 0.79 4.79 2.37 Earnings from continuing operations per common share - diluted (Restated) 1.63 0.78 4.73 2.33 Earnings/(loss) from discontinued operations per common share - basic - 0.27 - 0.17 Earnings/(loss) from discontinued operations per common share - diluted - 0.27 - 0.17 Earnings per common share - basic (Restated) 1.65 1.06 4.79 2.54 Earnings per common share - diluted (Restated) 1.63 1.05 4.73 2.50 Weighted average number of shares (basic) 58,578,691 58,678,730 58,557,577 58,642,637 Weighted average number of shares (diluted) 59,289,256 59,522,701 59,287,086 59,527,743 View source version on businesswire.com: https://www.businesswire.com/news/home/20240212551579/en/Contacts Ramina Fakhrutdinova (KZ) Public Relations Freedom Finance JSC +7 777 377 8868 pr@ffin.kz Al Palombo (US) Global Communications Chief Freedom US Markets +1 212-980-4400, Ext. 1013 apalombo@freedomusmkts.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Freedom Holding Corp. Reports Third Quarter Fiscal Year 2024 Financial Results By: Freedom Holding Corp. via Business Wire February 12, 2024 at 09:35 AM EST With $419 Million in Reported Revenue, Company Remains on Pace for a Record Year Freedom Holding Corp. (NASDAQ: FRHC) (the "Company"), a diversified financial services holding company with operations in the Central Asia and Eastern Europe, Europe Excluding Eastern Europe, the United States, and the Middle East/Causaus, today announced the financial results for their third quarter and nine months ended December 31, 2023, of fiscal 2024. Highlights include the following: $419 million in revenue Net income of $96 million, or $1.63 earnings per share, diluted Operating expenses of $307 million 177% increase in insurance underwriting premiums to approximately $79 million New branch offices now include Italy, The Netherlands, Austria, and Bulgaria Third Quarter Financial Highlights: The Company recognized revenue of approximately $419 million for the third quarter of fiscal 2024, compared to $214 million in the third quarter of fiscal 2023, a 96% increase. The Company's operating expense was approximately $307 million in the third quarter of fiscal 2024 compared to $163 million for the same period last year, an increase of approximately 89%. Net income was approximately $96 million for the third quarter of fiscal 2024 compared to $62.4 million for the same period in fiscal 2023, a 54% increase, providing for basic and diluted earnings per share of $1.65 and $1.63, respectively. This compares to $1.06 and $1.05 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, 2023, and 2022 were 59.3 million basic and 59.5 million, respectively. Nine Months Year to Date Financial Highlights: For the nine months ending December 31, 2023, the Company's revenue totaled approximately $1.2 billion compared to $567 million for the prior year period, an increase of 107%. The Company's operating expense was $840 million for the period as compared to $401 million in the prior year period. Net income was approximately $279 million for the first nine months of fiscal 2024, compared to $149 million for the same period in 2023, providing for basic and diluted earnings per share of $4.79 and $4.73, respectively. This compares to $2.54 and $2.50 for the same period last fiscal year. Weighted average common shares outstanding used to compute diluted earnings per share for the nine-month periods ended December 31, 2023, and 2022 were 59.3 million and 59.5 million, respectively. Balance Sheet Highlights: Total assets were $7.5 billion on December 31, 2023, as compared to $5.1 billion on the March 31, 2023, fiscal year-end. Net working capital increased to $1.0 billion for the period ended December 31, 2023, up from $771 million on March 31, 2023. Brokerage Customer Information: Total brokerage customer count for the Company increased to approximately 458,000 at December 31, 2023, as compared to approximately 370,000 customers at the fiscal year ended March 31, 2023. Approximately 56% of these customers carried positive cash or asset account balances. "Our Central Asia and Eastern European business lead the way for growth…" Commenting on the quarterly results, Timur Turlov, the Company's founder and chief executive officer, stated, "Our fiscal year 2024 has been excellent thus far, highlighted by the planned diversification of our revenue streams and