Freedom (US:FRHC)2025-02-07 11:10Client Growth - As of December 31, 2024, the number of banking clients increased to 1,407,000 from 904,000 as of March 31, 2024, representing a growth of 55%[187] - Freedom Life had 973,827 active contracts as of December 31, 2024, up from 616,301 active contracts as of March 31, 2024, indicating a growth of 58%[197] - Freedom Insurance reported an increase in active contracts to 567,931 as of December 31, 2024, compared to 190,872 as of March 31, 2024, reflecting a growth of 198%[198] - The number of retail brokerage customers rose to approximately 618,000 as of December 31, 2024, compared to approximately 530,000 as of March 31, 2024[213] Financial Performance - Total revenues for the three months ended December 31, 2024, were $655.2 million, a 57% increase from $418.6 million in the same period of 2023[211] - Net income for the three months ended December 31, 2024, was $78.1 million, down from $96.1 million in the same period of 2023[212] - Total revenue for the nine months ended December 31, 2024, was $1.686 billion, a 44% increase from $1.170 billion in the same period of 2023[269] - Net income for the nine months ended December 31, 2024, was $226.9 million, a decrease of 19% from $279.5 million in the same period of 2023[316] Asset and Liability Management - The total assets of Freedom Life reached approximately $510.1 million as of December 31, 2024, up from $371.5 million as of March 31, 2024[197] - Total assets increased to $9.1 billion as of December 31, 2024, up from $8.3 billion as of March 31, 2024[213] - As of December 31, 2024, total liabilities were $7.9 billion, including customer liabilities of $3.8 billion[346] Revenue Segmentation - The Brokerage segment reported a revenue increase of 29% to $213.33 million, driven by net gains on trading securities and increased fee and commission income[320][321] - The Banking segment's revenue rose by 47% to $206.37 million, primarily due to net gains on trading securities and derivatives[320][322] - The Insurance segment experienced a 106% revenue increase to $197.83 million, mainly from higher insurance underwriting income[320][323] Expense Management - Total expenses for Q4 2024 were $556.9 million, an increase of $249.8 million or 81% compared to $307.0 million in Q4 2023[241] - Total expenses, net for the nine months ended December 31, 2024, rose by 69% to $1.42 billion compared to $839.54 million in the same period of 2023[338] - Payroll and bonuses expense for Q4 2024 was $77.4 million, an increase of $32.3 million or 72% compared to Q4 2023, due to higher salaries and workforce expansion[255] Investment and Capital Expenditures - Capital expenditures for the construction of Elysium Tower in Cyprus amounted to approximately $8.2 million in fiscal year 2024, with an additional $2.0 million incurred in the first nine months of fiscal year 2025[354] - Freedom Telecom plans to enter the telecommunications market in Kazakhstan, with capital expenditures currently uncertain but expected to be significant[355] - Freedom Media, established on January 25, 2024, is projected to require approximately $54 million in capital expenditures over the next five years[357] Regulatory and Credit Ratings - S&P Global Ratings upgraded the long-term credit ratings of Freedom KZ, Freedom EU, Freedom Global, and Freedom Bank KZ from "B" to "B+" level on December 12, 2024[207] - The aggregate net capital and capital adequacy requirements of the company's subsidiaries was approximately $237.4 million as of December 31, 2024, all subsidiaries exceeded the minimum required amount[368] Strategic Initiatives - The company divested its Russian subsidiaries in February 2023 to focus on markets in Kazakhstan and Central Asia[183] - The company is in the process of obtaining a license to provide brokerage services in Turkey following regulatory approval on January 9, 2025[188] - An aggressive growth strategy has been pursued through both acquisitions and organic efforts, leading to revenue growth but also increased expenses and capital resource needs[370] Cash Flow Management - Net cash flows from operating activities for the nine months ended December 31, 2024, were $343.3 million, a significant improvement from a cash outflow of $1.4 billion in the same period of 2023[349] - Net cash used in investing activities was $652.6 million for the nine months ended December 31, 2024, compared to $593.0 million in the same period of 2023[352] - Net cash flows from financing activities were $833.6 million for the nine months ended December 31, 2024, down from $1.9 billion in the same period of 2023[353]