the healthy expansion of almost all business lines in each of our regions. Central Asian operations (Kazakhstan, Uzbekistan, and Kyrgyzstan) accounted for approximately 86% of our revenue for the quarter, totaling $361 million, a 137% increase over the same period last year." "Our Central Asia and Eastern European business lead the way for growth for our enterprise, which includes our Freedom Finance Bank, Freedom Finance Global, Freedom Finance JSC, and our insurance divisions: Freedom Life and Freedom Insurance," Turlov remarked, "contributing approximately $361 million in total revenue from these divisions." He further highlighted that, "Our Europe, Excluding Eastern Europe business line reported $39.5 million in revenue during the reporting period, and we are pleased to have announced the opening of a number of branch offices including Italy, Netherlands, Austria and Bulgaria." "Our operating expenses grew in line with our strategic expansion…" In the third quarter of fiscal 2024, Freedom Holding Corp. reported $307 million in expenditures, an 88% increase over the same period last year. "Our operating expenses grew in line with our strategic expansion plans for this year, which we fully expected," stated Turlov. "This also coincided with increased interest expenses of approximately $131 million as the amount of short-term financing through repurchase agreements and percentage costs on clients' deposits have grown as well." "Highlighted by $96 million in net income, this was another great quarter for Freedom overall and despite market challenges, our growth story continues, driven by our strategy to diversify our revenue streams. Our aim of building out a digital fintech ecosystem where our customers can access a broad array of financial and ancillary services in a one-stop-shopping fashion continues to bear fruit, particularly in our Central Asian markets, where our cross-selling capabilities continue to expand," stated Turlov. "Of course, none of this could have happened without the support of our group of highly trained professionals and service partners who work to meet the diversified financial needs of our customer base every day. In doing so together, we continue to build credibility and earn the trust of all stakeholders in the Freedom universe, and we look forward to what the future will bring for our organization," Turlov concluded. Additional select third quarter fiscal 2024 highlights: Similar to the preceding quarter ended September 30, 2023, interest income was the key driver of Freedom Holding Corp.'s performance, reaching $226 million, an 182% year-over-year increase, largely due to the expansion of the Company's securities portfolio, an increase in the amount of bonds held as a percentage of total trading securities, an increase in margin loans and an increase in issued retail banking loans. The Company realized a net loss from securities trading of approximately $5.1 million for the third quarter of fiscal 2024, compared to a gain of $25.5 million in the third quarter of fiscal 2023 due primarily to the decline in the value of Kazakhstan Development Fund bonds. The Company also realized a 177% increase in insurance underwriting income to approximately $79 million during the quarter as compared to $28.6 million for the same period of the previous fiscal year. Fee and commission income rose by 49% to approximately $120 million as compared to the same quarter last year thanks to the overall general growth of the Company’s operations between the comparable quarters and the migration of clients from our Belize affiliate to brokerage accounts at companies within our group. This revenue line was positively impacted by an increase in fee and commission income from payment processing at Paybox and its subsidiaries, which were acquired in the fourth quarter of fiscal 2023. 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 5,000 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. is headquartered in Almaty, Kazakhstan, and has operations and subsidiaries in 19 countries, including Kazakhstan, the United States, Cyprus, Poland, Spain, Uzbekistan, and Azerbaijan, among others. 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. To learn more about Freedom Holding Corp., visit www.freedomholdingcorp.com. Cautionary Note Regarding Forward-Looking Statements This release contains "forward-looking" statements, including with respect to Freedom Holding Corp.'s (the "Company") potential for future growth and success. 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated) December 31, 2023 March 31, 2023 ASSETS Cash and cash equivalents 561,883 581,417 Restricted cash 384,553 445,528 Trading securities 3,680,453 2,412,556 Available-for-sale securities, at fair value 202,497 239,053 Margin lending, brokerage and other receivables, net 961,392 376,329 Loans issued 1,346,005 826,258 Fixed assets, net 78,099 54,017 Intangible assets, net 46,771 17,615 Goodwill 52,238 14,192 Right-of-use asset 34,180 30,345 Insurance contract assets 12,728 13,785 Other assets, net 88,244 73,463 TOTAL ASSETS 7,449,043 5,084,558 LIABILITIES AND SHAREHOLDERS’ EQUITY Securities repurchase agreement obligations 2,889,173 1,517,416 Customer liabilities 2,248,042 1,925,247 Margin lending and trade payables 145,804 122,900 Liabilities from insurance activity 242,179 182,502 Current income tax liability 27,711 4,547 Debt securities issued 266,310 60,025 Lease liability 34,614 30,320 Liability arising from continuing involvement 494,513 440,805 Other liabilities 61,447 30,060 TOTAL LIABILITIES 6,409,793 4,313,822 SHAREHOLDERS’ EQUITY Preferred stock - - Common stock 59 59 Additional paid in capital 167,465 164,162 Retained earnings 903,517 647,064 Accumulated other comprehensive loss (34,845 ) (34,000 ) TOTAL FRHC SHAREHOLDERS' EQUITY 1,036,196 777,285 Noncontrolling interest 3,054 (6,549 ) TOTAL SHAREHOLDERS’ EQUITY 1,039,250 770,736 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 7,449,043 5,084,558 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 2023 2022 2023 2022 Revenue: Fee and commission income 120,159 80,883 330,565 253,486 Net (loss)/gain on financial instruments through profit and loss (5,089 ) 25,456 77,498 38,894 Interest income 226,445 80,255 588,857 187,817 Insurance underwriting income 79,017 28,557 181,882 78,998 Net gain on foreign exchange operations 38,825 20,866 54,430 30,014 Net loss on derivative (42,568 ) (21,469 ) (71,795 ) (22,523 ) Other income/ (expense) 1,845 (570 ) 8,988 (79 ) TOTAL REVENUE, NET 418,634 213,978 1,170,425 566,607 Expense: Fee and commission expense 42,818 18,314 103,116 60,068 Interest expense 131,223 52,037 365,650 132,971 Insurance claims incurred, net of reinsurance 40,989 17,419 96,491 51,586 Payroll and bonuses 45,083 21,610 116,711 55,252 Professional services 6,217 5,901 24,793 14,174 Stock compensation expense 1,039 2,939 3,303 6,519 Advertising expense 11,066 3,730 27,805 9,479 General and administrative expense 32,106 16,428 86,211 40,943 (Recovery)/Allowance for expected credit losses (3,526 ) 24,140 15,462 30,294 TOTAL EXPENSE 307,015 162,518 839,542 401,286 INCOME BEFORE INCOME TAX 111,619 51,460 330,883 165,321 Income tax expense (15,544 ) (5,069 ) (51,408 ) (26,567 ) INCOME FROM CONTINUING OPERATIONS 96,075 46,391 279,475 138,754 INCOME BEFORE INCOME TAX EXPENSE OF DISCONTINUED OPERATION - 13,667 - 14,467 Income tax benefit/(expense) of discontinued operations - 2,342 - (4,538 ) INCOME FROM DISCONTINUED OPERATIONS - 16,009 - 9,929 NET INCOME 96,075 62,400 279,475 148,683 Less: Net loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 96,368 62,864 280,317 150,191 OTHER COMPREHENSIVE INCOME Change in unrealized gain/(loss) on investments available-for-sale, net of tax effect 1,486 (54 ) 5,893 2,309 Reclassification adjustment for net realized (loss)/gain on available-for-sale investments disposed of in the period, net of tax effect (1,881 ) 320 (3,145 ) 197 Foreign currency translation adjustments 28,100 (5,611 ) (3,593 ) (301 ) OTHER COMPREHENSIVE INCOME/(LOSS) 27,705 (5,345 ) (845 ) 2,205 COMPREHENSIVE INCOME BEFORE NONCONTROLLING INTERESTS 123,780 57,055 278,630 150,888 Less: Comprehensive loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 124,073 57,519 279,472 152,396 EARNINGS PER COMMON SHARE (In U.S. dollars): Earnings from continuing operations per common share - basic (Restated) 1.65 0.79 4.79 2.37 Earnings from continuing operations per common share - diluted (Restated) 1.63 0.78 4.73 2.33 Earnings/(loss) from discontinued operations per common share - basic - 0.27 - 0.17 Earnings/(loss) from discontinued operations per common share - diluted - 0.27 - 0.17 Earnings per common share - basic (Restated) 1.65 1.06 4.79 2.54 Earnings per common share - diluted (Restated) 1.63 1.05 4.73 2.50 Weighted average number of shares (basic) 58,578,691 58,678,730 58,557,577 58,642,637 Weighted average number of shares (diluted) 59,289,256 59,522,701 59,287,086 59,527,743 View source version on businesswire.com: https://www.businesswire.com/news/home/20240212551579/en/Contacts Ramina Fakhrutdinova (KZ) Public Relations Freedom Finance JSC +7 777 377 8868 pr@ffin.kz Al Palombo (US) Global Communications Chief Freedom US Markets +1 212-980-4400, Ext. 1013 apalombo@freedomusmkts.com
Freedom Holding Corp. (NASDAQ: FRHC) (the "Company"), a diversified financial services holding company with operations in the Central Asia and Eastern Europe, Europe Excluding Eastern Europe, the United States, and the Middle East/Causaus, today announced the financial results for their third quarter and nine months ended December 31, 2023, of fiscal 2024. Highlights include the following: $419 million in revenue Net income of $96 million, or $1.63 earnings per share, diluted Operating expenses of $307 million 177% increase in insurance underwriting premiums to approximately $79 million New branch offices now include Italy, The Netherlands, Austria, and Bulgaria Third Quarter Financial Highlights: The Company recognized revenue of approximately $419 million for the third quarter of fiscal 2024, compared to $214 million in the third quarter of fiscal 2023, a 96% increase. The Company's operating expense was approximately $307 million in the third quarter of fiscal 2024 compared to $163 million for the same period last year, an increase of approximately 89%. Net income was approximately $96 million for the third quarter of fiscal 2024 compared to $62.4 million for the same period in fiscal 2023, a 54% increase, providing for basic and diluted earnings per share of $1.65 and $1.63, respectively. This compares to $1.06 and $1.05 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, 2023, and 2022 were 59.3 million basic and 59.5 million, respectively. Nine Months Year to Date Financial Highlights: For the nine months ending December 31, 2023, the Company's revenue totaled approximately $1.2 billion compared to $567 million for the prior year period, an increase of 107%. The Company's operating expense was $840 million for the period as compared to $401 million in the prior year period. Net income was approximately $279 million for the first nine months of fiscal 2024, compared to $149 million for the same period in 2023, providing for basic and diluted earnings per share of $4.79 and $4.73, respectively. This compares to $2.54 and $2.50 for the same period last fiscal year. Weighted average common shares outstanding used to compute diluted earnings per share for the nine-month periods ended December 31, 2023, and 2022 were 59.3 million and 59.5 million, respectively. Balance Sheet Highlights: Total assets were $7.5 billion on December 31, 2023, as compared to $5.1 billion on the March 31, 2023, fiscal year-end. Net working capital increased to $1.0 billion for the period ended December 31, 2023, up from $771 million on March 31, 2023. Brokerage Customer Information: Total brokerage customer count for the Company increased to approximately 458,000 at December 31, 2023, as compared to approximately 370,000 customers at the fiscal year ended March 31, 2023. Approximately 56% of these customers carried positive cash or asset account balances. "Our Central Asia and Eastern European business lead the way for growth…" Commenting on the quarterly results, Timur Turlov, the Company's founder and chief executive officer, stated, "Our fiscal year 2024 has been excellent thus far, highlighted by the planned diversification of our revenue streams and the healthy expansion of almost all business lines in each of our regions. Central Asian operations (Kazakhstan, Uzbekistan, and Kyrgyzstan) accounted for approximately 86% of our revenue for the quarter, totaling $361 million, a 137% increase over the same period last year." "Our Central Asia and Eastern European business lead the way for growth for our enterprise, which includes our Freedom Finance Bank, Freedom Finance Global, Freedom Finance JSC, and our insurance divisions: Freedom Life and Freedom Insurance," Turlov remarked, "contributing approximately $361 million in total revenue from these divisions." He further highlighted that, "Our Europe, Excluding Eastern Europe business line reported $39.5 million in revenue during the reporting period, and we are pleased to have announced the opening of a number of branch offices including Italy, Netherlands, Austria and Bulgaria." "Our operating expenses grew in line with our strategic expansion…" In the third quarter of fiscal 2024, Freedom Holding Corp. reported $307 million in expenditures, an 88% increase over the same period last year. "Our operating expenses grew in line with our strategic expansion plans for this year, which we fully expected," stated Turlov. "This also coincided with increased interest expenses of approximately $131 million as the amount of short-term financing through repurchase agreements and percentage costs on clients' deposits have grown as well." "Highlighted by $96 million in net income, this was another great quarter for Freedom overall and despite market challenges, our growth story continues, driven by our strategy to diversify our revenue streams. Our aim of building out a digital fintech ecosystem where our customers can access a broad array of financial and ancillary services in a one-stop-shopping fashion continues to bear fruit, particularly in our Central Asian markets, where our cross-selling capabilities continue to expand," stated Turlov. "Of course, none of this could have happened without the support of our group of highly trained professionals and service partners who work to meet the diversified financial needs of our customer base every day. In doing so together, we continue to build credibility and earn the trust of all stakeholders in the Freedom universe, and we look forward to what the future will bring for our organization," Turlov concluded. Additional select third quarter fiscal 2024 highlights: Similar to the preceding quarter ended September 30, 2023, interest income was the key driver of Freedom Holding Corp.'s performance, reaching $226 million, an 182% year-over-year increase, largely due to the expansion of the Company's securities portfolio, an increase in the amount of bonds held as a percentage of total trading securities, an increase in margin loans and an increase in issued retail banking loans. The Company realized a net loss from securities trading of approximately $5.1 million for the third quarter of fiscal 2024, compared to a gain of $25.5 million in the third quarter of fiscal 2023 due primarily to the decline in the value of Kazakhstan Development Fund bonds. The Company also realized a 177% increase in insurance underwriting income to approximately $79 million during the quarter as compared to $28.6 million for the same period of the previous fiscal year. Fee and commission income rose by 49% to approximately $120 million as compared to the same quarter last year thanks to the overall general growth of the Company’s operations between the comparable quarters and the migration of clients from our Belize affiliate to brokerage accounts at companies within our group. This revenue line was positively impacted by an increase in fee and commission income from payment processing at Paybox and its subsidiaries, which were acquired in the fourth quarter of fiscal 2023. 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 5,000 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. is headquartered in Almaty, Kazakhstan, and has operations and subsidiaries in 19 countries, including Kazakhstan, the United States, Cyprus, Poland, Spain, Uzbekistan, and Azerbaijan, among others. 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. To learn more about Freedom Holding Corp., visit www.freedomholdingcorp.com. Cautionary Note Regarding Forward-Looking Statements This release contains "forward-looking" statements, including with respect to Freedom Holding Corp.'s (the "Company") potential for future growth and success. 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated) December 31, 2023 March 31, 2023 ASSETS Cash and cash equivalents 561,883 581,417 Restricted cash 384,553 445,528 Trading securities 3,680,453 2,412,556 Available-for-sale securities, at fair value 202,497 239,053 Margin lending, brokerage and other receivables, net 961,392 376,329 Loans issued 1,346,005 826,258 Fixed assets, net 78,099 54,017 Intangible assets, net 46,771 17,615 Goodwill 52,238 14,192 Right-of-use asset 34,180 30,345 Insurance contract assets 12,728 13,785 Other assets, net 88,244 73,463 TOTAL ASSETS 7,449,043 5,084,558 LIABILITIES AND SHAREHOLDERS’ EQUITY Securities repurchase agreement obligations 2,889,173 1,517,416 Customer liabilities 2,248,042 1,925,247 Margin lending and trade payables 145,804 122,900 Liabilities from insurance activity 242,179 182,502 Current income tax liability 27,711 4,547 Debt securities issued 266,310 60,025 Lease liability 34,614 30,320 Liability arising from continuing involvement 494,513 440,805 Other liabilities 61,447 30,060 TOTAL LIABILITIES 6,409,793 4,313,822 SHAREHOLDERS’ EQUITY Preferred stock - - Common stock 59 59 Additional paid in capital 167,465 164,162 Retained earnings 903,517 647,064 Accumulated other comprehensive loss (34,845 ) (34,000 ) TOTAL FRHC SHAREHOLDERS' EQUITY 1,036,196 777,285 Noncontrolling interest 3,054 (6,549 ) TOTAL SHAREHOLDERS’ EQUITY 1,039,250 770,736 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 7,449,043 5,084,558 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 2023 2022 2023 2022 Revenue: Fee and commission income 120,159 80,883 330,565 253,486 Net (loss)/gain on financial instruments through profit and loss (5,089 ) 25,456 77,498 38,894 Interest income 226,445 80,255 588,857 187,817 Insurance underwriting income 79,017 28,557 181,882 78,998 Net gain on foreign exchange operations 38,825 20,866 54,430 30,014 Net loss on derivative (42,568 ) (21,469 ) (71,795 ) (22,523 ) Other income/ (expense) 1,845 (570 ) 8,988 (79 ) TOTAL REVENUE, NET 418,634 213,978 1,170,425 566,607 Expense: Fee and commission expense 42,818 18,314 103,116 60,068 Interest expense 131,223 52,037 365,650 132,971 Insurance claims incurred, net of reinsurance 40,989 17,419 96,491 51,586 Payroll and bonuses 45,083 21,610 116,711 55,252 Professional services 6,217 5,901 24,793 14,174 Stock compensation expense 1,039 2,939 3,303 6,519 Advertising expense 11,066 3,730 27,805 9,479 General and administrative expense 32,106 16,428 86,211 40,943 (Recovery)/Allowance for expected credit losses (3,526 ) 24,140 15,462 30,294 TOTAL EXPENSE 307,015 162,518 839,542 401,286 INCOME BEFORE INCOME TAX 111,619 51,460 330,883 165,321 Income tax expense (15,544 ) (5,069 ) (51,408 ) (26,567 ) INCOME FROM CONTINUING OPERATIONS 96,075 46,391 279,475 138,754 INCOME BEFORE INCOME TAX EXPENSE OF DISCONTINUED OPERATION - 13,667 - 14,467 Income tax benefit/(expense) of discontinued operations - 2,342 - (4,538 ) INCOME FROM DISCONTINUED OPERATIONS - 16,009 - 9,929 NET INCOME 96,075 62,400 279,475 148,683 Less: Net loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 96,368 62,864 280,317 150,191 OTHER COMPREHENSIVE INCOME Change in unrealized gain/(loss) on investments available-for-sale, net of tax effect 1,486 (54 ) 5,893 2,309 Reclassification adjustment for net realized (loss)/gain on available-for-sale investments disposed of in the period, net of tax effect (1,881 ) 320 (3,145 ) 197 Foreign currency translation adjustments 28,100 (5,611 ) (3,593 ) (301 ) OTHER COMPREHENSIVE INCOME/(LOSS) 27,705 (5,345 ) (845 ) 2,205 COMPREHENSIVE INCOME BEFORE NONCONTROLLING INTERESTS 123,780 57,055 278,630 150,888 Less: Comprehensive loss attributable to noncontrolling interest in subsidiary (293 ) (464 ) (842 ) (1,508 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 124,073 57,519 279,472 152,396 EARNINGS PER COMMON SHARE (In U.S. dollars): Earnings from continuing operations per common share - basic (Restated) 1.65 0.79 4.79 2.37 Earnings from continuing operations per common share - diluted (Restated) 1.63 0.78 4.73 2.33 Earnings/(loss) from discontinued operations per common share - basic - 0.27 - 0.17 Earnings/(loss) from discontinued operations per common share - diluted - 0.27 - 0.17 Earnings per common share - basic (Restated) 1.65 1.06 4.79 2.54 Earnings per common share - diluted (Restated) 1.63 1.05 4.73 2.50 Weighted average number of shares (basic) 58,578,691 58,678,730 58,557,577 58,642,637 Weighted average number of shares (diluted) 59,289,256 59,522,701 59,287,086 59,527,743 View source version on businesswire.com: https://www.businesswire.com/news/home/20240212551579/en/
Ramina Fakhrutdinova (KZ) Public Relations Freedom Finance JSC +7 777 377 8868 pr@ffin.kz Al Palombo (US) Global Communications Chief Freedom US Markets +1 212-980-4400, Ext. 1013 apalombo@freedomusmkts.com